House of Commons Hansard Debates for 30 Apr 1991

Mr. Keith Mans (Wyre) : I congratulate the hon. Member for Glasgow, Central (Mr. Watson) on being honest in expressing his views on the increase in value added tax. Some Opposition Members--notably the hon. Members for Derby, South (Mrs. Beckett) and for Hackney, North and Stoke Newington (Ms. Abbott)--said that VAT is a regressive tax that affects the poor most of all. However, when it came to whether Labour would get rid of it, those hon. Members were less than honest in what they said. As was pointed out by one or two of my hon. Friends, they dithered--in the same way as the Leader of the Opposition is dithering over whether to commit Labour to abolishing VAT.

The shift from local to indirect taxation was a fundamental part of my right hon. Friend's Budget, and it is one of which I thoroughly approve. I go along also with my right hon. Friend the Member for Worthing (Mr. Higgins) in believing that it is a pity that the Government did not go all the way and got rid of local taxation--at least until such time as they decide on a new structure for local government.

I am pleased that the Government went as far as they did, but hope that we will take on board the consequences. There is now a high level of gearing in terms of the way in which local tax works on local expenditure. It brings in only 11 per cent. of total local revenue, which means that just a small percentage increase in the tax could make for a large increase in the amount of money that people must pay. At least it is capped and I suggest that it will have to be capped at a relatively low level. That is the main difference between our suggestions for local government finance and those of the Opposition. Their fair rates proposal has no top limit, and no capping. It is rather odd that they are suggesting certain limits on central Government taxation and expenditure, but that they are

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not suggesting any capping for local government expenditure. That is a fundamental flaw in their economic programme.

Another aspect of the Finance Bill is the excellent help that it gives to worker share ownership plans and to profit-related pay. As many hon. Members know, I have encouraged that subject for a number of years, together with my hon. Friend the Member for Esher (Mr. Taylor). It is certainly encouraging that we are moving in the direction of allowing employees to take a fuller part in the operation of their companies. Profit -related pay improves productivity, cuts costs and improves job security. I hope that, at times when profits are not as great as they have been, directors and top managers will incur a cut in their profit-related pay. This Budget is undoubtedly good for business, but there is still a lot to do, especially as regards the environment. However, I sincerely hope that that aspect of the Budget can be dealt with in Committee.

9.21 pm

Mr. Chris Smith (Islington, South and Finsbury) : We must always examine a Finance Bill in relation to the economic circumstances from which it arises, for it is against that background that it may best be judged. Tonight and in Committee it will be our argument that the Bill miserably fails to measure up to the desperately needed measures required by the economy. We are in a deep recession and no amount of hype from the Chancellor, the Chief Secretary or Conservative Members will hide that fact.

That argument has formed a large part of our debate this evening. My hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy) spoke eloquently of the fact that engineers in his constituency are finding this recession even worse than the recession of 1980. My right hon. Friend the Member for Llanelli (Mr. Davies) talked about the great British industries which were being run down by the market ideologies of the past 12 years.

My hon. Friends the Members for Neath (Mr. Hain) and for Hackney, North and Stoke Newington (Ms. Abbott) spoke about important issues--how our economic circumstances are affecting their constituents.

Other important matters have been mentioned today. My hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) drew attention to the crucial question of what will happen to the proposed foundation for sport and the arts. My hon. Friend the Member for Glasgow, Central (Mr. Watson) spoke about the impact of measures in the Bill, especially upon people with low incomes. Perhaps most perceptive of all was my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), who contributes to our debates on the Finance Bill each year and who spoke about the Government's false optimism which parallels, almost precisely, what occurred in the 1920s.

The bare facts of our economic condition are incontestable. Since the right hon. Member for Huntingdon (Mr. Major) became Chancellor, 500,000 people have lost their jobs. Last month's rise in unemployment was the highest since records began. Every day, 100 businesses go bust in Britain and 3,000 people lose their jobs. The Chancellor has forecast that growth will fall by 2 per cent. this year. Meanwhile, growth in Germany is 4.5 per cent. and in France it is 1.8 per cent.

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Let us have no nonsense from the Government about international factors being the cause of the recession. Even the Treasury and Civil Service Select Committee did not buy that argument.

Worst of all, investment as a whole is set to fall this year by nearly 10 per cent. and manufacturing investment is set to fall even further. Investment does not seem really to matter to the Chancellor. It is, in his words of yesterday, "a lagging indicator." Nothing could more clearly demonstrate the blinkered economic vision of this Government. Far from being a lagging indicator, investment is the key future indicator of economic performance. According to the CBI's industrial trends survey, which has been widely quoted by the Government today, the chairman of the CBI's economic situation committee, Mr. David Wigglesworth, makes that point. He says : "Investment in plant and machinery is still being cut heavily and this can only reduce the capacity of firms to respond when demand recovers."

It was precisely the lack of capacity to respond to demand that created the problems of the mid-1980s and led to the recession that we now face. To write off investment as an indicator behind the present trend ignores the fact that it is a crucial determining factor of the future trend. The Chancellor would do well to recognise that fact.

Mr. Butterfill : As the hon. Gentleman seems to regard investment as such an important factor, can he say what his party would do to encourage it? We have heard that the Labour party would put a tax on savings which, in turn, would have an effect on investment. More particularly, if we look at the unincorporated sector, his proposals for a 59 per cent. tax rate mean that the risk-reward ratio for the unincorporated sector would be absolutely diabolical.

Mr. Smith : I shall turn shortly to the corporate tax allowance measures and the reform of the business expansion scheme which we propose, since they deal with precisely the point as to how we should encourage investment in a far more effective way than the Government propose in the Bill.

When the Chancellor tells us that recovery is just around the corner and when the Chief Secretary speaks--as he did even today--about what he calls the transformation of the British economy, they are talking nonsense, and I think that they know it. All the figures for output, investment, job vacancies, bankruptcies, growth and unemployment reveal that our economy is in deep trouble. Both we and the British people will not accept any attempts by the Government to talk their way out of the morass that they themselves have created. Remember, these were the people who told us a year ago that there would be no recession and who said, a few months ago, that, yes, there would be a recession but that it would be relatively shallow and short-lived. We did not believe them then. We do not believe them now when they say that recovery is coming, and coming soon. I wish, for the sake of millions of people and of thousands of firms, that it were true. Sadly, it is not.

There is one other myth that we must lay to rest. The Chief Secretary talked with astonishing pride of the Government's record on growth during the 1980s. He called it a success story. Let us get the figures perfectly clear. Average growth between 1979 and 1990 was 1.75 per

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cent. a year. That is the lowest figure achieved by any Government in this country since the second world war. Average growth, incidentally, under the 1974 to 1979 Labour Government was 2 per cent.

Mr. Sayeed : Can the hon. Gentleman give comparative figures for 1982 up to the present day?

Mr. Smith : By asking that question the hon. Gentleman reveals precisely the fallacy in the figures that are constantly trotted out by the Government. Of course, they ask us to look at their performance during the period from when the first recession that they created was finishing until the second recession was beginning, ignoring the periods of negative growth before and afterwards which must also be included in the equation. If the Chief Secretary believes that the worst performance since the war is a success story, he had better think again.

How does the Finance Bill measure up against a background of recession, rising unemployment and negative growth? Our opinion is that it measures up pretty poorly. There are some measures that we welcome. Last year we argued strongly for VAT relief on bad debts at one year rather than two years. Even after further consideration in last year's Finance Bill the Government rejected it. We welcome their repentance now.

For many years now we have been arguing for mortgage interest relief to be available only at the standard rate of tax. The Chief Secretary has recognised belatedly that it is fair to give the same rate of relief to all taxpayers. So why did the Government reject our proposal last year and the year before and why did the present Prime Minister tell the Welsh Tories last July how strongly he condemned Labour for meddling by making precisely that proposal? Again, we welcome the Government's repentance.

One item that was in the Budget but is not specifically included in the Bill is the increase in child benefit. It is long overdue and it is not enough. It involves a miserly 25p for the second and subsequent children, but at least it breaks the freeze and we welcome that repentance, too.

However, we have one question. The Government saved £360 million by freezing the married couple's allowance. They used only £220 million of that saving for the change in child benefit. Why did not they use the whole lot?

Although we welcome some items in the Budget and the Bill, many others are either iniquitous or inadequate or both. Of course, a general relief on corporation tax rates will be welcomed by some businesses, although not all, but it is better than nothing. It does not add up to a so-called Budget for business and will fail entirely to achieve what is most desperately needed--a motor to get investment going again.

That is why before the Budget we proposed a system of enhanced first-year capital allowances for investment in manufacturing industry to help give a kick start to the purchase of new plant, machinery and technology and the carrying out of research. That would have done far more in a far more focused way than anything in the Finance Bill. That is why we also proposed a complete change in the business expansion scheme to attract private funds into new enterprises, especially in the regions. Yet the Bill leaves the business expansion scheme precisely where it was before--a tax haven for the rich that is used almost entirely for investment in private rented property.

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I now turn to the miserable measure proposed in the Bill for training enhancement. Any recognition of training needs by a Government who have lopped £350 million off employment training and £300 million off youth training in the past two years is welcome, but what a wasted opportunity it is. We have been given a miserly scheme, hedged about with restrictions, which will cost the Exchequer only £15 million in a full year and will not come in for another year in any case. We could have had a proper recognition of the training needs of industry and a training programme led by Government initiative but drawing on the real enthusiasm to deliver in many industries. We proposed such a programme, but all that we got was £15 million in two years' time. That is hardly a good answer to our underskilled position in the world economic league.

Mr. Ian Taylor : The hon. Gentleman is making a series of interesting expenditure commitments for a putative Labour Government. How do they fit in with the stated priorities of his colleague, the right hon. and learned Member for Monklands, East (Mr. Smith), and the statement on Sunday by the Labour party leader that there is no more cash?

Mr. Smith : Clearly, the hon. Gentleman has not examined properly the proposals that we made in advance of the Budget. We set out clearly and in a costed fashion the measures that we recommended, including a major package of proposals on training, and we set out how we would go about funding them. The hon. Gentleman should examine his facts a little more carefully before intervening again.

Mr. Mans : Will the hon. Gentleman give way?

Mr. Smith : I have only five more minutes and I must get on. The centrepiece of the Budget and the Bill is the increase in VAT from 15 per cent. to 17.5 per cent. in order to get the Government off the poll tax hook. In a phrase that the Chief Secretary will come to regret, he said--I think that I am quoting him correctly--"In the circumstances in which we found ourselves, this was an appropriate step." Found themselves? Who dreamed up the poll tax? Who voted it through and imposed it on the British people? Who, even now, have offered no word of apology for the unfairness, administrative chaos, hardship and grotesque waste of public money that the poll tax fiasco has caused? The answer is the Government, including the Chief Secretary. The blame for the poll tax and for the shift in taxation to mitigate its electoral impact will lie fairly and squarely with the Government. The VAT increase is putting up prices, making people worse off and fuelling the underlying rate of inflation. The Government have made the wrong choice in their desperation to get rid of the poll tax liability that they created.

There is precious little in the Budget for the environment. The Government have taken some steps to bring company car taxation more into line with the proper value of the benefit. However, there is still no satisfactory distinction in the tax system between a car provided as a perk and one that is an essential tool of the trade. Where are the imaginative measures that could have been taken? We proposed an increase in the differential between leaded and unleaded petrol, an incentive for the fitting of catalytic converters, incentives for the purchase of environmentally

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sensitive products and the carrying out of home improvements, a graded scale of vehicle excise duty to encourage the use of smaller cars and a levy on landfill waste disposal. Such a programme of measures could have used the taxation system to help the environment. The Government have totally failed to take up that challenge. The Bill fails to take up the challenges facing our economy. It will do virtually nothing to help lift us out of recession. It will do precious little for families with children. It will do hardly anything for the environment. The Government started with a recession and are ending with a recession with an irresponsible short-term boom in the middle. They have failed the economy, as does the Bill. It is time for a Labour Government to start the recovery.

9.39 pm

The Financial Secretary to the Treasury (Mr. Francis Maude) : The Budget will, this year alone, make available to business three quarters of a billion pounds by not taxing it to the extent that it would have been taxed without the changes in the Bill. That decision was taken because we know that businesses are going through a difficult period. The recession will not go on for ever. We can speculate endlessly about when it will end, but we know that it certainly will end, and that when it does, British business will be well placed to grow in the 1990s as it did in the 1980s.

The hon. Member for Derby, South (Mrs. Beckett) seemed to forget that the debate was on the Finance Bill. She sent her researchers scurrying to find every bad statistic and every chance remark made by a commentator to construct a dreary litany of gloom. There was no good news that could not be rubbished and no bad news that could not be magnified. Sadly, she neglected the Bill and its important contribution to stimulating and encouraging recovery.

We listened with interest to the hon. Member for Berwick-upon-Tweed (Mr. Beith), who maintained a curious combination of contentions--that inflation was out of control but that we should relax monetary policy by cutting interest rates. He seems to have become a late convert to the "Monklands law" that, whatever the interest rate, it should be lower. I am sure that the right hon. and learned Member for Monklands, East (Mr. Smith) is pleased to have a convert. It is important to be aware of the priority that the hon. Gentleman attaches to the reduction and control of inflation.

The debate, as always, attracted many important and serious speeches. One thinks particularly of my right hon. Friend the Member for Worthing (Mr. Higgins), whose Committee has done such important work on the subject. He made, as usual, a speech of great authority, to which we listened with great respect.

The hon. Member for Stalybridge and Hyde (Mr. Pendry) made a series of extraordinary allegations that will surprise my hon. Friend the Minister for Sport when he reads them in Hansard. He made several points ; I regret that I did not answer them earlier, so perhaps I shall deal with a few of them now. Consultations are being held on the creation of the foundation for sport and the arts. It was always clear that we would contribute only if all three pools promoters participated, if the foundation was established on acceptable terms and if all the duty cut was passed to the foundation. He asked why the Bill does not cut the duty. That will appear as a new clause in

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Committee, with other Budget proposals that were not ready for inclusion when the Bill was published. I am sure that my right hon. and learned Friend the Chief Secretary will deal in detail with any further questions from the hon. Gentleman.

I am sorry that I missed the speech of my hon. Friend the Member for Corby (Mr. Powell), but I have seen a note of it. He mentioned inheritance tax and the possibility of 100 per cent. relief for businesses, which I have discussed with him previously. Already, 50 per cent. relief is available for substantial holdings in unquoted companies, which means an effective rate of 20 per cent. That compares well with regimes in other countries. Help is available in paying inheritance tax, such as payment over 10 years with interest-free instalments.

My hon. Friends the Members for Esher (Mr. Taylor) and for Wyre (Mr. Mans) spoke of the proposals to encourage the use of employee share schemes. I am grateful for their support. The proposals will take this important process further, which is to be widely welcomed. I am sorry that it was not more widely welcomed by Opposition Members, who I would have thought would favour workers having the opportunity of being encouraged to participate directly in the success of the enterprises for which they work.

My hon. Friends the Members for Stamford and Spalding (Mr. Davies) and for Bexhill and Battle (Mr. Wardle) made important and serious speeches. They both have considerable experience in the commercial world, which benefits their contributions and our debates. My right hon. Friend the Member for Croydon, South (Sir W. Clark) referred to clause 50 and my hon. Friend the Member for Eltham (Mr. Bottomley) mentioned it in an intervention. I know that several of my right hon. and hon. Friends have expressed concern about its provisions. We have listened seriously to what they have said about this difficult and technical set of issues. No doubt they can be thoroughly explored in Committee and I look forward to my right hon. and hon. Friends' contributions to those debates. I believe that the measure is right. It does not involve any double taxation and it is not retrospective. It simply remedies a technical defect and without it there would be a return to the building societies' general funds--not to the investors or depositors on whose interest the tax was levied in the first place--of the tax that properly should have been paid and properly was paid. I repeat that, without the provisions, there would be a capricious return of that tax to the building societies, which would reflect, at random, the point in the financial year at which their accounting year ended.

Sir William Clark : In view of the interest in clause 50 among my hon. Friends and the importance of retrospection and double taxation, would it not be a good idea if that clause were discussed on the Floor of the House rather than upstairs in Committee?

Mr. Maude : I hear what my right hon. Friend says. As he knows, such matters tend to be discussed through what are delicately known as "the usual channels" and no doubt they will be discussed in that way. Nevertheless, we are very much aware of the concern about this. The case for proceeding with clause 50 is powerful and we have

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considered it extremely carefully. I look forward to the opportunity of continuing the task of persuading my right hon. Friend that it is right.

Mr. Peter Bottomley : I do not want to dispute what my hon. Friend has said because he has much of the Finance Bill to cover in the next 14 minutes, but may I refer other hon. Members to the House of Lords judgments, because there is at least a point of argument about whether everything that their Lordships have said has been accepted by my hon. Friend?

Mr. Maude : My hon. Friend makes the point that there are disputed matters. There is plenty of scope for argument, and I look forward to pursuing the subject with my right hon. and hon. Friends--or rather my hon. Friend the Economic Secretary is looking forward to pursing this matter in Committee. Comes the hour, comes the man, and I am sure that my hon. Friend the Economic Secretary will deal persuasively with this point in Committee.

My right hon. Friend the Member for Croydon, South also referred to mobile telephones. I know of his concern about what he describes as a petty measure. I do not believe that it is petty. The private benefit of a portable telephone that is provided by an employer is already chargeable to tax but, at the moment, if it is to be properly accounted for, the employer has to keep detailed fiddly records, and that is a burden upon him. The introduction of a simple scale charge, at a modest level that would reflect only slight private use of the portable telephone, is a simplifying measure that will make life easier for employers. There has been a great deal of

misrepresentation about the effect of this measure, but I believe that it is right. It is also right that we should extend it to car phones.

Sir William Clark : Why should my hon. Friend suggest placing extra administrative burdens on small business men because of some private use, when mobile telephones produce about £10 million for the Exchequer? Surely that is administrative nonsense.

Mr. Maude : The point I was making was that the introduction of a simple scale charge would reduce the burden on small businesses because if there is a private benefit from the use of a portable phone, that is already chargeable to tax and already required to be accounted for in detail to the Inland Revenue. That seems burdensome ; it would be simpler and better to replace it with a straightforward and modest scale charge.

My hon. Friend the Member for East Lindsey (Sir P. Tapsell) raised the issue of capital gains tax in general terms. I am not one of the Financial Secretaries who has had the benefit of a conversation about that with him, but I look forward to doing so and to pursuing the points that he argued so persuasively.

My hon. Friend the Member for Bristol, East (Mr. Sayeed) talked about shipping. I know that there is concern about that, but as my right hon. Friend the Chancellor said in the Budget statement, there are limits to the extent to which the tax system can be skewed towards the special needs of a particular industry. It is worth saying that ships already receive capital allowances of 25 per cent. a year, which gives nearly full relief over seven to eight years. That compares with the average economic life of a ship--bought new--of 15 to 20 years, so the present regime already gives more relief more quickly against tax

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than would be the case if there were a straightforward allowance for commercial depreciation. The most important help that we can give the shipping industry is to foster business generally. Shipping will benefit from many of the other measures contained in the Budget, especially the cut in the main corporation tax rate.

Mr. Sayeed : Does my hon. Friend accept that our position is extremely poor vis-a -vis those countries with whom we must compete if we are to have an effective merchant marine because our competitors have much better capital allowance systems?

Mr. Maude : There are different capital tax regimes and corporation tax regimes in different countries and that will always be the case. As a result of the Budget, we now have a corporation tax regime that will give us the lowest tax rate of any country in the European Community--indeed, of any country in the Group of Seven. That is a massive advantage to British business, including shipping. We should emphasise the great benefits that will flow from that system. Many of the contributions from the Opposition referred to investment. It is important, but it is not an end in itself--it is a means to increase productivity and to improve business. However, sometimes the Opposition talk as though investment were intrinsically desirable and as though one measured the success of an economy by the increase in the amount of investment. The economy did not grow to the extent that it did in the 1980s merely because there were record levels of investment ; it grew because productivity increased, because industrial relations improved and because innovation increased. One can sometimes make too much of the influence of Governments on investment.

"Tinkering via investment, subsidies or other means to alter the relationship between the cost of capital and the rate of return on investment has noticeably failed."

Those are not my words, but those of the right hon. and learned Member for Monklands, East, in a speech that he made about five years ago. I think that he was right. He made the perceptive point that what matters is the real commercial rate of return on investment, not the artificial rate of return that is created by tax incentives and by subsidies. I am sorry that he has regressed from that position to the point where he and the Labour party now argue for increased capital allowances for industry, and for a tax credit for additional research and development. At one point, it seemed that the Labour party had accepted the Government's approach to corporation tax and it is sad that the right hon. and learned Gentleman has apparently not learnt the lesson but has regressed to previous heresies. This evening, we have heard much about what the Labour party would not like to see. We have heard less about Opposition Members do want. We know that they want to spend more public money because they have said so. That is a plausible claim and we believe that part of what they say because the Labour party has always spent more money when it has been in government. However, it is less clear where that money will come from.

Oddly enough, the Labour party's documents do not throw much light--

Mr. Allan Rogers (Rhondda) : Which documents?

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Mr. Maude : I will show where the information comes from if that will help the hon. Member for Rhondda (Mr. Rogers) because he will not get the information from Opposition Front-Bench spokesmen. The Opposition claim that they will raise £1 billion by tackling offshore trusts. That is a spendid idea, but there are two snags. The first is that we are already doing that, and the second is that it will raise not £1 billion, but less than £100 million. There is no pot of gold there. What is the Opposition's next wheeze? "Opportunity Britain" states that there is £5 billion in uncollected taxes, enough to pay for the entire backlog of school repairs and rebuilding. Once again that is a pot of gold and a windfall of £5 billion just waiting to be scooped in. However, there is one problem That money does not stay uncollected. It is the amount of tax which, by the end of the Inland Revenue accounting year, happens not to have been collected. Nearly all of it is collected soon afterwards, much of it with interest added. Bang goes another pot of gold and with it bang goes Labour's programme for school repairs and rebuilding.

Mr. Alfred Morris (Manchester, Wythenshawe) : With regard to collecting taxes, the Financial Secretary to the Treasury is aware of the vitally important cancer research at the Paterson institute in south Manchester and I use the word "vitally" in its literal sense. Is he aware that the institute faces a VAT bill of £1.2 million on its voluntary funded work and that that will now increase to £1.4 million? Is there nothing that he can do to help?

Mr. Maude : The right hon. Gentleman raised that matter at Treasury questions a few days ago. I explained then that there are limits on the extent to which exemptions can be given under European Community law. There are already tax reliefs worth £800 million a year to charities, of which £150 million are reliefs on VAT. However, there are limits to the extent to which they can be extended. We understand what the right hon. Gentleman has said, and no doubt my hon. Friend the Minister of State will consider the point.

Where else will the money come from to pay for Labour's spending programme? "Opportunity Britain" states :

"We will increase the Inland Revenue staffing and introduce tougher tax laws thus raising substantial extra income for public services." That is the key. This brave new programme for "Opportunity Britain" is not just a tax collection programme ; it is a job creation scheme. The brave new programme means more tax men and more staff for the Inland Revenue.

What about those tougher tax laws? What tax laws? Are all tax laws to be made a bit tougher or are some to be made a lot tougher? Which tax laws? How much extra income? From whom? What on? Who pays? How much and who collects it? Where are the answers to those questions? What are the Opposition going to do about VAT? Apparently, the Opposition now accept the increase in VAT that we are introducing this year. However, I recall that when my right hon. Friend the Chancellor of the Exchequer introduced his Budget, the Leader of the Opposition claimed that that was not a fair way to collect additional taxation. Does that view still stand? Would the Opposition reverse the increase? If so, where are they going to get the extra money? If they are not going to

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reverse it, why did the Leader of the Opposition say that it was unfair? Either they propose to leave in place something that they believe to be unfair or they believe that it is fair and the Leader of the Opposition has got it wrong. If he got it wrong, he should apologise. Which is it? Where are the answers? When it comes to taxes, the answer is always the same--"Tax the rich". That is what they always claim to do. They think that somehow the British public will accept that there is a painless way to raise all the extra tax. We know what they have done. We do not need to look at the crystal ball ; we can read it in the books. All Labour Governments have increased the basic rate of tax--the rate of tax that every taxpayer pays--and yet all Labour Governments have claimed in opposition that they would increase tax only on the rich. We need only to look at the history books. In the 1960s, the Labour Government increased the basic rate of tax by 2 per cent. In the 1970s, they increased it by 5 per cent. Had they told the electorate that? No, of course they had not. They were very coy about it. The British people know what they propose to do. The British people know that a Labour Government, like Labour councils, mean high spending and high taxes. They have had it once, they have had it several times, and they do not want it again. That is why they will continue to return a Conservative Government. Question put, That the Bill be now read a Second time : The House divided : Ayes 310, Noes 209.

Division No. 132] [10 pm

AYES

Adley, Robert

Aitken, Jonathan

Alison, Rt Hon Michael

Allason, Rupert

Amess, David

Amos, Alan

Arbuthnot, James

Arnold, Jacques (Gravesham)

Arnold, Sir Thomas

Ashby, David

Aspinwall, Jack

Atkinson, David

Baker, Rt Hon K. (Mole Valley)

Baker, Nicholas (Dorset N)

Baldry, Tony

Banks, Robert (Harrogate)

Batiste, Spencer

Beaumont-Dark, Anthony

Bellingham, Henry

Bendall, Vivian

Bennett, Nicholas (Pembroke)

Benyon, W.

Bevan, David Gilroy

Biffen, Rt Hon John

Blackburn, Dr John G.

Blaker, Rt Hon Sir Peter

Body, Sir Richard

Bonsor, Sir Nicholas

Boscawen, Hon Robert

Boswell, Tim

Bottomley, Peter

Bottomley, Mrs Virginia

Bowden, A. (Brighton K'pto'n)

Bowden, Gerald (Dulwich)

Bowis, John

Boyson, Rt Hon Dr Sir Rhodes

Braine, Rt Hon Sir Bernard

Brandon-Bravo, Martin

Brazier, Julian

Bright, Graham

Brown, Michael (Brigg & Cl't's)

Browne, John (Winchester)

Bruce, Ian (Dorset South)

Buchanan-Smith, Rt Hon Alick

Buck, Sir Antony

Burns, Simon

Butterfill, John

Carlisle, John, (Luton N)

Carlisle, Kenneth (Lincoln)

Carrington, Matthew

Carttiss, Michael

Cartwright, John

Cash, William

Chalker, Rt Hon Mrs Lynda

Channon, Rt Hon Paul

Chapman, Sydney

Chope, Christopher

Churchill, Mr

Clark, Rt Hon Alan (Plymouth)

Clark, Rt Hon Sir William

Clarke, Rt Hon K. (Rushcliffe)

Colvin, Michael

Coombs, Anthony (Wyre F'rest)

Coombs, Simon (Swindon)

Cope, Rt Hon John

Cormack, Patrick

Couchman, James

Cran, James

Currie, Mrs Edwina

Curry, David

Davies, Q. (Stamf'd & Spald'g)

Davis, David (Boothferry)

Day, Stephen

Devlin, Tim

Dicks, Terry

Dorrell, Stephen

Douglas-Hamilton, Lord James

Dover, Den

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