Paragraph 1(1) of the 11th Schedule to the Finance Act 1965 shall be amended by the addition, at the end of sub-paragraph (d)(iv), of the words: —
'Provided that for the purpose of this sub-paragraph (iv) a company resident in the United Kingdom, the whole of whose share capital is owned by another company resident in the United Kingdom, shall not be regarded as a subsidiary'.—[Mr. Patrick Jenkin.]
§ Brought up, and read the First time.
§ Mr. Deputy Speaker (Sir Eric Fletcher)
With this new Clause, we will 1426 discuss new Clause 29 "Loan interest paid by close companies".
§ 9.0 p.m.
§ Mr. Patrick Jenkin
I beg to move, That the Clause be read a Second time.
One of the effects of the Corporation Tax system was that it created a great gulf between those payments by a company which were to be regarded as charges on a company's income and, therefore, deductible for Corporation Tax purposes, and those payments which were to be treated as distributions and to attract the distributed tax. Therefore, it was essential that, when the tax was drawn up, companies should not be able to disguise what were distributions by dressing them up as charges.
1427 The law on this is contained in paragraph 1(1) of the Eleventh Schedule to the Finance Act, 1965, sub-paragraph (d) of which disallows loan interest which would otherwise be a charge from being a charge and forces it to be treated as a distribution in four cases. Three of them are not relevant, but one is, and it is to that that the Clause is directed. It is the case where interest is paid by a United Kingdom subsidiary company of an overseas parent on securities which are issued by the subsidiary to the parent. Alternatively, it is disallowed where the United Kingdom subsidiary pays the interest to an overseas subsidiary, both of them being subsidiaries of the same parent company.
The reason for the disallowance is obvious. It is a way of reducing the United Kingdom company's liability to Corporation Tax by allowing a deduction for interest when, in fact, the money is a remittance of profits to the overseas parent, and, therefore, a dividend. The paragraph does not apply the other way round, to a payment by a United Kingdom parent to an overseas subsidiary. That would have to be an interest payment. It could not be a dividend. There cannot be a dividend payment from a parent to its own subsidiary. Therefore, it would be illogical to treat it as a distribution.
New Clause 28 covers an extension of that principle where there is a payment of loan interest by one subsidiary resident in the United Kingdom to another subsidiary resident overseas, but where both subsidiary companies are subsidiaries of a United Kingdom resident parent company. The argument in favour of it is that in that case, too, there can be no question of the loan interest being a disguised dividend payment. Such a payment could not be a dividend, and it is argued, therefore, that it ought not to be treated as a distribution.
That is the effect of the amendment which would be embodied if the Clause were accepted, As the paragraph of the Schedule stands, such a payment of loan interest is treated as a distribution. This is highly artificial and it incurs a severe taxation penalty by being so treated. The Clause is intended to remedy this, and I hope that it will commend itself to the hon. and learned Gentleman.
1428 I am grateful that we have been permitted to discuss new Clause 29 with this one. Although this, too, covers loan interest, it does so in entirely different circumstances and raises an entirely different point. In this case, we are dealing with the disallowance of loan interest paid by a close company to a participating director of that company. Paragraph 9 of the Eleventh Schedule of the 1965 Act gave an extended meaning to the word "distribution" as it related to close companies. The disallowance of the interest as a charge imposes very severe fiscal penalties on close companies.
The penalty is not only that it is not deductible for Corporation Tax but also that it comes into the shortfall assessment and possibly even the Surtax apportionment under the close company rules. The purpose of the rule is clear—to prevent profits being taken out of the close company in the form of a deductible charge— but this is a clear case—this is the burden of my argument—of the Government's obsession with tax avoidance now operating to the detriment of the much wider economic interests of the country.
Indeed, few of their fiscal innovations have done more damage than the penal provisions applying to close companies. My party has already made it clear on numerous occasions that it will be our purpose to shift the emphasis from restrictive penal, anti-avoidance provisions to measures which will encourage investment, expansion and innovation. I hope that loan interest paid to participating directors will be early on the list.
The Clause would allow loan interest to be deductible up to the limit which would be a reasonable consideration for the loan made to the company and we have added another limitation, that the loans themselves must not exceed the equity capital of the company, including the reserves. When this matter was debated in 1965, the argument was put to the Government—
§ Mr. Michael Shaw (Scarborough and Whitby)
My hon. Friend referred inadvertently to the equity capital; I think that he meant the issued capital.
§ Mr. Jenkin
I accept the correction with thanks. The issued share capital and the reserves is the limitation imposed in the new Clause.
1429 On 22nd June, 1965, in a debate on the whole subject of loan interest and other deductions, I said, in an intervention in a speech of the Chief Secretary:What is the objection to allowing the first slice of interest, up to a reasonable commercial rate, in all these cases?The Chief Secretary replied:The objection is that if this is, in effect, a return on capital it should be treated as a return on capital."—[OFFICIAL REPORT, 22nd June, 1965; Vol. 714, c. 1633–4.]That entirely begs the question. If the investment in the company is in the form of a loan, there is no entitlement to the benefits which would accrue if it were in the form of an equity share; that is to say, there is a right to payment only of the sum loaned and a right to the repayment of a fixed interest.
If the shareholder and the debenture holder, let us say, were the same man, it would be up to him. He could disguise the one as the other, but to the extent to which the loan interest represents the reasonable commercial rate, I see no reason why it should not be treated with all the characteristics of loan interest paid to ordinary companies. It is quite different from a return on equity capital.
The case for changing the law can be simply slated. Close companies find great difficulty in raising new capital. Either they are forced to dilute the equity by going outside and bringing in new capital, or they wish to raise the money by loans. The obvious people who might wish to lend to a close company are those who already have a big interest in its success. Under the law as it stands this is impossibly expensive. The existing directors cannot afford to make loans to the company because of the way in which the interest is treated under our legislation.
Consider the case of a company which is pioneering in a technologically advanced sphere with a high risk project. It might wish to raise part of the capital by loans. The outsider might not be interested in lending the company money in view of the high risk involved, so that the only source may be the existing participators. One director may be able to put up the money while the other director does not have money to put up but has the technical expertise which is vital to the firm.
1430 In such circumstances, it would be wrong for the ownership of the company to be weighted more in favour of the director with the money, to the detriment of the other director, who has the technological expertise. Although he might be prepared to put up some money, it is probably impossibly expensive for him to do so. This cannot be right in the interests of such a firm or for the economy.
This state of affairs places grave obstacles in the way of a company which wishes to expand and raise new capital and there is mounting evidence that this is the result of Government policy. The Government could, by accepting new Clause 29 and making this one concession, show that they are genuinely willing to take a step which would be widely recognised as evincing their intention to make amends in the face of the damage that has already been done. It would also show that they are ready to take a more favourable view of the enterprise of smaller companies.
I hope that the Minister of State will grasp this opportunity of doing something for small enterprises.
§ Mr. Michael Shaw
I wholeheartedly support the case adduced so convincingly by my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) for the new Clause. I can say from experience that there is mounting evidence that the close company legislation is proving a serious hindrance to the development of close companies. This has been accentuated by the general financial policy of the Government.
As my hon. Friend said, close companies are restricted as to where they can go for credit. Normally, they do not go to the public. One of their natural sources is the banks. If they succeed in getting their requirements from that source, all well and good; and the interest is allowed against the profits and there is no withholding tax, either.
Since the Labour Party came to power, however—and particularly since the middle of 1965—there has been an almost continuous credit squeeze. This has attacked growing companies, which are usually close companies. If close companies are to be dynamic and are to goad established industry, they must be effective in grabbing their fair share of the 1431 market and establishing new markets. For this they must have capital to expand. Traditionally, the banks have supplied that capital because they have known their customers, when a project is a good one and when it is in good hands. In those circumstances, they have been prepared to back their judgment. But nowadays they are not free to do this, so close companies very often have to look elsewhere for their money.
As my hon. Friend has said, the directors, or those in control of the company —which is the same thing, as a rule—very often have to look into their own resources. That need not be themselves. It might be their wives, their parents—or, indeed, their grandparents or their children, or their brothers and sisters or partners—speaking from memory, I think that I have covered all the categories. They have a fairly wide field because, for this purpose, their associates are treated as being equivalent to the directors.
Bank credit being cut off, their natural source is one of their near relatives, to whom they may say, "We are expanding rapidly. Because of this Government"— and there is usually an adjective that goes with that, but we will let it pass— "we cannot borrow from the bank, although that is what we should like to do. Can you lend us some money to cover the next two years, when the money will begin to flow back?"
Normally speaking, the relatives, if they have the confidence and the money, in all probability lend the money, but this raises a very serious problem, because the fact that the money comes from these near relatives means that although the rate of interest may itself be reasonable and commercial, because of its treatment for tax purposes when it is paid by the close company it becomes a very high rate of interest, as not only is it not allowed as a charge against profits but it suffers from the withholding tax. It becomes an exorbitant rate.
This is a handicap on close companies borrowing from the natural source of borrowing from which no other type of company suffers. It is absolutely wrong. If we got rid of the withholding tax altogether, most of our difficulties in this respect would go, as would very many 1432 others. But I cannot discuss that tonight. I sincerely hope that, for the good of the future of close companies, which are bound up so closely with the future of the country, the Minister of State will see fit to accept the new Clause.
§ Mr. John Smith
New Clause 29 seeks to put right a piece of legislation which has been presented as a measure to prevent avoidance, but directors, or those who control small companies, often put up the money in the form of loans for reasons that have nothing to do with avoidance at all but are a form of self-denial.
Many small companies are arranged around a person with some money, and one, two or three people with no money but with technical ability. The man with the money very sensibly wishes to give his colleagues a share of the business. In order to give them a proper share, he does not swamp them by putting up the whole of his contribution, which is money rather than technical ability, in the form of equity capital. He forgoes his equity profit in order that his colleagues may have it, and puts up his capital in the form of loan capital. I should have thought that this was a form of redistribution which the party opposite would want to support and not to hinder.
Another point is that small and developing companies cannot always forecast accurately their need for capital. Their needs fluctuate—for example, a project may not mature. If they can get the money from the bank, well and good, although a bank, even without a credit squeeze, will not be at all anxious to lend for a period of longer than, say a year or 15 months. If they cannot get it from the bank, their only source for fluctuating capital is in the form of loans from the directors or those who control the company.
It would be quite inappropriate, in such circumstances, to put up the money in the form of equity capital, which is permanent capital and cannot be withdrawn if the need for that money disappears. Many companies in the past, for example, the steel companies before the war, got into very great difficulties through over-capitalisation. I should have thought the party opposite, who are engaged on so many projects designed to 1433 improve the efficiency of business, would have approved this new Clause for that reason, also.
On these two grounds, I hope that we can persuade the party opposite that this new Clause is not designed to create a loophole. Indeed I do not regard it even as giving a concession, but rather as removing something which is not only unfair but damaging to our economy. This is a sincere proposal, designed to help small, developing companies, which, in turn, are of very great help to our economy.
§ Mr. W. R. van Straubenzee (Wokingham)
The case for new Clause 29 has been so persuasively argued that I cannot believe that the Minister of State, when he replies—the hon. and learned Gentleman smiles. I am not sure whether he smiles in anticipation, or if it is the smile which a cat gives before it kills a mouse. That we shall soon discover. He has a very powerful case to answer.
I add my personal experience to the experience of my hon. Friend the Member for Scarborough and Whitby (Mr. Michael Shaw) in saying that the provisions which this Clause is designed to remove are very inhibiting to the kind of business which has been clearly outlined by my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin).
Some of us were fairly actively engaged in this matter in 1965 and can remember how absolutely obsessed, when it was under discussion, the Chief Secretary was with tax avoidance. There was some reason at that time for that, for hon. Members will recall the slightly unhappy events which took place in some exempt private companies, as they used to be, relating to loans which would be covered by this Clause. There was some justification for the attitude of the Chief Secretary in 1965. I draw attention to the limitations so carefully put into new Clause No. 29. It is a very modest provision. This is absolutely right, but it is so modest that I cannot believe that the equity of it will not strike any reasonably fair-minded person.
In our present set-up it is in the field of these close companies that the new techniques and thrusting ideas are given birth in the form of a company. This can be seen over and over again. By virtue 1434 of the fact that they are expanding in that way and of the difficulty of providing the appropriate finance, they are desperately reliant on loans from those who have faith in them. Overwhelmingly, they come within the terms of people very severely penalised as the law stands. In the general interests of the nation, in the sense that we want to encourage these new smaller companies to break into the technologies, this is a provision which ought to commend itself on general grounds to the Treasury Bench.
§ Sir D. Glover
I congratulate my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) on the able way in which he moved new Clause 28. I want to speak particularly to new Clause 29. I speak from my own experience of close companies. About 20 years ago I formed a very small company. It had to be small, because every other member who was to be active in the company, and who was to be a director, because of various family circumstances, did not have the capital available to put into the company at that time. Therefore, if the company was to get off the ground without being dominated either by me or by any single person, all the rest of the capital had to go in the form of loan.
I very much doubt whether that company, which afterwards became very successful, would ever have got off the ground under the conditions which were brought in by the 1965 Act. I doubt very much whether, under the conditions brought in by the 1965 Act, I or anybody else would have been prepared to put the money upon loan and be subjected to all the disadvantages arising under the 1965 Act.
My hon. Friend has done a worthwhile job in bringing the Clause before the House. I hope that the Minister of State will accept it. If I may offer a slight note of criticism of some of my hon. Friends, I do not think that the inhibiting factor comes with a company which has been going for five or 10 years and which has established a commercial reputation. Such a company, even if it is a close company, can borrow in the normal market—from a bank or from other organisations. Where this is inhibiting is on a new company which has only brains, imagination and courage. 1435 People do not want to back such a company with loans, unless they have some reason for doing so.
In my case, the reason was that I did not want to dominate the company, because it was a family business and over the years it would have led to feelings of jealousy if I had dominated it. It was, therefore, arranged that I put in a good deal of loan money. In other businesses it may be that one man has money and the remaining directors—young men, perhaps—have the know-how. In another case it may be that the father, the mother or some other member closely linked to those concerned has some money that can be used to back an idea, because that is what it is at that stage. It is a business which has an idea, the imagination and the courage to think that something can be made to grow.
Therefore, the money advanced to such a company is not advanced at that moment on any commercial criteria. It is advanced because those who put up the money have faith in the ability of the young men who are to run the company. On the other hand, that faith is not entirely philanthropic. It may be that this is the only liquid money they have. They cannot afford to put it into a company if, by so doing, they will reap all the disadvantages that now arise under the 1965 Act.
If the Labour Government really believe what they keep paying lip-service to—namely, in a mixed economy, in encouraging the entrepreneur, the young man with ideas, to get going in the growth of ideas that are always working through in a modern society—I do not see how they can refuse to accept the Clause, which was moderately put forward and which is moderate in its effect, but which would remove an enormous amount of inhibition from what the nation needs more than anything else, namely, the courage of the entrepreneur to take a chance and get ahead.
§ 9.30 p.m.
§ Mr. Taverne
May I assure the hon. Member for the Cities of London and Westminster (Mr. John Smith) that no one suspects for a moment that these new Clauses are put forward with the idea of providing loopholes? Whether they have that effect is a different pro- 1436 position. It often happens that a solution is found which at the time seems innocent, but which, nevertheless, can drive a coach and horses through Income Tax or other tax legislation.
May I tell the hon. Member for Wokingham (Mr. van Straubenzee) that I smiled because he started one sentence, which he did not complete, by saying that he could not believe that I would —and I am sure that he was about to say not be moved by the arguments and be able to refuse to accept the new Clause. It would be somewhat naïve to believe that on each occasion the eloquence of arguments moves the Treasury to accept everything put forward.
Clause 28 attempts to achieve something which one would obviously like to achieve if there were no possibility of amounts of interest being paid overseas which should not be treated as distributions. The hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) spoke of fellow subsidiaries. I think that he recognises that it is perfectly possible for two companies to be fellow subsidiaries, although for one still to be a substantial shareholder in the other. It is perfectly possible for Company A to own all the shares of Company B, but only a small part of the shares of Company C, the rest being owned by Company B. Both would then be subsidiaries, but it would still be possible for one subsidiary to be a substantial shareholder in the other.
The new Clause suggests where interest payments should not be treated as distributions. Unfortunately, the suggested solution does not circumvent the difficulty. A non-resident Company A could wholly own a subsidiary resident Company B, which in turn had a wholly-owned subsidiary resident Company C. Under the terms of the new Clause, Company C would not be regarded as a subsidiary of Company A. In that case, Company C could pay interest to its overseas grandparent, to call it such, Company A, and still get a deduction of relief which could not be granted to the subsidiary, Company B. It would be necessary to prevent this result from, being achieved, because it would then be very easy for subsidiary B to route interest payment to its parent A through C, and in this case the whole 1437 of the design of the Corporation Tax structure would be circumvented. That solution would be open to the widest possible abuse.
The majority of the speeches were made about new Clause 29 and it was about that that the widest concern was felt. Under Corporation Tax it is necessary to prevent the profits of a company from being reduced for tax purposes by what in substance are distributions of profits.
This is not a new problem. It existed previously under Profits Tax, and it was one which was met by similar rules, though not quite as stringent, because under the original rules the Profits Tax provisions provided that interest paid to a director, other than a whole-time service director, by a director-controlled company was disallowed in computing the company's profits for Profits Tax. This was extended, in a way to which a number of hon. Members, and some of my colleagues in the past, have objected, by the reference to associates. The whole scheme would have been blown wide open if this reference to associates was not there, by the loan being made, not by the controlling director, but by his wife or children.
Obviously the provision gives rise to difficulties. There are clearly cases when a payment of interest should be allowed for deduction. These are cases of a public company which pays debenture interest in computing its profits for Corporation Tax. There are other cases, where payments for interest on loan capital provided are ways in which the scheme is circumvented. There are cases here where this would blow Corporation Tax sky high.
The difficulty, as the Chief Secretary has explained, is that it is a matter of how far one should go. If one goes to the extent of preventing tax avoidance completely, there will be some bona fide hard cases. If one goes completely the other way, one opens the door to tax avoidance. One has to arrive at a reasonable half-way house. I recognise the difficulties about this. A decision was taken earlier that we would look to see how far hard cases came to light, how far there were complaints about the operation of this provision in individual cases.
1438 It was decided that this would be reviewed at the end of the year. The Inland Revenue has not had many complaints of cases of individual hardship. It has not had many cases emerging in practice where the rule has been criticised as inequitable. Cases which have been brought forward will be considered, and at the end of the year the whole position of these loans will be reviewed.
§ Mr. van Straubenzee
Will the hon. and learned Gentleman not recognise, in his usual very fair way, that it would be unlikely, in the situation so clearly set out from this side of the House, that one would take one's troubles to the Inland Revenue? It would be the last body to whom one would turn.
§ Mr. Taverne
If the tax is working in this way and individual cases of hardship arise, representations will be made. In this case, representations have been made in general, but it has been very hard to get individual cases brought forward, showing that the tax is working inequitably. A few cases have been produced and will be reviewed. It is a matter which has to be carefully considered. The new Clause will go much too wide, because its effect will apparently be to limit the loans by reference to the authorised, and not the issued, share capital. Therefore, the limit would be very high. The rule will be examined before the end of the year, and individual cases will be considered carefully.
§ Mr. Hirst
The hon. and learned Gentleman is relatively new to this, but he is a little naive if he imagines that the House will accept this sort of reply on a major matter of this character. We had a long discussion on this matter in 1965, and it is one upon which my hon. Friend the Member for Scarborough and Whitby (Mr. Michael Shaw) is absolutely right. He speaks from great experience. Mine is more modest, but it confirms his case.
What is the difficulty in this case? If the hon. and learned Gentleman really thinks that in this sort of situation people will write letters to the Treasury, he is being too naive for words. I do not know where to begin to educate him. He must be educated if he is to take part in finance debates, because we cannot take this. There will be a rumpus if we are to have that sort of reply.
1439 The hon. and learned Gentleman must know what he is talking about, not from the angle of a Treasury brief—which I would not question—but from practice. He must learn what happens and what makes business tick. After all this time— they were extremely uneducated a few years ago—the Government ought to be learning that the private or close companies are the genesis of everything, and that if we do not encourage them, we shall not get big businesses or even mergers. Not even Sir Frank Kearton can do it, which is saying something. One must operate from the beginning.
I have seen time and again in my business life and in my constituency smaller companies of this character being allowed to grow and ultimately becoming the great companies doing our export trade. They have not done it by rules, specifications and the application of the principles of the Labour Party as instanced in these debates. They never could have done. But the Government are so prejudiced by this business of tax avoidance.
If we can only encourage close and private companies to grow, what on earth would it matter in that context if one or two people, so to speak, got away with it? Until the Government realise this factor, they will get nowhere. The great majority of people operating our individual businesses are too busy and too keen to worry about a little tax avoidance. This is a prejudice in the minds of the Government. Of course, there will be the smart chap somewhere and, whatever we do, he will be there. But he is not to be worried about. Just because one or two people will do something which is not quite ethical does not mean that the whole lot should be clobbered.
My hon. Friend the Member for Ormskirk (Sir D. Glover) was right in saying that in many instances one cannot get one's business to grow easily. One cannot simply go to banks or finance houses in the City because, at that early stage, one has only an idea, something
§ sound but which one cannot sell the outside world yet. But many people—friends and the family—will say, "I do not really know whether this is a good idea but I think this man should be encouraged and I will help him and put forward money." Is that a crime? How are we to get our businesses growing if the Government do not understand the principle behind the whole thing? How dare the hon. and learned Gentleman present the House with such an answer? He should be ashamed of himself.
§ Mr. Patrick Jenkin
I entirely share the disappointment and frustration which my hon. Friend the Member for Shipley (Mr. Hirst) has just voiced with the reply. The hon. and learned Gentleman gave virtually no sign of having paid any attention to any of the arguments advanced from this side of the House about the difficulties this situation is creating for business, about the hampering restrictions it represents on the expansion of new businesses.
I will forbear for want of time from quoting it at length but I advise the hon. and learned Gentleman to read an article in The Director calledKilling Off Tomorrow's Big Businesses.It is by Mr. James Pilditch, of Allied Industrial Designers, Ltd., who writes that, if he gets £50,000 extra export business, his accountant works out that only a little over £1,000 of that reaches the shareholders after all the tax wanted under the new rules.
The hon. and learned Gentleman must realise that this and other rules on close companies are a grave disincentive to enterprise and effort. By his answers tonight, he has shown a marked lack of sympathy which my right hon. and hon. Friends would be justified in expressing dissatisfaction with by voting in the Division Lobby.
§ Question put, That the Clause be read a Second time: —
§ The House divided: Ayes 136, Noes 199.1443
|Division No. 260.]||AYES||[9.44 p.m.|
|Alison, Michael (Barkston Ash)||Brewis, John||Campbell, Gordon (Moray & Nairn)|
|Baker, Kenneth (Acton)||Brinton, Sir Tatton||Carlisle, Mark|
|Balniel, Lord||Bromley-Davenport,Lt.-Col.SirWalter||Chichester-Clark, K.|
|Biffen, John||Buchanan-smith,A1ick(Angus,N&M)||Clegg, Walter|
|Birch, Rt. Hn. Nigel||Bullus, Sir Eric||Cooke, Robert|
|Black, Sir Cyril||Burden, F. A.||Cooper-Key, Sir Neill|
|Boardman, Tom (Leicester, S.W.)||Campbell, B. (Oldham, W.)||Corfield, F. V.|
|Crowder, F. P.||Kimball, Marcus||Rawlinson, Rt. Hn. Sir Peter|
|Dance, James||King, Evelyn (Dorset, S.)||Rhys Williams, Sir Brandon|
|Davidson, James (Aberdeenshire, W.)||Kirk, Peter||Ridley, Hn. Nicholas|
|d'Avigdor-Goldsmid, Sir Henry||Knight, Mrs. Jill||Ridsdale, Julian|
|Dean, Paul (Somerset, N.)||Lambton, Viscount||Rodgers, Sir John (Sevenoaks)|
|Deedes, Rt. Hn. W. F. (Ashford)||Langford-Holt, Sir John||Rossi, Hugh (Hornsey)|
|Eden, Sir John||Longden, Gilbert||Scott-Hopkins, James|
|Elliot, Capt. Walter (Carshalton)||Lubbock, Eric||Sharpies, Richard|
|Errington, Sir Eric||Mackenzie, Alasdalr (Ross&Crom'ty)||Shaw, Michael (Sc'b'gh & Whitby)|
|Eyre, Reginald||Maclean, Sir Fitzroy||Silvester, Frederick|
|Farr, John||Macleod, Rt. Hn. lain||Sinclair, Sir George|
|Fortescue, Tim||McMaster, Stanley||Smith, Dudley (W'wick & L'mington)|
|Fraser, Rt. Hn. Hugh (St'fford & Stone)||Maddan, Martin||Smith, John (London & W'minster)|
|Galbraith Hn. T. G.||Maginnis, John E.||Stainton, Keith|
|Glover, Sir Douglas||Marten, Neil||Steel, David (Roxburgh)|
|Goodhart, Philip||Maude, Angus||Stoddart-Scott, Col. Sir M. (Ripon)|
|Goodhew, Victor||Mawby, Ray||Summers, Sir Spencer|
|Cower, Raymond||Maxwell-Hyslop, R. J.||Taylor, Sir Charles (Eastbourne)|
|Grant, Anthony||Maydon, Lt.-Cmdr. S. L. C.||Temple, John M.|
|Grieve, Percy||Mills, Peter (Torrington)||Thatcher, Mrs. Margaret|
|Griffiths, Eldon (Bury St. Edmunds)||More, Jasper||Turton, Rt. Hn. R. H.|
|Grimond, Rt. Hn. J.||Morgan, Geraint (Denbigh)||van Straubenzee, W R.|
|Gurden, Harold||Munro-Lucae-Tooth, Sir Hugh||Waddington, D.|
|Hall, John (Wycombe)||Murton, Oscar||Wainwright, Richard (Colne Valley)|
|Hall-Davis, A. G. F.||Nabarro, Sir Gerald||Walker-Smith, Rt. Hn. Sir Derek|
|Harrison, Brian (Maldon)||Nicholls, Sir Harmar||Wall, Patrick|
|Harrison, Col. Sir Harwood (Eye)||Noble, Rt. Hn. Michael||Walters, Dennis|
|Harvey, Sir Arthur Vere||Onslow, Cranley||Ward, Dame Irene|
|Harvie Anderson, Miss||Osborne, Sir Cyril (Louth)||Weatherill, Bernard|
|Hawkins, Paul||Page, Graham (Crosby)||Whitelaw, Rt. Hn. William|
|Heald, Rt. Hn. Sir Lionel||Pardoe, John||Williams, Donald (Dudley)|
|Heseltine, Michael||Pearson, Sir Frank (Clitheroe)||Wilson, Geoffrey (Truro)|
|Higgins, Terence L.||Peel, John||Winstanley, Dr. M. P.|
|Hirst, Geoffrey||Percival, Ian||Wolrige-Gordon, Patrick|
|Holland, Philip||Pike, Miss Mervyn||Younger, Hn. George|
|Hooson, Ernlyn||Pink, R. Bonner|
|Hornby, Richard||Pounder, Rafton||TELLERS FOR THE AYES:|
|Hunt, John||Powell, Rt. Hn. J. Enoch||Mr. Anthony Royle and|
|Jenkin, Patrick (Woodford)||Pym, Francis||Mr. R. W. Elliott.|
|Kaberry, Sir Donald||Ramsden, Rt. Hn. James|
|Abse, Leo||Datyell, Tarn||Herbison, Rt. Hn. Margaret|
|Albu, Austin||Davies, Harold (Leek)||Hooley, Frank|
|Allaun, Frank (Salford, E.)||Davies, Ifor (Cower)||Horner, John|
|Alldritt, Walter||Dempsey, James||Howell, Denis (Small Heath)|
|Anderson, Donald||Diamond, Rt. Hn. John||Howie, W.|
|Archer, Peter||Dickens, James||Hoy, James|
|Armstrong, Ernest||Doig, Peter||Huckfield, Leslie|
|Atkins, Ronald (Preston, N.)||Driberg, Tom||Hughes, Roy (Newport)|
|Atkinson, Norman (Tottenham)||Dunn, James A.||Hunter, Adam|
|Bacon, Rt. Hn. Alice||Dunwoody, Mrs. Gwyneth (Exeter)||Hynd, John|
|Barnett, Joel||Dunwoody, Dr. John (F'th & C'b'e)||Jackson, Colin (B'h'se & Spenb'gh)|
|Baxter, William||Edelman, Maurice||Jackson, Peter M. (High Peak)|
|Beaney, Alan||Edwards, William (Merioneth)||Jeger,Mrs.Lena(H'b'n&St.P'cras,S.)|
|Bence, Cyril||Ellis, John||Johnson, Carol (Lewisham, S.)|
|Bidwell, Sydney||English, Michael||Johnson, James (K'ston-on-Hull W.)|
|Bishop, E. S.||Evans, Albert (Islington, S.W.)||Jones, Dan (Burnley)|
|Blackburn, F.||Evans, loan L. (Birm'h'm, Yardley)||Jones, J. Idwal (Wrexham)|
|Boardman, H. (Leigh)||Faulds, Andrew||Kerr, Mrs. Anne (R'ter & Chatham)|
|Booth, Albert||Fernyhough, E.||Kerr, Dr. David (W'worth, Central)|
|Boston, Terence||Fletcher, Ted (Darlington)||Kerr, Russell (Feltham)|
|Braddock, Mrs. E. M.||Foley, Maurice||Lawson, George|
|Bray, Dr. Jeremy||Foot, Michael (Ebbw Vale)||Leadbltter, Ted|
|Brooks, Edwin||Forrester, John||Ledger, Ron.|
|Brown, Hugh D. (G'gow, Provan)||Fowler, Gerry||Lee, Rt. Hn. Frederick (Newton)|
|Brown, Bob (N'c'tle-upon-Tyne, W.)||Freeton, Reginald||Lee, John (Reading)|
|Brown, R. W. (Shoredltch & F'bury)||Galpern, Sir Myer||Lestor, Miss Joan|
|Buchanan, Richard (G'gow, Sp'burn)||Gardner, Tony||Lever, Harold (Cheetham)|
|Butler, Herbert (Hackney, C.)||Gray, Dr. Hugh (Yarmouth)||Lewis, Arthur (W. Ham, N.)|
|Callaghan, Rt. Hn. James||Gregory, Arnold||Lewis, Ron (Carlisle)|
|Cant, R. B.||Grey, Charles (Durham)||Lomas, Kenneth|
|Carmichael, Neil||Griffiths, Eddie (Brightside)||Loughlin, Charles|
|Carter-Jones, Lewis||Griffiths, Will (Exchange)||Luard, Evan|
|Chapman, Donald||Hamilton, James (Bothwell)||Lyons, Edward (Bradford, E.)|
|Coe, Denis||Hamling, William||McBride, Neil|
|Coleman, Donald||Hannan, William||McCann, John|
|Concannon, J. D.||Harper, Joseph||MacColl, James|
|Corbet, Mrs. Freda||Harrison, Walter (Wakefield)||MacDermot, Niall|
|Crawshaw, Richard||Haseldine, Norman||McGuire, Michael|
|Cronin, John||Hazell, Bert||Mackintosh, John P.|
|Grossman, Rt. Hn. Richard||Heifer, Eric S.||Maclennan, Robert|
|Cullen, Mrs. Alice||Henig, Stanley||McMillan, Tom (Glasgow, C.)|
|Mahon, Peter (Preston, S.)||Paget, R. T.||Spriggs, Leslie|
|Mahon, Simon (Bootle)||Palmer, Arthur||Steele, Thomas (Dunbartonshire, W.)|
|Mallalieu,J.P.W.(Huddersfield,E.)||Parkyn, Brian (Bedford)||Symonds, J. B.|
|Manuel, Archie||Pearson, Arthur (Pontypridd)||Taverne, Dick|
|Marks, Kenneth||Peart, Rt. Hn. Fred||Thornton, Ernest|
|Marquand, David||Pentland, Norman||Tinn, James|
|Mason, Rt. Hn. Roy||Price, Christopher (Perry Barr)||Tuck, Raphael|
|Maxwell, Robert||Price, Thomas (Westhoughton)||Urwin, T. W.|
|Mellish, Rt. Hn. Robert||Price, William (Rugby)||Walker, Harold (Doncaster)|
|Mendelson, J. J.||Rankin, John||Watkins, David (Consett)|
|Millan, Bruce||Reynolds, Rt. Hn. G. W.||Watkins, Tudor (Brecon & Radnor)|
|Miller, Dr. M. S.||Roberts, Albert (Normanton)||Weitzman, David|
|Milne, Edward (Blyth)||Robertson, John (Paisley)||Wellbeloved, James|
|Mitchell, R. C. (S'th'pton, Test)||Robinson,Rt.Hn.Kenneth(St.P'c'as)||White, Mrs. Eirene|
|Molloy, William||Robinson, W. O. J. (Walth'stow, E.)||Wilkins, W. A.|
|Morgan, Elystan (Cardiganshire)||Rose, Paul||Willey, Rt. Hn. Frederick|
|Morris, Alfred (Wythenshawe)||Rowlands, E. (Cardiff, N.)||Williams, Alan (Swansea, W.)|
|Morris, Charles R. (Openshaw)||Ryan, John||Williams, Alan Lee (Hornchurch)|
|Moyle, Roland||Sheldon, Robert||Willis, Rt. Hn. George|
|Murray, Albert||Shore, Rt. Hn. Peter (Stepney)||Wilson, William (Coventry. S.)|
|Neal, Harold||Short,Rt.Hn.Edward(N'c'tle-u-Tyne)||Winnick, David|
|Oakes, Gordon||Short, Mrs. Renée (W'hampton,N.E.)||Yates, Victor|
|O'Malley, Brian||Silkin, Rt. Hn. John (Deptford)|
|Oram, Albert E.||Silkin, Hn. S. C. (Dulwich)||TELLERS FOR THE NOES:|
|Orme, Stanley||Silverman, Julius (Aston)||Mr. Alan Fitch and|
|Oswald, Thomas||Slater, Joseph||Mr. Eric G. Varley.|
|Page, Derek (King's Lynn)||Small, William|