§ Section nineteen of the Finance Act, 1907, shall apply to any individual who claims and proves, in manner provided by that Section, that his total income from all sources exceeds two thousand pounds and does not exceed three thousand pounds, as if one shilling were substituted for ninepence, and as if, as respects any such individual, the thirtieth day of September nineteen hundred and nine were substituted for the thirtieth day of September nineteen hundred and seven.
§ Amendment made: To leave out the word "September" ["thirtieth day of September nineteen hundred and nine"] and to insert instead thereof the word "November."—[Mr. Lloyd-George.]
§ Question proposed, "That the Clause, as amended, stand part of the Bill."
§ Mr. HICKS BEACHI should like to ask the Chancellor of the Exchequer if there is to be any fixed proportion between the rate of the tax on the earned income as compared with the unearned income. Last year the tax on the earned income was said to be three-fourths of that on unearned income. It is now proposed to be six-sevenths, while by this Clause it is nine-fourteenths. I do not know whether it is the intention of the Treasury to fix any particular proportion between earned and unearned income.
§ Mr. LLOYD-GEORGEIt was 9d., next 1s., and then we come to 1s. 2d. It is really some form of graduation. I agree it is an imperfect form of graduation, but on the whole I think it is fair.
§ Mr. AUSTEN CHAMBERLAINI have not attempted to amend the Clause in any way, but I cannot allow it to go through 182 without saying that the distinction which the Chancellor of the Exchequer makes here does increase the real hardship which already existed in respect to the unequal sum charged on unearned incomes. I expressed my views on that last year or the year before last when the Prime Minister introduced the distinction. Certainly, if I may judge by the correspondence I receive, which is, I suppose, typical of that received by other hon. Members, it is felt to be an enormous hardship by people with small incomes, even much below £2,000 a year, earned by their own exertions in the first instance, but now derived from money which they have invested and on which they have retired. By the widows, and especially the daughters of such people, it is felt to be a great hardship that their small incomes, derived from the exertions of the man who was the breadwinner of the family, should be taxed more than the higher incomes of those who with better fortune and better health have been able to secure them. I thought that when the Prime Minister entered upon this path he was entering upon a path certain to bring greater hardship and create as many anomalies as he thought he had removed. I am afraid that by the extension of the principle embodied in this Clause the Chancellor of the Exchequer is only further increasing those anomalies and adding to the hardship.