§ Whereupon Mr. Speaker, pursuant to the Order of the House of the 12th February, proposed the Question, "That this House do now adjourn."
§ Major TRYON
I rise to refer to a matter arising out of the answer given at Question Time by the Financial Secretary to the Treasury. His answer was one dealing with a question put to him about the Income Tax and the position of married women, and the reply was:It would not be possible to single out the question of taxing a married woman for consideration in advance of the findings of the Royal Commission. I hope their case will be fully put before the Commission, and in this case my right hon. Friend thinks it would not be useful to receive a deputation.One question on this point was put by the hon. Member for Wood Green and the other by myself. I believe there is a general feeling that the present incidence of the Income Tax law upon married women is not fair, and that it is grossly unfair to add together the income of the husband and wife and treat it as one income. From this answer I gather that nothing is likely to be done to remove what we believe to be a serious injustice until the Royal Commission has reported. That will not be in time for the present Budget, and it may not be in time for the next Budget. Therefore I urge upon the Government that this great injustice shall be dealt with and considered now. I am not asking for the decision of the Government in advance of the Budget, but I am urging that it should be considered now, with a view to the difficulty being removed when the Budget is brought in.
What we complain of is that it is entirely wrong in principle, and it is in effect a tax on a legal marriage. If a man and woman are married, they are treated 571 differently under the Income Tax laws, and we regard that as exceedingly unfair. If I were to ask the Financial Secretary to the Treasury whether he considers a husband and wife to be two persons or one, he would be much too wise to answer. He would say, "Under which tax does this question arise," because under the Death Duties husband and wife are treated as two, but under the Income Tax they are treated as one. That seems to me to be wholly indefensible, illogical, and unjust. No one would conduct a business upon those lines, because it would not be considered honest. It may be said that there is some difficulty, but as a matter of fact a wife's income is already returned separately in amount though on the same paper. Therefore, this return does have to be worked out at the present time. If I seem impatient in raising this question, that is not a charge which can be made against those I represent, because it was brought up ten years ago by a former well-known member of my Constituency, and what has happened since has made the effects far more serious. Owing to the War an enormous number of women who have never worked before work now and their wages go into the family exchequer. Therefore, the principle of counting Husband and wife as one applies now in far more cases than before. Moreover, the Income Tax is levied on incomes actually lower, and, owing to the cost of living, on incomes relatively lower. I do not wish to be told that the financial needs of the nation are great. That is true, but when financial needs are great they lead to taxation which is also great. The burden of the tax is far heavier than before, and that fact is all the more reason for adjusting it evenly. I consider this to be an injustice to married people, the tax is not properly distributed, and I hope that the Committee will see their way to go further into the matter and not take up the attitude that the Royal Commission is in any way a bar to the consideration of it now. I hope that they will be prepared to deal with it in a satisfactory way in the coming Budget.
§ Mr. MACMASTER
I desire to associate myself with the views expressed by my hon. and gallant Friend. This tax really places a premium upon immorality, because the income of husband and wife are taken together, and an increasing burden is placed upon the combination, 572 whereas, if a man and woman live together unmarried they each bear a proportion of taxation which appertains to them. My hon. and gallant friend has pointed out the differentiation made in the case of the Death Duties compared with the Income Tax. It seems to me if the principle applied to the Death Duties is sound, it should be equally applicable to the Income Tax. There are many other aspects of the question. Why should there be this combination? Why should the incomes of the husband and the wife be united and treated as if they were common. Of course, if the purpose is to bring the income within the higher tax, and possibly the Super-tax, it means getting more money for the Treasury. But that is simply the argument of the burglar. There should be no serious difficulty in adjusting this matter. There is no equity, no fairness in combining the two sums in order to bring them within the limit which would involve the imposition of the higher rate of Income Tax. I do think that those invested with the regulation of taxation of the country should be able by the simple process of keeping two separate accounts and imposing the tax on each which is appropriate to that income, to avoid doing a real injustice to the parties, and thus creating an impediment to marriage. The people concerned might be induced to think it better to remain single. The whole argument is in favour of the encouragement of marriage, but this policy is directly contrary to it. The sooner this plan is adopted the sooner justice will be done to a very considerable class in this country.
§ Mr. G. LOCKER-LAMPSON
I am very glad my hon. Friend has brought forward this question, because really it is a much more important question than on the surface it would appear to be. In the first place, it seems to me the whole question; now is on a very different footing from what it was a few years ago. In 1913, when the Prime Minister was Chancellor of the Exchequer, he received a deputation on the subject, and on that occasion he said he would do his utmost to see that this grievance should he remedied as soon as possible. Since that date women practically have come into political equality with men. I really cannot see why one should differentiate between women and men with regard to what after all is perhaps, the most important tax imposed on the public. I do not know whether hon. Mem- 573 bers realise that it is not merely a question of a woman when she marries having to pay more Income Tax than she did before she was married. In certain cases neither a woman nor a man was liable to Income Tax before marriage, but on marriage they become liable to it. Take the case of a man and woman, both unmarried. Before marriage they had an income each of £129 per year, which was below the Income Tax limit. They had a total, therefore, of £258 on which they did not pay Income Tax, but on marriage what is the result? They get the relief of £120, plus £25—that is the allowance for the wife—and they have to pay on the residue of £113 to the extent of 3s. in the the £, which comes to £16 19s. 0d. The man and woman before marriage did not pay Income Tax at all, but by marriage they are penalised to the extent of nearly £17 a year. It seems to me a most monstrous anomaly, and there is no reason for it. My hon. Friend, in his answer today, said you could not disentangle the question of the tax on married couples from the rest of the Income Tax law. It is not only easily disentangled; it is not even entangled. This stands on its own basis. It is the one great anomaly of our Income Tax law in regard to married people. You have only to abolish it, treat the married woman like any other assessable person who is a taxable entity, and you have made the reform. My hon. Friend has made a great reputation in this House through his fair-mindedness and his statesmanship in the speeches he has made. I am quite serious when I say that if he could really have a talk with the Treasury officials, and could persuade them to carry out this reform he would greatly add to his reputation in the country in this respect. He would earn the gratitude of thousands of married women and thousands of families who are hard put to it now to make both ends meet. After all, these sums may seem very small to people who are well of for rich, but they mean a great deal to those who have very small incomes. I appeal to my hon. Friend, knowing him as I do, and as the House knows him as a fair-minded man, to approach the Treasury officials and do the utmost he can to remedy this grievance.
§ Mr. BALDWIN
I am not surprised that this subject should be raised, because it is one that has caused a good deal of interest amongst taxpayers for a great 574 many years, and, in common with many other anomalies, it is one that has been very tolerable so long as the Income Tax stood at 6d. in the pound, but which has become to many people intolerable now that we have an Income Tax of 6s. in the pound. I would say this to my hon. Friends: Of course they know quite well that I can give no undertaking. This is a matter within the authority of my chief, the Chancellor of the Exchequor, but I think I know what he would say if he were in my place this evening. I agree freely, as an individual and as a married man, that there is a great deal to be said for the case that has been presented to-night. It has always been an intolerable anomaly to feel that so far as taxation was concerned it would be cheaper to live with a woman who was not your wife than with a woman who was. That is an intolerable anomaly. I would, in passing, say that the argument of my hon. and gallant Friend the Member for Chertsey (Mr. Macmaster) left me cold, because be said that the existence of this form of taxation would act as an impediment to marriage. Not at all. It might cause friction after marriage, but when a man is in that state of mind that he contemplates marriage, he regards any payment that he may make on behalf of the lady who is to become his wife, not as a, burden, but as an additional matter of pride and honour for him.
Let me remind my hon. Friends that this is not the only anomaly that has to be dealt with. There are others as great. There are problems much more difficult, which have been waiting for some years during the War to be investigated and reported upon by the Royal Commission. There are in businesses such questions as the allowances for depreciation and the allowances for wasting assets. There is one very great and striking anomaly which, owing to the increase in the incidence of the Income Tax. has attained very large proportions, and that is the question of the Double Income Tax, which is probably the thorniest of all the questions, and the most difficult of solution of any that the Royal Commission will have to decide. I see no hardship in those who suffer wheat they conceive to be this disability of having to wait, in common with thousands of their fellow-taxpayers, while this Commission reports. Women are represented on this Commission. My right hon. Friend will ask a lady admirably qualified for the pur- 575 pose to sit on the Commission, but I believe all the women can be brought before the Commission. Of course it is impossible for me to say how long it may be in reporting, but I should hope on some of the less complicated questions it may be possible to report in time for such alterations as might be deemed necessary to be made in the Budget of 1920.
I quite see that some hon. Members believe it would be a very simple thing to take out of the anomalous cases, which are numerous, this particular one, and deal with it by itself. But there is the difficulty. By doing that you would be pre-judging any conclusion that they may come to on the point. I have no idea what views the Royal Commission may take as to the incidence of the Income Tax as between married and single people and as between those who have families and those who have not. It may be—I have no knowledge on this, nor can I have—that they may make entirely novel suggestions for the application of this tax, and it may be that if the Chancellor were to attempt, in the Finance Bill which he will soon have to introduce, to deal piecemeal with one aspect of the problem, it might make the task of the Commission more difficult in coming to conclusions and making the recommendations that they may desire to make. I am afraid to-night, in the absence of the Chancellor of the Exchequer, I can say no more than that I have strong sympathy with the point hon. Members have raised but that I cannot hold out any hope that my right hon. Friend will consent to deal with this point piecemeal and in advance 576 of the findings of the Royal Commission, any more than he will take out any other anomaly to deal with in like manner. I can only suggest to my hon. Friends that they marshal their forces and present their case before the Royal Commission and press it upon its attention.
§ Sir FREDERICK YOUNG
I wish to associate myself with my hon. and gallant I Friend in his protest against this tax on respectability. While I listened with interest to the speech of the hon. Gentleman (Mr. Baldwin), the latter part of it left I me rather cold. The question of putting the Royal Commission to any inconvenience has no great bearing on the question Royal Commissions are established to work out difficult and intricate problems; which are difficult for the House as a House itself to settle, but this particular I question has only one phase with which even the hon. Member on the Treasury Bench has dealt, the injustice of it and I the impolitic nature of it. It is very disappointing that this matter, important in itself but trifling in its difficulties of solution, should be postponed and should have to take equal time with the other questions, which are questions of difficulty, which very properly are being left to the Royal Commission. And speaking as one who has had some experience in politics, I say that Royal Commissions do not issue their findings very quickly, so that those who are suffering from this injustice are likely to continue suffering for a considerable time.
Question put, and agreed to.
§ Adjourned accordingly at Twenty-seven minutes after Eleven o'clock.