Inside Parliament: VAT imposition approved despite Tory protests

David Rendel, the victor of the Newbury by-election, read the oath and took his seat in the Commons yesterday in time to witness the bout of internecine conflict his victory and the council election results have unleashed in the Conservative Party.

Two Tories voted against the Government and at least five abstained as the proposal to put VAT on domestic gas and electricity bills from next April was carried by 295 votes to 285, a Government majority of 10.

Nodding with a newcomer's over- enthusiasm, Mr Rendel supported every word of an attack by Alan Beith, his party's Treasury spokesman, on ministers for ignoring the anger of the 37,000 who voted Liberal Democrat at Newbury.

A Government which was 'listening and learning' would be coming to the House asking for time to reconsider its extension of VAT, Mr Beith said as MPs debated the Finance (No2) Bill implementing the Budget.

The treat for Mr Rendel, along with all other opposition MPs, was to watch one Tory backbencher after another turning on Michael Portillo, Chief Secretary to the Treasury, over the tax, particularly its impact on pensioners just above income support level.

William Powell, Conservative MP for Corby, said he would vote against the VAT proposal 'with enthusiasm' and accused Norman Lamont, the Chancellor, of making 'a very serious error of judgement'. 'I feel ashamed that my party could bring forward such a proposal,' he said. The other Tory voting against the clause in the Bill imposing the VAT was Nicholas Winterton, MP for Macclesfield.

Mr Lamont's absence from the chamber for the debate, the first day of the Bill's committee stage, was repeatedly remarked on by MPs. Standing firm against any further help for pensioners, Mr Portillo said it was absolutely essential to deal with the public sector borrowing requirement which is expected to hit pounds 50bn this year.

'We have a problem in that we have scarce resources and we need to target those resources,' he said. 'Wherever you draw the line there will be people who are just above that line and who my honourable friends will believe to be very deserving cases.'

Pensioners' average incomes had gone up by 30 per cent since 1979, he said. 'I believe it would be unrealistic to give extra help to all pensioners above the retail price index effect. . . If we were to take extra measures to try and indentify especially the impact of fuel bills over and above the RPI effect that was felt by pensioners and others we could be talking about pounds 1bn in benefit. . . That would wash away a great deal of the revenue that is being raised in this way.'

From the Tory back benches, Angela Browning, MP for Tiverton, complained that the RPI calculation did not take into account the disproportionate amount of money spent on fuel by the elderly.

Harriet Harman, the shadow Chief Secretary, said the tax would force poor and needy people to choose between food and heat and paved the way for further extensions to children's clothes, food and newspapers.

Not above a bit of political gloating, she told MPs: 'The knives are out on the Tory back benches. The Chancellor may be the ritual mid-summer sacrifice. It is said the Chief Secretary is being mentioned as a possible successor. They say that he impresses. But it would be very hard for anyone not to shine when standing next to this Chancellor. But a reshuffle at the top, a few faces changing places, would change nothing and fool no one. What the voters were saying on Thursday was not simply that they want someone different doing the job, but they want the job done differently.'

One consolation for Mr Portillo was that the knives had also been out in the Labour Party - slicing off the Treasury spokesmanship of Lord Desai whose advocacy for ending zero rating for VAT on all items caused John Smith some embarrassment at Question Time last Thursday.

Ms Harman and Gordon Brown, the shadow Chancellor, knew of Lord Desai's remarks, published that day in Tribune, the left-wing newspaper, yet somehow allowed Mr Smith to walk into the Tory trap. 'With a general misled in this way by his brigadier, what is the response of the Labour Party? It is of course to fire the corporal,' Mr Portillo said.

The noble professor of economics will at least have more time to spare for other business in the Upper House. Yesterday, it concerned the use of the cane in schools.

A cross-party move to ban corporal punishment in independent schools through an amendment to the Education Bill was narrowly defeated by 128 votes to 121. While opposing the amendment, Lord Henley, a junior minister, was sympathetic to a call by Lord Wilberforce, a former law lord, to outlaw any punishment that breached the European Convention on Human Rights.

Whether or not the cane featured in the youth of Tam Dalyell, the Old Etonian Labour MP for Linlithgow, the curse of acne certainly did. Pressing for more research into 'relatively minor' skin disorders, Mr Dalyell said he did so 'as one who was a spotty teenager and was greatly embarrassed by acne during his national service'.

If David Rendel was watching the Question Time exchanges, he must have marvelled at the breadth of subjects pursued. Dennis Skinner, Labour MP for Bolsover, accused the Royal Family of being 'a bunch of cheapskates' for proposing an pounds 8 entry fee for Buckingham Palace, Robert Banks, Conservative MP for Harrogate, wanted the Millennium marked by the building of 'a great music palace' where the pop music of recent decades would be played in different halls and Andrew Mackinlay, Labour MP for Thurrock, was concerned about asteroid strikes.

Mr Mackinlay asked what assessment had been made about the Earth's vulnerability to asteroid strikes and said distinguished scientists were 'alarmed at their inability to alert the governments of the world to the gravity of the situation'.

The essence of the reply from William Waldegrave, Chancellor of the Duchy of Lancaster, was that the Government is leaving research on asteroid collisions to the United States. 'Let no one say that members from Essex only take a parochial view,' added Mr Waldegrave, probably more concerned about thunderbolts striking his party from closer to home.