§ "For the purpose of Super-tax the incomes of husband and wife shall not be aggregated."
§ Clause brought up, and read the first time."
§ Sir F. BANBURYI beg to move, "That the Clause be read a second time."
I had this Amendment down on the Paper for the Revenue Bill, which was not taken, and I took it off the Paper and now move it in regard to this Bill. It is a very simple Clause, and, I think, a very just one. There can be no reason why, for the purposes of the Super-tax, the income of the husband and wife should be aggregated. As the Committee knows, the income of a person liable to Super-tax is upwards of £5,000 a year. It is perfectly well known that there are wives of taxpayers who have anything from £1,000 to £2,000 or £3,000 a year and upwards, and in that case the income is either settled upon the wife or the money is entirely in her control. Therefore, the husband, though he may be assessed for Super-tax by his wife's income being added to his own, has practically no control whatever over her income, which, being added to his own, makes him liable for Super-tax. It may be that in the smaller cases settlements do not occur and that the husband has control over the wife's money, but in all the larger cases which are touched by the Super-tax. I think I am absolutely correct in saying that in nine cases out of ten the control of the money is entirely in the wife's hands. I know of several cases where the husband had to pay Super-tax on account of his wife's income of which 2183 he never had any control and of which he never received a farthing, while the wife refused to pay the Super-tax. I do not say that is a usual case, but such cases do occur. In the case of a brother and sister, or of two brothers or of two sisters keeping house together, the incomes are not aggregated, and why, therefore, should the income of a wife over which the husband has no control be added to the income of the husband? It is, I think, most unfair, and cannot be justified on any ground whatever. It may be said that where the husband has control over the money then he ought to pay Super-tax, and I do not know that I should be averse to the insertion of that in my Amendment. As it would be difficult to draw the Clause in that way, I simply put it down in the way I have moved it in order to have the opinion of the Chancellor upon it. I endeavoured in former years to move the Clause, but as the Debate usually occurred in December at about six o'clock in the morning I did not have the opportunity. I was taken to task earlier in the evening by the Noble Lord the Member for Hitchin (Lord Robert Cecil) for being too kind to the Government. I think I deserve some thanks for that attitude, and I hope the Chancellor will not forget that I have been subjected to obliquy for having assisted him too much, and that the least he can do is to give my new Clause a sympathetic hearing.
§ 10.0 P.M.
§ Mr. LLOYD GEORGEAs a Member of the Government, I can absolve the hon. Baronet from the charge brought against him. I am perfectly certain that in all cases he has done nothing except to drive a very good bargain for his party, and I do not think the Noble Lord need be under any misapprehension that the hon. Baronet is likely to give any point away to the Government. This proposal raises exactly the same point of principle as that raised by the hon. and learned Member for Cambridge University (Mr. Rawlinson), and the same considerations apply in both cases. If this Clause were accepted, the other Amendment could not be resisted, and this would have to be done for the general Income Taxpayer, and the result would be an enormous hole in the revenue derived from Income Tax. I say now, as I said then, that it is not merely because of loss of revenue, but on principle I think 2184 this proposal is wrong. You must in these cases treat the household income as one. It is the only fair way in which you could do it, to tax people according to their available means of livelihood. If you had a case of a husband and wife, each with £4,500 per year, under this proposal they would escape Super-tax altogether, while if either of them had £5,100 per year, that person would be subject to Super-tax, while in the first case the income would be very much greater. The same argument applies to the other Amendment, and I must refuse this on principle and on the ground that it would be disastrous to the revenue.
§ Lord ROBERT CECILI would not like my hon. Friend to think that I passed a general criticism on him, as it was only a passing and venial offence to which I referred. Apart from that, I confess I think he is right in this matter. I agree with the Chancellor of the Exchequer that the two cases really in principle are the same, and I agree with him that there is a good deal to be said for the view that you should consider the household expenses as one. The difficulty of that view is that it is not the view that is adopted for the purpose of taxation, except in the case of the husband and wife. In the case of an irregular union there would be no aggregation, or in the case of two sisters living together, or in the case of two brothers, or a brother and sister, and, in fact, in no other case. This is really based on the principle that husband and wife are to be regarded as one for the purposes of income as well as for other purposes. That has, however, entirely passed away. The Married Women's Property Act really destroyed that idea, and subsequent legislation has carried it further in every direction. For every other purpose husband and wife are, so far as their commercial entity is concerned, entirely separate. In taxation alone, they are treated as one. I do not think that is defensible. You can have a theory on which you can tax a house and not a person. That is not our theory. Our theory is that you tax a person. In that case I cannot see on what ground you are to treat husband and wife for this purpose as one person when you do not treat them in any other, commercial or property, as one person any longer. For these reasons it appears to me that the argument of my hon. Friends is absolutely incapable of refutation. This is merely a relic of an 2185 older and less civilised state of things, when we had a different view as to the relations of husband and wife from a property point of view.
§ Mr. RAWLINSONI must really protest against the argument of the Chancellor of the Exchequer. It, at any rate, has the benefit of novelty, but it is absolutely fallacious. You do not tax the household income. If a husband and wife were living apart there would be no exemption from this tax at all. The principle has nothing to do with the household entity. Other people living together are not taxed in the same way. It has never been suggested that the tax was upon the household income. A possible reason against accepting the new Clause might be that the Chancellor of the Exchequer cannot afford it, but no successful attempt has been made to defend the anomaly of treating the income of husband and wife as one. It is an anomaly arising from the old common law principle that the husband and wife for all purposes were one. That has ceased to be the state of the law, and in common justice this new Clause ought to be carried in the case both of Income Tax and of Super-tax.
§ Sir F. BANBURYThe Chancellor of the Exchequer did not deal with the suggestion that in the case of a husband having the full control and enjoyment of his wife's income he should be liable to the Super-tax. Perhaps the right hon. Gentleman would say whether he thinks there is something in that point.
§ Mr. LLOYD GEORGEI do not think that that really happens. What does happen is that the income available for running the establishment is largely the
§ joint income, and, therefore, the means available for paying the tax are larger. I do not think there is anything in the argument of two sisters or a brother and sister living together. That is purely a voluntary agreement, terminable at will. That with which we are dealing is a legal union, and you have to get the intervention of law to terminate it.
§ Lord ROBERT CECILThey could live apart by consent.
§ Mr. LLOYD GEORGEWhether in a case of that kind there should be different arrangement is another point. The hon. Baronet is not pleading the case of people living apart, whether by consent or otherwise. He is on the general proposition of married people, which is altogether different from the case of a brother and sister or two sisters living together.
§ Lord ROBERT CECILIt really is not different from the point of view of property. It is from the point of view of marriage, but from the point of view of property there is no distinction at all.
§ Mr. LLOYD GEORGEI am rather surprised at the view of the Noble Lord. If his noble relative were present I think he would administer a very severe rebuke.
§ Lord ROBERT CECILYou cannot pet over the Married Women's Property Act.
§ Mr. LLOYD GEORGEThere is a very serious distinction between the two as far as the law is concerned.
§ Question put, "That the Clause be read a second time."
§ The Committee divided: Ayes, 51; Noes, 192.
2187| Division No. 272.] | AYES. | [10.12 p.m. |
| Baird, John Lawrence | Gilmour, Captain John | Pryce-Jones, Colonel E. |
| Barlow, Montague (Salford, South) | Gretton, John | Ronaldshay, Earl of |
| Barnston, Harry | Guinness, Hon. Rupert (Essex, S.E.) | Salter, Arthur Clavell |
| Bathurst, Charles (Wilts, Wilton) | Hall, Frederick (Dulwich) | Samuel, Samuel (Wandsworth) |
| Boyle, William (Norfolk, Mid) | Hamersley, A. St. George | Sanders, Robert Arthur |
| Boyton, J. | Hamilton, C. G. C. (Ches., Altrincham) | Snowden, Philip |
| Bridgeman, W. Clive | Harris, Henry Percy | Stanley, Hon. G. F. (Preston) |
| Cassel, Felix | Henderson, Sir A. (St. Geo., Han. Sq.) | Stewart, Gershom |
| Cecil, Lord R. (Harts, Hitchin) | Hibbert, Sir Henry F. | Talbot, Lord Edmund |
| Chaloner, Colonel R. G. W. | Houston, Robert Paterson | Wheler, Granville C. H. |
| Clive, Captain Percy Archer | Larmor, Sir J. | White, Major G. D. (Lancs., Southport) |
| Dalziel, Davison (Brixton) | Lewisham, Viscount | Wolmer, Viscount |
| Dickson, Rt. Hon. C. Scott | Lloyd, George Butler (Shrewsbury) | Wood, John (Stalybridge) |
| Duke, Henry Edward | Lyttelton, Hon. J. C. (Droitwich) | Worthington-Evans. L. |
| Duncannon, Viscount | Morrison-Bell, Capt. E. F. (Ashburton) | Younger, Sir George |
| Eyres-Monsell, Bolton M. | Mount, William Arthur | |
| Fell, Arthur | Pollock, Ernest Murray | TELLERS FOR THE AYES.—Sir F. Banbury and Mr. Rawlinson. |
| Fisher. Rt. Hon. W. Hayes | Pretyman, Ernest George | |
| Gibbs, G. A. | ||
| NOES. | ||
| Abraham, William (Dublin, Harbour) | Hayden, John Patrick | O'Kelly, James (Roscommon, N.) |
| Acland, Francis Dyke | Hayward, Evan | O'Malley, William |
| Adamson, William | Hazleton, Richard | O'Neill. Dr. Charles (Armagh, S.) |
| Alden, Percy | Henderson, J. M. (Aberdeen, W.) | O'Shaughnessy, P. J. |
| Allen, Rt. Hon. Charles P. (Stroud) | Henry, Sir Charles | O'Shee, James John |
| Asquith, Rt. Hon. Herbert Henry | Higham, John Sharp | O'Sullivan, Timothy |
| Baker, Harold T. (Accrington) | Hodge, John | Palmer, Godfrey Mark |
| Baker, Joseph A. (Finsbury, E.) | Hogg, David C. | Parker, James (Halifax) |
| Balfour, Sir Robert (Lanark) | Hogge, James Myles | Parry, Thomas H. |
| Barlow, Sir John Emmott (Somerset) | Holmes, Daniel Turner | Pearce, Robert (Staffs, Leek) |
| Beauchamp, Sir Edward | Howard, Hon. Geoffrey | Pearce, William (Limehouse) |
| Beck, Arthur Cecil | Hudson, Walter | Phillips, John (Longford, S.) |
| Boland, John Pius | Hughes, Spencer Leigh | Ponsonby, Arthur A. W. H. |
| Booth, Frederick Handel | Illingworth, Percy H. | Price, C. E. (Edinburgh, Central) |
| Bowerman, Charles W. | Isaacs, Rt. Hon. Sir Rufus | Pringle, William M. R. |
| Brady, Patrick Joseph | John, Edward Thomas | Raffan, Peter Wilson |
| Bryce, J. Annan | Jones, Rt. Hon. Sir D. Brynmor (Swansea) | Rea, Walter Russell (Scarborough) |
| Burke, E. Haviland | Jones, J. Towyn (Carmarthen, East) | Reddy, Michael |
| Buxton, Rt. Hon. Sydney C. (Poplar) | Joyce, Michael | Redmond, John E. (Waterford) |
| Byles, Sir William Pollard | Keating, Matthew | Redmond, William (Clare, E.) |
| Cawley, Sir Frederick (Prestwich) | Kellaway, Frederick George | Redmond, William Archer (Tyrone, E.) |
| Chancellor, Henry George | Kelly, Edward | Richardson, Thomas (Whitehaven) |
| Chapple, Dr. William Allen | Kennedy, Vincent Paul | Roberts, Charles H. (Lincoln) |
| Clancy, John Joseph | Kilbride, Denis | Roberts, George H. (Norwich) |
| Clough, William | King, Joseph | Robertson, John M. (Tyneside) |
| Collins, Godfrey P. (Greenock) | Lambert, Rt. Hon. G. (Devon. S. Molton) | Robinson, Sidney |
| Condon, Thomas Joseph | Lambert, Richard (Wilts, Cricklade) | Roche, Augustine (Louth) |
| Cotton, William Francis | Lardner, James C. R. | Roe, Sir Thomas |
| Cowan, William Henry | Law, Hugh A. (Donegal, West) | Runciman, Rt. Hon. Walter |
| Craig, Herbert J. (Tynemouth) | Lawson, Sir W. (Cumb'rid, Cockerm'th) | Samuel, Rt. Hon. H. L. (Cleveland) |
| Crumley, Patrick | Lewis, Rt. Hon. John Herbert | Scanlan, Thomas |
| Cullinan, John | Lundon, Thomas | Scott. A. MacCallum (Glas., Bridgeton) |
| Davies, David (Montgomery Co.) | Lyell, Charles Henry | Sheehy, David |
| Davies, Timothy (Lincs., Louth) | Lynch, Arthur Alfred | Shortt, Edward |
| Davies, Sir W. Howell (Bristol, S.) | Macdonald, J. Ramsay (Leicester) | Simon, Rt. Hon. Sir John Alisebrook |
| De Forest, Baron | McGhee, Richard, | Smith, Albert (Lancs., Clitheroe) |
| Delany, William | Macnamara, Rt. Hon. Dr. T. J. | Smyth, Thomas F. (Leitrim, S.) |
| Denman, Hon. Richard Douglas | MacNeill, J. G. Swift (Donegal, South) | Strauss, Edward A. (Southwark, West) |
| Devlin, Joseph | Macpherson, James Ian | Taylor, Thomas (Bolton) |
| Dillon, John | MacVeagh, Jeremiah | Tennant, Harold John |
| Donelan, Captain A. | Markham, Sir Arthur Basil | Thomas, J. H. |
| Doris, William | Masterman, Rt. Hon. C. F. G. | Thorne, G. R. (Wolverhampton) |
| Duffy, William J. | Meagher, Michael | Thorne, William (West Ham) |
| Duncan, C. (Barrow-in-Furness) | Meehan, Francis E. (Leitrim, N.) | Toulmin, Sir George |
| Esmonde, Dr. John (Tipperary, N.) | Meehan, Patrick J. (Queen's Co., Leix) | Trevelyan, Charles Philips |
| Falconer, James | Molloy, Michael | Ure, Rt. Hon. Alexander |
| Ferens, Rt. Hon. Thomas Robinson | Montagu, Hon. E. S. | Wardie, G. J. |
| Ffrench, Peter | Morgan, George Hay | Waring, Walter |
| Field, William | Morrell, Philip | Warner, Sir Thomas Courtenay |
| Fletcher, John Samuel | Morison, Hector | Watt, Henry A. |
| George, Rt. Hon. D. Lloyd | Morton, Alpheus Cleophas | Webb, H. |
| Gill, A. H. | Muldoon, John | Wedgwood, Josiah C. |
| Gladstone, W. G. C. | Munro, Robert | White, J. Dundas (Glasgow, Tradeston) |
| Goldstone, Frank | Munro-Ferguson, Rt. Hon. R. C. | White, Sir Luke (Yorks, E.R.) |
| Greig, Colonel J. W. | Murray, Captain Hon. Arthur C. | White, Patrick (Meath, North) |
| Griffith, Ellis Jones | Neilson, Francis | Williams, John (Glamorgan) |
| Guest, Major Hon. C. H. C. (Pembroke) | Nolan, Joseph | Williamson. Sir Archibald |
| Guest, Han. Frederick E. (Dorset, E.) | Norton, Captain Cecil W. | Wilson, Hon. G. G. (Hull, W.) |
| Gulland, John William | O'Brien, Patrick (Kilkenny) | Wilson, W. T. (Westhoughton) |
| Gwynn, Stephen Lucius (Galway) | O'Connor, John (Kildare, N.) | Wing, Thomas Edward |
| Hackett, John | O'Connor, T. P. (Liverpool) | Wood, Rt. Hon. T. McKinnon (Glasgow) |
| Harcourt, Rt. Hon. L. (Rossendale) | O'Doherty, Philip | Yoxall, Sir James Henry |
| Harcourt, Robert V. (Montrose) | O'Donnell, Thomas | |
| Harmsworth, Cecil (Luton, Beds) | O'Dowd, John | TELLERS FOR THE NOES.—Mr. Wedgwood Benn and Mr. W. Jones. |
| Harvey, T. E. (Leeds, West) | O'Kelly, Edward P. (Wicklow, W.) |
§ Bill reported with Amendments; as amended, to be considered to-morrow (Tuesday).