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The Temporary Chairman (Mr. Joe Benton): Order. The hon. Gentleman can continue his party competition outside the Chamber. I should like us to return to clause 26.

Mr. Davey: I am grateful for that remonstration, Mr. Benton. I was just trying to help the hon. Member for Buckingham (Mr. Bercow), but of course I will return to the matter in hand. The Committee will be pleased to learn that I was just coming to a conclusion.

The Government did not adopt our proposals for income tax increases instead of national insurance increases simply because of the little card that they had at the 1997 election. It is about grubby politics, and not about what is best, fairest and most efficient for this country, and I deeply regret that.

Dawn Primarolo: In advancing his views, the hon. Member for Kingston and Surbiton (Mr. Davey) often talks a good talk, but he does not always follow through. It is a regular claim of the Liberal Democrats that they thought of an idea first, but when looking at this Government's investment, particularly in the health service, we find that we have, at every point, invested more than the Liberal Democrats wanted, and more than would have been yielded by their 1p on income tax or any of their other little ruses.

The hon. Gentleman says that he does not disagree with the Government that extra money is needed for the NHS, but he disagrees about the method of investment, and he focuses tonight on income tax rates. He says that he would have liked to table amendments to raise the 22p tax rate to 23p and to increase to 50 per cent. the tax on annual incomes of £100,000 or more. What is extraordinary is that he tabled an amendment, which was not selected, to put an extra 1p on the 22p rate, but he tabled no amendment on a 50 per cent. rate for incomes of £100,000 or more.

The hon. Member for Epsom and Ewell (Chris Grayling), who intervened on the hon. Gentleman, made the point, which the hon. Gentleman did not seem to understand, that because of the freezing of allowances, pensioners on higher incomes will be contributing, but when we consider the distribution of income among the small number of pensioners who pay tax on their fixed income, we see that the vast majority would be hit by the 1p rise in the 22p rate which the hon. Gentleman advances.

As we have said a number of times, the Government's view is that ever since Beveridge, the national insurance system has depended, rightly, on the principle that people contribute while in work for the benefits and services that they need when they cannot work—a sound principle that is being continued by this Government.

6.45 pm

Chris Grayling: I suspect that this point is symptomatic of the Liberal Democrats' ability to change their story according to circumstance, but is the Minister

8 May 2002 : Column 199

aware that the 1p on income tax to which she refers was, at the last general election, designed to be spent entirely on education? I am therefore slightly at a loss as to how the hon. Member for Kingston and Surbiton (Mr. Davey) relates that 1p to the health service tonight.

Dawn Primarolo: I am grateful for the hon. Gentleman's prompting. I was going to come to that point next, but I also wanted to make a point about savings. The hon. Member for Kingston and Surbiton talks about pensioners who have savings, but he makes no proposals in his speech or in any of the documents that the Liberal Democrats have produced to change the taxation rates on savings, which would be an issue for pensioners.

The point made by the hon. Member for Epsom and Ewell is also very interesting. The Government have specifically said that the rise in the national insurance rate will directly contribute to extra spending in the five-year plan for the NHS. The Liberal Democrats have put together a package of amendments on tax, and they spend the money everywhere. They do not match the extra spending that the Government are giving to the NHS; nor do they match our spending on education. Those amendments are just convenient little soundbites in which the Liberal Democrats fail to do precisely what they have implored the Government to do—be direct about what tax is being raised and what it will be spent on.

The Liberal Democrats then come up with the most extraordinary proposition. Income tax is an annual tax; it has to be renewed annually. Those who vote against this clause seek to prevent the Government from setting any rates for income tax, at a cost to the Exchequer of £102 billion this year and £117 billion next year. The hon. Gentleman needs to decide how he wishes to engage in this debate. My right hon. Friend the Financial Secretary said earlier that much of the Liberal Democrats' engagement in debates is not designed for a sensible discussion of the way forward; it is designed so that they can give the soundbites that will go into their "Focus" magazines to misrepresent the true choices facing the people of this country.

The Government say that a comprehensive health service, free at the point of need, will be funded through the Beveridge principles. We also say that we need more investment in our public services, and with all the work that we have undertaken to build a stable economic framework for growth and for sustainable public services, what is required now is a freeze on allowances and the setting of the tax rates this year at 10p, 22p and 40p again, as we promised at the election.

We said that we would use the tax credit system to help those in greatest need, to recognise the burdens and extra expenses of having children and to ensure that revenue is put aside for sustained investment, year on year, in the NHS to give us the first-class service that we need. It is about time that the Liberal Democrats stopped playing around with their 1p and faced up to the true magnitude of the investment in our public services that is necessary to make them first class. On that basis, I commend the clause to the Committee.

Mr. Edward Davey: That was a disappointing reply from the Paymaster General, who chose not to mention the fact that 60 per cent. of pensioners on low and modest incomes would not be hit by our proposals. She could

8 May 2002 : Column 200

have told the Committee that under parliamentary procedures it is impossible to table an amendment to increase the rate of income tax.

Dawn Primarolo: Perhaps the hon. Gentleman could explain why he tabled an amendment to increase 22p to 23p, even though it was not selected for debate.

Mr. Davey: The amendment was included on the Order Paper so that people could be clear about our policy. Having taken advice from the Clerk, I knew when I tabled it that it was not selectable; I hope that that answers the Paymaster General's point. We want to get our policy on the record. Unfortunately, parliamentary procedures prevent some amending of expenditure and tax Bills—I am very much against those procedures—which means that one has to try to make one's point in other ways, which is what we did. The Paymaster General therefore does not have a strong case.

The Paymaster General and the Financial Secretary share an antipathy to "Focus" newsletters, which have been effective in Brent and Bristol, where Liberal Democrats made net gains last Thursday—[Interruption.]

Dawn Primarolo: What irritates us so much is the fact that, in many of our constituencies, Liberal Democrats campaign locally on not increasing taxes and cutting public services, but in Committee their representatives have the audacity to argue exactly the opposite.

Mr. Davey: There are some areas where council tax—an unfair tax supported by the Government and the Conservatives who introduced it—is too high and hits pensioners. Our Liberal Democrat colleagues around the country are right to campaign both to replace council tax and to cut it. In the House, we have argued for increases in fair taxes that spread the burden of the cost of paying for public services, and we shall continue to do so. That proposal is now before the Committee, which should consider whether it supports increases in the health service budget funded by an inefficient, unfair mechanism or increases funded by a fair and efficient method. I advise Committee members not to support the clause, and urge them to join the Liberal Democrats in the lobby to vote for a fair and efficient way of raising money for our health service.

Question put, That the clause stand part of the Bill:—

The Committee divided: Ayes 452, Noes 53.

Division No. 227
[6.52 pm


Ainger, Nick
Ainsworth, Peter (E Surrey)
Alexander, Douglas
Allen, Graham
Amess, David
Ancram, Rt Hon Michael
Anderson, Rt Hon Donald
(Swansea E)
Armstrong, Rt Hon Ms Hilary
Atherton, Ms Candy
Atkins, Charlotte
Atkinson, David (Bour'mth E)
Atkinson, Peter (Hexham)
Austin, John
Bailey, Adrian
Baird, Vera
Barker, Gregory
Barnes, Harry
Baron, John
Bayley, Hugh
Beard, Nigel
Beckett, Rt Hon Margaret
Beggs, Roy
Bellingham, Henry
Bennett, Andrew
Bercow, John
Beresford, Sir Paul
Berry, Roger
Best, Harold
Betts, Clive
Blackman, Liz
Blears, Ms Hazel
Blizzard, Bob
Blunt, Crispin
Boateng, Rt Hon Paul
Borrow, David
Boswell, Tim
Bottomley, Peter (Worthing W)
Bottomley, Rt Hon Virginia
Bradley, Rt Hon Keith (Withington)
Bradley, Peter (The Wrekin)
Bradshaw, Ben
Brady, Graham
Brazier, Julian
Brennan, Kevin
Brown, Russell (Dumfries)
Browning, Mrs Angela
Bryant, Chris
Buck, Ms Karen
Burden, Richard
Burgon, Colin
Burnham, Andy
Burns, Simon
Burnside, David
Burt, Alistair
Butterfill, John
Caborn, Rt Hon Richard
Cairns, David
Campbell, Alan (Tynemouth)
Campbell, Mrs Anne (C'bridge)
Caplin, Ivor
Casale, Roger
Cash, William
Challen, Colin
Chapman, Ben (Wirral S)
Chapman, Sir Sydney
(Chipping Barnet)
Chaytor, David
Chope, Christopher
Clapham, Michael
Clappison, James
Clark, Mrs Helen (Peterborough)
Clark, Dr Lynda
(Edinburgh Pentlands)
Clark, Paul (Gillingham)
Clarke, Rt Hon Charles
(Norwich S)
Clarke, Rt Hon Tom (Coatbridge)
Clarke, Tony (Northampton S)
Clelland, David
Clwyd, Ann
Coaker, Vernon
Coffey, Ms Ann
Cohen, Harry
Colman, Tony
Connarty, Michael
Conway, Derek
Cook, Frank (Stockton N)
Cook, Rt Hon Robin (Livingston)
Cooper, Yvette
Cormack, Sir Patrick
Corston, Jean
Cousins, Jim
Cran, James
Crausby, David
Cruddas, Jon
Cryer, John (Hornchurch)
Cunningham, Jim (Cov'try S)
Cunningham, Tony (Workington)
Curry, Rt Hon David
Curtis–Thomas, Mrs Claire
Dalyell, Tam
Davey, Valerie (Bristol W)
David, Wayne
Davidson, Ian
Davies, Rt Hon Denzil (Llanelli)
Davies, Geraint (Croydon C)
Davies, Quentin (Grantham)
Davis, Rt Hon David (Haltemprice)
Davis, Rt Hon Terry
(B'ham Hodge H)
Dawson, Hilton
Dean, Mrs Janet
Dhanda, Parmjit
Djanogly, Jonathan
Dobbin, Jim
Dobson, Rt Hon Frank
Dodds, Nigel
Donaldson, Jeffrey M
Donohoe, Brian H
Doran, Frank
Dorrell, Rt Hon Stephen
Dowd, Jim
Drew, David
Drown, Ms Julia
Duncan, Alan (Rutland & Melton)
Duncan, Peter (Galloway)
Duncan Smith, Rt Hon Iain
Dunwoody, Mrs Gwyneth
Eagle, Angela (Wallasey)
Eagle, Maria (L'pool Garston)
Edwards, Huw
Efford, Clive
Ellman, Mrs Louise
Ennis, Jeff
Evans, Nigel
Fabricant, Michael
Fallon, Michael
Field, Mark (Cities of London)
Fisher, Mark
Fitzpatrick, Jim
Fitzsimons, Mrs Lorna
Flight, Howard
Flint, Caroline
Flook, Adrian
Flynn, Paul
Follett, Barbara
Forth, Rt Hon Eric
Foster, Michael (Worcester)
Foster, Michael Jabez (Hastings)
Foulkes, George
Fox, Dr Liam
Francois, Mark
Gardiner, Barry
Garnier, Edward
George, Rt Hon Bruce (Walsall S)
Gerrard, Neil
Gibb, Nick
Gibson, Dr Ian
Gillan, Mrs Cheryl
Gilroy, Linda
Godsiff, Roger
Goggins, Paul
Goodman, Paul
Gray, James
Grayling, Chris
Green, Damian (Ashford)
Grieve, Dominic
Griffiths, Jane (Reading E)
Griffiths, Win (Bridgend)
Grogan, John
Gummer, Rt Hon John
Hague, Rt Hon William
Hain, Rt Hon Peter
Hall, Mike (Weaver Vale)
Hall, Patrick (Bedford)
Hamilton, Fabian (Leeds NE)
Hammond, Philip
Hanson, David
Harris, Tom (Glasgow Cathcart)
Havard, Dai
Hawkins, Nick
Hayes, John
Heald, Oliver
Heathcoat–Amory, Rt Hon David
Henderson, Doug (Newcastle N)
Henderson, Ivan (Harwich)
Hendrick, Mark
Hepburn, Stephen
Heyes, David
Hill, Keith
Hinchliffe, David
Hoban, Mark
Hood, Jimmy
Hoon, Rt Hon Geoffrey
Hope, Phil
Hopkins, Kelvin
Horam, John
Howard, Rt Hon Michael
Howarth, George (Knowsley N)
Howarth, Gerald (Aldershot)
Howells, Dr Kim
Hughes, Kevin (Doncaster N)
Hurst, Alan
Hutton, Rt Hon John
Illsley, Eric
Jack, Rt Hon Michael
Jackson, Helen (Hillsborough)
Jackson, Robert (Wantage)
Jamieson, David
Jenkin, Bernard
Jenkins, Brian
Johnson, Alan (Hull W & Hessle)
Johnson, Boris (Henley)
Jones, Helen (Warrington N)
Jones, Jon Owen (Cardiff C)
Jones, Kevan (N Durham)
Jones, Lynne (Selly Oak)
Joyce, Eric
Kaufman, Rt Hon Gerald
Keeble, Ms Sally
Keen, Alan (Feltham & Heston)
Keen, Ann (Brentford & Isleworth)
Kelly, Ruth
Kemp, Fraser
Key, Robert
Khabra, Piara S
Kidney, David
Kilfoyle, Peter
King, Andy (Rugby & Kenilworth)
King, Ms Oona (Bethnal Green)
Kirkbride, Miss Julie
Knight, Rt Hon Greg (E Yorkshire)
Knight, Jim (S Dorset)
Kumar, Dr Ashok
Ladyman, Dr Stephen
Laing, Mrs Eleanor
Lait, Mrs Jacqui
Lammy, David
Lansley, Andrew
Lawrence, Mrs Jackie
Laxton, Bob
Lazarowicz, Mark
Leigh, Edward
Lepper, David
Leslie, Christopher
Letwin, Oliver
Levitt, Tom
Lewis, Ivan (Bury S)
Lewis, Dr Julian (New Forest E)
Lewis, Terry (Worsley)
Liddell, Rt Hon Mrs Helen
Liddell–Grainger, Ian
Lidington, David
Lilley, Rt Hon Peter
Linton, Martin
Lloyd, Tony
Loughton, Tim
Love, Andrew
Lucas, Ian
Luff, Peter
Lyons, John
McAvoy, Thomas
McCabe, Stephen
McDonagh, Siobhain
MacDonald, Calum
McDonnell, John
MacDougall, John
McFall, John
McGuire, Mrs Anne
McIntosh, Miss Anne
McIsaac, Shona
MacKay, Rt Hon Andrew
McKechin, Ann
Mackinlay, Andrew
Maclean, Rt Hon David
McLoughlin, Patrick
McNamara, Kevin
McNulty, Tony
Mactaggart, Fiona
McWalter, Tony
McWilliam, John
Mahon, Mrs Alice
Mallaber, Judy
Mandelson, Rt Hon Peter
Mann, John
Marsden, Gordon (Blackpool S)
Marshall, Jim (Leicester S)
Marshall–Andrews, Robert
Martlew, Eric
Mates, Michael
Maude, Rt Hon Francis
Mawhinney, Rt Hon Sir Brian
May, Mrs Theresa
Meacher, Rt Hon Michael
Meale, Alan
Mercer, Patrick
Merron, Gillian
Michael, Rt Hon Alun
Milburn, Rt Hon Alan
Miliband, David
Miller, Andrew
Mole, Chris
Moonie, Dr Lewis
Moran, Margaret
Morley, Elliot
Moss, Malcolm
Mountford, Kali
Mullin, Chris
Murphy, Denis (Wansbeck)
Murphy, Jim (Eastwood)
Murphy, Rt Hon Paul (Torfaen)
Murrison, Dr Andrew
Naysmith, Dr Doug
Norman, Archie
Norris, Dan
O'Brien, Bill (Normanton)
O'Brien, Mike (N Warks)
O'Brien, Stephen (Eddisbury)
O'Hara, Edward
Olner, Bill
O'Neill, Martin
Organ, Diana
Osborne, George (Tatton)
Ottaway, Richard
Page, Richard
Palmer, Dr Nick
Paterson, Owen
Pearson, Ian
Perham, Linda
Picking, Anne
Pickles, Eric
Pickthall, Colin
Pike, Peter
Plaskitt, James
Pond, Chris
Pope, Greg
Pound, Stephen
Prentice, Ms Bridget (Lewisham E)
Prentice, Gordon (Pendle)
Prescott, Rt Hon John
Primarolo, Dawn
Prisk, Mark
Prosser, Gwyn
Purchase, Ken
Purnell, James
Quinn, Lawrie
Rammell, Bill
Randall, John
Rapson, Syd
Redwood, Rt Hon John
Reed, Andy (Loughborough)
Robathan, Andrew
Robertson, Hugh (Faversham)
Robertson, John
(Glasgow Anniesland)
Robertson, Laurence (Tewk'b'ry)
Robinson, Peter (Belfast E)
Roche, Mrs Barbara
Rooney, Terry
Rosindell, Andrew
Ross, Ernie
Roy, Frank
Ruddock, Joan
Ruffley, David
Russell, Ms Christine (Chester)
Salter, Martin
Savidge, Malcolm
Sedgemore, Brian
Shaw, Jonathan
Sheerman, Barry
Shephard, Rt Hon Mrs Gillian
Sheridan, Jim
Shipley, Ms Debra
Simmonds, Mark
Simon, Siôn
Simpson, Alan (Nottingham S)
Simpson, Keith (Mid–Norfolk)
Singh, Marsha
Skinner, Dennis
Smith, Rt Hon Andrew (Oxford E)
Smith, Angela (Basildon)
Smith, John (Glamorgan)
Smith, Llew (Blaenau Gwent)
Smyth, Rev Martin (Belfast S)
Soley, Clive
Southworth, Helen
Spelman, Mrs Caroline
Spicer, Sir Michael
Spink, Bob
Spring, Richard
Stanley, Rt Hon Sir John
Starkey, Dr Phyllis
Steen, Anthony
Stevenson, George
Stewart, Ian (Eccles)
Stinchcombe, Paul
Stoate, Dr Howard
Streeter, Gary
Sutcliffe, Gerry
Swayne, Desmond
Swire, Hugo
Syms, Robert
Tami, Mark
Tapsell, Sir Peter
Taylor, Ms Dari (Stockton S)
Taylor, David (NW Leics)
Taylor, John (Solihull)
Taylor, Sir Teddy
Thomas, Gareth (Clwyd W)
Thomas, Gareth R (Harrow W)
Timms, Stephen
Tipping, Paddy
Todd, Mark
Touhig, Don
Trend, Michael
Trickett, Jon
Truswell, Paul
Turner, Andrew (Isle of Wight)
Turner, Dennis (Wolverh'ton SE)
Turner, Neil (Wigan)
Twigg, Derek (Halton)
Twigg, Stephen (Enfield)
Tynan, Bill
Tyrie, Andrew
Vaz, Keith
Viggers, Peter
Vis, Dr Rudi
Walley, Ms Joan
Walter, Robert
Ward, Ms Claire
Waterson, Nigel
Watkinson, Angela
Watson, Tom
Watts, David
White, Brian
Whitehead, Dr Alan
Whittingdale, John
Wicks, Malcolm
Widdecombe, Rt Hon Miss Ann
Wiggin, Bill
Willetts, David
Williams, Rt Hon Alan
(Swansea W)
Wills, Michael
Wilshire, David
Winnick, David
Winterton, Mrs Ann (Congleton)
Winterton, Nicholas (Macclesfield)
Winterton, Ms Rosie (Doncaster C)
Worthington, Tony
Wray, James
Wright, Anthony D (Gt Yarmouth)
Wright, David (Telford)
Wright, Tony (Cannock)
Wyatt, Derek
Yeo, Tim
Young, Rt Hon Sir George

Tellers for the Ayes:

Mr. John Heppell and
Mr. Graham Stringer.


Allan, Richard
Baker, Norman
Barrett, John
Beith, Rt Hon A J
Brake, Tom
Brooke, Mrs Annette L
Bruce, Malcolm
Cable, Dr Vincent
Calton, Mrs Patsy
Campbell, Rt Hon Menzies
(NE Fife)
Carmichael, Alistair
Chidgey, David
Cotter, Brian
Davey, Edward (Kingston)
Doughty, Sue
Ewing, Annabelle
Gidley, Sandra
Green, Matthew (Ludlow)
Harris, Dr Evan (Oxford W)
Harvey, Nick
Heath, David
Holmes, Paul
Hughes, Simon (Southwark N)
Jones, Nigel (Cheltenham)
Keetch, Paul
Kennedy, Rt Hon Charles
(Ross Skye & Inverness W)
Kirkwood, Archy
Lamb, Norman
Laws, David
Llwyd, Elfyn
Marsden, Paul (Shrewsbury)
Moore, Michael
Oaten, Mark
Öpik, Lembit
Page, Richard
Price, Adam
Pugh, Dr John
Reid, Alan (Argyll & Bute)
Rendel, David
Robertson, Angus (Moray)
Salmond, Alex
Sanders, Adrian
Smith, Sir Robert (W Ab'd'ns)
Stunell, Andrew
Taylor, Matthew (Truro)
Thomas, Simon (Ceredigion)
Tyler, Paul
Webb, Steve
Weir, Michael
Williams, Hywel (Caernarfon)
Willis, Phil
Wishart, Pete
Younger–Ross, Richard

Tellers for the Noes:

Bob Russell and
John Thurso.

Question accordingly agreed to.

8 May 2002 : Column 204

Clause 26 ordered to stand part of the Bill.

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