House Of Commons
Tuesday, 6th July, 1971
The House met at half-past Two o'clock
Prayers
[Mr. SPEAKER in the Chair]
Private Business
Torbay Corporation Bill
Lords Amendments considered and agreed to.
Mersey Docks And Harbour Board (Ore Berth) Bill Lords
[ Queen's Consent, on behalf of the Crown signified]
Bill read the Third time and passed, with Amendments.
Luton Corporation Bill Lords
Bill read the Third time and passed, without Amendment.
BOURNEMOUTH CORPORATION BILL [ Lords]
BRADFORD CORPORATION BILL [ Lords]
FLINTSHIRE COUNTY COUNCIL BILL [ Lords]
SCUNTHORPE CORPORATION BILL [ Lords]
Bills read a Second time and committed.
Bristol Corporation Bill Lords (By Order)
Order for consideration, as amended, read.
Bill to be considered upon Tuesday next.
Edinburgh Corporation Order Confirmation Bill
Bill considered; to be read the Third time tomorrow.
Oral Answers To Questions
National Finance
Growth Rate
1.
asked the Chancellor of the Exchequer what assessment he has made of the regional implications of the failure to reach his estimated 3·8 per cent. growth rate.
28.
asked the Chancellor of the Exchequer what assessment concerning the regional implications he has made arising out of the failure to reach his estimated 38 per cent. growth rate; and if he will make a statement.
I am not certain to which estimate the hon. Members refer; the Budget forecast was for a growth in output of 3·1 per cent. between the first halves of 1971 and 1972.
I apologise for nattering the Government by enhancing their growth rate. Can the Minister assure me that the regional problem will not be exacerbated by stupid decisions such as the siting of the value-added centre at Southend and that, whatever the exigencies of particular treaties, there will be no expansion of industrial development such as a steel mill at Foulness adjacent to an airport and industrial development there?
The hon. Gentleman has raised matters which are the subject of consideration and which are very wide of this Question. I assure him that the regional implications of decisions are considered very carefully. There is a Question on the Order Paper about the decision over the value-added tax headquarters.
Is the Chief Secretary aware that whatever estimates he has been working on have been totally unsuccessful for Scotland? With over 120,000 unemployed in Scotland, with more than 10 per cent. of the male population unemployed in some parts of North Lanarkshire, and with young boys now reaching 18 never having had any work yet, is it not time the hon. Gentleman swallowed his pride, got his estimates done properly and got our people work?
I do not accept the implication about the estimates. The problem of unemployment in the regions is being very carefully considered by my right hon. Friend the Chancellor and by the Government generally.
Medicines (Promotion)
2.
asked the Chancellor of the Exchequer whether he will exclude the promotion of medicines from being tax-deductible as a business expense.
No, Sir.
Will the Financial Secretary bear in mind that the Sainsbury Committee concluded that the drug industry spends too much money on the promotion of medicines and is excessive in its promotional practices? Does not the industry spend more on advertising than on research? Does not making the promotion of medicines tax-deductible as a business expense encourage this practice?
The only relevance of the tax system is that expenses, to be allowable, must be necessarily incurred in earning profits. The hon. Lady has raised very much wider implications which seem to be for my right hon. Friend the Secretary of State for Social Services.
Is my hon. Friend aware that less than 1 per cent. of the total N.H.S. bill is spent on information services by the pharmaceutical industry and that this 1 per cent. includes a very large subsidy to the medical journals, both learned and otherwise, and if we lost those the medical profession and patients, too, would be very much worse off?
My hon. Friend knows much more about these things than I do.
Building Societies
3.
asked the Chancellor of the Exchequer what is his estimate of the reduction in building society interest rates to borrowers that would result from the exemption of building societies from corporation tax, by such exemption being passed on fully in lower interest rates to borrowers.
Less than ¼ per cent.
I appreciate that building societies cannot easily reduce their rates to borrowers at present, despite the lower Bank Rate, because they have to compete for their money in the market in order to continue to attract sufficient funds to provide mortgages, but does not my hon. Friend agree that interest rates on mortgages could be reduced at a stroke if building societies were now exempted from taxation? Would this not implement yet another election pledge, by reducing mortgage interest rates from the all-time disgracefully high level to which they were allowed to rise by the previous Government? May we have some action?
I do not accept most of the implications of what my hon. Friend says. Nor is he correct in his assumptions about the effect of corporation tax on building society interest rates. If there had been no corporation tax of any kind on building societies and the whole of the corporation tax had been devoted to lowering interest rates, they could have gone down in 1968 by 0·2 per cent., in 1967 by 0·17 per cent., and in 1970 by 0·22 per cent.
The House will be surprised that the Chief Secretary could not accept the serious implications of his hon. Friend's supplementary question. As there has now been a cut in taxation on building societies—that is, through the cut in S.E.T.—what estimate has he made of what the effect will be towards a cut in their interest charges?
I answered that question—less than ¼ per cent.
Sterling
4.
asked the Chancellor of the Exchequer what official discussions have now been held with the United States of America about the phasing out of sterling.
None, Sir.
If sterling is phased out what effect will this have on the American dollar as a reserve currency?
It is quite wrong to suppose that any plans for phasing out the reserve currency rôle of sterling have been discussed with the E.E.C. or, indeed, any foreign Government. As my hon. Friend knows, all that has happened is that we have agreed that after our entry we shall be prepared to envisage a gradual and orderly rundown in the official sterling balances.
Does the right hon. Gentleman agree that talk about phasing out sterling is misleading, and typically misleading of the hon. Member for Banbury (Mr. Marten)?
I can only repeat what I have just said, that it is quite wrong to suppose that any plans for phasing out the reserve currency rôle of sterling have been discussed with any of these countries.
£ Sterling (Value)
5.
asked the Chancellor of the Exchequer what is the purchasing power of the £ sterling now, taking it as l00p on 18th June, 1970.
7.
asked the Chancellor of the Exchequer what percentage decline of the value of the £ has now taken place since 18th June. 1970.
Between mid-June, 1970, and mid-May, 1971, the latest date for which information is available, the purchasing power of the £ sterling fell by 8·7 per cent., which is equivalent to a fall from l00p to about 92½p. These comparisons are based on the movement in the General Index of Retail Prices.
In the first place, the hon. Gentleman has given me an erroneous answer: it is 91½, not 92½. Is he aware that since his Government came to power, on a pledge to deal with inflation at a stroke, the value of the pay packet of the man on average earnings has fallen by £2·38 a week? How does he reconcile this fine imposed on the average worker of £131 with the Prime Minister's pre-election promise of a high-wage economy?
I can only say that the average worker taken by the hon. Gentleman in his example has been quite exceptional if he has not enjoyed a fairly substantial wage rise during this period.
Will my hon. Friend underline that a lot of the price rises are due to decisions taken by the previous Government? Does it not take two years for decisions taken by the Government to come to full effect, and did it not take over two years for the Labour Government to devalue sterling and then run up a short-term debt of £1,500 million?
The right hon. Member for Coventry, East (Mr. Crossman) put it clearly on the record in a broadcast called "The Key to No. 10", when he said:
"The main fact is that we won the 1966 election by choosing the moment of wage inflation before prices had really been felt to rise, and obviously we were seeking to do if again in this election in 1970".
Industrial Production
6.
asked the Chancellor of the Exchequer what is his current estimate of industrial production for 1971.
My right hon. Friend has given no estimate for the level of industrial production in 1971.
Is the hon. Gentleman aware that despite that deplorable and calculated evasion, the Budget judgment of 3 per cent. economic growth rate in the following 12 months now stands condemned as perhaps the most outrageous economic howler of the year, and is he further aware that the Chancellor is now widely regarded as the arch-apostle of "stagflation", which was the woeful creed vigorously condemned by his distinguished predecessor, lain Macleod?
The Budget forecast was for a rise in output of rather over 1 per cent. between 1970 and 1971. As the hon. Gentleman knows, the Chancellor is reviewing current output. Industrial production in April is provisionally estimated to be almost 1 per cent. above the rate for the first quarter.
Tax Avoidance
8.
asked the Chancellor of the Exchequer what are the precise terms of reference of the special committee that has been set up within the Inland Revenue to investigate tax avoidance; how is tax avoidance exactly defined and interpreted; and when is the committee expected to report.
The committee is a sub-committee of the Tax Reform Committee, about which my hon. Friend the Chief Secretary answered a Question on 16th February. It has no set terms of reference but is examining the anti-avoidance provisions in the Income and Corporation Taxes Act, 1970. It will report to my right hon. Friend in confidence from time to time.
I regret that the reports will be in confidence. Will the Minister confirm that the latest official reports of his own Department reveal that the total of illegal evasion of income tax, profits tax and surtax, now standing at £9 million a year, is between 10 and 15 times more than the total fraudulent claims for all social service benefits, again according to official reports? Does he not consider, therefore, that it is in the national interest that the terms of the Fisher Committee should be extended to include this much bigger source of fraud through tax evasion?
With the greatest respect, evasion has nothing whatever to do with tax avoidance, which is the subject matter of this committee's deliberations.
Purchase Tax
9.
asked the Chancellor of the Exchequer whether he will now reduce the level of purchase tax.
No, Sir. However, we are keeping the situation under review, and, if it is judged that action to stimulate the economy is necessary, we shall not hesitate to take it.
Is not the great attraction of a cut in purchase tax that it would act immediately and directly on prices and thus give reassurance to those who are becoming increasingly alarmed at the rate of inflation in this country? Although, in the light of my hon. Friend's reply, we are prepared to wait just a little longer for further Government action, will he convey to the Chancellor that our patience in this matter is not inexhaustible?
My hon. Friend has, no doubt, forgotten that there are Budget measures which have not had time to take effect in the economy. The cut in selective employment tax became operative yesterday. There is another £163 million to come from the increase in child allowances—£205 million in a full year—and £560 million from increases in retirement pensions and National Insurance benefits. My right hon. Friend has already said that if and when he judges the economy to need further stimulus, he will consider what action should be taken.
Is the Chief Secretary aware that the nugatory effect on prices of the main weapon which the Chancellor used in his Budget—namely, the cut in S.E.T.—is now becoming obvious, and that the unprecedented unpopularity into which the Government have fallen in a record short time is due to the feeling which people have that they have been "had"?
I do not in the least accept what the hon. and learned Gentleman said. There have been considerable price reductions as a result of the cut in selective employment tax. The full effects have not yet been felt since the cut did not become operative until yesterday. The measures which the Government have taken to keep down nationalised industry prices have been sedulously opposed by right hon. and hon. Members opposite.
Gross Domestic Product
10.
asked the Chancellor of the Exchequer what is his latest estimate of the growth of the gross domestic product up to December, 1971, and April, 1972, respectively.
I would refer my hon. Friend to what I said in my speech during the debate on 28th June.
Is my right hon. Friend aware that the forecast growth of G.D.P. is based to a large extent on the increase in consumer expenditure in the second half of this year and the first half of next year? In the light of the disappointing retail sales figures announced today, will he consult my right hon. Friend the Leader of the House about a full economic debate before the House rises for the Summer Recess?
I am sure that my right hon. Friend the Leader of the House will take note of what my hon. Friend has said. In any event, I shall make sure that it is drawn to his attention. I am reviewing the prospects for the economy, but, subject to the outcome of that review, I believe that the increase in G.D.P. between the first half of 1971 and the first half of 1972 will be about 3 per cent. Estimates are not available for individual months.
Will not the Chancellor admit that the estimates on which his Budget calculations were made are now widely and frankly admitted to have been incorrect? Therefore, will he hasten the day when he will add something to the aggregate demand within the economy and cease believing that he is still the only man in the Government who is in step in these matters?
I have already made it quite clear—and I stand by what I said—that I am not prepared to anticipate the general review which takes place at this time of the year. I have said that publicly both inside and outside the House. The review is normally completed about the middle of this month.
Economic Growth
11.
asked the Chancellor of the Exchequer what rate of growth of real resources in the economy he now anticipates for 1972–73.
It has not been the practice to put forward forecasts of growth for periods beyond about one year ahead.
I realise that, and I am grateful to my right hon. Friend. I understand his difficulties with the economic review now taking place. Does not he agree that the estimates given in earlier speeches, albeit positively extravagant and dynamic compared with the annual rates of growth to which we became accustomed in the 5½ years of the previous Government, are very modest in comparison with those of other leading industrial countries? Could he not undertake to prime the pump just a little more?
I have already given the figures of the growth of G.D.P. in answer to the previous Question. It is true that many of our competitors over the years have been growing at a much faster rate than we have. The annual growth target for the E.E.C. countries for 1971–75 is 5·5 per cent. I should add, in answer to the direct point my hon. Friend raised, that if Britain in the 1960s had shared the average growth rate of the E.E.C. our national income would now be at least £10,000 million more than it is.
Instead of making absurd propaganda points about the Common Market, will the right hon. Gentleman turn his mind to the question put to him? Cannot he give the House a revised estimate of growth not only over the period of the short-term forecast, which has been given before, but also over the period of three to four years ahead, which was the practice of his predecessor?
The right hon. Gentleman will know, if he recalls those happy days which he spent at the Department of Economic Affairs, that while longer-term projections are prepared on various assumptions of the trend rate of growth over a number of years, these are mainly for planning public expenditure and do not involve forecasting growth in particular years. There has been no change in that respect.
Has the Chancellor seen the recent article by Peter Jay in The Times Business News, which suggested that if the economy grew fast enough in 1972–73, to have anything remotely like full employment we should be back in the severe balance of payments difficulties? What is his estimate of the likely balance of payments consequences of full employment in 1972–73?
I expect a substantial surplus on the balance of payments current account this year. I have not read Mr. Peter Jay's article.
European Economic Community
12.
asked the Chancellor of the Exchequer whether advertisements by business firms advocating membership of the European Economic Community are treated by the Inland Revenue as eligible for tax relief, or if they have to be declared as contributions to political activities.
Such expenditure is allowable as a deduction in computing profits for tax purposes only if it is shown to have been incurred wholly and exclusively for the purposes of the company's trade. The second part of the Question is a matter for my right hon. Friend the Secretary of State for Trade and Industry.
Can the hon. Gentleman tell us specifically whether the advertisement paid for by Lord Stokes will be eligible for tax relief? Is it the Government's policy to encourage big firms to go in for political advertising and then to subsidise it, to try to change public opinion on the Common Market?
I will not be drawn into discussing the tax affairs of individual businesses. We warmly welcome those industrialists who are prepared to stand up and be counted if it is in their interests to join the Common Market.
15.
asked the Chancellor of the Exchequer what estimate he has now made of the effect of the United Kingdom's revised contribution to the European Economic Community Budget on the balance of payments position at the end of any transitional period.
As my right hon. Friend the Chancellor of the Duchy of Lancaster said in the House on 24th June, the net United Kingdom contribution in the last year of the transitional period is estimated at about £200 million.
If it is not possible for the Government to forecast the growth of the economy five years ahead, unlike the Common Market countries we have just heard about, will they be able to state in the forthcoming White Paper on British entry that we shall have sufficient balance of payments surplus in 1978 to finance both faster growth and the cost of entry?
I believe that we shall. The hon. Gentleman had better await the publication of the White Paper, however, to see its terms.
Does my right hon. Friend agree that our contribution to the E.E.C. budget promises to be one of the best and most profitable investments that this country has ever made?
I agree entirely. I believe, and have always believed, that membership will offer major benefits to our economy and that we shall become more competitive in world markets as a whole. There will be beneficial effects upon our trade balances, and these will offset the costs of our contribution to the budget.
22.
asked the Chancellor of the Exchequer how the Inland Revenue determines whether the cost of advertisements by companies advocating entry to the Common Market has been incurred wholly and exclusively for the purposes of the company's trade.
By considering the facts of each case in the light of the case law on the interpretation of the statutory rule quoted in the Question.
Is the hon. Gentleman aware, with respect to these notorious advertisements by British Leyland, that I have had correspondence with Lord Stokes, who assures me that entry into the E.E.C. is not essential to his company but that a genuine free trade area in industrial goods would certainly meet his company's requirements? May we take it that the hon. Gentleman's encomium for Lord Stokes, expressing the views of 12 directors, will be echoed by his approval of the elected representatives of the workers of British Leyland, about 200,000 of them, who are unanimously opposed to entering the Common Market?
The hon. Member is making a pretty large assumption about that. I have no doubt that when the Government's White Paper is published tomorrow and we have the debates in this House and the country, even those of Lord Stokes' employees who at present have some doubts about this will recognise that their long-term interests in pay, employment and welfare depend upon our joining the Community.
Would the hon. Gentleman not agree that the supplementary question was a little unfair to one of Britain's leading industrialists? Would it not be better to reserve the position of those who are both for and against the Common Market at the same time for politicians and not industrialists?
I suppose that some can sit on the fence until the iron enters into their soul.
Eurodollar Market
13.
asked the Chancellor of the Exchequer if he will take the necessary steps to initiate talks with a view to the international regulation of the Eurodollar market.
The operations of the Eurodollar market are already kept under review by various international bodies and at regular meetings of the central bank governors.
I am well aware of that. But does not the hon. Gentleman think that in view of the growing rôle of the Eurodollar market in magnifying and speeding up the movement of funds between financial centres at times of monetary uncertainty, it is now imperative that his right hon. Friend should take steps towards international regulation of the vast 60 billion dollar market before this country becomes vulnerable once more at times of international exchange crises?
I do not think that a great deal more can be done about this matter. The Bank for International Settlements is the main source of statistics on the market and a focal point for discussion, and the Ministerial meeting of O.E.C.D. has instructed O.E.C.D. to give special attention to the factors leading to undesirably large short-term capital flows. The governors of the central banks in the Group of Ten and the Bank for International Settlements have set up a working party to formulate policy on the Eurodollar market. In addition, some countries, including the United Kingdom, have taken measures to control resident borrowing. I do not think that it is necessary to go very much further than that.
It certainly was not necessary to go on very much longer than that. Will the hon. Gentleman bear in mind that there is a serious problem here, and will he not sound quite so hopeless about it? I do not say that the solution is easy, but there is a special responsibility on the British Government, because the market is to a large extent run and controlled from London.
I entirely agree with the right hon. Gentleman on that. But I was asked whether we would take steps to initiate talks, and I was trying to show that many talks were already going on about the problem, which I agree is a difficult one.
Hire Purchase
14.
asked the Chancellor of the Exchequer, having regard to the personal loans schemes of the banks and other financial institutions which obviate hire purchase statutory restrictions, what estimate he has made of the economic, financial, fiscal and personal savings effects of total removal of all statutory hire purchase restrictions, as recommended by the Crowther Report, for reflation of the economy; and whether he will now make a statement.
It is not the practice to give estimates of the economic effects of individual instruments of demand management. On the general question of hire purchase terms control. I have nothing to add to the reply my right hon. Friend gave to my hon. Friend the Member for Horsham (Mr. Hordern) on 15th June.—[Vol. 819, c. 224.]
Would not my hon. Friend perceive that the great weekly growth of the personal loans schemes of the joint stock banks, which now evidently have unlimited sums to lend entirely free from statutory restrictions as to term of repayment or interest rate or otherwise, absolutely negatives the whole of the hire-purchase restrictions? Cannot the Government bring themselves up to date and study contemporaneous circumstances with a view to getting rid of archiaic devices that serve no valuable economic or financial purpose?
I am not sure whether my hon. Friend would describe himself as a contemporaneous circumstance or an archaic device, but I assure him that the Government are always up to date and that we are fully aware of all the factors affecting the recommendations of the Crowther Committee.
I recognise that the hon. Gentleman cannot anticipate the review which is taking place, but consumption does not appear to be rising as estimated. A relaxation of hire-purchase controls would be a particularly suitable form of action, as it would be quick-acting.
The House must not get itself into confusion. Either the controls are working, in which case the case for their removal on that account is a bad one, or they are not working, in which case their removal would have little effect. It seems to me that hon. Members on both sides must make up their minds which case they are going to argue.
On a point of order, Mr. Speaker. In view of that horrible answer, I beg to give notice that I shall seek to raise the matter on the Adjournment at the appropriate opportunity.
Capital Gains Tax (Compulsorily-Purchased Property)
16.
asked the Chancellor of the Exchequer if he will seek to amend the law in order to relieve from capital gains tax those whose property is purchased by compulsion.
I have noted my hon. Friend's view, but I do not consider that such a change would be justified.
Would my hon. Friend agree that to take away a man's house by force is in any event unkind, and for the State to argue thereafter that, even though he did not want to sell the house, there would have been a profit if he had wanted to sell it, and to take that profit on the basis of that illusion reduces the compensation, which in any case is usually inadequate? Is not this rather much, even for the Treasury?
The Treasury does no such thing. On the contrary, we do not take the profit. We charge capital gains tax on profit. If one is charging a gains tax on realised gains, one cannot look at the circumstances in which the gains arise in order to determine the taxability of the transaction. One would be in great difficulty, for example, in making a distinction in the case of a shareholder in a company where majority control was won and he was bought out by the majority shareholder. I do not see how one can draw a distinction.
Hydrocarbon Oils
17.
asked the Chancellor of the Exchequer to what extent in framing fiscal policy on hydrocarbon oils he takes into account considerations of pollution.
All relevant considerations are borne in mind.
Will this be borne in mind in determining the Government's attitude towards l.p.g. vehicles?
We will have an opportunity to discuss this matter later today. Some of the assumptions made about the pollution aspects of l.p.g. have been wildly over-stated in relation to vehicles and under-stated in relation to its use as industrial fuel. But the pollution aspects are important.
War Widows' Pensions (Taxation)
18.
asked the Chancellor of the Exchequer what esimate he has made of the cost to the Exchequer of providing that the widow of a deceased war pensioner should not have assessable income for tax purposes.
I regret that the information on which to base this estimate is not available.
In view of that answer it would seem that it is not worth pursuing such a very small amount. War disability pensions are free of tax. Would it not be right also to exempt war widows' pensions? Is the hon. Gentleman aware that other Commonwealth countries do this? Will he not now consider exempting war widows' pensions, since this would help war widows, particularly those who have to go out to work?
One cannot esimate the cost of this proposal. I do not, however, argue mainly on ground of cost but because the amount of other income which a war widow may have will affect her tax liability. I do not think it would be right to single out this form of pension for a tax exemption. It seems to me indistinguishable from other widows' pensions which presumably, under the hon. Gentleman's suggestion, would remain liable to tax.
Inflation
19.
asked the Chancellor of the Exchequer what is the latest estimate of the annual rate of inflation and what was the corresponding rate in June 1970.
As has already been announced, the index of retail prices in May, the latest available date was 9·8 per cent. higher than a year earlier. The corresponding figure for June, 1970, was 5·9 per cent.
Does the hon. Gentleman realise that it is six months since the Government claimed that they saw signs that inflation was falling off? In view of the Prime Minister's claim at the weekend, can the hon. Gentleman cite any more substantial evidence than existed six months ago to justify the Government's assertion that inflation is now reducing?
Despite the efforts of right hon. and hon. Members opposite to prevent the Government from operating directly on the prices of nationalised industries and their encouragement of inflationary wage settlements—yes, there are small signs that the situation is being contained.
Is the hon. Gentleman aware that the great expectations of reductions in prices as a result of the cut in S.E.T. will be received with some derision by the British people? Will the hon. Gentleman draw the Chancellor's attention to what the hon. Member for Bromley (Mr. Hunt) pointed out—that he should have reduced purchase tax instead of S.E.T.? Will he consider the use of the regulator so that purchase tax can come down and at least some of the hopes engendered by the Chief Secretary in the people of this country will be realised, if only in part?
I am aware of the higher prices which have been imposed on people, but at least this Government have not increased the burden by putting up taxes. We have made substantial reductions in taxation and my right hon. Friend has indicated again today that he is looking at the economy but is awaiting the results of the survey and will be prepared to act accordingly.
Post-War Credits
20.
asked the Chancellor of the Exchequer what estimate he has made of the cost of abolishing tax liability upon the repayment of post-war credits to pensioners who have paid all other taxes at the date of their retirement.
I assume that my hon. Friend is referring to cases where post-war credits are reduced because amounts of war-time tax were unpaid and remitted. To ignore these amounts would mean repaying tax which had never been paid: the cost of doing this is estimated to be about £5 million.
That reply reassures me, but does my hon. Friend accept that a lot of people feel bitter when they do not get the amount printed on their certificates? In view of the small amount involved, does not my hon. Friend feel that it would be a good thing to remove this liability?
I would find it difficult to agree with my hon. Friend on this. It was normal practice during and just after the war to warn taxpayers that the amount of their post-war credit would be reduced for tax unpaid and remitted. It is not possible to say that this was done in every case, but it was done in the great majority of cases.
Selective Employment Tax
21.
asked the Chancellor of the Exchequer what reductions in the cost of living are estimated to follow the reduction of selective employment tax for garages.
It is not possible to make a quantitative estimate of the effect the cut in S.E.T. paid by garages will have on the cost of living.
Is the hon. Gentleman aware that surveys carried out by newspapers of all political complexions show that there will be no significant reductions in prices and charges following the reduction in S.E.T.? Will the Chief Secretary look at prices and charges following this reduction, because he will find that neither competition nor the cut in S.E.T. has led to the reduction in prices or charges at a stroke?
The effect on garage costs is a cut of about £20 million a year as an element of cost which was imposed by the previous Administration. I have a large list of stores and other organisations which have effected price decreases, and I have no doubt that the reduction in S.E.T. will enable garages, among other organisations, to hold down their prices.
Some people can tell the Chief Secretary what to do with his list. Is he aware that a little earlier he told us that the full effect of the S.E.T. cut has not yet been felt? As he presumably has made an estimate of what the full effect will be, can he say what is his estimate and when it will be felt?
The hon. Gentleman may not be interested in prices coming down but we are. I merely suggested that since the halving of S.E.T. took place yesterday it was not reasonable to expect the full effects to be shown today.
Is my hon. Friend aware that some manufacturers are apparently putting pressure on retailers not to reduce their prices? Is my hon. Friend aware that I have a telegram from a constituent who says that retailers are not being allowed to pass on this benefit unless they put their prices up to the manufacturer's retail price? [HON. MEMBERS: "Oh!"] If I can produce evidence, will my hon. Friend promise that some action will be taken?
My hon. Friend seems to be describing a position which is illegal, following the Measure abolishing resale price maintenance piloted through the House by my right hon. Friend the Prime Minister. I would be grateful if he would inform me of the position so that appropriate action can be taken.
Unemployment, Trade And Price Index Statistics
23.
asked the Chancellor of the Exchequer if he will now make regular Ministerial broadcasts to explain the significance of the monthly unemployment, trade, and price index statistics.
No, Sir.
Does the right hon. Gentleman feel that he has a duty to explain to the British public in simple and non-technical language exactly why it is that month after month the unemployment figures have become more alarming while month after month the price increases have become more scandalous? If he cannot explain it, can he at least explain why he does not have a guilt complex about "conning" the British public?
We have only recently had a debate on the economy, when these various matters were discussed. The state of the economy is discussed regularly, both inside the House and in Ministerial speeches, and in addition, the Treasury publishes a monthly economic assessment in which the current economic situation is reviewed.
Has my right hon. Friend seen the statement by Mr. Reeves-Smith of the National Grocers' Federation in which he says that statements that the reduction of S.E.T. will significantly affect prices are totally misleading? Has he any comment to make on that?
I thought when I saw that comment that it would be interesting to see what the same Mr. Reeves-Smith said in 1966 when S.E.T. was first introduced to yield an amount approximately equal to the cut that I have made. He then made this observation:
I am sure that the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) would be the first to appreciate the significance of that."The average British housewife spends about £5 to £6 a week at the grocers. The tax could put 3s. 7d. a week on her bill."
Will the right hon. Gentleman tell us on how many occasions he quoted The Grocer with approval in the years to 18th June, 1970?
A quotation from the same Mr. Reeves-Smith is highly relevant, and I think again that the right hon. Gentleman will appreciate it because, after his Budget in 1968, the same Mr. Reeves-Smith said:
He might have added "at a stroke"."The Chancellor, by increasing S.E.T. and vehicle and petrol duties, has effectively determined that retail prices of food will rise dramatically."
If the right hon. Gentleman will not answer my right hon. Friend's Question, will he ask the grocer to answer it himself?
I can assure the right hon. Gentleman that Mr. Reeves-Smith has made a number of statements which would be equally unpalatable to the right hon. Gentleman. I was particularly taking care not to refer to The Grocer.
Company Liquidations (Departmental Co-Ordination)
Question No. Q1 to the Prime Minister—[Interruption.] Order. It is the convention of the House that when hon. Members have a Question to ask they rise to their feet.
I apologise for the discourtesy, Mr. Speaker.
Q1.
asked the Prime Minister if he is satisfied with the coordination between the Department of Trade and Industry, the Department of Employment and the Scottish Office in assessing the economic effects of company liquidations.
Yes, Sir.
Would the Prime Minister accept the view that the liquidation of U.C.S., which was threatened by the company in February, 1971, was avoided by the underwriting of guarantees by his Government and that the underwriting of the guarantees in February, 1971, was only given because the Government wanted to avoid the liquidation of U.C.S. and Rolls-Royce within a few days?
The arrangements which were made in February, 1971, were made because U.C.S. said that if these financial commitments were met, it would be a viable company. It was for that reason that we made financial resources available to Yarrow's, and also because it is a defence yard. This was not the situation on the last occasion in June.
Is the right hon. Gentleman telling the House that he always takes account of just what a company says it thinks about itself when he has at his disposal full reports of the company over a series of months? Is it not for him and his Department to judge from those reports and not from any statement which may be made by a director of the company?
The hon. Gentleman and his colleagues have been told the full facts of the situation and they must draw their own conclusions about the management of this company. The management of the company did not know the situation until 7th June, and it reported to the Government on 9th June. Indeed, it was only because the S.I.B. director on the board of U.C.S. had inquiries put in hand that the report was made to the company on 7th June. In 48 hours the Government were told.
Women And The Law
Q2.
asked the Prime Minister what further steps have now been taken to implement the remaining recommendations in the report of the committee of inquiry which examined the law as it relates to women.
New provisions for the attachment of earnings should lead to improvement in the enforcement of maintenance orders; and we are working also on improvements in the method of payment. The Law Reform (Miscellaneous Provisions) Act makes important changes in respect of widows' damages. The Finance Bill at present before Parliament contains provision that from 1972–73 onwards, if a married couple jointly so claim, the wife's earnings shall be charged to tax as if she were a single person.
Would not the right hon. Gentleman agree that last June he took advantage of the British woman? [AN HON. MEMBER: "Which one?"] Now she can see through him. Would he try to redeem his breach of promise to her by implementing all 34 recommendations in the report entitled "Fair Shares for the Fair Sex"?
I cannot accept the hon. Lady's contenton in the first part of her supplementary question in a general sense, but as far as the Cripps Committee is concerned we have already implemented about one-third of the recommendations which were made in that report, and some of the remaining recommendations are now being considered by the Law Commission and by the Committee on One-Parent Families. When they make their recommendations we shall be able to decide better whether to implement them or not.
Will my right hon. Friend always remember that many women in this country are very grateful that for the first time we have a Prime Minister who has been prepared to try to meet the legitimate demands of the women of the country?
I find myself in a somewhat embarrassing position between the two hon. Ladies.
European Economic Community
Q3.
asked the Prime Minister whether he now proposes to have a joint meeting with the Prime Ministers of Norway, Denmark and Eire about joining the Common Market.
There are frequent consultations, at both Ministerial and official level, between the United Kingdom and the other applicants for membership of the European Economic Community: but there are no plans for a meeting of the kind proposed by my hon. Friend.
As all three countries are to hold a referendum, could the Prime Minister possibly consider consulting the Norwegian Government which are to hold a consultative referendum not binding upon the Parliament and having nothing to do with the Norwegian constitution at all? Is he aware that if we had such a consultative referendum and a free vote in this House I think the public would be far happier about the whole thing and that it would take a lot of the party politics out of this very important national issue?
Each of these three countries takes its own decision as to parliamentary and other processes, and has done so, and respects the right of this Parliament to take its own decision.
In view of the development in Brussels which suggests that Norway may receive a special deal for fisheries, why does not the Prime Minister initiate joint talks with the Norwegian Government and the other applicant States to ensure that we get at least as good a deal on fisheries as they?
There have been discussions on this between the three Governments, and each Government have had consultations with the Commission and the Council of Ministers about it. One of the problems over fisheries is that the circumstances of the four countries are different and the existing laws of the four countries are different. I would not accept the hon. Member's conclusion which he has drawn from certain reports in the Press. This matter is due to be discussed further on 12th July.
If he should have such a meeting, will my right hon. Friend warn these Prime Ministers that, according to an anti-Marketeer on the other side of the House, one dread result of our entering the Common Market would be that we would have to eradicate from our hedgerows the male hop lest lightly, inadvisedly and wantonly he should impregnate the female hop and so encourage the continued production of British beer, which is said to be anathema to the anti-British bureaucrats in Brussels?
It may be the intention of some hon. Gentlemen opposite, but I cannot see that one hop would be very much good without the other.
Mr Smirnovsky (Talks)
Q4.
asked the Prime Minister if he will make a statement about his recent official discussions with Mr. Smirnovsky.
The Soviet Ambassador called on 17th June to convey a proposal for a conference of the five nuclear Powers. As my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs told the House on 21st June, we are studying this proposal carefully, and would wish to be represented at any such conference.
I am very glad to hear it. Presumably that means we would accept such an invitation?
indicated assent.
Will the British Government now propose the ending of all underground tests, since some inhibition by the nuclear Powers was implicit in the non-proliferation agreement?
Obviously, if there were to be such a conference this would be one of the matters discussed. I think the hon. Member is well aware of the problem which arose when the negotiation of the partial test ban treaty was going on. As I have said, if there is such a conference we shall wish to be represented. There are certain problems which have to be examined by all the countries concerned as to the general relation of such a conference to the general disarmament conference and also to the Strategic Arms Limitation Talks going on at the moment. These are matters we are now exploring.
Ministers (Deputations)
Q5.
asked the Prime Minister if he will initiate inquiries into the number of occasions in the last 12 months on which Departmental Ministers have refused to meet hon. Members leading deputations of their constituents on matters of urgent concern for which Her Majesty's Government are responsible.
No, Sir. My right hon. and hon. Friends receive large numbers of such deputations, but it is for the individual Minister to decide whether or not he should receive a particular deputation.
Is the Prime Minister aware of the experiment, unique in the United Kingdom, going on in Glenrothes New Town in Fife in so far as employers, representatives of the trade unions, the Development Corporation itself, and the Member of Parliament are undertaking quarterly meetings to discuss the economic problems of the new town, and that the last meeting unanimously agreed that representations should be made asking the Secretary of State to receive a deputation to discuss these matters and that it was led by myself and that the Secretary of State refused? Is the right hon. Gentleman aware that it was only after further representations that the Under-Secretary of State suddenly found that he had a date in August when he might be in Glenrothes, and that that is why the meeting has been arranged? Will the right hon. Gentleman undertake to issue an instruction to all his Ministers that when Members of this House ask to meet Ministers all efforts should be made to accede to such a request?
It is not necessary for me to issue instructions to that effect because my colleagues make every effort to meet deputations led by Members of the House. I am not prepared to issue an instruction saying that every request so made must be met, but Ministers try to meet them. I realise the importance of the experiment in Glenrothes which the hon. Member has described. My right hon. Friend the Secretary of State for Scotland has been fully informed about it both by the Corporation and by the hon. Member. My hon. Friend the Under-Secretary for Development, Scottish Office has offered to meet them on 17th August, and I have no doubt that the hon. Member for Fife, West (Mr. William Hamilton) will reply as soon as he thinks it appropriate.
Is the right hon. Gentleman aware that there is very much concern about unemployment in Scotland and that there is a feeling, rightly or wrongly, that there is a growing unwillingness in the Scottish Office to meet delegations? I have had occasion myself, in respect of unemployment, to lead a deputation from Kilmarnock and the Irvine Valley towns and was refused.
I do not think the right hon. Gentleman is being quite fair in that accusation because my right hon. Friend the Secretary of State has met many deputations. As for those organisations which are representative of Scotland as a whole, and the major cities, I have always been prepared to meet them myself. The right hon. Gentleman will know that I received the Scottish T.U.C., and. more recently, the Lord Provost of Glasgow and his colleagues, who asked to see me, and also the shop stewards at U.C.S. who came asking to see me. I think that, on reflection, the right hon. Gentleman will feel that his statement was not entirely fair.
Is the Prime Minister aware that very often when hon. Members are successful in getting meetings with Ministers they are referred to junior Ministers, and that junior Ministers, however sympathetic they may be to the case made out, are unable to make a decision because of their lack of authority, the result being that the Minister in charge has to make a decision without hearing the case?
I do not think I can accept that, either. One of the developments in government of the last 10 or 15 years has been that junior Ministers have had specific tasks allocated to them. Administrations of both parties have found it impossible to continue government, especially with the large Departments now being created, if only one Minister at the top has to see everyone, answer every question at every debate in the House, and deal with every single issue. I though it was the general wish that Ministers other than Secretaries of State should have specific responsibilities and be able to deal directly with hon. Members.
Welsh Affairs
Ordered,
That the consultative document "The Reform of Local Government in Wales", being a matter relating exclusively to Wales and Monmouthshire, be referred to the Welsh Grand Committee for their consideration.—[Mr. Whitelaw.]
Orders Of The Day
Finance Bill
Not amended (in the Committee) and as amended (in the Standing Committee), further considered.
New Clause 29
Disabled Passengers
A mechanically propelled vehicle fitted with controls enabling it to be driven by persons having a particular disability or a vehicle specifically and extensively adapted for use by persons having a particular disability that so incapacitates them in the use of their limbs that they have to be driven and cared for by a full-time constant attendant and registered in the name of such a disabled person under the Vehicles (Excise) Act 1962 shall not be chargeable with any duty under that Act by reason of its use by or for the purposes of that disabled person or by reason of its being kept for such use where—
and where regulations under section 16(3) of that Act requires a person to furnish particulars as to a vehicle exempted from duty by this section, they may require him to furnish in addition such evidence of the facts giving rise to the exemption as it is prescribed by the regulations.—[ Mr. Marten.]
Brought up, and read the First time.
3.31 p.m.
I beg to move, That the Clause be read a Second time.
I suggest that it will be for the convenience of the House also to discuss new Clause 46 (Exemption from vehicle excise duty used by husband or wife of disabled person).
As can be seen from the list of hon. Members sponsoring the new Clause, it is a non-party or all-party proposal.
On Saturday, I was playing cricket all day, not very well. On Sunday, I played six sets of tennis, not so well. I make that point because it is when one has done that over a weekend that one counts one's blessings. We hope that a Clause such as this will have an effect upon the Government Front Bench and get them in the end to change the attitude that the Treasury has always taken to this very limited subject which we as an all-party group are trying to put right. There have been similar Clauses moved in this House before. On 16th July, 1969, there was an excellent speech on this subject, and it sums up exactly what we feel and exactly what we want. I do not wish to take up the time of the House. For that reason, it may be convenient if I make some pretty free quotations from that speech, which says it all so well and so movingly. At the end of my quotations, I shall reveal who made the speech."The objective of the Clause is to grant road tax exemption to certain rather limited classes of severely disabled persons and to lessen the burden on such persons, many of whom are now totally immobile because of the difficulties with which they are especially faced.
I hope that my right hon. and hon. Friends on the Treasury bench have hoisted in that last point.The people to whom this applies are those whose mobility is dependent on travelling as passengers in private transport. We are, therefore, concerned here with a relatively small number of people and the cost is likely to be very small."
"The wording of the new Clause would strictly limit the number of persons to whom it could be applied for two reasons. The first is for ease of administration and definition and the second is to make it clear that there can be no increase to potential costs through abuse, through creating precedents, or through any form of escalation.
The limitation is twofold. We ask this "Concession only for people who fulfil two conditions. The first is that they are so severely disabled as to be unable to use an invalid carriage to which they would otherwise be entitled. This means that, by definition, they cannot use public transport. The second condition is that the vehicle for which we are seeking road tax exemption, in which they are to travel as passengers, should be so adapted for disabled persons as to be completely identifiable. This means that it has to have a hoist for a wheelchair or other form of extensive alteration which is already a criterion.
We seek this exemption because, among all those who have the misfortunate to be physically or mentally disabled, these are people for whom nothing has as yet been done to help or encourage or enable them to leave their own homes. They are not a large group. It is estimated that between 1,000 and 1,250 would be directly affected by the Clause. The estimated cost is between £25,000 and £30,000 in a year. But the concession would give a great deal of benefit and remove a serious anomaly, because these people cannot use any form of public transport, such as a ship, train or aircraft, without first having to use private transport to get there from their homes, and they are by definition unable to use an invalid carriage. They are equally obviously unable to use a bus, tube or any other kind of local public transport. They are, therefore, dependent entirely on their own resources as passengers.
Secondly, they are the only people among the disabled who get no help for any form of outdoor mobility—the others getting help with the servicing of invalid cars, and so on. The new Clause would only partly reduce the anomaly—an anomaly whereby the State gives help to the disabled man to get himself out of doors if he can drive an invalid carriage himself, but not to those more severely disabled who cannot drive themselves.
This is a ludicrous anomaly in some ways and one which could be eliminated without very much increase in cost to the State. The costs to the individual are now very high. With purchase tax at over 36 per cent. on vehicles, 4s. 6d. tax on petrol and the road fund tax at £25 it is possible for a disabled person in this sort of category to be paying in tax now between £100 and £110 a year to remain mobile. We are asking that part of the costs—the vehicle licence duty—should be removed from them.
A little later, it continues:What about the cost of such concessions? The Joint Committee on the Mobility of the Disabled has made an elaborate calculation indicating that the persons who would be affected by the limited concessions sought … would number between 1,000 and 1,250. I will not weary the Committee with all the details of these calculations, which seem to have been done with scrupulosity and conservatism as to the numbers."
"The disabled passengers for whom we are seeking this exemption are not difficult to identify. The same procedure could be applied as is applied to invalid tricycles. The disabled passengers could satisfy the conditions which they now have to satisfy, and administratively it is not difficult to identify the individuals concerned.
Then I skip a bit and finish off with these words:If the concession is, as we suggest, limited to specially and conspicuously adapted vehicles, those, for example, fitted with car top hoists or van conversions enabling a disabled person to enter the vehicle while still in a wheelchair, there is no chance of abuse, as the vehicle is easily recognised. It is even easier than most such concessions to police, since only two or three firms in the country are capable of undertaking such conversions. So there are no difficulties either in identifying those who are entitled to the concession or in policing the vehicles."
"Those people, of all people, are in a difficult situation. They cannot go out alone. The mere fact that they require constant attendance could be another way of policing this. It could be a condition of road tax exemption that the vehicle is insured for one driver only and that driver a full-time attendant of the disabled person.
That was a very long quotation from the speech of the present Chief Secretary to the Treasury. It was, in fact, the speech which I would have made that year. It is, I think, just, right and appropriate that I should quote that speech fairly fully to show what less than two years ago the Chief Secretary, who is not present at the moment, felt about the matter. I should like now to make one short quotation from the speech of my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin), now the Financial Secretary to the Treasury, who regrettably also is not present. He said:I see no reason why the Government should not accept the Amendment. I hope that the Financial Secretary will tell us that this is what he intends to do. He will be creating no precedent, and he will be helping a small number of people who are badly in need of help. He will be acting in a merciful, compassionate way at no cost to himself, the Government or the future. If he shows himself markedly reluctant, I shall ask the House to take this matter to a vote."
Need I say any more than those two excellent speeches, made less than two years ago by the two Treasury Ministers who are in charge of this matter? I think that at this stage I should sit down in the hope that they will now honour what they then said."The Amendment, moved by my hon. Friend the Member for Farnham (Mr. Maurice Macmillan) and supported by hon. Members on both sides, is a modest one. The Financial Secretary has not made what we regard as a wholly convincing case, and we therefore think that it would be right to divide in favour of the new Clause."—[OFFICIAL REPORT, 16th July, 1969; Vol. 787, c. 624–44.]
3.45 p.m.
I have played some part in supporting the hon. Member for Banbury (Mr. Marten) and my hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris) in this matter. First, I pay tribute to them personally for what they have done. A good deal is achieved only by the dedication of individuals to specific objectives. I hope that the hon. Member for Banbury and my hon. Friend the Member for Wythenshawe will succeed on this occasion. If not, I am sure that they will eventually succeed.
It is a misfortune that the party government of the House precludes decisions of this kind being taken opportunely. I am sure that on a free vote the whole House would wish to accept the new Clause. The House should realise that by acting in this present way it is not serving the public interest; it is serving a bureaucratic interest. I think that the bureaucracy should be brought before the Bar of the House and made accountable to it. The hon. Member for Banbury has been particularly modest. I think the argument is overwhelmingly in favour of acceptance of the new Clause. This, however, will not encourage me to prolong the debate unduly, but it is a pity that we cannot incorporate into the record statements of interested parties. I have before me, as I am sure the Minister has, the statement of the Joint Committee on Mobility for the Disabled. This makes an unanswerable case for acceptance of the new Clause. 4.45 p.m. We should realise the new Clause is concerned and that we are concerned with people who are so disabled that they cannot drive their own vehicles and must have drivers. These people have to rely on others to drive their vehicles for them. I know that the bureaucrats can make out the case that as this proposed provision is particularly open to evasion, someone may use the vehicle on occasions when the disabled person is not a passenger. This is not an argument which we can accept. More or less everything is open to evasion by people who are particularly anxious and determined to evade. We must strike a balance here and I should think that the overwhelming balance of advantage is in favour of the disabled person. In paragraph 8 of the document to which I have referred, the Joint Committee states:This is the case which the House puts before the Front Bench. I say this without any party political bias, because the Minister can point out that his predecessors have previously rejected this proposal. In terms of cost, it is a small anomaly which the hon. Gentleman is asked to rectify. It will not cost very much. I concede that there is a small risk of evasion. I confess that a few days ago my daughter converted a van into a caravan. This was accepted by the Customs and Excise. However, I concede that there is some risk of evasion. Overall, one has to judge the balance of advantage. Here the balance of advantage in favour of the disabled is overwhelmingly greater. I would far rather a few people might evade the law than that these people, to whom we owe a great obligation, should suffer this disadvantage. I hope that on this occasion we shall be successful. If not, we shall continue to pursue the matter as Finance Bill follows Finance Bill and eventually we shall succeed. Despite the argument which can be made against the proposal, that it is open to possible evasion, I hope that on this occasion we shall be successful. I hope that as the hon. Member for Ban-bury is now on the Government benches he will reap his reward."It is patently unjust that, through increasing physical disability alone, a disabled person can lose not only the ability to drive, with the consequent loss of freedom, but also lose all financial benefits he or she may have enjoyed as a disabled driver. The cruel anomaly whereby an increase in physical disablement results in decreasing help from the community must be corrected."
I should like to add my support to the case which has been so admirably expressed by my hon. Friend the Member for Banbury (Mr. Marten) and by the right hon. Member for Sunderland, North (Mr. Willey).
It is time that a democratic Parliament put first the case for the individuals who require this new Clause to be carried rather than the financial aspects in cases of evasion. I think that people count more than the House of Commons sometimes gives credit for. I therefore think that the new Clause is most important. I do not know quite what words to use, but it goes against the grain when the then Opposition argue a case and then change their mind when they become the Government of the day. If there is a case to argue fairly, and it is argued in the way that this one has been in the past, I cannot believe that the Government—any Government—are entitled to use the arguments that were used on previous occasions to defeat similar Clauses. I think that to do so is alien to the British character. The same sort of thing happened yesterday when we were discussing lifeboat men, and I took great exception to it. My hon. Friends on the Front Bench are men of great integrity, and I am sure that they will accept what I am saying. It is not right to make a speech in Opposition and then change one's views on becoming a member of the Government. Men of great responsibility, as they must be if they are on the Government Front Bench, be it a Conservative or a Socialist Government, have sufficient knowledge to know what is involved. They do not need to be told. They know because the administration of Government makes them fully aware of the facts. They know, because they have to carry the responsibility of Front Bench administration. When my hon. Friends were in Opposition they must have known the case that was going to be made against them. I do not care a hoot for the case against the Clause. I only know that it ought to be accepted, and I cannot think what I shall do or say if it is not. I have the greatest pleasure in supporting the Clause, and I am grateful to my hon. Friend for putting it forward. I cannot believe that my Front Bench will turn it down.I should like, first, to congratulate the hon. Member for Banbury (Mr. Marten) on the overwhelming and outstanding case that he has made for the acceptance of the Clause. He has made such a devastating case that it is hardly necessary for others to speak in support of it. Nevertheless, I believe that many hon. Members know from their experience that this problem, though small in numbers, is very real to those affected, and I sincerely hope that if the Clause goes to a Division it will be overwhelmingly carried.
The reason why I have decided to take part in the debate is that there is someone in my constituency who will benefit from the Clause being accepted. His is a very sad case, indeed, and because it is so sad I shall relate it. He is a young man aged 22, with many years of life before him. He went on holiday to the seaside, and while there he dived into the sea and broke his back, with the result that he is now completely paralysed. He will never walk again. He can hardly move in his chair. His parents are not rich—in fact, they are rather poor—but they have done their utmost to provide transport for him, and I am glad to be able to say that with the assistance of his former employers and friends he has been able to get some form of transport. The fact remains, however, that the tax on his transport is an additional burden on the parents and those who wish to assist. I do not think that they should be asked to bear that burden. There is a further point to remember. The adaptation of the special vehicles—and this was referred to by the hon. Member for Banbury—is very expensive indeed. I have seen one of these adaptations taking place, and I know that over a period of time any assistance that we could give by way of relief of tax towards the conversion of suitable vehicles would, indeed, be welcomed. Most of us in this House, and most people outside, enjoy reasonable health. We all know what a joy it is to be able to go out on a Sunday and play cricket or tennis. We know how marvellous it is to be able to go into the countryside and breathe the sweet and pure air which is so absent from our cities. Is it not our duty, as Members of this House—and would not people outside be with us if we were to do this—to say that every facility that we can possibly grant should be made available to people like my constituent to enable them to enjoy at least the fresh air of our beautiful and pleasant land? There is far too much bureaucracy in this country, and in many others, too. There are too many accountants looking at the books. There are too many people who judge everything in money terms. There are too few people with sheer commonsense and a little humanity. I submit that all we need is a little commonsense, a little humanity and perhaps, I was going to say a little more courage, from Ministers, but I had better not prejudge them, because they may say, "Well, chaps, this is an excellent idea. We said certain things while in Opposition, and as men of honour we shall translate them into action". I hope that Ministers will have the strength to stand up to the bureaucrats and say, "We are going to support the Clause because we believe that it is in the interests of common sense, in the interests of humanity, and in the interests of giving those less fortunate than ourselves some little extra relief".I earnestly hope that the Government will accept the Clause, for the reasons which have already been put forward, to which I have one further to add. The case in terms of compassion and humanity is so obvious that it hardly needs to be restated. It has been abundantly put forward already. The case in terms of logic was very clearly put by the right hon. Member for Sunderland, North (Mr. Willey) and my hon. Friend the Member for Tynemouth (Dame Irene Ward), and I need not add to what they said, but I should like to say something by way of economic argument in support of the Clause.
I should like to consider one example where it is possible to make a fairly precise calculation of the economic consequences to an individual of accepting the Clause. Among the cases that have been circulated to many hon. Members by the Joint Committee on Mobility for the Disabled, there is the case of a man who has been suffering from multiple sclerosis for about 10 years. Three years ago, having, presumably, been able to drive himself up to that time, he was forced to give up driving, and he has been in a wheel chair ever since. He has a wife and two daughters at school. 4.0 p.m. When this man was able to get about and go to work and his wife was able to go to work, between them they earned about £40 a week, on which they no doubt paid tax. They must now live on a total of less than £15 a week derived from sickness benefit, family allowance, and so on. When one adds to that £15 which is drawn entirely from public funds the tax which was previously paid on their joint income, the cost to public funds of keeping the man in idleness is about £1,000 a year. He is in this way being subsidised from what he doubtless regards as charity to do nothing, instead of being enabled to get out and earn his living and instead of his wife also being able to earn her living, which she can no longer do because she must stay permanently at home to look after him. This is one case where £1,000 a year in public funds goes to a man and his wife who are capable of earning their living, in return for their doing nothing. I do not know how many such cases there are. We are told that between 1,000 and 1,250 disabled people would benefit from the Clause. It is inconceivable that there are not at least 25, 30, 40 or 50 people in a very similar situation who are being subsidised from public funds at the rate of £1,000 a year to do nothing instead of being enabled to earn their living. We are told also that the total cost of the concession asked for by the Clause would be between £25,000 and under £40,000 a year. In other words, there need be only 30 or 40 cases such as I have described to wipe out the cost to the Exchequer of granting the concession. This is a simple example. I have no doubt that many others could be given. I turn from a purely economic argument which is unanswerable to an argument in human terms. My constituency has perhaps a higher proportion of disabled people than many other parts of the country, because the hospital and rehabilitation centres in Oxford are so exceptionally good that they attract large numbers of disabled citizens. I do not know any of these disabled people who would not put as their first priority being able to get out to earn their own living and to live as nearly as possible a normal life and not feel that they are a burden on the community. It is for this reason, as well as for reasons of logic and economics, that I earnestly press my hon. Friends on the Front Bench to accept the Clause.The question of transport for cripples has been near to mv heart for many years. I have interviewed on this subject every Minister of Health since Iain Macleod in 1951. Always one gets the answer as to the technical difficulties. The Clause touches only a very small fringe of the problem, but it is none the less a right one.
My interest is based upon what I believe to be the fundamental principle of Socialism and it may be of Christianity, too—from each according to his capacity to each according to his need. I can conceive of no greater need than the man who cannot walk having a means to enable him to move, to enable him to live, to enable him to earn his living. Now we are being asked to tax these substitute legs. It is an indecent tax for any community to levy. The State is taxing these cripples for that which is utterly necessary to them. This is indecent. It is not because we need the money. The amount of money involved is trivial. It is because there are administrative difficulties in making this exception and because, if we are just here, we might have to be just somewhere else. This always seems to be the most contemptible and also the most usual excuse of bureaucracy, that being just in one area might open a door which would involve one having to be just somewhere else. I do not mind if that happens. There may be technical objections to the Clause. I think that it is well drafted, and I heartily congratulate the hon. Member for Banbury (Mr. Marten) on having produced it. None the less, drafting is the business of Government. If the Government think that they can draft a better Clause, good luck to them. At least let them say as a matter of principle, "We will do what in Opposition we said that we would do. We will stop this indecency of taxing cripples on their injury and on their helplessness". Imposing and continuing this tax is something which no Government can decently do. However difficult it may be for our bureaucrats, this is a small thing which we can put and end to.I can add little to the eloquent and moving things which have been said on both sides. The hallmark of strong government is sensitivity, flexibility and an ability to stand up to those who issue briefs marked "resist".
I hope that we shall take a small but significant step towards the establishment of the just society which we all believe is necessary by supporting the Clause. The Government have singled out many categories of people who are in special need. I believe that they have made significant developments in these directions. This is another development which the Government must make. The numbers are few. The amount of money is negligible. The need of these people is enormous. The Minister has it in his power to come to their aid today. Unless he can do so by supporting the Clause—by accepting it wholeheartedly, or by producing a good alternative remedy of his own—I, for one, will find it impossible to support the Government in the Lobbies.I heartily agree with what the hon. Member for Cannock (Mr. Cormack) has said. We recognise that when parties move from Opposition into Government there are cases when, faced with the responsibility of government, Ministers have to express views which were previously expressed by their opposite numbers. This is to some extent inevitable and justifiable, but not in the present case.
On a free vote the Clause will command the support of all hon. Members. It would be a gross abuse of our party system for the Whips to be so applied as to compel hon. Members to vote against their conscience on a matter like this. There is no great issue of party contention here, and there would be no great cost to the Government. Only a very small improvement is asked for, but it would be thoroughly worth while. My only doubt is whether the new Clause is too limited and restrictive. I can envisage cases which might be excluded. Perhaps the Minister may take up that point and say that the fact that some cases might be left out is an illustration of the argument that a concession such as this could give rise to fresh anomalies. Perhaps it could, but, as my hon. and learned Friend the Member for Northampton (Mr. Paget) said, if other injustices, unfairnesses and needs are disclosed as we make this small but worthwhile advance, so much the better. Let us at a later date look at them also and see what can be done in their case, too. For heaven's sake, let us not deprive the people concerned of the real benefit which would flow from the new Clause simply on the argument that wider needs might be disclosed. We have seen the way our social services have developed. Every advance in our social services reveals more of the iceberg beneath the surface. But this is no argument against advance. On the contrary. It is further evidence of the need to continue to advance. All of us, I am sure, either from our personal experience or our experience as Members of Parliament dealing with the problems of constituents, have come across cases of need, for example, people suffering from multiple sclerosis or other progressive diseases who at first are able to drive but who, as time goes on and the disease inexorably develops, are no longer capable of driving and who are then condemned, if their means are slender, to stay at home, their horizons limited by the garden wall, or not even that if they live in a city centre. If the new Clause were adopted, such a person would be enabled that much more easily to spend his or her remaining years able to enjoy the benefits or the countryside, of travel, and, what is more, of access to the welfare services which the nation provides. It is utterly wrong that anyone such as a constituent whom I have in mind, a severely disabled girl, should be confined to one visit a week, or sometimes even less, to the local welfare centre because she is not able to drive herself. The facilities are there, they are not overcrowded, and she would be perfectly acceptable on many other occasions, but the local authority cannot provide the transport more than once a week or once a fortnight. The door to those facilities would be opened to such people by the new Clause. I am a little concerned about one phrase in the Clause, the reference to "full-time constant attendant". I hope that this would not exclude parents, or husband or wife, as the case may be, for they would clearly be full-time constant attendants. If the new Clause is taken up, it should be made clear that a member of the family will be so regarded. The cost to the public purse would be negligible, so much so that it is difficult to calculate. The Clause is limited in its application, and it could not be said to open the door to a flood of similar applications. It may, as I said, disclose the need to extend its provisions further, but, even so, the commitment would be strictly limited. The Clause commands the sympathy and support of all right hon. and hon. Members, including, I hope, those on the Government Front Bench.4.15 p.m.
I wholeheartedly support the new Clause, which has been so ably and lucidly presented and expounded by hon. Members on both sides. One is always deeply impressed by the sincerity which one senses in the House in debates on disablement. It has been that sincerity and the force of the cases presented which have in recent years led to the progress which we have made in care for the disabled.
The new Clause represents another vital step forward. Mobility has for many years been accepted as an important social factor in the lives of the disabled. Since 1964, when exemption from vehicle excise duty was first granted to disabled drivers, there has been a constant battle to fulfil this worthy social objective by extending the exemption to those too disabled to drive themselves or so severely disabled as to require help and attendance. These disabled passengers are desperately hampered in their attempts to live an independent life. Their work opportunities are rare. There is high unemployment among the disabled. Public transport is not designed to assist them to any great extent. If they wish to attend interviews for jobs or to travel to office or place of work, a vehicle or a driver is essential. Social and family life is severely restricted for them. Unless they can afford to run their own vehicles, the impromptu visit to friends or relatives or to the cinema or an evening concert is not possible. The difficulties facing the disabled family man or woman with children are so great that the quality of their family life is threatened. No one can deny the need for as much assistance as possible for these people who, because they are too handicapped to drive, do not receive the concessions which are given to others who can drive and who are, therefore, eligible for the free invalid tricycle with free insurance, vehicle excise licence and petrol allowance or for a grant towards the cost of converting an ordinary car. The disabled person who cannot drive becomes less and less mobile. The concessions and help are removed, and his or her mobility is again sharply reduced. The disabled driver, regardless of income, can have a grant of £90 to convert the controls of a car and he has a tax exemption of about £25 a year. The disabled passenger, on the other hand, perhaps suffering a worse handicap, has to adapt a vehicle so that he or she may travel as a passenger but receives no grant and no exemption from road fund tax. The cost to the Exchequer would not be substantial—perhaps £30,000 or £40,000 in lost revenue—but the gain to the 1,500 or 2,000 people concerned would be enormous. Their motoring costs would be sharply reduced, and a wider and more independent home life would ensue. I sincerely hope that the new Clause, which meets a social objective which both sides of the House wish to see achieved, will receive favourable consideration from the Government.This is one of those rare parliamentary occasions when there is a general consensus in this House to do something sensible by putting on the Statute Book a small reform at low cost which will give a great deal of happiness to a small proportion of our fellow citizens who are suffering great disability. I hope that the appeals made from both sides of the House will not fall on stony ground.
I have been long enough in the House to know that there are many occasions when it cannot be laid at the door of politicians that a certain course has not been taken. It is often the conflict of party positioning which is at the root of some of our failures in this House. I will not go into that matter in detail, but I will say a word or two about bureaucracy. We all know that behind the scenes we are served by some excellent people. In all the public departments there are highly qualified experts in this or that discipline, but they carry out their official functions in the most cautious manner. There is sometimes a feeling in the House that because something is not done, it is not because of any objection by the Minister who is answering at the Box on behalf of his Department, but because of the ultra caution of the bureaucrat who fears that abuse will creep in if the House gives authority for a departure of this kind. I will not make too much of that matter in this short debate, but I appeal to the hon. Gentlemen who are on the Front Bench to look carefully at the question of the disabled being assisted by motor traction. This proposal seeks a small concession which will go beyond the concessions which have already been granted, We know that at the moment one department of State deals with the needs of the disabled war service pensioners who are suffering certain degrees of disability. Their disability is measured by how many inches of a particular limb have been severed, and all this is laid down in orders and regulations. I have always contended that such regulations are too narrow and that their administration is too inflexible. I appreciate that an unqualified discretion in the hands of the Minister can be dangerous, and I would much prefer to see these matters set out in a statute to give them firm authority. Perhaps it will help if I cite a particular case. There is provision for small motorised vehicles to be given to severely disabled ex-Servicemen, but the regulations are so tightly drawn that it is impossible to extend the benefit to people who ought to enjoy it. There are other circumstances, on which I have been in correspondence with the Department, in which a married couple are both severely disabled. The question arises whether a vehicle should be provided to cater for both their needs. Unless both parties to the marriage carry the same degree of technical disability as closely defined in the regulations, they cannot have a two-seater vehicle and therefore the one partner cannot accompany the other when the vehicle is used. This may be only a marginal case, but this reinforces my view that the regulations which relate to concessions available for disabled persons are too tightly drawn and ought to be considerably loosened. This Clause is an attempt to do that and I add my congratulations to those hon. Members who have had the enterprise to table this proposal. In these days it is not so much a matter of public funds as a matter of the flexibility with which the system is operated. If the matter were a little more flexible, it may mean that somebody who finds himself in such a situation may be enabled to lead a more useful and fuller life if he or she is given the chance. Certainly when some 52 per cent. of all families in Britain have at least one motor car, it is particularly humiliating to the disabled to find that they cannot have facilities comparable to those possessed by their neighbours who enjoy their full faculties. Therefore, this Clause is a step in the right direction and is based on the strongest humanitarian principles. I hope that the hon. Gentlemen on the Government Front Bench, despite what is marked on briefs emanating from the Treasury which say "Resist this" or "Do not give way on that", and so on, will continue to control their own machine and will not let the Treasury machine control them. There is abundant evidence that it is the feeling of the House that in this affluent society there should be a greater liberalisation to bridge the gulf which exists between those who are suffering serious disablement and the rest of the population. This can be done in this small way by enabling such people to have the assistance of motor vehicles to enable them to cope more easily with their disability. Therefore, I add my small voice to those pleas which have already been advanced. I ask that we should break with tradition to the extent that, on a matter which is not of world-shaking importance in regard to any loss of revenue to the Treasury and which would enhance the prestige of Ministers, the hon. Gentleman who is to reply will have the courage to stand at the Dispatch Box and to say that, in response to the feeling of the House, he is prepared, if not to accept this precise Clause, to put forward an Amendment to give us what we ask.I congratulate my hon. Friend the Member for Banbury (Mr. Marten) and I would also pay tribute to the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) for the tremendous work they have done for the disabled. We are this afternoon dealing with an all-party matter, and the Joint Committee on Mobility for the Disabled should be congratulated in the way in which it has put forward a logical case. It so happens that the chairman of the Joint Committee is a constituent of mine.
It rather appears that in these sort of debates we play a game of charades. It depends upon the clothes we are wearing, or indeed on the side of the House on which we sit, as to whether we support a particular item. What we propose when in Opposition it appears we reject when in Government. This applies to Governments of both political persuasions who have both been at fault in not taking the opportunity to put right this anomaly. One must look at this matter from the point of view of the disabled. Such people because of their disability do not necessarily want to mix; they are rather frightened by their disability. Therefore, it is incumbent on everybody, including the Government, to do all we can to help. Since the cost is so low and will amount to some £30,000 or £40,000, this is surely a step which can be taken; I am sure that this proposal would be agreed to if it were put to a free vote. I am sure that my hon. Friends on the Front Bench in their heart of hearts know that this is an anomaly which should be remedied. There is a special allowance for the blind, and I do not see why this idea cannot be extended. There is an anomaly in that the partially disabled are able to drive a vehicle, but the severely disabled who cannot drive a vehicle receive no benefit at all. The Minister in winding up no doubt will say that he does not wish to deal with the matter in a piecemeal fashion, and after he has replied we all know that nothing more will happen. Surely in such a case as this we must firmly grasp the nettle. This is an anomaly and it may open the floodgates to evasion, but it should not be beyond the wit of the Inland Revenue or the Treasury to make regulations to overcome evasion. 4.30 p.m. I hope that the Minister of State will not say that this should be dealt with globally or that we should consider the possibility of evasion. On humanitarian and even economic grounds, it is ludi- crous that this small percentage of people should be forced to stay at home, as a charge on the State, because they have no mobility. It is better to give them the confidence which they have lost, and the opportunity to mix in the world and get a part-time job. I hope that my hon. Friend will realise the strength of feeling on this small Amendment and that it will be accepted in the spirit in which it was moved.My only criticism of the new Clause is that it does not go far enough, but we all recognise the difficulties in trying to extend the aid for the disabled. I pay tribute to the sponsors of the Amendment because it recognises the dignity of disabled people—something which has been ignored for far too long—and their right to independence. Independence and the ability to participate in the social life of the community are essential parts of the treatment required by the disabled. This may mean that the community will save money in the long term.
Only those who have been house-bound appreciate the problems involved for a disabled person and his family. There is a great deal of truth in the saying, "Show me a disabled person and I will show you a deprived family". If we can help to offset this kind of situation, we should do so. I hope that the Government will note the sincere and non-political views expressed by those with personal experience of the hardship cases involved. A community can be judged not only by how it caters for its aged and its young, but also by the way in which it caters for those who are less fortunate. If the Amendment assists these people, their families and the community it will have rendered a service of which we can be proud. I hope that the Government will not expect their own members to oppose a genuine and sincere attempt to provide a better life for those who, in the past, have been considerably ignored not only by the House but by the nation.I support my hon. Friend the Member for Banbury (Mr. Marten). He and others have already made out such a powerful case that there is very little more to say in justification. We know that some of my hon. Friends who are now on the Treasury Bench have previously expounded similar views, so the argument is already well known to them.
The right hon. Member for Sunderland, North (Mr. Willey) said that if there were a free vote there was little doubt that the new Clause would be accepted. It is to the credit of outside organisations and hon. Members who are particularly concerned with promoting the interests of the disabled that this process has gone on free of party political warfare. We all have the common interest of doing our utmost to help the disabled. We have all welcomed the new benefits introduced by this Government and their predecessor for the disabled. Many of us are impatient that we have not gone far and fast enough. This is a comparatively modest proposal affecting a comparatively small number of people—but for those people the benefit of the independence, dignity and opportunity for work which will be given by the new Clause is absolutely fundamental. I hope that my hon. Friends will appreciate the genuineness of feeling and will be able to respond sympathetically.Perhaps it is because I am a comparatively new Member that I am so unused to such agreement on both sides of the House, but I am glad that it is shown in such a worthy cause. I hope that this strong feeling will affect the Government Front Bench.
I hope that the Government will somehow signal their acceptance of the new Clause, but if there is to be a vote I hope that it is a little time coming, because, unfortunately, I am paired and I would not break the honour of that pair. I feel so strongly on this issue that I want to speak, but I cannot vote, although I want to vote. I hope that the debate will continue or that the Government will signal their acceptance. This must be very difficult for the Government, because their hon. Friends have expressed the matter so much better than I can express it. I wonder whether the Government have ever seen a person living as a cabbage. I often saw elderly folk in this condition before I became a Member of Parliament as well as after. They can hardly move around the room and their life is confined to four walls. It is a great joy for them to reach the window and see the traffic passing or children playing. Their only hope of enjoying a slightly fuller life is to be helped by somebody to see what is going on in the big world outside. I trust that the Minister will make this concession and avoid my having to describe it as the "hard" world outside. I urge him not to niggle over the small cost that this proposal would involve. I have no doubt that the Minister will say that to make this concession would cause a precedent. I see nothing wrong with that if, by establishing a precedent, we can begin to sweep away some of the hardship that is faced by the chronically disabled. We glibly vote millions of £s for the building of weapons of destruction. This concession would cost only a tiny amount of the cost of building a warship or warplane. Are we more concerned to destroy or preserve life—or, in this case, to bring a little succour to those who are least able to provide for themselves? Hon. Gentlemen opposite may think that I am making an impassioned plea. I am, not just because financial people are tough nuts to crack but because this is a subject on which I feel emotional. If I thought that it would serve any useful purpose, I would beg for this worthy cause. In an age of computers and space travel, it should not be beyond the comprehension of the gentlemen who serve the Government in the Civil Service to find a way of administering this proposal which would ensure that only the minimum of abuse occurred. 4.45 p.m. In the 12 months or so that I have been in this House, I have seen measures taken which were capable of being abused. The Government have insisted on those measures being implemented, and the civil servants have had to find ways of avoiding the abuses which could arise. I appreciate that we must watch the taxpayers' money. We are all taxpayers. In this case, however, abuse is unlikely, and if it were to occur it would be on such a small scale that it would not present a balance of payments problem or create an economic disaster. As with other hon. Members, cases of this kind are regularly brought to my political surgery. I have a number of cases on the books involving, for example, people requiring motorised wheelchairs. People come to me seeking assistance for their aged mothers and fathers. It is difficult enough to obtain these wheelchairs, let alone other assistance. Some of the red tape that is encountered is incredible. Perhaps we can begin to formulate a code of practice which ensures that the right people get the equipment and assistance they need. I am sure that such a method could be built up if the civil servants involved were instructed by the Government to put their minds to it. We know only too well of the ways in which people avoid their taxes, and particularly taxes applying to motor vehicles. By tightening up on the present motor taxation laws we could save many thousands of pounds and so gain far more than would be lost by any minor abuses that might arise out of implementing the new Clause. I appeal to the Minister will all the eloquence I can command—as I said, I would beg if I thought it would do any good—not to force this matter to a Division. If he does, he might find a surprising number of his hon. Friends in the Lobby voting against him.I do not claim to be able to put the case with such clarity as others who have spoken this afternoon, but I claim to be able to do so with as much fervour as anyone in the House. Those of us who have been very close to total disablement know how lucky we are and appreciate more than anyone else how lucky we are not to be as those who suffer grave disablement, those whom we are discussing.
There are many endearing things about people who are totally disabled. One is the way in which they appreciate small concessions so much more than do others. I have seen, when some concession has been given to the drivers of disabled persons' vehicles, particularly that enabling two persons to be in a vehicle instead of only one, the enormous joy which has been brought to married couples. That was a small concession, but it was well worth while. This Clause is a concession well worth making. We have charitable and humanitarian Ministers on the Front Bench. I sincerely hope that they will not be overruled by some bureaucratic intellectual arguments aginst the new Clause. With all the fervour I can muster, I hope that the House will support it and that the Government will accept it.I have listened with great interest to what has been said today, particularly to the speech of my hon. Friend the Member for Bradford, South (Mr. Torney). I do not know why he accused the Government Front Bench of being so stony-hearted that we should have a vote. How we could possibly have a Division on a matter of this kind I do not know.
I remember the way in which the provisions of the Chronically Sick and Disabled Persons Act, so ably piloted by my hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris), went through the House. It was not a party Bill; it had complete support from both sides. In Committee we discussed how we could help the disabled, and there was not a single dissentient vote. I remember hearing the hon. Member for Banbury (Mr. Marten) on provisions to assist the disabled with their transport. I had no intention of participating in this debate, but I have listened with interest to all the speeches. Ministers will recognise that there has not been one voice dissenting from the general view. Not one argument has been advanced to show why the Clause should not be accepted. It has universal support and it is not a party measure. In the long years that I have been in the House, I have noticed that when a party takes office the party in opposition puts forward a proposal which the Government deny, but when the party in office becomes the Opposition it puts forward the same proposal and the then Government will deny it. Here is a typical example. I do not know why this should be. A cause is worth supporting or it is not. Here is the House of Commons anxious to support the cause of the disabled. In the year since the Government took office many questions have been addressed to the Secretary of State for Social Services—and I am glad to see a Minister from the Department here today—about the disabled. I always understood that the Government were only too anxious to help the disabled in every way possible. Here is an instance when the Treasury could help in an extremely important matter. What are the possible objections to the Clause? I jotted them down as I listened to the speeches. First, there is the drafting. We are too sincere about this matter for anyone to get away with an excuse of that kind. I am certain that if the drafting is defective the hon. Member for Banbury would be only too ready to accept any improvement, although I have read the Clause and I think that he has done an excellent job. Secondly, there is expense. Surely this proposal would involve a comparatively small sum. We are dealing with only a small number of the disabled in a particular category and the Government could not possibly resist the Clause on the ground of expense Thirdly, there is administration. It has been suggested that there might be some objection on that ground, but I do not understand that argument. I do not see why there should be any difficulty about dealing with any snags in administration. If there were, they should be overcome in the interests of those concerned. Fourthly, it might be open to abuse. What abuse? Does this mean the sort of abuse which my hon. Friend the Member for Bradford, South mentioned? If, as there always is in some matters, there were any possibility of abuse, why should the Clause be rejected on that ground? It is designed to assist the disabled and it has been supported by every speech this afternoon, eloquently supported by many of them. No objection of any kind has been argued. In my small way I have tried to visualise the objections which the Minister might advance and I have dealt with each. I refuse to think that the Minister will want a Division on a matter of this kind. How could an Administration—and in a party voice I say even a Tory Administration—have the disgrace of having a vote about support for the disabled? Surely the Front Bench cannot be so stony-hearted as to refuse to accept the Clause. I confidently ask the Minister to say that he fully supports it and that, if there is any question of redrafting, he will see that it is altered to secure the relief which we seek to give.It is just over a year ago when we were all fighting a General Election and all trying to tell the voters how compassionate we were. All that is proposed by my hon. Friend the Member for Banbury (Mr. Marten), supported from both sides of the House, is a sensible piece of applied compassion.
The mandarins of the Treasury have always puzzled me. They ask Parliament to swallow the most enormous camels when they themselves will strain at the very smallest gnats. This is a very small gnat at which to strain. I cannot believe that the cost would be very great. I hope that we shall be told what the estimated cost is. I should have thought that it would be so small as to make it absurd not to grant the concession. We have reached a rather strange position in the exercise of applied compassion in government, and I am glad to say that a vast amount of compassion is exercised. My hon. Friend the Under-Secretary of State for Health and Social Security has reason to pride himself on the amount of money which his Department has got out of the Treasury for making all kinds of improvements in our social services. No doubt he had big battles behind the scenes, but they were battles which he won. Here is a very small battle being fought on the Floor of the House, coram publico. My hon. Friend the Under-Secretary is a compassionate man, and he would not be giving way on a big front if he granted this concession. 5.0 p.m. It is hard to see what precedents would be created which might cause the Treasury some trouble in next year's Finance Bill, or in the years to come. This is something which so essentially and logically stands by itself on its merits. But even if it created precedents, I should still say that the case for it was made out. It is one of those rather sad things, when we are all anxious to improve the social services, that we cannot do everything at once—if we could, we would always avoid any kind of criticism that we were helping one good cause in advance of another—we cannot achieve that. But here is a very small thing which, at very low cost, can be done at once without causing any trouble whatever to the Treasury. It is eagerly supported on both sides of the House and is a mere exemption from vehicle excise duty. There are already various exemptions, sometimes for commercial purposes, and this would be an easy one to grant. It has surprised me very much that the debate has lasted as long as it has. Perhaps it is an expression of the strong feeling which it has aroused. When other hon. Members have had their say, I hope that my hon. Friend will be able either to say that he grants the principle of the new Clause and accepts the drafting, in which case it can be added to the Bill straightaway, or that he accepts the principle but cannot accept the drafting, in which case he must find some other early method of attending to the matter, or that he is, and I hope that he would be able to say that although he does not feel that this is the occasion, at any rate he could give the firmest possible and most unequivocal undertaking that the Government will find another opportunity this year—I do not mean this financial year, but this calendar year—for doing what the new Clause aims to achieve.I also support the new Clause, and I compliment my hon. Friend the Member for Banbury (Mr. Marten) and the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris), both of whom have done so much in this and the previous Parliament to highlight the needs of the disabled. I do not need to repeat the arguments in favour of granting this tax concession to this section of the disabled, not because the argument was not self-evident, but because no one in the House needs to be convinced any longer; everybody agrees. When I say "everybody" I suspect that I include also the two Ministers on Front Bench who, I am sure, in their hearts would love to accept the new Clause; indeed, perhaps they will.
Something happens to Treasury Ministers when they become Treasury Ministers. They are the unwilling recipients of bleats from the Treasury. My heart goes out to the Minister who is to reply, if he has to rely on a Treasury brief full of technical arguments as to why the Clause cannot be accepted. The debate is also peculiar in that not only is the House convinced that we would be doing the right thing if the Clause were accepted, but the public also would agree. That is not always the case. Very frequently matters about which we agree in the House do not necessarily have the overwhelming public support. All sections of the public would be very surprised if they knew that this anomaly exists, that this one section of the disabled, those who are more disabled than the disabled and to whom a car is an absolute necessity, to whom it makes the difference between life being bearable and being unbearable, are somehow exempted from this tax concession. I hope that the Government will find a way to accept this very reasonable and cleverly-drafted Clause.Unlike the hon. and learned Member for Stoke Newington and Hackney, North (Mr. Weitzman). I came into the Chamber with the express purpose of intervening in the debate. As it has progressed, pretty well every point that I wish to make has been swept away from under my feet. Nevertheless, I congratulate most heartily my hon. Friend the Member for Banbury (Mr. Marten) on bringing forward the new Clause.
It is obvious by this time that it has the support of all hon. Members who have spoken so far and, no doubt, of all those who have listened to the debate. That being so, my hon. Friend the Minister of State, Treasury, must have taken on board the feeling of the entire House about this matter. I am glad to see him smiling; it has got home. Until a few minutes ago, my hon. Friend had with him the Under-Secretary of State for Health and Social Security. Perhaps he would not mind if I referred to him as the Angel Michael. I understand that the Angel Michael is at all times ready to assist those in difficulty. I am sorry that my hon. Friend the Under-Secretary has left the Chamber because my hon. Friend the Minister of State may need a little more assistance even yet. The hon. and learned Member for Northampton (Mr. Paget) sugested that the Government would need to take some action. My right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton) also touched on the difficulty that the Government are now in at this stage of the Bill if they do not accept the Clause. On the Report stage of the Finance Bill in July, 1969, a similar clause was introduced. Two years almost to the day have elapsed. In that period there has been time for this Clause to be brought forward. Without doubt there have been improvements in the drafting. I am not a lawyer, I am thankful to say. I have no legal backing. However, the Clause seems to me to be perfectly adequate in what it seeks to do and in its wording. I therefore suggest that the Minister of State should accept the Clause as it is drafted. If he does not, the very least that I personally will accept from him is an assurance that at the earliest possible opportunity—my right hon. and learned Friend the Member for Huntingdonshire gave the Minister of State some amplification of what an early opportunity would be like—he will bring forward legislation to take care of this point.I hope to be corrected if I am wrong, but from the purely procedural point of view if the Government were to accept the Clause in principle I believe that thy could on Third Reading move that the Bill be recommitted and introduce their new Clause at that point.
I am grateful to the hon. and learned Gentleman. He has been in the House for even longer than I have and has had a great deal of experience of Parliamentary procedure. I commend the hon. and learned Gentleman's remarks to the Minister of State.
It is conceivable that the Minister of State will deploy all sorts of arguments. The hon. and learned Member for Stoke Newington and Hackney, North referred to some of the argumnts which the Minister of State might adduce. I believe that the new Clause is similar in content, though perhaps not exactly in wording, to new Clause No. 13 which was considered by the House in the debate on the Finance Bill in 1969. On that occasion the then Financial Secretary to the Treasury, the right hon. Member or Manchester, Cheetham (Mr. Harold Lever), said this:We have heard today that it is only a small sum that is involved. The right hon. Gentleman continued:"On new Clause 13, it is not a question of worrying about floodgates of expenditure, or anything of that kind. I am not in the least concerned with that here. I do not think that vast expenditure is involved."
I warn my hon. Friend against using such language. What on earth does that mean? I repeat that I am no lawyer, but I can claim to have a certain degree of intelligence. The phrase"It is simply an attempt to keep some coherence which makes me unwilling to accept the Clause."
means less than nothing. The right hon. Gentleman continued:"it is simply an attempt to keep some coherence"
That is another brilliant statement which does not exactly help the cause."What is done here is to give to those who are rather worse disabled a fraction of the help that we now give to people who are less disabled."
No amount of rhetoric and verbiage will dissuade me from the view that the Clause is in essence right and it is the feeling of the whole House that it is more than welcome and, to say the very least, a very just move to help the disabled."This will not do as a remedy, or as a purported remedy."—[OFFICIAL REPORT, 16th July, 1969; Vol. 787, c. 641.]
5.15 p.m.
The paradoxical situation may arise in the near future when advances in technology make it possible for certain people who are now too severely disabled to drive, in fact to drive. At Possom Controls, which is possibly the most advanced unit in the world for helping disabled people, developments are taking place which will allow a paralysed person to drive a vehicle and to obtain a licence to do so.
There is the classic case of the constituent of the hon. Member for Horsham (Mr. Hordern). Paul Bates is the longest-living polio case in the country, existing in an artificial lung. He, in a paralysed state, can drive a vehicle and holds a Ministry of Transport licence to do so. He is condemned to life in a horizontal position, and is so disabled that most people would write him off, but in terms of disablement he would be entitled to exemption under the Act. The hon. Member for Newbury (Mr. Astor) recently accompanied me to Aylesbury. We saw some developments at the laboratory there which are fantastic. A large number of people are unable to use vehicles now because they are too severely disabled. Until the improvement in technology occurs, they have to be driven around by, and depend upon, relatives. This is a triple hardship. There is the hardship of severe disability. There is the financial hardship of having to pay for the vehicle. Then there is the amount of time which is absorbed either by someone they must pay to drive them or by one of their loved ones. One of my constituents who is a multiple sclerosis sufferer was a senior consultant to the Manchester Regional Hospital Board and he would be completely isolated in his home or, if he did not have a wife to take great care of him and drive him about, completely isolated in hospital. Why should this category of person suffer this triple disadvantage? On grounds of quality of life alone, quite apart from the moral issue, these people are entitled to the same treatment as is accorded to less severely disabled people. It is an anomaly that there are probably people who cannot qualify for tax exemption but who are driven about by their wives or by paid drivers and who may, in the not-too-distant future, qualify for exemption because technology will enable them to overcome their disability, though not to cure it. On this ground alone, the Minister of State should concede the argument. According to the Joint Committee on Mobility for the Disabled, we are talking of only 1,000 to 1,500 people. The loss to the Revenue would not be all that great and at least we should be treating all people as equals. What a disabled person wants more than anything else is to be treated as an equal. The Financial Secretary, when he was in opposition, fought for this cause for many years. Those on the Treasury Bench now have a chance of testing the water or of proving that they were genuine when they were in Opposition. They should accept the Clause.I am glad to follow the hon. Member for Eccles (Mr. Carter-Jones), who was good enough to refer to Mr. Paul Bates, one of my constituents, and I shall take up some of the hon. Gentleman's observations because the case of Mr. Paul Bates is a typical example of the sort of case which would be helped by the new Clause.
I was much moved, as were all right hon. and hon. Members who have so far spoken, by the merits of the case so well propounded by my hon. Friend the Member for Banbury (Mr. Marten). The fact that my hon. Friend's speech consisted in large part of quotations from speeches made by my hon. Friends the Chief Secretary and the Financial Secretary two years ago did nothing to lessen its qualities. Indeed, the case was as forcibly and well made today as it was two years ago. My hon. Friend the Minister of State is put in no great difficulty. He has merely to follow the observations made on that occasion, and repeated by my hon. Friend today, and do what the House wants. It is not right, nor is it in the long run tolerable that a view expressed strongly and voted upon by Members when in Opposition should be changed just because their party comes to Government. I realise that the position will not be quite so simple as that, however. I understand that there is in first-class tennis something called the Australian syndrome. This term, I gather, is applied to the sort of play which consists of serve followed by return of service, followed by volley, followed by overhead lob, followed by smash. It is rather repetitive and entirely predictable if one watches much tennis on television, and it is not, perhaps, very attractive after one has watched it for some length of time. That description, it seems to me, applies in every respect to the attitude of the Treasury towards this and many other proposals which are brought forward by way of Amendment or new Clause from time to time. The Treasury's attitude in answering the arguments is that of a brick wall seemingly capable of blocking any ball hit at it from no matter what angle. My hon. Friend the Member for Banff (Mr. W. H. K. Baker) put up a strong case last night for the lifeboat-men, and we had what I can only call the typical Treasury reply. Broadly, the Treasury reply rests on three main principles, if principles they can be called. First, the proposal is said to be too expensive. Second, it would create an anomaly. Third, a commission of inquiry has just been appointed and will be reporting in due course. Those are the three usual lines of argument. On this new Clause, we know for certain that there will be hardly any loss to the Revenue. It will be scarcely perceptible. So that argument cannot be adduced. Next, we have the second point of principle, the creation of anomalies. All our legislation affecting the disabled is riddled with anomalies anyway. It is our purpose as Members of Parliament to create even further anomalies in the pursuit of some alleviation for the victims of disablement. I come now to the case to which the hon. Member for Eccles was kind enough to refer, that of my constituent Mr. Paul Bates. I had an Adjournment debate on his problems a little time ago, and I received a sympathetic reply from my hon. Friend the Under-Secretary of State for Health and Social Security. But the answer was still "No". The simple point in Mr. Bates' case is this. He is so severely disabled as a war disabled pensioner that he is not able to climb into a car such as is provided free by the Government for less severely disabled war pensioners. Nor is he given any of the allowances which are given as of right to those other war disabled pensioners who are less disabled than he. So he fits precisely into the category covered by the new Clause. It is our purpose as Members of Parliament to add to the anomalies which already exist, and very happily exist through the exertions of such people as my hon. Friend the Member for Banbury and the hon. Members for Manchester, Wythenshawe (Mr. Alfred Morris) and for Eccles. It will be their never-failing endeavour, I am sure, to see that further anomalies are created. I come now to the third general Treasury point of principle, that there is a major inquiry proceeding and it is hoped to bring forward proposals in due course to cover not only this situation but many others as well. I earnestly ask my hon. Friend the Minister of State not to try to pass that one across us. The new Clause is in virtually the same form as it was two years ago. It was pressed hard then, and pressed to a Division, by my hon. Friends the Chief Secretary and the Financial Secretary, who spoke most eloquently in its support. The new Clause has been on the Paper for a long time. It has been available to my right hon. Friend the Chancellor of the Exchequer and his hon. Friends the Financial Secretary and the Chief Secretary, who will have recalled it readily because they spoke strongly in its favour some time ago. So let there be no question of my hon. Friend the Minister of State telling us that a special inquiry is already under way and examining the situation. We know what the point is. We know what we want. It is time that we had satisfaction.I add my congratulations to those already offered to the hon. Member for Banbury (Mr. Marten) and my hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris). As so much of the ground has been adequately covered, I shall follow the good example of other hon. Members and be brief.
There has been a great awakening to the cause and plight of the disabled in recent times, typified most, perhaps, by the Chronically Sick and Disabled Persons Act and by certain subsequent Government action which served to underline it. Some local authorities have, perhaps, lagged behind in applying the spirit of that Act adequately. I must say that my own local authority in Islington has had a particularly poor record in this respect over the years—one of the worst in London—although I am now assured that it is trying to apply the spirit of that Act with somewhat more enthusiasm and is to have a special report on it shortly in order to see what more may need to be done. This is not just a question of local authority concern. It is very much a matter of Government action as well. The Secretary of State for Social Services has gone on record publicly as saying that he wants to do far more for the disabled. Here is an opportunity for his friends on the Treasury Bench—their number has grown to formidable proportions in the last ten minutes—to help him in furthering that aim. There is no party division on this matter. It is said that there may be technical reasons why it would be difficult for the Government to accept the new Clause, but everyone knows that technical difficulties can be swept away if the will is there. Red tape can be cut through if the Government really want to do so. It will not be a large step to take, except for the relatively few people who will benefit directly from it. It is obvious from the small number involved that it will not be a costly measure to introduce, but it will be of enormous assistance to the disabled people whom it will help. This is an issue on which the Government can give way with good grace. If they do, they will receive—perhaps an unaccustomed experience for them nowadays—not only the good will of this side of the House but the good will of the country as a whole. In the tennis terms used by the hon. Member for Horsham (Mr. Hordern), the Government have already lost this debate game, set and match. I join every other hon. Member who has spoken in appealing to the Government to accept the Clause tonight, not to put it off, and not to force a Division.5.30 p.m.
The House should not assume that the Government have lost the debate game, set and match yet. I have been watching our Front Bench closely for the past two hours trying to discern the atmosphere around my hon. Friend the Minister of State, who was at first alone. He did not intervene to say what was the Government's opinion on the Clause, but I have noticed that he has recently been significantly strengthened by the presence of my right hon. Friend the Chancellor, and I can only hope that that presages some advantage to the House.
I must declare to the House and my own Government how I feel on this issue. I would rather they knew where I stand now than that I should make excuses to them afterwards. Notwithstanding all the difficulties which they could use as excuses, difficulties which my hon. Friend the Member for Horsham (Mr. Hordern) described so clearly and which were perhaps fed to them by the Treasury, the Treasury Ministers can make a decision which clearly meets the will of the House. We are admittedly taking part in a small debate within the framework of a large Bill, a debate affecting a small but very important group of people. When the debate is over it is not my colleagues and my Government that I am concerned to have to face but the disabled people whom I represent here and to whom I must declare what I have done today to help them. I speak as one who is closely connected with the Disabled Drivers' Association. Only last month I was a member of a packed congregation in Canterbury Cathedral at a yearly service which I always attend to pray for the disabled. But a Member of Parliament is required to do something more than to pray; he is here to take action, to do more than just persuade. He is here to show that he means what he says when he tells his constituents, "I will do all I can to help you". My right hon. Friend the Chancellor cannot ignore what he has heard in the debate. We know that he and his Treasury team are all men of considerable compassion. We know it from his record when he was a great Minister of Health in a former Conservative Administration. We know of the actions he took then for the disabled, at a time when he described those whom we are considering as the most severely disabled of all. I am sure that no hon. Member who has spoken today has been speaking to deaf ears. I hope that my right hon. and hon. Friends on the Treasury Bench will appreciate that while they can make decisions, and so recognise the will and determination of the House, decisions in Parliament can also be made elsewhere.The hon. Member for Banbury (Mr. Marten) said in moving the Clause that it has all-party support. It certainly has, even though no Liberal hon. Member's name is attached to the Clause.
This is by no means the first time the House has faced all-party Motions and Amendments on the subject, and various of my hon. Friends have spoken in favour of them in the past. Allusions have been made to the shuttlecock nature of our debates on this kind of subject. That element is perhaps one of the nastier of our parliamentary system, whether it is the right hon. Member for Cardiff, South-East (Mr. Callaghan) changing his mind about growth since he was Chancellor of the Exchequer, the Leader of the Opposition changing his mind about the Common Market, the two Front Benches throwing school milk at each other, or a debate about the disabled. I hope that it is not a party point, but at least one of the advantages of being a Liberal Member is that one can watch the changes with a detached air of cynicism and hope that one of these days the gods will intervene. What we are witnessing is not government by the House or by the elected Government but government by the civil servants, in this case the Treasury civil servants. That is a very nasty element in our democratic, or undemocratic, procedures. We have in the debate a general illustration that we do far too little to encourage people who wish to look after their relatives, whether those relatives are suffering from disablement, ill-health or any kind of old age. We happily finance vast schemes for old people's homes, homes for the disabled and homes for the mentally-handicapped, but we give far too little help through the tax system or direct welfare grants to those families which wish to look after their own disabled and elderly. We already have in our welfare system a means of helping disabled drivers to obtain special vehicles or specially converted vehicles. He we are talking about people who are almost certainly too disabled to drive themselves but have relatives who are willing to do it for them, yet apparently the Government are not prepared to help. We know only too well what the objections will be, if indeed they are objections. I think that the hon. Member for Canterbury (Mr. Crouch) is being a little too optimistic in supposing that the Government may intervene at this stage, because if they meant to accept the Clause they would have saved us a great deal of breath and time if they had said so in the early stages. But perhaps it is not too late to persuade them. When the matter was debated in Committee on 27th May last year the then Minister of State—of a different political persuasion, but on issues of this sort that makes no difference; the record remains the same—said:That is undoubtedly true, but there is no reason why this should be an impossible position. The Government would not have to spend vast sums in implementing the Amendment. As the hon. Member for Banbury has pointed out, the money involved would be peanuts compared with our total welfare commitments, so I do not see that money can be an excuse. The hon. Gentleman went on to talk about the possibility of abuse, but said that he was not saying that the argument about abuse was overwhelming. We can all echo that. I hope that the Minister will not tell us that it is overwhelming. I hope also, since right hon. and hon. Members opposite have now had about 12 months in the Treasury and the Department of Health and Social Security to consider the matter that they will not plead administrative obstacles. That again was mentioned by the then Minister of State on 27th May, 1970. when he said:"Treasury Ministers perhaps more than others occasionally find themselves in impossible positions."
He promised that he would discuss it with his colleagues and, presumably, his civil servants—probably more with the civil servants than with his colleagues—and that he would try to come up with a solution. He added:"Nor shall I say that there are administrative obstacles which cannot be overcome. There are administrative obstacles to doing virtually anything…"
A year has passed and surely there has been ample time for the Treasury and the Department to consider the whole matter. When the matter came to a vote on that previous occasion, 144 members of the Labour Party, then the governing party, voted this proposal down. I hope that on this occasion a substantial number of hon. Members of the present governing party will put their votes where their consciences are and where the desires of their constituents rest. I am aware that it is difficult for a member of one of the two large parties in this House to vote the way his conscience dictates."…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…".—[OFFICIAL REPORT, 27th May, 1970; Vol. 801, c. 1847–9.]
Patronising.
It is rare indeed that I get a chance to be patronising. I would have thought, on an issue like this, when hon. Members have stated so clearly where their views lie, that it would not be easy, though it is possible, for them to go back on their views and vote other than where they have stated that their consciences lie. I shall certainly support the new Clause.
I want first to say how sorry I am that, because of certain other duties, I was not able to be here to listen to the debate earlier. I had expected, as I think hon. Members opposite had expected, that this new Clause might have been taken yesterday evening, in which case it would have been possible for me to have been here. I wanted to be here because obviously this is a matter of great importance.
I am particularly pleased that my hon. Friend the Member for Canterbury (Mr. Crouch) referred to the time when I was Minister of Health and had to grapple with the very difficult problems involved in trying to get a sensible system for dealing with the mobility of the disabled. No one is more acutely aware of the problem than I am. No one is more acutely aware than I am that, during my year of office as Minister of Health—the last year before the 1964 general election—I failed to do other than improve the situation marginally, but I have always firmly believed, as do my right hon. Friends, that something has to be done to deal with this situation. It is in no carping spirit that I say to right hon. Gentlemen opposite that what we are trying to achieve in the present review by my right hon. Friend the Secretary of State for Social Services is something which might well have been done in previous years. Be that as it may, the review is now going on. I remind the House of the present position. At present, all those who qualify for help by the Health Departments through the provision of transport are relieved in one way or another from the payment of vehicle excise duty on their vehicles. Under Section 4(1)(g) of the Vehicles (Excise) Act, 1971, vehicles up to and including 8 cwt., adapted for use solely by invalids are covered. This exemption, originally made under the Finance Act, 1962, was extended by the Finance Act, 1964, to vehicles with adaptations to the controls installed by owners eligible for the assistance of Health Department grants. This extention is incorporated in the Vehicles (Excise) Act, 1971. At present, there are three categories of eligibility for conversion grants for the provision of invalid carriages. Broadly speaking, to become eligible, a person capable of driving an invalid carriage or a car with the necessary adaptations must have lost the use of his legs, be virtually unable to walk or be rather less disabled and need a vehicle to get to work and back again. Nearly 30,000 persons who are currently provided with transport or conversion grants under this scheme are given exemption from vehicle excise duty. 5.45 p.m. I turn now to the purpose of the new Clause. It is in exactly the same terms as a new Clause put down by my hon. Friend the Member for Banbury (Mr. Marten) in Committee but not reached for debate. It is also in exactly the same terms as a new Clause put down by the then Opposition when the Labour Government were in office. At that time, it was thought right by some of my hon. Friends to press that new Clause to a Division. The then Government decided that it did not have merit, resisted it and voted against it. I merely state the fact that most hon. Members opposite who were in the House at that time voted against the new Clause, doing so for the reasons advanced by the then Government, who took the view that it did not merit being passed by the House of Commons. I think I am right in saying that the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) was among those who voted against the new Clause. The purpose of new Clause 29 is to extend the scope of the exemption from vehicle excise duty to vehicles used by the disabled. At present, duty is payable for a vehicle owned and driven by a disabled person who receives or would be eligible for assistance from the Health Departments either in the form of the provision of an invalid carriage or through a conversion grant for an ordinary private car. The effect would be to extend the exemption to cars owned by disabled persons who are too disabled to drive either a privately owned vehicle or the invalid tricycle for which they qualify under the National Health Service Act, 1946, and the Health Services and Public Health Act, 1968, provided that conspicuous and permanent adaptations have been carried out on the car. The Government have accepted that the present arrangements for assistance with transport to the disabled are not satisfactory, and I have said frankly to the House that when I was Minister of Health I came to the same conclusion. It is for this reason, among others, that I have been a firm supporter of my right hon. Friend the Secretary of State in his determination to try and sort out the whole problem and to attempt to find a solution which will be both equitable and within the reasonable bounds of public expenditure. In the previous Conservative Government, before becoming Minister of Health, I was first Economic Secretary and then Financial Secretary to the Treasury. I played a leading part in the passage of four Finance Acts. Often pressures were brought to bear on the Government of the day, and the Chancellor, to accept particular proposals. I think my hon. Friends will agree that I have always been one of those who believe that any Government should have regard to the views of the House of Commons. I must say, however, that I believe that no Chancellor is worth his salt if he is prepared to accept amendments which he does not, after full consideration, believe to have merit. For my part, whatever the pressure coming from either side of the House, I shall always resist any amendment or new Clause if I am not in sympathy with the proposal which it embodies. There is no doubt that those disabled people whom it is intended to benefit by the Clause are deserving of help. As I have said, I found, when Minister of Health, that that is not in itself enough. There are many people at the present time who are deserving of help, but what any Chancellor or Secretary of State for the Social Services must also decide is what are the righit priorities and, if public expenditure is involved, whether one particular form of expenditure is preferable to another, bearing in mind the limited amount of national resources. Having been told of the views put forward, and taking into account the attitude—I hope that this is the kindest way of putting it—which the Opposition took when in office to this self-same Clause, I must tell the House that, subject to certain important qualifications, my advice would be to accept the Clause. It is clear from the Clause—and, indeed, has been accepted—that a vehicle excise licence duty concession would benefit only those disabled who could afford a vehicle. I must make it clear, therefore, to those who have supported the Clause—and I speak to those who have supported it throughout, not just on this occasion—that there can be no commitments of any kind to help those who cannot afford the vehicle. I recognise that the Clause has been supported on both sides of the House. We shall have to see how the definition ofworks. It may be necessary, if the present system were to be continued, to alter those words in some way. I could not, at the moment, on the information before me, put forward any better prosal for dealing with that aspect. The most important qualification I must make is that when the Government's review is completed—I must make this clear—they must hold themselves free to reverse this decision if they should reach the conclusion that it would be preferable to provide the help in some other way. For my part—and it is as much my responsibility as that of the Secretary of State for Social Services—I would have hoped that by now we could have resolved the difficult problems inherent in this question of providing transport for the disabled. It is a most difficult problem which we found impossible to solve when we were last in government. The Labour Administration also found it impossible to solve. Despite the fact that we have been in office for a year now, we still have not yet found a solution. It is, therefore, essential this time to find a solution which will last and which, while it will not please everyone, will be seen to be as fair and as equitable as we can make it. With these qualifications, I believe it right, because the Clause falls into that very small category of new Clauses and Amendments which Chancellors of the Exchequer find have merit, and in the light of the views which have been expressed, to advise the House to accept this Clause."conspicuous and permanent adaptations"
This has been something of a parliamentary occasion. Although I speak from this Despatch Box, I know that I reflect the feelings of right hon. and hon. Gentlemen on both sides of the House in welcoming the very important concession which the Chancellor has just announced. It seemed likely in the early part of the Chancellor's speech that he would be the first Member of this House to speak in criticism of the new Clause.
There was, however, a very important shift of emphasis as his speech progressed. Whether he has been in contact with the Patronage Secretary, I am in no position to know. Naturally, I warmly thank him for saying that the proposition we are making in the new Clause is now acceptable to the Government. The Clause was moved with all his customary felicitousness by my co-sponsor, the hon. Member for Banbury (Mr. Marten). When his party has been in power, he has been in favour of the proposition, just as he was when his party was out of power. There are those of us on both sides who, year by year, have pressed on the Government of the day the importance of making what, in financial terms, is a very minor concession to some of the most severely disabled of our fellows. The House knows that the Clause seeks to give to those who are too severely disabled to drive the same concession as is given to those who are fit enough to drive and to have their own vehicles. I am happy that the Minister of State has been saved the task of opposing the Clause. I would have sympathised with any Minister who may have had to speak against the proposition that has been made with such eloquence and force from both sides of the House. The Joint Committee on Mobility for the Disabled will be highly appreciative of the right hon. Gentleman's announcement. As the hon. Member for Surrey, East (Mr. William Clark) said, his constituent, Mr. Peter Large, is chairman of that important body. Mr. Large has said that the rule which we seek to correct is a cruel anomaly. Through this debate, all of us know that we have removed a long-standing and extremely cruel anomaly. I feel sure that disabled people everywhere will be grateful not only to the Chancellor, but to the hon. Member for Banbury for having introduced the Clause.By leave of the House. May I thank the hon. Gentleman for what he said. He has done as much as anyone in his attempts to help the disabled. I ought to say one thing. There is another new Clause linked with this, standing in the name of the hon. Member, new Clause No. 46. I ought to say that, as it goes wider than this Clause and in view of what I have said, I hope that the hon. Gentleman will not press it.
May I thank the Chancellor and all hon. Members who have taken part in this debate.
6.0 p.m.
I, too, would like to say how grateful the House should be to the hon. Member for Banbury (Mr. Marten) who has today won a very remarkable parliamentary victory. Apart from that I am extremely glad to hear the Chancellor say that this matter will be reconsidered. I do not regard that as a retraction. I regard it as a promise—that it will be reconsidered; but when this matter is considered generally I hope that one other point will be considered as well. It is one which the hon. Member for Banbury and I myself have pressed on very many occasions. It is the need for a second seat.
People who are not crippled have no idea how terrifying it is to be crippled and alone in a vehicle, helpless if it stops, helpless if it collides, helpless if anything happens, and all alone. Time and again we have had this argument, and when it has been considered, it has been argued that somebody not crippled would, if the provisions were changed, be able to have a free ride at public expense. That is just not a good enough argument against the case, and I very much hope that it will be reconsidered very carefully.Question put and agreed to.
Clause read a Second time, and added to the Bill.
New Clause
Amendment Of Section 6 Of The Finance Act 1894
Section 6 of the Finance Act 1894 shall be amended by the insertion of the following words after subsection (8):—
(9) Up to 10 per cent. of estate duty liability may be discharged by the surrender to the Exchequer of any government stock at its par value:
Provided such stock had been owned by the deceased person for five years or more.—[Mr. Willliam Clark.]
Brought up, and read the First time.
I beg to move, That the Clause be read a Second time.
It will be realised by the House and the Government that this will not be such an emotional debate as we have just had. It will be remembered that the Finance Act, 1894, lays down the method of collecting and the method of payment of estate duty. The new Clause seeks to amend the method of payment of estate duty. Estate duty is a capital tax and we should not forget that. It produces to the Exchequer between £350 million and £360 million a year. It is a great revenue raiser. What we seek by the new Clause to do is to give a boost or to give support to the gilt-edged market, in that part of estate duty payable could be settled by the surrender of gilt edged at par. Take the global figure of estate duty at £350 million, then up to 10 per cent. of that liability could be discharged by surrender of gilt edged at par. It means that the total amount which could be surrendered would be about £35 million or £36 million. Gilt edged at the moment is in a depressed state. It has been in a depressed state under both Governments. I would urge upon the House the importance of the gilt-edged market, particularly to savings. I do not intend to be emotive about this, but there are small savers up and down the country who have purchased gilt edged and seen it gradually eroded and eroded in value. One has only to mention one instance, I suppose the most infamous, of a decline in value of gilt edged and that is the stock known as Daltons. It was issued in 1946 or thereabouts at £100 but the value now is £26 to £27 but its real value is £10. Obviously there are people who are very upset by this sort of erosion. I have seen in the paper, and I am sure my hon. Friend has seen it, that the Treasury has a writ issued against it by the Association of Gilt-Edge Holders. This organisation is trying to get a date put on undated stocks in gilt-edged. When my hon. Friend goes back to the Treasury he will be able to read that writ. I may say I have had nothing to do with it. However, there is a feeling that something should be done for gilt-edged. Of course, to put a date on undated stock would be, so to say, mortgaging the future. I do not think any Government could do this. It is quite impracticable for any Government to enter into a period for repayment of undated stock no matter how far hence. There is one way we could support the market, and that is to allow the market forces themselves to increase prices. Our proposal is that if a person owns gilt-edged securities for five years prior to death then up to 10 per cent. of the estate duty liability may be discharged by surrendering gilt edged at par to the value of that 10 per cent. I am not wedded to the period of five years, but doubtless there must be some period stated. Let us consider Daltons again. It stands at £27. One's estate duty liability is £1,000. One hundred pounds at par value of Daltons could be surrendered in settlement of one-tenth of estate duty. On paper that would cost the Government £73. If one looks at the machinations of the market one will see that there is an incentive for people with cash, whose estate will pay this duty, to hold gilt edged. But only if there is capital growth in the gilt edged market, one will see that Daltons and War Loan and so on will go up to something like £60 or £70 in value. This would not cost the Revenue very much. Obviously, not everyone would take advantage of the new Clause but the total amount which could be satisfied would be £36 million. If one takes the average price of gilt-edged and a surrender price of £50 it means it would cost the Revenue £18 million. I would say that the cost in the first year to the Revenue would be about £10 million. There is no party consideration in this, but an advantage to the Government of doing this would be to keep faith with those savers who have put their money into gilt-edged.There will be a social or political cost of dating gilts. What about the case of the old lady who bought war loan and has seen it sink below £50 or £40? Surely this old lady will not benefit very much if it is tendered for estate duty? My hon. Friend ought to remember that he can apply this argument equally well to preference shares. What is so special about gilts?
There is something special about gilts in that the gilt market is, indirectly, the responsibility of the Government, whereas I should not think that this Government have issued many preference shares. There are a great many old people in this country who hold Daltons and who can get only £27 for them. By giving this concession for the repayment of 10 per cent. of estate duty, a boost will be given to the gilt-edged market, which will go up quite artificially since it will be in roughly the same position as agricultural land for duty purposes. I need not remind my hon. Friend that anyone holding agricultural land gets a 45 per cent. remission of estate duty.
This Clause gives an incentive to people to hold gilt-edged securities. My hon. Friend has sufficient financial acumen to realise that, if the incentive is there, people will start hedging and instructions will be given to executors about converting on death. Moreover, it will help the living who hold gilt-edged securities at £27 or £30. I hope that my hon. Friend was in the Chamber when I tried to explain the Clause. It may be that I did not explain it very well. However, I hope that the answer that I have now given him elucidates the point that I seek to make. I realise that my hon. Friend the Minister of State is not able to give me a categorical response to the effect that the Clause is acceptable, irrespective of whether the wording is in order. However, I suggest that here is a way of giving a boost to the gilt-edged market. I do not think that it will result in a gilt-edged bonanza. However, I understand that the Treasury is actively looking into the whole estate duty problem as regards its payment and, presumably, its rates as well. I should be grateful for an assurance that my hon. Friend will at least look at the idea. I do not suggest that the Clause is necessarily the ideal way of going about it, but I urge upon my hon. Friend that it is a way in which an incentive can be given to people who hold gilt-edged securities which, by their very nature, have no capital growth in them. To some extent, the Clause would introduce some sort of capital growth. For those reasons, I hope that my hon. Friend will consider it sympathetically.It is not very often that I disagree with my hon. Friend the Member for Surrey, East (Mr. William Clark). However, in one sentence, I wish to say that the way in which the Government can best help the gilt-edged market is by running the economy properly and not by distorting the whole market with discriminatory concessions.
I cannot understand why anyone holding gilts should be helped in this way against other people who hold other fixed-interest stocks. I should have thought that there was a social and even a political reason for dating War Loan. It is not as impossible as it is always made out to be. If the Government want to support the gilt-edged market, there are easier ways of doing it. As I have said, the principal way is by running the economy properly.6.15 p.m.
With respect to the hon. Member for Surrey, East (Mr. William Clark), this is one of the most eccentric Clauses ever sought to be introduced into a Finance Bill. It suggests that some hon. Members opposite are obsessed with the Stock Exchange and the market to an extent which completely destroys their discretion as Members of Parliament.
I have no doubt that the hon. Gentleman has a very compassionate purpose in moving the Clause. There are undoubtedly people who have suffered considerable hardship as a result of buying gilt-edged securities. But the purpose of the Clause is to set up a privileged class of purchasers of securities in the stock market. There is no doubt that people suffer hardship. But people who buy gilt-edged securities do so in the full knowledge that the price of those securities can vary. They can go up. They can go down. It seems to be an extraordinary proposition to suggest that one group of purchasers in the stock market should be exempt from events which cause the value of those securities to go down. We all know that, in effect, the price of gilt-edged securities is a reflection of the interest rates at the time. A person buying gilt-edged securities should try to forecast in his mind what is likely to happen to interest rates in the future. If he loses money, he is in the same situation as a person who buys equity shares. The hon. Gentleman might feel sorry for those who bought Rolls-Royce shares and who suffered probably equally severely as those who bought the stock launched by a previous Chancellor of the Exchequer, Mr. Dalton.This endeavour to equate Rolls-Royce shares with gilt-edged securities will not hold water. Has the hon. Gentleman memories of the immense appeal to patriotism,
That cannot possibly be compared with Rolls-Royce."Lend to defend to right to be free."
I quite agree that in the last war there was an emotional appeal to people to save money. But there were many ways of saving money at that time other than putting it in these stocks which have decreased enormously in value.
It is natural for the Government of the day to encourage people to buy securities. It is a form of salesmanship which one must expect. However, this Clause will create a privileged class of purchasers of stocks, and it seems to be another way——The hon. Gentleman will appreciate that this is precisely what happens with Victory Bonds. At death, they are surrendered at par.
But those are bonds which were issued in special circumstances. The hon. Gentleman seeks to change the arrangements under which Government stocks have been issued in the past.
To return to my main argument, what concerns some hon. Members on this side of the House is that the Clause is opening another enormous door for the avoidance of estate duty. The hon. Gentleman said that estate duty can be avoided by purchasing and holding agricultural land in that there is a 40 per cent. reduction. Here again is an enormous loophole for people to escape estate duty on a tremendous scale. The hon. Member for St. Ives (Mr. Nott) put his finger on a most important point. The hon. Gentleman spoke in compassionate terms about the poor old lady who has bought gilt-edged stocks in the past. However, that same poor old lady will not pay estate duty in normal circumstances since she will leave only a sum which will not be liable to duty. The Clause will have the effect simply of enormously increasing the opportunities to avoid estate duty. The hon. Member for Surrey, East spoke about the importance of keeping the gilt-edged market high. That may have a special significance for some wealthy people who have bought gilt-edged stocks on a large scale. I cannot see that it helps the national interest to keep the gilt-edged market at a high level. I suggest that the Clause is intended to benefit only a small section of wealthy members of the community who have been unfortunate in their speculation in that they have purchased gilt-edged stocks.I completely fail to understand what the hon. Member for Loughborough (Mr. Cronin) was talking about. Does he not realise that the last Government robbed all holders of gilt-edged stock by devaluing the currency? It is obvious to me that if the currency is devalued people are being robbed of what they have earned. For that reason, and because I believe there is a real risk for the investing community, be it private or public, in holding gilts, I support what was said by my hon. Friend the Member for Surrey, East (Mr. William Clark). He pointed out that this is a method by which people investing in the currency of this country, by believing in Britain, will get their reward. The hon. Member for Loughborough must understand that by devaluing the currency the Labour Government stole money from every holder of gilt-edged stock.
What is wrong about this proposal? One could say, as the hon. Member for Loughborough said, that we are changing the prospectus. If the new Clause is accepted, we are definitely changing the prospectus. But we have changed the prospectus before. We changed the prospectus when we allowed capital gains to come into gilts, and we changed it back. We changed it to a certain extent when, for patriotic reasons, we did the conversion to war loans. When we had a date on war loans, again for patriotic reasons, we changed the prospectus. I should not think that it would be a serious thing to do it again. My hon. Friend said that this will not affect the money supply, that it will not be inflationary, and that it will not cost the country much. What is right about the whole matter? The first point is that it will help Government borrowing. There are many ways in which we can help Government borrowing. I believe that it is correct that Government stocks should be treated in the long term in the same way as under five years. If one is buying a stock up to five years duration one buys or sells the interest when buying or selling. That is important. If Government stocks are static, as they are now, one does not get the institutional holders interested in them as much as they should be. If they can show more performance by getting a little more interest, if only for a few days, I think that that would do it. Therefore, the Government should consider that as an additional method of making Government borrowing easier.Surely my hon. Friend cannot want to make it easier for the Government to borrow. This is not what I should describe as a particular Tory sentiment. My hon. Friend rightly gave a lecture on devaluation. We do not want to make it easy for the Government to borrow; we want to make it difficult.
No. I believe in Government credit. I believe that it should be as high as possible. Obviously, my hon. Friend for St. Ives (Mr. Nott) feels that just because his constituents have land they are not interested in gilt-edged.
I believe that it will also help people in all income groups. The rich man who went into this would be paying a great deal of his interest away. Therefore, the hon. Member for Loughborough is not correct in thinking that it affects only one side. My main reason for supporting the Clause is that it is good for the country; it is giving a bonus to people who are supporting Britain by buying Government stocks.My hon. Friend the Member for Surrey, East (Mr. William Clark) has certainly raised some interesting questions, if not a little controversy on the benches behind me.
I did a little research into the history of the new Clause and discovered that my hon. Friend had tabled a similar Clause in 1963. Therefore, he has both the virtues of consistency and persistence in promoting this idea. I noticed that there was some difference in the objections to it on that occasion from those put forward now in at least one respect. In 1963 there were references in the objections to the Clause to the Colwyn Committee on National Debt and Taxation, 1927. It is worth quoting one passage from that report for the benefit of the House. As was said in answer to a point made by the hon. Member for Loughborough (Mr. Cronin), there are two particular Government stocks which are redeemable for estate duty. The 4 per cent. Victory Bonds which are acceptable at par value in payment of estate duty, and similarly the 4 per cent. Funding Loan 1960/90 is acceptable for this purpose on the basis of £80 for each £100 stock, and so on. They are very unusual in this respect. The Colwyn Committee pointed out:The arguments against my hon. Friend's proposal are substantial. Though I share his concern about the position of many holders of War Loan stock, it is curious that as a matter which frequently comes up in constituencies it rarely comes up in this House. I am tempted, but I shall resist the temptation, to go into this question in greater depth because, in answer to hon. Members' queries, I have signed a large number of letters on this topic. The points raised by my hon. Friend are open——"Such a privilege is valueless to the holder unless it covers some bonus or special monetary advantage; it is apt to work exceedingly unequally as between individuals, and it involves a concealed loss to the Exchequer. While under the stress of war borrowing, the concession was. perhaps, justifiable, we are glad to note that it has not been repeated in later issues."
Does the Minister of State accept that if he were to accept the Clause in relation to the 3½ per cent. War Loan it would be almost a pleasure to die to get paid out in full?
That would take us very wide indeed. I shall not fall to the temptation put before me by the hon. Gentleman.
What is clear about the new Clause is that the main benefit would accrue only to the beneficiaries of estates becoming liable for duty, that it would tend to work unequally between different holders, and that it would infringe the long established principle that all holders of a particular Government security should be treated alike. That is an important principle which one would be right to defend. I do not think that the effect on the market would be very significant. As has been rightly pointed out, the crucial question is the general management of the economy and of the money market. On those grounds the Clause would not be justified. It was suggested that the cost would not be great or might be non-existent. However, it should be remembered that while it is true that the Government would receive an amount of their own debt in return for the estate duty forgone and that on this debt they would save the future interest which they would otherwise have paid, they would still be short of the money that they would have received in estate duty and, assuming that there is no change in taxation on this account, they would need to borrow an equivalent sum. Because the borrowing would naturally be at current rates of interest rather than the rate of interest which is paid on a number of the stocks which my hon. Friend has in mind, there would be a considerable extra cost, albeit concealed, to the Exchequer. Finally, an overriding objection of principle to applying the concession on outstanding stocks which are already issued would be that we were effectively altering the terms of issue. My hon. Friend the Member for The High Peak (Mr. Le Marchant) suggested that this had happened in the past. However, the situation when the war loan was changed was different. It was a conversion or the option to take cash. I will not go over the history of those days when different economic circumstances prevailed. Basically, it is extremely important, if we are to maintain confidence in the gilt-edged market, that we should maintain the principle that the terms of a particular stock which has been issued do not change. For that reason, while appreciating the reasons which motivate my hon. Friend in proposing the Clause, I cannot recommend the House to accept it.In view of what my hon. Friend has said, I do not wish to put the matter to a vote. I beg to ask leave to withdraw the Motion.
Motion and Clause, by leave, withdrawn.
New Clause 38
Houses, Etc, Shown To The Public
Where a loss is incurred on the showing of a house or garden or arboretum to the public relief shall be allowed under section 168 of the Taxes Act 1970 whether or not profits arising would have been assessable under Case I or Case VI, Schedule D.—[ Mr. Robert Cooke.)
Brought up, and read the First time.
6.30 p.m.
I beg to move, That the Clause be read a Second time.
With this new Clause the House can also discuss new Clause 39–(Suspension of estate duty on houses of national, scientific, historic or artistic interest and on funds in trust for their upkeep).
In discussing these new Clauses I should like to begin by putting the problem into perspective. All over Britain, on this sunny afternoon, thousands of people, many of them visitors from abroad, have been enjoying historic houses and gardens, privately owned—the principal attraction—and those owned by the National Trust, the Department for the Environment, and others, and these houses and gardens have been seen at their very best on this day.
Few people give a thought to how these places survive for their enjoyment, and perhaps even the Government have not realised the difficulties that are involved or, if they have, they have not yet gone far enough to make it possible for these places to survive. I do not believe that I have to justify their survival. They are, after all, the principal tourist attraction, and tourism is a most valuable source of income to this country. It is historic Britain that people come from abroad to see, in greater and greater numbers, and even those at home are becoming more appreciative of our historic past and want to see these buildings, gardens and parks survive into the future. In a more crowded island, the need for places where the public can enjoyed are no longer there for them to and more important. The sad situation with regard to the buildings is that not even the cost of keeping out the winter damp is allowable for tax purposes in all too many cases. Buildings which the parents of those who this afternoon have been disporting themselves in the sunshine enjoyed are no longer there for them to see. In my view, there will be further losses despite the fine work done through the Historic Buildings Council for England, Scotland and Wales and, indeed, the assistance given by expert advisers from what used to be the Ministry of Public Building and Works. It should be said in passing that although the grant from the Council has generously been increased to £1 million, in effect all that is being done is to return to the owners of these houses some of the money that has already been taken away in taxes. I believe that I can speak with some experience about this matter, although I suppose that I ought to declare an interest. It is a lifelong interest in our architectural heritage, and in particular in our historic houses, and more especially those which are still lived-in homes. I am, myself, the owner of one of the nation's finest fifteenth-century houses. It came to me in my father's lifetime, because he had to make a cruel choice between handing it over to me and cutting himself off from it completely, or seeing the whole of his work of restoration and improvement taken away by estate duty. The provision under which the transfer was made has since been abolished by the previous Socialist Government, but there capital gains tax pursues the gift, so far ineffectively, though their agents are waiting their chance to pounce on me later. That may sound rather lurid, but in this case it is the fact. The first of my two new Clauses is designed to help to preserve historic houses in private ownership by making it easier to finance their opening to an increasing number of appreciative visitors. I hope that here I may have the close attention of the Treasury Minister who is to reply—I know that I have had his attention so far—because there is a particular point which I should like him to note. We are not seeking to create a special class of taxpayers. That has been the stock Treasury reply in recent years. Indeed, the hon. and learned Member for Lincoln (Mr. Taverne) gave that reply to a deputation from the British Tourist Authority Historic Houses' Committee. That is not the case. The buildings are already specially singled out and protected by innumerable laws, and fresh Acts are passed almost every year to protect the buildings. These Acts protect the buildings and houses, but sometimes positively prevent the owners from effectively showing them to the public. In many cases they make it more difficult to increase public access, which is necessary to try to produce anything like a reasonable income. The preservation moves that have been made to date are, on the whole, of a negative nature. They say to the owner, "Thou shalt not do this or that". They do not say, "Thou shalt make every effort to restore the building and make it available to the public". There is a disincentive here, and some local authorities pursue the implementation of Acts of Parliament in a most unhelpful way. I had better not digress on that one, but it is a fact. The Clause provides something positive. It is designed to enable owners to allow the loss of public opening to be set against other resources, if one is lucky enough to have them, and I should make it clear that if this provision were to be enacted it would not help me personally, though it would have helped in the past. Had it been possible to get Case I treatment for all the years that my father worked on the building, a substantial amount of his income from other sources as a surgeon would have gone into the protection and improvement of this historic building, and that would have been no bad thing for the nation. The plea that we are making is reinforced by what has been said by the Historic Buildings Council for England in its recent report for 1969–70. In a sense it has made the need for some action by the Government most urgent because, whereas before it was possible for an owner to argue with the tax inspector that he should get Case I treatment which would enable him to set the loss of public opening against his other income, and of course charge against the business of running the house—establishing it as a business, the expense of opening it, and so on—it is now extraordinarily difficult so to argue because the tax inspector can wave the report by this august body at the owner and say, "Here is the Council saying that in most cases it is impossible to run the affair with a view to making a profit, and therefore, you should not get your Case I treatment". I hope that the Treasury has a copy of the report. If not, I can make one available. It was the action of the Council in drawing attention to the inability of the vast majority to make any-think like a going business, with a view to making a profit, and that is the necessary qualification, which made it so difficult to get Case I treatment. Indeed, the Council believes that only a few cases can get it. That makes the case. The ground has been shot from under the taxpayers' feet by the Historic Buildings Council. If one cannot get Case I, there is always Case VI, under which one can carry forward the losses to future years in which a profit is made. But a profit is most unlikely and in some cases is impossible. True, it can be set against other Case VI income, but I am advised that, whereas Case VI income used to include sporting rents, which in some cases provided a good income, they have now gone into another case and there is nothing that most owners can set Case VI losses against. It might be supposed that, if one had struggled on for a lifetime to keep one of these historic buildings alive, one would be thanked for it by the nation or at any rate not attacked for so doing, but the present state of the law means that estate duty can very easily wipe out the work of a lifetime. New Clause 39 safeguards money not just for the upkeep of a historic building—if one is lucky enough to have any—but also for the protection of the lands and gardens and park and whatever other revenue-producing lands that the Exchequer chooses to allow. There is a wide discretion here. It tries to protect the resources supporting a historic building from the effects of estate duty, although there is a safeguard for the taxpayers at large, which is that, if the historic building, the asset, is sold or realised, the full rigours of taxation fall upon it. It is designed to put the House, garden and other lands in a similar position to certain very choice objects of scientific, historic or artistic interest which can be now so exempted in this way. It is ridiculous that, after all the work done by a private owner to keep a historic building alive to be enjoyed by many hundreds of thousands of people visiting this country and our own people, on his death, either all the contents are sold or the whole place is alolwed to fall into gradual decay. There are some owners who, rather than give up their heritage, will let it gradually run down. For work of the Historic Buildings Council for England, this vast sum of £1 million has had to be provided by the taxpayers, because, in the past, the taxation has crippled the resources of people trying to keep these houses in reasonable repair. If the Government want the country to continue to enjoy this part of our heritage, they must face the facts. I know that there are political obstacles, because there are people of extreme views—perhaps on the other side of the House, but certainly in the Socialist Party—who feel that these places should be institutionalised, that the State should take them over and that the private owner has no place. But the private owner provides those buildings with the greatest attraction for our own people and for overseas visitors. Statistics published by the British Tourist Authority amply prove this. These places should be allowed to live on, and they can be preserved if the owners are given just this bit of encouragement. The Government must face up to it. I would not expect them to go all the way today. All that I am asking them to do is recognise the problem and say that they will sympathetically consider our proposal and give us some hope for the future. This Clause is not designed to help the idle rich to continue to enjoy a life of luxury. Those people left our shores long ago and for all I know will never return. This new Clause is designed to enable people who are prepared to do so to stay here and battle it out with the elements of decay in the interests of the country at large.6.45 p.m.
I support the plea of my hon. Friend the Member for Bristol, West (Mr. Robert Cooke). I do so as one who has so often, like many members of the public, enjoyed visiting those historic buildings which are homes. I remember when Sir Stafford Cripps set up the Gowers Committee. He said that it was best that historic homes should continue to be lived in if they were to be fully appreciated by the public who visited them.
The Gowers Committee made a great many recommendations, in addition to the establishment of the Historic Buildings Council—from which grants are not always to be obtained—and they have not all been implemented. This new Clause is an attempt by my hon. Friend to pick out two modest but helpful provisions which would make it possible for some houses to remain open which would otherwise have to close down, as many others have done in recent years because inflation and high taxation have put it beyond the means of the owners to support these houses. I happen to live in a small old house dating from about 1550. The cost of ordinary repairs and maintenance is enormous in relation to its size, and if a larger house which the public want to visit is to be kept in proper condition, the owners must be able to find the money. If we put it beyond the means of the owners to keep these houses going, not only will they be driven out of homes which they may have occupied for many generations, but the public will also be driven out. That is, unless the National Trust can be persuaded to keep them on, but that means providing the necessary funds for the National Trust to do so, and those funds are not always available—or it may be that those historic homes can be turned into schools or museums or other public buildings. But that latter alternative involves the most enormous public expense in purchasing the buildings, adapting them, having them restored and so on. There have been several examples in my constituency of famous old houses which have been adapted in this way, but the expense has been colossal. These two Clauses do not go far enough, but they would help. Whether or not they are acceptable to the Government, I hope that the Chief Secretary will agree that the time has come to examine the whole matter again in the light of the 20 years' experience since a start was made on implementing the proposals of the Gowers Committee. Certainly, unless something is done, and pretty soon, we shall lose a further large portion of what is perhaps one of the most treasured parts of our national heritage.I support what has been said on this subject, and particularly about new Clause 38. I am sure that my hon. Friends would be satisfied if the Chief Secretary would say that the Government were seriously considering this whole problem.
This proposal would in many cases be more desirable to, though it would complement, the historic buildings grant where a private owner wishes to open his house to the public and where the public are interested in its historical associations and architecture. A person who chooses to spend other income to improve that type of property and so preserve it for posterity should be able to offset those costs against his other income. This would be a less expensive way of preserving our scheduled buildings than the constant increase in the historic buildings grant, of which I am greatly in favour and I am delighted of the recent increase which the Government have given. What we are suggesting is nothing more than an offset arrangement under personal taxation. It would be far less expensive to the Treasury than the principle which has already been accepted, namely, the Government grant. I am, therefore, highly sympathetic to new Clause 38, and I hope that the Chief Secretary will give an indication that the Government are continuing to look at this problem. Although, as I say, the increase in the historic buildings grant is greatly welcomed, it is often applied only to the problem of ancient and historic buildings after they have fallen into decay. In other words, the grant is normally available only when the roof has collapsed or death watch beetle is in evidence. Our proposal would enable owners to keep their buildings in good repair for posterity.I wholeheartedly associate myself with the pleas that have been made in this context. The Chief Secretary will be aware of the anxiety that exists in informed circles over this whole subject, and I wish particularly to support the point made by my right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton) that it is time for the Government to take a new look at the whole matter. My right hon. and learned Friend made an appropriate and timely suggestion.
I do not know whether the Chief Secretary will be able to agree to the new Clause. If not, I trust that he will be able to undertake to adopt the principle of it in due course. I hope that either tonight or in the measurable future a considered statement of Government policy will be made over this whole area. Such a statement is overdue.Nobody will quarrel with my right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton) that there is great attraction, from the tourist and general preservation point of view, in seeing that historic houses remain family homes lived in by people in private ownership. Indeed, this principle was accepted by Sir Stafford Cripps.
Nor will anybody quarrel with my hon. Friend the Member for St. Ives (Mr. Nott) that in many cases it is cheaper to pay the owners to go on living in historic houses than to maintain those houses in the form of public institutions. That is clearly accepted by the Government, as evidenced by the increased rate of grant, which is now running at about £1 million a year. I would go so far as to agree with my hon. Friend the Member for Bristol, West (Mr. Robert Cooke) that there are cases where the duty of preserving and upkeeping such a house could be onerous on the owner and even militate against the likely success of the owner's efforts to conduct a commercial operation by showing the house. However, there is considerable difficult in trying to meet these problems by means of the two new Clauses under discussion. My hon. Friends will agree that it is a difficult task to draft a provision which will distinguish between measures that are designed to preserve a house in private ownership and measures designed to preserve a house in current ownership, and this is a problem with which neither new Clause gets to grips. One difficulty about which my hon. Friend the Member for Bristol, West was obviously thinking in connection with the income tax provisions was that of a house which it was unlikely that enough people would ever want to visit in a given year for it to be able to produce a regular enough income which would give it Class I status and therefore an income from trading. On the other hand, if any form of income were allowable for tax purposes as money spent on such a house, it would be extremely difficult under this proposal to stop those who wish to show a small portion of the house or who show the house infreqently from receiving, in effect, a subsidy by relief on the upkeep of the whole of the property. One comes across this sort of case from time to time. It would be very hard indeed to do more under Schedule D than to continue the present arrangements of Class VI, which is the carry forward provision. However, this is something we shall continue to look at in our review of taxation, which my hon. Friends are no doubt aware is by no means complete. I hope I have said enough to show that I am aware of the problem that has been raised. New Clause 39 is designed to ensure that historic houses and trust funds for their upkeep are considered in the same way as pictures, prints, books, manuscripts, works of art and so on under Section 40 of the Finance Act, 1930, the details of which I need not weary the House by describing. The implication here is that the house and its immediate surroundings, and any trust fund set up for it, should be similarly exempt from the capital gains tax provisions that go with the exemption from death duty. The new Clause also provides that such a trust fund would be able to switch investments without the switch being regarded as a sale, which would attract estate duty, and presumably from capital gains tax, so long as the proceeds were reinvested or retained within the fund or applied to the upkeep of the house. Considerable difficulties would arise here, despite the arguments of the Gowers Committee. 7.0 p.m. There is a case for saying that this would not be more expensive than the Government grant which is available to designated houses, although, as has been mentioned, the grant is usually available to avert disaster. The problem is that with estate duty exemption, and particularly with the exemption of funds, there is very little guarantee as to the extent to which that exemption will be confined to the purposes for which it was allowed, that is to say, the upkeep of the property; and particularly so because by reducing the amount of dutiable estate it clearly also benefits the owner indirectly to a further extent. One of the problems raised by both new Clauses is that in some cases one is undoubtedly dealing with people who have made considerable personal sacrifices to live in a certain property because of love or interest or historic association; people who could live a great deal more comfortably somewhere else but who have chosen, for reasons which are by no means dishonourable, to spend more on maintenance of the property and less on themselves than they would if they lived somewhere else. But I must say that these Clauses as drafted would enable people to get very considerable help in the upkeep of properties in which they were living quite happily, and which they were well able to maintain without assistance. It is the wide divergence of the problem, the difficulty of confining taxpayers' help to the taxpayers' purpose of preserving property and preserving historic houses which makes it difficult to accept the Clauses as they stand. There is one major difference in regard to goods and chattels in respect of the provision of Section 40 of the Finance Act, 1930. Goods and chattels are removable and, above all, exportable, and the concession is designed to be much more clearly defined as maintaining the objects concerned intact and in this country. The problem with historic houses is not quite the same, because even if such a house is sold to another owner there is no reason why that owner should not show it just as much as the original owner did. My right hon. and hon. Friends made their point in regard to a problem which is by no means new. It was identified some ten years ago, and was the subject of the Gowers Report. In the course of the general review of our tax system which is to take place during the coming year, we will bear in mind what has been said in this debate.I am grateful to my hon. Friend for his reply, but all of us who have tabled or supported the new Clauses agree that a good deal more work needs to be done on the Treasury. Reference to the Gowers Report brought my hon. Friend's speech to its conclusion, but perhaps we might begin by getting that report back into print, and that is the Treasury's responsibility. Perhaps the document referred to from the Treasury Bench will be available to the House; perhaps we could have a few more copies of it. My hon. Friend will find that the Stationery Office have no more, and would like mine back.
The Gowers Report specifically said that a particular house and related land should be exempted from estate duty for so long as they were not sold, and also property assigned to trustees to manage the house. I presume that one might form some private trust for the property, in which case one would enjoy the same privileges as the National Trust. I see signs of dissent from the Treasury Bench, but that is not the answer I have had before, so perhaps we are worse off than we thought we were. My hon. Friend referred to further Government help—the £1 million to be used by the Historic Buildings Council—but let us be quite clear that that money is for capital repairs; making good the ravages of time and meeting the inability of owners to do the necessary work because they have had their resources reduced by taxation. It has nothing to do with the running costs of the building, which comprises much of what we propose to do. My hon. Friend said that the results of the new Clauses might make it just that much easier for people to go on living in houses where they are at present living quite comfortably. No doubt some of them are living quite comfortably at the present time. No doubt the Onslow family—your predecessors, Mr. Speaker—would still be living at Clandon Park in some degree of comfort if they had hung on to it, but do not let us imagine for a moment that the £200,000 which has been spent by the National Trust, and the various amounts of help from the Government, and indeed the other £100,000 which should be spent on the property, would have been spent by any family living comfortably in the family home which they had for hundreds of years. Instead they have been attacked by every form of taxation, beginning with the Lloyd George Budget, and even before that. Let us therefore not kid ourselves that this provision would enable people to go on living in comfort. In any case, that could be looked after, because the schedule of repairs and improvements could well be managed by the Historic Buildings Council and its architects. One could be told that if one did not spend, say, £10,000, one would not get tax relief. If there is any looseness in the new Clauses, I am sure that it is not beyond the ability of the Treasury, if it had the will, to tighten them up. I appreciate my hon. Friend's position, because a Minister always gets a brief when dealing with a new Clause, advising him, first, to pull it to pieces because of its drafting, or because it goes too far, or does not go far enough, or does not do that which the hon. Member tabling it said it would do. We expected that sort of approach, but our concern has been the spirit of the matter. My hon. Friend referred to Case 1. The trouble now is that one can keep one's house open, work very hard on it and collect quite a lot of money, only to find that all that income is merely added to-one's other incomes and consequently to one's tax burden. If one opens a house regularly, reasonable public access is required. That means that the house must be open on about one hundred days a year or to so many thousand visitors. That is perfectly well looked after under the existing Statute. A few people have tried to break the spirit of the agreement they had with the chairman of the Historic Buildings Council, but they are in a very small minority, and in any case they have been taken care of. Reasonable public access means reasonable access at reasonable times to all reasonable people. I believe that the Case 1 element would do away with the position where one can work very hard and perhaps after four or five years may have taken a total of £20,000 only to find that all the takings are liable to the full burden of taxation, resulting either in the owners being ruined or the best of the contents of the house being sold to satisfy tax demands. Even then the contents might well attract capital gains tax. It becomes a rolling stone picking up tax wherever it goes. I will not pursue the matter further, but I must point out that my right hon. and hon. Friends and myself, and other hon. Members who are not now present, could have mounted a massive operation this afternoon. We could have got a great many more hon. Members to come and carry on the debate. There is undoubtedly enormous interest in the subject outside the House. However, there are a great many more important matters for the House to discuss. I only say that if we allow these things to be destroyed we shall be the poorer, so will all our friends from overseas and those who come after us here. Perhaps having said so much in using my right to reply to the debate I may end in the hope that we shall do better next time and beg leave to withdraw the Clause.Motion and Clause, by leave, withdrawn.
New Clause 41
Receipts After Discontinuance: Allowable Deductions
Section 145 of the Income and Corporation Taxes Act 1970 shall be amended by inserting, after paragraph ( b) of subsection (1) the following paragraph—
Brought up, and read the First time.
I beg to move, That the Clause be read a Second time.
The purpose of the Clause is to put all self-employed people on the same basis as employed people for pension purposes. There are many professional men, doctors, dentists, surgeons, solicitors and others who choose to assemble their accounts on a cash basis and not on an earnings basis, and so they should be entitled to do. When they come to retire they immediately run into difficulties. It often takes months and even years for their patients' and their clients' fees to be paid. Until 1968, these post-cessation receipts were treated as capital and were not taxed. But since 1968 they have been treated as earned income and my hon. Friends and I do not dispute the justness of that. Meanwhile, professional people still have to look after their old age and the classic method whereby a professional man has established a pension for himself has been to buy an annuity and to pay premiums for that annuity contract. As long as the professional man is still in practice, he may set these premiums and his other expenses against his earnings. But as soon as he retires he can set only a few expenses against what are in effect delayed earnings and the most important impediment from which he suffers is that he can no longer set these premiums against these earnings. This is precisely the unfairness which the Clause is designed to remove. It is not a Clause entirely without limitation. The two-thirds rule which applies to the employed would continue to apply in this instance. There is one final injustice which the Clause is designed to mitigate. Where the net relevant earnings in the case of a man still in practice are not sufficient to cover the premiums of an annuity contract, he should be allowed to carry the surplus forward into future years. If that should be allowed for people still in practice, in exactly the same way it should be allowed for those who are retired. The Clause is designed to encourage and to give heart to those of our citizens who are self-reliant, precisely those members of the community whom we in the Conservative Party are anxious to encourage. I would remind my hon. Friend the Financial Secretary that he and some of his hon. Friends suggested a provision in 1968 couched in extremely similar terms.7.15 p.m.
I was intrigued to be reminded by my hon. Friend the Member for Truro (Mr. Dixon) that in 1968 we had suggested a Clause similar to this. But I remind him that that was the first year in which the outstandings became taxed. My hon. Friend will be delighted to learn that events have not stood still since then and that when a professional man receives outstanding fees after his retirement, the Revenue is prepared to allow qualifying premiums against those outstanding earnings.
I listened carefully to what my hon. Friend said and it did not seem to me that he was asking for any more than that. This is a relief which is available and in the circumstances I need not weary the House with a long explanation. If I have missed the point of what my hon. Friend was saying, or there is some matter which he would like me to look at, perhaps he will write to me and I will endeavour to clear it up. But as he put the case he seemed to be asking for something which the Revenue was already prepared to allow, and in the circumstances I feel that he will not want to press his Clause.Would my hon. Friend say whether the Revenue would concede expenses incurred in collecting any outstandings? Outstandings are taxed under Case 6 on Schedule D and therefore not treated in quite the same way as if collected in during the continuance of the profession. Would expenditure which would be deductible under Case 1 or Case 2 of Schedule D be allowed to the retired professional man against his outstandings?
That does not arise on the Clause, but my impression is that in ordinary circumstances normal expenses of this sort would be allowed, as the rules under Case 6 are sometimes described as analogous to the rules under Case 1. Dredging back from my memory, I have in mind the Epping Forest case which seemed to establish certain principles in this regard and I am told that these expenses would normally be allowed. However, I am rather shooting off the top of my head and it does not arise on this Clause. If I am wrong, I will write to my hon. and learned Friend.
In view of what my hon Friend the Financial Secretary has said in reply to me and my hon. and learned Friend the Member for Dover (Mr. Peter Rees), saying that his view of the law is somewhat more generous than I had understood it to be, and as I do not want to burden the House by prolonging the discussion, I beg to ask leave to withdraw the Clause.
Motion and Clause, by leave, withdrawn.
New Clause 48
Allowance Of Interest As A Deduction
(1) In section 122(1)( b) of the Taxes Act for the words 'annuity or other annual payment (not being interest)' there shall be substituted
the words 'annual interest or any annuity or other annual payment'.
(2) Where a person pays in any year of assessment interest on an advance from a bank he may claim that the amount of the interest shall be deducted from or set off against his income for that year of assessment.—[ Mr. William Clark.]
Brought up, and read the First time.
I beg to move, That the Clause be read a Second time.
With this I am prepared to allow discussion on New Clause 45–(Interest on bank overdrafts)—and new Clause 47–(Loans for maintenance and repair of let agricultural property).
This matter was fully aired in 1969 and my right hon. Friend the Chancellor of the Exchequer, my hon. Friend the Financial Secretary and my hon. Friend the Minister of State will remember it very clearly, for both the Financial Secretary and the Minister of State took part in the debate, as did the late Iain Macleod.
The point is to allow bank interest as a deduction from one's income for tax purposes. Until the abolition of bank interest as an allowable deduction, in 1969, we had always charged tax under our tax laws on net income. Any expenditure incurred in obtaining that income had been allowed. The late Iain Macleod summarised this cogently and succinctly when he said that it should be necessary for the Treasury to allowIt is as well to remind the House of this because it was a definite promise by a distinguished Conservative Member who, for a short time, became Chancellor. It was a clear promise and I am sure that my right hon. Friend the Chancellor is fully seized of the point. I do not want to repeat the argument and delay the House, but in many cases the taxpayer has to borrow money from a bank to satisfy his tax liability, that is, his estate duty liability. I remind my right hon. Friend that in winding up an estate, the estate duty is computed and it must be paid before the executor can handle the assets and realise them in order to pay the duty. Consequently, a bank overdraft is always organised. Many of my hon. Friends could give other examples whereby a legitimate bank interest should be an allowable deduction. The previous Government took a regressive step when they abolished this allowance for tax purposes. It is ludicrous to say that everybody who has a bank overdraft is of necessity a speculator running in and out of the stock market, earning a lot of money and charging the interest on his overdraft. This does not happen. In many cases bank interest is necessarily incurred in the obtaining of income. There are many complications in this legislation. There are loopholes in the charging of bank interest. My right hon. Friend will be seized of these points. None of us on this side of the House would advocate any change in the tax law that would lead to tax evasion. But in cutting out the whole of bank interest, one is penalising the true borrower, the man who borrows money to augment his income, in which he eventually pays income tax. When the previous Government introduced this regressive measure, the present Treasury Bench opposed it. In view of the commitment made, I hope that my right hon. Friend can deal with the Clause sympathetically. Although I accept that there are complications, and that between now and tomorrow, when we finish the Bill, it may be a little difficult to accept the Clauses, I hope that my right hon. Friend will give a firm and unequivocal undertaking that this matter will be looked at urgently, so that the taxpayer is not penalised as he has been since 1969."interest on borrowings for all normal personal, family, professional and business purposes; and, accordingly, when we form a Government we shall repeal these Clauses."—[Official Report, 18th July, 1969; Vol. 787, c. 1163.]
I reinforce the cogent argument of my hon. Friend the Member for Surrey, East (Mr. William Clark). I shall not set out, as he has very eloquently done, the reasons for my doing so, because the merits have been so fully argued in previous Finance Bills, notably in the Bill of 1969. In that year the Clauses introduced by the then Government were discussed upstairs in Standing Committee, and the Conservative Opposition at that time discussed the new Clauses and our Amendments to them for one whole morning, a whole afternoon, an evening and a whole night session. Therefore, I say no more on the merits of the matter, except to remind my right hon. Friend, who will need no reminding, of the principle of the relief that we seek to gain, that is, that the charge to tax should be on net income after allowing expenses necessary to obtain it. That is the principle and that is what we fought for so strongly when in Opposition.
My hon. Friend the Member for Surrey, East mentioned the words of the late Iain Macleod on 18th July, 1969:In our election manifesto we alluded to this repeal, as my right hon. Friend knows very well. I know that during the course of this Parliament that pledge will be carried out, and I fully support my hon. Friend on the Clause."We believe that relief should be available, as in the past, for interest on borrowings for all normal personal, family, professional and business purposes; and, accordingly, when we form a Government we shall repeal these Clauses,"—[OFFICIAL REPORT, 18th July, 1969: Vol. 787, c. 1163.]
I reinforce the remarks of my hon. Friends. I, too, am confident that something will be done in this respect fairly soon.
In my new Clause on the Order Paper I have tried to draw attention to the difficulties of those who own or operate agricultural assets consisting of one, two or three farms, or even more, when they cannot set against income the interest which is charged on their relevant bank account. The result of this has been that in some cases many agricultural companies, especially the smaller ones, have had to cease letting farms to prospective tenants because they have found that if they take the farm in hand themselves and farm it, they can have overdraft interest allowed for tax purposes on the necessary expenditure incurred in running the farm. That has had one regrettable effect in that it has, in a way, made it much more difficult for small farms and people who would like to become tenants to obtain a farm, because there are fewer and fewer coming on the market. When faced with the prospect of letting a farm and knowing that the expenses of running the business cannot be offset against tax, for the purposes that I have outlined in my new Clause, many landlords are either taking the farm in hand themselves or are, in some cases, selling it to an owner-occupier. This has hit hard the small would-be farmer with limited means because he cannot afford to pay the high price of agricultural land today, about £300 or more per acre for some of the best land in the Midlands. My hon. Friend the Member for Torrington (Mr. Peter Mills) and I tabled the Clause in the hope of calling the Chancellor's attention to this important point and highlighting the difficult position in which estate companies which operate farms are placed by not being allowed to offset their overdraft interest for tax purposes.I welcome the opportunity, like my hon. Friend the Member for Harborough (Mr. Farr), who spoke so well, to deal with the narrower aspect of this matter, but I strongly support what my hon. Friend the Member for Surrey, East (Mr. William Clark) and my hon. Friend the Member for Horsham (Mr. Hordern) have said regarding the general case.
All of us know how very difficult a Chancellor's choice is at any time. He is faced with an almost bewildering variety of alternatives. However much he may wish to please his friends and to honour promptly clear undertakings which have been given, it is difficult to please everyone when one has to have in mind at the same time the wise managament of our economy. We all greatly appreciate the presence of my right hon. Friend the Chancellor to reply to the debate. I hope that he will not mind my saying that inevitably there was some disappointment that he did not find himself able to act in regard to interest in his Budget this year. We all hope that, above all else, if he cannot accept the Clause, he will give a very plain undertaking and a timetable, perhaps, for next year. I return to my narrower point. It is a matter about which I and other hon. Members feel very keenly. My right hon. Friend knows that I have written to him on this subject. I thought it better that he should have a view in advance of Report stage, which is why that letter was not signed by a large number of my hon. and right hon. Friends. 7.30 p.m. The loan interest provisions of the Finance Act, 1969 entirely disregard the agricultural situation. They are, as my hon. Friend the Member for Harborough instanced, proving serious for owners of let land and can have only a damaging effect upon food production. My hon. Friend was right to underline the problems which exist in respect of young farmers attempting to obtain occupation of farms which are available for rent. The reason is that those who might wish to let their land are, for one reason or another—the disallowance of loan interest is one important reason—not willing to put farms upon the market. They are discouraged in almost every way from so doing by legislation of one kind or another. My purpose in tabling new Clause 47 was to give my right hon. Friend an opportunity, if he thought fit to take advantage of it, to recognise that the agricultural situation is a special one. Even if my right hon. Friend were not able to go all the way with my hon. Friends the Members for Surrey, East and Horsham, none the less he might think it right to harmonise the general tax code with the special situation of those who own agricultural land. Those who are considering letting land or who are letting land at present regard this as a matter of some importance. I do not think that the difficulties should be allowed to continue pending the promised repeal of the whole of the 1969 provision. It is profoundly unsatisfactory that if a farm is owner-occupied tax relief can be obtained on the interest on a loan applied to replacements, whereas if the farm is tenanted the owner is denied relief unless he is a company. That is neither fair nor sensible. It is a capricious distinction and should, in the interests of good sense, be removed promptly. I hope that my right hon. Friend will be able to give us some encouragement tonight.I am grateful to my hon. Friend the Member for Horsham (Mr. Hordern) for tabling the Clause and to my hon. Friend the Member for Surrey, East (Mr. William Clark) for the way in which he moved it. The speeches of my hon. Friends the Members for Horsham, for Surrey, East and for Harborough (Mr. Farr) and of my right hon. Friend the Member for Taunton (Mr. du Cann) were commendably brief, but they were none the less cogent for that. I take the point absolutely; my hon. Friends are right in saying that this subject has been discussed in great depth before now. I am pleased that the Clause has been tabled, because it gives me an opportunity to explain to the House the Government's intentions.
Before dealing with the general aspect, may I say that I am not at all sure, for reasons which I could deploy at some length, that new Clause 45 has merit. However, it is a matter which I will obviously take into account. I have great sympathy with what my right hon. Friend the Member for Taunton said about agricultural landowners. I agree with my right hon. Friend that it is wrong that they should not be able to claim relief for interest on money borrowed for the maintenance of let property. My right hon. Friend will appreciate the difficulties of legislating piecemeal for particular cases in advance of general legislation. I am grateful to my hon. Friend for having written to me some time ago and putting the point to me, because it enabled me to give the matter full consideration which sometimes one is not able to have in connection with Finance Bill debates. For the reasons which were explained at the time, we opposed the provisions in the Finance Act, 1969 which provided for the disallowance of interest payments. Both then and in our election manifesto we said that we would legislate to put this matter right. The House will recall that we did not commit ourselves to legislate in the first, or indeed in any particular, Finance Bill. We have repeatedly made it clear, and we said it in our manifesto, that our programme was a programme for a Parliament. I mention this because this commitment was different from, for instance, the commitment to deal with the disaggregation of children's investment income. There we said specifically that we would make the change in the first Budget; and this I have done. The whole House will understand why, with so many other taxation changes announced in the Budget, it was simply not possible as well to deal with the disallowance of interest. It was not just a question of my taking action. I also had to take into account the very considerable burden of work which faces the Inland Revenue; and I cannot help recalling, as many of my hon. Friends will, the problems which arose after the Finance Act, 1965 when the Revenue was placed in an almost impossible situation. I want now to explain to the House certain problems which have to be resolved. Since our intention was stated in 1969, an entirely new situation has been created by the Crowther Report, which has recommended that all consumer credit transactions, whatever form they take, should be recognised by law as involving a loan to the purchaser at interest. This, as I shall show, is a recommendation of not only immense importance, but also of great significance for the taxation system. The Crowther Report when on to urge, in referring to the possible restoration of tax relief for interest, that, whatever was done, all consumer credit transactions should be treated alike. It is also important to bear in mind that the Crowther Report made it clear that the Committee appreciated that practical considerations might rule out universal relief for all consumer credit interest. Whatever view may be held about the merits of the Crowther recommendations, on which the Government have not yet taken any decisions, the simple fact is that there are estimated to be 4 million or 5 million hire purchase transactions a year and these have never attracted tax relief. If we were now to adopt the Crowther recommendations and treat all consumer credit transactions alike, this would involve in total giving relief in 5 million or 6 million cases. To do this would mean, in terms of work load, the equivalent of more than 1,000 Inland Revenue staff working full-time to handle the claims. Right hon. and hon. Members on both sides will agree that this is just not practicable at this time and it was certainly never contemplated in 1969 that relief for interest should be allowed for instance for the millions of hire purchase transactions. The Revenue is already over-burdened. Although I have deliberately staggered the introduction of the major reforms which I announced in the Budget, those reforms are bound initially to add to the work load, although eventually they will certainly save it very considerably In the next financial year—1972–73–for instance, tax offices face the massive task of re-coding every P.A.Y.E. taxpayer in preparation for the new unified tax to come into effect in April, 1973. In the light of what I have said, the House will appreciate that, with the best will in the world, it was not practicable to act at this time. The recommendations of Crowther are themselves of great consequence, quite apart from the fiscal aspects of the proposals. I must therefore ask the House to accept that it is not yet possible to state what is the most equitable and practicable scheme for dealing with the situation which has been highlighted by Crowther. I should make the further point that I am advised that, although the new Clause is in order—obviously, it is, since it would not have been selected otherwise—it would not serve as a workable provision if it were written into the law. I hope that, in the light of what I have said, my hon. Friend will not wish to press the new Clause.I have some observations to make on new Clause No. 48, moved by the hon. Member for Surrey East (Mr. William Clark), though they will be short, as, clearly, this will be the subject of major debate on a future occasion.
As the new Clause stands, it would be totally unacceptable to the Opposition. It might be argued that it would, in itself, by encouraging personal borrowing, have a reflationary effect. There was always considerable argument about the economic impact of the 1969 measures. Viewed simply in terms of the amount of tax added to the revenue, the deflationary effect which was required at the time to act against consumption was somewhat limited, but it was always thought likely that it would have a considerable extra effect on personal borrowings, and some people in the City to whom I have spoken certainly thought that it played a considerable part in the decline of Stock Exchange values after the 1969 Budget. If that was right, to encourage personal borrowing again in this way would in itself have a reflationary effect, but we should firmly hold that it would be a reflation of the wrong kind for the benefit of the wrong people. I thought that the hon. Member for Surrey East, in presenting his new Clause to the House—the other new Clauses are directed more particularly to other circumstances—approached the subject somewhat superficially. We have now had the Crowther Report which, as the Chancellor said, is closely relevant. It seems to me that the Crowther Report will put considerable obstacles in the way of the Government's simple redemption of the pledge they made in 1969. If there is no extension to hire-purchase interest, it will be monstrously inequitable, as the previous position was. It was always true that this was a tax concession favouring only one section of the community. It favoured those who could borrow by means of bank advances but did nothing to relieve the position of the ordinary man who borrowed by means of hire purchase. As Crowther rightly pointed out, there is no inherent distinction between the two, save that one group are wealthier than the others. If there were a reform carried out simply in the terms of the pledge which was given, it would be one more example of reform favouring just one section of the community, like the disaggregation provisions to which the Chancellor referred. What is to happen now? As the Chancellor said, if this tax relief is to be given not only to those who borrow by bank advances but to those who borrow under hire-purchase arrangements, not only will there be a lot of work for the Revenue but there will be a great deal more cost to the Exchequer, and the economic effects will be much greater, I think, than anything contemplated in the past. It would be intolerable if one did not treat all borrowings alike, and, when the Crowther Report comes to be considered, its impact on whatever reform the Chancellor has in mind will be most important. I beg the Chancellor not to repeat on that occasion the mistakes made in this Budget. The need for one nation, which the Prime Minister expressed when he took office, will be as great in the years to come as it is now, and divisive policies favouring one section of the community alone—the theme of the present Budget—will be as disastrous then as they are proving now. There will need to be a change of course in economic and social strategy by the Government after this Budget period.The question of what is done about personal loans and overdrafts will be material because, if a tax concession is given to the man who can borrow tens of thousands in order to invest and nothing is done for the person who borrows in order to buy a washing machine, a refrigerator or a motor car, the effect will again be divisive. It will work against the one nation concept which is the country's need now, and it will not be the sort of measure which will help to improve our economic situation.
I appreciate that the hon. and learned Gentleman feels obliged to make certain points in the context of Crowther, and I appreciate that he has strong views about the management of the economy in general, but does he not understand that the case which my hon. Friend the Member for Harborough (Mr. Farr) and I advanced in our different ways in regard to the maintenance of agricultural property is totally different from the general matters with which he is dealing?
I have always recognised that there was a special difficulty in that respect, and I said in my opening sentence that I should address myself specifically to new Clause No. 48 in the name of the hon. Member for Surrey, East and his hon. Friends. I addressed myself primarily to the reforms adumbrated in that Clause.
7.45 p.m.
The House is grateful to my right hon. Friend the Chancellor of the Exchequer for coming to listen and to answer this short but important debate. We all realise the complications, particularly with the advent of the Crowther Report, though I endorse what my right hon. Friend the Member for Taunton (Mr. Du Cann) said, that Crowther really has nothing to do with the taxation of interest in agriculture.
We on this side realise that it was a package promise regarding interest which was made in 1969, and repeated last year. In view of what my right hon. Friend has said, I beg to ask leave to withdraw the new Clause.Motion and Clause, by leave, withdrawn.
New Clause 51
Replacement Of Business Assets: Exemption To Companies Carrying On Mutual Business With Its Members
Section 33 of the Finance Act 1965 shall be amended by adding, after paragraph ( c) of subsection 10, the words '( d) in relation to a company carrying on any mutual business with its members'.—[ Mr. Ogden.]
Brought up, and read the First time.
I beg to move, That the Clause be read a Second time.
First, Mr. Deputy Speaker, I thank you and Mr. Speaker for making it possible for us to discuss this matter in the House tonight. There are rather exceptional circumstances, and we appreciate what has been done to make this discussion possible. I declare my interest, as I have the honour to be parliamentary adviser to the Council of the Pharmaceutical Society of Great Britain, and the Society also has a direct financial interest in the Clause. There are some hon. Members here tonight who were not present in 1965, or who, if they were here, may have forgotten—as I had—that Section 33 of the Finance Act, 1965 is concerned with capital gains tax and exemptions from payment thereof. The purpose of the new Clause is to ensure that professional bodies shall in certain circumstances be able to claim exemption from payment of capital gains tax, as sections of industry and individuals are able to do. I begin by explaining how the matter was brought to our attention. When I say "our attention", I include the hon. Member for Nottingham, South (Mr. Fowler), in whose name also the new Clause was put down. Last week, we received a copy of a letter which the Pharmaceutical Society had written to the Chancellor of the Exchequer. In that letter, the president of the Society, Mr. Darling, explained a series of circumstances which, for the convenience of the House, I shall telescope in time. Hon. Members will know that the British Museum is to extend its premises. The home of the Society, No. 17, Bloomsbury Square, is required to provide a site for the extension of the British Museum Library scheme. The Society's headquarters has been in Bloomsbury Square for a number of years and it is, naturally, reluctant to leave its present home, but, as the site is required for what it has regarded as a greater purpose than its own convenience, the Society has agreed to the sale of the site, a purchase price has been agreed, and the negotiations for sale have continued on that basis. The purchaser is the Department of the Environment, which will use the site, when acquired, for the extension of the British Museum Library. Last week, the Society was informed that, contrary to what had previously been understood, any sum of money accruing to it from the sale of the site to a Government Department would be subject to capital gains tax. It had not understood this at any previous time—perhaps this was the Society's fault—and in the negotiations about purchase price, whether done through the district valuer or by normal commercial agreement, the Society had assumed that it would not be liable to capital gains tax. The Society had thought that it was in a similar position to an industrialist. If he wishes to sell one factory and move into new premises, the money accruing from the sale can be used in full towards the purchase of the new factory, provided he is carrying on his business. Similarly, a householder who sells his or her home and uses the money towards the purchase of another does not have to pay capital gains tax. The Society is now informed that under Section 33, even though it is a statutory, professional, non-profit-making body in the sense of profit as we understand it, and even though it has had exemptions over many years from the Inland Revenue Department for internal surpluses on the services it provides for its members, it will have to pay capital gains tax on any profit from the sale. Obviously, if it has been at the premises for 20, 30 or 40 years it will receive more than was paid for them. The whole proceeds from the sale to a Government Department are to be used to provide another home and headquarters to carry on not only its ethical and professional duties but its statutory duties. The purpose of the Clause is to say that a professional organisation carrying on professional and statutory duties shall have the same exemptions as an industrialist ox a home owner when it wishes to continue those duties—and in fact is forced by law to do so—when it has cooperated with the Government to give up its present site, and when it did not seek to make any profit but the profit was forced upon it by Government action. We informed the Treasury that these questions were being raised, so the matter is not completely new to the Financial Secretary. We apologise to him for having had to telescope the facts. We tried in the circumstances that were made known to us to bring the matter to the attention of his Department. He was not able to give any answers, and so we have been compelled to bring the matter forward in this way. I say that with no disrespect for the hon. Gentleman and the House. We ask quite simply that a non-profit-making organisation which has co-operated with Government Departments and is doing its public duty should not be liable to capital gains tax where a profit is forced upon it, partcularly when, as in the case that I have instanced, the tax would be paid to one Government Department, the Treasury, but the Society would have to reconsider the price of the property to another Department. In finally agreeing the price with the Department for the Environment, the Society would have to take note of the new situation. The Minister may be able to say that under existing legislation there is a provision of which I am not aware by which the Society is already exempted. We hope that he will give the matter favourable consideration.I have little to add to what the hon. Member for Liverpool, West Derby (Mr. Ogden) has said.
The curious rule to which the hon. Gentleman has referred affects not only the Pharmaceutical Society, of which I also have the honour to be one of the parliamentary advisers, but other professional bodies. I think that the Monopolies Commission said that there were 300 professional non-profit-making bodies in this country. It is curious that the law allows a trading company to carry over profits on the sale of, say, its headquarters and to devote the entire proceeds to the purchase of new headquarters, but that this form of exemption is not open to a professional body. That means that, for example, as I understand the position, if the Law Society wanted to move from Chancery Lane, or the British Medical Association wanted to move from Tavistock Square, or the Institute of Chartered Accountants wanted to move from Moorgate Place, they would also be caught by the rule and have to pay capital gains tax on the proceeds of the sale. The amounts involved in possible payment of the tax may run into several hundreds of thousands of pounds, and this may very much affect the planning of many professional societies. It seems peculiarly unjust that the Pharmaceutical Society, which is moving out of the building entirely to facilitate the extension of the British Museum and to fit in with the Government's plans, should be penalised in that way. The rule has a very serious potential effect upon other professional societies. I very much hope that my hon. Friend will be able to give us some encouragement on this point.I am grateful for the moderate way in which the hon. Member for Liverpool, West Derby (Mr. Ogden) and my hon. Friend the Member for Nottingham, South (Mr. Fowler) have raised the matter. It has come to the attention of Treasury Ministers only in the past few days, as the hon. Member for Liverpool, West Derby, acknowledged, which has made it a little difficult to give it the attention which clearly we should have liked to give it, in view of the case they have put before the House.
The legal position seems pretty clear. The professional body in question, the Pharmaceutical Society, and the other bodies mentioned by my hon. Friend are not charitable bodies. If they were charities, there would be no question of liability to capital gains tax. The Pharmaceutical Society was incorporated by royal charter. Like the other bodies, it is non-profit-making and, therefore, in respect of the activities between its members there is no taxable profit. But these bodies, for the purposes of the corporation tax, are treated as companies, and as such are liable to tax on their investments like any other body. Equally, they are liable to the capital gains tax. The hon. Member for West Derby referred several times to exemption from capital gains tax——I quoted two examples. I understand that if an industrialist carrying on normal industrial activities disposed of one factory to obtain a larger factory, the whole of the proceeds of the sale of the first factory could be used to pay for the new one, and he would be exempt. Similarly, a householder selling one house and using the whole of the proceeds to buy another for himself would also be exempt.
With respect, it is not an exemption. In the case of the industrialist, the capital gains liability is rolled over into the new assets. I apologise for the jargon, but one talks rather glibly of roll-over relief. That was what my hon. Friend was asking for—it was suggested that professional bodies which are not charities and are, therefore, liable to tax should nevertheless be entitled to the same treatment as though they were businesses fully liable to tax on all their profits.
The householder exemption is different. A householder is not liable; he is genuinely exempt from capital gains tax in respect of a house where he lives. The business roll-over is much more analogous to what the hon. Gentleman and my hon. Friend are seeking, where a firm sells one asset and invests the proceeds in another, and we have eased the rules in this very Finance Bill for businesses. Thus, they are not now confined to getting roll-over relief when the assets are assets of the same class—that is to say, buildings, plant and machinery, ships, aircraft, hovercraft and so on. 8.0 p.m. Nevertheless, the roll-over relief applies under the law as it stands only to traders, and the rationale behind that is simply that a business should be entitled to preserve its capital intact when it merely changes an investment from one asset to another. But a professional society really represents, although it has statutory duties and is incorporated by Royal Charter, the sum of its members, and if the members were owners of the asset in question there would be no doubt that they would be charged to capital gains tax on the appreciation in value of the asset from April, 1965, to the date of the sale. It therefore does not make any difference if the members, as it were, are incorporated by charter and form a professional body of this sort. A professional body is still a society and is not carrying on business. It is not a trader in the accepted sense. It is a body which owns property and, like any other body, is subject to the normal law of the land in relation to capital gains tax liability. That being so, it would be difficult to start making exceptions. We have the basic exception for charitable bodies but there are a large number of different sorts of body and individual taxpayers who have sought to secure a roll-over relief from capital gains tax, and it would be extremely difficult to know where to draw the line if we started exempting professional bodies. For example, one may take the case of agricultural landowners and urban landlords. They might well claim the same sort of treatment in a case where a property company invests in a block of flats or where an agricultural landowner invests in one estate, sells that and tries another one. There seems no real line that could be drawn between one category and another. The existing line is drawn between charges which are exempt and traders who are entitled to roll-over relief. Although I have sympathy with the situation in which the Pharmaceutical Society finds itself—I know the site very well and that it has been earmarked for the British Museum—and I appreciate the embarrassment in which the council of the Society must find itself, faced unexpectedly with a potential capital gains tax liability, I find it difficult to accept the new Clause both as it is worded and in its intention and spirit. I make no point about the wording. That would not be an apt argument to cover the question because this is not a mutual business in the normal sense of the word. But I find it difficult to accept the spirit and intention of the new Clause. I do not think that this is a matter which should affect the negotiations with the Department for the Environment. Tax liability which attaches is independent of any question of valuation for purchase for British Museum purposes. I am somewhat surprised that my hon. Friend sug- gested that the liability could run into several hundreds of thousands of pounds We must remember that we are talking about a gains tax and not a tax on the total realisation, and that this, furthermore, is only the gain which has accrued since 6th April, 1965. There has been in those six years a gain on property which this body has occupied for many years.Has the hon. Gentleman given up all idea of what he used to say in opposition with regard to inflationary effect upon capital gains tax, which would have had a great deal to do with this case had the Government been able to rectify what I thought myself was an error on the part of the Labour Government?
This is an interesting observation and, indeed, were such a provision written into the Statute Book the liaibility might well be less, although we are dealing here with a site in London where perhaps land values have risen rather more than the value of money has depreciated since 1965. I doubt very much whether the amount of liability is likely to be of the order of magnitude which my hon. Friend suggested, and I have no doubt that the Society will wish to pursue this with its accountants in order to determine the amount. The Inland Revenue will be helpful in trying to quantify.
I think my hon. Friend has slightly misunderstood me. I said that some cases in London have run into this figure. Surely that is not an exaggeration.
That may well be the case. I apologise if I have misunderstood. Be that as it may, the law is clear—that bodies which are not traders are not entitled to roll-over relief because they are not investing in assets successively for the purpose of a business, and a society of this kind seems to me to be outside the scone of what was the definite intention of Parliament when it legislated for the roll-over relief. It would be very difficult if we sought now to extend the scope of availability of roll-over relief because it would be impossible to know where to draw the line, right down to the urban landlord or the agricultural landowner. It is with great regret that I cannot accept the new Clause, which is supported on both sides of the House, but I hope that, in the light of my explanation, the hon. Member for West Derby will feel able to withdraw the Motion.
I am grateful to the Financial Secretary for the manner in which he has replied and for the trouble he has taken. This might be taken as an example of the inevitable law that once a Treasury Minister is installed, whatever party he comes from, he is reluctant to part with taxation at any particular time, although I accept the 6d. off the income tax and the rest. The hon. Gentleman congratulated and complimented the hon. Member for Nottingham, South (Mr. Fowler) and me on the moderate way we put our case. Perhaps we were a little too moderate. He offered us sympathy. But no one can spend sympathy. We were asking for cash—or at least the opportunity not to pay cash.
I omitted to say that this is the first time, to my knowledge, that the Pharmaceutical Society has asked us to make representations on a matter in which it has a financial interest. On every other occasion, its case has concerned the profession itself, standards, medicines and so on. I do not usually trouble the Financial Secretary in debates on Finance Bills. To me, "roll over" is usually something said to a dog. I was lost. Perhaps I should have consulted my hon. Friend the Member for Heywood and Royton (Mr. Barnett), but I am always lost long before he begins. I think that the Financial Secretary was saying, "Certainly not yet". I think that he was saying, "No". He was right in saying that the Department has had little time to consider this matter. On that basis, I hope that he will provide opportunity for further representations to be made to him and that he will give them the same degree of consideration that he has given the new Clause, but with a more hopeful verdict at the end of it. On the basis of the fact that I do not believe in fighting battles or dividing the House when I know I am going to lose, I beg to ask leave to withdraw the Motion.Motion and Clause, by leave, withdrawn.
Clause 2
Excise Duty On Gas For Use As Fuel For Road Vehicles
I beg to move, Amendment No. 1, in page 3, line 8, after 'values', insert:
'of the cost of conversion'.
Clause 2 subjects gas fuel to the equivalent rate of fuel tax as is charged on petrol. The first motor gas station outside London has been established at Hemel Hempstead. This is a very interesting process. It is necessary to have a car converted and then the motorist can use petrol or can switch over to gas fuel. The great merit is that the gas fuel is very much cheaper than petrol and a considerable number of my constituents have already converted to the system. The disadvantage is that there is a cost of about £120, depending on the vehicle, for conversion. The effect of the Amendment is to take account of this conversion cost.
If no account is taken then no one in their right senses would ever pay out £120 to burn fuel which costs the same as petrol. The result will be that investment in these gas stations will be lost and there will be no development of a useful alternative fuel, which ought to be encouraged. There is the possibility of using North Sea gas thus avoiding the importation of petroleum products.
The second argument in favour of this system has to do with pollution. There is no smoke, sulphur or lead emitted from this gas. There may be some carbon monoxide; opinion is divided on that. But it is a great improvement on petrol or diesel. Another reason why the fuel should be encouraged is purely from the point of view of diversification. We cannot tell what the future holds. Why should we go on using petrol or that disgusting fuel, diesel?
In Committee the argument of the Minister of Stale was that it may be that in future all vehicles will have to absorb the costs of anti-pollution measures and that these converted vehicles were absorbing the cost a little earlier. We must recognise that this is a dual-purpose vehicle using petrol or gas and as the petrol engine of the future is improved from a pollution viewpoint the cost of that will be additional to the cost of any conversion. That argument therefore falls to the ground. This does not deal with the position of those who have converted. If the spirit of this Amendment is not accepted, it will not only be grossly unfair to a growing industry but also appallingly unfair on those who have already spent this considerable sum.
8.15 p.m.
The hon. Member for Hemel Hempstead (Mr. Allason) pointed out that one of the advantages of liquefied petroleum gas was its anti-pollution qualities as compared with other fuels. It is to that aspect of the case, which took up a good deal of time in Committee, that I should like to address my remarks. It seemed to us on this side of the House, and also, I think, to many on the other side, that the replies we received from the Minister of State in Committee were unsatisfactory. We have tabled an Amendment rather broader in scope than the Amendment moved by the hon. Member for Hemel Hempstead, which has not been selected. I warmly support the hon. Gentleman's Amendment.
It is fashionable nowadays to pay lip service to the need to counteract pollution of the environment and the atmosphere. But lip service is not enough. It is becoming increasingly clearer, that the problems of pollution can be dealt with only by positive and deliberate Government action. Among the forms of action which can be taken to combat pollution, one of the most important items must be deliberate fiscal discrimination. Because of that, we were so distressed by the attitude which the Minister of State expounded in Committee. If the taxation system is to be used deliberately to further the cause of anti-pollution there must be times when considerations of revenue and even considerations of equity, as between one taxpayer and another, or between one taxable product and another will be over-ridden by other considerations. In Committee the Government gave little sign that they recognised this. On the contrary, they gave the clear impression that the consideration uppermost in their minds in putting this Clause into the Finance Bill was a revenue consideration. They saw a chunk of revenue escaping from their grasp and they wanted to make sure that it did not slip away. In discussions between Customs and Excise and representatives of the trade, which took place at the beginning of May, the Customs and Excise representatives began by saying that the main reason for including Clause 2 in the Finance Bill was a consideration of revenue and fiscal equity. The Minister of State made the same point. It is true that in the debates in Committee the Minister also said that he did not feel that liquefied petroleum gas possessed the advantages claimed for it in anti-pollution terms. In particular, the Minister argued three points. He said that petrol engines could be converted at a cost which worked out lower than the cost of a liquefied petroleum gas conversion, and that when they were converted in a way that would prevent them from emitting toxic fumes, they would be better than liquefied petroleum gas engines. Secondly he said that L.P.G. has no advantage over diesel from the pollution point of view. Thirdly, he used an argument which seemed to many of us the oddest of all the arguments, that if we were to encourage the use of L.P.G. on the roads by giving fiscal discrimination in its favour we would prohibit its use by industry and this would militate against the cause of preventing pollution, since the use of L.P.G. by industry ought to be encouraged. He said that what we should be concerned with was not just pollution on the roads but pollution as a whole, and that if we worried too much about pollution on the roads and not worried enough about pollution as a whole, we would be making pollution as a whole worse. I must say that I personally, on due reflection, find the arguments which were put forward by the Minister of State unconvincing. Customs and Excise itself recognised when it discussed the whole matter with the representatives of the trade that there is no immediate prospect of large-scale conversion of petrol engines in the way that it implied was possible. The point about diesel has been answered quite satisfactorily by representatives of the trade who say that although it is true that diesel engines do not emit so many toxic fumes, they do emit smoke and this can be very damaging indeed to health. Surely the argument that if we encourage the use of L.P.G. on the roads we shall somehow prevent its use in industry seems implausible indeed, because I gather from representatives of the trade themselves that L.P.G. does not compete with pollutant fuels used in industry. This is what representatives of the trade themselves say. So, if they are correct in that statement, that is an irrelevant argument. In any case, even if it were the case that L.P.G. competed with pollutant fuels in industry, it does not seem clear to me why we should be less concerned with pollution on the roads than with this rather nebulous concept of pollution as a whole. Pollution on the roads is a very important part of pollution as a whole and a very dangerous, damaging part of it. So I do not find the argument which the Minister of State used in Committee at all convincing. I am not trying at this point to commit myself firmly and 100 per cent. to the view of the representatives of the manufacturers. That would clearly be a mistake. I am not a technical expert. Very few of us in this House are technically competent to judge between the arguments which are put forward by the manufacturers and the arguments which are put forward by the Government. I suspect that the Minister of State himself is not competent to judge on the technical argument; he simply has to accept the advice which is given to him. What I do say is that the technical arguments which were put forward by the Minister of State in Committee are clearly not proven. They may be right, but they are not proven, and in the absence of solid and incontrovertible proof I see no reason whatever why the Minister of State should not accept the Amendment moved by his hon. Friend.The Amendment is an extremely moderate, modest little Amendment. It does not force any rate at all upon the Government. All it says is that among the relevant considerations which the Bill already says must be taken into account should be included the cost of conversion. That is all the Amendment does. It does not pin the Government down to any precise figure. If the Government were able to accept this Amendment they would go a long way to alleviating the anxieties which were created by their attitude in Committee, and they would show that they are at any rate prepared to take seriously the representations which have been made to them and that they are prepared to look again at the technical arguments. If they are, finally, convinced that L.P.G. does have advantages which have been claimed for it and that their technical and scientific advice has not been entirely accurate they will be able to change their mind when they bring in the order which the Clause empowers them to bring in.
I hope very much indeed that the Minister of State will find it possible to accept the Amendment. I can see no reason whatever why he should not do so, except complete Treasury obscurantism of the most unfortunate kind.
As my hon. Friend the Member for Ashfield (Mr. Marquand) said, there is a certain difficulty, in that none of us has that scientific expertise to pass an absolute judgment. On the other hand, some of us have gone to a great deal of trouble on this issue and I for my part would like to say that I have heard not only scientific arguments from scientists working for a particular firm but reasonably objective external advice, and that the burden of that objective, external advice is on the side of the industrial scientists and not on that of the Treasury scientists—or that the advice given to the Treasury could be more accurate, as my hon. Friend the Member for Heywood and Royton (Mr. Barnett) says.
I wish briefly to refer to some of the particular points which the Minister of State made and comment on them hoping for an answer. First, the Minister of State said that cost of the L.P.G. engine is higher than that of the equivalent petrol engine which if adapted would have a lower level of toxic emissions than an engine converted to L.P.G. This apparently is the advice also given to Customs and Excise, and Mr. Harbour, the principal executive officer of the Customs and Excise Department, said:Later, Customs said that it had not meant to imply that emission control devices for fitting to existing vehicles were readily available but was looking to the reasonably near future rather than the immediate present and at the problem in this wider context. Discussion with the A.A., the Motor Industry Research Association, and Ford Emission Laboratories reveals no knowledge of emission control devices available now or expected in the reasonably near future. My first question, therefore, is what is meant by "the reasonably near future"? 8.30 p.m. The Minister of State said that he did not agree that it would reduce pollution, especially when we take pollution as a whole. Pollution as a whole is not so significant as that in specific areas where people are exposed continuously. A congested cross-roads in Warwick, for example, showed four times greater hydrocarbon and 4½ times greater lead concentration than average, the lead concentration being three times the upper safe limit in California, which in turn is double that in the Soviet Union. What is meant by "pollution as a whole", and why does not the hon. Gentleman agree? The Minister of State then said that quite a lot of this gas, were it not used for road vehicles, would be used in industry substituting for more toxic forms of fuel. The fact is that, because of the high cost of storage and distribution, L.P.G. does not compete with the low-grade fuels which are the prime sources of pollution. L.P.G. competes mainly with indigenous natural gas. In any event, nowhere does it achieve the same improvement in emission as in a spark ignition engine. That is a view that I have gone to some trouble to check, and I should like the Treasury's advice to tell us whether in its opinion it is wrong and, if so, why. The Minister said that he understood that North Sea gas was not readily usable as a method of motor propulsion and was not so used, though conceivably it could be used in that way. There are a number of vehicles outside the United Kingdom running on liquid or compressed natural gas. However, development of natural gas vehicles will not come about in the United Kingdom if the financial incentive for the operator is removed by tax."Petrol engines could be fitted with an exhaust purifier to bring them to the same level as those of L.P.G."
Perhaps I might seek to clarify one point. There is some dis tinction between North Sea natural gas for this purpose and natural gas from elsewhere. Does the hon. Gentleman know of any case where a gas the same as North Sea gas is being used in a car?
What comes into account is possible imports of natural gas from South-East Asia. That may become a probability within a few years. It is certainly one possible discussion.
It was used largely in the balance of payments context. Again I ask the hon. Gentleman whether he knows of any case where a gas the same as natural gas from the North Sea is used in a car?
I stick to the possibility that some firms are talking in terms of the economic reality and possibility of bringing gas from much further afield—[Interruption] Does the hon. Gentleman wish to interrupt again? We can argue on fact like this. Apparently he does not.
The hon. Gentleman said that the Government were seeking equity between one fuel and another. I understand that this reference to electrically operated vehicles highlights a precedent covered during our discussions in Committee. If there is a different interpretation, I wish to know what the Minister of State meant. The hon. Gentleman said that electrical vehicles are entirely different in the sense that the degree of pollution is not debatable and that they operate on a very small scale. Power stations are a major pollution problem, and the use of electricity in vehicles merely shifts the point at which the emission takes place. There are said to be 30,000 electrical vehicles in operation and, by imposing a special vehicle tax to cover all road vehicles on non-taxed fuel, the Treasury would go some way towards the objective of equity, still leaving incentive for high mileage vehicles to use low pollution fuel. Limited supplies of L.P.G. and adjustment of the vehicle tax level will regulate any loss of revenue to a level commensurate with the improved environment. Then the Minister of State said that the tax on the vehicle would raise considerable administrative problems whereas the tax on fuel was comparatively simple and not likely to lead to any vast increase in costs. That may be true for the Customs and Excise authorities, but the industry will be faced with the heavy cost of duplicate storage systems and, in many cases, duplicate storage tanks. The nature of L.P.G. makes tanks between three and five times more expensive than those used for derv or petrol, and it is almost certain that, taxed at thermal parity, L.P.G. would disappear as a road fuel because costs are prohibitive. The Minister of State said that the powers to examine road vehicles are not significantly different from the powers that exist already with regard to derv. One significant point is that gas oil, the untaxed alternative to derv, is marked with a dye to distinguish it from the taxed fuel. It is not possible to mark untaxed L.P.G. because it is a gas under normal conditions, Inspectors, therefore, would not be able to detect whether the tax had been paid. It is not simply that we have been urged by one company to speak on its behalf. I have taken some trouble over the matter through the contacts available to any economist who writes for a weekly scientific magazine. The almost unanimous opinion is that the L.P.G. case is good, and it is in good faith and with sincerity that we put it forward tonight.I support my hon. Friend the Member for Hemel Hempstead (Mr. Allason) on the Amendment. We went over the ground in Committee and it is not necessary to argue again what I said then, except that my views have not changed.
If there is a potential loss of revenue, the right way to deal with it is by a tax being placed on the vehicle, as is the Continental practice, rather than on the gas. I hope that the Minister of State will signify his acceptance of the Amendment. If not, we must conclude that it is the Treasury's intention to eliminate the use of L.P.G. in road vehicles. I submit that that would be a grave error. The technical questions have been gone over competently by the hon. Member for West Lothian (Mr. Dalyell). I understand that there is no exhaust purifier on the market, or contemplated, which will reduce lead emission from petrol engines to the level when L.P.G. is used. I fancy that the same applies to sulphur and possibly to smoke. No doubt we are awaiting the final answer of some authority which will be regarded as impeccable on this subject. I take exception to the wording of the Clause as it stands. It seems to give too much latitude to the Treasury and takes away power from this House in an unacceptable way. The mandarins of Great George Street and their heyducks must not ask the House to give them carte blanche about taxation. Therefore, I hope that this extremely moderate insertion will be allowed so that the rather opaque significance of this paragraph will be made clear.My hon. Friend the Member for Hemel Hempstead (Mr. Allason) has moved a specific Amendment to the Clause. I shall seek to reply to the points he has raised and also to the more general points which have been raised on both sides of the House.
The substantial effect of the Amendment would be to load on to the Exchequer the cost of converting vehicles to run on gas, which I understand is normally about £130 to £150. No precise estimate of the cost can be made, because it depends on how the cost of conversion was assessed in terms of unit quantities of fuel, which would be a difficult and complicated calculation to make.rose——
If we assume that a quarter of a million vehicles, for example, were to be converted, which I think is the likely maximum number, that they cost on average £140 per conversion, and that the engines last on average five years. the cost, though small at first, would probably build up to a maximum of about £7 million a year.
I rose to ask the Minister of State to look at the Amendment again. Surely it does not say that the full cost of conversion would have to be borne by the Exchequer. It says that the cost of conversion would be one of the relevant considerations in deciding the rate of duty. I do not know what was in the mind of the hon. Member for Hemel Hempstead, but as I read the Amendment it did not lay down a precise figure. It merely stated that this was a factor to be taken into account.
I may have misunderstood my hon. Friend in thinking that he wanted to have taken into account 100 per cent. I have taken it to be that. It is possible that he had in mind a more flexible suggestion.
I had in mind 100 per cent. over the life of the vehicle, which is a considerable number of years.
If we were to do that we would have to relate the cost to the unit of fuel consumed, and this would be a complicated matter. I have sought to give an indication of what, on various arbitrary assumptions, it seemed the cost was likely to be, but I accept what my hon. Friend says if he wishes to interpret his Amendment in a particular way.
There is one point that I ought to take up. My hon. Friend laid stress on the fact that some of his constituents had converted vehicles to use L.P.G. In that context, I think it is important to appreciate that there was quite a lot of speculation in the Press at the time when these conversions took place—which I think has been mainly over the last year—to the effect that it was likely to be necessary to place a duty upon them to protect the Revenue, and therefore those who have converted have done so knowing that that was likely to be the case.When I opened the first L.P.G. station outside London in June of last year, there were a number of vehicles there waiting to be filled. It means, therefore, that conversions had taken place more than 12 months ago.
That may be so, but the number has increased only recently, and I think it was generally known in the trade Press that if the number began to accelerate it would be necessary for the Revenue to be protected. The crucial point, which I made in Committee, is that it seemed to us right to legislate now rather than wait until a number of further conversions had taken place on which the expenditure would prove abortive in the light of the change in the duty. It seemed right to take action now, rather than allow the situation and a degree of uncertainty to persist.
Is it the Government's intention to dissuade people from converting to L.P.G.? That, surely, will be the effect of the tax?
The position has been made clear. It is that we feel that there should be fiscal equity between the two types of fuel.
Many arguments have been advanced about pollution, and I should like to take those up. I recognise the considerable expertise in this matter of the hon. Member for West Lothian (Mr. Dalyell). He has put forward the case in his usual modest way, but we recognise that he has made a considerable study of the subject. I did not, in Committee, undertake to make a massive review of the subject, but I have in the interval gone into it as deeply as I could because I recognised that hon. Members on both sides felt that there was a degree of uncertainty about the situation, and I thought it my duty to do that. I hope, therefore, that the House will bear with me for a few moments while I go in some detail into the points that have been raised, and I hope that the hon. Member for Ashfield (Mr. Marquand) will not regard this as complete Treasury obscurantism of the most unfortunate kind. I think that, on reflection, he will feel that that is a little high. L.P.G. is the only fuel affected by the new proposal. The hon. Member for West Lothian referred to natural gas. It is conceivable that there could be imports of this gas which would be appropriate for the kind of uses about which we have been talking, but the information that I have been able to obtain is that this does not apply to North Sea natural gas. I think the jargon is that one is dry, and the other is wet, and that the kind in the North Sea is of the kind that would not be used in motor vehicles.I apologise for not being here for the first part of the Minister's speech. Will he confirm that if it proved practicable to use North Sea gas he would have no objection to its being used in this way?
That is a completely hypothetical question. One would have to look at it in the context of the time, because many other considerations would have to be borne in mind.
The L.P.G. about which we are talking is not manufactured for its own sake but arises in the course of refining hydrocarbon oils into petrol, and supplies will always be limited to some extent. The pricing policies of the oil companies in relation to what is essentially a byproduct are likely to be influenced considerably by the availability of outlets. Against this background, the environmental or pollution arguments are distorted if attention is focused on road traffic pollution alone to the exclusion of pollution in the rest of the environment. L.P.G. is, of course, a less convenient fuel than derv or petrol: it is less conveniently transported and stored, the vehicles which use it have less mileage range and the engines require special adaptants. Its use is still limited on the roads and has come about largely because of the accidental freedom from hydrocarbon oil duty. If we look at it—as we should: these things are not divisible—on broad environmental grounds, this diversion from other possible uses is by no means desirable, because L.P.G. has a real advantage as a non-pollutant over some other fuels—notably coal and fuel oil. Its more obvious use as a general industrial fuel is particularly important; it eliminates the discharge of sulphur dioxide, of smoke, grit, dust and soot. So there is considerable scope for it to reduce pollution generally. Hon. Members may have seen a number of half page advertisements in the national Press recently which pointed out that L.P.G. is making a vital contribution to nearly every kind of industry and which stress that not the least of its advantages is that it has a negligible sulphur content and that it makes a major contribution to reducing air pollution. The advertisements, which are remarkable in making no reference to its use as a road fuel, stress this point and say, for example, that the Coalville Brick Company has successfully solved a heavy smoke emission problem by converting to this kind of gas. So the point which the hon. Member for Ashfield made—that it is not a gas which is used in substitution for these other fuels, which are very heavy pollutants—taken in connection with the supply situation, seems to me, as it did in Committee, to make a reasonable argument that one needs to look at pollu- tion as a whole and not just the particular question of traffic pollution. But I will now turn to that narrower question of traffic pollution. It is true that L.P.G. engines compare favourably with ordinary uncontrolled petrol engines in emissions of carbon monoxide. I have gone into this subject in considerable detail, and our own view is that the figures which my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) quoted in Committee are greatly exaggerated. I am not saying that it is not possible to achieve the results he gave, but so far as we can establish, it depends on the condition of the engine and so on and more appropriate results—I have the technical details here—tend to produce a rather different conclusion. They suggest that the L.P.G. is no better than a controlled petrol engine under most working conditions and that diesel engines are remarkably superior to them all, so far as this kind of pollution is concerned—not necessarily smoke, of course.Would my hon. Friend give the House—this is a matter of considerable interest—the elements that he is speaking of in the toxic emission? Are they lead, sulphur or what?
I think I made it clear that I was talking in this context of carbon monoxide. I will turn to some of the other points in a moment or two.
We should therefore compare L.P.G. first of all with petrol engines. The point which should be made is that devices can be fitted to petrol engines to reduce their toxic emission to levels which are generally accepted in Europe as reasonable standards on a basis which is broadly comparable to L.P.G. engines. If they are fitted during manufacture, the extra cost of this kind of change ranges, I understand, from £1 to £8 for a popular model, which is only a fraction of the cost of £130 or so which would apply in the case of L.P.G. engines. Having gone into the matter further, I agree that such devices are not readily or cheaply available for fitting to existing uncontrolled petrol engines. However, we already have a number of popular makes of car which conform to European standards. I will not list the various makes now. These are being supplied to the home market. They are being introduced at the rate of about one million cars a year, and the House will appreciate that this is a substantially greater number than the total number would likely to be resulting from conversions to L.P.G. Although it is true that conversions are necessary on new cars in relation to the total problem, it is clear that once this is compared with controlled petrol engines, the situation is not such that one would feel that some discrimination is necessary between the two types of fuel. If one looks at this in relation to the question of diesel engines, one sees that L.P.G. has some advantage from the smoke and noise point of view, but I understand that L.P.G. engines are inferior from the point of view of toxic emissions. It is in this sphere, rather than in the field of petrol engines, that we are more likely to see the introduction of L.P.G., and this has been borne out by the kind of vehicle which has already been converted. I come to the general question of pollution. As for Government action, my right hon. Friend the Secretary of State for the Environment has made it clear that he is deeply concerned over this problem. The House will be aware that he has recently made a regulation to prevent the emission of fumes from the crankcases of new cars. He has also published a draft regulation to prevent smoke emission from new diesel engines, and he is further considering emissions appropriate to this country. I stress the phrase "appropriate to this country" because the hon. Member for West Lothian (Mr. Dalyell) made considerable reference to standards in other countries. We must, of course, remember that it is important to consider climatic conditions. For example, the conditions which one finds in the middle of a traffic jam on a throughway in Los Angeles are considerably different from the conditions found in Britain. The hon. Member for West Lothian will no doubt agree that the standards appropriate there are not necessarily those appropriate here.Did I understand the hon. Gentleman correctly? Did he say that the Treasury advice to him is that the toxic emissions from diesel engines are less bad than the toxic emissions from L.P.G. engines? Is that his argument, or have I misunderstood him?
I set the position out quite clearly. Our advice is that although L.P.G. engines have some advantage over diesel engines—from the point of view of smoke, smell and noise—they are inferior from the point of view of toxic emissions.
Is my hon. Friend aware that apart from carbon monoxide, lead and sulphur emissions must be taken into account?
The original point I made was about carbon monoxide. The question of lead raises some difficult questions, but I think the House would feel that this is a matter which should be pursued with the Secretary of State for the Environment because it is a particular problem which I am sure he will wish to consider as part of the whole range of questions at which he is looking relating to this subject. It would be wrong of me at this stage to go into the details of the point now.
However, I come to a matter which is within my province, and that is the question of the Revenue considerations. We have not made the point that there is some tremendous loss of revenue now, simply because the number of conversions is probably not more than about 1,000 vehicles. The crucial point, however, is that without any legislation of this kind there might be created a situation in which the number of conversions could increase very rapidly, so that the revenue loss would correspondingly rise speedily. I would have thought that it was common ground between the two sides that if this situation were likely to develop it is right that we should legislate early rather than late in the light of the situation which my hon. Friend the Member for Hemel Hempstead mentioned in relation to those who are converting from one kind of fuel to another. That being so, it is right that one should attempt some quantification, because if the use of L.P.G. should expand significantly and represent from 1 per cent. to 1–6 per cent. of total fuel consumption, or about £19 million a year, it would represent a Revenue loss of from £13 million to £21 million. Even if it grew to an enormous extent, the 10 per cent. envisaged by my hon. Friend the Member for Kensington, South in Committee it would, if untaxed, represent a Revenue loss of about £130 million—a very considerable Revenue cost. As I have sought to indicate, neither the scale nor the change in the degree of pollution is one that the Government feel they should accept. I have sought to give the House as long and as full an explanation as I can: I have an enormous file behind me here. I assure the House that I have gone into the subject very fully. It is a highly complex subject, but I thought it right that I should do so. But, taking the picture overall, and the pollution and Revenue arguments together, I think it right that the House should accept the Clause, and that it would be wrong, for the reasons I have given, to accept the Amendment.With the permission of the House, Mr. Speaker, I must say that, despite the charm of the Minister of State and the thoroughness with which he went into the scientific arguments, it seems to us on this side that he did not deal with the central point at issue, which is whether or not there should be deliberate discrimination by the Revenue in favour of anti-pollutant devices. He made it clear both at the beginning and at the end of his speech that his chief concern is protection of the Revenue rather than prevention of pollution. Because of that, I hope that my hon. Friends will vote for the Amendment.
I apologise to my hon. Friend the Minister of State and to the House for not being here when the Amendment was moved, but I could not be in two places at once. As some hon. Members know, I have been extremely interested in the problem of pollution emitted from road vehicles. I listened with great interest to what my hon. Friend said and I have read what he said in Committee, but I think that he has confused the two types of emission—that from industrial plant and that from vehicles.
The emission of pollution from road vehicles is low level, close to the ground, and does not escape easily, while that from industry escapes from a high chimney and is quickly blown away. Therefore, the use of very low pollutant exhaust gas—L.P G.—makes a significant contribution to the reduction of pollution. I do not say that the contribution is massive—the quantities are not sufficient for that—but the contribution to the reduction of low level emission in areas of high density traffic is significant. My hon. Friend has obviously done a great deal of homework on the subject since he dealt with it in Committee, and I listened with interest to his technical explanation. I felt that he may have paid more attention to fiscal equity than to what his right hon. Friend the Secretary of State for the Environment might think on the matter. I have listened to my right hon. Friend and some of his Ministers telling us of the need to take every step, however small, gradually to eliminate pollution. Any action by the Treasury which hinders a step forward in the reduction of pollution—in this case, pollution in city centres where there is a concentration of population, and not just industrial centres where the population may be more limited—is to be regretted. It is a pity that the Treasury should at this time itself take a step which is not completely in line with the intentions of the Secretary of State for the Environment. 9.0 p.m. I appreciate that my hon. Friend has made a considerable study of the matter and is now speaking with much knowledge of the various constituents of the various types of exhaust gases which may be produced by various types of road fuel, but I have felt for a long time that L.P.G. offered us an opportunity to make a contribution in certain areas towards reducing pollution, and we are concerned today about pollution in all its forms—industrial pollution, liquid pollution of our rivers, and, above all, atmospheric pollution in all its forms, and what worries us most is atmospheric pollution from everyday traffic, both domestic and industrial. I do not think that L.P.G. could be used by domestic traffic. There would have to be tens of thousands, if not hundreds of thousands, of filling stations throughout the country. L.P.G. is not available in such quantity, but it is available for those who use traffic and who drive only in city centres—for example, fleets of taxis, municipal vehicles of all sorts, buses and ambulances, and perhaps British Railways vehicles delivering in the city centres, and perhaps Post Office vehicles. I should not say these things if this type of road fuel were not already being used by such operators in the centres of some of the world's major cities for the very reasons which I am advancing, that it produces a lower pollution factor. But do not let us kid ourselves—these users did not reach that conclusion out of the goodness and generosity of their hearts, but because of some fiscal stimulus in the United States and in Holland, some encouragement to take a step in line with their equivalent of the Secretary of State for the Environment.Would the hon. Gentleman tell the Government that there are hon. Members on both sides of the House—for this is not basically a party matter—who beg the Government to use fiscal policy as an instrument in the anti-pollution drive which is what we want? It is the establishment of the principle for which we are all fighting this evening.
I hesitate to make any more appeals to the Government, because they have been very generous so far in responding to an appeal which I was just one of about 25 in making to them, and I could not expect two winners in a day, but I agree with the hon. Gentleman that it would be very encouraging to all of us—and this goes across all party barriers—if the Treasury could think again and could get into line with the Secretary of State for the Environment and make its own contribution towards a reduction of pollution, be it ever so small.
The lead can come only from the Treasury. We know that my hon. Friend is steeped in L.P.G. and what comes out, and we appreciate that he has learned about the problem. He has leaned over to understand what we are arguing about, but he has not gone far enough for me and I hope that he will make some emission from Treasury Bench which will encourage us all.My hon. Friend the Minister of State said that his chief concern was loss to the revenue. I must admit that my chief concern is justice for my constituents. I frankly admit that when they decided to convert they were con- cerned not with that aspect of pollution, but with the possibility of using a cheaper fuel. I disagree with my hon. Friend the Member for Canterbury (Mr. Crouch) who said that it is suitable only for taxis. I was proposing to have my next car converted to use this fuel as an alternative so that I could either use a very cheap fuel, which I could obtain in my constituency or use petrol when L.P.G. was not available. It seemed a very reasonable process to go through.
I did not mean to convey that it was only suitable for municipal vehicles. I have seen domestic vehicles converted, a Ford Cortina, for example, with a dashboard switch for changing from L.P.G. to petrol. I did not wish to mislead the House.
I am grateful to my hon. Friend. However, my hon. Friend the Minister of State had admitted that he intends to create a disincentive to L.P.G. By insisting on fiscal equity and an exact equivalent tax, it is clear that he is prepared to see this whole business put out of action. This is quite intolerable. His idea of fiscal equity has something a little wrong about it. When we tax, we tax according to the ability to pay. We do net necessarily tax everybody equally. With income tax, we recognise that some cannot afford to pay as much as others. Clearly, when £120 to £150 has been spent on converting a vehicle, as I might have converted mine, the owner cannot then afford to pay quite so much in tax as he could if he had not undertaken that heavy conversion. My hon. Friend the Minister of State has admitted that he wants to see this whole thing abolished.
I did not say that. I said that I thought that the two fuels should be treated on an equitable basis.
If my hon. Friend would use my interpretation of "equity", he would accept the Amendment. As he said that he will not accept the Amendment, he must mean that he intends to charge according to the calorific value of the fuel, whether petrol or L.P.G. This can only mean that the whole operation goes out of business. Not only is there the cost of conversion for the car but there is also the great expense to garages, mentioned by the hon. Member for West Lothian (Mr. Dalyell).
Undoubtedly my hon. Friend the Minister of State is throttling this enterprise. He may consider that fair enough, but what about those who have already converted? It surely cannot be fair to them, a year after they have converted their vehicles in perfectly good faith, to say, "I have now changed the rules of the game, so your cost of £120 to £150 is completely abortive." Surely that is grossly unfair. I cannot believe that my hon. Friend intends to do this. If my hon. Friend cannot accept the Amendment, I hope that he will at least be able to refund the costs of those who have carried out this conversion at very considerable expense, the small people who cannot afford this sort of expenditure.I hope that the Treasury will think very carefully before turning down the suggestions of my hon. Friends. Surely it must be to the benefit of the community to encourage the use of any fuel which causes less pollution than the fuels now in use. We have heard of people trying to get the steam engine reintroduced so as to save the filthy atmospheric pollution caused by the petrol-burning internal combustion engine. It has been suggested that electromotive power is the answer.
Hon. Members may well regard both those alternatives with some scepticism, but the Government should be doing something to discourage pollution. If this development will help to reduce the problem of pollution, the Government should not hinder it. The Treasury has
Division No. 409.]
| AYES
| [9.12 p.m.
|
| Albu, Austen | Cohen, Stanley | Eadie, Alex |
| Allaun, Frank (Salford, E.) | Concannon, J. D. | Edwards, Robert (Bilston) |
| Archer, Peter (Rowley Regis) | Corbet, Mrs. Freda | Ellis, Tom |
| Ashton, Joe | Crawshaw, Richard | Evans, Fred |
| Atkinson, Norman | Crosland, Rt. Hn. Anthony | Fernyhough, Rt. Hn. E. |
| Bagier, Gordon A. T. | Cunningham, G. (Islington, S. W.) | Fisher, Mrs. Doris (B'ham, Lady wood) |
| Barnes, Michael | Cunningham, Dr. J. A (Whitehaven) | Fletcher, Ted (Darlington) |
| Barnett, Joel | Dalyell, Tarn | Foot, Michael |
| Beaney, Alan | Davidson, Arthur | Galpern, Sir Myer |
| Benn, Rt. Hn. Anthony Wedgwood | Davies, Denzil (Llanelly) | Gilbert, Dr. John |
| Bennett, James (Glasgow, Bridgeton) | Davies, S. 0. (Merthyr Tydvil) | Golding, John |
| Blenkinsop, Arthur | Davies, Clinton (Hackney, C.) | Gordon Walker, Rt. Hn. P. C. |
| Boardman, H. (Leigh) | Davis, Terry (Bromsgrove) | Grant, George (Morpeth) |
| Booth, Albert | Deakins, Eric | Grant, John D. (Islington, E.) |
| Boyden, James (Bishop Auckland) | de Freitas, Rt. Hon. Sir Geoffrey | Griffiths, Eddie (Brightside) |
| Bradley, Tom | Dell, Rt. Hn. Edmund | Griffiths, Will (Exchange) |
| Brown, Hugh D. (G'gow, Provan) | Dempsey, James | Hamilton, James (Bothwell) |
| Brown, Ronald (Shoreditch & F'bury) | Doig, Peter | Hamilton, William (Fife, W.) |
| Buchan, Norman | Dormand, J. D. | Hannan, William (G'gow, Maryhill) |
| Buchanan, Richard (G'gow, Sp'bum) | Douglas, Dick (Stirlingshire, E.) | Hardy, Peter |
| Campbell, I. (Dunbartonshire, W.) | Douglas-Mann, Bruce | Harrison, Walter (Wakefield) |
| Castle, Rt. Hn. Barbara | Duffy, A. E. P. | Heffer, Eric S. |
| Clark, David (Colne Valley) | Dunn, James A. | Hooson, Emlyn |
| Cocks, Michael (Bristol, S.) | Dunnett, Jack | Houghton, Rt. Hn. Douglas |
an idea that all things must be equal, but I cannot believe that the Department of the Environment will view with favour any attitude in government which will not encourage the use of non-polluting or less-pollutiong fuels. I therefore hope that my hon. Friend the Minister of State will give this matter very careful consideration.
Because of the tax on L.P.G. about 1,000 vehicles will be paying revenue. Therefore, the Treasury will not get a substantial sum from the tax. My hon. Friend the Minister of State said that the two fuels must be treated on an equitable basis. He also referred to the production soon of a pollution-free or near pollution-free petrol engine. This is what we must all hope will arrive in the near future.
Until such an engine is on the market, the Government should not tax a form of fuel which materially reduces pollution, as several hon. Members saw for themselves when a taxi was brought to the House to demonstrate this fuel. It is a matter of waiting for only one or two years, but in that period we should not stifle a fuel which, even if only in the smallest degree, reduces pollution in the street, which is a form of pollution about which we should all be concerned if we care for the well-being of pedestrians in urban centres.Question put, That the Amendment be made:—
The House divided: Ayes 187, Noes 211.
| Howell, Denis (Small Heath) | Marquand, David | Sheldon, Robert (Ashton-under-Lyne) |
| Hughes, Rt. Hn. Cledwyn (Anglesey) | Marsden, F. | Short, Rt. Hn. Edward (N'c'tle-u-Tyne) |
| Hughes, Robert (Aberdeen, N.) | Meacher, Michael | Silkin, Rt. Hn. John (Deptford) |
| Hughes, Roy (Newport) | Mendelson, John | Silkin, Hn. S. C. (Dulwich) |
| Hunter, Adam | Millan, Bruce | Silverman, Julius |
| Jenkins, Hugh (Putney) | Miller, Dr. M. S. | Skinner, Dennis |
| Jenkins, Rt. Hn. Roy (Stechford) | Milne, Edward (Blyth) | Small, William |
| John, Brynmor | Mitchell, R. C. (S'hampton, Itchen) | Spearing, Nigel |
| Johnson, Carol (Lewisham, S.) | Morgan, Elystan (Cardiganshire) | Spriggs, Leslie |
| Johnson, James (K'ston-on-Hull, W.) | Morris, Alfred (Wythenshawe) | Stallard, A, W. |
| Johnson, Walter (Derby, S.) | Morris, Rt. Hn. John (Aberavon) | Stewart, Donald (Western Isles) |
| Jones, Barry (Flint, E.) | Moyle, Roland | Stoddart, David (Swindon) |
| Jones, Dan (Burnley) | Murray, Ronald King | Strang, Gavin |
| Jones, T. Alec (Rhondda, W.) | O'Halloran, Michael | Swain, Thomas |
| Kaufman, Gerald | O'Malley, Brian | Taverne, Dick |
| Kerr, Russell | Oram, Bert | Thomas, Jeffrey (Abertillery) |
| Lambie, David | Orme, Stanley | Thomson, Rt. Hn. C. (Dundee, E.) |
| Latham, Arthur | Owen, Dr. David (Plymouth, Sutton) | Tinn, James |
| Lawson, George | Palmer, Arthur | Torney, Tom |
| Leadbitter, Ted | Parry, Robert (Liverpool, Exchange) | Tuck, Raphael |
| Leonard, Dick | Pavitt, Laurie | Urwin, T. W. |
| Lestor, Miss Joan | Peart, Rt. Hn. Fred | Varley, Eric G. |
| Lewis, Arthur (W. Ham, N.) | Pendry, Tom | Walker, Harold (Doncaster) |
| Lomas, Kenneth | Pentland, Norman | Wallace, George |
| Lyon, Alexander W. (York) | Perry, Ernest G. | Weitzman, David |
| Lyons, Edward (Bradford, E.) | Price, J. T. (Westhoughton) | Wellbeloved, James |
| Mahon, Dr. J. Dickson | Price, William (Rugby) | White, James (Glasgow, Pollok) |
| McBride, Neil | Probert, Arthur | Whitlock, William |
| McCann, John | Rankin, John | Willey, Rt. Hn. Frederick |
| McCartney, Hugh | Reed, D. (Sedgefield) | Williams, Alan (Swansea, W.) |
| McGuire, Michael | Rees, Merlyn (Leeds, S.) | Williams, Mrs. Shirley (Hitchin) |
| Mackenzie, Gregor | Rhodes, Geoffrey | W ill aim, W. T. (Warrington) |
| Maclennan, Robert | Rhys Williams, Sir Brandon | Wilson, Rt. Hn. Harold (Huyton) |
| McMillan, Tom (Glasgow, C.) | Roberts, Albert (Normanton) | Wilson, William (Coventry, S.) |
| McNair-Wilson, Michael | Robertson, John (Paisley) | Woof, Robert |
| McNamara, J. Kevin | Roderick, Caerwyn E.(Br'c'n&R'dnor) | |
| Mahon, Simon (Bootle) | Roper, John | TELLERS FOR THE AYES |
| Mallalieu, E. L. (Brigg) | Rose, Paul B. | Mr. William Hamling and |
| Malalieu, J. P. W. (Huddersfield, E.) | Ross, Rt. Hn. William (Kilmarnock) | Mr. Donald Coleman. |
| Marks, Kenneth | Sandelson, Neville |
NOES
| ||
| Adley, Robert | Critchley, Julian | Hannam, John (Exeter) |
| Archer, Jeffrey (Louth) | Curran, Charles | Hastings, Stephen |
| Atkins, Humphrey | Davics, Rt. Hn. John (Knutsford) | Havers, Michael |
| Awdry, Daniel | d'Avigdor-Goldsmid, Maj-Gen. James | Hawkins, Paul |
| Baker, Kenneth (St. Marylebone) | Dean, Paul | Hay, John |
| Baker, W. H. K. (Banff) | Deedes, Rt. Hn. W. F. | Heath, Rt. Hn. Edward |
| Barber, Rt Hn. Anthony | du Cann, Rt. Hn. Edward | Heseltine, Michael |
| Beamish, Col. Sir Tufton | Dykes, Hugh | Hicks, Robert |
| Benyon, W. | Eden, Sir John | Higgins, Terence L. |
| Biffen, John | Edwards, Nicholas (Pembroke) | Hiley, Joseph |
| Biggs-Davison, John | Elliot, Capt. Walter (Carshalton) | Hill, James (Southampton, Test) |
| Blaker, Peter | Elliott, R. W. (N'c'tle-upon-Tyne, N.) | Holland, Philip |
| Boardman, Tom (Leicester, S. W.) | Eyre, Reginald | Holt, Miss Mary |
| Boscawen, Robert | Fair, John | Hordem, Peter |
| Bossom, Sir Clive | Fell, Anthony | Hornby, Richard |
| Bowdn, Andrew | Fenner, Mrs. Peggy | Hornsby-Smith. Rt. Hn. DamePatricia |
| Boyd-Carpenter, Rt. Hn. John | Finsberg, Geoffrey (Hampstead) | Howell, David (Guild-ford) |
| Braine, Bernard | Fisher, Nigel (Surbiton) | Howell, Ralph (Norfolk, N.) |
| Bray, Ronald | Fookes, Miss Janet | Iremonger, T. L. |
| Brewis, John | Fortescue, Tim | James, David |
| Brinton, Sir Tatton | Foster, Sir John | Jenkin, Patrick (Woodford) |
| Brown, Sir Edward (Bath) | Fowler, Norman | Jessel. Toby |
| Buchanan-Smith, Alick (Angus, N&M) | Fraser, Rt. Hn. Hugh (St' fford & Stone) | Jopling, Michael |
| Bullus, Sir Eric | Galbraith, Hn. T. G. | Kellett-Bowman, Mrs. Elaine |
| Burden, F. A. | Gardner, Edward | Kershaw, Anthony |
| Butler, Adam (Bosworth) | Gibson-Watt, David | King, Evelyn (Dorset, S.) |
| Campbell, Rt. Hn. G.(Moray&Nairn) | Kinsey, J. R. | |
| Carlisle, Mark | Gilmour, Sir John (Fife, E.) | Kitson, Timothy |
| Carr, Rt. Hn. Robert | Glyn, Dr. Alan | Knox, David |
| Channon, Paul | Goodhew, Victor | Lane, David |
| Chapman, Sydney | Gower, Raymond | Legge-Bourke, Sir Harry |
| Chataway, Rt. Hn. Christopher | Grant, Anthony (Harrow, C.) | Le Marchant, Spencer |
| Chichester-Clark, R. | Gray, Hamish | Lewis, Kenneth (Rutland) |
| Clark, William (Surrey, E.) | Green, Alan | Longden, Gilbert |
| Clarke, Kenneth (Rushcliffe) | Griffiths, Eldon (Bury St. Edmunds) | Loveridge, John |
| Clegg, Walter | Gummer, Selwyn | Luce, R. N. |
| Cockeram, Eric | Gurden, Harold | MacArthur, Ian |
| Coombs, Derek | Hall, Miss Joan (Keighley) | McCrindle, R. A. |
| Cooper, A. E. | Hall, John (Wycombe) | Maclean, Sir Fitzroy |
| Cormack, Patrick | Hall-Davis, A. G. F. | McMaster, Stanley |
| Costain, A. P. | Hamilton, Michael (Salisbury) | Macmillan, Maurice (Farnham) |
| McNair-Wilson, Patrick (New Forest) | Parkinson, Cecil (Enfield, W.) | Stainton, Keith |
| Maginnds, John E. | Percival, Ian | Stanbrook, Ivor |
| Marten, Neil | Pike, Miss Mervyn | Stewart-Smith, D. G. (Belper) |
| Mather, Carol | Pink, R. Bonner | Stokes, John |
| Maude, Angus | Pounder, Rafton | Sutcliffe, John |
| Meyer, Sir Anthony | Powell, Rt. Hn. J. Enoch | Tapsell, Peter |
| Mills, Peter (Torrington) | Price, David (Eastleigh) | Taylor, Robert (Croydon, N. W.) |
| Mills, Stratton (Belfast, N.) | Prior, Rt. Hn. J. M. L. | Tebbit, Norman |
| Mitchell, Lt. -Col. C. (Aberdeenshire, W.) | Pym, Rt. Hn. Francis | Temple, John M. |
| Mitchell, David (Basingstoke) | Quennll, Miss J. M. | Thompson, Sir Richard (Croydon, S.) |
| Moate, Roger | Raison, Timothy | Trafford, Dr. Anthony |
| Molyncaux, James | Rawlinson, Rt. Hn. Sir Peter | Trew, Peter |
| Monks, Mrs. Connie | Redmond, Robert | Tugendhat, Christopher |
| Monro, Hector | Reed, Laurance (Bolton, E.) | Turton, Rt. Hn. Sir Robin |
| Montgomery, Fergus | Rees, Peter (Dover) | van Straubenzee, W. R. |
| More, Jasper | Rees-Davies, W. R. | Waddington, David |
| Morgan-Giles, Rear-Adm. | Ridley, Hn. Nicholas | Walden, Brian (B'rn'ham, All Saints) |
| Morrison, Charles (Devizes) | Ridsdale, Julian | Wall, Patrick |
| Mudd, David | St. John-Stevas, Norman | Walters, Dennis |
| Murton, Oscar | Sandys, Rt. Hn. D. | Ward, Dame Irene |
| Nabarro, Sir Gerald | Scott, Nicholas | Warren, Kenneth |
| Neave, Airey | Scott-Hopkins, James | Weatherill, Bernard |
| Noble, Rt. Hn. Michael | Sharples, Richard | Wells, John (Maidstone) |
| Normanton, Tom | Shaw, Michael (Sc'b'gh & Whitby) | Whitelaw, Rt. Hn. William |
| Nott, John | Shelton, William (Clapham) | Wilkinson, John |
| Onslow, Cranky | Simeons, Charles | Wolrige-Gordon, Patrick |
| Oppenheim, Mrs. Sally | Skeet, T. H. H. | Worsley, Marcus |
| Orr, Capt. L. P. S. | Smith, Dudley (W'wick & L'mington) | |
| Owen, Idris (Stockport, N.) | Soref, Harold | TELLERS FOR THE NOES |
| Page, Graham (Crosby) | Spence, John | Mr. Keith Speed and |
| Page, John (Harrow, W.) | Sproat, lain | Mr. Hugh Rossi. |
Clause 4
Agricultural Machines—Vehicles Excise Duty And Customs And Excise Duty
I beg to move Amendment No. 5, in page 6, line 7, at beginning insert:
I think that it will be for the convenience of the House to discuss with it Government Amendment No. 6. The two Amendments are purely technical. They make no difference to the purpose of subsection (2) as originally drafted, which is to close with effect from 1st September, 1971 a loophole in the law which has recently been exploited to enable certain vehicles to take advantage of a fuel duty concession that was never intended to apply to them.'As from the said 1st September'.
The Amendments are needed to ensure that the intention of the Clause will be realised in Northern Ireland as well as in Great Britain. They have become necessary, for technical reasons, only because of the timing and nature of the related legislation of the Northern Ireland Parliament on licence duty.
Amendment agreed to.
Further Amendment made: No. 6, in page 6, line 13, leave out from beginning to end of line 17 and insert:
(b) the reference to an agricultural machine in paragraph 3(b) shall not include any vehicle which does not satisfy the conditions specified in paragraphs (a) and (b) of section 6(1) of the Finance Act (Northern Ireland) 1971 (which makes provision corresponding to that made by subsection (1) above).—[Mr. Higgins.]
Clause 12
Alterations Of Personal Reliefs
I beg to move Amendment No. 112, in page 9, line 40, leave out "330" and insert "380".
I understand that it is convenient to discuss at the same time Amendment No. Ill, in page 10, line 2, leave out "345" and insert "395" also standing in the name of the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) and the names of his hon. Friends.
With the Government's majority crumbling, as we have just seen, and since the justice of this Amendment is so obvious, I assume that the Government will accept it. It is my understanding of the Amendments as selected that No. 112 and No. Ill are consequential on the proceeding two, which have not been selected. The principle is clear—that we seek to increase the small age relief by £50. Amendment No. 112 is related to marginal relief because of the way the Amendments have been selected. If the Government wish to accept and deal with the general question of granting an additional £50 on age relief——
Order. I am sorry to interrupt the hon. Gentleman, but we have to be careful about these two Amendments and Mr. Speaker's selection. It is Mr. Speaker's view that this is a separate point and concerns the band between the two rather than the actual amount which is considered in the preceeding Amendments, which were thoroughly discussed in Committee. That is why he has not selected them. I hope that the hon. Gentleman, with his great knowledge of these things, will help me in my ignorance.
I am happy, then, to increase the band which would give some relief to elderly people, those over the age of 65, to the extent of £50, although I would have preferred selection of the previous Amendments. But naturally I accept Mr. Speaker's selection.
This relief would be for those over the age of 65 who have small incomes and it would not only apply to those seeking to work but equally—and I am sure hon. Members opposite will be keen to accept this—to those with small amounts of investment income. The argument frequently used for refusing this type of Amendment is that some people would be even worse off than those one is seeking to help. The late Iain Macleod used to say—and on reflection I think he was right—that we cannot help everyone in one Amendment, that we can only look at that Amendment and what it seeks to do. We would certainly argue that there are some who are worse off than those we are seeking to help through these Amendments, because there are people who do not have sufficient income to pay tax. But we cannot help them in this Bill. Had we been in Government, we would have helped them through a different Finance Bill and through a different fiscal policy from that of the present Government. We seek only in this Amendment to help those over 65 with an increased age allowance on the band of £50. As the Clause stands, after allowing for the normal retirement pension, a single person in a full year, 1972–73, can earn an additional £218 a year, just over £4 a week, and a married couple can earn in a full year £321, just over £6 a week. We seek to increase that by another £50. It would primarily affect those who would wish to work. The argument in Committee on this type of Amendment was that the margin is already enough over and above the pension as it will be from September onwards. I am not arguing about the size of that margin, but that there is a need to give additional relief because for a single person over 65 only to be able to earn just over £4 a week is inadequate. Elderly people tell me that they are not prepared to earn more than the amount allowed because it would mean them paying it all by way of tax. No matter how we try to convince them that this is not true and that they will pay a comparatively small amount in tax, in practice there are elderly people who work longer hours than they should for a wage lower than that to which they would otherwise be entitled. There is a sufficiently large number of bad employers only too happy to exploit that situation. 9.30 p.m. What we are seeking to do here is to increase the allowance and to enable elderly people who wish to work to earn a little more. This is the major purpose, although I know that it will affect others as well. There is a philosophical case against giving any kind of additional relief at all to those over the age of 65 to encourage them to go on working. It could be argued that a man or woman of 65 who has done a hard life's work should not be encouraged by the State to work longer. They should have an adequate pension and be able to live reasonably well on that pension without having to work. In practice that does not apply. The pension is not high enough to give an adequate standard of life. There are therefore many elderly people, over the age of 65, who work to supplement their income. In any case, it should not be our function to decide for elderly people that they should or should not carry on working after 65. Many wish to do so and they are perfectly entitled to the right to carry on working and certainly, at the present time, with inflation running as it is, it is understandable that many wish to supplement their income. I have looked back to the debates on this subject in 1968 when the Opposition moved a similar Amendment and voted on it. One of the arguments used at that time as to why the elderly people ought to have this additional relief was that price inflation was running at 5½ per cent. and that it merited the increase. With present inflation running at the rate of more than 10 per cent., how much more is this Amendment worthy of support. In a different society, in different times, with a different government we could have had a philosophical debate about leisure and the need for those over 65 to enjoy a well-earned retirement. [Interruption.] Perhaps the hon. Gentleman would like to enjoy a well-earned retirement. Given a General Election he would have that opportunity, but we may not, unfortunately, have that opportunity for a little while yet. For the moment we must face the situation that elderly people have to deal with a 10 per cent. rate of price inflation, unlike 5 per cent. at a time when hon. Gentlemen opposite were pressing and voting for a similar Amendment. We now have an affluent society for some while excluding many millions of old-age pensioners. This Amendment would not do a great deal, but it would do a little by giving an additional £50 relief.I am in something of a dilemma. The hon. Member for Heywood and Royton (Mr. Barnett) said that the Amendment increased the age relief on small incomes. It does nothing of the sort. The Amendment selected concerns Clause 12(2)(b) which prescribes the income limits beyond which marginal relief shall not run when the revised income limits for age exemption come into effect.
If the other Amendments on the Order Paper had been selected, the higher exemption limits would require a different taper arrangement. These two Amendments are concerned with those taper arrangements. They would not achieve the result they set out to achieve because the matching increase of £50 proposed by the Amendment is not sufficient in itself smoothly to taper a higher marginal relief starting from a higher point. Two other changes would be necessary in order to prevent marginal age exemp- tion relief from extending over an excessively long incomes band. However, if I am in order in addressing myself to the Amendments which the hon. Gentleman thought he was moving but in fact was not, I would say that of course it is perfectly true——Order. As those Amendments have not been selected that would not be in order.
I must ask the House to resist these two Amendments. The point of the relief itself is to prevent pensioners with small incomes from having to pay tax on the proposed pension increases which are designed to restore the real value of the pensions, and the amounts of age relief are geared to this narrow purpose, and the amounts of the marginal relief which these Amendments seek to increase are themselves geared to the amount of the age relief proposed in the Bill. It is for that reason that I ask the House to reject the Amendment.
By your leave, Mr. Speaker, and that of the House may I just say that for the hon. Gentleman to dismiss an Amendment simply on the technical ground that two other changes would be needed is not good enough. If he genuinely wanted to accept this proposal which we envisage—he knows very well what it is—it would be perfectly open to him to take the necessary action. He could have answered the arguments which I put before the House, but he turned two pages over in his brief and came to the last line which said, "I recommend rejection of the Amendments" to which he was not speaking.
It is very difficult for the House to accept the hon. Gentleman's advice when he has not given any argument in its favour. Therefore I can only recommend my hon. and right hon. Friends to support the Amendment by going into the Lobby to show that we support the principle we have in mind, and I hope that some hon. Gentlemen opposite will be able to support it, too.I am very pleased that my hon. Friend the Member for Heywood and Royton (Mr. Barnett) has stated such an unanswerable case for increasing the age exemption relief. The Chief Secretary did not even attempt to deny it. We had from him this extraordinary admission that the pension increases are only for the purpose of restoring the original value of the pension—so that there is no increase in them whatever.
I would draw the attention of the Chief Secretary to the fact that there is nothing more difficult than for a Member for Parliament to convince a retirement pensioner that he should pay income tax. The Chief Secretary should know this himself. No matter what pensioner I have spoken to or what organisation I have addressed, they are all absolutely resentful that retirement pensioners should pay income tax. What my hon. Friend is asking for is a very modest extension of relief. I would like to see it at a much more realistic amount. He proposes only £50, which is far from being unreasonable when we have regard to the fact that the pensions will not realistically be increased after all. They are so small that pensioners are bound to supplement them with incomes from some other source. Pensioners whom I know personally have to have part-time jobs for income in addition to their retirement pension, and, because they were badly wounded in either the last war or the First World War and have war pensions, they are paying a substantial amount of income tax weekly. I know of one case where a retirement pension of £5 a week is paid. In addition, the pensioner has part-time earnings and a war pension. I can think of nothing more cruel than the practice whereby the war pension of a man who has lost possibly a limb in the service of his country is taken into account in assessing him for income tax. The Chief Secretary should have taken account of such cases when he was listening to my hon. Friend's argument in favour of this modest increase, and it seems reasonable to appeal to him to reconsider his attitude. As a matter of fact, he adopted an indifferent attitude to my hon. Friend's argument. He seemed quite unconcerned about the plight of retirement pensioners. The day is fast approaching when we in this House should decide that the age exemption relief should be increased so substantially that the pensioner who has part-time earnings and who may be in receipt of a war pension and disability pension for the service that he has given his country ultimately will be exempt from income tax payments. I find nothing more upsetting and discouraging than to see these old boys, the boys of the Old Brigade, many of whom made great sacrifices serving their country at a time of need, finding at the end of their lives that the pensions that they earned through their sacrifices make them liable to income tax. The quicker that we end this injustice to our pensioners, the better. I should have liked my hon Friend to have asked for an increase of £150. Such a figure would have been reasonable, logical and convincing. Unhappily, most of the pensioners whom we are discussing are passing away in our lifetime. Many are living on borrowed time. I wish that the Government would give them each £50 a year to help them in that borrowed time. The right hon. Gentleman should reconsider his attitude toward the Amendment and decide, in the light of the discussion, to accept it. He should have the courage to say right away that he agrees that wiser counsels now prevail and that he accepts the Amendment.With the leave of the House, I ought to make one correction of fact. The hon. Member for Coatbridge and Airdrie (Mr. Dempsey) referred to disabled people. I should put on record that war disability pensions are not taxable, just in case there is any apprehension about them.
On their own, Amendments Nos. Ill and 112 are ineffective. You, Mr. Speaker, said that I should be out of order in going more deeply into the matter beyond saying that this is a narrow point with a view to preventing people paying income tax on the up-rating of the pension.Question put, That the Amendment be made:—
The House divided—
The Tellers having come to the Table—
Mr. Speaker, I beg to report that there has been a miscount in the Aye Lobby.
In that case I direct that the Division take place again.
Question again put. That the Amendment be made:—
Division No. 410.
| AYES
| [9.57 p.m.
|
| Abse, Leo | Griffiths, Will (Exchange) | O'Malley, Brian |
| Allaun, Frank (Salford, E.) | Hamilton, James (Bothwell) | Oram, Bert |
| Archer, Peter (Rowley Regis) | Hamilton, William (Fife, W.) | Orme, Stanley |
| Ashton, Joe | Hannan, William (G'gow, Maryhill) | Owen, Dr. David (Plymouth, Sutton) |
| Atkinson, Norman | Hardy, Peter | Palmer, Arthur |
| Bagier, Gordon A. T. | Harrison, Walter (Wakefield) | Parry, Robert (Liverpool, Exchange) |
| Barnes, Michael | Heffer, Eric S. | Pavitt, Laurie |
| Barnett, Joel | Hooson, Emlyn | Peart, Rt. Hn. Fred |
| Beaney, Alan | Houghton, Rt. Hn. Douglas | Pendry, Tom |
| Benn, Rt. Hn. Anthony Wedgwood | Howell, Denis (Small Heath) | Pentland, Norman |
| Bennett. James (Glasgow, Bridgeton) | Hughes, Rt. Hn. Cledwyn (Anglesey) | Perry, Ernest G. |
| Blenkinsop, Arthur | Hughes, Robert (Aberdeen, N.) | Price, J. T. (Westhoughton) |
| Boardman, H. (Leigh) | Hughes, Roy (Newport) | Price, William (Rugby) |
| Booth, Albert | Hunter, Adam | Probert, Arthur |
| Boyden, James (Bishop Auckland) | Jenkins, Hugh (Putney) | Rankin, John |
| Brown, Hugh D. (G'gow, Provan) | Jenkins, Rt. Hn. Roy (Stetchford) | Reed, D. (Sedgefield) |
| Brown, Ronald (Shoreditch & F'bury) | John, Brynmor | Rees, Merlyn (Leeds, S.) |
| Buchan, Norman | Johnson, Carol (Lewisham, S.) | Rhodes, Geoffrey |
| Buchanan, Richard (G'gow, Sp'burn) | Johnson, James (K'ston-on-Hull, W.) | Roberts, Albert (Normanton) |
| Campbell, I. (Dunbartonshire, W.) | Johnson Walter (Derby, S.) | Robertson, John (Paisley) |
| Cant, R. B. | Jones, Barry (Flint, E.) | Roderick, Caerwyn E (Br'c'n & R' dnor) |
| Castle, Rt. Hn. Barbara | Jones, Dan (Burnley) | Roper, John |
| Clark, David (Colne Valley) | Jones, T. Alec (Rhondda, W.) | Rose, Paul B, |
| Cocks, Michael (Bristol, S.) | Kaufman, Gerald | Ross, Rt. Hn. William (Kilmarnock) |
| Cohen, Stanley | Kelley, Richard | Sandelson, Neville |
| Coleman, Donald | Kerr, Russell | Sheldon, Robert (Ashton-under-Lyne) |
| Concannon, J. D. | Lambie, David | Short, Rt. Hn. Edward (N'c'tle-u-Tyne) |
| Corbet, Mrs. Freda | Lawson, George | Silkin, Rt. Hn. John (Deptford) |
| Crawshaw, Richard | Leadbitter, Ted | Silkin, Hn. S. C. (Dulwich) |
| Crosland, Rt. Hn. Anthony | Lee, Rt. Hn. Frederick | Silverman, Julius |
| Cunningham, G. (Islington, S. W.) | Lestor, Miss Joan | Skinner, Dennis |
| Dalyell, Tarn | Leonard, Dick | Spearing, Nigel |
| Davidson, Arthur | Lewis, Arthur (W. Ham, N.) | Small, William |
| Davies, Denzil (Llanelly) | Lomas, Kenneth | Spriggs, Leslie |
| Davies, S. 0. (Merthyr Tydvil) | Lyon, Alexander W. (York) | Stallard, A. W. |
| Davis, Clinton (Hackney, C.) | Mabon, Dr. J. Dickson | Steel, David |
| Davis, Terry (Bromsgrove) | McBride, Neil | Stewart, Donald (Western Isles) |
| Deakins, Eric | McCann, John | Strang, Gavin |
| de Freitas, Rt. Hn. Sir Geoffrey | McCartney, Hugh | Taverne, Dick |
| Dell, Rt. Hn. Edmund | Mackenzie, Gregor | Thomas, Jeffrey (Abertiliery) |
| Dempsey, James | McGuire, Michael | Thomson, Rt. Hn. G (Dundee, E.) |
| Doig, Peter | McMillan, Tom (Glasgow, C.) | Tinn, James |
| Dormand, J. D. | Maclennan, Robert | Torney, Tom |
| Douglas, Dick (Stirlingshire, E.) | McNamara, J. Kevin | Tuck, Raphael |
| Douglas-Mann, Bruce | Mahon, Simon (Bootle) | Urwin, T. W. |
| Duffy, A. E. P. | Mallalieu, E. L. (Brigg) | Varley, Eric G. |
| Dunn, James A. | Mallalieu, J. P. W. (Huddersfield, E.) | Walker, Harold (Doncaster) |
| Dunnett, Jack | Marks, Kenneth | Wallace, George |
| Eadie, Alex | Marquand, David | Weiztman, David |
| Edelman, Maurice | Marsden, F. | Wellbeloved, James |
| Ellis, Tom | Meacher, Michael | White, James, (Glasgow, Pollok) |
| Evans, Fred | Mendelson, John | whitlock, wmiam |
| Willey, Rt. Hn. Frederick | ||
| Fernyhough, Rt. Hn. E. | Millan, Bruce | Willams, Alan (Swansea, W.) |
| Fisher, Mrs. Doris (B'ham, Lady wood) | Miller, Dr. M. S. | Williams, Mrs. Shirley (Hitchin) |
| Fletcher, Ted (Darlington) | Milne, Edward (Blyth) | Williams, W. T. (Warrington) |
| Forrester, John | Mitchell, R. C. (S'hampton, Itchen) | Wilson, Rt. Hn. Harold (Huyton) |
| Galpern, Sir Myer | Morgan, Elystan (Cardiganshire) | Wilson, William (Coventry, S.) |
| Gilbert, Dr. John | Morris, Alfred (Wythenshawe) | Woof, Robert |
| Gordon Walker, Rt. Hn. P. C. | Morris, Rt. Hn. John (Aberavon) | |
| Grant, George (Morpeth) | Moyle, Roland | TELLERS FOR THE AYES: |
| Grant, John D. (Islington, E.) | Murray, Ronald King | Mr. William Hamling and |
| Griffiths, Eddie (Brightside) | O'Halloran, Michael | Mr. John Golding. |
NOES
| ||
| Adley, Robert | Blaker, Peter | Buchanan-Smith, Alick (Angus, N&M) |
| Allason, James (Hemel Hempstead) | Boardman, Tom (Leicester, S. W.) | Bullus, Sir Eric |
| Atkins, Humphrey | Bosoawen, Robert | Burden, F. A. |
| Awdry, Daniel | Bossom, Sir Clive | Butler, Adam (Bosworth) |
| Baker, Kenneth (St. Marylebone) | Bowden, Andrew | Campbell, nt. Hn. G.(Moray & Nairn) |
| Baker, W. H. K. (Banff) | Boyd-Carptnter, Rt. Hn. John | Carlisle, Mark |
| Barber, Rt. Hn. Anthony | Braine, Bernard | Carr, Rt. Hn. Robert |
| Beamish, Col. Sir Tufton | Bray, Ronald | Channon, Paul |
| Benyon, W. | Brewis, John | Chapman, Sydney |
| Biffen, John | Brinton, Sir Tatton | Chataway, Rt. Hn. Christopher |
| Biggs-Davison. John | Brown, Sir Edward (Bath) | Clark, William (Surrey, E.) |
The House divided: Ayes 183, Noes 212.
| Clarke, Kenneth (Rushcliffe) | Howell, Ralph (Norfolk, N.) | Pounder, Rafton |
| Clegg, Walter | Hunt, John | Powell. Rt. Hn. J. Enoch |
| Cockeram, Eric | Iremonger, T. L, | Price, David (Eastleigh) |
| Cooke, Robert | James, David | Prior, Rt. Hn. J. M. L. |
| Coombs, Derek | Jenkin, Patrick (Woodford) | Pym, Rt. Hn. Francis |
| Cooper, A. E. | Jessel, Toby | Quennell, Miss J. M. |
| Cormack, Patrick | Jopling, Michael | Raison, Timothy |
| Costain, A. P. | Kellett-Bowman, Mrs. Elaine | Rawlinson, Rt. Hn. Sir Peter |
| Crouch, David | Kershaw, Anthony | Redmond, Robert |
| Curran, Charles | King, Evelyn (Dorset, S.) | Reed, Laurance (Bolton, E.) |
| Davies, Rt. Hn. John (Knutsford) | Kinsey, J. R. | Rees, Peter (Dover) |
| d'Avigdor-Goldsmid, Maj.-Gen. James | Kitson, Timothy | Rees-Davies, W. R. |
| Dean, Paul | Knox, David | Rhys Williams, Sir Brandon |
| Deedes, Rt. Hn. W. F. | Lane, David | Ridley, Hn. Nicholas |
| du Cann, Rt. Hn. Edward; | Legge-Bourke, Sir Harry | Ridsdale, Julian |
| Dykes, Hugh | Le Marchant, Spencer | Rost, Peter |
| Eden, Sir John | Lewis, Kenneth (Rutland) | St. John-Stevas, Norman |
| Edwards, Nicholas (Pembroke) | Longden, Gilbert | Sandys, Rt. Hn. D. |
| Elliot, Capt. Walter (Carshalton) | Loveridge, John | Scott, Nicholas |
| Elliott, R. W. (N'c'tle-upon-Tyne. N.) | Luce, R. N. | Scott-Hopkins, James |
| Eyre, Reginald | MacArthur, Ian | Sharples, Richard |
| Farr, John | McCrindle, R. A. | Shaw, Michael (Sc'b'gh & Whitby) |
| Fenner, Mrs. Peggy | Maclean, Sir Fitzroy | Shelton, William (Clapham) |
| Finsberg, Geoffrey (Hampstead) | McMaster, Stanley | Simeons, Charles |
| Fisher, Nigel (Surbiton) | Macmillan, Maurice (Farnham) | Skeet, T. H. H. |
| Fookes, Miss Janet | McNair-Wilson, Michael | Smith, Dudley (W'wick & L'mington) |
| Fortescue, Tim | McNair-Wilson, Patrick (NewForest) | Soref, Harold |
| Foster, Sir John | Maginnis, John E. | Speed, Keith |
| Fowler, Norman | Marten, Neil | Spence, John |
| Fraser, Rt. Hn. Hugh (St'fford & Stone) | Mather, Carol | Sproat, lain |
| Gardner, Edward | Maude, Angus | Stainton, Keith |
| Gibson-Watt, David | Meyer, Sir Anthony | Stanbrook, Ivor |
| Gilmour, Ian (Norfolk, C.) | Mills, Peter (Torrington) | Stewart-Smith, D. G. (Belper) |
| Gilmour, Sir John (Fife, E.) | Mills, Stratton (Belfast, N.) | Stokes, John |
| Glyn, Dr. Alan | Mitchell, Lt.- Co). C.(Aberdeenshire, W) | Sutcliffe, John |
| Goodhew, Victor | Mitchell, David (Basingstoke) | Tapsell, Peter |
| Gower, Raymond | Moate, Roger | Taylor, Robert (Croydon, N.W.) |
| Grant, Anthony (Harrow, C.) | Molyneaux, James | Tebbit, Norman |
| Gray, Hamish | Monks, Mrs. Connie | Temple, John M. |
| Green, Alan | Monro, Hector | Thompson, Sir Richard (Croydon, S.) |
| Griffiths, Eldon (Bury St. Edmunds) | Montgomery, Fergus | Trafford, Dr. Anthony |
| Gummer, Selwyn | More, Jasper | Trew, Peter |
| Gurden, Harold | Morgan-Giles, Rear-Adm. | Tugendhat, Christopher |
| Hall, Miss Joan (Keighley) | Morrison, Charles (Devizes) | Turton, Rt. Hn. Sir Robin |
| Hall, John (Wycombe) | Mudd, David | van Straubenzee, W. R. |
| Hamilton, Michael (Salisbury) | Murton, Oscar | Waddington, David |
| Hannam, John (Exeter) | Walder, David (Clitheroe) | |
| Hastings. Stephen | Nabarro, Sir Gerald | Wall, Patrick |
| Havers, Michael | Neave, Airey | Walters, Dennis |
| Hawkins, Paul | Noble, Rt. Hn. Michael | Ward, Dame Irene |
| Hay, John | Normanton, Tom | Warren, Kenneth |
| Heseltine, Michael | Nott, John | Wells, John (Maidstone) |
| Hicks, Robert | Onslow, Cranley | Whitelaw, Rt. Hn. William |
| Higgins, Terence L. | Oppenheim, Mrs. Sally | Wilkinson, John |
| Hiley, Joseph | Orr, Capt. L. P. S. | Wolrige-Gordon, Patrick |
| Hill, James (Southampton, Test) | Owen, Idris (Stockport, N.) | Worsley, Marcus |
| Holland, Philip | Page, Graham (Crosby) | |
| Holt, Miss Mary | Page, John (Harrow, W.) | TFIXERS FOR THE NOES: |
| Hordern, Peter | Parkinson, Cecil (Enfield, W.) | Mr. Bernard Weatherill and |
| Hornby, Richard | Percival, Ian | Mr. Hugh Rossi. |
| Hornsby-Smith. Rt. Hn. Dame Patricia | Pike, Miss Mervyn | |
| Howell, David (Guildford) | Pink, R. Bonner |
I beg to move Amendment No. 8, in page 11, line 15, at end insert:
I am most grateful to Mr. Speaker for selecting this Amendment. It is supported by my right hon. Friend the Member for Stafford and Stone (Mr. Hugh Fraser) and my hon. Friend the Member for Tyne-mouth (Dame Irene Ward). It deals with the tax allowance for single women with elderly or infirm female dependants. If it seems a little familiar to some hon. Members it is because it has a very illustrious precedent, in that a very similar Amendment was moved to the 1967 Finance Act by my right hon. Friend the present Secretary of State for Education and Science, supported by my hon. Friend the Under-Secretary of State for Health and Social Security. I feel that I am in good company, therefore, but I also feel that it is rather sad that this Amendment has not been made during the intervening years. Our purpose is to do away with what would seem to be a very unfair anomaly whereby a married man gets £140 tax relief in respect of his wife, but when he dies and his single daughter takes over the care of the same woman—her mother—the relief to her is reduced by £30 to £110. In 1967, the allowance for a single woman had risen from £75 to £110, but the allowance for a man in respect of his wife was only £120, and that has since risen to £140. The anomaly is therefore even greater today than in 1967, when my hon. Friends the Chief Secretary to the Treasury, the Financial Secretary to the Treasury and the Minister of State, Treasury, all voted to do away with it. I hope that I am not being too naive if I look upon this as some ground for optimism. As my hon. Friends will be aware, these women who care for their elderly mothers have usually given up the opportunity of a career, of marriage and even of pleasant or remunerative work in order to do so, and are suffering severe financial hardship. In the context of the Amendment, I am not concerned with those single women who will receive the new £4 tax free constant attendance allowance, but rather with those who are still managing to do some work, because not only is their earning capacity much less than that of a man but they also have little opportunity to save during their working lives. Quite the reverse is the case. Those who are still managing to work at all are often having to struggle with the additional financial burden of either impending early retirement or of having to take protracted periods of time from work in order to care for their elderly or infirm relatives during periods of acute or chronic sickness. So they should be given every opportunity to save in what has become a very insecure working life for them, especially as many of them perhaps take on this responsibility at a time when they have reached an age when they are past their best earning capacity. I am sure that my hon. Friends will agree that in continuing to accept responsibility for their elderly parents and relatives at home they are saving the local authority the considerable expense of having to provide accommodation in an old people's home. They should therefore get every encouragement, not so much for their devotion, which is without prices and for which they would be the last to claim any financial recompense, but for the service they are providing in the community in accepting this responsibility, often at great personal sacrifice. That being so, an increase of £30 in their allowance would seem to be the very least we could possibly pay. When in 1967 my right hon. Friend moved her Amendment, the rather bizarre argument was advanced, which I am confident my hon. Friends will not follow, that the allowance which a married man receives in respect of his wife is not just an allowance for her but also for him. in other words, an allowance for two people. The fact remains that he gets the allowance because he has a wife. If he did not have a wife, he would not get the allowance and it must therefore be in respect of her. It is difficult to see why the single daughter, when she takes on the same responsibility, should be allowed less for doing so. Any allowance that the mother would have upon the death of her husband would depend on whether she had any taxable income, and most often she would not. In asking my hon. Friend to accept the Amendment I feel rather like Oliver Twist. The Chancellor has given some very good things in his Budget——(d) for the reference in subsection (2) to £110 there shall be substituted a reference to £140.
To whom?
Many more than have been given for many years. But I ask my hon. Friend to look upon the Amendment with sympathy. It is very modest, far more modest than the excellent Amendment moved in Standing Committee by the hon. Member for Woolwich, West (Mr. Hamling).
If my hon. Friend feels that, in view of all the largesse given, the allowance cannot be increased this year, I hope that he will ask his right hon. Friend to keep it in the forefront of his mind in the preparation of his next Budget.The whole House was impressed by the speech of my hon. Friend the Member for Gloucester (Mrs. Sally Oppenheim). Far from being Oliver Twist, she was more like Portia bringing a sense of justice to the Front Bench.
There are here two clear principles which must appeal to every hon. Member, especially those in the Conservative Party. The first is to see that the family bonds and connections which are so quickly being dissolved in the present society are maintained and that there is some help, when a daughter, or niece, or women with some other family connection, gives up her whole life to help and protect a mother, or some other relative, or someone with whom she feels a deep bond of affection, often making a great sacrifice, as my hon. Friend said, which cannot be recompensed in mere money terms. On this alone there is an overwhelming moral case for the Amendment. Secondly, there is a consideration which my hon. Friend merely mentioned but which must appeal to the Gradgrinds in the Treasury, which is that this investment will save the State immense expenditure of public funds on old people's homes. Today the geriatric is becoming a major problem with which we are failing to cope and any effort on the part of an individual should be aided and that burning spirituality of the family bond——Oh God!
is something which this Government above all Governments should encourage to flourish.
My hon. Friend moved the Amendment with great force and I ask the Government to accept it. The sum involved is small, but the good which could be done is enormous. I hope that the Amendment will be carried with the support of the whole House.I naturally support with great pleasure and, I hope, force the Amendment so ably moved by my hon. Friend the Member for Gloucester (Mrs. Sally Oppenheim). However, I should like to relate the history a little, because I am not certain how many of my hon. Friends now on the Treasury Bench know it.
One.
Never mind about one; do not spoil what I am going to say.
Long ago a dedicated women, the Rev. Mary Webster, who came from Woolwich, had the idea of establishing an organisation which was called the National Council for the Single Woman and her Dependants. To all of us who followed the wonderful effort of the Rev. Mary Webster, it was a great grief that she died very young without achieving her objective. But I am very glad to say that the National Council for the Single Woman and her Dependants has flourished ever since. Among its ranks of supporters have been members of all Parties. The hon. Member for Woolwich, West (Mr. Hamling) has given wonderful service in support of the organisation. We all admire that. The Amendment should be regarded as an Amendment of the House and not just an Amendment of one party. 10.15 p.m. Sometimes I enjoy being indiscreet. Sometimes it is much better not to be indiscreet. If I delved into history, I should find that some very distinguished members of my party have found, through various means, the finance to support this very important organisation. I never mind when I hear an argument against an Amendment if it is a straight argument, but when we have an organisation which has been supported by all parties over very many years on a basis of what we think is right and just, then I am less interested in political arguments than in winning the battle. I believe that we shall win the battle today, because both parties have supported this organisation and have agreed that it is a very important and human organisation. Whichever party has been in power, the organisation has been supported. Therefore, there ought to be no question of not accepting an Amendment of this kind, which was put forward by my hon. Friend with some very important logical points. I am sorry to have to make a complaint about my party because it has done a great deal more than the Opposition for many sections of the community, and that gives me all the more reason to believe that the Government will accept the Amendment. But on the kind of case which would be covered, I give an example of one of my constituents. She was a woman earning a very good salary. Her mother should have gone into a mental hospital. That woman gave up her very remunerative post because she would not allow her mother to go into a mental hospital. She gave up her appointment and she was not then able, on the income available to the household, to keep up her contribution for her retirement pension. It is very well known, though not often mentioned by either side of the House, that with the ever-increasing rate of contributions to the social security schemes, one can opt out because one has a low income. This constituent of mine had to opt out of continuing her contributions She made a major sacrifice. It takes many years to win a battle in Parliament. Treasury Ministers, whether in a Labour Government or in a Conservative Government, are occupied with many important economic issues. The brainy people in the Treasury—I mean apart from Ministers—live in an ivory tower: they have not time to go out among the ordinary people. They deal with thousands of millions of pounds and do not always consider the small issues. The small issues go to the bottom of the Cabinet agenda. We are not discussing an issue such as the Common Market, local government reform, river pollution, or water supplies. On human issues, Treasury Ministers and all hon. Members advocate a human approach. At present, Members of Parliament are not too popular. Those who vote for us like us to be genuine and honest. They do not care whether on the human issues a Member votes with his party or goes into the other Lobby. I do not like people supporting a case when they are in Opposition and running away from it when they are in power. This is a realistic and honourable way to state the case. When one knows, likes and admires those on the Treasury Bench. one does not like to see them stepping on a slippery stone. One likes them to do what is in their hearts to do. I know that it is in the hearts of those on the Treasury Bench and of Shadow Ministers to support the Amendment. There is a very good saying—"Know your enemy". The enemy is the answer. I cannot think of an answer which could remotely reflect a reason why the Amendment should not be accepted. These women do so much for their relatives. In the allocation of houses on a points system, local authorities expect a mother and a daughter to occupy only one bedroom. A woman who is working hard to maintain an elderly parent should have every consideration in this respect, but I have never been able to persuade any Minister of Housing to lay this down as an administrative act. I am sure that all my male colleagues here will not mind my saying that women probably understand better the difficulties of the kind of life led by the women whom we are trying to help. Men have a very sympathetic and human approach to these matters, however, and I should hate to deprive them of the opportunity to exercise their humanity tonight, whether they be on the Treasury Bench, the Shadow Treasury Bench, or the back benches on either side. Of one thing I am certain. Our proposal will be accepted with alacrity in the country. If I do not receive a satisfactory reply, I think that I may be able, with the permission of the House, to speak again, and I am sure that the same will apply to my hon. Friend the Member for Gloucester. Women are very good at speaking. I am rather sorry for whoever is to answer the debate, unless he is ready to say at once—as I certainly hope he is—that he accepts our case. The National Council for the Single Woman and her Dependants has been helped by Members of all parties. I am not giving anything away when I say that some Cabinet Ministers have been very faithful to the organisation. So let my right hon. and hon. Friends in the Treasury disregard the ivory tower officials—I imagine that they will be relieved if they are not required to poke their heads out of their ivory towers for once—and let them accept something which we all know will be most acceptable to the country as a whole. I can think of no answer against it, so I shall sit down now and give the Minister his opportunity.
I thank the hon. Lady the Member for Tynemouth (Dame Irene Ward) for her kind words about the National Council for the Single Woman and her Dependants, and I am particularly glad that she has put on record our indebtedness to the late Mary Webster. I am an officer of the National Council. We have no chairman since Mary died. I am the vice-chairman, and we have deliberately never elected a chairman in her stead. We have the rather curious situation that the senior elected official in an organisation whose concern is the welfare of the single woman is a man. But, no doubt, that is the way these organisation sometimes work, and it is the way the world works.
The argument so notably presented tonight by the hon. Lady the Member for Gloucester (Mrs. Sally Oppenheim) and her hon. Friend the Member for Tynemouth has been raised on many occasions. We have had similar debates in Standing Committee. I believe that I have taken part in every one of them ever since we first introduced this topic on a Private Member's Motion about five years ago. As the hon. Lady rightly said, it is a cause which has been notably supported by right hon. and hon. Members on both sides of the House. When we were in Government, it was supported by some of my party, and on that occasion it was strongly supported also by Conservative Members, some of whom now find themselves Ministers. The hon. Lady talked about voting. When I last raised this matter in Standing Committee, I said that I would not embarrass members of the Government by seeking to divide the Committee. As the House knows, I do not like embarrassing people. I do not like forcing people to swallow some of the things which they may have said in previous years and, perhaps, to vote in 1971 against a proposal for which they voted in 1969 or 1968. One does not like to be too cruel.I am sure that the hon. Gentleman would make the same point about his own side, all of whom voted against it in 1967.
Not all of them.
I cannot remember the number of times I have voted against my own Government.
10.30 p.m.
As a Whip, I can speak about that with a certain amount of feeling. There were several occasions when I voted against my own Government, even on a three-line Whip. I am now in the Whips' Office.
That is why.
The present Chief Whip has been known to vote against his own party on the odd occasion.
I followed the hon. Member for Tynemouth in an earlier debate in attacking some of the attitudes adopted by the Treasury Bench in previous Governments, and I very much support what she has said tonight. I do not go much for what I call the Treasury mind. Party politics aside, the feeling of the House tonight is in favour of the Amendment. We have had five years of debate on these matters. The time has come when the House is prepared to come down on the side of the single woman. There are no party politics in this, as the hon. Lady rightly said. It is a matter of supreme human justice and equality, not sentiment and not just humanity. Many of those in the section of the community with which we are here concerned are members of the National Council for the Single Woman and her Dependants, but many are not. Many of them have never even heard of the Council. All of them work hard and make sacrifices on behalf of their dependants. They do so uncomplainingly, without any thought of reward. The House is the one institution in the world that can say, "We are sensible of the just demands of a poor section of the British people, who are not very articulate." It is the one political institution in the world that can take that sort of attitude with a sense of its proper place in the history of constitutional assemblies.As a single woman who is fortunate enough not to have to maintain a dependant, I want to say a word on behalf of those single women who are more unfortunate than I.
Reference has been made to the National Council for the Single Woman and her Dependants. I commend to my hon. Friend the Minister its Report for 1970. There he will read a series of heartrending cases of women who have devoted their whole lives to supporting their aged parents, women who have given up their jobs and reduced themselves to poverty. My hon. Friend the Member for Gloucester (Mrs. Sally Oppenheim), who so ably moved the Amendment, has made out a splendid case on the ground not only that these women reduce the burden on other taxpayers but also of the strengthening of family bonds. I remind my hon. Friend the Financial Secretary to the Treasury that the amount being claimed is only £30 more. How much in his life does £30 mean? It means so much more in the lives of most of these unfortunate women. I support the Amendment very strongly.There was one moment in the speech of my hon. Friend the Member for Tynemouth (Dame Irene Ward) when I warmed to her more than customarily. This was when she expressed sympathy with a Treasury Minister who has the task of replying to a debate of the sort we have had on this Amendment.
I endorse entirely everything said about the way the Amendment was moved by my hon. Friend the Member for Gloucester (Mrs. Sally Oppenheim), who spoke movingly and sincerely about the problems that confront the single woman who has to look after an ageing or incapacitated relative. I was one of those who attended one of the first meetings of the National Council for the Single Woman and her Dependants, which was held in Committee Room 14 back in 1966, or perhaps 1965, because it seemed to me, on the basis of evidence in my constituency, that there was here a problem which had been insufficiently recognised by the parties. I think one of the glories of our society is the richness of campassion which flows to those facing problems of poverty or dependence. As the Welfare State advances and as old problems become dealt with new ones are brought for- ward by various organisations. The National Council for the Single Woman is an example; the Disablement Income Group is another. One can think of others. Without doubt, as my hon. Friends and the hon. Member for Woolwich, West (Mr. Handing), who has played a most notable part in the Council, have rightly stressed, grave personal problems confront these women, who often give up their careers in order to care for an aged or incapacitated relative, often at great financial and personal sacrifice. This was why the right hon. Gentleman the Member for Cardiff, South-East (Mr. Callaghan) introduced a new allowance of £110 in 1967 specifically for single women, whether they be spinsters or widows or divorced, who have to look after relatives, differentiating that case from the normal dependent relative allowance which was then and is still £75. The margin of £35 was then established. I want to deal with the point of the Amendment which was then moved by my right hon. Friend the present Secretary of State for Education and Science and to which Iain Macleod and others of us put our names. That Amendment would have provided that the sum of £110 should be increased by £10 to £120 for the very reason that my hon. Friend the Member for Gloucester has mentioned tonight—that it was thought that there should be the same figure as the differential between the married allowance and the single allowance on the footing that this represented an additional allowance paid to the husband in respect of his wife. The argument advanced by one of my predecessors, Mr. Niall MacDermot, was that this was a false analogy, that there was no proper parallel to be drawn between a differentiation between a married and single allowance and an allowance for dependent relatives such as is under discussion to-night. I hope that in paraphrasing what he said I will not be accused of indulging in absurd argument, because it is a perfectly genuine argument. The marriage allowance, which under our system goes to the husband in respect of himself and his wife, is an allowance in respect of two people and may well be in respect of two incomes. Furthermore, it is in respect of two people whose incomes are aggregated and in these circumstances it is sui generis and a false analogy to deduce from the relativities of those two allowances an argument that some other allowance should be directly and arithmetically related to it. The argument advanced by my hon. Friend the Member for Gloucester was that because the difference, as a result of the Budget last year of the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins), between single and married allowances was increased from £120 to £140, it is thereby necessarily right that this particular allowance for the single woman with a dependent relative should be increased to the same figure. What has to be borne in mind is that as a result of the proposal made by the right hon. Member for Cardiff, South-East in 1967 an exception was made, supported by all sides of the House, with respect to the normal dependent relative allowances. The ordinary taxpayer gets an allowance of £75, including the male taxpayer who is perhaps supporting his aged mother. It is purely coincidental that I called on two such families in my constituency last Saturday. The fact is that the man supporting his dependent relative gets only £75. The woman who supports a dependent relative gets £110. It has been asked by male taxpayers why there should be this additional advantage for the woman. The answer is fairly and properly given that because on the whole women are not as highly-paid as men. In an increasing number of occupations they now have equal pay. In general, the occupations women follow do not command the same incomes as those followed by men. Therefore it would be appropriate that they should get compensatory help in the form of increased allowances. The point is how far should the margin be widened? It is already £35. The question is: should it be widened as the Amendment suggests by another £30, so that the margin is £65, which is very nearly double the allowance given to the generality of taxpayers who already support dependent relatives? I would have thought that there would be a strong argument against this. We have to bear in mind the general relativity of these personal allowances among themselves. It is in the last resort a matter of judgment and broad social policy as to what the level of the allowances and the relativity of the allowances should be at any particular time or in any particular case. It may be said that when dealing with comparable circumstances, namely the taxpayer supporting a dependent relative, we would need very powerful arguments to justify one allowance being double the level of another in not dissimilar circumstances. It may be thought that, in these circumstances, the margin of £35 such as already exists in the tax system is perhaps not an unreasonable one. 10.45 p.m. I take the broad social point made so powerfully by my right hon. Friend the Member for Stafford and Stone (Mr. Hugh Fraser). The family must always be the first line of defence in the social services: the family first, the community second, and the voluntary and statutory authorities third. Naturally, we shall want to do all that we can to encourage and help the family to bear the responsibilities that that priority inevitably involves. As a Treasury Minister, equally I take the point that the cost of supporting incapacitated elderly people in institutions is vastly greater than if these people can be supported in the comfort and community of their own homes. These are matters of broad social policy. They are matters which obviously must be considered continuously by Governments—not only by the Treasury, but by the Department of Health and Social Security. There is one other point on the allowances which I should make. A dependent relative with no aggregation, as with a wife, is entitled to his or her own personal allowances. Furthermore, a dependent relative allowance, either £110 or £75, is not abated until the dependent relative's own income goes up beyond a certain figure. Because of the difference of £75 or £110, this figure is very different in the case of a dependent relative being supported by a single woman. In the current year, 1971–72, the limit of a dependent relative's income before abatement takes place is £364 a year. Where the person claiming the allowance is a single woman, it is £399. That is quite a considerable margin. Bearing in mind that my right hon. Friend's first priority this year in terms of personal allowances was to deal with the problem of the low threshold for families with children, I suggest that it would be wrong at this stage to accept the Amendment and to widen the gap between £75 and £110 by another £30. The cost of accepting the Amendment is not astronomic. At the same time, it is not insubstantial. In a full year, it would be about £4 million. But the prime weight of the argument is the need to bear in mind the general relativities of the personal allowances. My hon. Friend the Member for Gloucester said that, even if we could not feel able to accept the Amendment this year, we should undertake to consider it sympathetically for next year. I go further than that. In the course of our review of the tax system, we are keeping all the personal allowances under review. We have already embarked on discussions with the Department of Health and Social Security with a view to co-ordinating so far as we can the policies for dealing with the disadvantaged groups in our society, including the disabled and others, so that if possible we can devise a more coherent and rational co-ordination of the policies of the Department of Health and Social Security and of my right hon. Friend the Chancellor of the Exchequer in this vitally important sphere. Clearly the support of dependent relatives falls within this category. I assure the House that this is an aspect of policy which will receive the most urgent and intensive study by Ministers both in the Treasury and in the Department of Health and Social Security during the year. I believe that it would be wrong, in advance of that total review of personal allowances and bearing in mind that we have given priority to the children's allowances this year, to take the single step to widen the margin between the £75 dependent relative allowance for the generality of taxpayers so that it is nearly double for the single woman taxpayer who is supporting a dependent relative. I have listened with intense interest and sympathy to the case which has been made by hon. Members on both sides of the House. I give my hon. Friend the Member for Gloucester the undertaking that the matter will be firmly reviewed before next year. I therefore hope that, in the circumstances, she will not press the Amendment.I should be the last to castigate the Financial Secretary for doing his best with a difficult defending brief, which occasionally is the lot of Treasury Ministers. The hon. Gentleman approached this matter with sympathy and made a brave attempt to justify the present position. He pointed to the anomalies in the present system of allowances. He said that the question of personal allowances will be reviewed. This is a matter on which I think he would command the support of most of the House, because it needs to be reviewed.
In the meantime, what do we do about this special case which was created a few years ago? If it is a special case—it was then recognised to be a special case and was generally accepted by the House—then, for the reasons so eloquently advanced by the hon. Member for Gloucester (Mrs. Sally Oppenheim), there is a case for maintaining the value of this concession. We often argued in Committee that in doling out the relief which they have given the Government should have given a much higher priority to maintaining the value of allowances and the thresh-hold for tax in certain cases. The Minister said that the whole question of allowances is being reviewed. I am glad to hear this, because to some extent I got the impression, from the new tax allowances written into the Bill, that they were already fixed. I hope that they will all be reviewed. In the meantime, what is the attitude to this allowance? This concession, which would cost £4 million—considerably less than other concessions in the Budget—would go to a category which is rather more deserving—putting it in terms of "deserving" is not the right way of putting it; a more needy category—than many others which have had benefits in the Budget. As a holding operation, surely the Government could concede this concession. I therefore hope that the hon. Member for Gloucester will press the Amendment and not feel obliged to wait another year.I cannot altogether accept two of the arguments advanced by my hon. Friend. The first was that increasing this allowance for single women would widen the discrepancy between them and the generality of taxpayers. He conceded that a single male who was supporting a dependent relative would be earning more, but did not point out that that male would probably have a much higher pension expectancy than the single woman. Therefore, this must also be taken into consideration. As for the false analogy, my hon. Friend's argument seemed almost as bizarre as the one that I referred to, but it would only apply to an aggregate income. If only the husband's income were involved, the analogy would not be as false as all that. However, in view of my hon. Friend's assurances, which I shall hold him to, I beg to ask leave to withdraw the Amendment.
rose——
Does the hon. Lady have the leave of the House?
Yes.
The Financial Secretary did not explain why, if there is all this argument against the case, the National Council for the Single Woman and her Dependants, which has been advocating this for years, has been supported by so many of my own Cabinet Ministers and other hon. Members.
Having lived a long time and done a lot of things during the war, I remember that when we wanted to attract married women into the war, we increased their marriage allowances. When the war ended, no Government dared to go back on that. The widow, whatever her income, is entitled to a housekeeper allowance, whereas spinsters and bachelors are not: we have never been able to persuade any Government to do away with this unfair discrimination. Neither party has had the courage to deal with this inequality. It is for my hon. Friend to say whether she accepts the assurances which she has
Division No. 411.]
| AYES
| [11.1 p.m.
|
| Albu, Austen | Barnett, Joel | Brown, Hugh D. (G'gow, Provan) |
| Allaun, Frank (Salford, E.) | Beaney, Alan | Brown, Ronald (Shoreditch & F'bury) |
| Archer, Peter (Rowley Regis) | Benn, Rt. Hn. Anthony Wedgwood | Buchanan, Richard (G'gow, Sp'burn) |
| Ashton, Joe | Bennett, James (Glasgow, Bridgeton) | Campbell), 1. (Dunbartonshire, W.) |
| Atkinson, Norman | Blsnkinsop, Arthur | Cant, R. B. |
| Bagier, Cordon A. T. | Boardman, H. (Leigh) | Castle, Rt. Hn. Barbara |
| Barnes, Michael | Booth, Albert | Clark, David (Coins Valley) |
been given. I have faith in the promises which have been made, but my hon. Friend did not say that this case would be met. All he said was that they would all be reviewed. I should like my hon. Friend, with his great charm, to tell me why he has not answered these points.
Answer.
11.0 p.m.
With the leave of the House, Mr. Deputy Speaker, I cannot resist by hon. Friend's blandishments. I cannot give her the categorical pledge she asked for, because it would make nonsense of my right hon. Friend's review of allowances. As I stressed, it is the relativity of those allowances to each other which must be a primary factor in fixing their level, but I can give her the assurance that this allowance will be particularly examined in this review, and I hope she will accept that as sincerely intended.
May I say finally in answer to my hon. Friend——
No. The hon. Lady cannot make three speeches. If she wishes to withdraw her Amendment, she can say so, but no more.
The Question is——
On a point of order, I understand my hon. Friend was begging leave to withdraw the Amendment.
No.
Does the hon. Lady wish to withdraw the Amendment?
I——
No.
Question put, That the Amendment be made:—
The House divided: Ayes, 170; Noes, 190.
| Cocks, Michael (Bristol, S.) | John, Brynmor | Pentland, Norman |
| Cohen, Stanley | Johnson, Carol (Lewisham, S.) | Perry, Ernest G. |
| Concannon, J. D, | Johnson, James (K'ston-on-Hull, W.) | Price, J. T. (Westhoughton) |
| Crawshaw, Richard | Johnson, Walter (Derby, S.) | Price, William (Rugby) |
| Cronin, John | Jones, Barry (Flint, E.) | Probert, Arthur |
| Cunningham, G. (Islington, S. W.) | Jones, Dan (Burnley) | Reed, D. (Sedgefield) |
| Dalyell, Tam | Jones, T. Alec (Rhondda, W.) | Flies, Merlyn (Leeds, S.) |
| Davies, Denzil (Llanelly) | Kaufman, Gerald | Rhodes, Geoffrey |
| Davis, Clinton (Hackney, C.) | Kelley, Richard | Roberts, Albert (Normanton) |
| Davis, Terry (Bromsgrove) | Kerr, Russell | Robertson, John (Paisley) |
| Deakins, Eric | Lawson, George | Roderick, CaerwynE.(Br'c'n&R'dnor) |
| de Freitas, Rt. Hn. Sir Geoffrey | Lee, Rt. Hn. Frederick | Roper, John |
| Dell, Rt. Hn. Edmund | Leonard, Dick | Rose, Paul B. |
| Dempsey, James | Lestor, Miss Joan | Ross, Rt. Hn. William (Kilmarnock) |
| Doig, Peter | Lewis, Arthur (W. Ham N.) | Sandelson, Neville |
| Dormand, J. D. | Lomas, Kenneth | Sheldon, Robert (Ashton-under Lyne) |
| Douglas-Mann, Bruce | Lyons, Edward (Bradford, E.) | Short, Rt. Hn. Edward (N'e'Bie-u-Tyne) |
| Duffy, A. E. P. | Mabon, Dr. J. Dickson | Silkin, Rt. Hn. John (Deptfortd) |
| Dunn, James A. | McCann, John | Silkin, Hn. S. C. (Dulwich) |
| Dunnett, Jack | McCartney, Hugh | Silverman, Julius |
| Ellis, Tom | McGuire, Michael | Skinner, Dennis |
| Evans, Fred | Mackenzie, Gregor | Spearing, Nigel |
| Fernyhough, Rt. Hn. E. | Maclennan, Robert | Spriggs, Leslie |
| Fisher, Mrs. Doris (B'ham, Lady wood) | McMillan, Tom (Glasgow, C.) | Stallard, A. W. |
| Fletcher, Ted (Darlington) | McNamara, J. Kevin | Steel, David |
| Foot, Michael | Mahon, Simon (Bootle) | Stewart, Donald (Western Isles) |
| Forrester, John | Mallalieu, J. P. W. (Huddersfield, E.) | Strang, Gavin |
| Galpern, Sir Myer | Marks, Kenneth | Taverne, Dick |
| Gilbert, Dr. John | Marquand, David | Thomson, Rt. Hn. G. (Dundee, E.) |
| Golding, John | Marsden, F. | Tinn, James |
| Cordon Walker, Rt. Hn. P. C. | Meacher, Michael | Torney, Tom |
| Grant, George (Morpeth) | Mellish, Rt. Hn. Robert | Tuck, Raphael |
| Grant, John D. (Islington, E.) | Mendelson, John | Urwin, T. W. |
| Griffiths, Eddie (Brightside) | Miller, Dr. M. S. | Varley, Eric G. |
| Griffiths, Will (Exchange) | Milne, Edward (Blyth) | Walker, Harold (Doncaster) |
| Hamilton, William (Fife, W.) | Mitchell, R. C. (S'hampton, Itchen) | Wallace, George |
| Hamling, William | Morgan, Elystan (Cardiganshire) | Weitzman, David |
| Harman, William (G'gow, Maryhill) | Morris, Alfred (Wythenshawe) | Wellbeloved, James |
| Hardy, Peter | Morris, Rt. Hn. John (Aberavon) | White, James (Glasgow, Pollok) |
| Hattersley, Roy | Moyle, Roland | Whitlock, William |
| Heffer, Eric S. | Murray, Ronald King | Willey, Rt. Hn. Frederick |
| Hooson, Emlyn | O'Halloran, Michael | Williams, Alan (Swansea, W.) |
| Houghton, Rt. Hn. Douglas | O'Mallcy, Brian | Williams, Mrs. Shirley (Hitchin) |
| Howell, Denis (Small Heath) | Oram, Bert | Williams, W. T. (Warrington) |
| Hucfield, Leslie | Orme, Stanley | Wilson, Rt. Hn. Harold (Huyton) |
| Hughes, Rt. Hn. Cledwyn (Anglesey) | Owen, Dr. David (Plymouth, Sutton) | Wilson, William (Coventry, S.) |
| Hughes, Robert (Aberdeen, N.) | Palmer, Arthur | Woof, Robert |
| Hughes, Roy (Newport) | Parry, Robert (Liverpool, Exchange) | |
| Hunter, Adam | Pavitt, Laurie | TELLERS FOR THE AYES: |
| Jenkins, Hugh (Putney) | Peart, Rt. Hn. Fred | Mr. Donald Coleman and |
| Jenkins, Rt. Hn. Roy (Stechford) | Pendry, Tom | Mr. lames Hamilton. |
NOES
| ||
| Adley, Robert | Chapman, Sydney | Fowler, Norman |
| Allason, James (Hemel Hempstead) | Chataway, Rt. Hn. Christopher | Galbraith, Hn. T. G. |
| Archer, Jeffrey (Louth) | Chichester-Clark, H. | Glyn, Dr. Alan |
| Atkins, Humphrey | Clark, William (Surrey, E.) | Gower, Raymond |
| Awdry, Daniel | Clarke, Kenneth (Rushcliffe) | Grant, Anthony (Harrow, C.) |
| Baker, Kenneth (St. Marylebone) | Cockeram, Eric | Green, Alan |
| Baker, W. H. K. (Banff) | Cooke, Robert | Griffiths, Eldon (Bury St. Edmunds) |
| Barber, Rt. Hn. Anthony | Coombs, Derek | Gummer, Selwyn |
| Beamish, Col. Sir Tufton | Cormack, Patrick | Gurden, Harold |
| Bennett, Sir Frederic (Torquay) | Costain, A. P. | Hall, John (Wycombe) |
| Benyon, W | Crouch, David | Hall-Davis, A. G. F. |
| Biffon. John | Davies, Rt. Hn. John (Knutsford) | Hamilton, Michael (Salisbury) |
| Biggs-Davison, John | d' Avigdor-Goldsmid. Maj.-Gen. James | Hannam, John (Exeter) |
| Blaker, Peter | Dean, Paul | Hastings, Stephen |
| Boardman, Tom (Leicester, S. W.) | Deedes, Rt. Hn. W. F. | Havers, Michael |
| Boscawen, Robert | Dixon, Piers | Hawkins, Paul |
| Bossom, Sir Clive | du Cann, Rt. Hn. Edward | Heseltine, Michael |
| Bowden, Andrew | Dykes Hugh | Hicks, Robert |
| Boyd-Carpenter, Rt. Hn. John | Eden, Sir John | Higgins, Terence L. |
| Braine, Bernard | Edwards, Nicholas (Pembroke) | Hiley, Joseph |
| Bray, Ronald | Elliot, Capt. Walter (Carshalton) | Hill, James (Southampton, Test) |
| Brewis, John | Elliott, R. W. (N'c'tle-upon-Tyne, N.) | Hordern, Peter |
| Brinton, Sir Tatton | Eyre, Reginald | Hornby, Richard |
| Brown, Sir Edward (Bath) | Farr, John | Hornsby-Smith, Rt. Hn. Dame Patricia |
| Buchanan-Smith, Alick (Angus, N&M) | Fermer, Mrs. Peggy | Howell, David (Guildford) |
| Finsberg, Geoffrey (Hampstead) | Howell, Ralph (Norfolk, N.) | |
| Burden, F. A. | Fisher, Nigel (Surbiton) | Hunt, John |
| Butler, Adam (Bosworth) | Fookes, Miss Janet | Hutchison, Michael Cark |
| Carlisle, Mark | Fortescue, Tim | Iremonger, T. L. |
| Channon, Paul | Foster, Sir John | Irvine, Bryant Godman (Rye) |
| James, David | More, Jasper | Shelton, William (Clapham) |
| Jenkin, Patrick (Woodford) | Morrison, Charles (Devizes) | Simeons, Charles |
| Jessel, Toby | Mudd, David | Skeet, T. H. H. |
| Jopling, Michael | Murton, Oscar | Smith, Dudley (W'wick & L'mington) |
| Kellett-Bowman, Mrs. Elaine | Nabarro, Sir Gerald | Soref, Harold |
| Kershaw, Anthony | Neave, Airey | Speed, Keith |
| King, Evelyn (Dorset, S.) | Noble, Rt. Hn. Michael | Spence, John |
| Kitson, Timothy | Normanton, Tom | Stanbrook, Ivor |
| Knox, David | Nott, John | Stewart-Smith, D. G. (Belper) |
| Lane, David | Onslow, Cranley | Stokes, John |
| Legge-Bourke, Sir Harry | Owen, Idris (Stockport, N.) | Sutcliffe, John |
| Le Marchant, Spencer | Page, Graham (Crosby) | Taylor, Robert (Croydon, N. W.) |
| Longden, Gilbert | Page, John (Harrow, W.) | Tebbit, Norman |
| Loveridge, John | Parkinson, Cecil (Enfield, W.) | Temple, John M. |
| Luce, R. N. | Percival, Ian | Thompson, Sir Richard (Croydon, S.) |
| MacArthur, Ian | Pink, R. Bonner | Trafford, Dr. Anthony |
| McCrindle, R. A. | Pounder, Rafton | Trew, Peter |
| Maclean, Sir Fitzroy | Powell, Rt. Hn. J. Enoch | Tugendhat, Christopher |
| McMaster, Stanley | Price, David (Eastleigh) | Turton, Rt. Hn. Sir Robin |
| Macmillan, Maurice (Farnham) | Pym, Rt. Hn. Francis | van Straubenzee, W. R. |
| McNair-Wilson, Michael | Raison, Timothy | Waddington, David |
| McNair-Wilson, Patrick (NewForest) | Rawlinson, Rt. Hn. Sir Peter | Walder, David (Clitheroe) |
| Maginnis, John E. | Redmond, Robert | Wall, Patrick |
| Marten, Neil | Reed, Laurance (Bolton, E.) | Walters, Dennis |
| Mather, Carol | Rees, Peter (DŌver) | Warren, Kenneth |
| Maude, Angus | Rhys Williams, Sir Brandon | Weatherill, Bernard |
| Meyer, Sir Anthony | Ridley, Hn. Nicholas | Wells, John (Maidstone) |
| Mills, Peter (Torrington) | Ridsdale, Julian | Whitelaw, Rt. Hn. William |
| Mills, Stratton (Belfast, N.) | Rossi, Hugh (Hornsey) | Wilkinson, John |
| Mitchell, Lt.-Col. C.(Aberdeenshire, W) | St. John-Stevas, Norman | Wolrige-Gordon, Patrick |
| Mitchell, David (Basingstoke) | Sandys, Rt. Hn, D. | Worsley, Marcus |
| Moate, Roger | Scott, Nicholas | |
| Molyneaux, James | Scott-Hopkins, James | TELLERS FOR THE NOES' |
| Monks, Mrs. Connie | Sharples, Richard | Mr. Victor Goodhew and |
| Monro, Hector | Shaw, Michael (Sc'b'gh & Whitby) | Mr. Walter Clegg. |
Clause 13
Parent And Child—Repeal Of Aggregation Provisions, And Amendment Of Settlement Provisions
I beg to move Amendment No. 10, in page 12, line 28, at end insert:
The longer this debate goes on the smaller the Government's majorities become: as we proceed no doubt this pattern will develop in a most interesting way. We now come to one of the most indefensible Clauses in the Bill. We have given in Committee our reasons for so regarding it, and our objections to the Clause as a whole are twofold. First, it destroys the principle of equity that was created as between taxpayers in similar positions, who are now to be treated differently. Secondly, it reintroduces an element of social injustice which had in cases of higher income previously been abolished.(3) This section shall not apply for surtax purposes.
The Amendment does not deal with the first of these objections. What we now propose is a rather narrower reform. It still leaves the inequity which exists between, for example, maintenance pay- ments made to a wife by an order of the magistrates' court, where the children's income will, in effect, be treated as part of the family income and taxed in an aggregated fashion, and other payments made after a settlement in the High Court, where an arrangement can be made and the children's income can be separated. That kind of inequity will persist.
But the Amendment would limit the scope of the injustice which is created by the Clause. It would exempt cases of special provision for children in regard to aggregation for income tax, but it would mean that in future there would still be aggregation for surtax. This is a distinction which is already well known in tax law, because it already exists in the case of covenants. The Amendment is, therefore, very much a second best.
What does it mean in practice? It means that if there is a family of modest means—modest, that is, compared with the main beneficiaries under the Bill—the children's income will be their income—by which I mean an income within the surtax range—there will be no tax benefit of any kind proposed in the Bill.
The Amendment is to a large extent a test of the Government's good faith, because when we have approached the question in the past it has been strenuously denied by Government spokesmen that what they were interested in was the kind of arrangement which would benefit the wealthier families. They said that the cases that moved them to this reform and led them in the past to object to our reform were those in the middle income groups; the case, for instance, of the widow left with her commitments who wanted to educate her children. It was not the surtax payers with whom hon. Members opposite said that they were concerned.
By this Amendment we give them an opportunity in fact to show whether this is the category with which they are concerned, that is only the widows and those with the middle range of incomes and not the surtax payers. If it is, it is clearly the task of the Government to accept the Amendment to show that this is what they have been talking about all along; if not, it will be plain what the true purpose of the Clause is.
11.15 p.m.
It rather surprised me to see the Amendment on the Notice Paper after the debate which we had in Committee of the whole House last month. What it seeks to do is to apply the principle of aggregation solely for the purpose of surtax and, although I do not put too much weight on this, only for 1972–73, because by April, 1973, surtax is to disappear. The figure for the total cost of the concession in the Budget was £15 million and in Committee I gave the figures of £10 million for income tax and £5 million for surtax. So, although I accept that the hon. and learned Member for Lincoln (Mr. Taverne) did not accept the principle of the whole Clause, by this Amendment he seems prepared to settle for about one-third of it.
The crucial point is to realise how little tax advantage there would be in what has always been regarded as the case at which the aggregation Clause was aimed—the grandfather covenant. The reason for this is plain. Ever since 1965 any covenant made in favour of a grandchild has been ineffective to transfer income from the grandfather to the grandchild except for income tax purposes. It does not affect the grandfather's surtax. Accordingly, when income under the aggregation provisions of 1968 is deemed to be the income of the parents of the child, it could not in those circumstances be the income of the parents for surtax purposes, because it remained the income of the grandfather for surtax purposes, and even Labour Members did not seek to make it the income of two different people for surtax purposes. Therefore, the only advantage to be gained from making a covenant in favour of the grandchild, if it is to apply only for surtax purposes, is to make the child an income against which its own personal allowance may operate. But even then there is a limit to the advantage to the family, because we deliberately left the figure, at £115 above which the child allowance enjoyed by the parents would abate pound for pound. Therefore, the Amendment's effect on the generality of grandfather covenants would be almost negligible. A very limited measure of aggregation would remain to take effect. On the other hand, there would be a substantial complication to the tax system, because in addition to the question of whether the child was at work, and it is only aggregated when the child is not in full-time work, we should be introducing once again the problem of the age of the child between 18 and 21. The parent-child settlement would continue to apply for surtax purposes for children up to the age of 21 and we should have to determine the aggregation provision depending on whether the income came from the parent or some other person. Furthermore, one would be creating new anomalies. If, for instance, a child has £400 of income under a trust and no other income, under the present law and aggregation provisions, it is aggregated with his parent's income for tax purposes. It is liable to surtax in the parent's hands, but the parents can claim a child allowance. If the Amendment were to be accepted, so that the aggregation applied only for surtax purposes, the income would be taxed as a child's for income tax purposes, but in view of the amount the parent would not be entitled to the child allowance and it would follow that there would be no allowance due to the parent for surtax because the child allowance runs for surtax only when it applies for income tax. In other words, the income would be liable to surtax in the parent's hands without the benefit of the child allowance which can at present be claimed. I cannot believe that that would be the intention of the hon. and learned Gentleman. Obviously, a grotesque anomaly would result from it, and that is an added reason why it would be inappropriate to accept the Amendment. Perhaps the clinching argument about this is to remember the philosophy on which the aggregation principle was based. It was based on the concept of the common spending unit, that the parent and child would together be regarded as a single taxable family unit. But if it is to be only a single taxable family unit for the purpose of surtax, where does the principle go? The principle has largely been conceded if it is not to apply to the great mass of taxpayers which, as I said in Committee, probably ran into six figures where no question of any surtax is involved. If they are not to be regarded as common spending units, where is the logic of treating the family as a common spending unit solely for the purposes of surtax? As we said in 1968 and in 1969, and as I said in Committee, we deplored the whole principle on which the basis of this process of aggregation of children's income was based. We regarded it as being a grave injustice to many tens of thousands and possibly hundreds of thousands of families. This is in no wit changed by the fact that this is to apply only to surtax. I can only advise the House to reject the Amendment.There is a simple answer to the Financial Secretary's points. People who make settlements of this kind take advice. If complications arise in the case of surtax, which the Financial Secretary has mentioned, the settlements will not be made.
The Amendment is moved precisely to prevent settlements being made which would produce this inequity among taxpayers.
Amendment negatived.
Clause 17
Annuities For The Self-Employed And Others
I beg to move Amendment No. 92, in page 14, leave out line 4 and insert:
'"or under a contract for the time being approved under section 226A of this Act"'.
With this Amendment we are to take Government Amendments Nos. 93 to 104.
That would be for the convenience of the House, Mr. Speaker, as these matters are all consequential upon the main Amendment, which is Amendment No. 96. Amendment No. 92 is a paving Amendment to deal with retirement annuities for the self-employed.
In Committee I gave an undertaking to my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) and to my hon. Friend the Member for Surrey, East (Mr. William Clark) that we would consider whether it was possible to give the self-employed a facility similar to the lump sum death-in-service benefit available to employees through approved occupational pension schemes. My hon. Friend the Member for Kensington, South also asked whether we could not allow a man to make provision for his dependants and why a self-employed woman should not be able to provide for her husband or other dependant. The new Clause 226A, contained in Amendment No. 96, provides for all those matters. The remaining Amendments in the group are consequential on it. We have more than met the undertaking which I gave in Committee. I shall be very happy to answer any questions on this matter, but I do not consider it necessary to elaborate any further at this stage.Amendment agreed to.
I beg to move Amendment No. 74, in page 14, line 4, at beginning insert:
My hon. Friend the Financial Secretary will appreciate that this is a small point but one which rests on a difference of fact between himself and myself. The Amendment refers to the £1,500 premium which can now, as a result of the Bill, be paid by self-employed persons. It was the object of my original Amendment that part of the £1,500 should be allowed to be expended in the form of a disability benefit scheme. It was, according to the advice that I had, impossible for any self-employed person to devote part of the sum allowed for this purpose, which was previously £750 but is now to be increased to £1,500, for the purpose of taking out a disability scheme. In Committee I adduced the arguments. The Financial Secretary, on the advice available to him, answered in these words:'or an annuity payable on his becomning incapable through infirmity of body or mind of carrying on his occupation (hereinafter called a disability annuity)'.
that is me."There is obviously a difference of fact between my hon. Friend and myself"—
This is why I raise the point at this stage, so that the position can be clarified for those who are interested and for the insurance world in particular."I think that probably the right thing to do is for men to agree to look at it again."
"It may be that one of us has misunderstood the position. If my hon. Friend takes out a separate policy for disability, I agree that there would be no tax relief for that, of course But if he were to enter into a contract the main purpose of which was to provide him with a retirement annuity, and he had a subsidiary purpose to cover on insurance principles, not on the question of building up contributions, the actuarial risk of his becoming permanently disabled before retirement age, such a policy or such a scheme would be approved by the Inland Revenue under Section 226 (3) (b) which I read out.
My hon. Friend is seized of the point. What is required is for a separate disability to be made on actuarial principles on the likelihood of the pensioner's being disabled, quite separate from that of the ordinary retirement annuity scheme. The difference of fact emerges as to whether such a scheme is available. I wish to achieve this point of clarification. In Committee my hon. Friend recommended me to make some researches in the market. Naturally, I followed his advice. First, I approached the largest group concerned with unit trusts and retirement annuity pension schemes. It had no idea that the possibility of allowing disability pension schemes existed. I next approached the Life Offices Association. It had no idea that such possibilities existed. I then approached one of the leading firms of brokers at Lloyds, which was kind enough to reply to my letter in these terms:It may be that my hon. Friend has not explored the market as fully as may be in order to find out what the possibilities are. I am assured by my advisers that such arrangements are not infrequent and that in the overwhelming majority of cases they are readily approved by the Inland Revenue."—[OFFICIAL REPORT, Standing Committee H; 26th May, 1971, cc. 225–26.]
The point simply is that there is a difference of fact between my hon. Friend and myself. I regret that my hon. Friend's advice was insufficient in this respect, because the insurance world had not even heard of such a scheme and, when it had applied to the Inland Revenue, it had been told that it could not introduce it. All that is required on this Amendment is for my hon. Friend to make perfectly clear to the insurance world that such policies are allowed and will be welcomed by the Inland Revenue."Various insurance companies have endeavoured to include a sickness benefit with their self-employed annuity contract whereby a premium is paid to a sickness insurance of such an amount as will maintain payments to the annuity policy. The Revenue have stopped this on the basis that in infirmity earned income will fall drastically by definition of underwriters, and premium payments to the annuity policy cannot be automatically maintained in the absence of earned income."
11.30 p.m.
I am happy to respond to my hon. Friend the Member for Horsham (Mr. Horclern), and I am grateful to him for the way in which he has moved the Amendment. I think it fair to say that, between us, we got ourselves in a bit of a tangle in Standing Committee, and I am sure that we took the right way out, both of us agreeing to look into the matter again.
I entirely concede that I was too optimistic in the view which I took of what the market had on offer, but I stated the position correctly when I explained what would be permitted by the Inland Revenue under legislation already on the Statute Book, namely, that, where there is a retirement annuity contract and, as a subsidiary purpose, the self-employed man wishes to take out cover against permanent disability as part of that arrangement, the cost of that permanent disability contract will be regarded as part of the qualifying premium under the retirement annuity scheme. Further, I can confirm that it is not in law limited—I quote my hon. Friend's words in Committee—toIt can be taken out on, as he said, normal actuarial principles. That being the case, it is now up to the market to provide for the self-employed contracts which, clearly, some of them wish to take out. I have every sympathy with my hon. Friend and any other self-employed people who wish to protect themselves, as part of their retirement benefit scheme, against the hazard of becoming permanently disabled before reaching retirement. This is allowed under existing legislation. I hope that the market will respond by providing the necessary cover, and I hope that those who want that cover will go to the market and make their wishes known so that the necessary arrangements can be made by the life offices, by Lloyd's or by anyone else who chooses to underwrite this kind of business. So long as it is for permanent disablement of the self-employed person, it is within the scope of the existing legislation."the sum of the contributions that he makes"—[OFFICIAL REPORT, Standing Committee H, 26th May, 1971; c. 223.]
I am glad to have that assurance and clarification from my hon. Friend. In the circumstances, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Amendments made: No. 93, in page 14, line 18, leave out 'widow's annuity contract)' and insert:
contract approved under section 226A of this Act)'.
No. 94, in page 14, line 25, leave out 'widow's annuity contract' and insert:
'contract aproved under section 226A of this Act'—[Mr. Patrick Jenkin.]
I beg to move Amendment No. 73, in page 14, line 36, at end insert:
This Amendment also was referred to in Standing Committee, and there was a slight misunderstanding about the purport of what my hon. Friend the Financial Secretary said. However, I fear that the outcome is not likely to be quite so happy as it was on Amendment No. 74. The purpose here is to provide that, where a self-employed person has, for whatever reason, been unable to afford the full sum of £1,500 in payment of premium for his retirement annuity, such unexpended portion should be allowed to be rolled over into the following year and succeeding years. The principle is this. The new figure of £1,500 has been arrived at after making allowance for the rate of inflation which has proceeded since the old figure of £750 was fixed as long ago as 1956. We do not know what will happen in the future. We cannot tell at what rate premiums will run in a few years. What is certain is that those who are self-employed have no other means of creating pension annuities for themselves. It must have been the clear intention of my right hon. Friend's proposals that an average of £1,500 a year could be spent by those who are self-employed in providing retirement annuities for themselves—in other words, that the pension which they could derive for themselves when they retired would be based on £1,500 a year. There can, therefore, be no question of any possible loss to the revenue arising from deferring any payment from one year to another, except marginally on the time scale. The effect of the present proposal will be that those who are self-employed and who have large earned incomes will be able to devote £1,500 per annum to this purpose but those who are younger and whose incomes fluctuate markedly from one year to another may be able to afford £1,500 one year and not to afford it the next year. Surely those who have widely fluctuating incomes should be able to implement the principle and purpose of my right hon. Friend's proposal; they should be able to spend £1,500 a year in building up a capital sum to provide a retirement annuity. I hope that the Financial Secretary will not use the sort of argument which I have heard from the Treasury Bench—that this is rather different from the normal type of retirement benefit of those who are in ordinary employment. I hope that he will not say that this envisages the build-up of a capital sum which is in every way different from the normal retirement benefits. It is well known that those who are in employment receive retirement benefits from their companies who can adjust those benefits to suit the circumstances of inflation or what they deem to be a proper sum, and that in doing so the companies can take advantage of the tax concessions made to them in allowing sums to be built up to provide retirement benefits. We are dealing here with a fixed sum of £1,500 a year. There is no other way in which a self-employed person can protect himself for his old age and from inflation. I therefore hope that my hon. Friend will accept the Amendment.Provided that if full relief under this section cannot be given in any year of assessment by reason of an insufficiency of net relevant earnings in that year the amount so unallowed shall be carried forward to the next succeeding year of assessment and added to the qualifying premium for that year (so as to be part thereof for all purposes) and so on for succeeding years until fully relieved.
My hon. Friend the Member for Horsham (Mr. Hordern) recognised in his opening remarks that this Amendment offers slightly more difficulty than the last. The original Act of 1956 provided for a 10 per cent. qualifying premium up to a limit of £750. This was based on the reasoning in the Millard Tucker Report—although not on the Millard Tucker proposal, which was too complex. The reasoning was that the self-employed cannot for all purposes be equated to the employed man who is a member of an occupational pension scheme because a large number of them, notably controlling directors, self-employed traders and self-employed people in partnership who have built up a share in the partnership are in a position through their work to build up capital assets, and that therefore it was appropriate to fix an upper limit on the qualifying premium which might be paid under a retirement annuity scheme.
In the Bill we have increased the 10 per cent. to 15 per cent. and doubled the limit from £750 to £1,500. It might have been the case from the beginning that one should look at each year separately and take the 15 per cent. and £1,500 and say that no premium could be paid in excess of 15 per cent. or £1,500. In fact, even since 1956 that has not been the rule. The 10 per cent.—now 15 per cent.—was the figure allowed to be rolled forward. Any premium in excess of the 10 per cent.—now 15 per cent.—figure in any one year could be set against tax in the following year and so on. But The ceiling, if it is to be effective, must apply in each year individually. We argued in Committee about whether there was any need for a ceiling at all. In the end the Committee came to the conclusion that this was an appropriate feature of retirement schemes. That being so, it would make a bit of a nonsense of it if we were to allow those with incomes of £10,000 a year and more—it is only they who would be interested in rolling it forward—to treat a premium paid one year in excess of the £1,500 in such a way as to set it against the income of a succeeding year, which might be less than the £1,500. I appreciate that this does not go the whole way to abolishing the £1,500 limit, but it renders it very much less efficacious in its basic purpose of keeping down to a reasonable limit the amount of retirement benefit that a self-employed person may take out for himself. If we wanted to remove that limit, that is a separate matter. It is not before the House now. It would be wrong, and it would erode the principle, if we sought to roll it forward by enabling the premiums in excess of the 15 per cent. to be set against income for the following year. We are building into the system a considerable degree of flexibility already. My hon. Friend's Amendment goes too far, and I could not recommend the House to accept it.In intervening briefly I should declare a personal interest. In my brief hours away from the House I am self-employed. In spite of the very welcome reductions introduced in the Bill, we still have a steeply progressive tax system, and one which pays insufficient heed to the fact that self-employed people may experience very severe fluctuations of income. That was taken care of in the past by the three-year average rule. I hope that my right hon. and hon. Friends may consider its reintroduction on another occasion.
The Amendment takes some account of fluctuations of income encountered by self-employed professional people and could be accepted on that basis. It is no answer to it to say that it will render ineffective the limit proposed in the Bill. It will merely mean that the limit is carried forward; it will still remain, though not an annual limit.
As our tax code does not pay sufficient regard to fluctuations in personal incomes, I feel that the Amendment is fully justified.
I listened to my hon. Friend the Minister with great care and attention, and I know that he is doing his best to deal sympathetically with my Amendment. It applies to only a comparatively few people, and perhaps we should not devote too much concern to those earning £10,000 a year. But the fact of the matter is that the people concerned are self-employed, and they may have very widely fluctuating incomes. There is no way in which they can otherwise provide for themselves.
I wish that it were not necessary for my hon. Friend to use such phrases as "erode the principle" when we are talking about a sum of £1,500 which has been laid down in the Bill as suitable. There is no principle here. The sum has been laid down as £1,500 in any one year. If it cannot be expended in one year, for whatever reason, surely the balance should be allowed to be carried forward into succeeding years? Arguments of what are really convenience, without any possible cost to the Treasury, should not be elevated to a matter of principle and their erosion. Naturally, I will not press the Amendment. It affects far too few people. But I ask those responsible to produce rather less contentious arguments than those produced by my hon. Friend.Amendment negatived.
11.45 p.m.
I beg to move Amendment No. 95, in page 14, line 40, leave out from beginning to 'and' in line 45 and insert:
In Committee we considered the appropriate formula for determining the amount of a lump sum benefit that may be taken under a retirement annuity contract. I was able to agree with a number of my hon. Friends that the formula written into the Bill—three times the premium paid—was inappropriate and I undertook to consider an alternative formula. It has not proved easy but we have come up with a suggestion which we are satisfied is workable and which bears a not unreasonable relationship to the lump sum benefit which can be taken by a member of an employer's occupational scheme. The formula is that the lump sum should not exceed three times the annual amount of the remaining part of the annuity. This has the merit of being readily and easily calculable. It will, of course, differ depending on the length of time over which the man has contributed to the scheme. In some cases it will be more than 3N/80; in some cases it will be less. But it has the merit of relative ease of administration.Provided that the contract may give the individual the right to receive, by way of commutation of part of the annuity payable to him, a lump sum not exceeding three times the annual amount of the remaining part of the annuity, taking, where the annual amount is or may be different in different years, the initial annual amount'.
Amendment agreed to.
I beg to move Amendment No. 12, in page 15, line 5, at end insert:
(5) At the end of section 226(3) of the Taxes Act (discretionary approval) add—
(f) for the payment to the individual of an annuity during any period in respect of which he is entitled to an invalidity pension by virtue of paragraph (b) of section 3(1) of the National Insurance Act 1971, or would have been so entitled but for the provisions of section 3(2) of that Act.
I understand that it would be convenient to discuss at the same time Amendment No. 14, in Clause 18, page 16, line 19, after 'or' insert:
which also stands in the name of the hon. Member for Kensington, South (Sir B. Rhys Williams).'during any period in respect of which an employee, though not retired, is entitled to an invalidity pension by virtue of paragraph (b) of section 3(1) of the National Insurance Act 1971, or would have been so entitled but for the provisions of section 3(2) of that Act, or'.
I am grateful to you for allowing us to do so, Mr. Speaker.
The Amendments would give effect to a recommendation of the Disablement Income Group. I do not think that at this hour it is necessary to dilate very much on the purpose, since hon. Members who are interested will be able to refer to the debates in Committee, particularly the discussion on the Question "That the Clause stand part of the Bill" on 9th June. Then, my hon. Friend the Chief Secretary was helpful enough to say that he was interested in the arguments of the D.I.G. I think that it was because of his welcome to the points I raised that I have been successful in securing your selection of these Amendments, Mr. Speaker.
The Disablement Income Group feels—indeed, everyone who studies the matter must feel—that if a man falls into grave illness during the course of his normal working life it is wrong that the trustees of his occupational pension scheme should be put in the position where they may offer him a pension only if he will accept the fact that he is unable to return to work. It is putting a cash premium on surrender. This is, obviously, for psychological reasons, highly undesirable.
If a man insists, perhaps mistakenly, that sooner or later he will be fit enough to get back to work, the trustees are in difficulty in that they may not make him a payment from the scheme. This problem is well understood by the Inland Revenue, which tries to use the greatest sympathy in dealing with such cases, but it would be desirable if this were taken a step further than the discretion of the Inland Revenue, however merciful that may be.
I want to comment on some of my hon. Friend's remarks in Committee with regard to the erosion of the tax base. One gets a picture of the entire national income spread out before one and par-celled out between those parts liable 10 tax and the other parts, which are becoming threateningly large, from which taxation cannot be extracted. That is not a very accurate picture of the position.
Occupational pension schemes operate on the system of "save now, pay tax later." What we are speaking of is a postponement of tax, not an escaping from tax altogether. I recognise that postponement of tax has considerable advantages where capital gains tax and income tax are excused during the whole of the period. It must not be imagined that we are arguing for a complete escape from taxation; it is simply a question of postponement. This principle of "save now, pay tax later" is a highly desirable one and the Government should be looking at ways of extending its application.
If occupational pension schemes were allowed to develop in such a way that trustees were able to protect members from the results of unexpected disability, that would be all to the good and would be adding an incentive to saving which would be a real and compelling one. It would be particularly valuable in the situation in which we now find ourselves, when we are trying to find every possible means of extending the incentive to save.
Let us ask ourselves: What is the object of the occupational pension scheme? Surely it must be to encourage the buildup of real savings for use at the end of working life, whenever that may be. If it comes early, through illness, that seems all the more reason why the trustees should have the right to confer benefit forthwith. I hope that my hon. Friend will consider these arguments seriously. If he cannot undertake to accept the Amendment, let him work over it so that at a later stage we may see this type of inclusion statutorily agreed in occupational pension provisions.
I am grateful to my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) for the way in which he moved this Amendment. I have enunciated the principle—I hope that I shall be forgiven by my hon. Friend the Member for Horsham (Mr. Hordern) for referring to a principle, but I think it is a principle—that an occupational pension scheme should be a scheme primarily for providing pensions. The rationale for giving it substantial and valuable tax advantages is that it is now regarded as impracticable for people to save adequately for their old age out of taxed income. They can spread the income which they earn during their working lives over their whole life and it can be taxed accordingly.
I accept the principle my hon. Friend has put forward of "save now, pay tax later." It follows, as a general rule, that we should not attach to the pension scheme other benefits of a substantial nature which would materially change the character of that pension scheme. On an earlier Amendment I said to my hon. Friend the Member for Horsham that it would be appropriate—and the law allows them in the case of retirement annuity schemes and occupational schemes—for subsidiary benefits, such as permanent disability benefit, to be attached. There can be "death in service" benefit, as we know. My hon. Friend now seeks to go further, not with a permanent disability but with something of the nature of a temporary sickness benefit attached to this. This is something to which hitherto successive Governments have not felt able to accede. It would be right to say that it would be entirely wrong to rule this out for all time. As my hon. Friend knows, the State pension scheme is under intensive review by my right hon. Friend the Secretary of State for Social Services. Already some modifications—the invalidity pension has been mentioned in the Amendment—have been introduced. A major reform is on the stocks and in due course will be made public for discussion. It would be wrong for me at this stage to take an absolutely rigid view and say that in no circumstances would we be prepared to contemplate the sort of addition to occupational pension schemes which my hon. Friend has put forward. I cannot accept my hon. Friend's Amendments now. It would not be appropriate to write them into the legislation at this stage. But I do not say that they will remain inappropriate for all time. Certainly I respond to his invitation to study the matter fully and to consider it intensively in the course of the next months or year or so. If we consider that this would be appropriate to do, we can proceed to deal with the matter in subsequent legislation. I must make it clear that I am far from giving any sort of firm undertaking. That would be quite wrong. But I do not think that it would be right to rule it out in perpetuity. We are prepared to look at the matter, but not tonight. I hope that my hon. Friend will be able to respond to that by withdrawing his Amendment.I am much encouraged by my hon. Friend's remarks. My immediate interest is that we find a solution as soon as possible to the problem of the man who falls into permanent disability which he himself does not choose to recognise as such. There is also the problem of the person who is verging on chronic sickness, where it is not possible to decide his future working capacity. There are two separate problems, both deserving study, though they may require separate solutions.
However, in view of the Government's first-class record in regard to disability and their widespread keenness to amend our legislation where it bears harshly on the disabled, and recognising that much study needs to be given to the problem but that it is in good hands, I beg to ask leave to withdraw the Amendment.Amendment, by leave, withdrawn.
Schedule 2
Annuities For The Self-Employed And Others
Amendments made: No. 96, in page 60, line 16, leave out from beginning to except' in line 42 and insert:
Contracts for dependants or life insurance
'226A.—(1) The Board may approve under this section—
(2) The Board shall not approve the contract unless it appears to them that it is made by the individual with a person lawfully carrying on in the United Kingdom the business of granting annuities on human life.
(3) The Board shall not approve a contract under subsection (1)( a) above unless it appears to them to satisfy all the following conditions, that is—
No. 97, in page 61, line 10, leave out widow's annuity contract' and insert
'contract under subsection (1)(a) above'.
No. 98, in line 13, leave out '(2)' and insert '(3)'.
No. 99, in line 15, leave out 'widow's annuity contract' and insert 'contract under this section'.
No. 100, in line 18, leave out 'widows of the individuals' and insert:
'wives, husbands and dependants of the individuals, or lump sums payable to the individuals' personal representatives on death'.
No. 101, in line 26, leave out 'an approved widow's annuity contract' and insert:
'a contract approved under this section'.
No. 102, in line 43, leave out 'widow's annuity contract)' and insert:
'contract approved under section 226A of this Act)'.
No. 103, in page 62, line 12, leave out 'widow's contract' and insert:
'contract approved under section 226A of this Act'.
and No. 104, to leave out lines 19 to 21 and insert:
In this subsection 'individual's contract' means an approved annuity contract other than one approved under section 226A of this Act.—[Mr. Patrick Jenkin.]
I beg to move Amendment No. 105, in page 63, line 10, at end insert:
Persons born before 1916
5. For section 228(4) of the Taxes Act substitute:—
'(4) Subject to subsection (5) below, in the case of an individual born at a time specified in the first column of the Table set out below, section 227(1 A) and (1C) of this Act, and subsections (1) and (2) above, shall have effect with the substitution for references to £1,500 and to 15 per cent. of references respectively to such sum and such percentage as are specified for his case in the second and third columns of the Table.
| TABLE | ||
Year of Birth
| Sum
| Percentage
|
| 1914 or 1915 | £1,600 | 16 |
| 1912 or 1913 | £1,700 | 17 |
| 1910 or 1911 | £1,800 | 18 |
| 1908 or 1909 | £1,900 | 19 |
| 1907 or any earlier year | £2,000 | 20' |
Amendment to Chapter III of Part XIV of Taxes Act ( charges in respect of life policies)
6. In section 393 of the Taxes Act after subsection (2) insert—
'(2A) Nothing in this Chapter shall apply to a policy of insurance which constitutes, or is evidence of, a contract for the time being approved under section 226A of this Act'.
The Amendment does two separate things. Paragraph 5, which it seeks to insert in the Schedule, meets the undertaking which I gave to my hon. Friend the Member for Surrey, East (Mr. William Clark) to make additional provision for those who were born before 1916 analogous, though not on the same basis, to that provision made in the 1956 Act. We accepted the case that those who have a shorter time to build up adequate retirement benefits should be entitled lo pay premiums of a higher percentage and up to a higher ceiling. The table set out in paragraph 5 is written into the Schedule by the Amendment. I hope that it will commend itself to the House.
Paragraph 6 makes it clear that any policy of insurance taken out which is a retirement scheme is not to be covered by the general law which applies to insurance policies—the 10-year rule, and so on. It is obviously to make it clear that these are two different systems and that the rules are mutually exclusive.
Amendment agreed to.
Amendment made: No. 106, in page 63, line 21, to leave out sub-paragraph (4).—[ Mr. Patrick Jenkin.]
Clause 18
Occupational Pension Schemes
12 midnight.
I beg to move Amendment No. 13 in page 15, line 40, after 'retirement', insert:
'or on the termination of his service'.
This Amendment stands in the names of over 50 of my right hon. and hon. Friends.
At midnight we are embarking on a discuission of a highly technical matter. I think that it would have been better and more in the interests of the House if we had deferred our debate on this subject until tomorrow. However, I will soldier on.
It will be well known that for a number of years all parties have been committed to take steps to ensure that pension rights in occupational pension schemes are protected when the beneficiary changes his job. The reason why nothing is done about this matter is that, unfortunately, it is highly technical. There are also reasons which arise, naturally enough, from the opposition of those who would be likely to be adversely affected if protection of pension rights were made statutory.
The Conservative Party's commitment is quite plain. It is in writing in our manifesto, which says:
"we will ensure that everyone can take their pension rights with them when they change their job."
I think it is well known that in recent years I have put forward a number of suggestions which have seemed to me to get round the peculiar difficulties of this subject. The thanks of hon. Members in all parts of the House are due to my hon. Friend the Member for Petersfield (Miss Quennell) for the work which she did in producing a Bill on this subject in the last Session, in which she bravely tackled the whole problem of valuation and thereby produced a workmanlike and acceptable solution to the whole problem of transferability. It is unfortunate that that Bill did not reach the Committee stage, because we could have held a highly constructive debate on the recommendations which my hon. Friend incorporated in her Bill.
In this Session I was allowed, under the provisions of the Ten Minutes Rule, to introduce a Bill in which I was not so ambitious. My object in that Bill was to introduce what I might call preservation with a human face; that is, not transferability, but merely preservation with a provision that, with the passage of time, the preserved pension rights would be allowed to grow at something approximating to market rates. Unfortunately, for reasons which I need not go into this morning, that Bill has not been discussed by a Committee and the ideas in it, which I think were useful and constructive, are available only to hon. Members who seek it out in print.
The Amendment is drawn to implement the smallest degree of preservation which might be considered to be worth further discussion; namely, that employers should have the option to introduce a scheme the effect of which would be to give preservation; though without any guarantee that the preserved pension would be protected from erosion by the decline in the value of money which might be expected to take place with the passage of time.
There are a number of objections to any scheme of transferability or preservation. It is worth going quickly through them, although I shall not develop any of these arguments at the length which they deserve.
First, there is the question of the sanctity of contract. Many people take the view that if an employee enters the service of an employer who has an occupational pension scheme, it is up to him to inform himself about the terms of that scheme. If one of those terms is that if he leaves before a stated age of retirement he loses his rights, so much the worse for him. This argument is unacceptable, because the occupational pensions schemes receive very valuable tax concessions and these concessions are not part of the contract between employer and employee. They are given because the schemes are recognised to fulfil a valuable social purpose.
If the schemes do not fulfil that purpose by giving protection of pension rights on change of employment, the community has the right to withdraw those tax concessions, and, in my opinion, should do so. Whether the employer would wish to continue the scheme in those circumstances is up to him, but the community would have made its feelings known. Why should it not, when year after year all parties have committed themselves to taking action on this point? So I do not accept this argument. The taxpayer should not have to subsidise a contract of which he does not approve. But since the Amendment would merely make it optional for employers to afford some degree of preservation, no exception can be taken to it under this heading, even by people who do not accept my other argument.
The next argument is that preservation would mean too much work for the actuaries. This is advanced seriously by those who have studied the subject, so it must be taken seriously. It is possibly fundamental at a moment when we are expecting major changes in legislation affecting occupational pension schemes. However, the amount of work involved in calculating the amount of benefit conferred under this Amendment would be negligible. A consequential Amendment to the rules of the scheme would be immaterial—using that word in the sense in which it is used in the Bill—in schemes which already allow a lump sum payment as well as an annuity. In those which do not, some reconstruction is necessary anyway and it would be to the advantage of the trustees that they should know that the benefit of this Amendment was available to them so that they could redesign their schemes accordingly.
It is also argued that preservation at this time would be too expensive for employers, many of whom are going through a difficult time. I understand this. At any moment we may hear that a big occupational pension scheme has failed. I am not thinking of any particular one, but I dread opening my newspaper and reading that a scheme is unable to meet its commitments.
I do not want to force into insolvency any scheme which is finding it difficult to meet its outgoings. But for contributory schemes, the additional benefit to the members which might be obtainable as a result of this Amendment would only be equivalent—more or less—to the entitlement which they almost invariably have already; namely, to withdraw their own contributions if they choose to do so.
Very briefly, three-eightieths multiplied by the number of years service, multiplied by final salary, works out at 3·75 per cent. of final salary per annum; if a man withdraws his own contributions, they would most commonly have been made at about 5 per cent. of career earnings. Thus, even taking interest into account, we reach sums which in the majority of cases are not too different from each other.
The question might then be raised: what about non-contributory schemes? This Amendment is not aimed at them, because the problem of the mixed benefit rule, which the Amendment is designed to circumvent, would not apply in any event. In my own experience in personnel selection and assessment of salary schemes, the great majority of firms which operate non-contributory pension schemes take account of the fact in their salary structure, so one could say that, in effect, there are no truly non-contributory schemes.
The argument may be raised that to extend the option I am recommending would allow for tax evasion through job-hopping. This argument can be overdone, but, as I argued in Committee, taxation on refunds need not be as little as 10 per cent.; and for this purpose I would consider that the lump sum, if the beneficiary chose to exercise his option to take it early, could well be treated for tax purposes in the same way as a refund of contributions up to the last years before the normal age of retirement. Between 60 and 65 years, if 65 is the normal age of retirement, it would be appropriate to phase out liability for taxation so that when a person reaches normal retirement age, he can withdraw the lump sum in the usual way without being liable to tax.
Some may argue that it is not the right time to do this and that it would be better to await the Government White Paper which is expected imminently; that when managers of occupational pension funds have had an opportunity to digest the White Paper and the Government have introduced legislation to implement it, that would be the proper time for pension rights to become statutory.
Even as long ago as the Morgan Report in 1966 it was estimated that loss of pension rights through preservation not being available to beneficiaries was running at £50 million a year. Other estimates have been given officially from as little as £25 million to well over £100 million a year. It is extremely difficult to arrive at a precise figure of what pension fund members are losing because the Government do not act to give protection on change of employment; but a slogan figure of £100,000 a working day would be a reasonable minimum.
When we ask, therefore, whether it is the right time to act or whether it would be better to wait until later, we should reflect that people changing jobs are losing £100,000 of their savings every day that Parliament delays dealing with this problem.
My hon. Friend the Financial Secretary takes his stand on the ground that pension schemes are for providing pensions; but it is easy to point to ways in which that principle has already been eroded for occupational pension funds. There is the case I mentioned under the previous Amendment I moved where a person declares himself no longer available for work through sickness. There are also the special pension schemes where, because of the structure of the industry, the pension can be offered and a lump sum taken well below normal retirement age. I am thinking of police, firemen, and so on, who can normally retire before they are 60.
I am informed too, that there are a number of schemes in existence—with tax approval—where benefits are obtained partly under the old Section 379 and partly under Section 388, under which lump sums are payable where the entitlement under Section 388 was secured in an insured scheme.
My hon. Friend will agree, therefore, that the principle that pension schemes are only for providing pensions at the normal age of retirement has already been spectacularly eroded.
Possibly we should ask ourselves whether a man should be deprived of the use of his savings when he needs to make the most of his career. What the man puts into the pension fund is not part of the trust in the same way as the contribution which his employer puts in. The employer's contributions are intended to provide a pension on the employee's retirement; but if the man is himself putting money into the hands of the trustees, then he invariably considers that that money is part of his personal capital, and, in my opinion, he is right to think that.
12.15 a.m.
It would be a false move on the part of the Government if they took their stand on the theory that all the money flowing into the hands of the trustees was capital available only for the ultimate provision of a pension and was not available to the beneficiary in time of need or to advance his career.
I realise that it is highly convenient for pension fund managers, the life offices and others concerned with the provision of pensions under occupational pension schemes to secure the Government's acceptance of the principle that a man may not take a refund of his own contributions or any lump sum during his working life. The financial advantage to such managers and the offices is so overwhelming that the Government should regard their arguments, if not as suspect, then at any rate as naturally highly biased. They would be wise to take into account the point of view of the beneficiaries who, after all, are also voters.
At a time when we are trying to achieve a property democracy, we should accept that for many people the savings they hold in their occupational pension schemes are far and away their largest asset. By the time a man is 40, the savings he holds in his scheme, if it is at all satisfactory, are likely to be substantially more valuable than his house. We should not expect him to leave an asset of that sort locked up when he needs money for the exploitation of his capacities and earning power.
We need to bring it about that a larger and larger proportion of our population should be free to make their own way because they have the self-respect which the ownership of a sum in capital gives to a man. It does not behove a Conservative Government to stand in their way and to make it difficult for men to withdraw their contributions when they need them.
Why, in any event, is a lump sum allowed in occupational pension schemes'? The Government have endorsed this lump sum principle in this year's Finance Bill in that they have allowed all occupational pension schemes to provide a lump sum based on the three-eightieths formula. I do not quarrel with that. Indeed, I think it should be somewhat larger. However, this formula is now available for all such funds when the man reaches the normal age of retirement. Why should that option not be made available before he reaches the normal age of retirement?
I mentioned the mixed benefits rule and said that the Amendment was designed to circumvent it. It should not be necessary to circumvent this rule which is purely discretionary and in my opinion, should never have been applied. It should now be withdrawn. But if the Chancellor of the Exchequer is not able to eliminate the evil effects of the mixed benefits rule, let him seriously consider extending this alternative option of a lump sum of approximately equal value instead of contributions.
When a man is leaving a firm which runs an occupational pension scheme, the personnel manager—or the last person who interviews him—should say "Do not make a fool of yourself and insist on taking your contributions back. Instead, let us give you an advance in the form of a lump sum, and then we can preserve for you the whole of the rest of your entitlement." This would open the door a tiny crack towards the establishment of general preservation and eventually of transferability.
There are many other points I would have liked to raise on this subject, but I will leave them to another occasion though I do not know when that is likely to occur. In the meantime, I will listen with great interest to my hon. Friend's reply and I hope that even at this late hour he will deal with my arguments seriatim.
I have listened to my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) with very great interest and, like him, having heard him, I wish that he had been in a position to address his remarks to a rather fuller House. I share his regret that we are dealing with these very important matters as late as we are. I assure him that I have taken the most careful note of what he has said. I also want to take this opportunity to thank my hon. Friend the Under-Secretary of State for Health and Social Security, who has sat through all these debates on pension provisions—both self-employed and occupational pension schemes—and who has also listened, perhaps more relevantly than I, to what my hon. Friend has had to say.
My hon. Friend asked me to deal with all his arguments seriatim and this is a pretty tall order. I feel that I would see some glances of dismay from other hon. Members were I to attempt to do so. If I do not deal at length with the points he has made, I assure him that it is out of no discourtesy to the importance of his arguments and is certainly no indication of any lack of importance that I attach to what he has said. But perhaps I might take up one of the major points which seems to emerge from his argument. Here I must say how grateful my right hon. Friend the Chancellor of the Exchequer was that my hon. Friend took some trouble to set out his arguments in a letter which he wrote to my right hon. Friend last March. My hon. Friend makes two main pleas in relation to pension schemes. One is a plea for preservation, and this evening he has advanced powerful arguments for this to be introduced as early as possible. The second plea is for entitlement to withdraw in advance some part of the capital sum to which a man is prospectively entitled if he remains a member of the scheme until his retirement. I am sure the whole House shares my hon. Friend's anxiety to see full preservation come into effect as soon as possible. I do myself. I have in earlier debates referred to the fact that the Private Member's Bill which in 1964 I pledged myself to my constituents to introduce should I be lucky in the Ballot was introduced in 1965. It was effectively blocked, and I shall not raise the temperature by saying by whom it was blocked. The Bill subsequently introduced by my hon. Friend the Member for Petersfield (Miss Quennell) was, as it were, a grandchild of my Bill, as was the Bill which my hon. Friend introduced some year or two ago. I claim no parentage for the Bill which he sought leave to introduce earlier this year. I accept the case my hon. Friend has made for preservation, and I only say that this is clearly one of the matters which fall to be dealt with by my right hon. Friend the Secretary of State for Social Services in his reconstruction of the National Insurance Scheme. As my hon. Friend knows, we are pledged to reconstruct the scheme on the basis that the substantial earnings-related pension benefits which people will increasingly enjoy should be enjoyed through occupational schemes, with the State scheme being, as it were, a fall-back scheme. It is inherent in any such proposals that a wide measure of preservation should be insisted on, and I must ask my hon. Friend and the House to await the proposals to be published by my right hon. Friend the Secretary of State for Social Services. They will cover the subject of preservation. I am in a greater difficulty about my hon. Friend's other proposal about a lump sum on leaving employment. My difficulty stems from what seems to me to be a basic contradiction in what my hon. Friend is suggesting. In one breath he asks that we embrace the principle of preservation—namely, that a man should not squander his pension benefits as he now may, by withdrawing his contributions, and under the mixed benefits rule he is entitled to no share of his employer's contribution because it is plainly desirable that the pressures on him should be to maintain his pension entitlement so that he retires with the maximum available pension which he can earn from his and his employers' contributions through his working life. In the next breath my hon. Friend says that a man is entitled to withdraw sums perhaps not once but on a number of occasions during his working life, so that he subtracts progressively from the benefit of the pension entitlement which he has built up, which would contravene the principle of pension provision which is the object of the whole scheme.If I do not misinterpret the Clause, is it not true to say that at the end of a career in which a man has exercised the rights which I have suggested he should have on one or even more than one occasion the benefit to which he would be entitled would still be of the same order as the benefit to which he would be entitled if he remained with one firm all his career and drew a lump sum on pension at the age of retirement?
But the lump sum drawn on pension is not intended primarily as a means of going on a world cruise, or something of that sort; it is part of the retirement benefit. It is in the form of a lump sum only because it may help a man to purchase a house if he moves away from where his job has been, or to provide himself with an additional purchased annuity, or something of the sort; it is part of the retirement benefit. If he is entitled to withdraw it on occasions during his working life as a sort of redundancy pay, that would be straining the object of a pension scheme beyond what should be the object of a pension scheme.
Is my hon. Friend suggesting that a man should not be entitled to withdraw his own contributions?
As I understand it, my hon. Friend's wish is that a man should not withdraw his own contributions, because that way he would effectively destroy the value of any pension benefits which he might have built up. Merely to call it a lump sum and dress it up as though it were an advance payment of the lump sum to which he would be entitled on retirement seems to conflict with the principle of preservation which my hon. Friend mentioned and which is warmly supported.
Will my hon. Friend give way?
No, I have given way enough. My hon. Friend addressed the House at some length and I am entitled to reply to his speech. I hope that I have not misinterpreted what he said. There is relatively little in the Amendment except to allow sums to be withdrawn from a pension scheme during its currency. My hon. Friend has made the position very clear.
My right hon. Friend is prepared to consider this in the light particularly of the proposals which are produced by my right hon. Friend the Secretary of State for the Social Services when the White Paper on the reconstruction of National Insurance is published later this year. My hon. Friend the Member for Kensington, South, has made a notable contribution to the debate inside and outside the House over a number of years, and his speech tonight will be studied in the Treasury and the Inland Revenue and, I am sure, in the Department of Social Security. But I ask him to accept that it is unrealistic to expect any Government to adopt the whole of his proposals in their totality and it would be wrong to chide a Government, which have already gone a considerable distance in the direction in which my hon. Friend would wish them to go and which may well go further, for being unable to go the whole way and adopt the totality of his proposals. I appreciate the enthusiasm and expertise which my hon. Friend brings to the subject, but it is unrealistic to imagine that it is the only possible course to adopt the totality of what he proposes. I have listened with interest to what he has said and I have sympathy with much of it. I will bear it in mind in the course of the coming year when further steps will be taken in occupational schemes, and my hon. Friend cannot ask fairer than that.12.30 a.m.
My hon. Friend is evidently under a misapprehension as to the meaning of my Amendment. It was not my intention that a man should be entitled to take back both his contributions and an advance on his lump sum. I was offering this as an alternative. My hon. Friend's remarks were not apposite unless what he has in mind is that in future a man should be entitled to take back neither a lump sum nor his contributions.
If the intention of the Amendment is accepted, that it should offer an alternative, one or the other, my hon. Friend's arguments about, for instance, accepting the totality of my recommendations are rather wide of the mark. However, this is not the time to discuss a matter as technical as this. I recognise the force of my hon. Friend's argument that a White Paper on this subject is about to be produced; but the right way to deal with the problem of protection of pension rights is through the tax system rather than by fresh legislation affecting occupational pension schemes in the future. We have missed an opportunity to do something about this scandalous problem. It remains unsolved, and nothing has been done about it in this year's Budget, which I deeply regret. But so much has been done in the Budget which is first class that perhaps one must not complain too bitterly about that. When we see the White Paper, I hope that some solution to the problem will be found and that it will be implemented at a very early date. As I believe that this is what is in the minds of my right hon. and hon Friends, I beg to ask leave to withdraw the Amendment.Amendment, by leave, withdrawn.
Schedule 3
Occupational Pension Schemes
I beg to move Amendment No. 107, in page 65, line 15, leave out from 'any' to '(including' in line 16 and insert:
'repayment to an employee during his lifetime of any contributions',
The Amendment implements an undertaking I gave in Committee that a repayment of contributions made after a man's death should not be subject to tax.
Amendment agreed to.
Clause 21
Claims For Deferment Of Part Of Surtax For 1972–73
I beg to move Amendment No. 15, in page 18, line 41. leave out Clause 21.
This is consequential to the Amendment taken earlier.Amendment agreed to.
Further consideration of the Bill, as amended, adjourned.—[ Mr. Maurice Macmillam.]
Bill, not amended in the Committee and as amended in the Standing Committee, to be further considered this day.
Elderly And Disabled Persons (Heating Allowances)
Motion made, and Question proposed, That this House do now adjourn.—[ Mr. Speed.]
12.35 a.m.
A fortnight from Midsummer Day may not seem the most appropriate moment for raising the issue of heating allowances as of right for the elderly and the disabled. I believe, however, that, if anything is to be done about this need before next winter, now must be the time for planning rather than later. Moreover, for many of those for whom I make this plea the requirement of adequate heating and the necessary costs are not. unfortunately, limited to the winter time but extend throughout the year.
I am asking for heating allowances as of right for the elderly and disabled, subject only to a medical certificate of need, because the present system of means-tested discretion is patently failing miserably. Only about 2 per cent. of the 7 million elderly or disabled persons receive any special assistance with heating costs. The Under-Secretary is not a hardhearted man, and I am sure that he would concede that nobody could deny that this is a mere drop in the ocean of need. At present specific assistance with fuel costs is given to elderly or disabled persons only through supplementary benefit offices in one or both of two ways. First, weekly additions may be given for extra fuel costs where, for example, a man or his wife on supplementary benefit is housebound or cannot leave the house frequently because of advanced age or chronic poor health or because the accommodation is damp or otherwise difficult to keep adequately warm. Second, exceptional needs payment may be made in the form of a lump sum to meet fuel expenses. For several reasons I believe that the present framework of assistance is utterly inadequate. One central reason is that much less than half the total number of retirement pensioners receive supplementary benefits and probably ½ million who are entitled to claim because of low income do not do so and are thereby excluded from any special assistance with heating costs. To that extent I believe that it is no use the Under-Secretary replying that the present system of help through supplementary benefits is satisfactory because the supplementary benefits scheme is a flexible instrument for channelling extra assistance to those in greatest need. It is not, and it does not do this. I will quote a current example, for the details of which I am grateful to the organisers of the National Campaign for the Young Chronic Sick, as I am grateful to them for details of other cases:Another example is quoted by Help the Aged in March of this year as follows:"This lady is aged 70, living on a £5 a week pension. Although entitled to supplementary benefits, she will not accept what she feels is charity. She has a high ceilinged, two-roomed flat with a gas fire in one room. She allows herself doses of heat but for the main sits in the extreme cold."
that is, for six months throughout the winter. Apart from those who are entitled to claim but do not, there is an unknown, though undoubtedly substantial, number of retirement pensioners and disabled persons who are living only slightly above the supplementary benefit entitlement level but are thereby rigidly excluded from receiving any special help with heating costs. How are they to be assisted, in view of the 10 to 15 per cent. increase in gas and electricity charges over the last year? It is no use the Minister arguing that they will be taken care of by the £1 rise in pension this September, partly because the increase in the real purchasing power over the value at the time of the last rise will be eroded, as he well knows, in a matter of a few weeks, but chiefly because to argue that heating costs of £2 a week or so are taken into account in a pension of £6 is just absurd. Nor do I believe that the special help which is at present given for heating is other than utterly inadequate. The number who receive a weekly addition for extra heating needs—151,000 a year, according to the latest figures—is minute in relation to the extent of the real need. Nor is the amount given more than a token pittance. Hitherto, the average amount has been 20p a week, and 40p in more serious cases. The sheer inadequacy of these sums is glaringly revealed by an item in a recent report by the secretary of the National Campaign for the Young Chronic Sick:"A Cheshire widow aged 64 with a pension of £5, has only £2.75 to pay all her bills after her rent has been paid. Her electricity has been cut off since September"—
That is the normal amount."I visited a young disabled widow last winter who was trying to manage with two children on supplementary benefit. I found her huddled over her gas fire, almost in tears from the cold. Not so long ago she had applied to the local branch of the Department of Social Security for a heating payment and was given an extra 20p a week."
I am aware that, following the announcement by the Secretary of State on 27th November last year, these rates have now been raised to 25p, 50p, and in rare cases—they certainly are rare—75p. These are not exactly massive increases to meet a massive need. Yet the Under-Secretary of State felt able to write to me, nevertheless, on 2nd March this year,"She uses more than this in one day, and even in the middle of summer often has to use the fire".
What sort of world does the hon. Gentleman live in? Such statements roll too easily from the air-conditioned centrally-heated offices of Whitehall. The reality for hundreds of thousands of retired and disabled people is very different. Here is another typical example:"We consider that where there is a need for extra heating among supplementary pensioners, the new rates will adequately cover the extra cost."
That example is important for this reason. For a disease such as multiple sclerosis, a constant temperature has to be maintained because the patient is highly vulnerable to pneumonia. The consequent cost of heating for such families is very high, summer and winter, and particularly where they live in cold, draughty accommodation with high ceilings and large rooms, as, unfortunately, it seems, too many of them do. The other form of special help with heating which is given to the elderly and disabled is the lump sum exceptional needs payment. Here again, the measure of assistance is miniscule. The number of grants given exclusively for fuel costs alone in the last year for which figures are available was 197,000, and the average value of exceptional needs payments at only about £6, if not exactly derisory, is utterly inadequate. Here is another illustration on this point:"The husband has advanced multiple sclerosis. 50p is allowed per week for heating which in fact costs £2.40 per week. So on their social security, which is already strained, they have to find almost an extra £2 a week".
That is, for one quarter. I believe that the seriousness of this situation is most vividly and cruelly demonstrated by the figures for deaths from hypothermia due to shortages of heating. On 2nd February, the Under-Secretary of State for Health and Social Security stated in the House:"Miss T is in her late 30s and is severely disabled with polio, being completely paralysed from the neck down. Due to impaired circulation, she is always cold, and even on hot days during the summer I have never failed to see her in a bulky knit cardigan. She lives in a large house which is hard to keep warm and has an electric fire on all day long. The last electricity bill was £33."
Dr. Geoffrey Taylor, who has made a special study of this problem, has drawn attention to the fact that a better indicator of the effects of shortage of heating lies in the fact that 90,000 more elderly people die in the winter months than in the summer. Whatever is the truth between these contrasting figures, a current Brunei study by Malcolm Wicks will, I believe, throw some light on the problem in the near future. What is disturbing from the point of view of the debate is that when I asked on 15th February in how many cases of the 155 deaths attributed to hypothermia was the person concerned receiving extra financial assistance for the purpose of heating, the answer was that the information was not available. In view of the appalling state of affairs which I have described, I am asking that the Government should begin now to plan and put into operation for next winter a heating allowance as of right amounting to £1 a week for each week for the six winter months and 50p for the remaining months to all those retired or chronically disabled persons whom their doctor indicates by medical certificate need extra heating. I believe that in the most serious cases the doctor should also have the right to recommend a discretionary extra 50p for the winter months, making a total of £1.50 per week in the cases of most exceptional need in winter. Since the Government have already refused any concession over rental charges for gas and electricity, for which, absurdly, many elderly single people living alone can pay double the cost of the units of fuel consumed, the only alternative, without the deterrent of means testing, to assist elderly and disabled people is through heating allowances as of right realistically geared to today's inflated fuel prices. I regard it as a measure of the Government's commitment to the needs of the elderly and the disabled that some definite action should be taken now along the lines of these proposals."In 1969. the last year for which detailed figures are available, the deaths of 155 people of 65 years and over were attributed to excessive cold, hunger, thirst and neglect in which hypothermia was a contributory or underlying cause."—[OFFICIAL REPORT, 2nd February, 1971; Vol. 810, c. 1438–39.]
I am grateful to the hon. Member for Oldham, West (Mr. Meacher) for raising this important subject, but I am surprised that, with his knowledge of and great interest in it, he should make a suggestion which is so impracticable and so indiscriminate. He asks that all pensioners and disabled people should have a heating allowance, subject to a medical certificate of need. I should like to explain what are the main weaknesses of his proposal and then state what the Government are doing to meet this problem.
There are about 8½ million people within the range which he mentioned, and they are a very large and varied group. Even within the group of the disabled, there are many, thank goodness, including hon. Members, who are able to live active lives and to earn their own living. Within the group of retirement pensioners, there are many with very substantial resources. Even millionaires are pensioners. Second, the hon. Member singles out one need for special treatment. Our climate makes heating very important for a large part of the year, but it is only one need amongst others, like food, housing, clothing and light. The cost of those items, like that of fuel, is taken into account in the Index of Retail Prices, which we use to measure variations in the cost of living. These variations in turn have an important bearing on the periodical adjustments to contributory National Insurance benefits and supplementary benefits. That is the main weakness in the hon. Gentleman's argument. He has not sufficiently taken into account the fact that those items are considered in deciding the level of the benefits. In addition, there is the extra help available based on the particular needs of the recipient as individually assessed. Here again there is a long list, such as rent and rate rebates, payment of rent, with supplementary benefit, allowances for special diets, lump sum payments for major household essentials and sometimes for clothing, and special additions for fuel. The next practical point is the medical certificate of need. On what basis would doctors decide whether a certificate should be issued? Everybody needs heat, and it may be that as general categories the old and chronic sick are rather more hit than most other people, apart from the very young. But is it not imposing an impossible burden on the medical profession to expect its members to distinguish within those categories the ones who need extra money for heating from those who do not? For example, do they give a certificate to a rich old man living in a country house who also needs lots of heat for medical reasons? Do they refuse a certificate to a man of modest means living in a modern centrally-heated council flat? Do they take means into account as well as medical need? If they do, at once we are in the area of asking the medical profession to do something outside the medical needs of the case. But if they do not, we get into the ridiculous position where a rich man with a medical need will get a certificate whereas a poor man with less medical need will not. So the hon. Gentleman's suggestion does not stand up.Does the Minister not think it reasonable that even people with means should receive the assistance subject to a medical certificate of need, on the basis of the principle the Government have accepted that people over 80 should receive a special pension simply because they are over that age, even if they are rich?
It is a reasonable and fair assumption that need will grow as people become older, and the chances are that in the vast majority of cases the resources people over the age of 80 will need for the business of living will be greater than for younger people. The hon. Gentleman is saying that we should have indiscriminate resources available to the category of people of whom he has spoken, whether they need them or not. That would be a very bad use of scarce resources and contrary to the selective approach which the Government have adopted.
What are the Government doing to see that the old and the sick have adequate warmth? There are many ways in which we are taking positive steps to alleviate the problem. There are the heating additions allowed by the Supplementary Benefits Commission, which are available to the most vulnerable section of the community who have special heating needs because of illness or bad accommodation. Help in this way goes to those who need it most. Scarce resources are thereby concentrated where they will do most good. We estimate that about 290,000 supplementary pensioners and a further 60,000 younger people, many of whom are chronically sick or disabled, will be covered by the improved additions we have introduced well in time for the coming winter. In addition, of course, there are the substantial increases in pension and supplementary benefits which come into operation in September. Not only are these by far the biggest increases in money terms but they will more than cover the price increases. I assure the hon. Gentleman that there is no question of these new benefits being eroded in a matter of weeks. There will be a substantial increase in real value. Over and above that, there are selective improvements for the over-80s, the chronic sick and the disabled. Very elderly people are obviously at risk and the 25p age addition to the retirement pensions for all pensioners over 80, with complementary provisions in the supplementary benefits scheme, will enhance the position of the over-80s and bring benefits therefore to the whole population over that age. There are the four new allowances which will help many of the chronic sick and disabled—the invalidity allowance, the improved earnings rule for the wife of a disabled person, the higher allowances for the children, which come in in September, and, of course, the attendance allowance, which begins in December. All these are substantial improvements on the cash side, but, of course, that is not the only side which is necessary. The care services are equally important—provided by the family, by statutory bodies and by voluntary bodies. It is sometimes alleged—the hon. Gentleman referred to this—that 60,000 or even 90,000 old people a year die of hypothermia or through cold. This is a distortion of the statistics which were compiled by Professor Dennison of the Centre for Environmental Studies. He said that deaths in the six colder months of the year averaged 60,000 more than in the warmer months, and that in the winter of 1962–63 they rose to over 90,000. He was doing no more than state the obvious—that more people die in winter than in summer, largely due to increases in respiratory diseases and not that anything like that number die of hypothermia. Unfortunately, the figures have been misunderstood and misquoted in such a way as grossly to exaggerate the problem and create quite unnecessary alarm. In fact, in 1969 the deaths of only 155 people aged 65 or over were attributed to excessive cold, hunger, thirst and neglect, in which hypothermia was a contributory or underlying cause. Poor heating was not the only factor responsible since some of the deaths occurred in the summer part of the year. Of course this is still too many such deaths. But the matter was put in perspective by Mr. M. R. F. Simson, Secretary of the National Corporation for the Care of Old People and a much respected authority on these matters. As he pointed out in his article in the British Hospital Journal and Social Service Review of 8th May:For example, cases are known where fairly well-off people have suffered simply by insisting on an unheated bedroom. Elderly people often run risks like this because they are not fully aware of the dangers to them of an inadequately heated room. I still work on the principle of "cold stable, healthy horse". That may be all right for people of our age but it can be dangerous for these elderly people. Then there are the elderly who are unable to cope with preparing and lighting a fire. What they need as well as sufficient money is a friendly visitor or home help prepared to come in each day to light the fire and perhaps help in other ways. The answer may be some small aid or adaptation which helps the person concerned to look after himself in a better fashion. Landlords and local authorities have in some cases undertaken to replace open coal fires with electric or gas fires or central heating, or made it easier for the bed-ridden to operate a switch that turns on the electric fire. Sometimes sheer apathy or depression causes an otherwise healthy old person to sit, cold and alone, when what is required is something to spark his interest in the outside world and overcome his sense of loneliness. For example, arrangements for him to attend an old persons' club or fixing up for transport to take him regularly to a day centre will increase his social contacts and at the same time deal with the problem of keeping him warm. The problem of inadequate heating is thus a complex one which can often be tackled most successfully in intricate ways, according to the overall health and social needs of the individual. My Department issued a circular in November of last year to local health and welfare authorities about the risk of hypothermia in the elderly and home-bound, reminding them of the need for preventive and precautionary measures to deal with it. It also advised them of the help available through supplementary benefit. The Supplementary Benefits Commission has also told its local offices to watch out for old people who might be at risk, and to co-operate with local authority staff to ensure that heating arrangements are adequate for the old people they visit. To sum up, we are providing, next September, before the cold weather returns, for large cash increases in pensions and other benefits which raise them to highest-ever levels in real values. In addition, we are providing extra cash benefits for the very old and chronic sick. Where heating problems are concerned cash alone is not enough. The need is also for regular visiting and supervision of the cases most at risk and for close co-operation between the statutory and voluntary health and social service agencies to ensure, through education and vigilance, that everything is done to reduce the danger of suffering through cold. I am glad that the hon. Member has raised this subject, and I hope he will feel that, through the various measures I have outlined, the Government are as concerned as he is about this important matter, and that we are doing our utmost to help."Money is important to some degree, but it will not always buy what the existing circumstances demand. The fact is that the old need help of all kinds from all those willing and able to give it."
Question put and agreed to.
Adjourned accordingly at three minutes past One o'clock.