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Mr. Bercow: Will the Economic Secretary give way?

John Healey: Although the hon. Gentleman's Front Benchers are reluctant for me to give way, I shall of course do so.

Mr. Bercow: I am extremely grateful to the Economic Secretary. While he is dealing with the salient point raised by my hon. Friend the Member for Billericay (Mr. Baron), will he also reveal to the House what assessment he has made of the likely increase in take-up of means-tested benefits as a result of the extremely short-sighted stance that the Government have adopted?

John Healey: I have to be honest with the hon. Gentleman: I did not make that specific assessment as part of my preparations for dealing with the new clause.

Retaining the ISA and PEP 10 per cent. payable tax credit beyond April 2004 would unbalance the general package of reforms that we have put in place, which the hon. Member for Eddisbury described as the looming abolition of tax credits. Although he suggests that the ending of this payable tax credit will put off savers, especially those who are basic and lower rate taxpayers, from investing in equity ISAs, the average tax credit per person per year is only £25. For the majority, it translates into a reduction in tax benefit of less than that, and for more than 40 per cent. the reduction amounts to less than £10 a year. Two thirds will experience a reduction of payable tax credits amounting to less than £20 a year. Only 3 per cent. of basic rate taxpayers will experience a reduction in tax benefits amounting to more than £100. In recent times, a major factor in connection with confidence in equity investments has been the general state of the markets, not the threat of the ending of this payable tax credit.

After April 2004, ISA and PEP investors will still pay no income tax on the investment returns from their PEPs and ISAs. Other tax benefits, such as exemption from capital gains tax on long-term capital

1 Jul 2003 : Column 226

appreciation, and the fact that they do not have to return details of their PEPs and ISAs to the Inland Revenue, will remain attractive for many investors, including those who are lower and basic rate taxpayers.

For all those reasons, I am unable to accept the new clause. I hope that in the light of this useful debate, the hon. Gentleman will not press it to a vote; if he does, I shall have to ask my hon. Friends to vote it down.

3.45 pm

Mr. Stephen O'Brien: The debate has been useful and notable because hon. Members from several parties have contributed. That includes the curiously supportive as well as curiously critical contribution of the hon. Member for Yeovil (Mr. Laws). It was slightly "On the one hand, on the other". The hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) made a helpful contribution, and that description applies especially to the speeches of my hon. Friends. The figure of 14 million people has been mentioned, and lower income groups are targeted by another potential Government stealth tax. It has been said—not by me—that the Government's success over all income levels is now threatened. The ultimate issue was whether there would be a question mark over overall savings or shifts between different sorts of savings products. The Economic Secretary did not know. The last thing that Parliament should do is to risk diminishing savings; we should always try to enhance them. Removing section 76(1)(a) of the Finance Act 1998 and thereby retaining the 10 per cent. tax credit on the products that we are considering, especially for basic rate taxpayers, would be beneficial. The hon. Member for Banff and Buchan (Mr. Salmond) expressed that well. We give that priority and I urge hon. Members to support the new clause.

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

The House divided: Ayes 189, Noes 301.

Division No. 263
[3:46 pm


AYES


Ainsworth, Peter (E Surrey)
Allan, Richard
Amess, David
Atkinson, David (Bour'mth E)
Atkinson, Peter (Hexham)
Baker, Norman
Baldry, Tony
Barker, Gregory
Baron, John (Billericay)
Barrett, John
Beith, rh A. J.
Bellingham, Henry
Bercow, John
Beresford, Sir Paul
Boswell, Tim
Bottomley, rh Virginia (SW Surrey)
Brake, Tom (Carshalton)
Brazier, Julian
Breed, Colin
Brooke, Mrs Annette L.
Browning, Mrs Angela
Bruce, Malcolm
Burnett, John
Burns, Simon
Burnside, David
Burt, Alistair
Butterfill, John
Cable, Dr. Vincent
Calton, Mrs Patsy
Cameron, David
Campbell, Gregory (E Lond'y)
Campbell, rh Menzies (NE Fife)
Carmichael, Alistair
Cash, William
Chapman, Sir Sydney (Chipping Barnet)
Chidgey, David
Chope, Christopher
Clappison, James
Clarke, rh Kenneth (Rushcliffe)
Clifton-Brown, Geoffrey
Collins, Tim
Conway, Derek
Cormack, Sir Patrick
Cotter, Brian
Curry, rh David
Davey, Edward (Kingston)Davis, rh David (Haltemprice & Howden)
Djanogly, Jonathan
Dodds, Nigel
Doughty, Sue
Duncan, Peter (Galloway)
Duncan Smith, rh Iain
Evans, Nigel
Ewing, Annabelle
Fabricant, Michael
Fallon, Michael
Field, Mark (Cities of London & Westminster)
Flight, Howard
Flook, Adrian
Forth, rh Eric
Foster, Don (Bath)
Fox, Dr. Liam
Francois, Mark
Garnier, Edward
George, Andrew (St. Ives)
Gidley, Sandra
Gillan, Mrs Cheryl
Goodman, Paul
Grayling, Chris
Green, Damian (Ashford)
Green, Matthew (Ludlow)
Greenway, John
Grieve, Dominic
Gummer, rh John
Hague, rh William
Hancock, Mike
Harris, Dr. Evan (Oxford W & Abingdon)
Harvey, Nick
Hawkins, Nick
Heath, David
Heathcoat-Amory, rh David
Hendry, Charles
Hermon, Lady
Holmes, Paul
Horam, John (Orpington)
Howard, rh Michael
Howarth, Gerald (Aldershot)
Hunter, Andrew
Jack, rh Michael
Jenkin, Bernard
Johnson, Boris (Henley)
Keetch, Paul
Kennedy, rh Charles (Ross Skye & Inverness)
Key, Robert (Salisbury)
Kirkbride, Miss Julie
Kirkwood, Sir Archy
Knight, rh Greg (E Yorkshire)
Lamb, Norman
Lansley, Andrew
Laws, David (Yeovil)
Leigh, Edward
Letwin, rh Oliver
Lewis, Dr. Julian (New Forest E)
Liddell-Grainger, Ian
Lidington, David
Lilley, rh Peter
Llwyd, Elfyn
Loughton, Tim
Luff, Peter (M-Worcs)
McIntosh, Miss Anne
Mackay, rh Andrew
Maclean, rh David
McLoughlin, Patrick
Malins, Humfrey
Maples, John
Marsden, Paul (Shrewsbury & Atcham)
Maude, rh Francis
Mawhinney, rh Sir Brian
May, Mrs Theresa
Mitchell, Andrew (Sutton Coldfield)
Moore, Michael
Moss, Malcolm
Murrison, Dr. Andrew
Norman, Archie
Oaten, Mark (Winchester)
O'Brien, Stephen (Eddisbury)
Osborne, George (Tatton)
Ottaway, Richard
Page, Richard
Paice, James
Portillo, rh Michael
Price, Adam (E Carmarthen & Dinefwr)
Prisk, Mark (Hertford)
Pugh, Dr. John
Randall, John
Redwood, rh John
Reid, Alan (Argyll & Bute)
Robathan, Andrew
Robertson, Angus (Moray)
Robertson, Hugh (Faversham & M-Kent)
Robertson, Laurence (Tewk'b'ry)
Robinson, Peter (Belfast E)
Roe, Mrs Marion
Rosindell, Andrew
Ruffley, David
Russell, Bob (Colchester)
Salmond, Alex
Sanders, Adrian
Sayeed, Jonathan
Selous, Andrew
Shepherd, Richard
Simmonds, Mark
Simpson, Keith (M-Norfolk)
Smith, Sir Robert (W Ab'd'ns & Kincardine)
Soames, Nicholas
Spelman, Mrs Caroline
Spicer, Sir Michael
Spink, Bob (Castle Point)
Spring, Richard
Stanley, rh Sir John
Streeter, Gary
Stunell, Andrew
Syms, Robert
Tapsell, Sir Peter
Taylor, Ian (Esher)
Taylor, John (Solihull)
Taylor, Matthew (Truro)
Taylor, Dr. Richard (Wyre F)
Thomas, Simon (Ceredigion)
Thurso, John
Tonge, Dr. Jenny
Tredinnick, David
Trend, Michael
Trimble, rh David
Turner, Andrew (Isle of Wight)
Tyrie, Andrew
Viggers, Peter
Waterson, Nigel
Watkinson, Angela
Webb, Steve (Northavon)
Weir, Michael
Whittingdale, John
Wiggin, Bill
Willetts, David
Williams, Hywel (Caernarfon)
Winterton, Ann (Congleton)
Wishart, Pete
Young, rh Sir George
Younger-Ross, Richard

Tellers for the Ayes:


Mr. David Wilshire and
Mr. Mark Hoban


NOES


Adams, Irene (Paisley N)
Ainger, Nick
Ainsworth, Bob (Cov'try NE)
Alexander, Douglas
Allen, Graham
Anderson, Janet (Rossendale & Darwen)
Armstrong, rh Ms Hilary
Atherton, Ms Candy
Atkins, Charlotte
Austin, John
Bailey, Adrian
Baird, Vera
Banks, Tony
Barnes, Harry
Battle, John
Bayley, Hugh
Beard, Nigel
Beckett, rh Margaret
Begg, Miss Anne
Bell, Stuart
Bennett, Andrew
Benton, Joe (Bootle)
Berry, Roger
Best, Harold
Betts, Clive
Blackman, Liz
Blears, Ms Hazel
Blizzard, Bob
Borrow, David
Bradley, rh Keith (Withington)
Bradley, Peter (The Wrekin)
Bradshaw, Ben
Brennan, Kevin
Brown, Russell (Dumfries)
Buck, Ms Karen
Burden, Richard
Burgon, Colin
Burnham, Andy
Byers, rh Stephen
Campbell, Alan (Tynemouth)
Campbell, Mrs Anne (C'bridge)
Campbell, Ronnie (Blyth V)
Caplin, Ivor
Casale, Roger
Challen, Colin
Clapham, Michael
Clark, Mrs Helen (Peterborough)
Clark, Dr. Lynda (Edinburgh Pentlands)
Clarke, rh Tom (Coatbridge & Chryston)
Clarke, Tony (Northampton S)
Clelland, David
Clwyd, Ann (Cynon V)
Coffey, Ms Ann
Cohen, Harry
Coleman, Iain
Connarty, Michael
Cook, Frank (Stockton N)
Cook, rh Robin (Livingston)
Cooper, Yvette
Corbyn, Jeremy
Corston, Jean
Cousins, Jim
Cox, Tom (Tooting)
Cranston, Ross
Cruddas, Jon
Cryer, Ann (Keighley)
Cryer, John (Hornchurch)
Cummings, John
Cunningham, rh Dr. Jack (Copeland)
Cunningham, Jim (Coventry S)
Cunningham, Tony (Workington)
Dalyell, Tam
Davey, Valerie (Bristol W)
David, Wayne
Davidson, Ian
Davies, rh Denzil (Llanelli)
Davies, Geraint (Croydon C)
Davis, rh Terry (B'ham Hodge H)
Dawson, Hilton
Dean, Mrs Janet
Denham, rh John
Dhanda, Parmjit
Dismore, Andrew
Dobbin, Jim (Heywood)
Donohoe, Brian H.
Doran, Frank
Drew, David (Stroud)
Dunwoody, Mrs Gwyneth
Efford, Clive
Ellman, Mrs Louise
Etherington, Bill
Field, rh Frank (Birkenhead)
Fisher, Mark
Fitzsimons, Mrs Lorna
Follett, Barbara
Foster, rh Derek
Foster, Michael Jabez (Hastings & Rye)
Foulkes, rh George
George, rh Bruce (Walsall S)
Gerrard, Neil
Gilroy, Linda
Godsiff, Roger
Goggins, Paul
Griffiths, Jane (Reading E)
Griffiths, Nigel (Edinburgh S)
Griffiths, Win (Bridgend)
Grogan, John
Hain, rh Peter
Hall, Mike (Weaver Vale)
Hall, Patrick (Bedford)
Hamilton, David (Midlothian)
Hamilton, Fabian (Leeds NE)
Hanson, David
Harman, rh Ms Harriet
Harris, Tom (Glasgow Cathcart)
Havard, Dai (Merthyr Tydfil & Rhymney)
Healey, John
Henderson, Doug (Newcastle N)
Henderson, Ivan (Harwich)
Hendrick, Mark
Hepburn, Stephen
Heppell, John
Hesford, Stephen
Hewitt, rh Ms Patricia
Heyes, David
Hinchliffe, David
Hodge, Margaret
Hoey, Kate (Vauxhall)
Hood, Jimmy (Clydesdale)
Hoon, rh Geoffrey
Hopkins, Kelvin
Howarth, George (Knowsley N & Sefton E)
Howells, Dr. Kim
Hughes, Kevin (Doncaster N)
Humble, Mrs Joan
Hurst, Alan (Braintree)
Hutton, rh John
Iddon, Dr. Brian
Illsley, Eric
Ingram, rh Adam
Irranca-Davies, Huw
Jackson, Glenda (Hampstead & Highgate)
Jackson, Helen (Hillsborough)
Jenkins, Brian
Johnson, Miss Melanie (Welwyn Hatfield)
Jones, Helen (Warrington N)
Jones, Jon Owen (Cardiff C)
Jones, Lynne (Selly Oak)
Keeble, Ms Sally
Keen, Alan (Feltham)
Kemp, Fraser
Khabra, Piara S.
Kidney, David
Kilfoyle, Peter
King, Andy (Rugby)
King, Ms Oona (Bethnal Green & Bow)
Knight, Jim (S Dorset)
Kumar, Dr. Ashok
Ladyman, Dr. Stephen
Lammy, David
Lawrence, Mrs Jackie
Laxton, Bob (Derby N)
Lepper, David
Leslie, Christopher
Levitt, Tom (High Peak)
Lewis, Ivan (Bury S)
Lewis, Terry (Worsley)
Linton, Martin
Lloyd, Tony (Manchester C)
Love, Andrew
Lucas, Ian (Wrexham)
Luke, Iain (Dundee E)
Lyons, John (Strathkelvin)
McAvoy, Thomas
McCabe, Stephen
McCafferty, Chris
McDonagh, Siobhain
McDonnell, John
MacDougall, John
McFall, John
McGuire, Mrs Anne
McIsaac, Shona
McKechin, Ann
McKenna, Rosemary
Mackinlay, Andrew
McNulty, Tony
Mactaggart, Fiona
McWalter, Tony
Mahmood, Khalid
Mahon, Mrs Alice
Mallaber, Judy
Mandelson, rh Peter
Mann, John (Bassetlaw)
Marris, Rob (Wolverh'ton SW)
Marsden, Gordon (Blackpool S)
Marshall, David (Glasgow Shettleston)
Martlew, Eric
Meacher, rh Michael
Merron, Gillian
Michael, rh Alun
Milburn, rh Alan
Miller, Andrew
Mitchell, Austin (Gt Grimsby)
Moffatt, Laura
Moran, Margaret
Morgan, Julie
Mountford, Kali
Mudie, George
Mullin, Chris
Murphy, Denis (Wansbeck)
Murphy, Jim (Eastwood)
Naysmith, Dr. Doug
Norris, Dan (Wansdyke)
O'Brien, Bill (Normanton)
O'Hara, Edward
Olner, Bill
O'Neill, Martin
Palmer, Dr. Nick
Picking, Anne
Pickthall, Colin
Pike, Peter (Burnley)
Pollard, Kerry
Pope, Greg (Hyndburn)
Pound, Stephen
Prentice, Ms Bridget (Lewisham E)
Prentice, Gordon (Pendle)
Primarolo, rh Dawn
Prosser, Gwyn
Purchase, Ken
Quinn, Lawrie
Reed, Andy (Loughborough)
Reid, rh Dr. John (Hamilton N & Bellshill)
Robertson, John (Glasgow Anniesland)
Robinson, Geoffrey (Coventry NW)
Roche, Mrs Barbara
Rooney, Terry
Ross, Ernie (Dundee W)
Roy, Frank (Motherwell)
Ruane, Chris
Ruddock, Joan
Russell, Ms Christine (City of Chester)
Ryan, Joan (Enfield N)
Salter, Martin
Sarwar, Mohammad
Savidge, Malcolm
Sawford, Phil
Sedgemore, Brian
Shaw, Jonathan
Sheridan, Jim
Short, rh Clare
Singh, Marsha
Skinner, Dennis
Smith, rh Andrew (Oxford E)
Smith, rh Chris (Islington S & Finsbury)
Smith, Geraldine (Morecambe & Lunesdale)
Smith, Jacqui (Redditch)
Smith, John (Glamorgan)
Smith, Llew (Blaenau Gwent)
Southworth, Helen
Starkey, Dr. Phyllis
Steinberg, Gerry
Stevenson, George
Stewart, Ian (Eccles)
Stinchcombe, Paul
Stoate, Dr. Howard
Stringer, Graham
Stuart, Ms Gisela
Sutcliffe, Gerry
Tami, Mark (Alyn)
Taylor, Dari (Stockton S)
Thomas, Gareth (Clwyd W)
Tipping, Paddy
Touhig, Don (Islwyn)
Trickett, Jon
Truswell, Paul
Turner, Dennis (Wolverh'ton SE)
Turner, Dr. Desmond (Brighton Kemptown)
Turner, Neil (Wigan)
Twigg, Derek (Halton)
Tynan, Bill (Hamilton S)
Vaz, Keith (Leicester E)
Vis, Dr. Rudi
Walley, Ms Joan
Ward, Claire
Wareing, Robert N.
Watson, Tom (W Bromwich E)
Watts, David
White, Brian
Whitehead, Dr. Alan
Williams, rh Alan (Swansea W)
Williams, Betty (Conwy)
Winnick, David
Winterton, Ms Rosie (Doncaster C)
Wood, Mike (Batley)
Woodward, Shaun
Worthington, Tony
Wray, James (Glasgow Baillieston)
Wright, Anthony D. (Gt Yarmouth)
Wright, David (Telford)
Wright, Tony (Cannock)
Wyatt, Derek

Tellers for the Noes:


Jim Fitzpatrick and
Paul Clark

Question accordingly negatived.

1 Jul 2003 : Column 230

New Clause 2

Debits and Credits Treated as Relating to Capital Expenditure


'.—(1) Paragraph 14 of Schedule 9 to the Finance Act 1996 (debits and credits treated as relating to capital expenditure) is amended as follows:
(2) After subparagraph (1) insert—
"(1A) This paragraph also applies where any debit or credit given by an authorised accounting method for any accounting period in respect of a loan relationship of a company is allowed by generally accepted accounting practice to be treated, in the accounts of the company, as an amount brought into account in determining the value of a financial asset.".
(3) After subparagraph (3) insert—
"(4) For the purpose of subparagraph (1A) above a 'financial asset' is as defined by Financial Reporting Standard 5 issued in April 1994 by the Accounting Standards Board, as from time to time amended.".'.—[Mr. Flight.]

Brought up, and read the First time.


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