Clause 42. — (Selective Employment Tax.)

Orders of the Day — Finance Bill – in the House of Commons at 12:00 am on 29th June 1966.

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4.17 p.m.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

The next Amendment selected is Amendment No. 34, page 48, line 27, at end insert: Provided always that the said amount shall be one penny in the case of those persons set out in Parts II and III of Schedule 10 to this Act. There is a series of Amendments which go with it:

Amendment No. 147, in page 48, line 27, at end insert: Provided that in respect of any person who is deaf, the tax shall be one shilling. Amendment No. 29, in page 48, line 27, at end insert: Provided that if that person worked less than twenty-one hours during that week, the amount shall be one shilling Amendment No. 30, in page 48, line 27, at end insert: Provided that if that person is aged over sixty-five if a man or over sixty if a woman the amount shall be one shilling. Amendment No. 31, in page 48, line 27, at end insert: Provided that in respect of any person who has reached the age of 65, the tax shall be one shilling. Amendment No. 32, in page 48, line 27, at end insert: Provided that in respect of any person who is registered as disabled the tax shall be one shilling. Amendment No. 33, in page 48, line 27, at end insert:

PART II
Employees of the following:—
51. Charities, namely organisations which are wholly charitable and exempt from income tax
2. Religious organisations
3. Educational establishments
4. (a) Nursing and convalescent homes
(b) Private hospitals
(c) Old people's homes
105. Disabled, incapacitated and similar persons requiring a whole or part-time nurse or help
6. Organisations for the promotion or study of science, literature or the arts.

Provided that in respect of any person who is employed for less than twelve hours in a week, the tax for that week shall be one shilling.

Amendment No. 35, in page 48, line 27, at end insert: Provided that in the case of disabled persons the foregoing amount shall be sixpence.

Amendment No. 37, in page 48, line 27, at end insert: Provided that in the case of persons who are employed for between eight and twenty hours a week the tax shall be at one-half of the above-mentioned amounts and in the case of persons employed between twenty and thirty hours a week the tax shall be at the rate of three-quarters of the above amounts.

Amendment No. 39, in page 48, line 27, at end insert: Provided that in the case of disabled persons within the meaning of the Disabled Persons Employment Act 1944, the tax shall be one penny.

Amendment No. 40, in page 48, line 27, at end insert: Provided that in respect of any person who is employed by a registered theatrical employer the tax shall two shillings.

Amendment No. 161, in page 48, line 27, at end insert: Provided that if that person worked less than twenty-one hours during that week, the foregoing amounts shall be halved.

Amendment No. 175, in page 48, line 27, at end insert: Provided that in respect to any person who is blind the tax shall be one shilling.

Amendment No. 220, in page 48, line 27, at end insert: Provided that in respect of any person who is employed by a registered theatrical employer in a theatre outside the Cities of London and Westminster the tax shall be eight shillings.

Amendment No. 361, in page 48, line 27, at end insert: Provided that in respect of any person who is employed by a club which is a registered society within the meaning of the Industrial and Provident Societies Act 1893 or the Friendly Societies Act 1896, the amount shall be one shilling.

Amendment No. 73, in Schedule 10, page 103, line 33, at end add:

PART III
The following employees:—
15(a) Disabled and incapacitated persons
(b) Part-time workers for less than 20 hours per week
(c) Men over 65 years of age and women over 60 years.

Since those Amendments were selected, there has appeared on today's Notice Paper, on page 1020, an Amendment in the name of the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter)—in page 48, line 27, at end insert: Provided always that the said amount shall be one penny in the case of a person who is in receipt of a relevant pension under the National Finance Acts 1946 to 1966— which inadvertently and inaccurately has been starred. I think that it would be appropriate for that Amendment, which, in fact supersedes an earlier Amendment, Amendment No. 109—in page 48, line 27, at end insert: Provided however that if that person is in receipt of a retirement pension under the National Insurance Acts 1946 to 1966, the tax shall not be payable in respect of that person— which was out of order, to be added to those which can be discussed with No. 34.

Photo of Mr Geoffrey Rhodes Mr Geoffrey Rhodes , Newcastle upon Tyne East

On a point of order. In the course of the last meeting of the Committee, the hon. Member for Tynemouth (Dame Irene Ward) stated that I had attacked the Selective Employment Tax outside this Chamber but had refrained from doing so in this Chamber. It was further suggested by the hon. Lady that such behaviour was habitual on my part.

I wish to state that I have made no such speech on the tax outside this chamber. The one speech which I have made in this matter was made in the House last Thursday and is recorded in cols. 1013 to 1020 of HANSARD for 23rd June.

4.30 p.m.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

I am grateful to the hon. Member for giving me notice that he would make this personal statement. [Interruption.] I was about to apologise and say how sorry I was. The hon. Member made his speech subsequent to the one which I read in a paper in the North of England some time ago.

I apologise. I did not notice that the hon. Member had spoken that night. I hope that he will accept this and will feel comforted by the fact that he is now one up on me. But he does this in the North of England quite often. I noted that he voted for the Selective Employment Tax in the specific Division. I am sorry that I had not noticed he had made the speech, and I hope that he will accept this apology——

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

I am only apologising, Sir Eric.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

We cannot pursue the matter further.

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

On a point of order. You have called Amendment No. 34, Sir Eric, which I will shortly present to the Committee, but you have also said that 15, and now 16, other Amendments are to be discussed with it. The usual phrase is "for the convenience of the Committee". I would like to make it clear, Sir Eric, that it is most inconvenient, certainly to this side of the Committee, to discuss these Amendments in this way. There are Amendments for the blind, the deaf and the disabled, which certainly in our view should be separately discussed. Perhaps you would make it clear, Sir Eric, that this is a matter of selection by the Chair in which you have overruled the protests that have been put to you.

Perhaps you will take notice, Sir Eric, that we regard the selection of 10 new Clauses out of 60 on the Order Paper as quite unacceptable. [HON. MEMBERS: "Hear, hear."]

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

Further to that point of order. I should like to say a brief word, Sir Eric, about the selection of the social service new Clauses. You will, I think, agree that this year, when there are no Clauses in the Bill dealing with social service matters but when Clause 42 adds burdens to many sections of the community, such as the old, there is a strong case for full opportunities being given to deploy new social service Clauses during discussion of the Bill.

I calculate that of 22 new Clauses which have been tabled five have been selected and two others have been selected for discussion with one of those five. I think you will agree, Sir Eric, that this is a very small proportion of social service Clauses. For example, there will be no opportunity whatever to discuss age relief, on which a number of new Clauses have been put down.

As for the disabled, the selection of new Clause 11 with new Clause 55 and of new Clause 30 will give only a very limited opportunity to debate specific aspects of tax relief for the elderly. May I respectfully ask you at least to give us a chance to deploy the full case under new Clause 12?

My final point concerns new Clause 10, which deals with tax relief on medical insurance schemes and which appears in the names of myself and a number of my hon. Friends, and also new Clause 48, which deals with family covenant schemes. New Clause 10 concerns a subject which has not been discussed for a good many years, and I think I am right in saying that new Clause 48 is something new which has not been discussed in this form in the House of Commons before. In view of these points, I hope that it will be possible, Sir Eric, for you to reconsider your selection of the social service new Clauses.

Photo of Mr Geoffrey Hirst Mr Geoffrey Hirst , Shipley

Further to that point of order——

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

It might be convenient if I reply to those two points of order. As the Committee will be aware, the matter of selection of both Amendments and new Clauses is entirely for the Chair, and it is quite inappropriate to criticise the Chair's selection. At the same time, since the practice began of putting up a provisional selection, the Chair has always been prepared, between the time of putting up the notice in the Lobby and the sitting of the Committee, to listen to representations made by hon. Members.

I think that the right hon. Member for Enfield, West (Mr. Iain Macleod) is in error. Amendment No. 34, which is in his name and is being called, is, in my view, correctly associated with all the other Amendments, none of which are Official Opposition Amendments but are put down by Private Members, back benchers, on both sides of the Committee. I have not received any representation from any such Member that there was any inconvenience in their Amendments being discussed with Amendment No. 34. On the contrary, I am quite sure that it will provide a much more satisfactory debate if all those Amendments are discussed together and replied to. As I have said before, if any hon. Member wishes to have a separate Division and makes a good case for a separate Division for any of them, I shall be quite prepared to listen to such representations.

With regard to what the right hon. Member has said about new Clauses, he is again in error. The number of new Clauses provisionally selected this year bears precisely the same proportion to the total number of new Clauses on the Order Paper as was the case last year, the year before and in previous years. There is obviously the greatest difficulty in selecting new Clauses. Every hon. Member who puts one down attaches great importance to his own ideas. I will bear in mind what the hon. Member for Somerset, North (Mr. Dean) has said and consider whether any further selection in necessary, but I cannot allow the matter to be debated.

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

On a point of order, Sir Eric. I refer to Amendment No. 363 which you were kind enough to indicate a moment or two ago you would be disposed to allow to be discussed with Amendment No. 34. As you have said, Sir Eric. Amendment No. 363 is erroneously starred, but I shall be grateful if I might at the same time draw your attention to the fact that it has also had an unhappy time in being misprinted in two words. "Relevant" in the second line should obviously be "retirement", and "Finance" should, equally obviously, be "Insurance". I acquit the Table of any blame. I am quite certain that the blame lies much nearer home in respect of my own calligraphy.

In view of what you have said in general, Sir Eric, may I submit that Amendment No. 363, which raises a distinct point and one of considerable importance, is one which you might see fit to select, if necessary, for Division?

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

I am obliged. It might be for the convenience of the Committee, while the right hon. Gentleman is correcting the phraseology of his Amendment, to mention one other correction that ought to be made. The dates are wrong. "1946 to 1966" should be "1965 and 1966".

Photo of Sir Raymond Gower Sir Raymond Gower , Barry

May I raise a slightly different point, Sir Eric? I appreciate that after discussion of so many Amendments together it would be without precedent for them to be followed by about 12 or more Divisions. On the other hand, you will note that some of these Amendments have only one thing in common, namely, a proposal to reduce the tax. They are widely divergent in the reasons for the suggested reductions of tax. To that extent, will there be a possibility at least of a number of Divisions? The fact that it has been agreed that a Division for one reason——

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

I have already said that when we come to the particular Amendments we can consider whether there should be a separate Division on any of them.

Photo of Mr Geoffrey Hirst Mr Geoffrey Hirst , Shipley

Further to the point of order. I hope you will forgive me, Sir Eric, for just commenting on one point. I am naturally concerned in the Amendments which you have selected to be grouped together—as I understand it, for the convenience of the Committee. Having had a little experience in this matter of these procedures, I did not think it customary to come to plague the Chair, as it were, in advance, with a list of them. I have always supposed it to be for the convenience of the Committee that Amendments should be grouped and that that was not binding on the Chair. I thought that the selection and the procedures upon it were actually effective when the Chair announced the decision—as, indeed, you did, although your phraseology, if I may say so, speaking in a perfectly friendly way, omitted the phrase "for the convenience of the Committee", as my right hon. Friend mentioned.

I have had some experience in these matters and of arguing with many Chairmen of Committees over the years, and I remember, for instance, that one of them, although he was very polite to me, told me to go away and said, "I cannot discuss the provisional selection". So, quite frankly, it did not occur to me to come to plague you, though I should be delighted to do that on any other occasion, if this is to be the policy. However, it simply did not occur to me, because I thought that this was the proper time to raise points on this matter.

There is another point I must put, if I may. The Opposition as a whole, if I may humbly say so, has a distinct and definite responsibility to the public. It is common to all parties in the Opposition, and irrespective of party, and its individual Members have responsibilities to their constituents, and I have never been satisfied that the Amendments put down by Front Bench Members, whether in Opposition or in Government, necessarily contained my views. I think that my point on this would be shared by all Chief Whips.

On the other hand, though there are Amendments which have not official, Front Bench backing, by signature, some of us here on these benches know, being more privy to these things than yourself, that they have the fullest possible support of my right hon. Friends on the Front Bench. I do not bother necessarily to get their signatures. It is not necessary in this party at any rate, for everybody to sign everybody's Amendments to indicate everybody's preference. Many Amendments which I have put down in association with others, I happen to know have the support of my right hon. Friends on the Front Bench. We do not go splashing our signatures all over the place.

What we attempt to do is to express a case in relation to the policy of the Government of the day and we put our Amendments down as serious expressions of opinion and of policy in the public interest. When there is grouping of Amendments like this it is more difficult to ensure that every point is covered. I do not question the Ruling you have given, though joining my right hon. Friend in making the protest he has made, and hoping that we can have Divisions, as you have said, and that a subsequent occupant of the Chair, who has not had the benefit of hearing this discussion which has taken place now, will not refuse a Division on the basis that he has not knowledge of what has now taken place. Of course, we know that you will stick to what you have said and will accept a Division on any Amendment, if any hon. Member on either side of the Committee should wish to force a Division.

I am sorry to have been rather long, but this is an important point of principle, and may affect our procedures for a long time to come.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

The hon. Member can rest assured that any other occupant of the Chair while I am not here will have learned of what has been said and will be in the same position as I am to allow a separate Division if called for on any of the Amendments which are being discussed with Amendment No. 34.

I think I should just add this. It is not only Members of the Opposition who are concerned with these Amendments. A large number of Amendments have been put down by back bench hon. Members on the other side of the Committee, too, and they are just as concerned as the hon. Member for Shipley (Mr. Hirst) and Members on his side of the Committee with raising particular points. I still think that it will be for the convenience of all Members of the Committee, regardless of where they sit and of which party they belong to and whether they sit on a Front Bench or a back bench, that there should be a general debate on these Amendments which have been grouped and which have a great deal in common, and then for separate Divisions to take place as hon. Members may respectively wish.

4.45 p.m.

Photo of Mr Norman St John-Stevas Mr Norman St John-Stevas , Chelmsford

We are concerned not only with the minority, the Opposition, in this Committee, but with the good progress of the whole debate, and as a result of this grouping which has been made of such disparate subjects being linked together as the position of the disabled—[HON. MEMBERS: "Oh."] Well, this is——

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

I am afraid I cannot allow the hon. Member to criticise——

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

—the selection which has been made or the way in which it has been made.

Photo of Mr Norman St John-Stevas Mr Norman St John-Stevas , Chelmsford

I am not criticising at all, Sir Eric. I am pointing out that the result is—and I want your guidance on this question—that we shall be discussing at once the disabled, the blind, theatres, education, old people's homes, part-time workers, science, literature and the arts, and hotels, and my fear is—and this is the point on which I should like your guidance—that we shall move from point to point with different Members getting up and speaking on one subject or another so that the momentum of the debate will be dissipated. That will not be cured by a Division. The point on which I ask your guidance is whether it will be possible for you from the Chair to arrange for these points to be discussed point by point, by a grouping within the grouping, by your selecting certain Amendments which have something in common.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

I think the hon. Member's fears are unfounded and that on the selection which has been made we can have a sensible debate.

Photo of Mr Geoffrey Hirst Mr Geoffrey Hirst , Shipley

I am very grateful to you., Sir Eric, for what you have said, and I am sure the Committee appreciates it very much. There is just one other aspect of the matter. In the last debate I was prevented from speaking by the moving of the Closure. I am not criticising that, but, without now going into the details of the Amendments, which speak for themselves, it would be a very serious matter for the rights of the Opposition if by reason of the Chair considering the convenience of the Committee, or by reason of any other aspect, adequate discussion of a principle of an Amendment were not possible. This is a difficulty which arises in the grouping together of a large number of Amendments, that people may be denied opportunity to speak to the principle of any one of them because we are speaking of all of them. I hope we can have some assurance that you are not going to place us in that position.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

I do not think that the hon. Member ought to imagine for one moment that the Chair is unconscious of the fact that a number of Amendments are grouped together. By taking the Amendments together we should have a much wider debate than otherwise there would be.

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

Clearly, we must agree to differ, and I wish to pass from the point of order. It is of obvious importance to the Committee. Perhaps at leisure you may reflect on the difference between us, but I cannot think it would help if I were to go round, as I easily could, adding my name to the myriads of Amendments tabled by both sides of the Committee in the expectation that there will be a more likely chance of their being called. I cannot think that that would be of advantage to the Committee. I pass from the new Clauses, too. We shall be able at another time to consider the precedents of other years.

I beg to move Amendment No. 34, in page 48, line 27, at the end to insert: Provided always that the said amount shall be one penny in the case of those persons set out in Parts II and III of Schedule 10 to this Act. The Amendments have been signed on the Notice Paper by about 20 members of the Conservative Party, rather more than 30 members on the Government Benches and six Liberals. Those are the names which appear, but a vastly greater number clearly have signed although their names are not necessarily carried forward from day to day.

Amendment No. 34 would reduce to 1d. the categories set out in Amendment No. 73, and it is to Amendment No. 73 that I shall direct my speech. The reason why we move to reduce the tax to 1d., as the Treasury will have naturally appreciated, is that, according to the Budget Resolutions, it is out or order to reduce the tax to nothing. That is why, I assume, a number of Amendments suggested by hon. Members from both sides of the Committee are out of order, although, no doubt, they could be put right for Report.

The first point to be made refers to charities. Under great pressure, which was certainly initiated from this side of the Committee, the Chancellor of the Exchequer has made a concession which is very welcome, that is to say, that in due course there is to be a refund to what one might call official charities which satisfy certain legal definitions. It remains true that the smaller the charity, the bigger the burden the tax will relatively be. Charities will still have to find the money for the interest-free loan from September to February, or March, of next year.

Naturally, we welcome that concession. However, I wish to draw to the Chan- cellor's attention the fact that a vast number of excellent organisations, which, in the sense in which we use the word, are wholly charitable, will not benefit from the concession which he has announced. He and I are at least agreed that it would be entirely undesirable for a Chancellor, or anyone else for that matter, to choose between charities and therefore they have to be all in, or all out, under some acceptable definition which can be presented to the Committee in some legal form.

Yet it remains true that many charities are charities in fact but not in law. I will give only one illustration in any detail. I take the example of the Hospital Saving Association. It has Her Majesty as patron and the chairman is Mr. Lesser, who is a man of enormous distinction in the Health Service, particularly on the voluntary side, and, I am sure, known to many hon. Members on both sides of the Committee. It is a non-profit-making hospital contributory scheme. It pays no tax on its contributions by a rather unofficial arrangement dating, I understand from a letter received, presumably from the Chancellor of the day, in 1931. But it pays tax on its investment income and, because it is not a charity in the legal sense of the word, it does not benefit from the Chancellor's announced concession. Therefore, it does not get any relief—I have checked these facts with the general secretary an hour or so ago—from S.E.T.

The Chancellor must find a way in which absolutely admirable associations of this sort, which are charities in everything except the legal definition of the word, can benefit from the relief from S.E.T. which he plans for the charities with which we are perhaps more familiar. The Hospital Saving Association has about 2,500,000 contributors. It has 10,500 honorary group secretaries. These people are not affected, because they do voluntary work. I give the figures merely as an illustration of how splendid this work is. Its aim has always been to encourage the weekly wage earning sections of the community to make extra provision for themselves and their families by voluntary health insurance. But the association also has no fewer than 200 whole-time staff and so it will have to pay £9,000 a year in S.E.T.

The point is that the H.S.A. tries to balance its contributions against its benefit payments each year, and it follows that a charge like £9,000 going into the Chancellor's pocket is taken directly out of the benefits which would otherwise accrue to the wage-earning sections of the community who contribute—2,500,000 of them—through H.S.A. to this sort of voluntary insurance.

I am sure that the Chancellor is sympathetic in principle, but he may say that there are many difficulties. I dare say that there are, but he ought to find a way in which organisations like the H.S.A.—and I give that one illustration, but other hon. Members could add 50 more—could benefit from the concession which has been given to charities.

I shall say nothing about religious organisations now, except that we have on the Notice Paper an Amendment to the S.E.T. Bill which will help them.

The third item is educational establishments. I draw the Chancellor's attention to the fact that we have put "educational establishments", just like that, and we mean all of them. We do not mean just the State provision alone; we do not mean just the private provision alone; and we do not mean a mixture of the two. We mean educational establishments, "approved" educational establishments, and if that word is needed, it can be added by all means.

It was clear in earlier debates that many hon. Members opposite welcomed the weakening of the private sector of education which was bound to flow from the imposition of S.E.T. The hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), trying to illustrate this, commented on the difference between the pupil-teacher ratio in boarding schools and that in the State system. Of course the ratios are different. In one case the teachers are looking after children for 24 hours a day and in the other for seven hours a day, so that the ratios are bound to be very different. The short point is that it would be undesirable for the prejudices of so many hon. Members opposite to be satisfied as a sort of by-product of this shabby tax.

Fourthly, we refer to health provision generally, and again I mean not just the National Health Service, but the many other forms of health provision through- out the country which are as truly part of our provision for health as are our hospitals and the Health Service itself. Again I hope that this tax will not in any way be used as a stick to push towards State provision those who wish to find provision individually or outside the State system.

5.0 p.m.

Hon. Members will be able to think of many examples. I take just one from my constituency and the place where I live. I know of an excellent private nursing home for old people. It is run with a competent staff, but I suppose that, technically, it is profit-making in that it is not part of the National Health Service and is owned by a man and his wife, the wife acting as matron. That sort of thing is very common. I dare say that there are some here and there which are not particularly satisfactory, but most of these old people's homes run in this way are a splendid and invaluable contribution towards the provision which the State has to make for the health of its citizens.

They should in no way be excluded from any benefits which the Chancellor feels that he can put forward just because they do not formally form part of the elaborate State provision for health which we have and of which I am a great admirer, particularly after the years which I spent as Minister of Health. I ask the right hon. Gentleman, in the same way as with education, to consider the contribution which can be made by organisations that are not part of the State service.

The fifth point which we make covers the vast field of the disabled, the blind and the deaf, in respect of whom my hon. Friends were pleading for separate debates a few moments ago.

I suppose that we can only refer to the other Bill in passing. It is one of the inconveniences of having to debate the two Bills separately. The other Bill makes some provision for employers who are elderly, disabled or whatever it may be, but it does nothing for the disabled, the part-time and elderly people who are employees. For some reason, Lord Montgomery's name is always associated with this because, quite properly, he draws a retirement pension. Heaven knows, he has earned it. Under the new Bill, he will be able to set off the tax for his batman, and I am not convinced that that is the first priority that we ought to be able to put forward. There is no requirement of hardship in the new Bill, and it does not meet many of the individual cases which are in the minds of us all and which we have put forward in a number of speeches.

The argument which the Government put forward about employees is that full employment looks after them. As far as it goes, that is a very good point. Full employment is the best safeguard for those who are not in the full stream of employment. Full employment helps the disabled person to find a niche somewhere which is not only rewarding to him financially but extremely satisfying from every point of view. The hon. Member for Bedwellty (Mr. Finch) will remember that over the years he and I have discussed the point on a number of occasions. It is important to keep these people in the stream of life, feeling that they are contributing as much as possible to the community.

The great danger which I see is this. There is now a tax on the employment of these people. Much of the work that they do is part-time work on Saturdays and Sundays. It may now be possible to find people for whom tax has already been paid in the week and perhaps for whom a premium has already been drawn in that week and who may be available without charge from the point of view of S.E.T. for jobs on Saturdays and Sundays which so far have so often gone to the part-time, the disabled, and the elderly. That is a particularly important point in relation to such matters as retail distribution and other forms of industry which rely particularly on part-time work on Saturdays and Sundays and have to build their organisations round it.

I hope that we shall not hear, just like that, the assertion that full employment looks after what might be called the difficult cases. That is too easy an assumption for us to make, and we must see whether we cannot look after these people much more satisfactorily than has been done.

I just mention in passing the sixth and last of our proposals in Amendment No. 73 to Schedule 10, dealing with the promotion of literature and the arts. Here the Government are giving with their left hand in grants and plan to take away with their right hand in Selective Employment Tax. At the best, some of these companies—and I use the word not in its industrial sense but in its theatrical and other senses—will break level. One knows the ways of the Treasury. Most of them are practically certain to lose, and I am surprised that the Minister concerned with the Arts—to whom I pay tribute for the work that she has done—has agreed, apparently, to the very unsatisfactory arrangements which so far have been put forward for recompense.

If I may bring my remarks to a close, at 7.45 yesterday morning when the Chancellor finally moved that we should adjourn, he suggested that the Opposition should find new arguments. With respect, there is no difficulty in doing that. The difficulty is in selecting from all the arguments and cases which have been put to us. I have used the example of the Hospital Saving Association largely because of my own affection for it. I assure the House that I could have found literally scores of other examples which have been put to me in the last few weeks. I do not ask the Chancellor to find new arguments. All I ask is that he should find one different word. In our discussions on Clause 42 so far, he has said "No", and nothing else. We have had it in many guises, sometimes charmingly and sometimes roughly, and in a number of different voices. Always the answer has been "No ".

I am sure that the real reason why the answer is "No" is because there is a perishing machine somewhere up in Newcastle which has all our records tabulated. Because the machine has neither eyes nor a heart, it cannot distinguish between one man and another, between a fit young man of 21 and a disabled person who may be years older than that and doing a part-time job. That is the difficulty. We are up against a machine. One of the functions of the House of Commons is to provide eyes, ears and, if necessary, a heart for the State machine. That is exactly what we are trying to do by the Amendment.

The truth is that there is no majority in the country for this proposal. The Liberal and Conservative Parties may differ in detail, but they are wholly united in their opposition to S.E.T. They alone polled more than 50 per cent. of the voters at the last General Election. I would have added the co-ops, if it had not been that the Co-operative Members have shown themselves willing to be docile poodles to the Patronage Secretary at all times throughout the debate. I say that with a great deal of regret. However, if they maintain that attitude, I hope that they will spare us the crocodile tears with which they explain their support of the Government in the Lobby.

In moving the Amendment and its related Schedule, I say nothing about the other 14 Amendments on the Order Paper. No doubt those who have put their names to them and others will speak for the propositions which they advance.

The short point is that, unless we show special consideration to those whom I have enumerated in Parts II and III of the Schedule, we will be left with a savagely cruel impost through S.E.T. on almost everything that is worth while in the quality of life in the country. We can make a good start to putting it right by accepting the Amendment and the Schedule.

Photo of Mrs Joyce Butler Mrs Joyce Butler , Wood Green

This debate is so wide-ranging that I should like, if I may, to confine what I have to say to Amendments Nos. 147 and 29. The former is concerned with a group of people who I think are the forgotten people in our community, those who are hard of hearing or deaf. I think that they are forgotten because on the whole their disability is not obvious. They move about among us looking like people with normal hearing, but their great difficulty is that of communication. This makes for particular problems when they are seeking employment, because their difficulty of communication so often makes it much easier for people not to talk to them at all, and it makes it much easier for employers not to consider employing them.

I have had a number of letters from people who are hard of hearing. In one case a woman who had been through a number of interviews with employers was an expert at lip reading. She had carried off the interviews highly successfully. She had understood everything that was said to her. Everything that she said was satisfactory, but at the end each employer said, "The difficulty is that of communi- cation", and not one of them would employ her. A number of letters make the same point.

The man who was chairman of the youth section of the Association of the Hard of Hearing told me that over and over again young people, because they were deaf, could not find an employer to take them on. If those who are hard of hearing are employed in one of the services, where the employer will not get a refund of the Selective Employment Tax, they will, inevitably, find it difficult to maintain their employment if the employer decides that he has to cut down his staff. These are the people at whom he will look in those circumstances.

There may not be a large number of them, and this is one of the things which I should like the Chancellor to consider. I do not think that acceptance of the Amendment will cause him a serious loss of revenue, because, although there are thousands of people who are hard of hearing, a large number of them are already retired. Some of them are housewives, who are not in employment, and a considerable number of them are employed in industry where they can carry out mechanical work without any need to be able to hear what is going on.

I am concerned about the limited category of those who have other skills which they want to use in offices, in the distributive trades, and in other services of this kind. I do not think that their numbers are extremely large, but they are an important section of the community, and it is important that we do not equate deafness with lack of intelligence and lack of skill to do this different type of work.

We ought not to relegate, as we do at the moment, deaf people to unskilled mechanical work because this is all that employers are prepared to offer them. Employers today think twice about employing people who are deaf, and I am sure that with the Selective Employment Tax they will think not twice, but three or four times, before they take on an employee who is deaf.

I ask the Chancellor to look sympathetically at the Amendment. It is very difficult to give numbers. It is very difficult to categorise this group of people. Some of them are registered as disabled, but the great majority are not, and I have been wondering how the Chancellor could select people who are deaf, how he could as it were register them. I believe that if he looked at the National Health Service records of people who are registered for a Medresco hearing aid, this would give him the register that he would need to except these people from the application of the S.E.T. to the extent that employers will pay only 1s. a week for employing them.

The majority of those who are hard of hearing use a hearing aid. In the first place they usually go through the National Health Service machinery. To get a hearing aid through the National Health Service they have to be medically examined and certified by a doctor as being deaf. There would, therefore, be no question of evasion, and even if later on they were to use some other form of hearing aid, I think that this would give the Chancellor a pretty good idea of the people to whom I am referring in the Amendment, and I ask him to consider it sympathetically.

5.15 p.m.

I should like now to deal with the question of part-time workers, and particularly the large number of married women who work part-time. This is an enormous group of people, but even so there is a shortage of suitable part-time work. Some years ago I carried out a survey among a group of women. I found that there was great dissatisfaction among them because they could not get the part-time employment that they wanted.

It is a mistake to think, as people sometimes do, that women who undertake part-time work are doing it for some frivolous reason. In almost every case it is a real economic necessity. For the young couple with, say, two children, quite often it is only when the children go to school and the wife is able to take on a part-time job for three or four hours a day that the couple really begin to get on their feet and be able to cope adequately with their financial responsibilities.

For the older married woman, time and again her contribution from part-time work helps to meet the mortgage, to pay instalments on the house, to pay the rent, to keep older children at school after the official school-leaving age, and so on. For the retired woman who works part-time, and particularly those who do so much of the cleaning of this building and so many others, this part-time work is vitally necessary to enable them to manage with their retirement pension.

This is an important category of women, and I am not happy about the way we are treating it in regard to the S.E.T., because if this part-time work is to do what these women want it to do, which is to give them a real addition to their income, it has to be for more than eight hours a week. In practice, for most of them it is a question of three or four hours a day, which would be covered by the 21 hours mentioned in Amendment No. 29. If employers could be exempted to the extent of paying only 1s. for them it would be a great advantage from many points of view.

Employers who have so organised their employment that they can employ two or three women part-time to replace one full-time worker are performing a real social service. They are making very good use of available labour. They are probably at a slight disadvantage in doing so, but they are doing a valuable job. Those employers will be penalised under the S.E.T. arrangements. Quite near me there is a co-operative shop in which the manager employs three women—two for 15 hours a week and one for 12 hours a week. Those three women take the place of one full-time employee. For these three women he will have to pay 37s. 6d. in Selective Employment Tax.

Certain consequences are bound to follow. The employer will be penalised for employing part-time labour and he will have to do something about it. He may try to reduce the work of all those employees to eight hours a week. This will give them a serious cut in their wages, which will be a great hardship to them. It may also cause him to decide to reduce the number of hours during which the shop is open, which again would be contrary to the present demand for longer rather than shorter shopping hours.

If the employer does not do this he will have to find some means of meeting the additional bill, and inevitably the cost will be passed on to the customer in the form of higher prices. I am told that whereas the prices of groceries are pretty well known, and are watched closely by housewives, in other services and other types of shop there is less knowledge of what prices should be. In those cases price increases can be made without a great deal of public reaction. This will have serious effects on our prices and incomes policy.

In the case of co-operative shops there is a possibility that the tax will be met by cutting the dividend on purchases. I ask my hon. and right hon. Friends to realise that even today the dividend is very valuable to those who shop in cooperative shops. Many thousands of housewives use that dividend to buy necessities for their homes, their children and themselves—necessities which they could not otherwise afford. It is not a light matter for them for the dividend to be cut in this way. Furthermore, it is a matter of social policy which we ought to consider very carefully.

Many other hon. Members wish to speak on this subject, so I shall not proceed further on it. I hope that after the Chancellor has listened to all the points which have been and will be made he will be able to give us an assurance that he will consider the working of the Selective Employment Tax in respect of the categories of people which have been discussed this afternoon, and will be able to make a concession in respect of some of the very important social ones.

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

The hon. Member for Wood Green (Mrs. Joyce Butler) has made a very powerful case in respect of the two matters to which her speech was devoted. As for the deaf, she brought out clearly the opportunity which the Government have so far failed to take to use S.E.T. as a means of giving specific encouragement to the employment of certain categories of handicapped people. I hope that in respect not only of the deaf but of other categories to whom I shall refer shortly the Committee will insist that within the framework of the tax and within the general economic policy, right or wrong, behind it, the Government, having decided on a tax of this kind, should make sure that it is used to help those categories of people whom everyone wants to see helped.

The hon. Lady raised the important question of part-time employment. I entirely agree with her that part-time employment, especially of women, is of very great social as well as economic importance. The trouble is that a rate of tax which may not bear very heavily relative to the sort of wage that full-time employment brings in is proportionately much more heavy and discouraging when seen against the background of the naturally lower rate of earning that goes with part-time employment.

The hon. Lady put her finger on a very weak spot in the Tax when she showed that an employer who employs three women part-time for more than eight-hours each in a week, instead of employing one person full-time, will pay three times as much tax as he would if he were employing only one person.

In the vast majority of these cases it is completely unrealistic to think that this Tax, or anything else, will drive people to work in factories. If they are driven out of their present employments they will be driven out of employment altogether—and what good does the Chancellor think that will do to anyone, and also to the economic and social life of the country?

My right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) pointed out that the series of Amendments which have caught the favourable eye of the Chairman of Ways and Means all seek to reduce the tax in respect of this employment to 1d. rather than—as most would wish to see—excluding this employment wholly from the tax. My right hon. Friend explained that this was done because of the terms of the Budget Resolution. In these circumstances those terms are highly objectionable. When the Government intended to impose a tax of this sort it was wrong of them to take early steps to prevent a clear-cut decision by this Committee to take certain occupations out of the ambit of the tax.

I have not the slightest doubt that the Chancellor will be able to quote precedents. He will be able to quote the short-lived effort in this direction that was made in 1961 by the right hon. and learned Member for Wirrall (Mr. Selwyn Lloyd). But there is a distinction which will invalidate that as a precedent for consideration in this case. That was a new tax, and so is this; but that was a tax which, had it been imposed, would have been imposed not on a selective basis but right across the board. But the Chancellor, having taken upon himself to impose a tax which was deliberately selective, should have left it to the Committee to decide whether selectivity should run to the point—as the Americans would put it—of "selecting out" certain categories.

The offence is made worse by the fact that the Chancellor has himself selected out two categories. Subsection (2) provides that the tax shall not operate in respect of employment in the Armed Forces, or to mariners and airmen, for very good reasons. If, when the Chancellor has produced a tax which is, first of all, intended to be selective in its effects because of the repayment provisions, he himself then goes further and cuts out altogether two particular categories in respect of whom he says the tax should not be paid, that is an unfair diminution of the rights of the Committee in preventing hon. Members moving straightforward Amendments to eliminate the tax for other particular categories.

5.30 p.m.

The desirability of exempting charities, which is the intention behind the notional penny, has been made far greater by the right hon. Gentleman's rejection of the first Amendment to the Clause about the dates of collection and repayment. When he spoke in that debate, the right hon. Gentleman did not face the problem that this differentiation of dates means that every charity in this country will have to make an interest-free loan to the Government when the tax comes into operation in September until February.

If the right hon. Gentleman has studied this, as he must have, he will know that that will be a very great strain on certain of those charities. They might have to go to the banks and borrow—if they borrow at present rates of interest it will be extremely expensive, as no one knows better than the Chancellor—and they will lose the interest which they will have to pay for perhaps six months on those loans.

He has not guaranteed that they will all get their money back promptly on 6th February even if repayment starts then. I would guess that six months in respect of the repayment of the first money paid is an underestimate. Therefore, they will either have to borrow and be permanently worse off because of the interest or, as I am afraid many will do, they will have to cut back their charitable work in the latter part of this year.

This is absolutely wrong. The Chancellor having rejected our proposal that, at least, the tax should not fall until it can be repaid where he wants it to be repaid, then, particularly in respect of charities—though the argument is valid over a wider section—I would beg him to take the better course and exempt them from making payment at all. The Chancellor cannot want to take permanently from charities—that is what the interest on the money means—sums of money by way of this tax and so damage their work. He could avoid doing so by accepting the Amendment.

I now come to Amendment No. 363, which, as we were told earlier, can be discussed with my right hon. Friend's Amendment, No. 34, and which has suffered from a number of printers' and calligraphic errors. It should read: Provided that the said amount shall be one penny in the case of a person who is in receipt of a retirement pension under the National Insurance Acts 1946 to 1965. This Amendment is to be differentiated from all the others in one respect—its administrative practicability. My right hon. Friend referred in rather derogatory terms to a "perishing machine" at Newcastle. As I was responsible as Minister of Pensions for installing the physical machine to which he refers, I was not sure that for once his choice of adjectives was particularly happy, but the Chancellor made the point with which I will deal when he was winding up on Thursday night.

Interrupting the Leader of the Opposition, the Chancellor said: Time after time, the question I was asked was whether charities could be exempted from payment of the tax. I have been asked that about lots of groups. The answer is 'No', because the Insurance stamp is being used. This is an entirely different matter from whether there can be repayment of the tax."—[OFFICIAL REPORT, 23rd June, 1966; Vol. 730, c. 953–4.] In other words, what the right hon. Gentleman was saying is that one cannot exempt because one has to collect on the stamp and the National Insurance office could not know by whom the person is employed. I will not argue that general issue, though there is probably a case the other way, but in the case of Amendment 363 particularly a different stamp is concerned.

These people are not, as in my hon. Friend's Amendment, people over a particular age, but people in receipt of a National Insurance retirement pension. The Committee will know—you, Mr. Steele, will know in particular from your past experience—that those people receiving a retirement pension, either because they are over the age at which the retirement condition bites or because their earnings are below the earnings rule level, do not make their own contribution except for a few pennies in respect, I think, of industrial injuries. The contribution is the employer's.

Therefore, what is crucial on the administrative side is, that there is a different stamp, a stamp for the employer-only contribution in respect of pensions. Therefore, if the Chancellor wanted to accept this proposal, it would be administratively perfectly easy. He is going to increase, generally by a very large amount the cost of the National Insurance stamp. All he would need to do administratively if he accepted the Amendment would be to leave the present employer-only stamp in respect of pensioners as it is.

In fact, administratively, it would be easier, because the Ministry of Pensions and National Insurance would not have to change one stamp. This is perfectly practicable, too. I would ask the Chancellor to deal, at least on this Amendment, with the merits, social and economic, and not try to hide behind any administrative problem.

Photo of Sir Albert Costain Sir Albert Costain , Folkestone and Hythe

My right hon. Friend has made a strong case in this respect. Has he considered that charities which are well known and have to be established by the Chancellor should be issued with free stamps to save them from having to apply for this interest-free loan? The free stamps could have on them the name of the charity, so that there could be no question of fraud. This would follow up his example about the old-age retirement stamp.

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

That is an interesting and forceful argument, but I do not want to dilute my argument by adding my hon. Friend's gin to the whisky in my own tumbler. They are both powerful and stimulating fluids, but the mixture might not be agreeable to the Chancellor, although they are both dutiable liquids——

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

I agree with the Chancellor, and I hope that on this point my hon. Friend will allow me to be an abstainer.

My proposition is administratively practicable. Why, then, does the Chancellor want to levy this tax on the employment of pensioners? Broadly, he produced two arguments for his tax—the traditional one of a Chancellor, that he wants the money, and the argument, good or bad, that he wants to divert labour from services to factories.

I asked him a Question not long ago about the cost of exempting pensioners and he told me that it would be £10 million. That is a not insubstantial figure, even against the background of the tax, but I wonder whether he really thinks that £10 million levied on the employment of pensioners is a worthy or creditable impost.

I do not know whether the national economy is so poised on a knife edge that this £10 million is essential to it. If the Chancellor tells me that it is, I would say to him with respect that he can make it up either by a small reduction in the 7s. 6d. repayment for industrial employment, or by bringing into full payment of the tax some of those nationalised industries which the Bill proposes to exempt. Either of those alternatives seems a less bad way of getting £10 million than putting this impost on the employment of pensioners.

Is it realistic to suppose that people of this age, at least 65 if they are men and at least 60 if they are women, will be diverted in substantial numbers to factory employment? I am glad to say from my experience in the Ministry of Pensions and National Insurance that some are still at work in factories over that age, but it seems unlikely that many would be diverted into them from a different kind of work after pension age. I do not think there is a case for imposing this tax in respect of pensioned workers.

I hope the right hon. Gentleman will not use the argument which he used the other night, and which the Parliamentary Secretary to the Ministry of Labour used in answer to a Parliamentary Question the other day, that the tax falls on the employer and therefore it is all right. That seems a foolish argument, because it confuses the administrative point at which the tax is imposed with its effect. It is just as much sense to say that tobacco tax does not fall on consumers of tobacco because it is levied at the point of production. Its effect is what matters. As to the effect, we come to the very important point which follows the point made by the hon. Lady the Member for Hackney——

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

I beg the pardon of the hon. Lady and I congratulate Wood Green. There are many cases in which pensioners on small incomes do a few hours of work. There is a typical case in the countryside with which hon. Members will be familiar when a pensioner does 10, 12 or perhaps 14 hours a week working for a very modest wage in some one's garden or helping on a farm. Against the sort of earnings which that sort of man gets 25s. a week is a large and may be a decisive factor in deciding not to employ him. Can the Chancellor really want that?

As one who at one time was a social service Minister I know that social service Ministers of both parties have for years exerted themselves, not without success, to stimulate employment of older people. That has not been only or even necessarily because of the money those people may earn, but because, as many of us know and we have seen case after case, people fit for work when deprived of work begin to go to pieces and deteriorate as a result of that deprival. Let us not underrate also the economic contribution which pensioners can make by working. The contribution to the economy is very real at this time of shortage of labour.

I believe that for the fit older people suitable work, almost certainly not full-time work, is literally in many cases a life-saver. This is a matter of vital importance. If the Chancellor puts this 25s. a week on the employment of these older people, particularly in the country —in many cases their remuneration may not be more than twice that amount—he will probably cause quite a number of them to be turned away. What good will that do? They will not be likely to go into factories and he will not be likely to get the tax because if they are turned away the tax will not fall on them.

Therefore, both objects will fail, the getting of the money and the securing of diversion of workers to factories. I ask the Chancellor to look at this question carefully again. The proposal is administratively practicable. Although it would cost a certain amount, it would not be a large sum and it is a sum which he could recoup in other ways. It is not unfair, would not conflict with his idea of the redeployment of labour and what is more it is socially right, progressive and just.

5.45 p.m.

Photo of Mr Peter Doig Mr Peter Doig , Dundee West

I draw particular attention to Amendment No. 161 which is in my name. This seeks to halve the amount charged if the person concerned works less than 21 hours a week. This seems the easiest to administer of the proposals before us. For that reason it might commend itself to the Chancellor. It is also reasonably fair. Some of the other suggestions could be very unfair. For instance, a shop which employs two part-time workers as against a rival shop employing one full-time worker would have to pay double the amount of Selective Employment Tax for the two part-time workers. If my Amendment were accepted the two charges would be equal. If some of the other Amendments were accepted the emphasis would be on the part-time worker having the advantage.

I want hon. Members to look closely at the effects of this proposal. Many married women are employed in shops. I take the example of a chemist's shop. Chemists' shops perform an essential service to the public. If they cannot get part-time workers or they find it uneconomical to employ them, there is more than the question of the financial return to the Exchequer. If allowance is not made for this people such as chemists will have to recruit full-time staff who otherwise might be engaged in manufacturing industry.

If shopkeepers have to pay the extra amount they may have to increase prices.

Or shopkeepers might have to cut services rendered to the public and people will go without necessary medicines and so on. There are many other examples which could be given. If the loss of revenue would be too great were this proposal accepted, I suggest that the Chancellor should reconsider the question of premium payments. Money which could be handed back in this way would serve a more useful purpose than premium payments.

This Government have been very successful so far in their employment policy. There have been improvements in employment every month. If this continues, before long we shall be reaching a point at which it will be impossible to recruit new labour. If part-time workers are turned away because of the tax people who otherwise would go into manufacturing industry will be employed in their place in chemists' shops and so on. Then we shall have the opposite of what the Selective Employment Tax seeks to achieve. I ask the Chancellor to take this seriously into consideration.

Photo of Mr David Renton Mr David Renton , Huntingdonshire

Although I am opposed to the tax, I realise that, if used properly, it would give the Chancellor a great opportunity to reduce hardship. I hope that the right hon. Gentleman will heed what is said this afternoon, because it would be a great pity if that opportunity were missed. This is undoubtedly, as my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) mentioned at the close of our proceedings on Monday, the most important set of Amendments to the Bill. The reason why it is such an important group of Amendments is that every one of these Amendments deals with human problems.

My right hon. Friend mentioned the difference between those charities which are charities in law and which will benefit from the Chancellor's second thoughts and those which are charities in fact but not in law and which will not benefit. I want to mention, first, those charities which are strictly charities in law, because I hope that the Chancellor will have still further thoughts about them. Because of the forced interest-free loan which they will have to make, they will have to raise between £2 million and £3 million. Even their having to do this is entirely contrary to an established principle hitherto accepted by all parties, that charities should be excluded from direct taxation. The reason for this is the good one that charities are complementary to the State in providing welfare services. The Government confirmed this principle in last year's Finance Act, which provided that charities should be exempt from the Corporation Tax and from the Capital Gains Tax.

Photo of Mr Hugh Jenkins Mr Hugh Jenkins , Wandsworth Putney

What makes the right hon. and learned Gentleman think that this is direct taxation?

Photo of Mr David Renton Mr David Renton , Huntingdonshire

It is taxation which comes into the Finance Bill and which is directly paid by the citizen. The employer pays it as a liability imposed upon him. Admittedly, he pays it in respect of an employee, but I would consider that this is a form of direct taxation. That is my answer to the hon. Gentleman's question. If the hon. Gentleman catches your eye, Mr. Steele, he will no doubt be able to express a contrary argument, although I do not think that there is a valid contrary argument.

The principle that charities should be excluded from direct taxation was well in the minds of all of us who took part in the lengthy discussions on the Charities Act, 1960, in which, incidentally, the Chairman of Ways and Means played a most valuable part. This principle was the foundation on which some of the discussions took place, especially the discussions with regard to the registration of charities.

Before breaching this principle, even to the extent of requiring a forced interest-free loan to be made in the guise of a payroll tax, which I maintain is a direct tax, the Government should justify their action. They have not done so. Rather than do so, I would hope that the Government would accept Amendments Nos. 34 and 73, or something on those lines.

My right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) said that charities will have two choices in having to pay this tax. One is to borrow from the bank. The other is to reduce the work which they do. These are two alternatives, but I think that there are others equally unsatisfactory. This is the first speech I have made on the Finance Bill, and if the Committee will bear with me I want to draw attention to the unsatisfactory character of all the courses open to charities.

Charities could pay out of readily available cash, but few of them have got it, because they find it hard enough to balance their books on current account. So this should not be considered as a serious possibility. No doubt it is the one which the Chancellor hoped would apply when imposing this tax on charities, but it is not a serious possibility.

Then there is the question of raising a loan from the bank. Charities would have to find security for that. Some charities, in order to raise capital for future charitable work, have already gone to the full extent of the security that they could possibly raise. Now, I do not know whether the Chancellor will allow bank advances to be made for the purpose of paying the tax. If he does allow them, it will be inflationary and, therefore, the tax will defeat its own object.

If the Chancellor does not let the banks make advances, charities which have no ready cash available will have to ask the trustees to sell their endowments, even though they would hope to buy them back or replace them some six or nine months later. This would be a harsh course in some cases, but, in any event, it would involve applications to the courts, because, although trustees always have power to make advances for the benefit of a charity and its charitable purposes, I doubt whether they have power to do so merely to enable the charity to pay tax. So, whichever way charities find the money, the whole position is fraught with trouble. I hope that the Chancellor will have second thoughts and accept something on the lines of Amendments Nos. 34 and 73.

I want now to turn shortly to the position which arises on Amendment No. 73, with particular relation to Items 1, 4 and 5 of the new Part II. There are many private homes and hospitals not making large profits, as my right hon. Friend the Member for Enfield, West mentioned, which help the National Health Service very greatly. They help the Service partly because in some cases they provide services which the Service has not got, but also because in any event they relieve pressure on the Service. Everyone knows that this is great enough already.

The purpose of the tax is to redistribute manpower. If any of these private hospitals, nursing homes, or the like, have to reduce their staff they will have to reduce the number of patients they take, and the burden on the Service will be heavier than ever.

I mention, as a particular example, private homes for mentally handicapped children, because these are playing a very vital part in what is acknowledged to be exceptionally difficult social work. The homes that I know of—and I know of a number of them—do not make much profit and they find it very hard to get staff. Whenever such a home closes down, as I know from my personal experience, immediately a harsh problem arises for the children and their parents.

On 10th May I wrote to the Chancellor about this and drew his attention to the valuable debate we had in the House of Commons on 18th February. I do not want to repeat to the Committee all the evidence that was then given of work done for these children by charities and by private organisations, as well as by the National Health Service. I will merely add that the Chancellor should be very careful indeed before he strikes even a moderate blow at this very fine work.

Then there is the problem of mentally handicapped young people who have had special training for work in industry. Not enough of them have done so. It is difficult work. There is such a training unit at Slough which takes only those young people with an I.Q. of 50 or less. This is a very severe degree of mental handicap. The unit trains such youngsters in simple manual tasks and in such things as travel to and from work, timekeeping, the value of money, drawing wages, and so on—all the essentials of a worker's life.

When trained, these young people have to be placed in industry. At the moment some employers are very good indeed. They are virtually treating themselves as charities in taking these young people on. These young people are engaged on a whole-time basis. It would be an unnecessarily severe punishment for them if their employers had to pay the Selective Employment Tax. In fact, I am afraid that many of them may not do so. The examples that could be given in support of the various categories in this Amendment are multitude but I will just choose one which has come from my own constituency——

6.0 p.m.

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

The right hon. and learned Gentleman says that manufacturers and industries take on these people and then regard themselves as charities. If that is the case, they will get an additional 7s. 6d. a week.

Photo of Mr David Renton Mr David Renton , Huntingdonshire

I am grateful for that intervention because it enables me to say that I was perhaps using the words loosely when I said that they regarded themselves as charities. The point is that these young people do not always earn the full wages that other workers do. It is an act of generosity on the part of an employer when he takes them on. Obviously the employer is not technically a charity, but he is acting in a generous and charitable way. That is what I was trying to imply. That is why I say that I think it would be a great pity if such an employer were to be penalised by having to pay the Selective Employment Tax.

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

The right hon. and learned Gentleman said that these people had been taken on in industry. I was pointing out that to the extent to which this is true there is an additional payment. I agree that if they go into the services there is a tax payable on them, but in a great deal of this discussion, whatever categories we are discussing, there is a tendency to forget that large numbers of these people are employed in industry where there will be a premium.

Photo of Mr David Renton Mr David Renton , Huntingdonshire

The Chancellor's intervention is beyond belief. He knows perfectly well that even manufacturing industry which is going to get the premium will think very carefully indeed about their payroll, as I understand it—I do not say always, but in many cases—because sometimes they will feel it undesirable to increase their bank overdrafts and their current outgoing commitments, even though they will get a premium at a later stage.

As I understand it, the Chancellor's approach to this matter has been all along that he hopes that even in manufacturing industry the Selective Employment Tax will make people careful about the employment of labour. If that is not so, why is he asking manufacturing industry to pay the tax at all, merely in order to get a premium at a later stage? It would be far simpler, administratively cheaper and better all round if he simply gave them the premium. I think the Chancellor's second intervention missed the whole point of the purpose of his tax on manufacturers. If I am still wrong, no doubt he will intervene again and I shall again endeavour to persuade him.

I should like to give an example from my own constituency. It is a simple example, but it happens to be an example of all three points mentioned in Part III of the proposed addition to Schedule 10 in Amendment No. 73. That Part deals with disabled people, part-time workers for less than 20 hours a week, men over 65 years of age and women over 60. The example is of an old lady who lives alone. She has got some small private means. She was terribly injured in an accident 20 years ago and is almost completely paralysed in both legs.

She cooks for herself. She has a daily help who comes in part-time for some hours each day, but I understand that it adds up to slightly more than 20 hours a week. Otherwise she is entirely dependent upon the part-time help of her old gardener whom she has employed for many years. He does all the fetching, carrying, messages and the shopping in the village. He carries in the fuel, he makes the fires and keeps them going, and so on. The gardener is also employed for more than 20 hours a week. This incapacitated old lady of moderate means, as I see it, under the Bill as it stands, will have to pay the Selective Employment Tax both for the part-time daily help and for the part-time gardener. If that is not severely harsh, I do not know what is.

I must apologise for detaining the Committee for some time, but this is the only attempt that I have made to persuade the Chancellor on this Bill. As he knows, I do not idly utter on these occasions. I earnestly implore him to regard this tax as a great opportunity for doing good, for relieving personal hardship instead of increasing it as it undoubtedly Will if the Bill remains as it is.

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

The right hon. and learned Gentleman is an old friend of mine of many years standing, and it was on that basis that I sought to interrupt him. I do not think he has understood the basic conception. As to the sad case that he has quoted, I would not judge it on the basis of what I have heard, but it seems to me that it comes exactly under Clause 6 of the Selective Employment Payments Bill under which she will get a refund.

Photo of Mr Harold Finch Mr Harold Finch , Bedwellty

I support the Amendment in so far as it is concerned with the disabled. As the Clause stands at present, I believe that it will affect the employment of the disabled in the service industries and, that being so, I am afraid that it would tend to increase unemployment among these disabled people. I know my right hon. Friend the Chancellor of the Exchequer feels that one is inclined to exaggerate the situation, but even if one takes the most optimistic view there will certainly be some adverse effects upon the disabled in the service industries.

Therefore, I should like to put this question. Even if it has only a limited adverse effect, why include the employer of the lame, the blind and the handicapped? This section of the community always finds it difficult to get suitable employment. Apart from those employed in the manufacturing industries, quite a large number are employed in the service industries. If we strike the slightest trade recession, if firms find themselves in difficulty, if things do not go as they ought particularly with regard to industrial undertakings, they will seek to cut costs and economise. It is my experience—I have been in the trade union movement for many years—that it is the disabled man whose position will be placed in jeopardy and he will find himself unemployed. That is what is troubling me.

Once a disabled man is unemployed, it is difficult for him to get another suitable job. Once he is idle it is most difficult for him. There are organisations which have spent years finding suitable work for the disabled—ex-Service men's organisations, the British Legion, the trade unions and, indeed, the D.R.O.s at the Ministry of Labour. The function of these D.R.O.s in the Ministry of Labour is to resettle disabled men in industry. That is what they are employed to do. It is their function to do what they can to find suitable work for the disabled. But they will not stand much chance of getting disabled men into service industries when employers, whether we like it or not—and I shall not go into the merits—will have to pay 25s. for a disabled man who is perhaps doing only the lightest of work.

Difficulties are likely to arise, as I know from my own experience. An employer in most cases is bound to employ 3 per cent. disabled people, and a large number of employers take on more than 3 per cent. I have often gone to employers—and I shall not mention names—appealing to them to find jobs for disabled men and women. Yet often they have already been employing more than 3 per cent. For example, an ex-Service man maimed in the war may have been out of work for a long time. We have gone to an employer and said, "We know that you are employing at least 3 per cent. already, but can you squeeze this man in?" Time and again—and I must say this for the employers—they have been employing up to 5 or 6 per cent. in many industries but have found work for more. But it is a difficult matter and we still have thousands of disabled men unemployed.

The mining industry is passing through a serious phase. Pits are closing and more and more men are being declared redundant. The National Coal Board has done a great deal for disabled miners, but the time has come with the continual closure of pits when it is unable any longer to find suitable work for these men in such numbers. There is an increasing number of unemployed disabled men, particularly in South Wales. They are suffering from all kinds of disability, particularly pneumoconiosis. One of the principal activities of the National Union of Mineworkers these days is finding work for disabled men declared redundant.

What does this situation mean to the Exchequer financially? If a disabled man is not in work, he will get unemployment benefit. But if he is unemployed for a long time the maximum benefit he can receive is from seventeen to nineteen months. After that, the benefit ceases and he receives National Assistance. Thousands of disabled men in South Wales are on National Assistance because their benefit has expired. So, in the end, the Exchequer has to pay. From the point of view of taxation, my right hon. Friend will get nowhere if disabled men are unable to obtain employment.

A disabled man has no resources. We have been debating the Capital Gains Tax, investments and other resources upon which employers can draw to help meet the tax. But a disabled man has no such resources. He stands alone. A man disabled in the war has no other means than work. He cannot make up for his losses. I know many young men, skilled miners or engineers, who have been disabled through a fall of roof underground and are able to do only light work. They have to get it where they can. But there is nothing more soul-destroying for a disabled man than to find that he cannot get work.

6.15 p.m.

I know that my right hon. Friend is right in saying that the tax may encourage the switching of jobs, but it is not easy to switch a disabled man from a service to a manufacturing industry. We are dealing with men who, perhaps, must sit down to work and who may not bring in to their employer a remunerative return for their employment. I do not want to be a party to anything which would impair the employment of disabled men Or women, whether they be ex-Service people who have given up part of their lives to the country or men and women who have suffered accidents in industry through no fault of their own and only want to work.

I know that my right hon. Friend himself does not intend to do anything to impair the employment of the disabled, but I do not think that this proposal has been thoroughly gone into. Government Departments could not possibly have analysed the situation. If they had, I am sure that they would have given consideration to the position of the disabled.

In the country generally, unemployment is low, but in South Wales the unemployment figure for the disabled has gone up—not a great deal, but an increase nevertheless. In South Wales, 4,494 dis- abled men are unemployed compared with 4,297 last year. It is not a great increase but this is, after all, a time of full employment. I hope that my right hon. Friend will look at this problem again. I do not want to make a lengthy speech. We know the facts. All sorts of organisations are continually seeking work for the disabled, and I hope that my right hon. Friend will not put anything in the way of finding such employment. I ask him to see what he. can do in order to insure that the disabled are able to get work.

Photo of Sir Lionel Heald Sir Lionel Heald , Chertsey

I support the hon. Member for Bedwellty (Mr. Finch), who speaks from such deep knowledge of this subject, as I know. It is a subject in which I, too, have been interested for many years. The example of the disabled is something that we should insist upon as showing that there is something fundamentally wrong with this tax.

I am afraid that we shall be told by the Chancellor that he is sorry—and we all know that he, as an ex-Service man himself, would indeed be sorry—if this tax should have the kind of effect the hon. Member for Bedwellty has outlined. Nevertheless, I think that the right hon. Gentleman will tell us that this is inevitable from the tax. It is a dreadful thing.

As the hon. Member for Bedwellty knows, better than I do, those of us interested in this matter have been battling ever since the First World War to get good treatment for disabled people. There have been difficulties—including opposition on official lines in making definitions, and so on.

We have had all these problems with invalid carriages and matters of that sort but we managed to make progress all the time, and there has been more consideration for these men, for ex-Service men—and I am glad that the hon. Member for Bedwellty (Mr. Finch) also mentioned the miners, with whom I had the great privilege of serving in the Royal Engineers during the First World War.

During these years we have been making progress, but with this tax we shall take a great step backwards. Owing to the policy which the Chancellor has been forced to accept—I do not think that he would have thought of initiating a scheme which would have these results, but he has found himself, apparently, bound to accept it—we shall do something that, in normal times, if we were not dealing with a tax provision, we should not think of doing.

We must all think about this very seriously. I do not bring it forward as a party matter. There are at least 12 different matters about which one could have spoken under the Amendment, which covers all the headings of the small private enterprise, the social services, and so on. This is, perhaps, the most striking one, at any rate to anyone who has ever had anything to do with disabled men and who knows how difficult it is, as the hon. Member for Bedwellty said, to get them into a job.

If it will be difficult to keep them in jobs, that will make the situation much worse. We are not speaking on sentimental lines, and still less on the line that we want a stick with which to beat the Chancellor. We want to alert the Government to the danger of what they are doing and its wrongness.

Photo of Mr Hugh Jenkins Mr Hugh Jenkins , Wandsworth Putney

First, I take up a point made by the right hon. and learned Member for Huntingdonshire (Sir D. Renton) on the question of what sort of tax this is. It is not just a question of semantics. If this were a form of direct taxation, it would have certain characteristics which would deal in some degree with some of the points with which I want to deal. The distinction which is generally drawn, and which I draw, is that a direct tax is one that one pays directly to the Exchequer, and is unconnected with any other form of activity. An indirect tax is a tax that one pays arising from another transaction.

The distinction is that the indirect tax does not vary in relation to the income of the payer. One of the objections to our rating system is that it is not only a form of indirect taxation but that it is also, like most indirect 'taxation, regressive.

Photo of Mr David Renton Mr David Renton , Huntingdonshire

I do not think that it would be right, in considering charities, for the hon. Gentleman and I to get down to a discussion on mere words. Would he not accept from me that it has been a general principle for many years, accepted on both sides of the House, that charities are excluded from direct taxation and exempted from rates, and, because of the special part which they play in the welfare services, should be treated in a special way from the financial point of view?

Photo of Mr Hugh Jenkins Mr Hugh Jenkins , Wandsworth Putney

They are being treated in a special way in this piece of legislation, but I made the point for another reason. One of the problems about the tax is that the Chancellor has failed to vary it. It is on a standard rate basis, and one pays 25s. for a man, 12s. 6d. for a woman and for a boy under 18, and 8s. for a girl under 18. This is what one pays under any set of circumstances.

I want to draw attention to particular circumstances where there is a case for variation in the amount of the tax. It is, as I see it, one of the features of a direct tax that it varies, and this tax does not. It is a level payment, and as such it has characteristics of an indirect tax. I think that it should have a variation—I understand the Chancellor's point about it being necessary to levy a tax on all employees, or at least on almost all employees. Excluding certain sections from payment would be administratively a much more difficult problem than hon. Gentlemen suggested.

Therefore, I take the point that application of the tax must be general. But I do not think that this means that the same amount of tax must be paid for each category of employee.

I wish to draw attention to Amendment No. 40, which is in the names of myself and some of my hon. Friends, and Amendment No. 220, which is in the name of my right hon. Friend the Member for Vauxhall (Mr. Strauss) to which a larger number of names have been added. Some, including my own, have been squeezed off the Notice Paper, because only the names of the first five or six hon. Members appear in it.

These two Amendments are the same in principle. They seek to establish a lower rate of tax to be paid by registered theatrical employers. Under Amendment No. 40, any person employed by a registered theatrical employer would be taxed only at a rate of 2s. Amendment No. 220 provides that for any person employed by a registered theatrical employer in a theatre outside the Cities of London and Westminster the tax would be 8s.

I should be very happy not to press Amendment No. 40, and to withdraw it in favour of Amendment No. 220, which is, as it were, a refinement of it. There is an argument that the theatrical employer in the West End of London is probably not in need of any special amelioration of the tax. Therefore, I think that the point of my right hon. Friend in Amendment No. 220, that this partial relief for a theatrical employer should be operative only outside London, is reasonable. That it should be 8s. rather than the, perhaps, too nominal figure of 2s. which I suggested, would make the tax worth collecting.

I therefore address myself now to Amendment No. 220. Is it necessary to temper the wind to this particular type of employer? I think that it is. Very few employers nowadays are in danger of going out of business, other than through sheer incompetence. This sometimes happens, and I do not say that sheer incompetence is unknown in the world of theatrical employers. It sometimes exists, but it is possible for a theatrical employer to go out of business through no fault of his own, because the chances have been, and always will be, very evenly balanced in the position of the small theatrical entrepreneur in the provinces.

I have received a large number of letters from theatrical employers, and no doubt other hon. Members have also received such letters, asking us to intervene on their behalf and make the case that the theatres in the provinces are in a bad way, and that if we impose the full rate of tax upon them this will have the effect of taking the theatre away from quite a large section of the community in the provincial areas, and in Scotland and Wales.

The matter is serious, and I have had to determine in what degree the complaints which were made have been genuine and in what degree they have been false. I am fairly well qualified to make this sort of decision, because for 15 years I have been dealing on the opposite side of the table with employers, and I am fairly well skilled in detecting the man who is down to his last swimming pool and thus possibly can continue a little longer, and the man who is in the process of having to give up altogether.

6.30 p.m.

I asked for details. I have selected a few examples to show what I mean in speaking of theatrical employers in real difficulty. First, the Forbes Russell company, which puts out seven repertory companies. It engages about 77 artistes in these seven companies, and the additional cost will be £74 7s. 6d. a week. I think that that is just about the turnover for that company.

Photo of Mr Joel Barnett Mr Joel Barnett , Heywood and Royton

Is it not a fact that in many companies of this type the actors are self-employed? Could my hon. Friend say what percentage—I think that it is probably a large one—are self-employed and, therefore, not subject to the tax?

Photo of Mr Hugh Jenkins Mr Hugh Jenkins , Wandsworth Putney

There are no self-employed actors. They are all employed persons. Self-employment is to be found only among variety artistes. The variety artiste is the only self-employed person in the entertainment world.

Photo of Mr Hugh Jenkins Mr Hugh Jenkins , Wandsworth Putney

My hon. Friend must allow me to know best in this matter.

Photo of Mr Joel Barnett Mr Joel Barnett , Heywood and Royton

I can only say that I have acted for people in this profession and submitted returns on their behalf as self-employed—[HON. MEMBERS: "Oh."]—and had them accepted.

Photo of Mr Hugh Jenkins Mr Hugh Jenkins , Wandsworth Putney

I shall accept my hon. Friend's apology in due course.

I was saying that some of the complaints made by the employers are genuine and some are not. There was an operation mounted by the Howard and Wyndham company which seemed to me to be very much a public relations effort. I think that we need not treat that too seriously, because it is a large company unlikely to go out of business, but it remains the fact that it did make a loss last year of about £10,000. The impact of the tax, other things being equal, would increase the loss this year to about £30,000. Therefore, some changes will have to be made, reductions will have to come in its employment, or the business will have to improve if the company is to remain in being.

A company many of us will be concerned about is D'Oyly Carte. It has been operating on a profit-making basis, though in recent years the amount of profit has been reduced. The cost for this company in a year will be £5,700, and this will certainly have the effect of reducing the amount of touring done by the D'Oyly Carte company, if no more than that.

The man in real difficulty is the small manager in the provinces. I have taken one example here, David Kirk Productions. Here is what he says: The Ilfracombe Urban District Council have spent £58,000 in modernising a theatre. Having done which, they will not run it themselves, and so far from giving guarantees, they will not give even percentage terms. I have leased it for three summer seasons, putting in my own staff, and taking down a company to run a play policy. So far as I can see, this new tax suddenly drops on my budget another £20 a week for the last three weeks of the summer season, which is just 'not on'". He is talking about what he is already committed to, of course. What happens to those running summer shows with a line of 20 girls, before anything else, I cannot imagine. What is more, as I see it, the money is taken from us and then given as a bonus to those manufacturing cigarettes, contraceptives or armaments. Why am I suddenly the villain of the piece, and these gentlemen heroes to be given a Socialist incentive? As a manager, I have survived Entertainment Tax, which, in taxing the turnover, was bad enough. Now the basic assumption of this one seems to be that by employing actors per se I am committing a sin and to be penalised—a fiscal policy as far-sighted and forward-looking as the window tax or the poll tax. Do not mention the former to the Chancellor, or, with all those glass-fronted office blocks, he might feel that he was on to something. There is here an area of work which really cannot stand the tax. I think that similar arguments to the ones I have already advanced could reasonably be put in respect of films and television, but I have not put those arguments, although I have been pressed to do so, because, in my judgment, those employers can withstand the impact of the tax.

Photo of Mr David Gibson-Watt Mr David Gibson-Watt , Hereford

Although the ballet companies are not mentioned in the hon. Gentleman's Amendment, will he agree that certain ballet companies, such as the Harlequin company, which do a tremendous amount of travelling about the country, would also come under the umbrella of protection which he is urging should be provided for the people to whom he has specifically referred?

Photo of Mr Hugh Jenkins Mr Hugh Jenkins , Wandsworth Putney

Yes, but there is another consideration there. Those companies which are in receipt of support from the Arts Council are charities and will receive the tax back. This is a matter which will, I hope, be confirmed and spelled out rather more clearly at the end of the debate. Nevertheless, although such companies receiving support from the Arts Council will have a refund, there will be the period of difficulty between payment and refund. Payments will start in September and the money will not come back until February, so that they will have to carry on for that time.

Companies in receipt of public support, the non-profit distributing companies, are now, as a result of the Chancellor's announcement, in a better position than the profit-distributing companies. I am not speaking on behalf of profit-distributing companies as such, and, in my view, the major profit-distributing companies can suffer the tax reasonably well. I am concerned about the smaller profit-distributing companies, the men who put on the summer shows, and so on. If as a result of the tax such companies can no longer carry on, the people in the various local communities will be likely to lose their theatre.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

Has the Arts Council yet issued a schedule of companies and undertakings which will come under its umbrella? Last week, I asked the right hon. Lady the Minister responsible for the arts, and she said that the check had not yet been carried out. Do we now have a list so that we may know what we are talking about when we speak of those covered by the Arts Council umbrella?

Photo of Mr Hugh Jenkins Mr Hugh Jenkins , Wandsworth Putney

There is no great difficulty about that. The Arts Council publishes in its annual report a list of the companies which had its support during the year, and those companies will get the return. I am sure that, if the hon. Lady has any particular company in mind, the Arts Council will give her an assurance about it. But we need not worry overmuch—not that we should be unconcerned—about companies in receipt of State support. We have to concern ourselves with the companies not in receipt of State support.

If my hon. and learned Friend cannot accept the Amendment, will he give the Committee an assurance that he will, with the Arts Council, investigate the possibility of creating a new category of help? I suggest that, in addition to its supporting function, the Arts Council should have open to it the possibility of an investment function so that the Council itself could invest in private theatrical companies on a profit and loss basis. The threatre is very short of capital. If the Chancellor found it possible to do what I suggest, he would ameliorate the effects which the tax will otherwise have upon the theatre in the provinces.

Photo of Dr Michael Winstanley Dr Michael Winstanley , Cheadle

I have no wish to make a blunderbuss type of speech to deal with all of the Amendments grouped together under this one head. I would say that while I and my hon. Friends on this bench are responsible for two of the Amendments, we are substantially in suport of the remainder. The right hon. Gentleman the Member for Enfield, West (Mr. Iain Macleod) said that the two parties on this side of the Committee were in agreement in wishing to see the end of this tax, or at least in wishing to improve it. I confirm that that is the case.

In particular, I want to draw the Committee's attention to a group of people to whom reference has already been made in this debate, and with whom I have been professionally concerned for many years—the disabled. As a doctor, I have been concerned with the working of the Disabled Persons (Employment) Act, in finding employment for disabled persons. The Disabled Persons (Employment) Acts of 1944 and 1958 were introduced to enable disabled persons to compete with fit persons for employment on equal terms.

Broadly speaking, they have worked, as a result of the quotas which industry and various establishments are required to take. They have also worked because many of these firms have co-operated to the point of exceeding their quotas. There have been difficulties and there are many firms, known to me personally, which do not take their quotas. They evade the Act by seeking to get on to the register many people whose disablements are more imaginary than real. There is the type of employer, who, to bring the total number of disabled persons up to the appropriate figure, will seek to get people, probably a mild diabetic, who have not been substantialy disabled, to go on to the register so as to keep his figures up.

Photo of Bernard Braine Bernard Braine , Essex South East

The hon. Gentleman has just made a rather serious charge. Surely no disabled man can be added to the register and kept on it without a medical certificate? Is he not aware that despite the workings of the Acts unemployment among disabled workers is five times the national average?

Photo of Dr Michael Winstanley Dr Michael Winstanley , Cheadle

I am grateful to the hon. Gentleman. I entirely accept what he says.

Certainly, a medical certificate is required, but the criteria for being placed on the Disabled Persons Register are two. First, a person has to be considerably disabled in the performance of his duty and, secondly—and this is the category about which I was talking—it is also considered valid for a person to go on to the register if he would be substantially handicapped in obtaining other employment should he lose his present job.

I have had to fill in these certificates for persons in occupation and I have asked the first question on the form—"In what way are you handicapped in your present job?" They have said, "I am not handicapped at all, in any way." The fact is that they would be handicapped if they lost that job and had to seek employment in the open market.

I did not mean to criticise employers generally. Most of them operate this fairly and co-operatively and are a very great assistance.

Photo of Mr Richard Winterbottom Mr Richard Winterbottom , Sheffield, Brightside

I am interested in what the hon. Gentleman says because I am a mild diabetic. I am a two-pill a day man, and presumably I would be able to be entered upon the register. Is it the case that a man taking two pills a day can be so certified, because if it is, then in terms of potential numbers, according to the information that I have, about 30 per cent. to 40 per cent. of the population is covered?

Photo of Dr Michael Winstanley Dr Michael Winstanley , Cheadle

The hon. Member is entirely right—he does qualify for inclusion on the Disabled Persons Register. There is every reason why many of these people should be so included. It is a form of protection and an assistance to them if they should lose their employment at a later stage—which the hon. Gentleman may.

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

What the hon. Member for Cheadle (Dr. Winstanley) is suggesting would be a very wise protection for the hon. Member for Sheffield, Brightside (Mr. Winterbottom), in case of electoral reverse.

Photo of Dr Michael Winstanley Dr Michael Winstanley , Cheadle

The reason for my bringing up this point will become apparent in due course. What I am saying is that the Disabled Persons (Employment) Acts work up to a point and work very largely because some employers take a great deal more than their quota of disabled persons. At the moment, there are 47,000 persons on the Disabled Persons Register who are unemployed. The true figure might be even higher, because many of these people are sometimes in receipt of National Insurance certificates since the question often arises about whether they are certified as unemployed or unfit. This is rather a difficult line to draw. The Acts are only just working, and are. somewhat precariously balanced, and this even at a time of a labour shortage.

6.45 p.m.

Many of these disabled persons are employed in service occupations. The catering industry, which has come in for a great deal of notice during our discussions on the Selective Employment Tax, makes considerable use of disabled persons, because it can find employment which is suited to particular disabilities. There are organisations like the British Legion, which makes great use of disabled persons. Hon. Members will know that the associated company of the British Legion, the British Legion Attendants Company, employs many such persons for car parks. Similarly, they are employed as school traffic wardens and as staff of various kinds.

I want to direct the Committee's attention to what the position will be if this tax goes through, unamended, and if no special provision is made for disabled persons. First of all, the manager or the director in charge of a firm employing disabled persons will look with alarm at his increased wage bill and, in this, if I may have his attention, he will have the support of the Financial Secretary, because the Chancellor wants him to do this. Next, he will consider how to cut the bill, and when he gets to that point he will have proceeded exactly as the Chancellor wants him to do.

What will he next do? First, he will decide not to get rid of those people who could make the maximum contribution to a manufacturing industry. The probability is that he will come down finally in favour of eliminating the handicapped. If, in doing so, the number of disabled person falls below the quota, he will then do what I have known firms to do, and here we return to the point I was making earlier. He will go round the firm and find people whom he had not hitherto realised had various disabilities, which are not affecting them in their present occupation, and see to it that they go on to the register, which they are entitled to do, thus restoring his quota, and, at the same time, putting out of employment a number of disabled persons.

Photo of Mr Richard Winterbottom Mr Richard Winterbottom , Sheffield, Brightside

This is not wholly right. The hon. Gentleman has specified the catering industry. In all of the four catering wages boards provision is made for those who are disabled, or are not as fit as others to be paid a rate of pay less than the minimum rates of pay provided under the Catering Wages Act. Therefore, it becomes a problem to the employer whether he should dismiss people and lose the amount of rebate that he is allowed. It would be a mathematical calculation to see whether there was any benefit in consequence.

Photo of Dr Michael Winstanley Dr Michael Winstanley , Cheadle

I am grateful to the hon. Gentleman. I accept his point. But he has said himself that this is a specific point affecting a specific occupation in a specific situation. The general point which I made is still valid.

Photo of Sir Raymond Gower Sir Raymond Gower , Barry

The hon. Gentleman has referred all the time to the quota, but he will acknowledge that companies and firms in the service industries are often small and employ fewer than 20 people. Such firms have no quota. They also employ disabled people and can get rid of them without there being a legal bar against their doing so.

Photo of Dr Michael Winstanley Dr Michael Winstanley , Cheadle

I am grateful for the hon. Gentleman's assistance. Perhaps I am misleading some hon. Members because I was anticipating the Chancellor's answer that there is the quota to ensure the retention of these people. I fully accept that this does not apply to employers with fewer than 20 employees and that there is no quota for them.

I cannot believe that it is the wish of the Chancellor of the Exchequer to introduce a tax which will operate in this way. There is an acute shortage of labour and we want to make the maximum possible use of everybody, for humanitarian reasons as well as from economic considerations; but the economic considerations are sufficiently compelling. We cannot afford to place obstacles in the way of disabled people continuing to work and to make a contribution. I find it extremely difficult to believe that this is what the Chancellor wants to do.

There is not the slightest doubt that if this tax is not amended it will have the effects which I have outlined. As a doctor, I know that I shall find it very much more difficult to obtain employment for disabled people than I have found in the past; and I have not always found it easy in the past. I very much hope that when the Chancellor answers this debate he will tell us that he will do something about disabled people.

Photo of Mr Laurie Pavitt Mr Laurie Pavitt , Willesden West

The hon. Member for Cheadle (Dr. Winstanley) has taken up extremely effectively a point made by a number of hon. Members opposite and by one of my hon. Friends concerning the disabled. The whole Committee, I am sure, agrees with the intention behind a number of the Amendments and wishes to put pressure on the Chancellor of the Exchequer to do something about those cases on whom in turn the pressure of this tax will be very severe. The most important point which the hon. Gentleman made was in differentiating between the number of disabled people employed in service in- dustries and the number employed in manufacture. I hope that the Financial Secretary, when he replies, will give us a little more information on this point because, with the records available, it should be possible to have something closer to reality than the vague idea that there may be more in manufacture than in services, or vice versa.

Should there be a large number of disabled people employed in manufacture, it may be a great advantage to have this tax as they attract the premium, and it may be an advantage which would persuade employers to employ more of them. On the other hand, as the hon. Member for Cheadle said, if it is weighted on the other side, we hope that the Chancellor will find a way of getting rid of an imposition which it would be a difficulty for us to accept. It is more likely that this kind of amelioration will be made under the Ministry of Labour Bill rather than under this Bill. Nevertheless, if we want to oppose this, now is the opportunity.

I should like to refer to the Amendment spoken to so ably by my hon. Friend the Member for Wood Green (Mrs. Joyce Butler). The Committee will know that I suffer from a hearing disability. Such a disability is not only difficult to cope with, but is very little understood. Everybody understands what it is like if a person has lost an arm, or is blind, or has some other disability. But people do not know very much about hearing disability and are usually very impatient with it. I hope, therefore, that the Chancellor of the Exchequer will be able to do something on the lines put forward by my hon. Friend the Member for Wood Green for those who are trying to cope with a hearing disability and yet seeking to be usefully employed in the community.

The right hon. Member for Enfield, West (Mr. Iain Macleod) has moved an omnibus Amendment covering a wide variety of people. I always enjoy listening to the right hon. Gentleman, even when I disagree with him most profoundly, because he has one of the clearest dictions and deliveries among hon. Members and I do not have to strain so much to hear him. I only wish that he would more frequently use his ability to talk to better advantage.

I should like to take up one point which he made because I feel sure that it has common interest. It was raised originally by the hon. Member for Worcestershire, South (Sir. G. Nabarro) in the debate which started, as it seemed to most of us, only a few hours ago, and which seems to be going on into eternity. He was concerned to prod those of my hon. Friends who, like myself, are Co-operative Members. I should like to repeat the very clear statement made by my hon. and learned Friend the Member for Warrington (Mr. W. T. Williams) that Co-operative Members are opposed to the way in which this tax bites in a number of different degrees. I should like to correct the right hon. Gentleman's statement about our position in the Lobbies. If he refers to the Division lists, he will see that Co-operative Members did not go into the Lobby with the Government in any of the debates which terminated at 8 a.m. yesterday.

I wish to talk mainly to the Amendment standing in my name and the names of a number of my hon. Friends, Amendment No. 29. For once in my life, I find myself very much in agreement with what the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) in the point he made about procedure. It is extremely difficult for us to find ourselves circumscribed by the Budget procedure. I hope that the Select Committee on Procedure, or any other body which considers the procedure of the House of Commons, will consider the position when hon. Members seek to make Amendments to a Finance Bill they find themselves pre-empted by what has happened previously when the relevant Budget Resolution was passed. We are inclined to agree with every tax which the Chancellor introduces in general, but never in particular when it affects us or a particular cause which we have at heart. One of the Committee's difficulties is that there are so many good causes lumped under Amendment No. 34 that not one of them is likely to get through the needle eye of the Treasury.

I assure the right hon. Member for Enfield, West that I am, in large measure, in agreement with the various categories with which he wishes to deal, but I want to speak mainly to my own Amendment and to put some arguments to the Treasury in order to get some ameliora- tion of the tax as it affects part-time workers. I differ slightly from the right hon. Gentleman in that my Amendment refers to 21 hours whereas his Amendment No. 34, which incorporates the Schedule, Amendment No. 73, refers to 20 hours. The difference between us is much smaller than usual. I take 21 hours only because it is the amount of part-time work usually referred to in Acts of Parliament dealing with relevant matters.

Although I speak as a Co-operative Member, I am not on this occasion putting forward a particularly Cooperative case for the part-time worker. There is a case for the Co-operative movement, but it is not the one which I seek to argue now, for the Co-operative movement, as a non-profit-making industrial provident society, is different from firms which are joint stock companies. I wish to refer mainly to retail distribution as a whole and the use of part-time labour in it, not only because of the incidence of this tax on the general economy, but because I regard a large amount of retail distribution as an essential part of our economy.

Where the application of this tax is not sufficiently selective is that it is not selective enough in deciding the desirable number of products which need to be encouraged and the undesirable ones which need not have that encouragement. Nor does it distinguish sufficiently between those services which are important, socially useful and valuable and services which might, perhaps, be regarded as not so important.

7.0 p.m.

I should like to quote the representations made by the "Little Neddy"—the N.E.D.C. for the retail distributive trades—in a letter sent to the Chancellor of the Exchequer stating that it was puzzled by the heavy fiscal discouragement which the Government is thought to be giving to the employment of part-time workers at a time when the Distribution E.D.C.—with its tripartite backing "— that is, support from all sides— has been encouraging the employment of part-time workers as a means of overcoming the national labour shortage. The use of part-time female labour broadly increases the activity rate and does not decrease the availability of labour to other industries. I am reinforced by a further quotation, one which is far away from the Cooperative movement. The Willesden Chamber of Commerce makes the similar point in representations to me that its members have suffered for many years from a shortage of suitable labour in the distributive trades and that the only way in which they can continue to give service in my constituency of Willesden is by the use of part-time labour. We thus have the general case which, I hope, the Committee will consider.

One of my hon. Friends has said that we must release more part-time labour so that the National Plan may be completed by 1970. Especially if female labour is used, shopping habits are an important consideration. This tax may mean that it is not possible to give convenient shopping times to consumers merely because, unless it is possible to obtain part-time labour, service cannot be given.

The National Plan requires more part-time workers in a number of specialties. As a doctor, the hon. Member for Cheadle will know that in his own specialty of general medicine, it would be a considerable service to the community if, in view of the shortage of doctors, especially in general practice, instead of employing a doctor to act as a filing clerk or to type letters, we could employ receptionists to give patients appointments and to do a number of things at present taking the doctor's time. This would help to overcome the shortage of doctors which, in any event, cannot be finished with in medicine until seven years' later, when the next batch of doctor trainees comes from the universities.

In education, we are crying out for smaller classes, which means that we must have more teachers. We are appealing strongly for married women who are qualified to come back again when their children pass the age of 5. Here is another direction in which, if a part-timer is taken out of services so that we cannot buttress and facilitate a person who wishes to give service in some of the ways in which the community needs so much, it will not be a good tax for the community, but a bad one.

In nursing, in spite of last year's excellent recruitment figures, we are in precisely the same position and hospitals in some areas would welcome the opportunity to employ married women who qualified as nurses, in the same way as consultants are employed, on a sessional basis.

In retail distribution, which is my main concern, although I recognise, and my right hon. Friend the Chancellor has made the point clearly, that the tax is a revenue-raiser and most of the other things that we are discussing are by-products from it, the fact is that not only is there no surplus of labour, but there is an acute shortage which can be compensated for only by employing people part-time.

Before I came to the House of Commons, I had the privilege for many years of working on trainee induction courses for youngsters leaving school. The situation for so long as I have known it in that direction was that before 1939 it was possible to get adequate labour in retail distribution. Youngsters were prepared to accept work in a grocer's shop as an honourable, safe career and pensioned at the end. Since 1945 the position has been entirely reversed. Youngsters find that they can go into a factory and earn twice as much as they will earn as a grocer, or as a milkman, or in retail distribution.

The result is that for 20 years retail distribution has had to accept for training and service those who are more or less unable to find their niche somewhere where the pay is better and conditions very often more favourable. Therefore, if milk and bread are to be delivered, and we are to give coverage of food that is necessary so that the consumer can be served, we are forced back to part-time labour.

Many shops are able to employ people and not only female labour, at weekends when trade is heaviest. I know that my right hon. Friend the Chancellor has tried to meet this problem by differentiating the tax between males and females in proportions different from their rates of insurance. A large number of 17-year-olds, however, are prepared to work on Fridays and Saturdays. This means that they work for more than eight hours and, therefore, become liable to the tax. They work only a few hours in excess of eight, however, so that each extra hour becomes a very impost. Very often one is paying something like 25s. for an extra two or three hours' work, which makes this arrangement practically impossible to operate.

I have drawn my examples from the Co-operative movement, and not from outside trade, because I have more ready access to it. The London Co-operative Society, for example, employs 2,457 part-timers. About 300 work less than 20 hours a week and 228 of these are females. In addition, an average of 1,000 are employed every week for less than eight hours. This is a quite large proportion of the labour force.

At Leighton Buzzard—I hope that nobody will ask me why I chose Leighton Buzzard; it is simply one of those names, like Chipping Norton or Chipping Sodbury, which catches the eye when scanning the list—one employee in three works part-time. At Basingstoke, the ratio is one in four.

I have done a little homework on this and have looked through a number of statistics and figures, with which I do not wish to weary the Committee. In the main, however my analysis confirms the point made by one of my hon. Friends that three part-timers are employed to do the job of one full-timer This means that the tax will work at a much higher rate than the Chancellor envisaged in his Budget speech. The fact that a trader has managed to modernise and convert his business into self-service to deal with the labour shortage means that it is still necessary to employ part-time labour. It seems, therefore, that the tax will be a disincentive rather than an incentive to more modern methods of retail distribution.

One hon. Member has claimed that in the House and in Committees we too frequently adopt a metropolitan view. We too frequently like to think in terms of London, Cardiff or Manchester. But when one considers retail distribution in rural areas and the large number of mobile shops which are used, I do not quite know what can be done to cut down the labour of a man who drives a mobile shop. Does one have simply one-third of a man driving or, as the only alternative, three men taking it in turns on a part-time basis? Once again, the incidence of the tax upon part-timers is far too swingeing to be fair to a distributor who is trying to do an equitable job in the community.

There are a number of other practical and technical points that I could raise. I have had the good fortune to be able to raise them privately with my right hon. Friend the Chancellor of the Exchequer. Whether I was able to be effective then, or will be effective now, is another proposition.

However, I recognise the Chancellor's difficulties. I have sought, as one always does when one feels strongly about a thing, as I do about this, and when one is fighting a cause, as I am this, to see the point of view of the man who will be defending the opposite case, and I have sought to see the Chancellor's difficulties and I recognise that there are two basic things the Chancellor is seeking to do. First, he wants to preserve simplicity in administration of the scheme. He does not want it to get too complicated. Secondly, he wants to take £230 million or so out of the economy.

My right hon. Friend is, therefore, concerned in case the Amendments to his Bill would, if they were accepted, amount to so much that they would destroy the purpose of the tax. I think that many of us may wish to debate this further on the Question, "That the Clause stand part of the Bill", and debate the whole tax, but that is not my purpose at the moment. I want to concentrate on the issue of the part-timers.

Looking, first, at the question of ease of collection and simplicity in adminsstration, already the Ministry of Pensions and National Insurance has, in connection with part-timers, about 30 different varieties of stamps. It would appear, therefore, that it would not be impossibly difficult to arrange for that number to be 31. There is the very real difficulty which the Ministry would face, and that is that it could not, as a physical possibility, have the job of printing completed by 5th September. I hope that you will forgive me, Mr. Godman Irvine, for harking back to the first Amendment debated on Clause 42, and the date, but there is no doubt about it that it is not possible for the job of printing to be done before 5th September. I am, however, sure that it could be done by February, and perhaps the Chancellor would look at that.

Again, if we are able to devise a scheme to take account of those who work for less than 21 hours and the differential between those who work for less than 21 hours and those who do full-time work, would the Post Office be able to cope with the additional work which would be put on its shoulders? As the Chancellor quite rightly said in his Budget speech, one of the great advantages to the Treasury of this tax is that other Ministries have to do most of the work rather than the Treasury; there is collection by the Ministry of Pensions and National Insurance and disbursement by the Ministry of Labour, and in between times the Post Office has the handling of any additional stamps to be sold. It would be useful to know, and I hope that the Financial Secretary, when he replies to the debate, will tell us, whether or not discussions have gone on with the Post Office to see whether or not it would be able to handle this difficulty.

7.15 p.m.

A further difficulty, I think, will be that of checking if we make a stipulation that a part-timer is one who works less than 21 hours. How do we know, if his employer says, "This man is doing only 21 hours", whether he is, in fact, doing 19 or 22? Of course, that question of the boundary line will arise in any case. But I would remind the Financial Secretary that there has been a similar case, payments through the Milk Marketing Board, where there was not adequate machinery for checking, and what the Government have done is to enable payments to be made on audited certificates.

Therefore it would seem that, if the Chancellor wants to do this, it would be a possible way of achieving the end of the Amendment if he would adopt some such procedure for the purpose of checking. If he wants to make some kind of concession in respect of part-timers for the sake of the economy it would be far easier to gear it not so much to hours, but to gear it to pay. It can be assumed that the payment of part-timers is within a certain sum and we could have a ceiling, at whatever may be the amount decided, to say that that should be exempt from payment of the payroll tax. This would, perhaps, be a way of meeting the problem of the part-timers.

The second objection the Treasury would have is, naturally, the one of cost and whether, if my right hon. Friend were to accept the Amendments under the very wide umbrella put up by the right horn. Gentleman the Member for Enfield, West (Mr. Iain Macleod) of all these various categories, including the one for which I am pleading, that of part-timers, the cost would be so great as to be destructive of my right hon. Friend's tax. The 1961 Census would show that there were at that time 1,160,000 part-timers of whom 90 per cent. were female. I work it out, therefore, that the probable total cost of this concession, if we were able to find a way of exempting part-timers, would be about £35 million. There are several ways, if my right hon. Friend needs to take £230 million or £240 million out of the economy, of recouping that amount. This is linked with the other Bill, but it would be possible to meet this problem on other financial grounds.

One way is the suggestion put forward in another Amendment which has not been called about the self-employed person. If the Chancellor is seeking to deploy labour more successfully in producing goods, rather than in providing services—and I hope to argue this case later on this evening, or it may be in the morning—it is because he thinks that too many people are employed uneconomically in distribution, but the fact remains that there is a large amount of uneconomic distribution because there are too many retail selling outlets which have not modernised their distribution sufficiently to do it with less labour and in less time. Therefore, should he find some way of making the self-employed person liable this would not only give him back his £35 million but would raise it by £40 million as well.

Photo of Mr Arthur Palmer Mr Arthur Palmer , Bristol Central

Could not the cost be offset by reducing the premiums on certain manufacturing industries?

Photo of Mr Laurie Pavitt Mr Laurie Pavitt , Willesden West

That is another way. It would be possible, and there is the whole possibility of the grading of the premiums.

I would conclude by asking the Chancellor——

Photo of Dr Michael Winstanley Dr Michael Winstanley , Cheadle

The hon. Member keeps repeating the figure of £35 million. I think that he must accept it as an illusory figure. The Chancellor cannot be under the illusion that we are to have the same number of part-time workers when this tax comes in as we have at the moment. It will get rid of part-timers. They will become full-timers.

So the cost would be very much less than £35 million.

Photo of Mr Laurie Pavitt Mr Laurie Pavitt , Willesden West

I am most grateful for the help of the hon. Member for Cheadle. I am trying to state my case at its worst in order to be fair, but I accept what the hon. Member said, although the number could be much less for a number of reasons other than that.

I would conclude by asking the Committee to consider this matter seriously, and I ask the Chancellor to do so as well, although I accept that because of the mechanics of the way we are having this debate, with a number of Amendments grouped together, and because of the fact that the ameliorations are more likely to come in the second Bill than in this, we may not get the concessions now; but I do implore the Treasury to look at the whole effect of this, not only in financial terms but in the human terms argued by a number of hon. Members in this debate, to look at it from the point of view of what is best for the community as a whole.

If my right hon. Friend cannot, at this stage, accede to these suggestions, let us at least talk further, in the hope that at a later stage we may be able to refine what the Chancellor has recognised as being a very blunt instrument. Let us, then, give some amelioration so that part-timers may be exempt, for the sake of the economy and in the interest of good sense.

Photo of Bernard Braine Bernard Braine , Essex South East

Like all who have spoken in this interesting debate, I am completely convinced that this tax will discriminate harshly against the disabled who have been described quite recently by Professor Titmuss as one of the weakest and most deprived groups in our affluent society.

I do not think that anybody who has listened to the debate today, or who listened to the debate in Committee on the Ministry of Social Security Bill on 17th June, can be left in any doubt as to the acute physical, psychological and financial difficulties of the disabled, whether they are working, whether they are confined in hospital beds, or whether they are eating their hearts out on National Assistance at home.

All who understand this problem, whether engaged in government, as medical men, or as social workers, are agreed that our aim should be to help the disabled to live as normal lives as their disabilities, whatever they may be, permit. This means encouraging them to overcome their physical handicaps, and the psychological and social difficulties which these always bring, by becoming self-supporting and self-respecting members of the community. That means, in short, encouraging them to work, as Member after Member has said in this debate.

At least, that was the aim before the Chancellor introduced this strangely un-selective tax. How right my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) was to say that we assumed all too easily that full employment had solved the problem of the disabled, of the weaker elements in our society. As the hon. Member for Sheffield, Brightside (Mr. Winterbottom) said, the difficulties of finding work for the handicapped are enormous both in regard to the placement of school leavers, as any youth employment officer can testify, and in the case of older persons, as any disablement resettlement officer knows.

I would like to reinforce the case which has been made so eloquently and in such compelling fashion by the hon. Lady the Member for Wood Green (Mrs. Joyce Butler). She dealt with the deaf, those who suffer from a disability which Dr. Johnson once described as "one of the most desperate of human calamities." Well he might. For I have been reading the summer edition of the Social Service Quarterly, in which Mr. Kenneth Lysons, in an extremely sensitive and well-informed article on the welfare of the deaf, says: Few people other than those who are personally or professionally involved understand that deafness is not an isolated disability but a chain reaction of disabilities affecting all aspects of life … The deleterious effects of deafness on personality, social growth, educational progress and emotional development are immeasurable. So it is that trying to fit the deaf into useful work and, what is more, trying to keep them in work presents formidable difficulties. The deaf are quite unlike the blind in one important respect. They can see what is going on, but so often it is as though they are looking through a glass window at a world with which they cannot communicate. It is because of this difficulty of language and communication that the deaf are generally limited in the choice of occupation. Often they are unable to take up work in which contact with other human beings forms an essential part.

Managers and foremen, as I know from my own personal experience, have not the time and have not the patience to explain adequately to deaf workers the various technical terms and processes involved in their work. Moreover, despite all that was said by the hon. Member for Cheadle (Mr. Winstanley) with most of which I fully agreed—he was speaking directly from experience—there are some employers who are, frankly, disinclined to employ a deaf person.

Then there is the case of those suffering from a wide variety of crippling handicaps who wish to work so as to overcome their disability, to prevent it from taking complete command of their lives. I am referring to those who are partially paralysed, the arthritics, epileptics and paraplegics. We have all had them coming to our consituency "surgeries" week after week and year after year with their difficulties.

One dedicated disablement resettlement officer who works in my constituency said to me recently that in many ways these people are not just disabled. They also endure discomfort in the same way as normal persons do who are unemployed through sickness. Advancing age, the nature of their handicap and the limitations which this puts on the kind of employment they can take—I should like to have the Financial Secretary's attention; we are dealing with a subject touching a small but gravely afflicted element in our society and though I am not all that hopeful that we shall get satisfaction from the Treasury Bench this afternoon, we ought to be listened to.

7.30 p.m.

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

I assure the hon. Gentleman that I am listening to what he says. As the hon. Gentleman will appreciate, it is also the duty of those on the Treasury Bench to reply to debates and to do that one has to have some conversations directed to that end.

Photo of Bernard Braine Bernard Braine , Essex South East

I fully accept what the hon. and learned Gentleman says. On the other hand, when one is deploying an argument, and has the ear of the rest of the Committee, it is annoying if there is a conversation on the Treasury Bench. It is disconcerting and it is discourteous

However, I fully accept what the hon. and learned Gentleman says. I am sure that he would be the first to agree that the very disabilities to which I am referring limit the kind of work which these people can do, the distance they can travel to work, and the opportunities open to them to get even light or part-time employment.

The point I am making is that unless these Amendments are accepted—and this is the message which has gone out in speech after speech—an additional discouragement will be imposed upon those employers who, out of goodness of heart or as a result of the pressures brought upon them by dedicated disablement resettlement officers of the kind I have quoted, employ disabled people. A tax of 25s. a week on a disabled man and 12s. a week on a disabled woman may make all the difference between having a job and complete despair. That is the message which we are trying to convey to the Treasury.

I do not apologise for having intervened in the very interesting speech of the hon. Member for Cheadle. Unemployment among disabled workers in this time of full employment is five times greater than the national average. In February, there were 659,000 people on the Disabled Persons Employment Register. The hon. Gentleman said that of those, 47,000 were unemployed. The figure ought to be broken down. About 7,000 were suitable only for employment under sheltered conditions. But that still meant that there were 40,000 disabled persons unemployed at a time of acute labour shortage.

As the hon. Gentleman said quite rightly, that is only a small proportion of the total number of disabled people in our community. Many work preferring to hide their disability if they can, or are fortunate in having sympathetic employers. But many are so discouraged that they have been forced to live on National Assistance.

I ask the Committee's permission to read a short extract from an article by Lady Hamilton, of the Central Council for the Disabled, in New Society, on 5th May, when she said: By making an outright attempt to get out and earn a living, a disabled person inevitably becomes involved in higher living costs. Difficulties of accessibility, accommodation and transport assail him at every turn. No income tax relief is allowed to meet these extra commitments. Present conditions encourage the handicapped to settle for the meagre safety net provided by the welfare state. Now at this moment comes this clumsy, ill-thought-out and iniquitous tax which will discourage employers from employing disabled workers over and above the 3 per cent. quota. That is the purpose of the tax. It is designed to cut down the number of persons in the service industries. That is the Government's declared intention. It will certainly discourage employers from helping the hard-pressed officers at the Ministry of Labour to place disabled persons in suitable employment.

It is incredible that this situation should not have been foreseen. If the Minister of Pensions and National Insurance, a lady with a large heart and a deep knowledge of these matters, had been in the Cabinet, or if the Minister of Health had been in the Cabinet, the Chancellor might have been told at the proper time that what he was going to do about charities and what he will be doing to the disabled was socially wrong and in complete opposition to everything that has been preached by all political parties and social thinkers in recent years.

Let me simply proclaim my philosophy on this. I think that is it is one which will have the support of every hon. Member in the Committee. One can see many parts of the world enduring poverty and indignity to human beings of a kind which we can hardly understand here and such as is not within the knowledge and experience of the man in the street. In this country we enjoy a high standard of living and I suggest that we should be moving in precisely the opposite direction from what the Government are doing by this tax. We should be setting an example by seeking to help our disabled fellow citizens by tax allowances, if they are working, and by constant attendance allowance, if they are chronically disabled. In a just society, we should be giving a conscious preference to the weaker element—the elderly, the sick and the disabled. I am sure that no one in the Committee would disagree with that.

I ask the Financial Secretary to convey to the Chancellor this message. The right hon. Gentleman heard the earlier part of the debate, and it is a pity that he has not been here to listen to all the speeches. In regard to the incidence of his tax upon our disabled fellow citizens he should reflect and relent. If, in this matter, he behaves magnanimously, he will add immeasurably to his stature.

Photo of Mr George Strauss Mr George Strauss , Lambeth Vauxhall

I hope that the hon. Member for Essex, South-East (Mr. Braine) will forgive me if I move away completely from the very important subject which he has put before the Committee to an entirely different one. It is the subject contained in Amendment No. 220, which is supported by a large number of my hon. Friends. The purpose of it is to prevent the damage which many of us fear will be done to our provincial theatres unless some action is taken by the Government.

There is no need for me to appeal to the Financial Secretary or to any other Member of the Government for sympathy. I think it is agreed on all sides that the present Administration has done great things for the arts. They not only believe in furthering the arts, but have provided far greater sums of money than ever before for that purpose. Through the Arts Council, they have gone out of their way to provide considerable additional sums for the theatres, in particular.

We have no fear that theatres which have been supported by the Arts Council up till now will be damaged as a result of the tax. They all come under the 1960 Charities Act and will in no way be damaged by the S.E.T. But there is one section of the theatre world which is very important culturally which has no protection and which we fear will suffer considerable harm. I am referring to the commercial theatre in the provinces. I have no qualms at all in putting forward the case for our provincial theatres, because they present a very important cultural service to their communities. If that service were withdrawn serious harm would be done to those communities.

The commercial theatres in the provinces receive no Arts Council grants. They are not protected because they are charities. However, they provide a very important cultural service in many towns. Not only do they put on light comedies and pantomimes—and it is as a result of the income which they get from their pantomimes that they are able to exist for the rest of the year—but serious and important plays which are very much appreciated by audiences and which make a real difference to the cultural life of those towns.

The unfortunate fact is that very few of these theatres pay their way in any substantial sense. They scrape along, some of them making practically no profit at all. One finds that most actors, technicians and managerial staff employed in them receive miserably poor salaries. They work there because they are dedicated to the theatre. Such theatres might increase their incomes by raising seat prices, but they know that in the face of competition from television and the cinemas there is a certain limit above which they cannot raise their prices.

Unfortunately, these theatres usually employ a large number of people and the tax will be a real burden to them. I know of one theatre which is doing an excellent job and making a real contibution to the life of the community. The tax will impose a burden of £5,000 a year on it, and it has no chance of getting it back. Unless some relief is given to many of these theatres, they will have to close down within a year or two because of the imposition of the tax.

Photo of Sir Harmar Nicholls Sir Harmar Nicholls , Peterborough

I wonder whether the right hon. Gentleman has in mind the position of the theatre group which, according to the Financial Times, is talking about turning its theatres into business properties. Last year it showed a loss of £10,000, and the imposition of the tax will add another £23,000 to the loss which it will have to bear next year.

Photo of Mr George Strauss Mr George Strauss , Lambeth Vauxhall

I was not thinking so much of the big group to which the hon. Gentleman refers. I was thinking of the smaller theatres in many parts of the country which carry on as a result of the enthusiasm of the actors and staff and the support of small sections of the local population. Many of them will have to close down.

In my view, it is not reasonable to do what some of my hon. Friends would like and say that because these theatres provide culture they should be exempted altogether. I could not speak enthusiastically in support of exempting the London theatres. If there is to be a selective tax on services, I see no reason why musical comedies in the West End such as "Hello Dolly!" should not make their contribution.

In the great entertainment centre of the metropolis most of the plays offer amusement as well as enlightenment. I am happy to see any type of theatre exist and flourish. Whether it provides relaxation or mental stimulus is not so important. But one could say logically that in the provinces, where the situation is very different, where there is a dearth of cultural activities where theatres are few and far between and where they are struggling to keep alive, there should be some differentiation. I do not say that they should be exempted altogether, but the tax on those theatres should be at the lowest level contained in the category of taxes set out in the Bill. That is why we suggest that the rate of tax should be 8s. in the case of employees of those theatres rather than the larger sums which they would otherwise have to pay.

The case is very simple. It does not need arguing. I appreciate the difficulties, and I appreciate that the Financial Secretary would like to see some help given to these theatres. I do not know whether the way we have suggested is the best: way of dealing with it. There may be some other way which the Government; have in mind, but I put in a strong plea. to the Government that, either now or when we consider the other Bill connected with the Selective Employment Tax, they should provide some means whereby these theatres which are doing such an important job in the provinces are enabled to be kept alive, because it is certain that many of them will have to close unless some relief is given from this tax.

Photo of Mr Robin Turton Mr Robin Turton , Thirsk and Malton

One thing that is becoming clear from this debate is that so many hardships are being created by this tax, and the area of damage to the economy is becoming so wide, that it tends to make one speech not follow the preceding one in every detail. I feel strongly that each of us should try to concentrate on one or two points. Many hon. Members want to speak, and it is much better that we should deal with one or two points each.

I want to concentrate particularly on the problem of old people. I am very concerned about the effect which this tax will have on the problem of old age and of old people getting employment, particularly in the rural areas, where old people are usually in the service industries, and certainly not in the manufacturing industries, although there are a few in agriculture.

To a certain extent I thought that the hon. Member for Willesden, West (Mr. Pavitt) made a cogent speech about part-time workers. The problem of old people comes into the problem of part-time work, because quite often a retired person cannot do a full week's work. He probably works for two or three days a week or, alternatively, he works a very short day, and yet an employer will have to pay an additional stamp of 25s. for his services.

I ask the Government to reconsider this at an early date, because everyone who has worked with this problem of old age knows how difficult it is to secure employment for old people and how valuable some form of work is for someone living on a pension. It enables him to supplement his inadequate pension.

7.45 p.m.

The Chancellor has said that he wants simplicity of administration. It is in dealing with the problem of old age that he can make a simple and beneficial Amendment, because those who are receiving a pension but who are working have a different stamp from all other employed people. For them there is only the employer's contribution, plus the industrial injury contribution. Thus, with old people who have retired, it is possible to keep that stamp without any alteration at all. In other words, we can exempt old people who have retired from the provisions of the Bill, and I commend this suggestion to the Financial Secretary.

My proposal does not deal with the whole area mentioned in Amendment No. 73, which deals with all old people over 65 or 60. My proposal would not cover somebody who was delaying his retirement, but I submit that if we were to give pensioners special treatment and exempt them from this tax it could be done without any great difficulty.

My second point concerns educational establishments. I do not understand how the manufacture of intelligence can be regarded as a service industry. To my mind it is vitally important for the future of this country to encourage as many people as possible to teach. The effect of this tax on some establishments will be punitive, particularly those which employ a large number of part-time teachers.

As I see it, the position at the moment is that local authority educational establishments will pay the tax in September and it will be duly refunded to them. The educational establishments covered by section 4 of the Charities Act will pay the tax and have it refunded to them. But the other educational establishments which are not covered by section 4 of that Act will have to pay the tax without refund.

In a Written Answer on 21st June my hon. Friend the Member for Norfolk, South (Mr. J. E. B. Hill) was given information about the effect of this tax on direct grant schools and on independent schools which are recognised as efficient. We now know that 43 per cent. of direct grant schools will get a refund, while 57 per cent. will pay the tax and not get a refund. For independent schools recognised as efficient, 49 per cent. will pay the tax and get it refunded, while 51 per cent. will pay the tax without refund.

I submit to the Financial Secretary that this method of treating what is really a manufacturing industry, education, in such a way that we get this subdivision whereby some pay the tax and get it refunded while others get no refund, is making a nonsense of the whole matter, particularly because some of the establishments which will carry the burden of the tax are those which we want to help most.

I am thinking particularly of those independent schools which provide boarding education for the children of colonial and foreign servants, and overseas students. This form of boarding education is not available in many parts of the country in any form other than at these independent schools. I warn the Government that if they continue this tax on educational establishments, with this differentiation against certain of the efficient independent schools and direct grant schools, they will drive a great many of them out of business, particularly those smaller schools which have to rely on a great many part-time teachers.

I suggest that the Government must think again on this matter. If we are thinking of getting this country fit to cope with the problems of this new age of technology, it is vital not to discourage education in any form by this kind of Finance Bill. I am sure that the Financial Secretary recognises the great damage that is being done by this provision.

He should also realise that it is no good saying, "This is something that we can try to repair. We agree that we are doing a great deal of damage. This is rough justice, but we will try to ease it by later Orders." That will not do any good in the case of the two problems to which I have referred—the employment of the old and the position of educational establishments which give parents educational freedom of choice.

Photo of Mr Arthur Palmer Mr Arthur Palmer , Bristol Central

Unfortunately, I was not able to take part in the earlier debate on this Clause, because I was away abroad, engaged usefully and selectively if indirectly in the business of the House. I am glad that I am here now and in a position to say a few words about part-time workers.

I am not one of those who have gone out of their way to condemn the Selective Employment Tax. In my constituency and elsewhere I have defended its broad application. I must confess, however, that I would have preferred to see more stress being given to it as an employment tax and not so much stress being put on its selectivity, because if that side is examined we find that the selectivity is so crude and deals out such rough justice that it tends to take away the value of what is in conception a good tax.

It would have been a particularly good tax if it had been introduced gradually. So I am not against its broad principles, but I am certainly very much against its operation in relation to the part-time worker.

Having listened to the arguments so far it seems to me that they fall into two categories. I hope that my hon. and learned Friend the Financial Secretary will have noticed this, and also that there has been universal endorsement of the points raised so far by hon. Members on both sides of the Committee.

The first argument is the argument of humanity. Part-time workers are often elderly people; they are often people whose health is not very good; they are often disabled people, or married women—sometimes with young children—who, of necessity must work. They may be married women, who, their children having grown up, are making a useful contribution to the country by returning to work in industry.

It is natural that workers of this kind should go into the distributive and retail services, because that is the kind of work which is often near their homes, and the sort of work for which their previous outside or domestic employment has trained them. It is unlikely that if they are unable to do this work they will transfer to work in the manufacturing industries.

Under conditions of full employment, and from the point of view of sheer humanity, many of these people, most of whom are women, have been encouraged to take on this part-time employment, and if they are forced out of it it will be very hard on them; they will be very discouraged—and I cannot believe that my right hon. and hon. Friends intend this to happen. I have received a great deal of correspondence on this issue. I can assure my right hon. and hon. Friends that tremendous public feeling is building up about the way in which the part-time worker will be treated by the operation of this tax. I ask them, therefore, to consider this question from a human point of view.

I turn now to the economic arguments. Because of my connections with my trade union which organises technical employees I have received a circular from the Ministry of Labour pointing out that trade unions, in co-operation with our employers, should do all they can to encourage part-time workers to continue in employment, because this is essential, it is argued, to the general health of the economy. Those part-time workers include pensioners, the circular adds. That is quite sensible and rational in present circumstances, but at the same time, by making life so difficult for part-time workers in the places where they are likely to be employed, my right horn. Friend the Chancellor is undoing the good which the Minister of Labour is attempting to do.

I speak also with extra feeling on this part-time issue economically, because I represent not only the Labour Party but the Co-operative Party, and through my connections with co-operative societies I realise of what value the employment of the part-time worker in the distributive trades is to the national life.

Co-operative societies, naturally, have a focal connection with life as it is found around them; if the part-time women workers who work in co-operative stores are forced out of that employment—as will undoubtedly happen in the case of the smaller societies—they will not go to work in factories. If the Chancellor of the Exchequer or his hon. Friends think that they will they are deluding themselves, as time will show.

There is no human justification for this attack on the part-time worker, and there is no economic justification for it. What, then, is the justification? It appears that the Chancellor needs money. But all Chancellors need money. In broad principle, I prefer a tax of this kind to financial measures which are deflationary, but I should have thought that an adjustment to take account of the loss to the revenue by giving relief for part-time workers would be quite simple. It could be made within the dual system which my right hon. Friend proposes to introduce.

It would be out of order now to discuss the Selective Employment Payments Bill under which premiums are to be paid to manufacturers, many of whom have not asked for them and in many cases do not need them. But it should be quite simple to reduce somewhat these unnecessary cash bonuses to manufacturing industry so as to make it possible for the part-time worker in distributive and service industries to continue in employment.

I do not know whether my right hon. Friend has convinced himself that what he is doing in this matter is right, but he has not convinced me. I am an engineer and not an economist but I am certain that it is better to allow part-time workers to continue to be employed in hotels or co-operative stores or in the offices of scientific societies, rather than encourage lavishly the makers of "one-armed bandits"; or gnomes for use in gardens, that could never be exported to Zurich. I should have thought that the first type of employment was generally complementary to the health of the economy and the second not.

8.0 p.m.

I hope that my hon. and right hon. Friends will not go the way of so many members of the Treasury Bench, who look upon arguments in the Committee, particularly when they are from both sides, as something which simply has to be endured, but which they hope will stop eventually, when they will push on in their own stubborn way. I suggest to my hon. Friends that the fact that there is a coincidence of opinion across the Committee is a very good reason for supposing that those of us on the Floor of the Committee have the better of the argument in this case.

At least, I hope that, when my right hon. Friend replies to the debate, he will do something by sheer force of argument to convince those such as myself who are not against the broad principle of an employment tax, that in this matter of part-time workers we are wrong and he is right. But it will not be easy for him.

Photo of Sir Raymond Gower Sir Raymond Gower , Barry

The hon. Member for Bristol, Central (Mr. Palmer) said that the Floor of the Committee has had the better of the argument, but there has been no argument. Indeed, all the comments have been turned to one direction. The Chief Secretary must be aware now that the Selective Employment Tax in its present form appears to have no friends in the Chamber apart from Ministers. That is what he has to face——

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

Surely the hon. Gentleman has not been absent from every Division?

Hon. Members:

"In the Chamber".

Photo of Sir Raymond Gower Sir Raymond Gower , Barry

I have left the Chamber for only a short time this evening. I have been here from the beginning of the debate. Every hon. Member who has spoken, from either side, has been very critical of the tax in its present form. Whatever the economic virtues of the tax, which we would be out of order in debating at present, it is obvious that in its present form, in the view of all who have spoken so far—and all who have been present, judging from the noise from both sides—except the Front Bench on the Government side, needs radical amendment.

It seems clear from the speeches so far what sort of amendment the Clause needs. The hon. Lady the Member for Wood Green (Mrs. Joyce Butler) admirably moved an Amendment dealing with one respect in which it could be amended, as it relates to the deaf. Without being sentimental about the condition of the deaf, I think that the Chief Secretary will admit that deafness can be a grave disability for a person seeking employment. Indeed, were I at this moment responsible to a company for engaging personnel, I would be less than human and probably not doing my duty efficiently if, in many cases, I engaged a deaf person rather than a person with good hearing, so great can this disability be.

Of course, we all know of deaf people who, by virtue of their diligence, can nevertheless do excellent work, but deafness is a severe disability. If he turns down this Amendment, he will be giving notice to all the deaf people in the country who are holding positions, perhaps tenuously, that the Government will make it more difficult for persons with considerable deafness either to retain their present employment or to obtain employment in future. This is a very serious matter, as I am sure the Chief Secretary will agree.

Another category which has been referred to is that of the disabled. Undoubtedly—the Chief Secretary and Chancellor of the Exchequer may make a good deal of this—the needs of the disabled are partially provided for by earlier legislation, under which certain factories with more than 20 employees have to employ a quota of people in this category. Nevertheless, of course, by the very nature of their disability, many of these people, willy-nilly, work in establishments which employ fewer than 20 employees and which thereby have no legal obligation to employ this quota. Because of their disability, as is the case with the deaf, these people are more likely to find the sort of work which they can do in the service industries than in the major productive industries.

The position of the disabled, in many parts of the country, is at best difficult. It is not easy for them to find employment within their capability and many employers—this happens in my part of the country, in South Wales—have done more than they are required by law to do. In some cases, they employ 4 per cent. and 5 per cent. instead of the required 3 per cent. However, if they are faced with an impost of this nature—some of them, of course have also very deep difficulties with their credit and liquidity—and if they have to wait a considerable time before they get the so-called premium, it is doubtful whether, during the interim period of nearly six months, they will be able to retain the extra persons beyond the quota. They will retain only the quota which they are required to retain.

Of course, it seems likely that the smaller organisations wil not even do that, when they are not obliged by law to do so. In a smaller organisation, employing fewer than 20, it is more difficult to employ disabled people.

Nobody in his right senses would minimise the awful disability which blind people suffer. It is only in a limited sphere that they can find any employment at all, but some have triumphed over their difficulties and are able to do something—mostly in a service industry of some kind or in an office, with the aid of Braille, and so on. To take any step which would make it more difficult for employers to employ disabled people is something which any Government would be ashamed of.

If the Amendments are not accepted, it will be noticed that the Government will make things more difficult in future for the deaf, for many of the disabled and for the few blind people who obtain employment either to retain their employment or to obtain such work in the future.

An extraordinarily powerful case was adduced by my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), on behalf of retirement pensioners. He made it clear that some concession can be made for these people with great ease, administratively. He explained the existence of a distinctive stamp. It should be in accordance with the policy of the Government, as it has been for all previous Governments, to encourage the employment of the elderly. In many parts of the country, that employment will tend to be in service industries rather than in the major productive industries.

The Government are in a cleft stick. They say that they want to encourage people to go from the service industries into the productive ones, but these groups of people, in many cases, could not possibly move into productive industries. How can a person over retirement age suddenly contemplate moving from a service industry into a productive one? It is not feasible. Any measure framed on the assumption that it is possible, to put it frankly, is absolutely absurd.

I turn to the question of part-timers. Again, I do not want to be unduly sentimental.

Photo of Mr Charles Hale Mr Charles Hale , Oldham West

What is wrong with being sentimental? We have had five or six days' discussion on economics and statistics without caring a damn about an individual. Why not mention an individual with kindness, with feeling and with sympathy?

Photo of Sir Raymond Gower Sir Raymond Gower , Barry

All right, I will.

A great number of part-time workers are widows. Many of them are left with dependants for whom even the provision of a State pension supplemented with an extra allowance for children is quite inadequate. Many of them have to make provision for commitments entered into while their husbands were still alive. Should we do anything which will make it more difficult for these people to obtain work? It will be noticed by the Government that if they reject the Amendment it will be more difficult in future for these people to retain work or to obtain new employment.

Another reason why the Government should accept the Amendment is that most of these categories, if not all, are capable of identification. Some of the Amendments identify them by accurate description, those, for instance, who are on the Disabled Persons' Register and those who are in receipt of retirement pensions. Many blind people receive pensions. All these people are capable of easy and accurate identification.

A sophisticated society such as ours, like that of the United States or of most countries in Western Europe, whatever the Chancellor may do in future, will increasingly have a large proportion of service industries. Yugoslavia, Czechoslovakia and most Eastern European countries had very few service industries after the war. America has many more such industries than we have. We hope that the day will come when we shall have larger and better symphony orchestras and more people playing in them. That is a service. We hope that the day will come when more will be employed in museums, in art galleries, and providing better opera and ballet. All those are services and there will be more people working in such services in future.

The attitude of the Government towards this matter is completely out of date. They are looking backwards to the time when nine-tenths of the people worked in heavy productive industries. They should be looking forward to a new era when fewer and fewer people will be working in productive industries. They should look forward to a better society with a better standard of living. To this extent the Government are fighting against the tide, like King Canute.

The Government's economics are completely unsound. They have made an artificial distinction between services and production. The proposals we make are based on common humanity. The Government should give priority to examination of this. Their own supporters are deeply anxious about the nature of this tax as it stands. Their supporters do not want the deaf, the blind, the disabled, part-timers and widows to be prejudiced, as they surely will be if this Clause is not amended.

8.15 p.m.

Photo of Mr Alf Morris Mr Alf Morris , Manchester Wythenshawe

The right hon. Member for Thirsk and Malton (Mr. Turton) suggested that we should each confine ourselves to two points during this debate. I hope that he will allow me the bonus point of saying that I was unusually disappointed by the speech of the right hon. Member for Enfield, West (Mr. Iain Macleod). I am always disappointed with his speeches, but I found this one unusually disappointing.

Photo of Mr Alf Morris Mr Alf Morris , Manchester Wythenshawe

I should soon be out of order if I were to respond to the hon. Member for Chelmsford (Mr. St. John-Stevas).

What I found most disappointing in the speech of the right hon. Gentleman was his reference to prejudice on this side of the Committee against independent fee-paying schools. Of course, to some extent, he was right. I am hopelessly biased in favour of the State system of education, and so I think are well over 90 per cent. of the people of the country. But, just as I am hopelessly biased in favour of the State system, so are many hon. Members opposite very strongly biased in favour of independent fee-paying schools. The right hon. Gentleman should not accuse us of great prejudice when, if he looks behind him, he will find prejudice quite as strong in favour of the private enterprise sector of the educational system.

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

The hon. Member has completely missed the point. If he heard what I said he would know that I stressed over and over again that we were concerned with, and had drawn the Amendment to cover, all educational establishments. I am not interested merely in the private sector nor merely in the public sector; I am interested in both. The reason for mentioning the private sector is that it will be discriminatorally affected by this tax while the public sector will not be. That is the reason I mentioned it.

Photo of Mr Alf Morris Mr Alf Morris , Manchester Wythenshawe

I am addressing myself to the right hon. Gentleman's point that we on this side of the Committee are prejudiced against independent fee-paying schools. He knows very well that there is equal prejudice on his side of the Committee in favour of independent fee-paying schools. The point he has just made does nothing to alter my contention that conflicting prejudices are to be found on the two sides of the Committee.

I turn to the question of part-time labour. In recent speeches, it has been argued by many of my right hon. Friends that one of the most intractable and serious problems facing British industry is the problem of excessive overtime. It has been argued again and again that too many people are working unnecessary overtime. My fear about the effect of the Selective Employment Tax on part-time labour is that it will cause many employers to increase the amount of overtime worked by their full-time employees. It is by no means fanciful to assume that there will be many employers who will dismiss part-time employees and add to the hours of work of their full-time employees. This assumption is reinforced by the complete lack of evidence of labour hoarding in retail distribution. Indeed, I am told by people who are far more expert than I am in retail distribution that there is, if anything, a labour shortage.

Photo of Mr Alf Morris Mr Alf Morris , Manchester Wythenshawe

My hon. Friend the Member for Sheffield, Brightside (Mr. Winterbottom) agrees with me, but he will have an opportunity to develop his views by making a contribution to the debate.

Photo of Mr Charles Hale Mr Charles Hale , Oldham West

My hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris) assures us that hon. Members will have an opportunity later, but that might well depend upon whether another Privy Councillor pops in and pops out, because there must come a time when somebody moves the Closure. [HON. MEMBERS: "No."] This business of Privy Councillors popping in and popping out and being heard is becoming a real menace to our debates.

Photo of Mr Alf Morris Mr Alf Morris , Manchester Wythenshawe

I was merely paying a tribute to the ingenuity of my hon. Friend the Member for Brightside. I am certain that he will catch your eye, Mr. Godman Irvine, as he has succeeded in catching the eye of other occupants of the Chair in previous debates on the Selective Employment Tax.

If one of the purposes of the tax is to encourage mobility of labour from distribution to manufacturing industry, I am certain that this will not happen in the circumstances of a labour shortage in the distributive trades. My hon. Friend the Member for Willesden, West (Mr. Pavitt) made a cogent and persuassive speech on behalf of the Co-operative movement.

Photo of Mr Alf Morris Mr Alf Morris , Manchester Wythenshawe

Or, rather, on behalf of retail distribution generally and of the Co-operative movement in particular. I was particularly interested in what my hon. Friend had to say about the effect of this tax upon co-operative societies. My hon. Friend should not be disappointed or upset by the jibes which have come from the other side of the Committee against him and against the Co-operative movement. The hon. Member for Chelmsford (Mr. St. John-Stevas) enjoyed himself in a previous debate at the expense, as he thought, of the Cooperative movement. There is, of course, no similarity whatever between the motives and aims of those who speak for the Co-operative movement and those who speak for the Conservative Party. There is a world of philosophical difference between my hon. Friend the Member for Willesden, West, who speaks for a non-profit-making organisation and who believes in the common ownership of distribution, and those who speak from the other side of the Committee from quite different motives.

Photo of Mr Laurie Pavitt Mr Laurie Pavitt , Willesden West

I want to make it quite clear that when I made my contributions to the Committee I was not putting the case this evening for the Co-operative movement. I could do so and would be only too willing to do so, but I did not do so on this occasion.

Photo of Mr Alf Morris Mr Alf Morris , Manchester Wythenshawe

I hope that my hon. friend will forgive me if I say that whenever I hear him speak about retail distribution I think of his service to the Co-operative movement and of the very great contribution he has made to the movement. He did the movement a great service this evening. But my hon. Friend is not, of course, the only person to have heard from his co-operative society.

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

Mr. Iain Macleod rose——

Photo of Mr Alf Morris Mr Alf Morris , Manchester Wythenshawe

I think I have already given way sufficiently, but I am willing to give way again whilst the right hon. Member for Enfield, West reads the letter he has received from a co-operative society.

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

Can I read one sentence? The Enfield Highway Co-operative Society by letter of 19th May asked for my help, I replied on 23rd May saying that we would certainly table Amendments. The one sentence I want to read is this: I am sure you are aware, however, that the prospects of Mr. Callaghan giving way are remote and I hope we can rely on the support of Co-operative Members of Parliament.

Photo of Mr Alf Morris Mr Alf Morris , Manchester Wythenshawe

It is quite clear from that letter that the Enfield Highway Co-operative Society was not expecting any support from the right hon. Gentleman, The motives of hon. Members opposite are quite different from those of my hon. Friend the Member for Willesden, West, and from the Co-operative movement.

I was saying that my hon. Friend the Member for Willesden, West is not the only member of the Committee to have heard from his co-operative society. I am rather proud, as the representative of a Manchester constituency, of the Manchester and Salford Co-operative Society, which has a great past and is deserving of a great future. Mr. D. H. Lewis, the very able chief executive officer of the society, has written to me in these terms: For your own information, and based upon the information currently available, the cost of this tax will amount to no less than £99,030 in a full year. When I tell you that the Society's net surplus for the whole of the year ended 15th January, 1966, amounted to £102,623, you will appreciate the gravity of the situation. Mr. Lewis went on to emphasise his difficulties concerning the problem of part-time employees. He hoped that hon. Members on this side would seek substantial relief for co-operative societies. I am certain that he has made no protest, as the Enfield Highway Society did, to hon. Members opposite.

Photo of Mr Alf Morris Mr Alf Morris , Manchester Wythenshawe

There may be a considerable demonstration from the Co-operative movement, but as of now the Cooperative movement is clearly looking to hon. Members on this side to state its reservations about the effect of this tax.

Photo of Mr Norman St John-Stevas Mr Norman St John-Stevas , Chelmsford

Mr. St. John-Stevas rose——

Photo of Mr Alf Morris Mr Alf Morris , Manchester Wythenshawe

I have already given way enough.

Photo of Mr Norman St John-Stevas Mr Norman St John-Stevas , Chelmsford

The hon. Gentleman has not given way to me.

Photo of Mr Alf Morris Mr Alf Morris , Manchester Wythenshawe

The hon. Gentleman himself did not give way very much in his speech to the Committee. I have very carefully studied the hon. Gentleman's behaviour in this Committee.

Photo of Mr Alf Morris Mr Alf Morris , Manchester Wythenshawe

The hon. Gentleman is not quick to give way to other hon. Members. I intend to make this point on behalf of my own co-operative society in Manchester. In January of this year when other retail distribution firms were increasing the price of bread, the Manchester and Salford Co-operative Society reduced its price. Indeed, anyone living in Manchester today can buy a loaf of bread from the Manchester and Salford Co-operative Society for 2d. less than one can buy it from any other bread retailer. [Interruption.] The hon. Member for Aldershot (Sir E. Errington), whom I very much respect, as he knows, has only recently joined us in the Committee. I was making the point that the Manchester and Salford Co-operative Society is selling bread at a lower price than other people.

8.30 p.m.

Photo of Sir Eric Errington Sir Eric Errington , Aldershot

I follow the hon. Gentleman's point. If there is a question of a profit of only £3,000 per annum, either this tax will have to be passed on in the form of increased prices by the co-operative society or else it will be making a loss. It is a matter for the co-operative society to decide what it will do.

Photo of Mr Alf Morris Mr Alf Morris , Manchester Wythenshawe

The Co-operative movement, like the rest of the retail trades, will have to deal with the impact of the Selective Employment Tax. This is not one of the variables between the Cooperative movement and private trade. What is different is that the Co-operative movement in Manchester is selling bread at a lower price than is private trade.

I could give the Committee a whole list of commodities which the Manchester and Salford Society have not increased in price during the last 18 months. Moreover, the Co-operative movement throughout Britain has responded with great loyalty to the call for restraint in prices. I hope that fact will borne in mind by the Treasury Bench. One further point is that the Manchester and Salford Co- operative Society has been very successful in keeping down labour costs as a proportion of total costs. I hope it will, therefore, be felt that what has been said by the chief executive officer of the Manchester and Salford Co-operative Society is well worth listening to.

I now come to the question of elderly people. Hon. Members will recall that I introduced the topic of pre-retirement training in the last Parliament. I spoke in the House about the incidence of preventable illness, especially of mental illness, among those who have retired. I believe that the most healthy people among the elderly are those who decide that they will try to avoid a sharp break between full-time employment and retirement. It is emphasised in the National Plan that in the next few years we shall need more and more elderly people in part-time employment. If this tax as it is to be applied to part-time employees reduces the number of elderly people who are in part-time employment, I would consider this to be its worst consequence in social terms.

I hope that the speech of my hon. Friend the Member for Willesden, West, and other persuasive speeches from this side of the Committee about the effect of this tax on part-time employment, will be carefully and sympathetically considered by the Chief Secretary.

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

I thought that the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) was going to be the first Member who has spoken in this Committee not to make substantial criticisms of this tax. But eventually as his speech went on it became clear that he, like every other hon. Member who has spoken, was going to put before the Government some very powerful criticisms indeed. They have come from all quarters of the Committee.

The aspects affecting the disabled, old people and part-timers have been well covered, but I want to make one comment. I hope that we shall not have from the Government the sort of argument we have heard in the past on this tax. They have tended to say, "Your arguments are exaggerated and there will not be the difficulties that you claim." I hope that the Government, having heard the substantial arguments which have been put, will not repeat that reply tonight.

The Government surely have a perfect instrument in the tax for encouraging the employment of the disabled, the elderly and the part-timer if only they will use it. Not only have powerful arguments been put forward in this Committee. They have been put forward by a good many other people who are well qualified to speak on it. For example, Professor Titmuss wrote a letter to The Times on 11th May. By no stretch of the imagination can Professor Titmuss be called a pillar of the Tory establishment. On many occasions the Labour Party has looked to him for inspiration and guidance in the formulation of social policy, and no doubt still does. Professor Titmuss wrote: Do we or do we not wish to encourage the employment, part-time or full-time, of older men and women and the rehabilitation of the disabled and the handicapped?Unless amendments are made to exclude these groups (administratively this would not present great difficulties) the social and psychological effects—as well as the purely financial—could be serious and far-reaching.I find it odd that at a time when a number of countries are becoming more conscious of the social aspects of budgetary and economic instruments, Britain would seem to be moving in a reverse direction. That is a sound letter from someone whom the Labour Party, quite rightly, regards highly and to whom it looks for assistance and guidance in the formulation of social policy.

I want to turn to two aspects which have not been mentioned a great deal in the debate so far, in particular to Amendment No. 73, which refers to nursing and convalescent homes, private hospitals and old people's homes. There is no doubt that the tax will be a severe impost on these institutions. The vast majority are not wealthy, merely providing for a small number of rich people, but are meeting a whole variety of needs. In many cases they are finding it exceedingly difficult to make ends meet, and the tax is bound to bear hardly on them because one cannot run a hospital or old people's home, or home for the chronic sick without a substantial amount of labour.

As my right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton) said, these institutions are helping to relieve pressure on the National Health Service; indeed they are its essential partners. If they did not exist the pressure on the N.H.S. would be even greater than to-day. It is necessary that these institutions should be exempted from what will otherwise be a crippling impost.

Secondly, the tax will be arbitrary and unfair as between them. I welcome the exclusion of charities from the tax, but, of course, some of these organisations are charities and others are not. It may be possible for some of them which are not now charities to change their arrangements so that they can become charities, but I am certain from the inquiries which I have made that in a good many cases it will be impossible for institutions of this kind to become exempt as charities. All these institutions have a common aim and purpose, to heal the sick and to relieve suffering, yet some will pay the tax and others will not. I hope, for this reason, too that the Government will find some means to relieve all institutions of this kind.

I now turn to the proposed Amendment to Amendment No. 73 which would exempt medical treatment insurance schemes. In many cases these provide the means whereby patients can pay for treatment in these private institutions. Here again, we are not dealing with a few wealthy people; we are dealing with a growing number of people who, very often with the help of their employers, are providing for themselves through provident associations. There is an essential link between the homes and the provident associations, which in many respects provide the means whereby the homes can remain in being.

The main insurance schemes of which I am thinking are the British United Provident Association, the London Association for Hospital Services and the Western Provident Association. There are others, but I believe that these are the main ones. They are all non-profit-making bodies, limited by guarantee, but they are not charities and they cannot become charities within the definition of the Charities Act.

The largest of these, the B.U.P.A., estimates that this tax will cost it £24,000 a year, a very substantial additional burden. The smallest, the Western Provident Association, estimates that it will cost it about £2,000.

One illustration will show the arbitrary nature of the tax. Running in harness with the B.U.P.A. is the Nuffield Nursing Homes Trust, which provides small hospitals and nursing homes for the treatment of the sick. Since the Trust was set up in 1957, it has spent no less than £2¼ million on providing hospitals and nursing homes. Half of this money has come from voluntary contributions in the areas in which the homes have been set up, and the rest has come from the funds of the B.U.P.A.

One of the main reasons why the B.U.P.A. felt that it was essential to set up these nursing homes was that in parts of the country there were not sufficient private beds for it to be able to ensure that it could fulfil its contracts with those who were insured with it. It felt that it was essenial to do this if its job was to be done properly. Yet we find that the parent organisation, the B.U.P.A., will pay the Selective Employment Tax, whereas the daughter organisations, the private hospitals, which are in this case charities, will not. It makes no sense that there should be this distinction between the two.

I hope that the Government will agree to find some way in which provident associations of this kind can be exempt because if, as a result of the tax, they could no longer continue, or had to reduce their services, the direct result would inevitably be greater pressure on the National Health Service. A significant feature of these organisations, which are spreading among growing sections of the community, is that they bring additional resources into the National Health Service, and are therefore valuable partners with it.

8.45 p.m.

I come now to another series of organisations, the British hospital contributory schemes. Here is a classic example of the tradition of thrift among weekly wage earners. In spite of the introduction of the National Health Service after the war and the introduction of comprehensive National Insurance benefits, these schemes still exist and prosper. But in the vast majority of cases they are not charities and they will, therefore, have to pay.

The British Hospital Contributory Schemes Association estimates that the cost of the Selective Employment Tax to these schemes will be about £40,000 a year. They provide mainly cash benefits for their members while in hospital. The contributions are seldom more than 6d. a week. They have over 4 million contributors and an income of about £3¼ million a year. With dependants, they cover about one-quarter of the population of England and Wales, who are eligible for cash benefits while undergoing hospital treatment.

Some of these schemes also provide their own convalescent homes, and this is one of the reasons, because of the staffing of those homes, why the tax will be so heavy on them. Not only do they provide benefit for their members in that way, but they have made substantial sums of money available to medical research and medical charities, well over £1 million since the National Health Service was set up.

These are essentially organisations of wage earners. Not only are they helping their members, but they are bringing additional resources to bear on the relief of suffering and hardship. Again, there is a case for finding a way to give relief from the tax.

hose are a few examples to add to the many already given by hon. Members on both sides. Together, they make an immensely strong case for the Government to think again and find some means of exempting these worthy organisations and individuals.

Photo of Mr Richard Winterbottom Mr Richard Winterbottom , Sheffield, Brightside

I agree in large measure with what has been said by hon. Members opposite today. I wonder what is the matter. Are they wrong, or am I? A change has taken place somewhere. What I shall say tonight will be in line with principles and examples which I urged repeatedly from the Opposition benches. Tonight, I shall use them on the Government side. What a pity hon. Members opposite did not say in the past, when they sat on this side of the House, what they are saying now. Let us be consistent in these things.

I think that the motive and approach of the Opposition, even though I agree with much of what they have said, are quite different from mine. I approach this matter from a sentimental point of view. When it comes to questions such as the social welfare of old people, the disabled, the blind, the sick and all of those who are, by physical infirmity, at a disadvantage in society, I believe that a Government should do all that it can to bring aid and succour to them. I say to the Government that though they be the salt of the earth, if they are a Government who forget the fundamental purposes of social welfare, as it applies to the people enumerated in these Amendments, then they are as a salt that has lost its savour, and fit only to be cast into the depths of the sea.

Having said that, I want to deal principally with part-time workers. Someone mentioned the business of checking. Whether a person works eight hours or 21 hours, or whatever time one fixes to a part-time worker, there will always be the difficulty of checking. The one distinction which applies to part-time workers, that there is no payment of the tax in respect of those who work less than eight hours per week, is a means which will be used relentlessly. Indeed, many people will be forced to use it in this way by the circumstances in which they find themselves because of this tax.

In my city the damage is already being done and will develop. Students at the university there like to earn a little pocket money. Goodness knows, they do not get much. They work for two days a week in one of the retail establishments in the city, but already that two days a week has been cut to one day, to eight hours. It may be found that there will be an increase in the number of part-time workers, but the amount of work done, and the remuneration received, will be much less than before. The part-time workers who will work for eight hours will be at a premium.

What happens if they work for two employers, for two separate eight hours, or for three employers for three separate shifts of eight hours? How will we estimate whether the man has to work in one shop, two shops or three shops; whether he works for one firm or can be transferred to another firm; whether he works for a major firm or a subsidiary? All these things can happen, and I venture to prophesy that they will happen. They will make a mockery of the Bill.

Those Members who have tabled these Amendments know very well that there is not the slightest hope of their being accepted by the Government. If the Government were to accept them there would be no Bill left. The Government would have to start from scratch, and perhaps that would be a good thing, with the knowledge of what has transpired during the debate. Perhaps they would be able to evolve something in the nature of a payroll tax which would be equitable and patently equitable, to all.

Photo of Sir Raymond Gower Sir Raymond Gower , Barry

I agree with much of what the hon. Gentleman is saying, but is not he carrying his argument a little far when he suggests that there would be nothing left of the Bill if these Amendments were accepted? Surely all the fit people of working age who were working full time would be included.

Photo of Mr Richard Winterbottom Mr Richard Winterbottom , Sheffield, Brightside

For practical purposes, it would be a case of the administration not being worth the candle which would be necessary to collect what was left if all these people got the relief which everybody wants them to get. It would be a case of starting from scratch.

There is another point about part-time workers which has not been mentioned. It concerns the business of the travelling shop. I know about this matter because, as my hon. Friend the Member for Oldham, West (Mr. Hale) realises, I was the first man in the country to start a grocery shop on wheels.

Photo of Mr Charles Hale Mr Charles Hale , Oldham West

I thank my hon. Friend for calling attention to my existence, because I have been worried about the fact that the consistent diet to which I have been subjected for the last two months might have rendered me wholly invisible.

Photo of Mr Richard Winterbottom Mr Richard Winterbottom , Sheffield, Brightside

My hon. Friend may be invisible to some people, but he will never be invincible in their eyes.

Let me refer to the part-time worker in relation to travelling shops. The object of a travelling shop is to get the maximum number of hours on the road during the hours which shops are permitted to be open. The greater the number of hours within the week, the more the travelling shop can do the business for which it is intended. Therefore, the work of the travelling shop is not done in the shop; it is done in the warehouse, so that the travelling shop can go on the road first thing in the morning.

This work is done by part-time labour. If anything is done to take part-time labour from this field of operation, it will probably destroy the whole of the distribution process. Anything which drives the part-time worker out of industries in which part-time work is essential is a disservice to industry. The part-time worker is essential in certain occupations.

9.0 p.m.

I am proud of the fact that I am a trade unionist I am as much in love with my trade union today as I was on the first day that I joined it. I am proud that that trade union is probably one of the best unions dealing with research into distribution and the service industries generally. Its considered opinion, after long investigation, is that although it does not like the idea of part-time workers—such workers destroy the idea that negotiations can be brought to a speedy conclusion; they are a thorn in the flesh of successful negotiators on every occasion—the distributive trade would collapse completely if part-timers were not allowed to operate. If these people are essential, one has to question anything that drives them out of the occupation in which they are so necessary.

It is said that one cannot ride two horses at once, especially if they are going in opposite directions. Are not the Government riding two horses going in opposite directions? They say in the National Plan that they want to divert as much part-time labour as possible into the world of distribution to release full-time workers for productive industry. In the next voice, however, they say, "We will tax you until you cannot be employed." If anyone tries to ride two horses like that, there is an inevitable rupture. That rupture may destroy the distributive trades.

If it destroys the distributive trades, sheer force of logic tells me that it will destroy the other service industries as well. It will destroy the catering industry. A great deal has been said about part-timers in that industry that will not bear examination by those who know a great deal about it. There are a lot of part-timers in the catering industry that that industry cannot do without. Without mechanisation for washing-up, one has to have somebody who is either disabled or mentally deficient to do it. Nobody else will do it. The Catering Wages Act recognises this. It recognises that a social service is performed by employing those people. If we promote social welfare by employing them, anything that destroys the opportunity for employing them should be closely examined, and if it does not stand up to that examination it should be roundly condemned. That is why, in voice, I support these Amendments.—[HON. MEMBERS: "Only voice?"] In voice, I support these Amendments.

Photo of Mr John Wells Mr John Wells , Maidstone

The Government have a majority of 100.

Photo of Mr Richard Winterbottom Mr Richard Winterbottom , Sheffield, Brightside

Jesus Christ never taught me to be a saint and to go to Calvary to that extent. I am not going into the Division Lobby for the Amendments. I am not taking my objection to that length. I am taking it to the logical length I possibly can in terms of condemnation of the Government for a tax which is injurious, unfair and unjust. Those who blame me for not taking it to its logical conclusion should remember—as I have used a Biblical illustration—"Let him who is without sin cast the first stone." I will leave it at that.

This is my point, that part-timers are so important to the service industries that special consideration should be given to them by the Government before it is too late. If the application of the present proposals actually becomes law then the damage will have been done and it will take more than mere Amendments to correct the damage done.

For a Government to admit having made a mistake can be the salvation of the soul of that Government. I believe that they know they are wrong; I believe that they know they have made these mistakes; I believe that those people who know they have made mistakes should confess to those mistakes and try to make amends before it is too late.

I believe that these Amendments contain an idea which is in the minds of hon. Members on both sides of the Committee, an idea of which the Government should take notice before it is too late, and alter the Bill.

Photo of Mr Geoffrey Hirst Mr Geoffrey Hirst , Shipley

The hon. Gentleman the Member for Sheffield, Brightside (Mr. Winterbottom) has made a very interesting and, if I may say so, very sincere and impressive speech, but it would, I think, have been a little bit more impressive, because, I know, he feels very strongly about this as he showed in an earlier speech—if I remember aright, it was on Second Reading—if he had been prepared to carry his view to a logical conclusion. I cannot see why he should not.

Some of my hon. and right hon. Friends will remember, and certainly the right hon. Gentleman the Member for Sowerby (Mr. Houghton), were he present on the Government Front Bench, would remember, the time when I supported him extremely strongly when we were debating the Finance Bill of that time and I was on the Government benches. In the matter of the disabled, which has represented a large amount of our discussion today, I personally supported the right hon. Member and went into the Lobby—yes, against the Government I generally supported, against the whole party. I did not just merely abstain. I did that because I had the courage of my convictions, and I stand by them.

I think that hon. Members on the other side who have consecutively made speeches in favour of these Amendments should have that courage. I know that one has certain responsibilities towards one's party and towards the Government one supports, and when the Government had a majority of five or six or three, hon. Members supporting the Government may indeed have had seriously to question where their loyalty lay, whether to the Government or to their party or to their constituents or their personal convictions, and I would not question that; but when the Government have their present majority I personally think that it is shameful if hon. Members on the other side do not have the courage of their convictions.

I was out of the Chamber for about half an hour, but otherwise I have been here the whole afternoon and evening, and, of course, I may have missed a speech, but the whole time I have been here I have not heard a single speech which did not condemn, in principle and in detail, this tax and its implications.

Photo of Mr Jon Rankin Mr Jon Rankin , Glasgow Govan

Is the hon. Gentleman measuring the strength of a conviction by the size of the Government's majority?

Photo of Mr Geoffrey Hirst Mr Geoffrey Hirst , Shipley

I do not know what the hon. Gentleman means by that. I know that he likes having his pipe and not smoking it.

Photo of Mr Geoffrey Hirst Mr Geoffrey Hirst , Shipley

The hon. Member for Oldham, West (Mr. Hale), whom I greatly respect, was probably not in the Chamber when something occurred and I know that the hon. Member or Glasgow, Govan (Mr. Rankin) will not have taken the slightest offence at my little friendly quip.

Photo of Mr Jon Rankin Mr Jon Rankin , Glasgow Govan

I had a smoke before I came in and there is, therefore, no need to try again. If I misunderstood the hon. Gentleman, he will correct me, but I understood him to be arguing that if the Government majority were small it would not be very advisable to carry one's convictions into the Lobby against the Government, whereas if the majority were large, it would be easy to carry one's convictions into the Lobby against the Government.

Photo of Mr Geoffrey Hirst Mr Geoffrey Hirst , Shipley

The hon. Member has a great capacity for making his point at considerable length; it is one of his endearing qualities. I put it perfectly clearly and I think that he understands. He knows perfectly well that one represents all the people of the constituency, but that the majority, which allows one to come here, has certain party views and expects one, in principle and in general, to serve that party.

If, by taking convictions into the Lobby, unless it is on an extremely strong moral issue, one thereby to that extent puts one's party in jeopardy, that must be different from when there is a majority of 100. The point is perfectly clear and nobody, least of all as experienced a Member as the hon. Member for Govan, should have questioned it.

We have had a considerable discussion about this serious matter, which is the deep bones of the Finance Bill and which has been debated throughout Monday and today, as the Chief Secretary knows only too well. Although, as he knows, the armistice between him and me is over, I do not want the engagement to be unnecessarily severe, provided that my right hon. Friends and I are reasonably allowed to attain our objectives, objectives which both sides of the Committee clearly wish to be attained as quickly as possible.

This is one of the most devastating taxes ever thought up. I do not think that anyone with experience of our country or knowledge of its circumstances would ever have proposed it. I have some measure of respect for the Chancellor of the Exchequer and, personally, I acquit him of the charge that the tax is his brain child. That would not be a very nice thing to think of him and, frankly, I do not think it tonight—I may tomorrow, but tonight is another day. I hope that that is fully understood, because the Committee is in a good mood and expects some help from right hon. Gentlemen opposite.

My right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) very properly explained how the tax would be taken into consideration. If it had been the sort of tax which the Conservative Government of a few years ago envisaged but did not carry through—and on Second Reading I said that I did not mind a payroll tax right across the board—the position would have been quite different. But there is no hon. Member on either side of the Committee who imagines that a levy of 25s. a week on each male employee will not be considered. Some employers will take into account whether a person is what I call "tax-paid". There will be a considerable preference in shops and elsewhere where there is part-time working for the person who is already tax-paid. There is this great disadvantage which will accrue to shopkeepers in particular in relation to weekend working, and the rest of it.

9.15 p.m.

I personally thought that the hon. Member for Wood Green (Mrs. Joyce Butler) made a good speech, and she showed clearly how the tax can be very damaging to the part-time worker. She instanced a case where three part-time workers were employed in a shop, which is by no means unique, in respect of whom the tax would come to 37s. 6d., or three times the amount payable in respect of one full-time employee.

What are the Government trying to do, apart from making an unholy mess of the economy? We have known that for a long time. But what are they trying to do in social justice? The rest is taken for granted. The whole country knows that they are making a mess of the economy. We are concerned to know whether there is any merit in this legislation. There is no element here of something being absorbed at once just because one is not hit with a bat on the head and everyone thinks that it is a good show. Now we are finding that they are all hit on the back of the head.

There has been no voice raised in the Committee from anyone wanting to eke his way on to the Front Bench at the cheapest rate by coming to the assistance of the right hon. Gentlemen. There has not been a murmur from anyone, and that is something which I have never seen in any party. Not one weed, not one little clipped dandelion, as my hon. Friend the Member for Yeovil (Mr. Peyton) said recently, has come to their aid. That shows that the tax has no merit which could be scraped from a dirty dustbin and found edible by the lowest form of insanitary cat.

The hon. Member for Wood Green also spoke on a matter which is of deep concern to me when she referred to incapacitated people. She spoke particularly about the blind and the deaf, as did my hon. Friend the Member for Essex, South-East (Mr. Braine). There is a particular case for such people, and right hon. and hon. Gentlemen opposite cannot doubt at all. As we have heard from one or two hon. Members opposite, employers as a whole have been extremely good about the discretionary employment of incapacitated people. Many of them go beyond the statutory 3 per cent. Many of them lean over backwards when Members of Parliament approach them. My own experience has been no different from that of the hon. Member for Bedwellty (Mr. Finch) and other hon. Members.

One of the problems about which we feel particularly is that of the blind, deaf or incapacitated man with some guts and a sense of personal security who does not want to be a charge on the State. He has everything which I admire most of all—a willingness to overcome personal difficulties which he hardly likes to have referred to.

Are the Government trying to shoot that sort of man down in flames? I cannot believe that that is their purpose. No Government would be so inhuman. But that is the result of this legislation, and the right hon. Gentlemen on the Treasury Front Bench have to wear it. They cannot pass it over to the Opposition or to the Liberal Party, which is usually one of their scapegoats when they are in a jam. They have to wear it in the House and in the country.

Photo of Dr Michael Winstanley Dr Michael Winstanley , Cheadle

Hon. Gentlemen opposite are not the only people who are apt to use the Liberal Party as their scapegoats and pass things on to us.

Photo of Mr Geoffrey Hirst Mr Geoffrey Hirst , Shipley

That is an irrelevant remark, and I am sorry that I paid the Liberal Party the compliment that I did. I was trying to be helpful, but if my remarks are not going to be helpful I shall save the time of the Committee and not make them. I do not want frivolous interruptions, but if there is a genuine one I shall deal with it.

It is important that the Government should realise that they will have to carry the can, and deservedly so, for the inhuman effect which this tax will have. I do not say that the Government intentionally desire this effect. That is ridiculous, and I am not saying it. The Financial Secretary knows that I would not say such a thing, but that is what is going to happen.

I do not see how any Government can hold up its head for a moment and try to argue any financial gain for this tax. I know my figures too well for that. The Government cannot do that. It cannot be done that way, and it would be utterly contemptible if that were to be the end of this discussion tonight. Does the hon. Member for Oldham, West wish to intervene?

Photo of Mr Charles Hale Mr Charles Hale , Oldham West

The hon. Gentleman has selected me for animadversion, having refused to give way when I wished to intervene on an observation relevant to what he had to say. If, after that, he expects that I shall be displaying any especial courtesy to him, let me tell him that I am not doing so. I was turning to my hon. Friend because I am slightly deaf and saying, "He must be talking rubbish, but I cannot hear every word".

Photo of Mr Geoffrey Hirst Mr Geoffrey Hirst , Shipley

The hon. Gentleman knows me only too well to know that I would not try—I hope that he can hear me—to compete with him in courtesy in this House, but, on the other hand, as I have the Floor of the House, and the Chairman is listening to me, I rather dislike the idea of an accompaniment by the hon. Gentleman.

There is one other aspect to which I want to refer, and that is the question of charities and religious bodies, which have been mentioned today. I know that the decision has been taken with regard to charities, but I think that, as usual, the Government have not thought this out. They rushed in when the Opposition proved only too well how uncharitable they had been. But even now they are in a dilemma, or they ought to be in one, because they are not being fair. It is nonsense that charities, if the tax is to be refunded to them, should be expected to pay these ghastly sums of money for up to six months, and have to borrow money in the meantime, very often at a high rate of interest. We shall be lucky if we get away with 7 per cent. if the Government last for another three months. The alternative, as one hon. Member pointed out, is for the charities to cut down some of their activities to meet this monstrous charge. In other words, crippled children will have to pay for the Government's folly.

I do not think that the Government have woken up to how this will be interpreted in detail when this impost comes. I am prepared to say that people may think that I am exaggerating tonight. I do not mind. I have heard all this before, but so often I have found that what I have said has been only too well understood when the time has come. We are inclined to live from day to day, but the time will come when this will come home to people. That will be when the bill has to be met, and it will have to be met, because the Government can put on the screw. It is not something which we can pass to somebody else. The Government can put the bailiffs in.

The Government are putting the tax on charities, even though the money will be refunded, which will mean that they will have to get advances from the bank, and I agree with my hon. Friends that we have not had sufficient information about whether, having put on this impost, the Government will give charities facilities for dealing with it. But even if they are, the charge remains and the cost remains. The Government have the impertinence to take this sum interest-free. It is an insult. It is uncharitable in every conceivable Christian sense of the word.

I am interested in the question of part-time workers from a constituency point of view, because I represent one of the greatest wool textile constituencies in the country, whose firms depend enormously for their fantastically good export records upon the use of part-time workers. This is a very serious matter for these firms, and especially for many who work not as principals but on commission. Moreover, some are hit by this tax in a most illogical way.

I made a passing reference to this point during the Second Reading debate. Associations such as the Association of Exporters of Raw Materials and Yarns are engaged 100 per cent. in exports, and not one of them is a manufacturer. They are all exporters. They help to pay the bill that the Government want paying. They do not get this 7s. 6d., less all the costs of the services, and pay Corporation Tax and the other stuff that wipes it out. Do they get a refund? No. They pay the full tax because they are miserable distributors—nasty, dirty distributors. I am ashamed of the Government. I am disgusted with them.

The whole of Lancashire, the North of England and Scotland are disgusted with the Government. The West Country is disgusted with them. This is an unmitigated disaster. Those who are playing the greatest part in satisfying our economic needs are being hit, hit, hit by this tax, and not a single hon. or right hon. Gentleman opposite can deny that.

The Government have not advanced a single inch to meet this case. Not a single letter did I receive from the Government after my Second Reading speech, when I gave a full explanation of the point. I have not had even that courtesy. It is disgraceful. The association to which I have referred is utterly disgusted.

This amounts to biting the hand that is feeding us. It is a most unchristianlike act that any Government—even a Labour Government with all its manifestations of evil—could possibly conceive. I have nothing but unmitigated contempt for the Government in this matter. They can only repair a small portion of the damage that they are doing, and reduce slightly the hate which will be felt for them by the country in due course, if they meet some aspects of these human problems, let alone the commercial problems. If they cannot do that they will have abrogated any right, in human, social terms, to be the Government.

Photo of Mr Charles Hale Mr Charles Hale , Oldham West

Perhaps I may, in gently intervening in the debate, express my thanks to the Chair, first, for recognition—after all, I have not been a very active Member for a long time, and I am very grateful to know that I am still remembered—secondly, for the privilege I have had in watching Privy Councillors pass through the Chamber for the last five hours—men whom I used to remember with affection and have so rarely seen—and. thirdly, although I am not sure about this, for being called after the hon. Member for Shipley (Mr. Hirst), which I thought was a slight indignity.

I must thank you, Sir Eric, for the selection of Amendments, which has left me in a slight difficulty. I have no criticism at all, as I appreciate your difficulty, but my Amendment about people who work 24 hours a week has not been selected, although somebody else's, about people who work 21 hours, has been selected. I know that it is difficult to keep the mathematical balance in the course of an impromptu day. My speech has been postponed already for five hours and therefore perhaps will not be quite so fresh as it could have been at about quarter past four; still I will try.

9.30 p.m.

First, I have to say something unkind to the Financial Secretary or the Chief Secretary—I am not sure which—because he has been wandering up and down the country describing my most distinguished constituent as a train robber. He did it at the 1964 election He did it at the last election. Yet this man is a gentle, kindly, distinguished bloke. His taste in modern art is somewhat defective, and I have said so, but he is one of the best employers in Oldham, an employer of many people in Oldham, thank God, and a very good employer. Yet the Financial Secretary calls him a train robber. Now he wants to give him a subsidy of 7s. 6d. a workman—and he employs 20,000 or 30,000 in Oldham. I think this is over-generous when one considers that this money will be skimmed off from the Oldham co-op and destroy their "divvy".

This is just a question of argument. What has St. Sebastian done to win the approval of the right hon. Gentleman who has been, one might say—I do not want to say, "vulgarly" rude, except that I would use the word in its technical and proper sense—commonly rude to him? He has been very rude to him and I thought that he disapproved of him. I like him very much.

I am not sure that he should have 7s. 6d. a head for everyone whom he employs at a time when he is still able to effect contracts on terms which lead to the display of more intelligence in Oldham than is normally displayed in Whitehall. I apologise for mentioning Oldham, which is west of Suez and perhaps out of order. But I am concerned to mention the older people in Oldham as well, of course, as the older people in the remoter parts of the world.

I encounter some problems in dealing with these people. Every time we have a Finance Bill, of course, we have these jolly debates in which everybody thoroughly enjoys himself until nine o'clock in the morning and we get observations about widows and one-legged hill farmers. The people whom I interview in Oldham very often have the misfortune now to be slightly older than I am. Not much—I am getting pretty near the pension stage, and jolly pleased I am at the prospect that I might be able to sneak out and forget these Communist denunciations and other things before I get involved myself.

I have to see old-age pensioners and disabled people of whom there are many in Oldham. There is an old history of malnutrition which contributes to disablement in Oldham, as anybody knows——

Photo of Dr Michael Winstanley Dr Michael Winstanley , Cheadle

Dr. Winstanley indicated assent.

Photo of Mr Charles Hale Mr Charles Hale , Oldham West

I notice the hon. Member for Cheadle (Dr. Winstanley) nodding his head. There is a history of rickets in the area. By God, one could see that the first time I went there fifty years ago. One could see the physical set-up indicative of rickets in youth among disabled people in Oldham. What are we to do about them? I want to know. I think that it is important that I should know.

With great respect, this Committee, with all its ability, sincerity and virtues, which I admire as much as most people, seldom transplants itself into the sense of really getting in touch with this sort of problem.

I had a letter 18 months or so ago from a charming and cultured lady in Oldham who, it transpired—she did not even say this in her letter—was one of the early adult thalidomide victims. She said, "My doctors say that I must do some work as a question of therapy." She had to acquire an invalid carriage and had to find specialised employment. She had to employ someone to look after her house. I suppose this is the case of the "one-legged hill farmer", I do not know. She said, "I have to pay National Insurance for my home help for two or three days. I have to pay National Insurance for the woman who looks after the house." What happens now if we say that that woman has to pay 25 bob or 12s. 6d. for the person who works in that house? What happens now if as an employer she has to pay 12s. 6d. for her help? It will not happen because she committed suicide a long time ago. She could not bear the burden of this sort of problem. Many of us cannot. Many of us get weak.

I constantly see old-age pensioners, usually widows. They come to me and say, "Leslie, they call me a single woman." I say "You are a single woman. What are you worrying about?" They say, "Leslie, you don't understand. I'm not a young girl paying 30 bob a week to her father who can dash off for weekends at Brighton or something like that; I am 66." I recall the precise figures of a case which came to me some weeks ago. The lady was 66 and she was getting £4 12s. a week old-age pension because she worked six years after she was 60 in order to get an extra four bob. Then she found she had run herself into Income Tax.

With great respect to the Chancellor, whom I love and like and do not wish to criticise, I point out that immensely generous concessions were given by a previous Government to Surtax payers years ago so that they do not pay Surtax on £5,000. How do we equate that with people who are getting eight quid and have to pay Income Tax? This woman was getting £4 12s. of which 12 bob was the supplement. She said, "That's about all they let me earn. If I earn any more I will lose my pension." I quote the facts as they were given to me and I am absolutely certain of them. She said, "Leslie, you don't understand. I'm living in a house built," as half Oldham was built, "100 years ago and I have to maintain it. My husband left this to me. It is the one thing he left. This is my home. What do I do, surrender and go to an old people's home, or keep the house?" There is a lot of sentiment attached to it. Damn it, if there is no roof to one's house, what can one do? She said, "How much will it cost out of my £9 4s. to keep the roof repaired and how much to have the plumber? Then they take a bit of Income Tax off me."

I say it is a monstrous scandal that a Socialist Government should never have permitted to exist. What is to happen now? She will get the sack—of course she will. Do not let us have any humbug about this. How many old people will be kept in spare-time employment? My hon. Friend the Member for Wood Green (Mrs. Joyce Butler) opened the debate with a magnificent speech and with deep and obvious sincerity, and she was supported by many other speakers in the earlier stages.

When I ventured to mention the Oldham Industrial Co-operative Society the hon. Member for Worcestershire, South (Sir G. Nabarro) became rather excited. I observed that he fitted the description of the appearance of an officer at the Battle of Sebastopol when he was rather excitedly denouncing over-full employment. The hon. Gentleman was shocked at the idea that we were keeping too many people in employment.

I say with deep sincerity that the Oldham Industrial Co-operative Society is the best co-operative society I have ever met. It is terrific. It is splendid. It has a sense of public duty. When I sat here on these benches arguing on behalf of the small retailer, I never got a word from the Oldham Industrial Cooperative Society. The society did not mind what I was doing. "Live and let live" is one of the maxims by which the society seeks to operate. It is a pretty good society. The society is not terribly worried. As I said, the society did not even approach me. I approached the society. It employs 135 people on Fridays and Saturdays. This is a good thing, because on those days shopping is terribly difficult.

Photo of Mr Charles Hale Mr Charles Hale , Oldham West

I should be delighted and surprised if I got the support of the hon. Member. Shopping is not easy on those days. The society takes on these extra staff on Fridays and Saturdays so as to make shopping easier. Naturally, the society tries to secure the services of older employees and give this opportunity to people who perhaps have had previous experience and who are now only too glad to supplement their old-age pensions. What happens?

Photo of Mr Charles Hale Mr Charles Hale , Oldham West

I am not sure what that refers to.

Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Worcestershire South

One hundred and thirty-five times 12s. 6d.

Photo of Mr Charles Hale Mr Charles Hale , Oldham West

The hon. Gentleman is nearer to the result than I expected.

Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Worcestershire South

One hundred and thirty-five people employed on Fridays and Saturdays times 12s. 6d. means £85, to the nearest £. That is the figure I named.

Photo of Mr Charles Hale Mr Charles Hale , Oldham West

The correct figure, as I have worked it out quickly during the hon. Gentleman's intervention, is a little over £80 and a little less than £85; but that is not the point. The Oldham Industrial Co-operative Society will pay the £85 a week. The society is generous-hearted and a very good employer. Indeed, in Oldham we have very good employers. We do not have many disputes.

There must come a point at which the question arises whether this economic philosophy——

Hon. Members:

Speak up.

Photo of Mr Charles Hale Mr Charles Hale , Oldham West

I am sorry. It is many years since anybody in the House of Commons really wanted to hear me. This touches me. I am infinitely grateful for that interruption, which I welcome. I will try to respond to the injunction. These ambits of employment are limited. They are not replaceable. My hon. Friend the Member for Wood Green mentioned somebody who employed three part-time workers a week. One appreciates the possibility—three payments. But the person over 60 is not permitted to work other than part-time. I can understand the argument that part-time work, on the whole, is economically unviable. I can understand the Chancellor saying that we want to reduce part-time work—but not in a society where people over 60 are compelled to work part-time and are told that if they work an excess hour they may forfeit their old-age pension.

9.45 p.m.

I say sadly to the Chancellor, with respect, that that lady receiving £4 12s. a week made the sad discovery that by stopping on to work for six years, and who got an extra 12s., landed herself with Income Tax. I wonder how much it costs to collect that tax. Across the road I have a dozen piles of letters relating to tax liabilities which I have tried to sort out, from old people in Oldham who think they should not be paying tax at all. The amount of assistance that I get from the tax office in Oldham is magnificent. It goes to any amount of trouble to make clear that its computations are right. It certainly costs the community more to do this.

The Committee may have forgotten that there is no P.A.Y.E. on old-age pensions. One has to compute the old-age pensions and take the tax out of wages. There were cases of error, and they were corrected afterwards. People had lost the whole of their week's wages in tax because of tax accumulations. I knew of a man who during Christmas week did not draw £2 out of a full week's wages because of tax accumulations. We really ought to stop this.

To introduce a specialised individual tax directed against part-time labour is an iniquity. We have been asked to encourage part-time labour. We have been asked to make appeals to people to try to work and help the country. We have been asked to say that we would revise the provisions against pensioners and so on, so that they could work rather longer. All this has been going on, and suddenly we are told that we are to place a burden on them.

The right hon. Member for Enfield, West (Mr. Iain Macleod) introduced a number of Amendments which were comprehensive and extensive. May I briefly mention one institution of which I am a member and which I think should be mentioned—the London Library. It has not written to me, except to say that I have got some books which should be returned and which it had back weeks ago. I approached that institution some years ago. This is a very brief but interesting story. The London Library has been exempted from rates for many years under a curious Act which applied to the old-fashioned learned institutions, and some anti-Hampden had challenged all this. All these decent institutions were landed into law costs running into thousands of pounds contesting the question whether they should pay rates or not. I think they were badly advised. I would not have fought the action. I would have come to Parliament. I think they would have done better in the end had they done so.

I introduced a Ten-Minute Rule Bill, signed by Members of all parties, to exempt the Library. A deputation was received by the then Minister of Housing and Local Government, who is now a noble Lord and could be Lord Hampstead, though I do not think he is. However, he was very helpful. I am not one of his admirers, but I must say that on this matter he was helpful. He pointed out that legislation was impossible while litigation was taking place. In effect, it seemed that we would have to go on for years because once we had finished with the London Library case there would be the cases of the Royal College of Music and other decent institutions which were being assailed.

I introduced a Bill as a demonstration and withdrew it, by consent, when it was arranged that a Measure would be introduced later which would enable local authorities to provide special exemptions for associations of this kind. But the London Library, having spent thousands of pounds on litigation and in paying arrears of rates that had been claimed, found that Westminster City Council did not regard it as the type of institution which should be exempted and, as far as I know, it is still paying every penny of the rates.

Then, of course, the right hon. Member for Wallasey (Mr. Marples)—last heard of in Japan—introduced, as Minister of Transport, the horrid system of having people wandering about plastering tickets on cars. Every time I go to the London Library it costs me £2, paid at Bow Street months later. I think that I must be the most prosecuted Member of Parliament.

Now the S.E.T. is being levied on an institution of learning which makes not a penny profit and which provides scholarships for students and all kinds of special services. It is an institution almost without compare in the world. It was founded by Thomas Carlyle, more or less, after a row with the British Museum, which did not like him daubing comments on its books. I have a little sympathy with the Museum in that view.

The London Library is a great institution. If one is asked whether it is a charity, one must reply that it never started out to be one but it certainly never makes a profit. If the Government close it down it would be a beastly and unnecessary act, and I hope that the representations we are making on its behalf will be heard. Its closure would be a loss to authorship and to learning. It is a genuine public service which we ought to preserve.

I apologise for intervening, but I felt that I should try to say these few humble unsolicited and uncontroversial words.

Photo of Lieut-Colonel Stephen Maydon Lieut-Colonel Stephen Maydon , Wells

I know that the hon. Member for Oldham, West (Mr. Hale) will forgive me if I do not follow him. He made a wide-ranging and interesting speech. But I want to return to the question of part-time workers. One of the objections that the Treasury will have to our proposals is the question of how to identify a part-time worker and how to draw the line between someone who, for example, works less than 20 hours and someone who works more than 21.

But this is already being done. They, at any rate, purport to separate those who work less than eight hours from those who work more than eight hours. If it is possible with the division drawn at the figure of eight, it is equally possible with the division drawn at the figure of 20, or any other number one likes to choose.

The question of part-time workers is particularly important in an area like the West Country, where there are no big cities or great conurbations. Most of our towns are comparatively small. Most of our industry is comparatively simple, and there are no large industrial complexes. It is very largely a seaside holiday area. One has only to look at the map to realise what a long sea coast we have and what great amenities and facilities there are for holiday makers. This is not unique to the West Country; there are many other parts of the country where the conditions are much the same.

We have great scope for employment of part-time workers in our shops. Chemists have been mentioned today, because they provide a useful—and, in fact, an indispensable—service. There is also scope for part-time secretarial help in offices, part-time domestic help in hotels, boarding houses and cafes, and part-time workers in hundreds of other non-industrial jobs in rural and seaside communities—such things as the care of sports grounds, playing fields, car parks, camp and caravan sites. They do not all belong to local authorities, and so they will not all be exempt from the tax. Many of these facilities and amenities give part-time employment to people, particularly to those who are disabled or incapacitated in one way or another.

I endorse everything that has been said tonight about the difficulties of deaf people, but there are many other people who are incapacitated in other ways, whose cases are equally deserving. Then there are the retired people who have given up their full-time work, but for whom continued activity is essential to maintain their health and vigour, and sometimes their mental stability as well. Elderly people who have given up work, whose families have grown up, married, and, in many cases, gone away, can be very lonely. Their friends and companions are those people whom they have been accustomed to meet at their daily work. If that companionship is suddenly cut off at the age of 60 or 65 the effect can be catastrophic, and it is intolerable and thoroughly inhuman to impose this additional burden on elderly people who want to continue in part-time employment after finishing the full vigour of their working life.

I am sure that this was careless thoughtlessness on the part of the Government, and that on second thoughts they must relent. They have heard nothing but criticism all this afternoon and evening, and for the past few weeks hardly a newspaper that any member of the Treasury Bench may have seen does not mention one aspect or another of this disastrous facet of this new tax.

10.0 p.m.

Now, education establishments. One hon. Member opposite made great play earlier of the division between private and State education. To me, this is quite immaterial. The one cannot do without the other. Both are essential. One has only to think for a moment of the intolerable burden which would suddenly be thrust upon State education if the independent side were closed down overnight. Far be it from any of us to decry either type of education. Both are essential to the country, as I say, and such speech about independent schools as we have recently heard from the Government benches is foolish speech indeed.

Many of the independent schools, thank goodness, are charitable institutions, but the ones which are not will suffer the impact of this foolish new tax. I ask the Treasury Bench, before it is too late, to think again.

Photo of Mr Geoffrey Rhodes Mr Geoffrey Rhodes , Newcastle upon Tyne East

I have followed the tortuous path of this long debate on Clause 42 for more hours than I care to remember. The remarkable feature of it is that, throughout these many hours, there has been a sustained and substantial attack, frequently on a closely analysed and reasoned case, from both sides of the Committee. I think that I am right in saying that not for many hours has anyone spoken against some of the Amendments now before the Committee. I do not think that any hon. Member on this side has seen fit to support his own Government.

It seems to me that, when a debate takes place in which there appears to be virtual unanimity among back benchers across the Floor, whatever the party political motives may be behind some of the speeches made by hon. Members opposite—[HON. MEMBERS: "No."]—with a view to embarrassing the Government, if the criticism is equally sustained from this side, also, one must ask my right hon. and hon. Friends to ask themselves a question: could we not be wrong?

Those of us who have criticised the tax, and Clause 42 in particular, seeking to amend it, have not in every case argued that the principle behind the tax is wrong, or that the principle in the White Paper was wrong. The sustained attack has been on points of application, in the method by which the principle is being put into practice.

These Amendments cover special categories of people who, in the view of those moving or supporting them, should be dealt with specially and separately. During the last hour or so, I have been wondering what kind of reply will be given by the Treasury Bench to the very effective case which has been put on a whole variety of Amendments. I suppose that the answer will be that this is a rough and ready measure, that it is a blunt instrument, that this aircraft—the S.E.T.—must be got off the ground somehow and that it will take time to perfect it. But there is such a wide range of anomalies. We are constantly told that they will be ironed out later, though we are not told which of the anomalies the Government have in mind for ironing out.

I hope that we will have a clearer lead from the Treasury Bench before this debate finishes as to the points that it thinks are most acceptable with a view to the future improvement of the Tax. We will be told, and I made a speech in closely analytical detail on Thursday last about the application of this tax, that the points are valid but that it will take time. I would suggest that if we lacked the time to bring in a Measure more effective than this appears to me to be, we must ask ourselves why was there not more adequate preparation in the formation of the Bill or, alternatively, why the Bill was not brought in a year hence, when the details could have been thrashed out.

A further argument may be that if the Government give way to Amendment A or Amendment B or category C or category D, as one tots up the score the sum of money involved will be so substantial as to undermine the fiscal objectives of the Bill. But as has already been pointed out, the Government could have made a substantially greater revenue by not being so generous in their indiscriminate granting of premium subsidies to may manufacturers who have not asked for them and who do not need them.

Again, in terms of further sources of income, to compensate for the loss of revenue caused by accepting Amendments on particular categories, some of us have asked, why is it, in taxation upon the service industries, that self-employed people in those industries should not be included? I will give one case, retail distribution. It simply is not true that the least efficient elements in retail distribution are the co-operatives or the multiple and the larger firms. I understand that 90 per cent. of the grocery trade is being run on the basis of small man businesses, largely self-employed people who will be greatly helped by this tax to the detriment of other distributors. Yet these very parts of the distributive trade are, time and time again, the least economic and most inefficient units.

If we talk about the saving of money to pay for these special cases I would suggest that we have an extremely untidy method of collecting this form of taxation, with hundreds of millions of pounds being paid out by many people who will later recoup it, sometimes at a loss to themselves. For example, a substantial number of local authorities will have to pay a great sum of money in before it is repaid, and I imagine that it will cost them a great deal in terms of interest, and so on.

I would like to refer briefly to the elderly part-time employees. As I read the White Paper and see this point about surplus labour and services, and persuading people to come back into manufactur- ing trades, I would say that there are a considerable number of part-time employees who would seem to be extremely unlikely to come back to manufacturing, from which they have retired.

Take the catering industry as an example. It employs a large number of elderly people and housewives who, by reason of age or occupation, can only be part-time employees. To economise on their labour will not provide more labour for the manufacturing industries. It is not in the nature of the economy for this to happen. The part-time employment in our economy is not the soft under-belly of our economy. I would argue that it is the hoarding of surplus labour on the part of some manufacturers that might well be the key when considering the question of the soft under-belly of our economy.

These Amendments have sought to exempt certain groups, principally in the service industries. I have never argued that to tax services was wrong. I have argued that taxation will follow the consumer, and, in as much as more and more money is being spent on services, I would rather have this kind of new taxation than increased taxation on commodities, which are already extremely highly taxed.

We have to tax on the basis of social priorities, which means that we have to exempt certain categories of people from the tax because of the services which they render to the community and we have to include certain manufacturing industries in the tax because they do not serve the national economy or other manufacturing industries in their long-term objective of capturing the export markets. It is this untidy, inconsistent application which has brought objections from these benches, not the principle. It is wrong to tax certain services which are good, healthy, efficient or socially desirable and wrong to subsidise certain manufacturing industries, which, by no stretch of the imagination, contribute to the economy.

May I say a word of explanation about the Co-operative movement. There is a great deal of confusion. Co-operative Members have not come here to speak for special discrimination in favour of the Cooperative movement. We have come here to speak from our experience over many years in retail distribution and to tell the Government something about the distributive trades, which, at least in terms of the Bill, they do not seem to understand.

I made a speech on Thursday on the Selective Employment Payments Bill in which I analysed in great detail the nature of distribution and, I hope, showed the Government that some of the effects of the tax would be to penalise the efforts for streamlining warehousing, centralised distribution, centralised transport and the development of computers, thereby defeating the principles behind the tax. That speech was not answered by the Chancellor of the Exchequer. All he said at the end of the debate was, "As far as the co-operatives are concerned, we cannot exempt them". Yet the point for exemption was never put in that debate. It has not been put by any of my Co-operative colleagues in this debate.

What we say is that this tax has a special significance for the Co-operative movement, since in this country, unlike in many countries overseas, the movement is not predominantly a manufacturing movement; it is primarily a distributive movement which employs a substantial number of part-time staff. In the past, it has employed people in relatively uneconomic services because it wanted to continue door-to-door distribution to certain isolated villages as a service to its membership. We have continued to deliver goods when it has not been in the interests of the dividends of the society to deliver the goods. We felt that we had an obligation to the elderly and people in certain areas which would otherwise be isolated from retail distribution.

The purpose of the evidence presented to the Chancellor of the Exchequer by Co-operative Members and representatives of the Co-operative Union, based on their detailed knowledge of the trade, has been to show why there should be Amendments to the Bill, none of which has been conceded by the Government. It is because no concession has been made to the case which has never been answered but which has been put forward continuously that my Co-operative colleagues have refrained from supporting the Government throughout the debates on Clause 42 and will continue to refrain, I understand, from voting for the Government until we have finished with this Clause.

Let us look at this tax from the point of view of the ordinary, active member of, say, the Newcastle-upon-Tyne Cooperative Society. One of its members said to me, "It seems odd. Our society, which is providing a wide range of service for a mass of people in this city, will have to pay an extra £150,000 a year in taxation. We could see some justice in this if it were not for the fact that, for example, the Newcastle breweries will get a heavy subsidy under this tax which they do not need and for which they have not asked ".

It is this kind of contrast which is, in a sense, illogical. This is the kind of image which the Government are presenting in the country because they have persisted in standing firm against all the legitimate suggestions and reasonable points put to them by some of my hon. Friends and some hon. Members opposite.

It is because the tax is bad in implementation that we have sustained this attack. We cannot support this proposal because we feel that it does not achieve the objects that were set out for it. I appeal once again to the Government, as we have done many times and will continue as the years go by, to meet the reasonable requests of those who speak for the trade and who know that their case has not yet been accepted by the Treasury Bench.

10.15 p.m.

Photo of Mr Nicholas Scott Mr Nicholas Scott , Paddington South

I have listened to most of the debate from the time the hon. Lady the Member for Wood Green (Mrs. Joyce Butler) began right through to the speech of the hon. Member for Newcastle-upon-Tyne, East (Mr. Rhodes), who has just concluded. As a fairly new member of the Committee I was incredulous when I heard an hon. Member opposite sell the past by saying that in his case at least the vote would not follow the voice. How one can imagine that the pressure across the Floor of the Committee will have any notice taken of it by the Government when hon. Members announce even before the Division takes place that they do not intend to carry their views into the Division Lobby, I do not know.

I do not want to delay the Committee long, but I wish to raise a point which I do not think has yet been raised: that is, the effect that the Clause will have on the employment of married women. We know how crucial is the employment of married women in the economy. The Economist of 18th June said: Meanwhile, although the Chancellor has bowed to considerations of equity by entitling charities to claim refunds, nothing has yet been done about the far more important—in economic terms—case of part-time workers. This is not just a matter of chars and chauffeurs. The typical part-time worker of today (and even more so of tomorrow) is the married woman with young children—the only remaining pool of unutilised manpower that is now left for this overemployed country to draw upon. I hope that it is not too late to express the hope that the Chancellor may have second thoughts upon this aspect of the effect of his tax, because it is both economic and social nonsense in its unamended form.

The disincentives from which married women already suffer when considering going out to work were pointed out in the New Statesman of 16th April last year, which went into the case at great length. I will mention only one or two of the points that were made in that article. It stated: If a woman wants to work and has preschool age children, then she needs either a nursery school or domestic help. If a woman works when she has children at school she will still need … domestic help. Some at least of the load of cleaning and washing must be shed—and domestic help … is expensive. The author of the article reckoned that one professional woman to whom attention was drawn, having paid for that help, worked for a profit margin of 6d. an hour after paying Income Tax and the help that she needed at home. The article ended by saying: Society in considering the place of the professional woman today shows little sign of moving into the second half of the twentieth century. The married professional women are there and willing to return. It is up to the Government to think of something more imaginative and concrete than advertising to tempt them back. Instead of something "imaginative and concrete" we have the Selective Employment Tax, which is adding to the disincentives for women in this situation to go out to work and to make the contribution that they can make to the economic strength of the country. They are being subjected to a two-flanked attack. First, they will have to pay the Selective Employment Tax for the person who comes part-time, possibly for an old-age pensioner who comes to clean their home. Secondly, they will have to pay it for the part-time mother's help who comes to care for their children—the married woman's 12s. 6d. for her char and 12s. 6d. for her mother's help, 25s. in all, out of her taxed income, is a disincentive, and for her own employer there is the disincentive of the 12s. 6d. he has to pay per married woman, too heavy a disincentive to put upon the only remaining pool of unutilised manpower which is now left for this over employed country to draw upon.

If the Government really want to put this disincentive upon married women to come forward to work, let them say so, but if they do not, if they want them to come forward, for heaven's sake let them find a way even at this late stage of removing before it is too late the disincentive inherent in this tax. I am sure a way can be found to remove it. It is a marginal decision for these women whether to go out to work or not, and I would not have thought it beyond the invention of the Chancellor to find ways of putting an incentive before them rather than a disincentive.

Secondly, but very briefly, I want to add my voice to the many which have already been raised in this debate against the social implications of the tax in hitting those in our society least able to help themselves and whose hold on employment is, by definition, most tenuous, the old and disabled in particular. In Clause 6 of the other Bill, the Ministry of Labour's Bill—I know we shall be discussing that later—the provision is made to refund Selective Employment Tax to employers of the disabled.

It seems to me to be an anomaly that no provision is made for the disabled themselves, and that they will continue to be taxed, particularly when unemployment, as has already been said, among the disabled is at five times the rate of national unemployment, and it must be heartbreaking for those in the Ministry of Labour who fight so hard to place disabled workers to find that the Treasury is working in the opposite direction. It is the disabled, the old-age pensioners, working for a few hours, almost certainly in service industries, who will be hardest hit by this tax.

We listened on Monday of this week to the social security team at the Dispatch Box opposite telling us of the many high priorities which they have, and giving excuses for their inaction over a wide range of policy. I like to think that the reason why they have been unable in their own Department to act with more vigour is that they have been opposing the Chancellor behind the scenes because of the affects of his Selective Employment Tax. I like to think that, and I am only sad that, if that is true, they have not had more effect upon his policy.

There are other complaints which, at this hour, I shall not reiterate against this tax, but it is a tax which lacks economic logic and, I believe, common humanity, and the Amendments we are discussing now, while they would not make it a good tax, would at least give it a little of each of those two qualities.

Photo of Mr Jon Rankin Mr Jon Rankin , Glasgow Govan

If my recollections are correct it seems to me that in this debate, ever since it started, we have been witnessing an expression of what has been called the Marxian analysis. We have the thesis as expounded and represented by the Government; we have the antithesis expressed on the other side; and tonight we have the phenomenon that the thesis and the antithesis are merging into the synthesis, and it is the synthesis we want to impress upon the Government, so that they will carry out the Marxist historical criticism and proceed with the combination of thesis and antithesis as determined tonight. I hope that my right hon. Friends on the Front Bench are listening to what we are saying, because in all my experience in the House of Commons, now going back nearly 21 years, this is the first occasion on which I have seen back benchers on my own and the Opposition sides uniting to make a common demand on the Government.

At this stage, I do not want to say anything which would appear to put my own Government in difficulty by threatening. I want to coax and induce them to come my way. As a Labour and Cooperative Member, like my colleagues I have been driven to abstain and to indicate clearly to the Government that we cannot support Clause 42. It is also a fact that we are here in process of providing Supply, which the Government must have if they are to pay the old folk and do all sorts of other things. But we are asking them to pause and to think that some of these things need not be done to the extent which they are being done.

The Government have said that there is a state of inflation and that for the well-being of Britain we have to try to get rid of it. They have, therefore, introduced this deflationary Budget. We are to abstract about £260 million net spending power from the economy to try to modify this state of inflation. But there are many of us on this side of the Committee and, I am sorry to say, only a few hon. Members opposite, who suggest that there is another way to produce this state of deflation. It is by reducing the numbers of our fellow citizens who are at present not employed in productive work and whose services are engaged in the far parts of the world helping to create the inflation which we seek to cure. We cannot have about 500,000 men, who could be adding to our wealth, situated east of Suez, and in other places, only consuming that wealth.

Photo of Mr Thomas Steele Mr Thomas Steele , Dunbartonshire West

Order. I hope that the hon. Gentleman will now relate his remarks to one of the Amendments.

Photo of Mr Jon Rankin Mr Jon Rankin , Glasgow Govan

I agree, Mr. Steele—[Interruption.] I know that these views are not popular with hon. Members opposite, but they have to realise that what I have said is fact. However, I shall not go further with that part of my argument.

10.30 p.m.

Nevertheless, that part of my argument is basic to the financial situation which the Government are seeking to cure, and their action in doing so is putting a movement to which I have been long attached into serious difficulty. I have been a member of the co-operative society all my life, I come from a family of co-operators and the Co-operative movement has been part and parcel of our way of life for as far back as I can think.

Photo of Sir Harmar Nicholls Sir Harmar Nicholls , Peterborough

Which Amendment is the hon. Gentleman speaking to?

Photo of Mr Jon Rankin Mr Jon Rankin , Glasgow Govan

If the hon. Gentleman will restrain his impatience, he will soon hear about the Amendment to which I am speaking. I am thinking of the part-time people who are concerned in this, the 11,000 in the Co-operative movement, a bigger number than has ever been mentioned by any hon. Member opposite in his speech. I shall come to all these things, and whether I reach them at twelve o'clock or one o'clock is immaterial to me. Time is of no consequence.

Photo of Mr Thomas Steele Mr Thomas Steele , Dunbartonshire West

But being in order is. I hope that the hon. Gentleman will now put himself in order.

Photo of Mr Jon Rankin Mr Jon Rankin , Glasgow Govan

As we are fellow Scots, Mr. Steele, there is no dispute between the Chair and me on that. I am merely looking at the general position at the moment, and I was developing my speech along lines which I hope will satisfy the hon. Gentleman opposite in due course.

I said that I was concerned chiefly with the impact of this tax on a movement which is very close to my heart. I am thinking in particular of the Cooperative movement in Scotland, which has not had much attention during this debate. My hon. Friend who spoke previously is not a Scottish Member and he dealt particularly with the tax as it applied in the part of England to which he belongs.

My hon. Friend said that the Co-operative movement was seriously affected by the tax because manufacturing was a very small part of its work but distribution was a very large part of it. But the Cooperative movement, although it has a small manufacturing industry and a large distributive industry, is much more than merely those two things. Throughout its history it has been a great social force in the life of Scotland.

Photo of Mr Thomas Steele Mr Thomas Steele , Dunbartonshire West

Order. The hon. Gentleman must indicate the Amendment which he is discussing.

Photo of Mr Jon Rankin Mr Jon Rankin , Glasgow Govan

Yes, Mr. Steele. I am dealing with Amendments No. 29 and No. 30, standing in the names of my fellow co-operators, and all that I am saying is, in my view, closely related to them. I was merely pointing out that the movement has been a great social force in Scotland. If it has stood——

Photo of Mr Thomas Steele Mr Thomas Steele , Dunbartonshire West

Order. This is where the hon. Gentleman is going astray. We are not actually dealing with the Question, "That the Clause stand part of the Bill" at the moment. We are dealing with the specific point of the Amendment.

Photo of Mr Jon Rankin Mr Jon Rankin , Glasgow Govan

I am coming to that point. I am going to deal with those who are employed part-time in the Cooperative movement.

As things stand at the moment, the tax will cost us £2¼ million in Scotland. There are 34,000 persons employed in the Co-operative movement on the distributive, manufacturing and educational sides——

Photo of Mr Thomas Steele Mr Thomas Steele , Dunbartonshire West

Order. I must draw the hon. Gentleman's attention to the fact that the Amendment numbers which he has quoted deal with part-time workers or disabled people only.

Photo of Mr Jon Rankin Mr Jon Rankin , Glasgow Govan

I am sorry that you interrupted me so quickly, Mr. Steele. I was going on to say that, of those 34,000, 11,000 are part-time employees in the Scottish movement, which is a very big number.

If the tax which is to be imposed on them has to be met, there will be an additional cost to the movement in Scotland of £364,000 per year. In view of the other costs which co-operative societies in Scotland face today, with keen competition from other distributive units and, as a result, the tendency for trade to decline and for dividend to decline, if the movement has to face this added charge it will be affected very seriously.

It is because this imposition placed on the societies in Scotland by the Government will hit them so severely that I am appealing to the Chancellor, through the Financial Secretary, to pause and reconsider the tax and its effect on part-time employees in the movement with which I am connected.

Photo of Sir Harmar Nicholls Sir Harmar Nicholls , Peterborough

Sir Harmar Nicholls rose——

Photo of Mr Jon Rankin Mr Jon Rankin , Glasgow Govan

There are plenty of hon. Members able to speak for other industries, and if the hon. Member for Peterborough (Sir Harmar Nicholls) has not already spoken, I hope that he will do so. I have made it clear that I am speaking for an industry in which I am keenly interested, though I am not saying anything that is not applicable to other industries in a similar position.

A plea for the part-time worker in the Co-operative movement is a plea for a part-time worker in any distributive trade.

Photo of Mr John Biggs-Davison Mr John Biggs-Davison , Chigwell

Then why does the Co-operative movement support the Labour Party?

Photo of Mr Jon Rankin Mr Jon Rankin , Glasgow Govan

For the simple reason the worst enemy that the Co-operative Party has ever known has been the Tory Party.

Photo of Mr Jon Rankin Mr Jon Rankin , Glasgow Govan

The devil is sick at the moment, and the devil would like to appear as a saint. That is why the Tories are supporting the Co-operative movement. It was the Tory Party in Scotland that tried to prevent us from even getting land on the Island of Arran on which to build our co-operative shops, so why should we even dream of supporting the Tory Party or becoming affiliated to it?

This, however, is a special occasion—it may be a temporary one—on which the Opposition are showing a little sense, and we do not mind using them for our purposes. I hope that even now the Chancellor will think of doing something about the application of this tax to the Co-operative movement. If he accedes to my request, his name in Scotland will indeed be blessed.

Photo of Miss Joan Vickers Miss Joan Vickers , Plymouth, Devonport

I am pleased to follow the hon. Member for Glasgow, Govan (Mr. Rankin). We have heard a great deal about co-operative societies today, but I should like him to know that in Plymouth a Conservative was head of the Cooperative movement for a long time. I do not know whether the hon. Gentleman has heard of the blue and white tickets?

Photo of Miss Joan Vickers Miss Joan Vickers , Plymouth, Devonport

I am dealing with England. We hear too much from the Scots in comparison with their numbers in this House.

The Co-operative movement is not as badly off as it would like to pretend, because it includes manufacturing industry in its activities. One of the difficulties of the small baker in Plymouth is that as the co-operative society has its bakeries separate from its shops it will be able to get back the premium. Thus, the co-ops are not as badly hit as they are trying to make out, many smaller industries are much worse off than they are.

I support what was said by my hon. Friend the Member for Somerset, North (Mr. Dean) about insurance for medical treatment. It is essential to have a statement from the Government about this, because in the West Country there are 39,000 people on the hospital waiting list and if the schemes which operate at present cannot carry on the number on the waiting lists may be increased considerably. Some small homes have to pay £10 a week in tax while it costs only £9 5s. to keep a patient. This shows how out of proportion the amount of tax will be.

I support the plea made by my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) about independent schools. I do so from a different aspect. Many Service people overseas have to send their children to England to be educated. The schools referred to by my right hon. Friend may be the only places where they can be taught, because they may not be eligible to go to State schools, not having taken the necessary examinations. These schools provide a very necessary form of education, and they have to be boarding schools because the parents of the children who attend them have to be away from this country for most of the year, in such places as Singapore or Malta.

What I object to about this tax is that it raises money at the expense of the weakest people, those least able to look after themselves. No mention has been made so far of the single woman who looks after dependent relatives. This tax will hit her particularly hard, because, as I understand it, the average income of such a person is about £500 a year. With the insurance stamp she will have to pay £1 3s. 10d. a week which will cost about £60 13s. 4d. extra a year. Many of these women may not have bank accounts. How will they get this extra money to pay their tax? Many of them employ part-time workers to look after their dependent relatives. I know a clerical worker who has to pay £3 10s. a week for help for her old father. I realise that she will get this tax refunded, but how will she manage in the meantime? I should like to know from the Treasury Bench what arrangements the Government are making to help people in these circumstances, because if she has to pay this amount and wait six months for the tax to be refunded she will not be able to carry on. In many cases it will mean retiring from work and receiving National Assistance so that these women can stay at home and look after their relatives.

10.45 p.m.

Could not there be a system whereby it would be possible to go to the Ministry concerned and have the money paid back monthly, perhaps by producing their card? This tax will be a considerable drag on an income of £500 a year, especially as many of these people have not got a banking account or even a house on which they can raise a mortgage. I do not see how they can get this money to pay for the care of their relatives if they have to wait months.

I would also like to raise the question of part-time workers. I have gone into the question of the number of hours they work and the times at which they work. Many work between 6 a.m. and 9 a.m.—mostly cleaners—and they cannot possibly go to a factory at that time. Others work when their husbands come home, to look after the children, between 6 p.m. and 10 p.m. I do not think the Chancellor will suggest that these women will be able to find employment in factories at these particular times. They average about 15 hours a week, and the payment varies from £3 to £3 10s. according to the area in which they live.

I went into a shop yesterday, and the women serving me were over 65 and part-time workers. They said that they might lose their jobs and they were very worried about it.

Then there are women who have been deserted, wives who have been divorced, women with very large families, and those with sick husbands. None of these women could possibly work full-time. And in the West Country where we have such very low wages—lower than the national average—many women have to go out to work in order to get sufficient money to augment their husbands' incomes.

This will mean that most of them will be much better off if they give up their jobs and go on National Assistance, particularly with the new rates. So this will cost the Government considerably more money in the end than if they make concessions now. There are large numbers of self-respecting people who work now, and are anxious to work, but who will not be employed because their employers are not willing to pay this tax; so I hope this matter will be considered again.

In the contract cleaning business, window cleaning, the cleaning of offices, hospitals, private schools and so on, I gather that 75 per cent.—in some firms even 90 per cent.—of the labour force are part-time workers, and there is going to be enormous unemployment in these areas. This tax is also going to hit small shopkeepers very hard indeed. A number of small shops open from 6 a.m. to 8 p.m. People are anxious to get their newspapers early in the morning, and I suppose the Government are anxious to put over what they are doing, as well as other news. But if we are to get our papers in the morning, we are dependent on many part-time workers.

I have a letter here from the owners of a small shop, a newsagent and tobacconist's, which also sells fishing tackle, ladies' and children's wear. They say that because they have to keep the shop open between 6 a.m. and 8 p.m. the tax is going to cost them another £12 a week. They draw my attention to the fact that many items of stock that they sell have fixed prices; therefore it will not be possible for them to pass on the extra cost to the customer, as will be done, I regret to say, in most cases. They will therefore have no alternative but to dismiss a number of their staff.

This will also happen in the case of pharmacists. They depend to an enormous extent upon part-time workers, and they have very little chance of passing the cost on, or recouping themselves. They also sell goods which mainly have fixed prices, and they receive a National Health dispensation fee which is quite inadequate.

Photo of Mr Thomas Price Mr Thomas Price , Westhoughton

Pharmacists are the worst example the hon. Lady could have picked. Their profit margins are much higher than in other retail establishments, for which a much better argument could be put forward. This is well known to anyone who knows anything about retail distribution.

Photo of Miss Joan Vickers Miss Joan Vickers , Plymouth, Devonport

Many of the items that they sell have fixed prices, and their National Health dispensing fee is quite inadequate, in view of the long hours they work, the stocks they have to carry, and the tremendous responsibility they have. This is quite a good example, in my opinion, and in addition to this they are dependent on a great many part-time workers.

I want to deal for a moment with the catering trade. I come from the West Country, which has a special interest in this trade. It probably employs more part-time workers than any other industry, especially for what is known as the functional trade. Thirty million people in this country take holidays, and five million go abroad. The West Country caterers do a very good job as dollar earners, and if they are forced to put up their prices because they have to employ so many part-time workers, who normally work from 9 a.m. to 3 p.m., they will have to pass on the cost to the customer. This will make it much more expensive for him. The Chancellor has asked people not to go abroad for their holiday, but the imposition of this tax upon the catering industry will mean that many more people will do so.

In 1959 we had 4·9 per cent. unemployment in the West Country, until the Local Employment Act came into force. Now the position is much better, at least in the Plymouth area, but we have no I.D.Cs.

Photo of Mr Hugh Wilson Mr Hugh Wilson , Truro

Will my hon. Friend bear in mind that in the West Country many establishments which are connected with the tourist trade are not only dependent on part-time workers but have an exceptionally short season—a maximum of four months—and that some establishments will not open at all because there will be no profit margin if they have to pay this tax?

Photo of Miss Joan Vickers Miss Joan Vickers , Plymouth, Devonport

I am grateful to my hon. Friend for that intervention. The tax affects his part of the West Country more than mine, but I was talking of the West Country as a whole. We have no other employment incentive. Therefore, where will these people go if there is no part-time employment for them.

Further, much of our tourist trade goes to the retail shops, and if we do not have people serving behind the counter two things are likely to happen. First, people will not be able to complain if goods are not up to standard; they will have to take what they can get if it is a self-service shop, and the standard of goods is likely to get worse. Secondly, the already serious amount of shoplifting that goes on in these shops will be increased. It is a great pity that the Government, by doing away with many of these part-time workers, should increase crime at this time.

I hope that the Chancellor will particularly note my first point about single women with dependants, and that he will say how soon they will get their money back and whether the process will be made as easy as possible. I hope that the required form-filling will be as simple as possible. He might consider having a different coloured card for the part-time worker, with the amount of money concerned stated. They should have different and perhaps cheaper stamps.

If he cannot do what we have asked with regard to part-time workers, perhaps he would let the employer pay 50 per cent., which would encourage them to have part-time workers. I hope, mainly, that the Government will consider my first point.

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

On a point of order. We are in Committee, and no hon. Member, as far as I know, has sought to speak twice, though it is within our rights to speak as often as we wish. We are debating 16 Amendments, and have, therefore, had, so far, an average of 20 to 25 minutes discussion per Amendment. There are hon. Members in the Committee on this side who have been waiting seven hours to be called and whose names are on these Amendments. May we therefore have an assurance from the Chair, Mr. Steele, that even though the Financial Secretary rises to curtail the debate, under no circumstances, on these Amendments, would the Chair accept a Motion for the Closure?

Photo of Mr Thomas Steele Mr Thomas Steele , Dunbartonshire West

I cannot accept a Motion for the Closure. I have no authority to do so.

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

We have been debating these Amendments for over six hours and I hope that the Committee will not think that I am intruding unnecessarily if I seek to reply to some of the many points made in the debate——

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

Would the hon. and learned Gentleman then undertake to make a second reply when he has listened to the rest of the debate?

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

I give no undertakings at all. I have heard many arguments repeated already in this debate.

That was one of the things which led me to think that this might be a proper time for me to intervene.

The right hon. Member for Enfield, West (Mr. Iain Macleod) set an admirable example of brevity when he opened the debate. He moved an Amendment which itself covers a very wide field and embraces the subject matter of a very great number of the Amendments which we are discussing with it. Although there are 16 Amendments, there is, of course, a great variety in the subject matter of the Amendments. They reduce themselves to certain broad headings with which I shall seek to deal.

One has a difficult task in seeking to reply to a debate of this kind. If one seeks to reply to every point, one is told that one is, and builds up a reputation for being, lengthy and tedious and wearisome—a reputation which tends to survive, I find. If, on the other hand, one speaks too shortly, one is treating the Committee with contempt. It is difficult to strike a balance, but one can start off with the confidence that whatever one says one will be told that one's speech is the most unsatisfactory inhuman and heartless ever heard, even from the Treasury Bench.

I would begin by reminding the Committee that the Bill provides for the collection of this tax with the National Insurance stamp. The basis of it is the stamp on the Insurance card. This is a necessary feature of the tax, so that it may be introduced this year. My hon. Friend the Member for Newcastle, East (Mr. Rhodes) suggested that we should have deferred the tax to next year so that it could be brought forward in a more refined form. I would ask him and any other hon. Member who thinks that way to answer the question which we have put many times, but which has not been answered. If we do not introduce this kind of tax, what sort of tax with a similar effect would people prefer us to introduce?

11.0 p.m.

Photo of Dr Michael Winstanley Dr Michael Winstanley , Cheadle

The hon. and learned Gentleman must be fair to hon. Members who have made specific suggestions for specific alternatives. I myself at some length put forward our proposals for an alternative, in pounds shillings and pence, and in detail. It is not that we have not put forward proposals. It is that they have not been answered by the Treasury Bench.

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

I did not hear any such argument from my hon. Friend the Member for Newcastle-upon-Tyne, East, who is the one Member in this debate who raised that issue.

The result is that it is not possible administratively to—[Interruption]. I would be grateful if hon. Members who wish to carry on conversations would do so outside the Chamber. It is not possible administratively to grant exemptions which are dependent upon the occupation of the employer or the employee. We cannot, for example, pick out theatrical employers, which was a case taken by my hon. Friend the Member for Putney (Mr. Hugh Jenkins) supported by my right hon. Friend the Member for Vauxhall (Mr. Strauss), or hotel proprietors or people in the catering trade, and give them special treatment, because they cannot be distinguished as a separate class within the National Insurance system.

We can only deal with categories of people who can be distinguished for the purposes of National Insurance. The right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), supported among others by the right hon. Member for Thirsk and Malton (Mr. Turton), suggested that for this reason we should be able to give special treatment to retirement pensioners because, they pointed out, there is a different card for retirement pensioners compared with the card for other employees. Up to a point, that is true, but, unfortunately, the card which applies to them is not exclusive to them. It applies also to those married women and widows who do not elect to contribute. I think that the whole Committee will agree, on reflection, that it would be very undesirable to create an exemption which would result in pressure being brought to bear upon women to elect not to contribute and in that way to sacrifice their insurance cover.

Another of the main classes which we have discussed are the various categories of the disabled. My hon. Friend the Member for Bedwellty (Mr. Finch), who, of course, has enormous experience in the field of assisting the disabled, was the first to raise this matter, and many other hon. Members followed him. Again, there is no separate card for the disabled and there is no identification of disabled persons on their card. There is, of course, the disabled persons' register, which is a separate matter, not related to the National Insurance stamp and card system.

I do not say that it would never be possible under any circumstances to devise a system, if that was thought right and necessary, in order to distinguish other categories from those that exist at the moment within the National Insurance system. But I do say that it certainly is not possible to do that this year and in time for the implementation of the tax this year.

Photo of Mr Percy Grieve Mr Percy Grieve , Solihull

That deals with the point so far as it goes, but surely it is not beyond the wit of the Government to devise a system this year which will avoid a gross and terrible injustice to the disabled.

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

I will come to the merits of individual cases in a moment and give reasons why I think the hon. and learned Gentleman is mistaken in thinking that this is a gross and terrible injustice. I am now pointing out the administrative considerations.

Equally, in the case of the deaf, I was asked particularly by the hon. Member for Essex, South-East (Mr. Braine) whether there is a separate register for them. There is no such register; but I am not pretending that even if there were it would solve the problem, because it would not.

My hon. Friend the Member for Wood Green (Mrs. Joyce Butler) suggested that we could make use of the fact that many, if not most, deaf people have applied for hearing aids and that one could identify them as a class on that basis. Again, this is not something that is married to the National Insurance stamp system.

Photo of Mr Thomas Price Mr Thomas Price , Westhoughton

I put it to my hon. and learned Friend seriously that the House of Commons has never accepted the argument of administrative convenience as being an adequate or valid reason for refusing to deal with a patent injustice which has been well argued from both sides.

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

I know that the House of Commons has never accepted it, but I am now stating what the position is. I am coming in a moment to the merits of the arguments in particular cases. But I would ask all those who take this attitude about administrative difficulties to remember it next time they criticise the growth of the Civil Service, as so many hon. Members opposite do.

The right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) said that in subsection (2) of the Clause there is an exemption for the Armed Forces and foreign-going mariners and suggested that this showed that we could, if we wanted, exempt a particular class of person. But that can be done in these cases for the precise reason that the employers pay a reduced rate of contribution, related to the fact that their employees do not enjoy many sickness benefits which would otherwise be provided under the National Health Service. The point is that they are an identifiable class within the National Insurance system.

My hon. Friend the Member for Willesden, West (Mr. Pavitt) criticised the tax, because, he said, we are not selecting as we should between socially more useful and socially less useful services, between the socially desirable and the socially less desirable. All I can do is to repeat that this is not a differentiation that it is possible for us to make having regard to the form of the tax.

Photo of Sir Lionel Heald Sir Lionel Heald , Chertsey

Sir L. Heald rose——

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

I hope that the right hon. and learned Gentleman will allow me to go on. I think that it would be more convenient to let me pursue my argument and then seek to intervene later. I am making general observations now and will come to particular categories later. If I do not meet points put by right hon. and hon. Members, I will gladly give way and seek to do so.

My second general observation is to point out that provision is already made for refunds in certain of the categories referred to in Amendment No. 34. Indeed, that was acknowledged and welcomed by the right hon. Member for Enfield, West.

I would like, first, to deal with the question of charities and religious organisations. There is complete provision for refund to them. The right hon. Member for Enfield, West criticised us because we are limited to registered charities only under the legal definition of charities. But surely this is an inevitable consequence of the decision which my right hon. Friend took, with the agreement of the Committee, that it was not possible for him to distinguish between charities. Some of my hon. Friends would have felt that some bodies registered as charities were less deserving of special exemption than other bodies which are not registered as charities. This is not a distinction which my right hon. Friend can be expected. to make, and it would be considered invidious if he tried to do so.

The right hon. Gentleman the Member for Enfield, West in moving that Amendment, referred to one body, the Hospital Savings Association, which I think is, in effect, a form of mutual insurance organisation that provides certain sickness and other benefits for its members. It does not have the status of a charity, and the right hon. Gentleman told us that it has investment income which has for many years been taxed. I assume that if it had been able to bring itself within the legal definition of a charity it would have had an obvious economic incentive to do so. But I suppose that because its benefits were confined to its members it did not qualify.

I do not know the particulars of that organisation. There is another organisation—I do not want to mention its name, because I have no authority to do so—which made representations, and said that it would have to pay a tax of about £12,000 a year under these provisions. When that was looked into, it was found that the increase in members' contribution that would be required to pay that sum, if the whole tax was passed on in terms of increased contributions, would work out at approximately 8d. per member, per year. I do not know the particulars in the case of the Hospital Savings Association to which the right hon. Gentleman referred, but that example perhaps illustrates the exaggerated fears which some people have had about the incidence of the tax The point was made that even the charities which receive the exemptions will have a bridging difficulty, in finding the money to make what has been termed the interest-free loan to the Government until they receive the refund. But when the deputation of the National Council of Social Service and the Churches Main Committee came to see my right hon. Friend this was not the point that they made. Their concern was not so much with the burden of the tax. They were more eager and anxious to establish, or re-establish, the principle of exemption from tax for charities in general.

The Committee will remember that originally my right hon. Friend took the view that, this having the nature of an indirect tax, it should be equated with other indirect taxes, which charities pay. It is a matter for argument as to what is the true nature of the tax, whether it is to be regarded as direct or indirect. In any event, as is well known, my right hon. Friend has now decided that the refund should be made.

I do not believe that the bridging burden is the real concern to charities that has been suggested. The religious organisations will qualify for the refund, provided that they are ecclesiastical corporations under the Charities Act, and this will mean that all those ancillary employees about whom many hon. Members have received representations—the vergers and cleaners in local churches—will be employees in respect of whom the churches will be able to claim the refund.

This would seem to cover all the universities and university colleges. It would seem that all direct grant grammar schools should be able to claim the refund. Other grant-aided bodies will be able to have assistance of the kind which has been indicated, through the system of the grants. I shall come back to that. All the church schools which are not wholly supported already will be able to qualify, as will very many of the independent schools. As I have said, very many of those which have not done so already will, no doubt, take steps to have themselves formed into charities.

As regards those which do not, or do not wish to do so, there is a very real distinction in character between a body which is a commercial organisation and one which is a charity. It is a perfectly proper distinction to draw for the purposes of this tax. The same considerations apply to the various other health organisations referred to in item 4 of Amendment No. 73

11.15 p.m.

I come now to the class which has been the subject of the most discussion, the disabled. I have spoken of the difficulty in relation to the stamp. We have heard many speeches, some of them very moving, all speeches of great sincerity and many made by hon. Members with a great deal of knowledge and experience of assistance to the disabled.

Most of these speeches expressed very pessimistic prognostications of the effect of the tax upon the employment of the disabled. Speaking for myself, I feel that many of those fears will prove to have been unfounded, and I hope that I am right. But I say at once that my right hon. Friend will be watching and reviewing the working of this tax, particularly in its relation to the disabled, most anxiously and carefully. He will certainly not hesitate to take what steps he can to adjust the form of the tax if these fears prove to be better founded.

Turning to some of the points raised, I begin by answering the request that I should give what figures are known in this matter. There are about 600,000 registered disabled persons in employment. Roughly two-thirds of these, about 400,000, are either in the neutral sector, qualifying for the refund, or in manufacturing industry, enabling their employers to claim the premium in respect of their employment. This is a factor which has been overlooked in our debate. In the manufacturing industries there will be a positive incentive to employ these people, as also for the part-time workers, to whose care I shall come in a moment.

In effect, we are dealing with about 200,000 people, all of them still able to enjoy the protection of the quota of designated employment schemes, under the Disabled Persons (Employment) Act, where employers with 20 or more workpeople are bound to employ a minimum number of 3 per cent. of disabled persons in their labour force.

In addition, it is right to remind the Committee that the most severely dis- abled are nearly all employed in sheltered workshops, a kind of employment usually provided by the Government, or by Government agencies, which will otherwise attract the refund. Many of them are in the manufacturing sector and will attract the premium. Many hon. Members have taken a keen and active interest in the work of Remploy and they would apply to it.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

Is not taxing the disabled the equivalent of taxing the sick, about which I thought hon. and right hon. Gentlemen opposite felt strongly?

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

No, we are not taxing the disabled. What we are doing is taxing employers. What I am seeking to do is to answer the argument that this tax will result in the employers being less willing to employ disabled persons, and inclined to dismiss them. I do not believe that it will. The effect of the tax, from the point of view of the employer, is the same as a wage increase. The employers of disabled persons have in past years faced many wage increases, considerably greater than this tax. The reaction of the employers has not been to turn round and dismiss disabled persons, or to say that they would not employ any more such persons.

Photo of Mr Percy Grieve Mr Percy Grieve , Solihull

Mr. Grieve rose——

Photo of Mr Thomas Steele Mr Thomas Steele , Dunbartonshire West

Order. If the Financial Secretary does not give way, the hon. and learned Gentleman must resume his seat.

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

Those employers, and there are many of them, who employ more than the legal requirement of 3 per cent. do so out of an acute sense of social responsibility. I know that many hon. Members on both sides of the Committee have taken an active part in promoting this movement among employers. I do not believe that the introduction of this tax will suddenly make them change their attitude. The idea that disabled workers are people who need special help if they are to hold down jobs is a mistaken one which ought to be discouraged. The great bulk of them are able to perform a perfectly normal job. It is a matter of ensuring that they get the right job, which is within their more limited capacity by reason of their disablement. But having found the right job, the majority of them do that job equally as well as the next man, who is not disabled.

Photo of Dr Michael Winstanley Dr Michael Winstanley , Cheadle

We have heard from the hon. Member for Sheffield, Brightside (Mr. Winterbottom) that, in the catering industry, under the Catering Wages Act there is specific provision to pay disabled persons at a rate yower than the standard rate. If this is not a concession, to induce these employers to employ disabled persons, what is it? The hon. and learned Gentleman said that wage increases have not had this effect——

Photo of Mr Thomas Steele Mr Thomas Steele , Dunbartonshire West

Order. An interruption should be short.

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

The hon. Member has great experience in this matter as a doctor, and he knows that the great majority of these disabled persons who find work do it as well as a normal man. Special provision is made to enable disabled persons to find jobs. The argument which we have used about full employment is a valid one. A full employment society is the greatest protection and security to the disabled person in finding employment.

I repeat that my right hon. Friend will watch this position most carefully, and if it is found to be right and possible, he will consider what special treatment can and should be made in a more refined scheme to help the disabled.

Photo of Lieut-Colonel Stephen Maydon Lieut-Colonel Stephen Maydon , Wells

The hon. and learned Gentleman has given an undertaking that his right hon. Friend will watch this; but, assuming that he is right and his right hon. Friend is wrong, will he tell us what he will then do? Can he immediately reverse what has been decided once the Bill is passed? What can he do?

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

Not immediately. The assumption he suggests is not one which we are prepared to make; but we will watch this to see how far the assumption is right and, if so, to see what elaborations and refinements can be made in the administrative machine.

Photo of Sir Lionel Heald Sir Lionel Heald , Chertsey

I apologise for interrupting, but this is a matter about which many hon. Members are deeply troubled. On 4th May last, my right hon. Friend, talking about the disabled, said: I do not believe that these matters—I put it as charitably as I can—have been thought out". The Chancellor replied: Yes, they have. and added: I can tell him now—I am sure that he will accept what I say—that I thought very carefully and am thinking now about the position of the disabled. It is an obvious point which occurs to anybody as soon as he considers a matter of this kind".—[OFFICIAL REPORT, 4th May, 1966; Vol. 728, c. 1651–2.] Does the hon. and learned Gentleman realise that the fact that the Chancellor is not prepared to address the Committee this evening on this subject is one which causes us deep concern?

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

I have not a copy of the relevant HANSARD here at the moment, but I think that the Chancellor was speaking of disabled employers, and they have been provided for in the Selective Employment Tax Bill. However, be that as it may——

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

I was speaking on the day after the Chancellor had presented his Budget—the 4th May. I was talking of the disabled, and not disabled employers. The context is absolutely clear.

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

I assure the right hon. Gentleman that the Chancellor has considered the position of both as carefully as he can and thought it right to take the action he has in the case of the disabled employers.

The last part refers to scientific, literary, and artistic organisations. This is not a class which is easily identifiable within either the National Insurance scheme or within the tax system. My hon. Friend the Member for Putney (Mr. Hugh Jenkins) has referred to the position of those bodies assisted by the Arts Council and other grant-aided bodies, but I can only refer the Committee again to the specific assurance which was given during the Second Reading of the Bill. Right hon. and hon. Members will find it in HANSARD for 25th May, where my right hon. Friend the Chief Secretary made the position quite clear.

There is also the question of theatrical people, but I will not detain the Committee by elaborating on that point; it can all be found in HANSARD. My right hon. Friend the Member for Vauxhall (Mr. Strauss) and my hon. Friend the Member for Putney spoke about commercial organisations, mostly in the provinces, which are not covered by Arts Council grants. I cannot answer the specific question raised about the scope of the Arts Council grants being extended to full-time theatrical organisations, but I will draw the attention of my right hon. Friend the Under-Secretary of State, Department of Education and Science, who has special responsibility for the arts, to that point.

I will turn now to the next major class of workers, namely, those who are employed part time. This has been the other main topic which has occupied our attention. I can see that there is a difference, and very special force in the argument on part-time workers. It is not like the argument in the case of the disabled and others: I appreciate that the effect on employers cannot be exactly equated with that of an ordinary wage increase for the reason that this tax, relatively speaking, bears more heavily in relation to the part-time worker than it does in relation to the full-time worker. This is the strength of the criticisms and arguments adduced under this heading.

11.30 p.m.

There is already an exemption in relation to the part-time workers employed for not more than eight hours a week in the sense that they do not come within the National Insurance Scheme and, therefore, their employers do not have the stamp or pay the tax. There would be very strong objections to trying to exclude from the scheme part-time workers who work for a greater period—say, up to 21 hours—because they would lose very many of their National Insurance benefits. I am sure that no one would want to press for that.

It was suggested, particularly by the hon. and gallant Member for Wells (Lieut.-Commander Maydon), that if it was possible administratively for the National Insurance scheme to distinguish between people working only up to eight hours and those working more, it should be equally possible administratively to distinguish between, say, people working over or under 21 hours. That is not right, for this reason. If an employer were to try to show a worker who is working for more than eight hours as a worker working fewer than eight hours and not return any insurance card for him, the protest would come from the worker, who would be deprived of his National Insurance benefits.

No such check would exist if we tried to draw a distinction, say, at 21 hours. The worker would have no reason not to agree to his employer falsely showing someone who was employed for more than 21 hours as being employed for less. There is no machinery in the present card system by which the National Insurance officials could know from the card the number of hours for which a person was employed or who his employer was in any particular week. Therefore, this is not a matter which is administratively simple, as has been suggested.

Nor would it be a matter merely of adding one extra category of stamp, as my hon. Friend for Willesden, West (Mr. Pavitt) suggested. Any alteration of this kind would involve at least 10 additional classes of stamp to deal with the existing different categories of employee.

Photo of Sir Albert Costain Sir Albert Costain , Folkestone and Hythe

The hon. and learned Gentleman claimed that people would lose their benefits. Would he explain what a married woman whose husband was in full employment would lose by not having a stamp?

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

The case of the woman who has opted out and deprived herself of benefits is different. We are being asked to consider a different form of exemption covering the whole field of part-time employees. For the reason I have given, that would not work.

As has been said many times, 90 per cent. of part-time employees are women. It is because of this, and because of the level of contribution which has to be paid, that the tax which has to be paid is related to the average earnings. This lower rate for women takes into account the very large incidence of part-time employment among women. [Laughter.] The hon. Gentleman may laugh, but this is the fact. I do not see why he should find facts so humourous. Perhaps he prefers prejudice to fact. I agree that the scheme is only based on averages and averages have a crudity about them, but this is one of the ways in which the rates allow for the fact that 90 per cent. of part-time workers are women.

Photo of Mrs Margaret Thatcher Mrs Margaret Thatcher , Finchley

I gave some figures about this yesterday. The average earnings for men are about £20. The average earnings for women are £8 a week. The average earnings for women working part time are roughly £5 a week. If the argument the hon. and learned Gentleman is advancing now is correct, the rate for women should be a good deal lower than 12s. 6d.

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

I think that the hon. Lady's figures certainly for average earnings for men, are taken from earnings in industry. Of course, those people qualify for premium.

Photo of Mr Eric Lubbock Mr Eric Lubbock , Orpington

Mr. Eric Lubbock (Orpington) rose——

Photo of Mr Thomas Steele Mr Thomas Steele , Dunbartonshire West

Order. The hon. Member must remain seated if the hon. and learned Member who has the Floor does not give way.

Photo of Mr Eric Lubbock Mr Eric Lubbock , Orpington

The hon. and learned Member did not see me, Mr. Steele. I am most grateful to him for giving way now.

I was going to ask him, if this is a good argument for charging the lower rate for women, that a large number are employed only part time, why does not the same argument apply to retired people, who are also, in many cases, employed only part time?

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

I am coming to the retired people in a moment. I am dealing with the part-time classification as such.

The real point here is whether the failure in the scheme to make a distinction specifically for part-time workers is going to provide a disincentive to employers to employ part-timers in the service industries. Obviously, it will not provide a disincentive in manufacturing industry. On the contrary, it provides an incentive, because if an employer in manufacturing industry employs two or three part-timers in place of a full-timer he will get two or three times the premium he would get for the single employee. So there is a very real incentive for employers in the manufacturing sector to recruit and employ as many part-time workers as they can.

But I think that the real answer I would give on this question in relation to service industries is contained in the phrase my hon. Friend the Member for Sheffield, Brightside (Mr. Winterbottom), who has enormous experience in this field, repeated over and over again in his speech, that is that it is absolutely essential—absolutely essential, he said—in the distributive trades to employ part-time workers.

I agree with him. That reflects the pressure which there is for employment of part-time workers, and I believe that, with the development of our economy, that pressure will remain, and that that incentive to employ part-time workers will remain, and that is why I believe, again, that the fears which have been expressed, and widely expressed, are ill founded.

But, again, I would respond to the appeal of my hon. Friend the Member for Willesden, West and of other hon. Members who have spoken from both sides, and say that we shall consider most carefully whether or not this tax is having the effect which it has been suggested that it will have upon the employment of part-time workers, and introduce what ameliorations we are able to do which are necessary to meet any such situation.

Photo of Mr Arthur Palmer Mr Arthur Palmer , Bristol Central

If this is so, if my hon. and learned Friend is to watch this, how can he get over the administrative difficulties which, at the moment, he says it is impossible for him to get over?

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

I have already said that this is something which, at the moment, is based on the National Insurance scheme. It has to be introduced with that scheme as it is. It is not possible to carry out this kind of refinement which has been suggested to the scheme within the limit of time which we have to introduce this tax.

I turn to the question of retired persons. I apologise for having taken so long, but I have given way a good many times and in many directions. It was the right hon. Gentlemen the Members for Kingston-upon-Thames (Mr. Boyd-Carpenter) and for Thirsk and Malton (Mr. Turton) who, in the first instance, raised this problem, which has been discussed by many other hon. Members. I pointed out and dealt with a particular administrative problem. Again, I was asked to give what figures we have. There are about 438,000 men and 535,000 women retirement pensioners in employment, a strikingly high figure. Figures are not available of the numbers of those who are employed in the manufacturing sector and the number in services. If the assumption were made—I am not suggesting that it is necessarily the right one—that they are in the same proportions as for the total population, it would mean about 360,000 in the manufacturing industries, and, again, the employers of all those who are employed in the manufacturing sector will qualify for the premium. In conditions of full employment, there is little reason to think that the incidence of this tax will lead to their being at risk of losing their jobs.

If the Amendments were accepted, and we were to make an exemption for retirement pensioners, one of the side effects would be to lead to undesirable pressures being brought to bear on older workers to continue in employment but to continue as retirement pensioners and thereby forgo the extra pension which they would otherwise get on retirement.

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

Surely the weakness of that argument is that for the younger ones the earnings rule would prevent that pressure being effective and the older ones could draw their pensions, anyhow.

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

The right hon. Gentleman has great experience in this field, far more than I have, but I think that he will find that there are still many of the older pensioners for whom such pressures could be effective. But I do not put this forward as a main point. I did not seek to. I described it as a side effect.

There is a difference of opinion within the Committee as to what the effect of the tax will be on the employment of retirement pensioners. As in the other cases, my right hon. Friend will watch the position most carefully and consider what, if any, action is necessary.

Finally, I would seek to answer the specific question put to me by the hon. Lady the Member for Plymouth, Devon-port (Dame Joan Vickers), who spoke of the position of the single woman with a dependent relative, who would become entitled to a refund under Clause 6 of the Selective Employment Payments Bill. Strictly speaking, this is a matter to be dealt with on that Bill, which we shall consider shortly. But, if I might seek to answer the point, in order to establish their rights such people will have to show that they come within the provisions of that Clause to the satisfaction of the Special Benefits Commission, and the Commission will have power to grant a discretionary allowance in the kind of case which the hon. Lady described, where there would be real hardship in the bridging period.

11.45 p.m.

Photo of Mr David Gibson-Watt Mr David Gibson-Watt , Hereford

I am glad to be able to take part in this discussion because, like many other hon. Members, I have sat through the debate and listened to many excellent arguments produced on this side of the Committee and on the other side in favour of the Amendments.

The Financial Secretary made a very poor fist of trying to answer those Amendments. He did not produce a single tenable argument. Also, I do not believe that he has given us any concession at all. All he said was that the Chancellor would "watch", rather like Mr. Asquith, who said that he would "wait and see". We have been given nothing at all, in spite of this series of very important Amendments.

One of the points which the hon. and learned Gentleman made was that when the tax hit the employer of a part-time worker, the reaction of that employer would not be to get rid of his employee, but, rather, to treat it in exactly the same way as he would a wage increase. I do not know whether the hon. and learned Gentleman is himself an employer. If he is, he would expect the reaction of his employee to be as follows: "If my employer can afford to give 25s. a week to the Government because he employs me, then, in the same breath, he can afford to pay me the same amount".

We were told by the Chancellor earlier that the tax was deflationary. The point which I have just made is one reason why it will be very much the reverse. We shall never know why the Chancellor swallowed the idea of this tax. If he could have foreseen the difficulties into which he has got himself and the whole of the Treasury and the hornets' nest which he has stirred up, he would never have started out with this new tax. Indeed, the number of good amendments which have been put down on the Order Paper, particularly those which have been discussed today, are proof enough of that.

In winding up his remarks, my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) said that, unless we show special regard for those included in the Amendment, the tax will have a savagely cruel impact. I do not think that any hon. Member would disagree with those words. Unless the tax is changed in its incidence upon so many deserving sections of the community, it will be savagely cruel.

If I may, I want to underline two special problems, though I do not disregard the important arguments advanced by other hon. Gentlemen about the disabled, the deaf, the old, the blind, part-time workers, nursing homes and the other deserving cases. I want to underline the point made by my right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton) when he said that there are charities in law and charities in fact. It will be very difficult for anyone, in all justice, to decide who is to get the relief and who is not.

In my own constituency, Hereford, there is an organisation called the Community Council. It is responsible for helping people in need, the old and the disabled. It is an umbrella organisation and, from what I have heard so far, that body and others like it will not be helped. Old people's homes which are run privately or by voluntary organisations will not be helped, either. What about the N.S.P.C.C, or the R.S.P.C.A., for that matter? All these organisations play a great part in the life of our country, particularly in local areas.

The Chancellor happens to represent a Welsh constituency. What about the organisations which cannot be called truly charities but which are truly Welsh?

What about the Welsh National Eisteddfod? How much money will that great national organisation have to pay to the Chancellor? What about the Welsh Youth Orchestra? How much will that pay? On the scientific side, what about the Royal Welsh Agricultural Show? What about the sporting activities for which the capital city of Wales, Cardiff, is itself so famous?

Photo of Mr Geoffrey Hirst Mr Geoffrey Hirst , Shipley

He will be watching it.

Photo of Mr David Gibson-Watt Mr David Gibson-Watt , Hereford

Perhaps the Chancellor will be watching county cricket. Perhaps he will be watching Wales trying to win the triple crown, but he will have the itch at the back of his mind that he, and he alone, was responsible for bringing in the Selective Employment Tax which will hit the voluntary and sporting societies to which we are referring.

Photo of Sir Harmar Nicholls Sir Harmar Nicholls , Peterborough

Will my hon. Friend include the Peterborough Agricultural Show, which is going to a new and expensive ground?

Photo of Mr David Gibson-Watt Mr David Gibson-Watt , Hereford

Willingly, if it is of any help to my hon. Friend to do so. I hope that the Chancellor will consider all the voluntary organisations which are not charities in law, to see how they can be helped.

If voluntary and local organisations which do so much work which is truly national were forced to close down, to draw in their tentacles, we would find that more and more of this work would devolve on the State. We on this side of the Committee do not believe that that would be a good thing. It may be that the Socialist Party would like to see the State taking over more and more of the work done by voluntary organisations. It may be that this is one of the essential differences between the two parties. I hope that I am wrong about that, but if I am not, I believe that this is a grave danger which is brought about by this tax, and it is a danger which these Amendments seek to alleviate.

Whether these voluntary organisations are charities in law, or charities in fact, both will be hit, one way or another. It is no good talking magnanimously about exempting people as though money is being given away. The charities in law will themselves have to borrow money from the bank, and the fact is that at the moment many of them are living on a shoestring. The reason for this is that many parts of the country are suffering from depopulation, and it is becoming more and more difficult for this sort of organisation to get support because of the dwindling number of people who are reasonably well off and able to support them.

I am entirely dissatisfied with the hon. and learned Gentleman's reply. After listening to the debate all afternoon, I had hoped to get something from the Treasury, some concession for the long list of positive criticisms which have come from both sides of the Committee, none stronger than those in the excellent and reasoned speech of the hon. Member for Newcastle-upon-Tyne, East (Mr. Rhodes) to which, apparently, the Treasury Bench has turned a deaf ear.

I hope that before the night is over, before it is too late, the Chancellor will at least be able to tell us that some concession will be given on one, two or even three, of the Amendments which have been tabled.

Photo of Mr Richard Wainwright Mr Richard Wainwright , Colne Valley

I wish to speak to Amendment No. 37, in the name of my right hon. Friend the Leader of the Liberal Party and other of my hon. Friends, and to which a speech has not been addressed in the course of this debate.

The purpose of this Amendment is to insert two categories of tax between the nil rate and the full rate, namely, a half rate, and a three-quarter rate, to take care of various different types of part-time worker.

The facts and figures regarding the importance of part-time workers have been thoroughly deployed in this debate, and I do not wish to repeat them. I should like to say what comfort we on this bench have drawn from them, and from finding that for once the isolated bench, the lonely bench, is not this one, but the Government Front Bench, which has remained isolated and lonely throughout this long debate.

One of the virtues of having a scale for part-time workers is that there would be considerably less incentive to evasion. My hon. Friends and I take the view that nothing is more calculated to invite evasion than a crude tax in which the taxpayer jumps immediately from the nil rate to the full rate.

If the Government wants to discourage evasion we think it should introduce a scale, or if you like a principle of marginal relief, so that the taxpayer does not feel that by suppressing or altering figures he will change from the status of full taxpayer to nil taxpayer.

From what has already been said it seems to me that the Treasury Bench is living in a state of illusion about evasion. The suggestion has been made that workers, to make quite sure of preserving their benefits, are in the habit of chasing their employers vigorously to see that a card is stamped. This surely does not square with the facts of life as many of us see them.

There must be a very great number of people working more than eight hours in respect of whom a card is not at the moment returned, and when there is the additional liability of this tax to be taken into account surely evasion is likely to increase rather than decrease. But if the only burden for making a correct return were a comparatively low rate of tax, I think that we could expect a greater degree of compliance with the law.

For that reason, and also for the reason which has been so powerfully deployed during the whole of this debate—namely, the importance of doing nothing to hinder the employment of part-time people—we commend Amendment No. 37 and at the appropriate time I shall ask my hon. Friends to divide the Committee.

Photo of Hon. John Silkin Hon. John Silkin , Deptford

The Treasurer of Her Majesty's Household (Mr. John Silkin) rose in his place and claimed to move, That the Question be now put.

Photo of Mr Geoffrey Hirst Mr Geoffrey Hirst , Shipley

On a point of order——

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

The Question is, That the Question be now put.

The Committee proceeded to a Division

Photo of Mr Percy Grieve Mr Percy Grieve , Solihull

(seated and covered): On a point of order. Many of my hon. Friends and I have been waiting seven hours to speak on this matter of vital national importance and we have not been heard. I ask the Chair to protect the interests of my hon. Friends and of the nation. Sixteen Amendments have been grouped together, and far too little time and far too little debate has been given to this matter of serious national importance.

Photo of Mr Geoffrey Hirst Mr Geoffrey Hirst , Shipley

What is the answer?

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

On a point of order——

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. The hon. Member knows perfectly well that the decision of the Chair whether or not to accept the Closure is not open to dispute.

Photo of Mr Geoffrey Hirst Mr Geoffrey Hirst , Shipley

It is just gagging, gagging.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

On a point of order——

Photo of Mr Geoffrey Hirst Mr Geoffrey Hirst , Shipley

What do the assurances of the Chair mean?

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

On a point of order.

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

(seated and covered): On a point of order. I wish to give notice that I shall put down a Motion of censure on you, Sir Eric, for not protecting the rights of back benchers.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

The hon. Member is perfectly entitled to put down a Motion, but he is not entitled in the Committee to criticise the behaviour of the Chair.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

(seated and covered): On a point of order. I wonder why we should have this alteration in procedure. I have been in the House for 30 years and I have never known it necessary for the Chair always to accept a Motion by a Chief Whip.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

That is not a point of order.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

Yes, it is. This is an alteration in procedure.

The House divided: Ayes 163, Noes 127.

Division No. 69.]AYES[11.58 p.m.
Abse, LeoDunwoody, Dr. John (F'th — C'b'e)Kenyon, Clifford
Albu, AustenEdelman, MauriceKerr, Russell (Feltham)
Alldritt, WalterEden, Sir JohnLawson, George
Allen, ScholefieldEllis, JohnLeadbitter, Ted
Anderson, DonaldEnglish, MichaelLee, Rt. Hn. Jennie (Cannock)
Armstrong, ErnestEnsor, DavidLever, Harold (Cheetham)
Ashley, JackEvans, Albert (Islington, S.W.)Lever, L. M. (Ardwick)
Atkins, Ronald (Preston, N.)Fernyhough, E.Lewis, Ron (Carlisle)
Atkinson, Norman (Tottenham)Fitch, Alan (Wigan)Luard, Evan
Barnett, JoelFletcher, Raymond (Ilkeston)Lyon, Alexander W. (York)
Beaney, AlanFletcher, Ted (Darlington)Lyons, Edward (Bradford, E.)
Bidwell, SydneyFloud, BernardMcBride, Neil
Bishop, E. S.Foot, Sir Dingle (Ipswich)McCann, John
Blackburn, P.Foot, Michael (Ebbw Vale)MacDermot, Niall
Blenkinsop, ArthurFord, BenMacdonald, A. H.
Boardman, H.Forrester, JohnMackenzie, Gregor (Rutherglen)
Boston, TerenceFowler, GerryMcMillan, Tom (Glasgow, C.)
Bottomley, Rt. Hn. ArthurFraser, Rt. Hn. Tom (Hamilton)MacPherson, Malcolm
Boyden, JamesFreeson, ReginaldMahon, Peter (Preston, S.)
Braddock, Mrs. E. M.Gardner, A. J.Mahon, Simon (Bootle)
Bradley, TomGarrett, W. E.Manuel, Archie
Brooks, EdwinGarrow, AlexMapp, Charles
Brown, R. W. (Shoreditch & F'bury)
Buchan, NormanGinsburg, DavidMarsh, Rt. Hn. Richard
Buchanan, Richard (G'gow, Sp'burn)Gordon Walker, Rt. Hn. P. C.Mason, Roy
Callaghan, Rt. Hn. JamesGregory, ArnoldMayhew, Christopher
Cant, R. B.Griffiths, David (Rother Valley)Mitchell, R. C. (S'th'pton, Test)
Carmichael, NeilGriffiths, Will (Exchange)Morris, Charles R. (Openshaw)
Carter-Jones, LewisHamilton, William (Fife, W.)Moyle, Roland
Coe, DenisHannan, WilliamNeal, Harold
Coleman, DonaldHattersley, RoyNewens, Stan
Concannon, J. D.Hobden, Dennis (Brighton, K'town)Noel-Baker,Rt.Hn.Philip (Derby,S.)
Conlan, BernardHooley, FrankNorwood, Christopher
Craddock, George (Bradford, S.)Horner, JohnOgden, Eric
Crawshaw, RichardHowarth, Harry (Wellingborough)O'Malley, Brian
Davies, Dr. Ernest (Stretford)Howie, W.Orme, Stanley
de Freitas, Sir GeoffreyHughes, Emrys (Ayrshire, S.)Owen, Dr. David (Plymouth, S'tn)
Dell, EdmundHughes, Hector (Aberdeen, N.)Page, Derek (King's Lynn)
Dewar, DonaldHughes, Roy (Newport)Paget, R. T.
Diamond, Rt. Hn. JohnJackson, Colin (B'h'se & Spenb'gh)Parker, John (Dagenham)
Dickens, JamesJackson, Peter M. (High Peak)Parkyn, Brian (Bedford)
Doig, PeterJones, Dan (Burnley)Pavitt, Laurence
Driberg, TomJones, J. Idwal (Wrexham)Peart, Rt. Hn. Fred
Dunn, James A.Kelley, RichardPentland, Norman
Perry, George H. (Nottingham, S.)Rowland, Christopher (Meriden)Varley, Eric G.
Price, Christopher (Perry Barr)Rowiands, E. (Cardiff, N.)Wainwright, Edwin (Dearne Valley)
Price, William (Rugby)Shaw, Arnold (Ilford, S.)Walden, Brian (All Saints)
Rankin, JohnSheldon, RobertWatkins, David (Consett)
Rees, MerlynSilkin, John (Deptford)Weitzman, David
Rhodes, GeoffreySlater, JosephWells, William (Walsall, N.)
Richard, IvorSummerskill, Hn. Dr. ShirleyWillis, George (Edinburgh, E.)
Roberts, Albert (Normanton)Swingler, StephenWyatt, Woodrow
Roberts, Goronwy (Caernarvon)Thomas, George (Cardiff, W.)Yates, Victor
Roberts, Gwilym (Bedfordshire, S.)Tinn, JamesTELLERS FOR THE AYES:
Robertson, John (Paisley)Tomney, FrankMr. William Whitlock and
Rose, PaulUrwin, T. W.Mr. Harry Gourlay.
NOES
Alison, Michael (Barkston Ash)Grimond, Rt. Hn. J.Noble, Rt. Hn. Michael
Atkins, Humphrey (M't'n & M'd'n)Gurden, HaroldOnslow, Cranley
Awdry, DanielHall-Davis, A. G. F.Orr, Capt. L. P. S.
Bennett, Sir Frederic (Torquay)Harrison, Col. Sir Harwood (Eye)Osborn, John (Hallam)
Bennett, Dr. Reginald (Gos. & Fhm)Harvey, Sir Arthur VerePage, Graham (Crosby)
Berry, Hn. AnthonyHastings, StephenPardoe, John
Bessell, PeterHeald, Rt. Hon. Sir LionelPearson, Sir Frank (Clitheroe)
Biggs-Davison, JohnHeseltine, MichaelPeel, John
Blaker, PeterHiggins, Terence L.Percival, Ian
Bossom, Sir CliveHirst, GeoffreyPike, Miss Mervyn
Boyd-Carpenter, Rt. Hn. JohnHogg, Rt. Hn. QuintinPink, R. Bonner
Boyle, Rt. Hn. Sir EdwardHolland, PhilipPowell, Rt. Hn. J. Enoch
Brinton, Sir TattonHooson, EmlynPym, Francis
Bryan, PaulHornby, RichardRamsden, Rt. Hn. James
Buchanan-Smith, Alick (Angus,N&M)Howell, David (Guildford)Rawlinson, Rt. Hn. Sir Peter
Buck, Antony (Colchester)Jenkin, Patrick (Woodford)Renton, Rt. Hn. Sir David
Campbell, GordonJohnston, Russell (Inverness)St. John-Stevas, Norman
Carlisle, MarkJopling, MichaelScott, Nicholas
Carr, Rt. Hn. RobertJoseph, Rt. Hn. Sir KeithShaw, Michael (Sc'b'gh & Whitby)
Chichester-Clark, R.King, Evelyn (Dorset, S.)Smith, John
Clark, HenryKirk, PeterSteel, David (Roxburgh)
Clegg, WalterLangford-Holt, Sir John
Cooke, RobertLegge-Bourke, Sir HarryStoddart Scott, Col. Sir M. (Ripon)
Corfield, F. V.Lloyd, Ian (P'tsm'th, Langtone)Taylor, Frank (Moss Side)
Costain, A. P.Lubbock, EricTeeling, Sir William
Crawley, AidanMacArthur, IanThatcher, Mrs. Margaret
Crosthwaite-Eyre, Sir OliverMaclean,Sir FitzroyThorpe, Jeremy
Crouch, DavidMacleod, Rt. Hn. IainTilney, John
Crowder, F. P.McMaster, Stanleyvan Straubenzee, W. R.
Currie, G. B. H.Macmillan, Maurice (Farnham)Vickers, Dame Joan
Doughty, CharlesMaginnis, John E.Wainwright, Richard (Colne Valley)
Eden, Sir JohnMaude, AngusWalker-Smith, Rt. Hn. Sir Derek
Elliot, Capt. Walter (Carshalton)Mawby, RayWard, Dame Irene
Errington, Sir EricMaydon, Lt.-Cmdr. S. L. C.Weatherill, Bernard
Farr, JohnMills, Peter (Torrington)Whitelaw, William
Fortescue, TimMills, Stratton (Belfast, N.)Wilson, Geoffrey (Truro)
Foster, Sir JohnMiscampbell, NormanWinstanley, Dr. M. P.
Gilmour, Sir John (Fife, E.)Mitchell, David (Basingstoke)Wood, Rt. Hn. Richard
Glover, Sir DouglasMorrison, Charles (Devizes)Woodnutt, Mark
Gower, RaymondMunro-Lucas-Tooth, Sir HughYounger, Hn. George
Grant-Ferris, R.Murton, Oscar
Gresham Cooke, R.Nabarro, Sir GeraldTELLERS FOR THE NOES:
Grieve, PercyNeave, AireyMr. R. W. Elliott and
Griffiths, Eldon (Bury St. Edmunds)Nicholls, Sir HarmarMr. Reginald Eyre.

Question put accordingly, That the proposed words be there inserted:—

The Committee divided: Ayes 124, Noes 158.