HC Deb 02 July 1917 vol 95 cc869-75

(1) If any individual who has been assessed or charged to Income Tax or has paid Income Tax either by deduction or otherwise, claims and proves in manner prescribed by the Income Tax Acts that his total income from all sources, although exceeding one hundred and thirty pounds does not exceed seven hundred pounds, and that for the year for which the Income Tax is charged he has the custody of and maintains at his own expense a child or children living and under the age of sixteen years at the commencement of that year, and that neither he nor any other individual is entitled to relief from Income Tax in respect of the same child or children by virtue of Section sixty-eight of the Finance (1909–10) Act, 1910, as amended by any subsequent enactment, or if any other individual is entitled to such relief that that other individual has relinquished his claim thereto, he shall be entitled in respect of every such child to relief from Income Tax equal to the amount of the Income Tax upon twenty-five pounds.

(2) The provisions of Sub-sections (2) and (3) of Section sixty-eight of the Finance (1909–10) Act, 1910, as amended by any subsequent enactment, shall apply to the relief given under this Section, to the manner of claiming such relief, and to the proof to be given with respect thereto as if they were herein re-enacted and in terms made applicable to this Section.

Sir C. SEELY

I beg to move, in Subsection (2), at the end to add the words, "(3) Section sixty-eight of The Finance (1909–10) Act, 1910 (which gives relief from Income Tax in respect of children under the age of sixteen years), as amended by Section seven of The Finance Act, 1914, shall apply in the case of a child over sixteen years of age who is, owing to mental or physical infirmity, incapable of performing any work or is attending as a full-time scholar a secondary school or university recognised as such by the Board of Education."

May I say that I quite appreciate the difficulty of all these small questions, and for myself I would have much preferred to leave Income Tax as it used to be a clear and a simple tax, with no alterations, no allowances of any sort or kind. I think you should levy your tax and all these allowances to meet special occasions should be dealt with in another manner. But you have made a number of alterations and a number of allowances, and I think you ought to complete them. I suggest that this Amendment is only a matter of justice as regards the allowance for children. That allowance is, I assume, based on the ground that a child under sixteen is an expense to the parents and not a gain. If similar conditions prevail in, the case of a child over sixteen then I submit the same allowance should be made.

The latter part of my Amendment I present with more hesitancy, but I would ask the right lion. Gentleman to consider it carefully. One great thing realised out of this War is the value of a good education. When the War is over we shall be face to face with a very great deficiency in young men with a good education. We shall have lost a very large number of those who were undergoing education in the higher and secondary schools when the War commenced. Therefore, I think that the whole subject of higher and secondary education is one which deserves the careful attention of the. Government. If they could see their way to adopting this suggestion they would, I think, be doing something to increase public interest in the question, and giving a concession of considerable value. I would press it the more strongly because there will be as the result of the War a very considerable number of persons who will be reduced in income. One of the cruellest things which happens in great convulsions of this kind is the number of families who from being in a certain position are reduced from that position, and one of the most trying things is the effort of the mother or the grandmother or the grandfather to bring up the children in the same position and with the same education as the father bad before, and which they would have had if it had not been for the great convulsion which may have removed the father and reduced their circumstances. I think this would not amount to any very large sum, and in the cases to which it applies it would be of very great value and assistance, therefore I press it on the attention of the right hon. Gentleman.

Mr. ADAMSON

I desire to support the Amendment, which is of considerable importance to the working classes. A year ago the Chancellor of the Exchequer lowered the Income Tax limits from £160 to £130, and thereby brought in a large number of workmen who are now paying the tax. That was done chiefly on the ground that wages had advanced, and that it was thought to be only an act of justice that working men should contri- bute some small payment to the cost of the War. Since that change circumstances have considerably altered. Not only have we had wages of the workmen advanced, but the cost of living has been going up out of all proportion to the advances secured by the workers of the country. At the present moment I think that the average increase secured by the working classes of the country amounts to from 30 to 35 per cent, over pre-war wages, whereas the cost of food at the present time is 102 per cent, over the prewar standard. That means that the workers are really worse off than they were before the War began. This Amendment would bring a certain measure of relief to a number of working-class homes, and it must be remembered that many workmen are anxious to give their children the benefit of a secondary education. Those are cases which require special consideration, and I hope, therefore, that the Chancellor is going to give effect to the Amendment.

Mr. BALDWIN

I confess that one has a good deal of sympathy with the Amendment which has been so well laid before the Committee by my hon. Friends, but I regret very much that we cannot accept it on two grounds. In the first place we have already made a concession by introducing the adopted child into the Bill as a subject for relief of Income Tax, and we think that until we have gained some experience of the practical working of that concession that it is as far as we ought to go. As the Amendment is moved, unless we restricted very closely the wording of it, I think we might find ourselves liable for dependents, possibly in considerable number. In regard to the second point, on which both the hon. Gentlemen laid a good deal of stress, the point of making exemptions for children of sixteen who are scholars at certain specified schools, I do not think this way of approaching that subject is the best way. The proper method of helping young people in their education is surely through the scholarship or bursary administered by the Board of Education. Any move in this direction ought to come from them, and not by way of remission of taxation. After all we must remember that a scholarship or a bursary gives a direct benefit to the child of any parent, however poor. The Amendment, as moved, would limit the benefit to be given to the child of a father who was an Income Tax payer. On these two grounds then—that we consider in the direction of the adopted child we have gone as far as we can this year, and on the ground that, so far as the education of the child is concerned, help should come through the Board of Education and not by way of remission of taxation through the parents—I very much regret that we cannot see our way to accept this Amendment.

Mr. J. M. HENDERSON

I am sorry to hear my hon. Friend say that he cannot accept the Amendment. Of course, there is much in what he says in regard to the Grant for education. In Scotland particularly we have our advantages. But there are any number of people who struggle to give their children the best possible education but whose children cannot earn bursaries, and therefore who do not get them. In many other cases, I know, the bursary is more than eaten up by the extra expense of sending the boy or girl to a distant school—for higher schools are not in every parish. It is a very small concession that is asked. It only means about £2 10s. or £3 per child. Really I think that in the case of those who cannot get bursaries, but who are quite capable of benefiting by higher education, it is very desirable that this thing should be done. We know very well the strain that is put upon children of sixteen to go and earn their livelihood, thereby getting them out of the run of education, so that very soon they forget a good deal of what they have learnt. The great thing for the future of this country would be to promote continuation tuition. That is another argument. In Scotland, for instance, we have continuation beyond the age of sixteen. The new Education Bill which is promised for England will, we gather, go beyond that. There is a certain time in the life of young persons where they cannot possibly earn anything, and when they are more than ever a strain upon the parents who are doing their best for them. I hope, really, that this matter will be much more thoroughly considered by my hon. Friend. Last year we arranged a limit of between £500 and £700 under which this could be claimed. But we all know that £700 is not nearly so much now as was £500 a couple of years ago. So that really there is no advantage in it. I support my hon. and gallant Friend opposite, and would ask for a reconsideration of this matter before the Report stage. I do not suppose he will go to a Division, but the matter is really a very serious one, and it ought to be taken into reconsideration. So far as the education Grant is concerned, what can be done is this. Where the education Grant is given no allowances may be made. It could be checked in that way. Where the young boy or girl and their parents are desirous of the best possible education, then the Government, I think, ought to help the parents a little—not a great deal—in the direction indicated.

Mr. T. WILSON

I would like to make an appeal to the right hon. Gentleman in connection with this matter, particularly in regard to the first part of the Amendment. Those proposed to be benefited are not a very large number. Of course, I refer to those boys and girls who, owing to mental deficiency or physical infirmity, are absolutely unable to earn anything at all. These boys and girls, and also when they grow up, are a burden upon their parents, or it may be grand-parents. There are a large number of working people in this country who prefer to Keep children of this kind at home—it may not perhaps be for the best—but prefer to keep them at home to sending them to an asylum, or a home. I really do think that in such cases—and it must not be forgotten that their maintenance would cost anything from 4s. to 10s. a week— the Government ought to help, especially where there is only coming into the home £2 10s. or £3 per week. I appeal to the Government, if they cannot make a promise now, to consider the matter further before the Report stage, and to offer 30me concessions on the lines indicated in the Amendment.

Sir C. SEELY

I really think that my right hon. Friend has not quite understood the point of the Amendment. He must have taken it that there are a very large number of these mentally and physically deficient children. We are quite prepared to accept any limitations in this matter that he suggests, if he sees fit to limit the concession absolutely to the very small number of children to whom it really is intended to apply. As regards the second part of the Amendment, I really ought to point out that a scholarship or a bursary does not meet the' case in any way whatever. The bursary or scholarship is for the specially clever child. This is intended to meet; the hard cases of the child who but for the War and the heavy increased taxation would be able to be sent to a secondary school, and is now precluded from being so sent. It is that child to which the second part of the Amendment is intended to apply. It is that case I would ask the Government carefully to consider between now and the Report stage.

Amendment, by leave, withdrawn.

Clause ordered to stand part of the Bill.

Clause 13 (Repayment of Income Tax on Sums Deducted from Profits) ordered to stand part of the Bill.