§ Sir J. D. REESasked whether the Budget allowance of the Income Tax upon £10 for each child under sixteen has, in the case of a man who has to pay tax at the 9d. rate on earned income and also pays tax on unearned income at the 1s. 2d. rate, to first come off the 9d. scale; whether a man who earns with three children under sixteen gets only £1 2s. 6d. instead of £1 15s. allowed, while, on the other hand, a man who does not earn but lives on dividends gets the full £1 15s.; and, if so, whether some more equitable arrangement can be devised?
§ Mr. HOBHOUSEThe answer to the first part of the question is in the affirmative; and in this connection I would refer my hon. Friend to Section 68 (3) of the Finance (1909–10) Act, 1910. With regard 1107 to the second part, the answer is in the affirmative; but I may point out that the man with "earned" income pays tax at the rate of 9d. only, whereas the latter with "unearned" income pays at the rate of 1s. 2d. in the £ throughout. As regards the third part, I do not think any alteration is necessary.