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The Prime Minister : As I said earlier, there was a range of matters to deal with unemployment. One is deregulation, which has just been mentioned. Not to impose extra costs on employers, as the social chapter would, is a second illustration of what needs to be done. Other measures include policies that will enable the economy to grow--as we have been seeking to do--and to protect capital investment, as we did in the previous public expenditure round. There are also the international macro points that I mentioned earlier : the United States is tackling its budget deficit, Japan will continue to support domestic demand as necessary, and in continental Europe there will be a move towards a reduction in interest rates. The necessity and attraction of closing the fiscal deficit in this country, as in other countries, is that it will be easier to make further interest rate reductions.
Dr. Ian Twinn (Edmonton) : Is my right hon. Friend aware of the positive and warm support he receives from Conservative Members for the achievements of the summit, especially the progress towards freer world trade and the greater advantage that that will have for our manufacturing industry? Will he now renew his efforts among our European partners to ensure that they all share our enthusiasm for free world trade?
The Prime Minister : Yes, I will certainly do that. A number of our European partners are also firm advocates of free trade. There are one or two who are slightly less firm in their advocacy and we shall endeavour to encourage them. We are not the only advocates of free trade in Europe ; a number of other nations wholly share our views.
Mr. Bob Cryer (Bradford, South) : How much of the money that has been allocated to Russia will go towards helping to dismantle its nuclear weapons? Would not it impress the other G7 countries if, instead of talking about the nuclear non-proliferation treaty in glowing terms, the Prime Minister did something about it by introducing a programme in the United Kingdom to shift our manufacturing base away from producing weapons of war to manufacturing for peace and getting rid of Trident nuclear weapons? On the basis of his argument, our jobs will depend on either the manufacture or maintenance of weapons of mass extermination for the next 20 years. Is that his policy?
The Prime Minister : The hon. Gentleman refers to weapons of mass extermination, when nuclear weapons act as a deterrent to protect the nation. That is their purpose. If the hon. Gentleman is so keen for us not to manufacture them, I hope that he will make that point equally clearly in Barrow and Devonport and that he has previously made it in Rosyth. His point rings with a rather curious air against representations made by many of his hon. Friends during recent months.
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Mr. Cryer : What about diversification ?
The Prime Minister : On the question of Russia, to which I was just coming, we are already helping the Russians with the transport of nuclear weapons and with technical help on their destruction. That is of importance to Russia, and, as his right hon. and learned Friend the Leader of the Opposition mentioned earlier, it is important to Ukraine, where further progress needs to be made.
Mr. Tim Devlin (Stockton, South) : As my constituency is not far from that of the hon. Member for Hartlepool (Mr. Mandelson) and as it produces pharmaceuticals, chemicals, engineering products and other products that fall into the eight areas on which, it has been agreed, tariffs will not be imposed in the future, may I warmly congratulate the Prime Minister on negotiating away those tariffs ? I hope that he will bring as much pressure to bear as he can to end the GATT round as soon as possible.
The Prime Minister : I am grateful to my hon. Friend. I certainly undertake to do that, and I am grateful for his earlier remarks.
Mr. Cynog Dafis (Ceredigion and Pembroke, North) : I noted with interest the Prime Minister's reference to the Rio accord, which is intended to underpin all economic and trade policies henceforth. I wonder whether the Prime Minister is aware that a recent United States district court ruling meant that the north American free trade agreement could not be ratified because it did not include an environmental impact statement. Is not it possible that a similar fate might await the GATT agreement and that that could unravel the whole round ? In that case, will the Prime Minister give some detail about the nature of the environmental discussion in Tokyo and the effect on the agreement there ?
The Prime Minister : One of the significant points made in the discussion on the environment at Tokyo was that President Clinton pledged himself wholeheartedly to the Rio accords. That was a shift of policy for the United States and one that was very welcome. As the hon. Gentleman may know, much work has been going on following Rio to produce national plans for sustainable development, for dealing with climate change, for biodiversity and for forests by the end of 1993. There have been meetings of the United Nations commission on sustainable development ; the most recent was in New York last month. Developed and developing countries are now working together actively to put the Rio commitments into practice. Rio is becoming a reality.
Mr. James Clappison (Hertsmere) : Does my right hon. Friend agree that many of the issues that figured most prominently at Tokyo, such as cutting deficits, deregulation and improving the flexibility of the labour market, were issues of British concern? Just as at Copenhagen, the agenda reflected Britain's concerns. Does my right hon. Friend further agree that there is growing evidence that Britain's case is prevailing, both in Europe and in the rest of the world?
The Prime Minister : My hon. Friend is entirely right about that point. It was very striking in the Copenhagen discussions just a few weeks ago and it was equally evident in our discussions in Tokyo last week. One of the reasons for that is that we went into the recession earlier than many other countries did. There is nothing like a recession to
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concentrate people's minds on the reality of what needs to be done. Many countries, now that they are entering recession, are having to look, just as we have done, at some very hard decisions to help people and to recreate jobs.Mr. John Spellar (Warley, West) : The Prime Minister conceded earlier that Japan was not experiencing high levels of unemployment. While he was in Tokyo, did he take the opportunity to look at what is happening in Japan? Did he notice, for example, that the Japanese are spending $70 billion in public works programmes to expand the economy? Did he notice that Japanese employers are trying to hold on to their workers and are not taking every opportunity to cut the work force? Did he notice that they are not as obsessed with the flexible labour market ideology? In fact, the Japanese Government and Japanese employers cannot understand all the fuss about the social market. Did the Prime Minister notice that, in spite of all that, it is the Japanese who have the substantial balance of payments surplus and that it is we who have the balance of payments deficit? When will he abandon the outdated Thatcherite philosophy and look at what really works in this world?
The Prime Minister : The hon. Gentleman may care to study Japan a little more closely before he entirely advocates that. He might, for example, not be entirely happy if we reduced our public spending share of gross domestic product to the Japanese level. That would make a significant difference and one that would be pretty unwelcome to the hon. Gentleman. If he looked at the social costs in Japan, he might also be just a little less enthusiastic. If he looked at some of the wage levels in parts of Japan, he might be a good deal less enthusiastic. I suggest that the hon. Gentleman spends his holiday in Japan.
Points of Order
4.22 pm
Mr. Tam Dalyell (Linlithgow) : On a point of order, Madam Speaker. This is a genuine point of order on which I have had discussions with my right hon. and learned Friend the shadow Attorney-General and a number of colleagues.
You will recollect and have had it brought to your attention, Madam Speaker, that in 1941 one of your predecessors, Mr. Speaker Clifton Brown, took exception to the various efforts made to raise under the emergency procedure the fall of Singapore before it actually happened. Are we to understand that your advice is that if there is a serious threat of military action whose importance is not challenged and whose urgency is not challenged, but which may not meet the third criterion, which is that it is definite, you cannot hear a Standing Order No. 20 application?
Bluntly, it is appalling that the House of Commons should face the situation where, apparently, there is British endorsement of a United Nations plan to launch missiles on a foreign city, Baghdad, which the House cannot discuss before it has actually happened. Will you, Madam Speaker, reflect over the next 24 hours and come up with a ruling on the conditions in which you will hear an application under Standing Order No. 20 in the case of possible military action?
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Madam Speaker : I cannot anticipate what may or may not happen in an emergency. I must look at every application on its merits and I do precisely that. But as the hon. Gentleman knows, there have to be new developments. This is a continuing situation and there must be a new immediate development before I can grant an application. I look at each application to me entirely on its merits and will continue to do so.
Mr. Peter Hain (Neath) : On a point of order, Madam Speaker. I ask that you give a ruling debarring hon. Members who are Lloyd's names from voting on Report this evening or tomorrow on Third Reading. If hon. Members who are Lloyd's names vote themselves tax privileges which are worth perhaps thousands--or even tens of thousands--of pounds, that is tantamount to them putting their hands on taxpayers' money and putting it straight into their wallets.
Lloyd's names have a direct pecuniary interest and "Erskine May" cites a whole series of precedents in which hon. Members are debarred from voting. I realise that they mostly concern private Bills and that the Finance (No. 2) Bill is a public Bill. Nevertheless, the 14 clauses and two schedules in the Bill that apply exclusively to Lloyd's affect uniquely and personally those 44 Members who are shown on the Register of Members' Interests as having an interest in Lloyd's. Therefore, I feel that they should be debarred from voting, and I ask you to give that ruling.
Mr. Alistair Darling (Edinburgh, Central) : Further to that point of order, Madam Speaker. My hon. Friend the Member for Neath (Mr. Hain) raised an important distinction between a private Bill and a public Bill. The Finance (No. 2) Bill is a public Bill.
I draw specific attention to amendment No. 21, which you have selected for debate this afternoon. It renders the special reserve funds liable to tax. My submission is that that represents an immediate and personal interest on the part of those hon. Members who are Lloyd's names.
No doubt, Madam Speaker, you will refer me to the ruling that your predecessor made on 14 January 1986 at column 1013 when the issue before the House was whether hon. Members who were Lloyd's names could vote for an amendment that widened the scope of the Finance Bill. Your predecessor quite rightly held that, on a matter extending the scope of the Bill, the House was dealing with a public matter. In my submission, there is a difference. We are not talking about the scope of a public Bill. We are talking about an amendment, which, if pressed to a vote, would result in tax privileges being available to a number of hon. Members, all of whom are Conservative. It would be useful if you would give a ruling at to what exactly is meant by an "immediate and personal" interest, which is referred to on page 354 of the current edition of "Erskine May".
Finally, Madam Speaker, you will be aware that the matter was raised on 24 March 1981 by my hon. Friend the Member for Blackburn (Mr. Straw) in relation to the Lloyd's Bill. Mr. Speaker advised Members that if there was any doubt on the matter, they should not vote.
It would be helpful if you would let us have a ruling as the matter is of interest not just to Members of the House. Members of the public would like to be assured that the House would not let a situation arise where Members who
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had a vested interest in their own benefit were allowed to vote in a way that other members of the public were precluded from doing. Several hon. Members rose --Madam Speaker : Order. I think that I can now deal with those points of order if I may be allowed to do so.
Mr. Geoffrey Dickens (Littleborough and Saddleworth) : Shame.
Madam Speaker : Yes, it is a shame but we ought to make some progress and I am quite prepared to deal with those points of order. I am grateful to the hon. Member for Neath (Mr. Hain) for giving me notice that he would raise this matter. The rule against voting on a matter in which a Member has a personal pecuniary interest does not apply on a public Bill so long as other similarly situated persons will benefit in the same way.
The provisions of the Finance (No. 2) Bill are not confined to those members of Lloyd's who are also Members of the House. There is no prohibition on such Members voting on this matter of public policy.
Several hon. Members rose --
Madam Speaker : Order. I have not finished. Hon. Members should not be so impatient, but should listen to my entire ruling. The House will expect members of Lloyd's affected by the Bill who speak in the debates on the relevant clauses to declare their interest.
Mr. Darling : Further to that point of order, Madam Speaker. I should like to be clear about the matter. Do I understand that the effect of your ruling is that, because there are members of Lloyd's who are not Members of Parliament, Conservative Members of Parliament can vote for the measure, notwithstanding the fact that they gain direct benefit? I understand that a further procedure has to be invoked. However, the House must look at such circumstances because many people regard that as rather unfair.
Several hon. Members rose--
Madam Speaker : Order. Let me take the matter a stage further because I want it to be clear to the House. The hon. Member for Edinburgh, Central (Mr. Darling) is quite right. The measure affects other individuals outside the House and, for the sake of completeness, I shall leave the House with this thought. If I ruled that no hon. Member could ever vote on a measure that would allow him or her to enjoy benefits available to others, the House would never be able to vote for a reduction in income tax. I hope that that clarifies the point. I have given my ruling and I will accept no further points of order on that matter.
Mr. Jonathan Evans (Brecon and Radnor) : On a point of order, Madam Speaker.
Madam Speaker : Is it a different one?
Mr. Evans : It is an entirely fresh point of order, Madam Speaker. May I have your guidance on clarification of the position under Standing Order No. 31, which, as you know, deals with the selection of amendments, so as to
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assist Back Benchers in future over the submission of amendments at this stage of consideration of a Bill? I am referring specifically to the Finance Bill.The point is covered on page 502 of "Erskine May", which says that the power is exercised by the Speaker as
"a check upon excessive repetition of debates which have already taken place in committee."
I have in mind that, on 10 May, the House, in Committee, spent a full day debating issues that appear to be grouped together under amendment No. 7 and other amendments on the provisional selection list.
I do not question your selection in any way, Madam Speaker, but I should like to know whether there has been any change in the guidelines or in Standing Orders, given that "Erskine May" says that that is a power that Speakers tend to exercise "rigorously".
Madam Speaker : The hon. Gentleman will find that "Erskine May" also says that the Speaker has total discretion over the selection of amendments. Irrespective of whether a matter has been debated earlier, it is at the discretion of the Speaker to decide whether to select such amendments for debate during our consideration of the Finance Bill.
Mr. Dennis Skinner (Bolsover) : On a point of order, Madam Speaker. I did not get involved in the points of order raised by my hon. Friends the Members for Edinburgh, Central (Mr. Darling) and for Neath (Mr. Hain) because they dealt adequately with those points, which you then answered. However, in your answer--
Mr. Dickens : Ah, the hon. Gentleman will get involved now.
Mr. Skinner : No, this is straight and above board. In your answer, Madam Speaker, you said that if the rule were applied in the way that we wanted, hon. Members could not vote on a reduction in income tax because we would all benefit, as well as those outside. The clear distinction is that, while all Members of Parliament would benefit from a reduction in income tax from 25 to 20 per cent., or even to 15 per cent., in the Lloyd's case, only 44 Tory Members will benefit.
Madam Speaker : Clause 123 relates to Members of Parliament, but not all Members will benefit from it. That is quite distinct from the taxation point. I have given my ruling on the matter, and we should not now return to it.
Mr. Bob Cryer (Bradford, South) : On an entirely separate point of order, Madam Speaker. One of the developments that has taken place since I was elected in 1974 is that the House has adopted a much more tightly controlled attitude towards Members' financial interests. In the circumstances, would not it be helpful if you asked either the Select Committee on Members' Interests or the Select Committee on Procedure to look at the position of those who have financial interests and their voting abilities ? I am not challenging your ruling because, unfortunately, I do not have the power to do that, but it might seem outside that it is inconsistent with the development of tighter scrutiny in the House.
Madam Speaker : The hon. Gentleman can make such references himself. I am certain that my ruling will be seen to be accurate and logical when it has been printed and reflected on.
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Mr. Harry Cohen (Leyton) : On a point of order, Madam Speaker. I have listened carefully to what you have said. You commented that if hon. Members who are also members of Lloyd's speak during the debate, they should declare an interest. Will you reflect and make a ruling before te contained in the Register of Members' Interests. I am advising Members who wish to speak that they must declare an interest when they do so. Hon. Members have never been called upon to declare an interest before they enter the Division Lobby.
Mr. Jimmy Boyce (Rotherham) : On a point of order, Madam Speaker. Are there any matters of public policy that are decided in the House that do not affect people outside the House?
Madam Speaker : I think that I require notice of that question.
Mr. Boyce : I am sure that you will get that for tomorrow.
Dr. Norman A. Godman (Greenock and Port Glasgow) : On a point of order, Madam Speaker. I wish to raise a point that concerns the general principle of declaration of hon. Members' interests. I am not a Lloyd's name. Does an hon. Member have to declare an interest at the onset of his speech, or can he simply allude to it during that speech? The 44 Lloyd's members on the Conservative Benches should, if they catch your eye, declare an interest at the beginning of any intervention that they make.
Madam Speaker : The procedures of the House on this matter are clear and direct. An hon. Member must declare an interest immediately on standing to speak.
Mr. Rod Richards (Clwyd, North-West) : Further to the point of order raised by my hon. Friend the Member for Brecon and Radnor (Mr. Evans). I seek your guidance, Madam Speaker, on the group of amendments starting with amendment No. 7. Many of the amendments deal with the same point and could be described as repetitive and overlapping. Have the guidelines for those matters changed?
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Madam Speaker : No. We never allow repetition or overlapping to occur in the House. I am sure that the hon. Gentleman is not challenging my selection of amendments.
Mr. Dickens : On a point of order, Madam Speaker. I wish to make a point about fair play. I rose following your response to the first point of order, and you would not allow me to continue because you said that you had given an answer. You have since called four Opposition Members to speak on the same subject. I shall not detain the House by pressing you on this, Madam Speaker, but I like to see fair play.
Madam Speaker : The hon. Gentleman often rises to say that I have been particularly fair. If he reflects on Hansard tomorrow, he may see that the points to which he refers which were raised by hon. Members were separate from my ruling.
Mr. John Butterfill (Bournemouth, West) : On a point of order, Madam Speaker. I seek advice from you for the future.
Madam Speaker : Is it on the group of amendments starting with No. 7?
Mr. Butterfill : My point relates to petroleum revenue tax, and the concerns of hon. Members on that subject. We know that the matter was debated extensively on Second Reading and that some amendments that were tabled by members of the Committee were ruled out of order for various reasons.
The issue is complex and hon. Members have taken counsel's opinion on the amendments that have been tabled today to ensure that they are in order. Although I appreciate that the matter was explored at some length in Committee, the concept of transitional arrangements was not so explored. Is there a way in which, in the future, hon. Members can frame amendments so that we can be sure that they will be in order and available for consideration?
Madam Speaker : I am sure that the Public Bill Office, which is open all hours, will be extremely helpful.
Ways and Means
Scottish Trusts-- Resolved,
That provision may be made in relation to trusts having effect under the law of Scotland where the trustees are resident in the United Kingdom.-- [Mr. Dorrell.]
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Orders of the Day
Finance (No. 2) Bill
Not amended (in the Committee) and as amended (in the Standing Committee), considered.
New clause 17
Scottish trusts
.--(1) Where--
(a) any of the income of a trust having effect under the law of Scotland is income to which a beneficiary of the trust would have an equitable right in possession if that trust had effect under the law of England and Wales, and
(b) the trustees of that trust are resident in the United Kingdom, the rights of that beneficiary shall be deemed for the purposes of the Income Tax Acts to include such a right to that income notwithstanding that no such right is conferred according to the law of Scotland.
(2) This section shall have effect in relation to the income of any trust for the year 1993-94 or any subsequent year of assessment.'.-- [Mr. Dorrell.]
Brought up, and read the First time.
4.39 pm
The Financial Secretary to the Treasury (Mr. Stephen Dorrell) : I beg to move, That the clause be read a Second time.
The purpose of the new clause is to apply the same income tax treatment to beneficiaries with an interest in possession in the income of a trust governed by Scots law as applies to beneficiaries with an interest in possession in the income of a trust governed by English law. At present, beneficiaries of English and Scottish trusts are treated differently because of the differences in the underlying legal position.
We discussed this point in Committee, and the new clause responds to the undertaking that I gave there to bring the two systems into line. Scottish lawyers who are present may recognise that we have done this by aligning Scottish legal practice with the practice in England. That may not be the best solution in the context of Scottish nationalism, but in the time available it seemed the most practical way of responding to the concerns expressed in Committee.
Mr. Alistair Darling (Edinburgh, Central) : We welcome the new clause, which we pressed for in Committee. I am glad that, in a comparatively short time, the Government have met our objections. There remain one or two matters that might be dealt with in the Finance Bill to be introduced at the end of this year. I understand that one or two parts of the new clause might be better phrased--according to some of my colleagues who regularly practise in Scotland.
First, it is suggested that the phrase,
"having effect under the law of Scotland"
might be better expressed as
"a trust, the proper law of which is the law of Scotland". Such matters of definition are important. Without the change, the measure would also affect an English trust that happened to have land in Scotland.
As the House is anxious to make progress on other matters I will write to the Minister with my other
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suggestions. Meanwhile, we welcome the new clause, without which Scottish beneficiaries of a trust would have been treated less favourably than English ones.Mr. A. J. Beith (Berwick-upon-Tweed) : The Minister said that there are reasons why this form of new clause might not be so welcome as its purpose. When the issue was first raised in Committee, the effect of the Bill as it then stood being to treat dividends received through trusts in Scotland differently from those in England, the Minister was at first unpersuaded. He said that as the payment received in the Scottish case is not a dividend it would be wrong to treat it as though it were. He then listened to our arguments and was eventually persuaded that something had to be done.
Meanwhile, my hon. Friend the Member for Orkney and Shetland (Mr. Wallace) wrote to the Lord Advocate pointing out that in his view a breach of article 4 of the treaty of union might be involved because that treaty provides that
"all rights, privileges and advantages which do or may belong to a subject of either kingdom should be communicated to the subjects of the other".
The combined considerations of the Lord Advocate and the Minister resulted in a Government willingness to table a new clause to sort out the matter.
The Minister must not be surprised to learn that Members who have a concern for Scots law are unhappy that a form of words should have been chosen which treats the matter as an extension of English law instead of changing the Scottish legal basis. The new clause uses the words :
"notwithstanding that no such right is conferred according to the law of Scotland".
My hon. Friend the Member for Orkney and Shetland tabled an amendment-- probably in order, but not chosen--which dealt with the matter via the law of Scotland. Although the Minister seemed to hint that considerations of time had driven him to this desperate expedient, I cannot believe that any technical failing in my hon. Friend's amendment could not have been improved by the efforts of the Lord Advocate's Department, assisted by the Treasury. That could have produced an amendment framed within Scots law.
Treasury Ministers may not be aware of the strong feeling in Scotland that a sort of legal imperialism prevails under which the Scots legal framework, the Scots statute book and Scots common law are all gradually eroded by United Kingdom legislation being tacked on to Scottish law. Law Bills relating to England and Wales often have clauses relating to Scotland added to them, with the result that the law of Scotland is not contained in a distinctive statute book or in Scots common law.
The Minister was thus right to anticipate that there would be some criticism on this score, and right to expect some lamentation over the fact that the practice of bolting bits of English law on to Scots law continues. It was not really necessary to go about the matter in this way.
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