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Amendment of S. 193 of Taxes Act 1970

Orders of the Day — FINANCE (No. 2) BILL – in the House of Commons at 12:00 am on 16th July 1975.

Alert me about debates like this

'Section 183 of the Taxes Act 1970 shall have effect in relation to tax charge for 1975–76 as if at the end of subsection (2) there were inserted—(3) Tax shall not be chargeable under Case I or II of Schedule E under the provisions of this Section, section 196 of this. Act or section 36 of the Finance (No. 2) Act 1975 for the year 1975–76 on the value of any vouchers issued to employees of any body corporate up to an amount of £52 in that year of assessment, on the value of free coal or the amount of any cash payments received in lieu of free coal by miners, on the value not exceeding £52 in that year of assessment of the provision of goods or services provided free or at reduced rates to employees of a body corporate in an employment to which this section applies where those goods or services are of the same kind as those provided to the general public by that body corporate and on an amount not exceeding £52 in that year of assessment paid to any class of persons in receipt of any salary, fees or emoluments payable out of the public revenue in excess of the sum fixed under section 191 of this Act.

(4) In this section 'employment' means an employment such that any emoluments thereof would fall to be assessed under Case I or II of Schedule E and the amount of such emoluments calculated on the basis that they are employments to which Chapter II of Part VIII of this Act applies and without any deduction being made under section 189 of this Act in respect of money expended in performing the duties thereof or under section 192 of this Act in respect of any fee, contribution or subscription but excluding the amounts in subsection (3) above do not exceed £5,500.

(5) In this section 'body corporate' means any person carrying on a trade, profession or vocation.

(6) In this section 'voucher' has the same meaning as in section 36(3) of the Finance (No. 2) Act 1975."'.—[Mr. Ridley.]

Brought up, and read the First time.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

I beg to move, That the clause be read a Second time.

Photo of Mr George Thomas Mr George Thomas , Cardiff West

With this it may be convenient to take Amendment No. 65 in Clause 35, page 25, line 13, after 'Act', insert: 'and does not include a voucher, stamp or similar document entitling an employee to goods, including raw materials and minerals, not exceeding in the aggregate in each year one working day's production or extraction of such goods by an employee of the same grade working at the place of work, including a mine or quarry, which is such employee's usual place of employment'.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

This new clause arises out of debates in Committee on the clauses dealing with benefits in kind when the Government announced, first, that they were in a terrible muddle over the whole question of benefits in kind and, secondly, that they would set up a review to regularise the position.

This new clause seeks to hasten the Government along in that regularisation because it applies for one year only—the year ahead—and it tries to deal out a certain amount of elementary justice on the question of benefits in kind.

It says that all employees may obtain a benefit in kind or a voucher in lieu to the value of £1 a week for the tax year following—that is, all employees earning up to £5,500 a year. I do not believe that that is the whole answer to the problem, but at least it sets it fair as between all classes of people in trades of all different kinds.

The two points that I remember from our debates in Committee and on which I should like to elaborate are, first, the extraordinary unfairness of the basis of valuation of benefits in kind, and, secondly, the extraordinary arbitrariness of deciding those able to obtain them.

I turn to the first point. A seat on the Concorde to Australia might sell at £600, yet if a seat is vacant an airline employee has the benefit in kind worth £600. All national airlines offer virtually free travel—limited perhaps in degree—to their employees if there are spare seats. The same is true of the railways and of other forms of transport. The argument advanced by the Financial Secretary is that the benefit in kind must be valued as to what the employer loses from giving it. The whole basis of Clauses 34 and 35 is that we are considering not what it is worth to the employee to receive the benefit in kind, but what it costs the employer to give it.

When we deal with coal we find the same answer. Miners' free concessionary coal concerns not what it costs the employer; it concerns the benefit the miners receive from having the coal. The kind of statutory justification for free coal for miners is that it may cost the National Coal Board more to dig the coal out which the miner gets as a concession, but once the miner has taken it home, it is an expensive and difficult job to scrape it out of his coal cellar and take it away from him. Therefore, what is the coal worth?

This is a marvellous basis of valuation. I suppose that every company director could argue that as the Rolls-Royce has been bought and is waiting outside the office, it does not cost much more for him to take it for a swan in the park with his secretary. In another instance, as the smoked salmon and champagne have been delivered to the party, if they are not consumed it will be extremely difficult and expensive to make any use of them because the smoked salmon will rot and the champagne will go flat. Therefore no benefit would be derived by anyone because the company had already spent the money.

This argument is so patently ridiculous that it needs examining. Someone working in a post office who presumably gets no benefits in kind—he does not get free stamps for his letters—must agree that a person working for an airline who can get a free trip to the Far East or to South America is immensely fortunate. The subtle Treasury argument that it is the loss to the employer not the gain to the employee that matters will, I fear, fall on very stony ground in the ears of those who do not receive benefits in kind.

The new clause seeks to limit the value of the benefit in kind to all workers who receive £1 a week. That is the first step towards some form of equity. The second step must be to extend this benefit to everyone. It is not good enough that some groups of workers obtain benefits in kind and others do not. Therefore, if no tangible benefit in kind is provided, the proposal seeks to allow the employer to issue vouchers that will be tax free to the value of £52 a year and it goes on to seek to limit the value of benefits in kind to £52 a year for any one worker.

We have drawn the income limit at £5,500 a year. We did this at a time when the Yorkshire miners were preparing their claim for submission to the Coal Board. We worked out that if they received £100 a week, they would fall foul of the benefit if the income exemption limit were not put at £5,500 a year. This could have meant that they would be disqualified from receiving concessionary coal of any sort. That was far from the thoughts of my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies) and myself when we considered this matter, because we do not wish to take away benefits in kind, and it would be out of order to propose it in this new clause. We presume that £5,500 is at about the right level.

We must pursue a little further the matter of concessionary coal. I have read the Bill again and again, and I cannot understand why, if a miner receives a voucher in lieu of concessionary coal it is not taxable. The Financial Secretary murmured about the statutory concession, but my hon. Friends looked up the statutory concession, which makes no mention of vouchers. Nor does there seem to be any extension in the statutory concession to vouchers in any of the clauses which we are discussing.

Therefore, we are of the opinion that, but for this new clause, miners who take vouchers in lieu of concessionary coal will be taxable on the value of those vouchers. The argument that it is impossible to determine the value of the concessionary coal cannot apply in the case of vouchers because vouchers would be encashable for a certain sum of money—they are because they carry a certain sum of money on their face. Therefore, I ask the Financial Secretary how he will except vouchers in lieu of benefits in kind within the provision of Clause 35 unless he accepts this new Clause.

8.0 p.m.

There is another point on which I am sure the House would like to comment. That is that the motor cars of trade union leaders are not actually taxable at all when use for private use. It is iniquitous that a business man who uses his car half the time for personal and private use, particularly if his income is over £5,000 a year, should be taxed on that part of the use, whereas someone who is not in a profit-making organisation, such as a trade union leader or the organiser of a charity, if he is paid over £5,000, should get free use of a car in a personal capacity.

We cannot in this Bill seek to change the position because it would require an increase in taxation—a proposal which is not in order. But this must be a point to which the Financial Secretary would want to respond, because I am sure he would agree that it would cause considerable alarm and dismay if it became widely known that the taxation law affecting trade union officials in relation to benefits in kind is far slacker—indeed, is non-existent—in respect of a motorcar or something like that. Mr. Scargill's famous motor car, about which we heard, can be driven by Mr. Scargill six days a week on his own private business and the union will pay the whole of that cost, and it is not taxable in his hands.

It is this sort of social injustice and these inequalities and inequities which make the public anti-trade union. If there is resentment—which I find all over the country—about the way in which the trade unions behave on occasion, the least that the Government can do is to hold the ring fairly between citizens as regards taxation on matters such as this. I hope that we shall hear a firm pledge by the Financial Secretary that this particularly obnoxious loophole will be stopped up at the earliest possible opportunity in the next Finance Bill.

We know that there is to be a review of benefits in kind. It would be impossible to make them all taxable. It is absurd to think that the baker baking bread will not take a few loaves home for himself, or that the miner mining coal should not have a few sacks of coal for his own personal consumption. People of many other trades and professions who have traditionally and rightly taken some of their own production should be encouraged to continue to do so. But the situation becomes totally intolerable if it includes expensive benefits such as air fares to faraway places, and it is equally intolerable if it excludes large numbers of people whose particular product is not suitable for treating as a benefit in kind because they, in times of high taxation, have much worse a deal than they would have if taxation were at a lower level.

I hope that the Financial Secretary will say something about his principles in this matter. The botched-up clauses in the Bill are in response to the spite of the Secretary of State for Social Services in relation to BUPA. They will not solve the problem. We need a thorough review of the whole question of benefits in kind. This is the appropriate moment to call upon the Financial Secretary either to accept the new clause or to say on which principles he would prefer to have the situation based. All that the Government have done by opening up this subject of benefits in kind in this Bill is to alert all those who follow our debates to the extremely inequitable basis of the whole situation at present.

Photo of Mr Peter Rees Mr Peter Rees , Dover and Deal

I congratulate my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) on introducing this extremely important new clause. I rise to speak both to the new clause and to Amendment No. 65.

I hope that without immodesty I can claim some small part in ensuring that this issue has reached the light of day, because in Committee when we debated what is now Clause 35, it occurred to me, on reading the definition of "voucher" in subsection (4), that it might well catch, inadvertently perhaps, some bill, some wayleave, some ticket, given to a miner or his dependant for his free coal.

Having the privilege to represent a seat which has three very important coal mines, I thought it wrong that, perhaps inadvertently, the Government should sweep into the fiscal net the undoubted benefits which those who work underground receive from their labours. For myself, I do not grudge them their free coal. That is a matter which perhaps we should debate and will debate. But I wonder whether free coal should stand on its own.

I believe that this raises the general question of how far a worker is entitled to derive a tangible benefit from his day's work. Why should not the worker who produces biscuits take home a free tin of biscuits? Nearer home, in my constituency, there is a factory which makes bathing caps. Why should not the girls who work in that factory take home a free bathing can? Or a hot water bottle? —[Interruption.] Or whisky—indeed, why not? For all I know, those who work in distilleries north of the Tweed may well be given a free bottle of whisky. How it is treated fiscally I do not know, but I suspect that on general principles it is treated as a benefit in kind and assessed on that basis.

What strikes me as quite wrong is that by a side wind, inadvertently—or perhaps by design—the Government should bring free coal into charge for tax. I should like to know what Mr. Gormley and Mr. Scargill and the leaders of the National Union of Mineworkers thought about this clause. Were they consulted? It will generate a great deal of ill will in the mining industry if they find that, without proper debate, free coal is now to be subject to tax.

I appreciate that there are general considerations on both sides. There are some who are not involved in the mining industry, and do not have the good fortune to enjoy this particular kind of benefit, who say that it should be subject to tax and subject to exactly the same principles which perhaps subject them to tax in regard to their—dare I say it—free whisky, free biscuits or free bathing caps. There are others who say "No, free coal, like any other product, represents the tangible fruits of a man's working day and we should not grudge him a modest return in this way".

These are important principles which we should canvass. In Committee I did not feel it right that we should pass this clause without exploring this matter. After a certain amount of pressure the Financial Secretary, with a certain reluctance, rose to inform us that there was, in fact, an extra-statutory concession which specifically exempted miners from tax in this regard. In fact, when one looked at it a little more closely, one found that the extra-statutory concession applies only where cash is paid to a miner in lieu of his free coal. That may be a permissible extension of the principle. I do not know.

But what I find very unattractive—I hope that other hon. Members will find it unattractive—is that we should be asked to enact a clause which will sweep into the fiscal net a range of benefits in kind represented by a voucher but that at the moment we are doing so we should be told blandly by the Government Front Bench that this will not touch a certain range of benefits because there is an extra-statutory concession already operating which will continue to operate.

I have always been against extra-statutory concessions. The Government of the day should, so far as possible, try to clothe these concessions, if they feel there is some principle which justifies them, in statutory language. If we are to have long, closely fought debates, on the details of Clause 35, if the Financial Secretary feels that this clause might or should not extend to free coal or vouchers for free coal, that provision should be specifically written into the Bill. I am sure that that principle will command acceptance on both sides of the House, because it is not a partisan point. That is the way in which we should conduct our legislative business. I hope that I carry the right hon. Member for Down. South (Mr. Powell) with me on that.

The Financial Secretary, perhaps conscious of the ambivalence of his position, said that if a provision could be produced on Report that would resolve this unattractive dilemma he would consider it with great favour. I searched the Notice Paper in vain for any new clause or amendment from the Government to deal with that problem, and because I did not find one I ventured to put down my modest Amendment No. 65. But, with his customary assiduity, my hon. Friend the Member for Cirencester and Tewkesbury had produced a yet more elaborate and comprehensive clause. The basis of both the clause and my amendment is the idea "free coal, yes, but let us extend this principle".

The amendment perhaps goes a little further than my hon. Friend would entirely approve, in that I have tried to extend the principle to everyone. Those who work with hand or eye should be entitled to receive free of tax the equivalent of one day's production of their labours. That must be an approach that will command acceptance on both sides of the House—at least, I hope that it will.

I have no doubt that the Financial Secretary will say, as Financial Secretaries are prone to say, that my amendment is riddled with obscurities and ambiguities, and that he cannot accept it as it stands. That is a criticism that one faces with as much equanimity as one can. But the Government must on Report declare themselves on the general principle. Do they or do they not say that the principle of free coal is good? If so, do they say that it should be extended to all branches of industry, including service industries? If they do, one appreciates the pressures on them, largely self-induced, this summer, but perhaps we shall be disposed to hold our hands and wait for the next Finance Bill, whether in October or April.

I want the Government to tell us whether certain perquisites, such as free coal in the mining industry, are to be sacrosanct. I appreciate that that perquisite pleases certain of my constituents, but not all. Are certain perquisites, such as inflation-proof pensions of civil servants, to be free of wealth tax? The same principle will run through our debates when we debate the wealth tax.

I hope that I shall be forgiven if I make some sharply partisan points. I do not have the Government's approach to fringe benefits—if we may use that phrase, shot through with a certain hypocrisy and humbug. Directors who choose to take out their business associates are to be taxed on the "free" dinner that they receive, although I am not aware that it is free, because it is usually paid for by their companies. That is evidently an unacceptable benefit, which must be assessed on the director concerned. If the TUC entertains Mr. Shelepin, that may be a benefit, but it is not a benefit in kind which is to be assessed on Mr. Len Murray and his colleagues. What distinguishes between those two benefits?

As my hon. Friend, with his customary grasp of these matters, has said, Mr. Scargill may drive a Volvo tax-free. I do not begrudge him his Volvo. I do not share his politics or his economic or social aspirations. But I am sure that by the standards by which he operates he does a good job for the members of his branch of the National Union of Mineworkers. However, many directors and many employers do an equally good job for their companies, and in doing it they have a motor car. It may be that on occasions, tired after their day's work, perhaps entertaining visiting potentates, they drive home in their company car. They are to be assessed on that benefit. But when Mr. Scargill, tired after his day's labours at Scarborough, drives home, he is apparently not to be taxed on that benefit.

Which way are we to have it? Is everybody to be taxed, or nobody? Let us have a clear principle established by the Government. We have put down the amendments to give the Government a chance to rationalise a difficult and complex area of law.

I have been a little harsh in the words that I have used. I have accused the Government Front Bench of hypocrisy and humbug. Here is a chance for the Government to show themselves in their true colours as those who believe in equality of sacrifice and an equal share of the fiscal burden. In that light, I commend my modest amendment, in the hope that we shall at last have a little equity and plain speaking in a rather difficult area.

8.15 p.m.

Photo of Mr John Nott Mr John Nott , St Ives

I had hoped that one or two of my hon. Friends might have joined my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) and my hon. and learned Friend the Member for Dover and Deal (Mr. Rees) in trying to draw out the Financial Secretary on this probing new clause.

I remind the House that the debate became necessary because of the Financial Secretary's extraordinary performance in Committee, where my hon. Friends did not dispute the Government's right to impose taxation on vouchers. Indeed, we accepted the essential fairness of the principle that, with certain reasonable exceptions, it was right to tax goods in the same way as money and that there was no reason why one man should receive an income of £1,000 taxed and another a benefit in kind of a smiliar amount untaxed.

Having begun our debates in an entirely co-operative and helpful frame of mind, as always, we were driven as a result of the debate, either through the incompetence of the Minister's reply or because of the facts, into believing that there was gross discrimination in the tax system in favour of two specific sections of the community who have been mentioned in this debate.

The White Paper on counter-inflation policy completely surrounds a memorandum of instructions sent by the TUC to the Government. The White Paper is based on that memorandum. Therefore, we are not surprised to find in our tax system the situation described by my hon. Friends, who gave the example of Mr. Scargill. None of us has anything against Mr. Scargill as an individual. As my hon. Friend said, he represents his members to the best of his ability. The Financial Secretary laughs. Perhaps he has something against Mr. Scargill, but we accept that Mr. Scargill is doing a good job on behalf of his members.

We find it consistent with the Government's counter-inflation White Paper that Mr. Scargill should be entitled to drive around in his Volvo without being taxed on it. It happens to be a well-chosen model. By chance, I drive the same model myself. Mr. Scargill drives around in his Volvo and apparently, wherever he goes in it, whether on pleasure or business, he is not taxed on it as a benefit in kind, whereas, as far as I am aware, those in virtually every other section of the community, except those who work for charities and trade unions, have to pay tax on similar use of a motor car.

Therefore, we want to know why the Government should allow this discrimination in favour of trade union officials to continue. Why should other people have to pay tax and not the trade union official? What is so special about him?

This brought us to the question of miners' coal. None of us have anything against miners. My hon. and learned Friend the Member for Dover and Deal has many miners in his constituency, and I am sure that at the next election they will be voting unanimously for him. Likewise, I represent miners in my constituency and I would like to know whether, as coal miners are entitled to an extra-statutory concession on their coal, my tin miners are entitled to extra-statutory tin. Just as the coal miners can exchange their coal for cash, so my miners, with a little more difficulty, could exchange their tin for cash.

We got into a considerable muddle with the Financial Secretary during the Committee stage. He kept leaping to his feet to help out, but every time he spoke our confusion grew and his own confusion grew even deeper.

Photo of Mr Alec Woodall Mr Alec Woodall , Hemsworth

Does not the hon. Gentleman know that miners cannot exchange their concessionary coal for cash? The coal is only for a miner's domestic use and cannot be exchanged. Under the agreement by which a miner receives the coal, he cannot even give it away.

Photo of Mr John Nott Mr John Nott , St Ives

I am delighted that the hon. Member has at last participated in our debates. We were trying to draw him out during the Committee stage so that he could tell us of the practices in coal-mining areas. He was silent throughout, even though we tempted him to provide us with that sort of information. Perhaps he can tell us whether a miner can give coal to his grandmother. Would a grandmother be a dependant? No doubt the Financial Secretary will be able to help us.

The clause clearly says that vouchers received in exchange for goods are taxable, so why are miners' vouchers not taxable? We were told that the reason was that the coal they received was an extra-statutory concession, as if some Treasury Minister or official was able by fiat to overrule statutes. We are here debating the Finance Bill while somebody, somewhere in the Whitehall system, is dealing out extra-statutory concessions to his friends, saying "You are a miner. Never mind about the law. You can have your coal without bearing any tax upon it." We hope that the Financial Secretary will be able to elucidate these matters in a way he was not capable of doing in Standing Committee.

It may be said that the points we are raising are irrelevant because the P11D limit starts at £5,000 a year and benefits in kind are taxed only where income exceeds that figure.

My hon. Friend the Member for Cirencester and Tewkesbury, with great circumspection, put a figure of £5,500 in the new clause because at the time we were expecting a miners' claim for £5,000 a year. I do not know whether the Chairman of the National Coal Board, Sir Derek Ezra, is a miner for the purposes of receiving free coal. As chairman of a nationalised undertaking, he is paid very much more than £5,000 a year, but presumably, if members of the NCB are entitled to vouchers which they can exchange for coal, once a week on pay day Sir Derek receives a similar voucher and theoretically is entitled to go into the cellars of the National Coal Board, grab his free sacks, load them into his Rolls-Royce, if that is the sort of car provided for him, and take them home.

There may be members of the National Coal Board who are above the P11D limit and technically are able to receive a voucher which they could exchange for coal, so do not let it be said that this is an irrelevant debate.

We realise that if the new clause were accepted it would involve a considerable cost because it would effectively give a tax-free benefit of perhaps £52 a year to every employee in the country. We do not imagine that in these stringent times the Government would wish to make available that amount of tax-free benefit to the community generally.

This is a probing clause, but I am sure that my hon. Friend the Member for Cirencester and Tewkesbury will wish to question the Financial Secretary closely after he has replied. We hope he will make clear to us that there is no discrimination in favour of, for example, Mr. Scargill and his car or the miner and his coal.

I am sure that the Financial Secretary did not express the situation very clearly in Committee. He now has the opportunity to put the record straight. For the first time in our lives, we can say that we would like to hear from the hon. Member for Bolsover (Mr. Skinner). He represents a mining constituency, and we would like to hear from him and from the hon. Member for Hemsworth (Mr. Woodall) as well.

Photo of Mr Robert Sheldon Mr Robert Sheldon The Financial Secretary to the Treasury

I am not sure why, of all the many debates we have had in Committee, we now find ourselves with a carbon copy of these debates. I made it quite clear then that this clause had no effect on the extra-statutory concession to miners. There must be some obsession of a peculiar kind that some hon. Members have about miners and the mining industry that forces them to return to these matters again and again. It shows a concern well in excess of what the present position warrants, but it is not for me to select the particular subjects to which the Opposition want to return. Their choice simply demonstrates the matters that they believe to be of the greatest importance.

8.30 p.m.

The purpose of the new clause is to enable everyone earning less than £5,500 a year to enjoy a concession of an average of £1 a week benefit from their employers, tax free for 1975–76. I would have thought that a party which was concerned about the public sector borrowing requirement would not have made this subject one of its first priorities for changes in legislation. The way in which the Conservatives want to give this benefit to such people is by a cash voucher issued to employees under the terms of Clause 36. The benefit would be provided in the form of goods or services which the employer provides for the general public. It would be available to all, and payments to public servants would be in excess of their fixed expense allowances. The kernel of the clause is that it exempts entirely the miners' coal allowance in cash and kind and seeks to provide what the Conservatives consider to be this unique benefit for the rest of the community. In so doing the Conservatives have sought to draw attention to what they believe is an anomaly.

Perhaps I can go into the history of the concession. It dates from the war years when at a critical period in our history we were extraordinarily dependent upon output from the mines. Some hon. Members, for example, instead of joining the Armed Forces were allotted places in the mines to produce coal, so important was the production of coal. The situation therefore arose in which a concession was considered to be in the national interest, and it was given.

In the way in which these extra-statutory concessions arise, it has continued from then on. It is not the only such concession. Luncheon vouchers are not dissimilar. They have a very long his- tory. They were an extra-statutory concession which has tended to cling on. We are therefore saying that those who take the vouchers will be subject to tax in the way we discussed in Standing Committee.

I had better clear up one misconception which was based on what was said in Standing Committee. I indicated then that our proposals had no bearing on the extra-statutory concession. I stated that repeatedly, and eventually, seeking to adopt an emollient approach, I said that if there were any question of the legislation appearing to challenge the extra-statutory concession on coal, I would ensure that it was made quite clear that this was not the intention.

I have carried out that undertaking. I am assured that the concession is not affected. The hon. and learned Member for Dover and Deal (Mr. Rees) will doubtless be delighted at that news and will pass it on to his constituents. I gave the reasons in Committee for the way in which the concession arose and the way it has continued over a succeeding number of Governments. I was, however, uncertain on one aspect, and this I have sought to clarify. I did not then have the records from pits throughout the country. I suspected that there might be an odd pit here or there which arranged its affairs differently from the others. I understand, however, that there is no practice of issuing miners with vouchers which can be exchanged for coal. There was the possibility that one pit somewhere might do so, but I understand that this is not the case. Since the clause deals with the exchange of vouchers for coal I would have thought that that was the clearest indication I could give that the hon. and learned Member's constituents would not be affected. I am sure he will warmly welcome this news.

Photo of Mr Peter Rees Mr Peter Rees , Dover and Deal

I am obliged for that reassuring piece of news, but the Minister has not applied himself to the point I raised. It is not a question whether this clause may affect an extra-statutory concession but how the extra statutory concession may affect this clause or the general principles of tax laws. Would the hon. Gentleman explain to the House why it is beyond his wit and that of the parliamentary draftsmen and the distinguished Department which the hon. Gentleman heads to clothe the extra-statutory concession with statutory force? We quite understand what he is saying. It will be very reassuring and I shall be very happy to repeat his reassurance this week-end. But since the principle is so crystal clear and easy to comprehend, I would like to know why, after this period of time, if the hon. Gentleman is embarking on this review of provisions relating to the extra-statutory benefit, he cannot clothe it with statutory form so that everyone can see that it is part of the law of the land.

Photo of Mr Robert Sheldon Mr Robert Sheldon The Financial Secretary to the Treasury

I am very pleased by, and the whole House will welcome, the hon. Gentleman's concern for his miner constituents. As to why it has not been possible to clothe extra-statutory concessions in statutory form, he must look at a number of Governments in the past in this connection and that of luncheon vouchers. At least I am able to offer him one assurance, that no previous Government would have been able to offer him had he made this same point to them—that there is in progress a review of the whole matter of benefits in kind. I shall come later to the way in which that is to operate.

Photo of Mr John Nott Mr John Nott , St Ives

is this a convenient moment to ask the Financial Secretary a question? He said there were no vouchers issued to miners, but can he give us details of what happens when coal is delivered? Presumably the miner must have a piece of paper or something indicating his entitlement to a certain amount of coal, and a lorry must go round delivering coal to miners in exchange for something. A point was made in Committee about what the clause speaks of— any voucher, stamp or similar document … It was on this point that we were seeking to draw the hon. Gentleman. What is meant by those words "similar document". I am talking here of a legal definition. I am not trying to deny the miner his coal, but surely there must be a piece of paper which must be a "similar document" as defined by the clause.

Photo of Mr Robert Sheldon Mr Robert Sheldon The Financial Secretary to the Treasury

I have gone into the question of how deliveries are made. One can see various ways in which deliveries can be made on a regular basis, knowing full well the entitlement of each miner. There are no such vouchers operating in this way. I am assured that this is not the way in which these regular deliveries are made, and because of that they do not come within this clause.

As to the way that it is done, hon. Gentlemen are perfectly at liberty to undertake an investigation of a number of matters outside the clause. I am only saying that for the purposes of this clause, which is concerned with vouchers, there are no vouchers or similar documents as outlined in this clause involved, so that the point does not come within the province of the clause. If hon. Gentlemen want to pursue their interest in the mining industry, the way in which miners are paid and operate and how they work for their living, there are many opportunities open to them to conduct their investigation in a number of ways. But I suggest that this clause is not the vehicle for such an expression.

Photo of Sir John Cope Sir John Cope , Gloucestershire South

The hon. Gentleman has said that a review is going on, which I am sure we all welcome. Will he, in the course of it, consider seeking to put the concession on coal in statutory form if that is to be continued? That might at least put it into the list as an extra-statutory concession, because at present the concession on coal, as opposed to cash in lieu, is not in the list of Inland Revenue statutory concessions.

Photo of Mr James Dempsey Mr James Dempsey , Coatbridge and Airdrie

May I ask my hon. Friend, if all these benefits are to be looked at, whether we should not look at the benefits which farmers get from the production of the fields? The farmer does not buy potatoes, milk or vegetables. All these are part of his remuneration. I hope that that, too, would be looked at as a benefit.

Photo of Mr Robert Sheldon Mr Robert Sheldon The Financial Secretary to the Treasury

I am grateful to my hon. Friend. The review of benefits in kind will be wide ranging.

Before I finish with the problems of the miners, which have so beset the debate on Report and in Committee, I should like to mention Mr. Scargill. Neither the hon. Member for St. Ives (Mr. Nott) nor the hon. and learned Member for Dover and Deal begrudged Mr. Scargill his car or the way in which he operates. I was pleased at that. I am concerned that the review of benefits in kind should take place. The hon. and learned Member for Dover and Deal should know that trade unions are not trading bodies and do not come under these provisions. Therefore I failed to understand the question which was asked.

I can give one or two pointers about the way in which the benefits in kind review will operate. Benefits in kind are increasingly given by employers. Employers make concessions to their employees by means of benefits in kind. As a result of the review we shall bring legislation to the House. The Opposition will be able to examine it and our suggestions of what should be done.

No Government could accept this clause. I hope that it will not receive the endorsement of the House.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

We have achieved one major improvement in that the Financial Secretary has done his homework. He came to the House with a well researched brief. He has obviously been in the pit districts. I was delighted that his answer to the debate was much better than the botched-up job he made in Committee. Although this is a minor by-product of the Report stage, it is valuable.

I was disappointed that the Financial Secretary failed to deal with the cars of those in non-trading bodies who receive over £5,000 a year. He failed to say whether the review of benefits in kind would take that point into account. He seemed to be acutely embarrassed by the problem of trade union leaders not being taxed on the benefits they receive by way of cars. He was right when he said that we did not begrudge Mr. Scargill his car. We do not begrudge anyone a car. Only traffic wardens do that.

The point made by the Opposition is that the tax implications should be dealt with. We would be strictly out of order if we did not concentrate on the tax implications. But the fact that, for instance, the director of Oxfam—I do not mean him personally—or the secretary-general of a large trade union should receive a tax advantage from his benefit in kind which the business man or the manager does not have is clearly an anomaly which we want the Financial Secretary to remedy. I am delighted to see it recognised that that is a fair point. I am glad to see that the Chief Secretary agrees.

8.45 p.m.

To turn to the question of coal and other concessions which workers receive, the fact that in the extra-statutory concessions list there is described cash in lieu of coal seems on the face of it to deny what the Financial Secretary said about no pit in the land giving cash in lieu of coal. Why, then, is there an extra-statutory concession in favour of cash in lieu of coal if no cash in lieu of coal is given? That is the first unsolved riddle.

The second and more major unsolved riddle is this. If there is an extra-statutory concession which is on the extra-statute book—if there is such a thing—and Parliament legislates as it seeks to do in Clause 34, why does not the Bill overrule the extra-statutory concession? It surely must. The very fact that the concession is not statutory weakens it, and the fact that this is a later rather than an earlier statute must mean that this statute will apply. I cannot see how it will not apply. If at any stage a pit issues vouchers in lieu of coal or cash in lieu of coal, I am still of the opinion that the Bill will overrule the extra-statutory concession.

My hon. and learned Friend the Member for Dover and Deal (Mr. Rees), who has already gone to Dover to break the glad tidings, has left too soon because the doubt remains, and the Financial Secretary, although he sought to clear it up, has not succeeded. One of the most valuable contributions to the debate came from the hon. Member for Coatbridge and Airdrie (Mr. Dempsey), who with his usual and expected rapier-like intellect pointed out that farmers get extra-statutory cabbages and milk. I think we could find many similar examples. We are urging upon the Government that all these concessions should be regularised, that everyone should be limited as to what he may take out extra-statutorily and that everyone should have some rights.

I remember going round a champagne firm in Epernay where I was told that each worker was allowed to drink a certain amount of wine. I was astonished to find that the ration was eight bottles a day. Apparently that extra-statutory concession had become rather expensive, and the number of bottles had been reduced to two a day. It was said that at that level the lack of absenteeism and the devotion to duty were such that it paid to make this free concession.

Again, however, there will always be hon. Gentlemen like the hon. Member for Coatbridge and Airdrie who will say "Why should they get eight bottles of champagne a day when I get nothing?" I do not know what Members of Parliament get as "perks"—perhaps an extra White Paper a week or an Adjournment debate specially arranged on a Friday afternoon. We certainly deserve something after the announcement which the Leader of the House made today. Some perquisite or concession for Members of Parliament will, I am sure, be on the way, and I hope that we shall hear about it when the review comes forward.

The feeling behind the clause is that all these concessions should be taken into account and should be made fair for all. We should then have a clear idea of what the law is and be able to review the whole position on the principles which have been outlined.

As the Financial Secretary has met many of the points which have been made by my hon. Friends and has shown a willingness to understand the principle which underlies our contributions, I think that it would be wise of me to seek to withdraw the clause. I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.