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6.45 pm

The hon. Member for Galloway and Upper Nithsdale (Mr. Morgan) raised concerns, specifically about fuel duty. I hope that he will be reassured by what I have said about the impact of the method used for inflation uprating of duties. He expressed particular concern, for reasons that I well understand, about the position of low-income constituents in areas such as his. They will benefit particularly from the changes that we have announced to vehicle excise duty. We have extended the threshold for the lower rate from 1100 cc to 1200 cc vehicles. His constituents will also benefit from the new arrangements being introduced from next year for lower rates of vehicle excise duty on fuel efficient cars. Those measures will be particularly welcome to the hon. Gentleman and his constituents.

Mr. Morgan: Will the Minister accept that those measures are much more likely to benefit those who can afford to buy new cars? People on low incomes tend to buy second-hand cars, often without a low engine size because such cars tend to be cheaper on the second-hand market.

Mr. Timms: The concession for vehicles of less than 1200 cc applies equally to new and old cars. I anticipate that the hon. Gentleman's constituents who are on a limited income and driving an inexpensive car will welcome those measures.

Mr. David Heath (Somerton and Frome): I wonder whether the hon. Gentleman can help me with a query

18 Jul 2000 : Column 275

from a constituent who points out that the differential between unleaded petrol and leaded petrol was introduced as a perfectly proper environmental measure. Why is that differential maintained between unleaded petrol and lead replacement petrol? That affects people who own older cars, which may not be able to run on unleaded fuel.

Mr. Timms: The differential with lead replacement petrol is a reflection of the different costs in the production process. I should be happy to drop the hon. Gentleman a line setting out the details of that arrangement.

I am grateful to the hon. Member for Kingston and Surbiton (Mr. Davey) for his explanation of the new clause. I know that he takes a keen interest in the way that the tax system affects pensioners. As he said, my hon. Friend the Paymaster General had an opportunity to debate a wide range of issues of concern to pensioners with him in the Adjournment debate on 9 June and, in particular, to consider the proposals made by the low income tax reform group.

For reasons that he spelled out, the hon. Gentleman would prefer the Revenue to reflect in the PAYE codes on occupational pensions, which are issued in January and applied in April, the increased amount of state pension and the increased amount of allowances resulting from indexation. His proposal is that the Revenue would be able to do that if the Treasury order setting out index values of allowances were published by the end of December rather than on Budget day the following March. Publishing that order earlier would not have that effect because it is always possible for Parliament to override indexation, as it did in 1999 when pensioner allowances rose by up to £200 more than the indexation required.

Mr. Edward Davey: I understand that point, but surely in most years and in most circumstances there would not need to be a second tax coding because Parliament would usually go by the normal Rooker-Wise index.

Mr. Timms: I know that the hon. Gentleman feels strongly about this. My hon. Friend the Paymaster General gave him an assurance during the debate on 9 June that she would look into this matter. I know that she is doing so with great care and I hope that the hon. Gentleman will feel that he can accept that assurance and not press this issue.

Mr. Heathcoat-Amory: The Minister started by saying that we had debated these matters before, but we have raised them again because we still have not got any answers. I will make a deal with him--I shall stop raising the subject if he starts giving some answers. The debate that we have just had illustrates my point because, for example, the Minister did not apologise on behalf of the Paymaster General for the flat untruth of her assertion that the previous Government had indulged in the same subterfuge.

The fact is--I note that the Minister did not disagree--that we had an historical system for uprating all the allowances and duties. It was the incoming Labour Government who changed the rules to uprate according to a forward-looking estimate of inflation. That is why fuel duty and other indirect taxes went up by 3.4 per cent. this year, instead of increasing by the pension increase index of 1.1 per cent. I ask the Minister to correct that example

18 Jul 2000 : Column 276

of a Treasury Minister misleading the House. That is a serious enough point to draw the Minister into a late intervention, and I will give way to him if he will now agree that that was an example of a Minister giving an incorrect reply. The fact that he will not do so only confirms our allegation that no one believes what this Government say about taxes any more. It is no good the Prime Minister saying that he now wants a lot of eye-catching initiatives instead of policies, when he has already lost the trust of the House and of the wider public. The Government cannot even admit it when they have made a mistake.

The Minister then boasted that there was no problem because the Government had achieved what he called low and stable inflation. If that is the case, why are they putting up alcohol and road fuel duties by nearly 3.5 per cent., when they have an inflation target of 2.5 per cent.? I do not call that either low or stable.

The Minister also said that the figure of 3.4 per cent. appears in the Red Book so it is not a secret. I never said that it was. We spotted quickly the divergence and that the Government were putting up allowances by only 1.1 per cent. and all other duties by nearly 3.5 per cent. My point, which I repeat, is that the issue of inflation and the inflation index is discussed in no fewer than three places in the Red Book but at no point in those discussions does the figure of 3.4 per cent. appear. The Minister cannot contradict that point.

Mr. Nicholas Soames (Mid-Sussex): Does my right hon. Friend agree that, with that eagle-eyed clarity and persistence that led him to seek out that figure, he has also drawn other inconsistencies in the Red Book to the attention of the House?

Mr. Heathcoat-Amory: That was a typically sagacious intervention by my hon. Friend, who is clearly on form at an early point in our proceedings. We have said enough to demonstrate beyond doubt that on this issue we are right--and I include my hon. Friend in that observation. We are on the side of right and truth and it is the Government who have made a mistake. We shall divide the House on the issue.

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

The House divided: Ayes 168, Noes 319.

Division No. 275
[6.54 pm


AYES


Allan, Richard
Amess, David
Arbuthnot, Rt Hon James
Baldry, Tony
Ballard, Jackie
Beggs, Roy
Beith, Rt Hon A J
Bell, Martin (Tatton)
Bercow, John
Beresford, Sir Paul
Bottomley, Peter (Worthing W)
Bottomley, Rt Hon Mrs Virginia
Brake, Tom
Brand, Dr Peter
Brazier, Julian
Breed, Colin
Brooke, Rt Hon Peter
Bruce, Ian (S Dorset)
Bruce, Malcolm (Gordon)
Burnett, John
Burns, Simon
Burstow, Paul
Butterfill, John
Cash, William
Chapman, Sir Sydney
(Chipping Barnet)
Chidgey, David
Chope, Christopher
Clappison, James
Clarke, Rt Hon Kenneth
(Rushcliffe)
Clifton-Brown, Geoffrey
Collins, Tim
Cormack, Sir Patrick
Cotter, Brian
Cran, James
Curry, Rt Hon David
Davey, Edward (Kingston)
Davies, Quentin (Grantham)
Davis, Rt Hon David (Haltemprice)
Donaldson, Jeffrey
Dorrell, Rt Hon Stephen
Evans, Nigel
Ewing, Mrs Margaret
Faber, David
Fabricant, Michael
Fallon, Michael
Fearn, Ronnie
Flight, Howard
Forth, Rt Hon Eric
Foster, Don (Bath)
Fox, Dr Liam
Fraser, Christopher
Garnier, Edward
George, Andrew (St Ives)
Gibb, Nick
Gidley, Sandra
Gill, Christopher
Gillan, Mrs Cheryl
Gorman, Mrs Teresa
Gorrie, Donald
Green, Damian
Greenway, John
Gummer, Rt Hon John
Hague, Rt Hon William
Hamilton, Rt Hon Sir Archie
Hammond, Philip
Hancock, Mike
Harris, Dr Evan
Harvey, Nick
Hawkins, Nick
Hayes, John
Heald, Oliver
Heath, David (Somerton & Frome)
Heathcoat-Amory, Rt Hon David
Hogg, Rt Hon Douglas
Horam, John
Howard, Rt Hon Michael
Howarth, Gerald (Aldershot)
Hughes, Simon (Southwark N)
Jack, Rt Hon Michael
Jackson, Robert (Wantage)
Jenkin, Bernard
Johnson Smith,
Rt Hon Sir Geoffrey
Keetch, Paul
Kennedy, Rt Hon Charles
(Ross Skye & Inverness W)
Key, Robert
King, Rt Hon Tom (Bridgwater)
Kirkbride, Miss Julie
Kirkwood, Archy
Laing, Mrs Eleanor
Lait, Mrs Jacqui
Letwin, Oliver
Lewis, Dr Julian (New Forest E)
Lidington, David
Lilley, Rt Hon Peter
Livsey, Richard
Lloyd, Rt Hon Sir Peter (Fareham)
Loughton, Tim
Luff, Peter
McIntosh, Miss Anne
MacKay, Rt Hon Andrew
Maclean, Rt Hon David
Maclennan, Rt Hon Robert
McLoughlin, Patrick
Madel, Sir David
Major, Rt Hon John
Malins, Humfrey
Maples, John
Mawhinney, Rt Hon Sir Brian
May, Mrs Theresa
Moore, Michael
Morgan, Alasdair (Galloway)
Norman, Archie
Oaten, Mark
O'Brien, Stephen (Eddisbury)
Ottaway, Richard
Paice, James
Paterson, Owen
Portillo, Rt Hon Michael
Prior, David
Randall, John
Rendel, David
Robathan, Andrew
Robertson, Laurence
Roe, Mrs Marion (Broxbourne)
Ross, William (E Lond'y)
Rowe, Andrew (Faversham)
Ruffley, David
Russell, Bob (Colchester)
St Aubyn, Nick
Sanders, Adrian
Sayeed, Jonathan
Shepherd, Richard
Simpson, Keith (Mid-Norfolk)
Smith, Sir Robert (W Ab'd'ns)
Soames, Nicholas
Spelman, Mrs Caroline
Spicer, Sir Michael
Spring, Richard
Stanley, Rt Hon Sir John
Streeter, Gary
Stunell, Andrew
Swayne, Desmond
Syms, Robert
Tapsell, Sir Peter
Taylor, Ian (Esher & Walton)
Taylor, John M (Solihull)
Taylor, Sir Teddy
Thomas, Simon (Ceredigion)
Tonge, Dr Jenny
Townend, John
Tredinnick, David
Trend, Michael
Tyler, Paul
Tyrie, Andrew
Viggers, Peter
Waterson, Nigel
Webb, Steve
Whitney, Sir Raymond
Whittingdale, John
Wigley, Rt Hon Dafydd
Wilkinson, John
Willetts, David
Willis, Phil
Wilshire, David
Winterton, Mrs Ann (Congleton)
Winterton, Nicholas (Macclesfield)
Yeo, Tim
Young, Rt Hon Sir George

Tellers for the Ayes:


Mr. Peter Atkinson and
Mr. Stephen Day.


NOES


Ainger, Nick
Alexander, Douglas
Allen, Graham
Anderson, Donald (Swansea E)
Anderson, Janet (Rossendale)
Ashton, Joe
Atkins, Charlotte
Austin, John
Barnes, Harry
Barron, Kevin
Battle, John
Bayley, Hugh
Beard, Nigel
Begg, Miss Anne
Benn, Hilary (Leeds C)
Benn, Rt Hon Tony (Chesterfield)
Benton, Joe
Bermingham, Gerald
Berry, Roger
Betts, Clive
Blackman, Liz
Blears, Ms Hazel
Blizzard, Bob
Boateng, Rt Hon Paul
Borrow, David
Bradley, Keith (Withington)
Bradley, Peter (The Wrekin)
Bradshaw, Ben
Brinton, Mrs Helen
Brown, Rt Hon Nick (Newcastle E)
Brown, Russell (Dumfries)
Browne, Desmond
Buck, Ms Karen
Burden, Richard
Burgon, Colin
Butler, Mrs Christine
Byers, Rt Hon Stephen
Caborn, Rt Hon Richard
Campbell, Mrs Anne (C'bridge)
Campbell, Ronnie (Blyth V)
Campbell-Savours, Dale
Cann, Jamie
Caplin, Ivor
Casale, Roger
Caton, Martin
Cawsey, Ian
Chapman, Ben (Wirral S)
Chaytor, David
Chisholm, Malcolm
Clapham, Michael
Clark, Rt Hon Dr David (S Shields)
Clark, Paul (Gillingham)
Clarke, Charles (Norwich S)
Clarke, Eric (Midlothian)
Clarke, Rt Hon Tom (Coatbridge)
Clelland, David
Clwyd, Ann
Coaker, Vernon
Coffey, Ms Ann
Cohen, Harry
Coleman, Iain
Colman, Tony
Connarty, Michael
Cook, Rt Hon Robin (Livingston)
Cooper, Yvette
Corbett, Robin
Corbyn, Jeremy
Corston, Jean
Cousins, Jim
Cox, Tom
Crausby, David
Cryer, Mrs Ann (Keighley)
Cryer, John (Hornchurch)
Cunningham, Rt Hon Dr Jack
(Copeland)
Cunningham, Jim (Cov'try S)
Curtis-Thomas, Mrs Claire
Dalyell, Tam
Darling, Rt Hon Alistair
Darvill, Keith
Davey, Valerie (Bristol W)
Davidson, Ian
Davies, Geraint (Croydon C)
Davis, Rt Hon Terry
(B'ham Hodge H)
Dawson, Hilton
Dean, Mrs Janet
Denham, John
Dismore, Andrew
Dobbin, Jim
Doran, Frank
Dowd, Jim
Drew, David
Dunwoody, Mrs Gwyneth
Eagle, Angela (Wallasey)
Eagle, Maria (L'pool Garston)
Edwards, Huw
Ellman, Mrs Louise
Ennis, Jeff
Field, Rt Hon Frank
Fisher, Mark
Fitzpatrick, Jim
Flint, Caroline
Flynn, Paul
Foster, Michael Jabez (Hastings)
Foster, Michael J (Worcester)
Fyfe, Maria
Gardiner, Barry
Gerrard, Neil
Gibson, Dr Ian
Gilroy, Mrs Linda
Godsiff, Roger
Goggins, Paul
Golding, Mrs Llin
Gordon, Mrs Eileen
Griffiths, Jane (Reading E)
Griffiths, Nigel (Edinburgh S)
Grocott, Bruce
Grogan, John
Gunnell, John
Hain, Peter
Hall, Patrick (Bedford)
Hamilton, Fabian (Leeds NE)
Hanson, David
Heal, Mrs Sylvia
Healey, John
Henderson, Doug (Newcastle N)
Henderson, Ivan (Harwich)
Hepburn, Stephen
Heppell, John
Hesford, Stephen
Hewitt, Ms Patricia
Hinchliffe, David
Hodge, Ms Margaret
Home Robertson, John
Hood, Jimmy
Hope, Phil
Hopkins, Kelvin
Howarth, Alan (Newport E)
Howells, Dr Kim
Hoyle, Lindsay
Hughes, Kevin (Doncaster N)
Humble, Mrs Joan
Hurst, Alan
Hutton, John
Iddon, Dr Brian
Illsley, Eric
Jackson, Ms Glenda (Hampstead)
Jackson, Helen (Hillsborough)
Jenkins, Brian
Johnson, Miss Melanie
(Welwyn Hatfield)
Jones, Rt Hon Barry (Alyn)
Jones, Mrs Fiona (Newark)
Jones, Helen (Warrington N)
Jones, Ms Jenny
(Wolverh'ton SW)
Jones, Jon Owen (Cardiff C)
Jones, Dr Lynne (Selly Oak)
Jones, Martyn (Clwyd S)
Jowell, Rt Hon Ms Tessa
Keeble, Ms Sally
Keen, Alan (Feltham & Heston)
Keen, Ann (Brentford & Isleworth)
Kelly, Ms Ruth
Kennedy, Jane (Wavertree)
Khabra, Piara S
Kidney, David
Kilfoyle, Peter
King, Andy (Rugby & Kenilworth)
Kumar, Dr Ashok
Ladyman, Dr Stephen
Lawrence, Mrs Jackie
Laxton, Bob
Lepper, David
Leslie, Christopher
Levitt, Tom
Lewis, Ivan (Bury S)
Lewis, Terry (Worsley)
Liddell, Rt Hon Mrs Helen
Linton, Martin
Lloyd, Tony (Manchester C)
Lock, David
McAllion, John
McAvoy, Thomas
McCabe, Steve
McCafferty, Ms Chris
McDonagh, Siobhain
McDonnell, John
McFall, John
McGuire, Mrs Anne
McIsaac, Shona
McKenna, Mrs Rosemary
Mackinlay, Andrew
McNamara, Kevin
McNulty, Tony
MacShane, Denis
Mactaggart, Fiona
McWalter, Tony
McWilliam, John
Mahon, Mrs Alice
Marsden, Gordon (Blackpool S)
Marsden, Paul (Shrewsbury)
Marshall, David (Shettleston)
Marshall, Jim (Leicester S)
Martlew, Eric
Meacher, Rt Hon Michael
Meale, Alan
Merron, Gillian
Michael, Rt Hon Alun
Michie, Bill (Shef'ld Heeley)
Miller, Andrew
Mitchell, Austin
Moffatt, Laura
Moonie, Dr Lewis
Moran, Ms Margaret
Morley, Elliot
Morris, Rt Hon Ms Estelle
(B'ham Yardley)
Morris, Rt Hon Sir John (Aberavon)
Mountford, Kali
Mudie, George
Murphy, Rt Hon Paul (Torfaen)
O'Brien, Bill (Normanton)
O'Hara, Eddie
Olner, Bill
O'Neill, Martin
Organ, Mrs Diana
Osborne, Ms Sandra
Palmer, Dr Nick
Pearson, Ian
Pickthall, Colin
Plaskitt, James
Pollard, Kerry
Pond, Chris
Pope, Greg
Pound, Stephen
Powell, Sir Raymond
Prentice, Ms Bridget (Lewisham E)
Prentice, Gordon (Pendle)
Primarolo, Dawn
Prosser, Gwyn
Purchase, Ken
Quin, Rt Hon Ms Joyce
Quinn, Lawrie
Radice, Rt Hon Giles
Rammell, Bill
Rapson, Syd
Reid, Rt Hon Dr John (Hamilton N)
Rooker, Rt Hon Jeff
Rooney, Terry
Ross, Ernie (Dundee W)
Rowlands, Ted
Roy, Frank
Ruane, Chris
Ruddock, Joan
Russell, Ms Christine (Chester)
Ryan, Ms Joan
Salter, Martin
Sarwar, Mohammad
Savidge, Malcolm
Sawford, Phil
Sedgemore, Brian
Shaw, Jonathan
Sheerman, Barry
Sheldon, Rt Hon Robert
Shipley, Ms Debra
Short, Rt Hon Clare
Simpson, Alan (Nottingham S)
Skinner, Dennis
Smith, Miss Geraldine
(Morecambe & Lunesdale)
Smith, Jacqui (Redditch)
Smith, John (Glamorgan)
Smith, Llew (Blaenau Gwent)
Snape, Peter
Soley, Clive
Southworth, Ms Helen
Squire, Ms Rachel
Steinberg, Gerry
Stevenson, George
Stewart, David (Inverness E)
Stewart, Ian (Eccles)
Stinchcombe, Paul
Stoate, Dr Howard
Strang, Rt Hon Dr Gavin
Straw, Rt Hon Jack
Stringer, Graham
Sutcliffe, Gerry
Taylor, Rt Hon Mrs Ann
(Dewsbury)
Taylor, David (NW Leics)
Temple-Morris, Peter
Thomas, Gareth (Clwyd W)
Timms, Stephen
Todd, Mark
Touhig, Don
Trickett, Jon
Truswell, Paul
Turner, Dennis (Wolverh'ton SE)
Turner, Dr Desmond (Kemptown)
Turner, Dr George (NW Norfolk)
Turner, Neil (Wigan)
Twigg, Derek (Halton)
Tynan, Bill
Vis, Dr Rudi
Walley, Ms Joan
Ward, Ms Claire
Wareing, Robert N
Watts, David
White, Brian
Whitehead, Dr Alan
Wicks, Malcolm
Williams, Rt Hon Alan
(Swansea W)
Williams, Alan W (E Carmarthen)
Williams, Mrs Betty (Conwy)
Wills, Michael
Winnick, David
Winterton, Ms Rosie (Doncaster C)
Woodward, Shaun
Woolas, Phil
Worthington, Tony
Wray, James
Wright, Anthony D (Gt Yarmouth)
Wright, Tony (Cannock)
Wyatt, Derek

Tellers for the Noes:


Mr. Mike Hall and
Mr. Robert Ainsworth.

Question accordingly negatived.

18 Jul 2000 : Column 280

New Clause 6

Married couples allowances


'The Chancellor of the Exchequer may by order introduce regulations to provide for increases in personal tax allowances to recognise married couples. Orders made under this section may only be made if a draft of the instrument containing the order has been laid and approved by resolution of the House of Commons.'.--[Mr. Ottaway.]

Brought up, and read the First time.


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