§ Notwithstanding anything in the Finance (No. 2) Act, 1915, or the Income Tax Act, 1918, weekly wage earners as defined in these Acts shall be assessed upon their wages for the 321 whole year, and the tax shall be payable by four equal quarterly instalments in the year.—[Mr. Adamson.]
§ Brought up, and read the first time.
§ Mr. ADAMSON
I beg to move,That the Clause be read a second time.No question has been a source of greater dissatisfaction in recent months among the working classes than the question of Income Tax. I am not entitled on the consideration of this Clause to deal generally with the question of Income Tax, but am confined to the Clause which I am moving to have read a second time. The cause of continued dissatisfaction to which I have referred is in the main the question of the payment o any Income Tax at all on amounts under £250 a year. There is at the same time a considerable amount of dissatisfaction with regard to the particular matter dealt with by this Clause, namely, the assessing of the workmen's wage for Income Tax on a quarterly basis instead of on a yearly basis. I know the reply which in all probability I shall get from the Financial Secretary. It will be that this is done for the convenience of the very parties that the new Clause deals with. It may be a matter of convenience, but it is also a matter that very frequently causes serious trouble and loss. You may have a workman earning sufficient money to bring him within the payment of Income Tax during the first quarter of the year or the first and second quarter of the year, but suddenly something goes wrong with his employment; here mains idle for a week or two or the nature of his employment changes, and his wages arc considerably reduced, and before the end of the year it is found that if his wages had been assessed on a yearly basis he would not have been liable to pay Income Tax at all. Again I am a wave that the Financial Secretary will reply, "But he is in a position to recover any money that he has paid on the quarterly assessment, should his yearly earnings not make him liable to payment of Income Tax." That is perfectly true, but if that is done a considerable amount of trouble is placed upon the workman. He has to undertake a considerable amount of correspondence with the assessor of Income Tax, or, as an hon. Friend reminds me, he may have to visit the assessor before he can get his money returned. In many cases rather than undertake the worry working men would be prepared to allow the money to remain 322 in the hands of the assessor. In other cases, instead of undertaking the worry themselves, they pass it on to the shoulders of officials of their particular trade unions. I can assure the Committee that those individuals have sufficient trouble without this extra one being heaped upon them. We are very anxious that some arrangement should be made whereby the worker will be placed on exactly the same footing as other sections of our people. I was going to suggest again—I do not know whether it will meet with the approval of the Financial Secretary—that this is a matter which he might seriously consider with the Chancellor of the Exchequer between now and the Report stage. It may be possible that neither lie nor the Chancellor of Exchequer is in a position to go into all the difficulties involved in my proposal, and I make him this suggestion with a view to full consideration being given to the matter. If he is prepared to give it such consideration, and to allow either my Friends or myself, who have some knowledge of the difficulties involved, the opportunity of discussing the matter with himself or his officials, I shall be satisfied and not press this Motion tonight.
§ 9.0 p.m.
§ Mr. BALDWIN
The suggestion put forward by my right hon. Friend is exactly what was in my own mind. This is a very difficult and technical subject, but one in which I do not think we can make any substantial progress by discussing it now. My one desire is to make this collection as easy both for the Inland Revenue and for the Income Tax payer as it can be made.
When this tax was first brought down to its present level, if my memory serves me, Mr. McKenna had a conference with some of the right hon. Gentleman's Friends, and the system now in vogue is the one he finally adopted. I shall be only too pleased to meet my right hon. Friend and two or three of his Friends —I think the fewer the better—in conjunction with the officials of the Inland Revenue, and to go thoroughly into the question with a view of seeing whether anything can be devised before the Report stage which would meet his case and at the same time protect our interests. I make him that offer with the hope that we may be able to meet some of the difficulties. I quite recognise that the difficulties to which he alludes are real, 323 and I am certain that that is the best method of procedure if we wish to reach a successful solution.
§ Mr. SEXTON
I want to go a bit further than my right hon. Friend. I want to ask the Financial Secretary to take into consideration the case of the man who is not in a sense a weekly wage earner. As I said before, I am pleading for the bottom dog, the man who is a "casual" the man who works for half a dozen different employers, who is so much occupied looking for work, and who—it is no reflection on the man—is so illiterate that when he is suddenly faced with a demand from the Inland Revenue in the shape of a document that would puzzle even me to understand, that would tax the ingenuity of a Philadelphian lawyer sometimes to understand, he lets the thing go by default. I am not trying to excuse any man for seeking to escape his share of the burden of taxation. We all should bear our proportion. Let me put the case to the hon. Gentleman. Take the question of the casual labourer. I am speaking of men whom I know in Liverpool. The man in that position may receive slightly over £3 per week, and that to-day represents a purchasing power of something like 30s. I know that with the conditions laid down as to wives and children many of those men could get exemption, but there are a number of men who have no wives and no children, but have aged parents, or others dependent upon them. These men are being told and expected to put in all they can in order to increase production. But if overtime is going to be taxed, that does not encourage increased production. Men are not inclined under those circumstances to work overtime. I state that to be the fact respecting the men whom I have the honour to represent. Notices are now being served on these men for assessment for Income Tax. A casual labourer is suddenly asked for Income Tax, and has got nothing to pay it with. He is asked to pay arrears of Income Tax on an income which he has not got and never had. Those men do not go to the trade union secretary, like those referred to by my right hon. Friend. They do not go anywhere, but get that irritable and disgusted at this imposition that they throw the form on one side and let the matter go by default. At the end of the quarter a man in that position is presented suddenly with a demand from the Inland Revenue for Income Tax on an income he never got.
324 Assessment is made by the Inland Revenue people on a return sent in by the employer.
As far as Liverpool is concerned, we have machinery whereby the assessment could be got. It is the only port in the United Kingdom where there is a clearing house for collecting wages. That machinery was originally created under the Board of Trade to enable a man to get his wages from all his employers, in order to save him from having to go round to a number of them. The machinery has been sought to be used for criminal cases and for the school board, and now, when it is sought to use it for Income Tax purposes, the men naturally object. I hope the right hon. Gentleman will consider the case of the casual labourer as a distinct case from the man who earns and gets a steady weekly wage. It is an irritating element and one which is going to give more trouble. I suggest to the hon. Gentleman that, for the little they get out of it, and considering the irritation it arouses, the game is not worth the candle. and I would request of him to consider the matter in conjunction with my right hon. Friend, and I shall be only too pleased to give him any assistance I can in the matter.
§ Mr. RAWLINSON
The hon. Member who has just spoken has put his case very clearly, but surely it is a strong case against the Motion before the House and in favour of making the demand not every three months but every twelve months.
§ Mr. RAWLINSON
My hon. Friend said he was the last person to prevent anybody paying Income Tax due by law. We must assume that a man getting £3 a week is liable to Income Tax, and surely it would be far more for the man's convenience that there should be a collection at frequent intervals, even weekly, rather than longer.
§ Mr. SEXTON
The man to whom I was referring is really exempt, but he is more or less illiterate and does not take advantage of the form, but lets it go by default although he is not really liable to pay the tax.
§ Mr. RAWLINSON
That is a somewhat different point. Surely this Amendment will not help a man in that positron? The man who is not really bound to pay should 325 not have to pay, and, equally, the man who ought to pay should pay. There is not the slightest doubt that a large number who ought to pay are not paying, and I am sure we are all anxious that that should be stopped. Every honest man would wish that those who are not bound to pay should be helped in every way to get out of paying. There are not only trade union officials to help such men, but a large number willing to help. There are philanthropic agencies and Income Tax agencies which, for a very small percentage, would act for the people in the situation described by the hon. Member. If, however, the man, when he gets the Assessment Paper, will not go to the trade union official or anybody else, but gets irritable, that is an exceptional case we cannot deal with by legislation and this Amendment would not help such a man. The whole of the arguments of the hon. Member point to the fact that there should be a collection at much shorter intervals rather than longer. The present system is too long rather than too short. For these reasons I submit that this is an Amendment which ought not to be carried. It would not help those who ought not to pay, and it would not compel those to pay who might to do so.
§ Mr. ADAMSON
I am quite satisfied with the undertaking given by the Financial Secretary, and I am certain that if there is any particular point in connection with the speech of my hon. Friend behind me, the Financial Secretary will be willing to consider it. I would, in the circumstances, ask leave to withdraw my Amendment.
§ Motion and Clause, by leave, withdrawn.
§ The DEPUTY-CHAIRMAN (Sir E. Cornwall)
The next Amendment in the name of the hon. Member for West Fife (Mr. Adamson)—[Lery on Capital] —needs a Resolution in Committee of Ways and Means, and is, therefore, not in order.