§ Any person who claims and proves that any part of his income upon which, but for this Section, Income Tax would be charged at the rate of one shilling and twopence is derived from any trade, business, or profession carried on within the United Kingdom, shall be entitled to such relief from Income Tax as will reduce the amount payable on the income derived as aforesaid to the amount which would be payable if the tax were charged thereon at one shilling.
§ Motion made, and Question proposed, "That the Clause be read a second time."
§ Mr. PETOI desire to move the Second Reading of this Clause in the fewest possible words, but at the same time I cannot allow the opportunity to go by without saying something, as the subject is one of very real importance. I am perfectly certain that the Clause will have the consideration of the right hon. Gentleman, the Chancellor of the Exchequer, because he has already carried the principle which underlies it a very long way. I want to put the matter before the Committee on the broadest possible ground. I maintain that we want a broad distinction between earned and unearned incomes in this country. Undoubtedly the principle which ought to underlie that, and it is the principle in the Clause, is that people who are actually engaged in any trade, business, or profession carried on in the United Kingdom should be allowed to pay Income Tax at some lower rate. The rate I have 2869 suggested in this proposed Clause is one shilling. I ask hon. Members opposite to remember what the hon. Member for Blackburn (Mr. Snowden) said the other day in this House. He said that as far as he was concerned he would be very glad to see all incomes of £5,000 a year reduced to £2,000 by taxation, because an income of £2,000 was enough for anyone.
But I would remind the Committee that there is a very wide distinction between the different forms of income. There are thousands of cases in this country where people have paid Income Tax, as I have myself, not only on every single penny or pound of capital they possess in the world, but a great deal more than they now possess. If you have an Income Tax at 1s. 2d. in the pound and you charge that on the gradually accumulating capital of people who are managing businesses and enterprises in this country, then, I say, you are discouraging enterprise, energy and thrift. Moreover, you are definitely and distinctly encouraging people to go into business into any other country than this. Therefore I ask the Chancellor of the Exchequer to take the earliest opportunity of carrying his own principle a step further. He has reduced Income Tax on earned incomes below £3,000 and in doing that has carried what had already been done a step further. I ask him to have another stepping stone between the 9d. and the 1s. 2d. for the classes of people I have mentioned. If they were only required to pay 1s. it would mark the difference between one kind of income and another, and give encouragement to people to go into business and employ labour in this country. It is the desire of all of us to see increased employment available for our workers and I suggest that this will be a practical step in that direction. I hope the Chancellor of the Exchequer will accept the Clause and help to bring about the encouragement of trade, which is now discouraged to a greater extent than perhaps many people imagine by the enormous incidence of direct taxation.
§ Mr. LLOYD GEORGEI can hardly think the hon. Gentleman is quite in earnest in moving this Clause, and I should be rather surprised if his eloquence had converted even himself. What does the Clause mean? The hon. Gentleman proposed that somebody who is receiving a comparatively small income, invested either in land or some form of gilt-edged security, should pay 1s. 2d., while the man who is making a huge in- 2870 come out of a trade or profession—a lawyer making £15,000 or £20,000 a year, or a business man making £40,000 or £50,000 out of trade—should be let off with paying 1s. The proposal is not one that I can entertain for a moment. It is indeed a perfectly preposterous one.
§ Question, "That the Clause be read a second time," put, and negatived.