§ Section twenty-two of the Finance Act, 1920 (which provides for a deduction from assessable income in respect of dependent 1186 relatives), shall have effect as if for the words "twenty-five pounds" there were substituted the words "fifty pounds."—[Mr. G. Barker.]
§ Brought up, and. read the First time.
1187Mr. BARKERI beg to move, "That the Clause be read a Second time."
The object of this Amendment is to redress a serious injustice perpetrated by Section 22 of the Finance Act of 1920, which restricts abatement of Income Tax to £25 for the maintenance of a dependent relative. I thought this Amendment would find ready acceptance, and I was very much disappointed by the speech of the Chancellor of the Exchequer with reference to the Amendment under discussion half an hour ago. The Chancellor of the Exchequer took up the attitude that in every Act of Parliament there are certain defects, and if any of these defects are eliminated it upsets the whole balance of that Act of Parliament. That seemed to me an amazing argument to use in a deliberative Assembly. It seemed to me a counsel not of perfection but of imperfection which would justify opposition to the most reasonable Amendments. I do not think anyone can contend that £25 is sufficient to maintain an adult person. It is simply 9s. 7d. per week. If we said that 25s. a week was the minimum amount to maintain an adult, we should not be guilty of exaggeration. Twenty-five shillings per week is £65 per year, which is £40 more than the abatement at present allowed. That £40 has to be paid by a claimant who is keeping a dependant relative, and the Government not only gives a man no encouragement for keeping a dependant relative, but actually taxes him to the tune of 5s. in the pound for the £40 he spends in maintaining that relative. Not only is it a most humane act for a man to maintain a dependant relative, but it is a noble act, and it is, as a matter of fact, a duty; but the man who does it is not only doing a humane act, but he is performing a service to the State and possibly to the Poor Law.
Therefore there can be no justification whatever for allowing such a small abatement as £25. It is most unjust to put a tax on the £40 that is expended in the maintenance of a dependent relative. It is not Income Tax in any sense of the word. It is a tax on expenditure—expenditure of a very noble and humane kind—and I hope the Government will respond to the strength of the appeal that is made in this Amendment. I am certain that no grounds of economy can justify the perpetration and perpetuation of injustice of this character. Taxation should be 1188 equitable and just, and no financial straits will justify an injustice of this character. Therefore I strongly appeal to the Committee and to the Government to accept this Amendment. The Amendment will benefit everyone in the State that has to keep a dependent relative. I am not moving it because I am on the Labour Benches. It will have a general application to the whole country, and I hope the Government will refuse to continue penalising men and women who are doing noble work of this kind. Reference has been made this afternoon to cases that have been before the magistrates. There was a case reported, I think, in the "Observer" a week last Sunday, which created general interest in the country. It was the case of a business man in London, a widower, whose daughter kept house for him, and he was not allowed anything but the £135 abatement. The man was so incensed by the injustice that he refused to pay his Income Tax, and was brought before the magistrates on purpose to expose this injustice in the law. The magistrate sympathised with him, and when he had got the sanction of the Court to the act he had done he paid his Income Tax. It is anomalies of this character that create a great deal of irritation in the country, and it should be the first duty of the Government to remedy such anomalies.
§ Mr. G. BARNESIf necessary, I should like to associate myself with the hon. Gentleman who has just spoken and second this Amendment. It is a simple filial duty that is being performed by the son under the circumstances, and it is very common among working people, as we all know, if the father dies for the son or sons to discharge the obligations of the father. Some years ago, when the tax was small, nobody bothered about it, but now that the tax is large it makes a very considerable inroad upon a poor man's income, and for that reason I associate myself with the proposition that has just been made. I want to put a new point to the learned Solicitor-General. Sometimes this duty is undertaken not by one son, but by two, and if my memory serves me right this exemption is given only in the event of the son wholly maintaining this dependant relative. If that be so, it seems to cut out the case of two sons who may be maintaining a relative between them, 1189 half each. I should like to know if that is so, and if it is so there ought to be some provision made whereby if there are two sons and if they between them maintain a relative they should be allowed the abatement. There is another small point. Is it necessary to have a legal document drawn up in order to get the benefit of this exemption, because if so, it may have the effect of preventing a good many men getting the benefit of it. Workmen do not want to bother with lawyers. They know the law costs money, and is very uncertain, and they would rather have this relief on proof being given of a common-sense nature.
§ The SOLICITOR- GENERAL (Sir Ernest Pollock)The right hon. Gentleman the Member for Gorbals (Mr. G. Barnes) has told us that people do not like to be worried by lawyers and therefore I shall endeavour to be brief. First let me say that the view presented by the hon. Member for Abertillery (Mr. Barker) and also by the right hon. Gentleman who seconded the Amendment is shared by the whole Committee. There are a great many people in all ranks and classes of life who maintain relatives who are not able to maintain themselves. It certainly should not be claimed that that is a special privilege or duty exercised by any particular class. As the hon. Member for Abertillery rightly said, it is a duty which is fulfilled. May I make this observation? Sometimes when we are discussing the Finance Act we look upon these matters of family ties and family duties too much in the light of pounds, shillings and pence. I do not think that those who perform the duties look upon them at all in that light. I believe they perform them from the highest possible motives, and I do not believe, whether the abatement is made larger or smaller, there will be less of these noble qualities shown among all sections of the nation.
With regard to the particular Amendment, may I say this—perhaps one ought to get one's true perspective on questions of this sort—it was the Finance Act of 1920 which first recognised that some relief should, if we could afford it, be given in these cases, and the result was that the relief which is now sought to be amended was given, and the amount of that relief was increased by the Act beyond what the Royal Commission suggested. The Royal Commission suggested 1190 the sum of £25, but having regard to the difference between assessable income and taxable income, the amount is really above that sum. When we have given that, it is not quite fair for the hon. Member for Abertillery to say £25 is not enough to maintain a person. We all agree, but one must look at it from a different point of view. What the Act of 1920 did was to recognise that a number of persons carried out, and nobly carried out, those responsibilities which fell upon them. Therefore, the Act says it is possible to give a certain amount of relief in those cases. That relief was fixed at a sum which was placed in the Act of 1920, not at all by way of being a sum which would enable that duty to be performed, or as being a proper estimate of the cost of maintaining the relatives, but as being an. allowance, a relief, which the State could afford to give in recognition of the duty performed and a relief which had not been given before. I am sorry to say that, under the circumstances of the present time it is really impossible to increase that relief, but let no one believe that the sum is granted for the purpose of maintenance or carrying out a duty. It is in relief of those persons who fulfil their duty. May I now answer my right hon. Friend's questions? If he will look at the Section of the Act, he will see the terms are, "If the claimant proves," and it is not necessary that there should be a legal document for that proof to be given. A short investigation by the surveyor of taxes is all that is necessary. In many localities the people are quite well known. Everybody knows that a particular householder has a relative living with him. Certainly no reference to a lawyer or a legal document is necessitated as a condition precedent.
§ Mr. BARNESIs it applicable only to those people who have dependent relatives living with them?
§ Sir E. POLLOCKThe Section says:
If the claimant proves he maintains at his own expense any person.It does not include that condition. Perhaps I improperly indicated or suggested there might be that limitation. That is not so. The second question asked was in the case of two persons who jointly proved—
§ Major MORGANTwo or more.
§ Sir E. POLLOCKI do not think there is any difficulty about that. A per- 1191 son who proves that he maintains or contributes to maintain another person will be entitled to ask for the reduction. Of course that would have to be investigated, because the relief cannot be duplicated by the fact that two persons maintain the same individual. I do not think any difficulty would arise, because as a matter of fact the probability is, one person would make himself responsible for the maintenance and would collect contributions from other persons who shared the responsibility with him. I suppose every person in this House knows of such cases within his own knowledge.
§ Mr. GRUNDYI am exceedingly sorry the right hon. Gentleman offers no hope of this concession being given. I was more than surprised he gave us no facts or figures as to the number of persons who maintained dependent relatives or the reduction which is likely to be involved in the national revenue. One would have thought we might have been supplied with particulars as to the numbers affected and the amount of revenue involved in increasing this relief from £25 to £50.
§ Sir E. POLLOCKI will give the hon. Member the figures. In the current year the increase burden on the Exchequer would be a sum of £120,000, and in a full year the cost would be £300,000.
§ 8.0 P.M.
§ Mr. GRUNDYI am very much obliged to the hon. and learned Gentleman because it helps one to point out to this Committee that this concession we are asking for does not involve a very large sum of money. One is rather deterred in this House from giving those extreme cases which are known to all of us who live in working-class areas, but I do not want to narrow the discussion down to working-class areas because this filial love and responsibility applies to all classes of the community. I could give one or two striking examples. Here is a widowed mother. Her eldest son with a large family is unable to take his mother in, though more than willing. A married sister takes the mother in, with the consent of her husband, and the son-in-law who carries the responsibility of his wife's mother receives the small relief of £25. When such a small sum is involved as that mentioned by the right hon. Gentleman, £300,000, I think this is a concession that might be made, and made 1192 for this reason: I take it it is part of this House's duty to encourage all that is best in human nature. The learned Gentleman put the case in better language than I can command. He pointed out that these people recognised their responsibilities and generally accepted them, but there are some that might not, and this increase that we are asking for might mean that many who would otherwise drift into the Poor Law institutions would be taken in by some of their relatives. I am exceedingly sorry that the right hon. and learned Gentleman gives us no hope of receiving this concession. I could point out to the Chancellor of the Exchequer that in my opinion the concession, which only means £300,000 and deals with a matter of this kind, would be a very good expenditure indeed to allow to the people that take unto themselves these responsibilities.
§ Mr. W. GRAHAMI am very reluctant to delay the Committee in any way, but I think I am correct in saying that this is the first occasion in recent years in which we have got absolutely no concession of any kind on these allowances while the Finance Bill has been in Committee. There is a strong case for this Amendment. Strictly speaking, there are three classes of dependant relatives. The first class is the dependant relative who by reason of old age or infirmity is unable to maintain himself or herself and is maintained in the home of this, applicant for the abatement. In the second place, there is the widowed mother of either the applicant himself or of his wife, whether incapacitated or not. Then, in the third place, there is the case of the father whose daughter is resident with him and upon whose services he absolutely depends by reason of his infirmity or old age or other cause. The point to which I wish to direct attention is that in the first two cases, which are admittedly hard enough, absolutely no abatement of any kind is given if the incapacitated individual has an income of £50 or over. It will not. be suggested that £50 per annum is in any way adequate to maintain an incapacitated individual in that position under present circumstances, and yet in those cases the abatement of £25 is refused. In the third case I recognise that that condition does not apply. There is only one other point. 1193 Those of us who have had occasion to be connected with the work of local authorities know that this abatement covers a very large number of people who are on the border line of passing over to the care of Poor Law and other institutions. I am perfectly satisfied that the argument of the hon. Member for Rother Valley (Mr. Grundy) is sound, namely, that if a little more generous abatement were given, many people would be willing to undertake the duty of looking after aged relatives. I think in the long run this concession would be found to be a very good investment for the State. I therefore hope that even yet the Government may give us this concession, seeing that up to this stage we have got absolutely nothing from the Chancellor of the Exchequer, which is perhaps not surprising when a Scotsman is now in charge of the national money-bags; but seeing we have got absolutely nothing so far, I do appeal most strongly to him to grant the little consideration asked for in the Amendment.
§ Mr. HAYWARDI would like to add my word to that of the hon. Member who has just sat down. I entirely agree with what was said by the right hon. Gentleman the Solicitor-General that the person who undertakes the liability of maintaining a relative does so uninfluenced by any
§ consideration whatever of any concession accorded in the Finance Act, but, after all, we are considering these relationships in connection with the Finance Act. The right hon. Gentleman said that the principle underlying the abatement which was made in 1920 was not that the concession was made with the view of allowing sufficient for the maintenance of the relative, but that it was merely a recognition of the situation which was created by the maintenance of the relative by the son or daughter, as the case might be. I do not know where the learned Solicitor-General got that idea from. It may have been in the Debates which took place at the time, but I should have thought that the natural construction of the concession was that it was a concession or allowance for maintenance, that it was taken into consideration that it would cost a certain amount of money to discharge the obligation, and an abatement was allowed for that amount. I can conceive of no other principle on which it could have been logically granted. If that be so, can anyone say that the sum of £25 allowed in these cases should be considered the maximum? In these times I am sure nobody would agree that £25 is sufficient, and I hope the full £50 will be allowed.
§ Question put, "That the Clause be read a Second time."
§ The Committee divided: Ayes, 53; Noes, 194.
1195| Division No. 184.] | AYES. | [8.14 p.m. |
| Barnes, Rt. Hon. G. (Glas., Gorbals) | Graham, R. (Nelson and Colne) | Myers, Thomas |
| Barnes, Major H. (Newcastle, E.) | Graham, W. (Edinburgh, Central) | Newbould, Alfred Ernest |
| Barton, Sir William (Oldham) | Grundy, T. W. | Raffan, Peter Wilson |
| Benn, Captain Wedgwood (Leith) | Guest, J. (York, W. R., Hemsworth) | Rees, Capt. J. Tudor- (Barnstaple) |
| Bowerman, Rt. Hon. Charles W. | Hallas, Eldred | Richardson, R. (Houghton-le-Spring) |
| Bramsdon, Sir Thomas | Hartshorn, Vernon | Robertson, John |
| Breese, Major Charles E. | Hayday, Arthur | Royce, William Stapleton |
| Bromfield, William | Hayward, Evan | Spencer, George A. |
| Brown, James (Ayr and Bute) | Hodge, Rt. Hon. John | Swan, J. E. |
| Cairns, John | Holmes, J. Stanley | Thomson, T. (Middlesbrough, West) |
| Cape, Thomas | Irving, Dan | Thorne, G. R. (Wolverhampton, E.) |
| Carter, W. (Nottingham, Mansfield) | Johnstone, Joseph | Waterson, A. E. |
| Cowan, D. M. (Scottish Universities) | Kenworthy, Lieut.-Commander J. M. | Williams, Aneurin (Durham, Consett) |
| Davies, A (Lancaster, Clitheroe) | Kenyon, Barnet | Williams, Col. P. (Middlesbrough, E.) |
| Davison, J. E. (Smethwick) | Lawson, John James | Wood, Major M. M. (Aberdeen, C.) |
| Edwards, Major J. (Aberavon) | MacVeagh, Jeremiah | |
| Finney, Samuel | Mallalieu, Frederick William | TELLERS FOR THE AYES.— |
| Galbraith, Samuel | Morgan, Major D. Watts | Mr. Frederick Hall and Mr. G. |
| Glanville, Harold James | Murray, Dr. D. (Inverness & Ross) | Barker. |
| NOES. | ||
| Addison, Rt. Hon. Dr. Christopher | Balfour, George (Hampstead) | Bird, Sir William B. M. (Chichester) |
| Agg-Gardner, Sir James Tynte | Barlow, Sir Montague | Boyd-Carpenter, Major A. |
| Amery, Leopold C. M. S. | Barnett, Major Richard W. | Bridgeman, Rt. Hon. William Clive |
| Armitage, Robert | Barnston, Major Harry | Briggs, Harold |
| Ashley, Colonel Wilfrid W. | Bell, Lieut.-Col. W. C. H. (Devizes) | Brittain, Sir Harry |
| Atkey, A. R. | Bellairs, Commander Carlyon W. | Broad, Thomas Tucker |
| Bagley, Captain E. Ashton | Betterton, Henry B. | Brown, Major D. C. |
| Baird, Sir John Lawrence | Birchall, Major J. Dearman | Bruton, Sir James |
| Baldwin, Rt. Hon. Stanley | Bird, Sir A. (Wolverhampton, West) | Buckley, Lieut.-Colonel A. |
| Bull, Rt. Hon. Sir William James | Henry, Denis S. (Londonderry, S.) | Pinkham, Lieut.-Colonel Charles |
| Carr, W. Theodore | Hewart, Rt. Hon. Sir Gordon | Pollock, Sir Ernest Murray |
| Carter, R. A. D. (Man., Withington) | Hickman, Brig.-General Thomas E. | Pratt, John William |
| Chamberlain, Rt. Hn. J. A. (Birm. W.) | Hinds, John | Prescott, Major W. H. |
| Churchman, Sir Arthur | Hood, Joseph | Pretyman, Rt. Hon. Ernest G. |
| Clough, Robert | Hope, Sir H. (Stirling & Cl'ckm'nn'n,W.) | Purchase, H. G. |
| Coats, Sir Stuart | Hope, Lt.-Col. Sir J. A. (Midlothian) | Rae, H. Norman |
| Colfox, Major Wm. Phillips | Hopkins, John W. W. | Randles, Sir John Scurrah |
| Colvin, Brig.-General Richard Beale | Hopkinson, A. (Lancaster, Mossley) | Rankin, Captain James Stuart |
| Conway, Sir W. Martin | Horne, Sir R. S. (Glasgow, Hillhead) | Remer, J. R. |
| Coote, Colin Reith (Isle of Ely) | Hotchkin, Captain Stafford Vere | Richardson, Alexander (Gravesend) |
| Cory, Sir J. H. (Cardiff, South) | Hunter, General Sir A. (Lancaster) | Robinson, S. (Brecon and Radnor) |
| Craik, Rt. Hon. Sir Henry | Hunter-Weston, Lieut.-Gen. Sir A. G. | Rodger, A. K. |
| Curzon, Captain Viscount | Hurd, Percy A. | Samuel, A. M. (Surrey, Farnham) |
| Davies, Alfred Thomas (Lincoln) | Hurst, Lieut.-Colonel Gerald B. | Samuel, Samuel (W'dsworth, Putney) |
| Davies, Major D. (Montgomery) | Jackson, Lieut.-Colonel Hon. F. S. | Sanders, Colonel Sir Robert Arthur |
| Davies, Thomas (Cirencester) | Jameson, John Gordon | Seager, Sir William |
| Davison, Sir W. H. (Kensington, S.) | Jephcott, A. R. | Seddon, J. A. |
| Dawes, James Arthur | Jesson, C. | Seely, Major-General Rt. Hon. John |
| Denniss, Edmund R. B. (Oldham) | Jones, Sir Edgar R. (Merthyr Tydvil) | Shaw, Capt. William T. (Forfar) |
| Dewhurst, Lieut.-Commander Harry | Jones, Sir Evan (Pembroke) | Smith, Sir Harold (Warrington) |
| Dockrell, Sir Maurice | Jones, G. W. H. (Stoke Newington) | Smith, Sir Malcolm (Orkney) |
| Doyle, N. Grattan | Jones, Henry Haydn (Merioneth) | Sprot, Colonel Sir Alexander |
| Edwards, Hugh (Glam., Neath) | Kellaway, Rt. Hon. Fredk. George | Stanier, Captain Sir Beville |
| Elliot, Capt. Walter E. (Lanark) | Kidd, James | Stanley, Major Hon. G. (Preston) |
| Evans, Ernest | King, Captain Henry Douglas | Steel, Major S. Strang |
| Eyres-Monsell, Com. Bolton M. | Lane-Fox, G. R. | Sturrock, J. Leng |
| Falcon, Captain Michael | Law, Alfred J. (Rochdale) | Sugden, W. H. |
| Falle, Major Sir Bertram Godfray | Lindsay, William Arthur | Surtees, Brigadier-General H. C. |
| Fell, Sir Arthur | Lister, Sir R. Ashton | Thomas-Stanford, Charles |
| Fildes, Henry | Lloyd, George Butler | Thomson, F. C. (Aberdeen, South) |
| Flannery, Sir James Fortescue | Lloyd-Greame, Sir P. | Thomson Sir W. Mitchell- (Maryhill) |
| Ford, Patrick Johnston | Locker-Lampson, Com. O. (H'tingd'n) | Thorpe, Captain John Henry |
| Foreman, Sir Henry | Lorden, John William | Tickler, Thomas George |
| Forestier-Walker, L. | Loseby, Captain C. E. | Turton, Edmund Russborough |
| Foxcroft, Captain Charles Talbot | M'Curdy, Rt. Hon. Charles A. | Waddington, R. |
| Fraser, Major Sir Keith | Mackinder, Sir H. J. (Camlachie) | Walters, Rt. Hon. Sir John Tudor |
| Fremantle, Lieut.-Colonel Francis E. | McLaren, Robert (Lanark, Northern) | Ward-Jackson, Major C. L. |
| Gange, E. Stanley | Macleod, J. Mackintosh | Watson, Captain John Bertrand |
| Ganzoni, Sir John | McNeill, Ronald (Kent, Canterbury) | White, Col. G. D. (Southport) |
| Gardiner, James | Maddocks, Henry | Wild, Sir Ernest Edward |
| Gee, Captain Robert | Manville, Edward | Williams, C. (Tavistock) |
| Gibbs, Colonel George Abraham | Middlebrook, Sir William | Willoughby, Lieut.-Col. Hon. Claud |
| Gilbert, James Daniel | Mitchell, William Lane | Wilson, Lt.-Col. Sir M. (Bethnal Gn.) |
| Gilmour, Lieut.-Colonel Sir John | Molson, Major John Elsdale | Wilson, Col. M. J. (Richmond) |
| Goulding, Rt. Hon. Sir Edward A. | Montagu, Rt. Hon. E. S. | Winterton, Earl |
| Green, Joseph F. (Leicester, W.) | Moore, Major-General Sir Newton J | Wise, Frederick |
| Greene, Lt.-Col. Sir W. (Hack'y, N.) | Nail, Major Joseph | Wood, Hon. Edward F. L. (Ripon) |
| Greig, Colonel Sir James William | Neal, Arthur | Wood, Sir J. (Stalybridge & Hyde) |
| Hacking, Captain Douglas H. | Nicholson, Reginald (Doncaster) | Woolcock, William James U. |
| Hallwood, Augustine | Ormsby-Gore, Hon. William | Worsfold, T. Cato |
| Hall, Lieut.-Col. Sir F. (Dulwich) | Parker, James | Worthington-Evans, Rt. Hon. Sir L. |
| Hamilton, Major C. G. C. | Pearce, Sir William | Young, E. H. (Norwich) |
| Hannon, Patrick Joseph Henry | Peel, Col. Hon. S. (Uxbridge, Mddx.) | |
| Harmsworth, C. B. (Bedford, Luton) | Perkins, Walter Frank | TELLERS FOR THE NOES.— |
| Henderson, Major V. L. (Tradeston) | Perring, William George | Colonel Leslie Wilson and Mr. |
| Hennessy, Major J. R. G. | Pilditch, Sir Philip | Dudley Ward. |
§ It being after a quarter-past Eight of the Clock, and leave having been given to move the Adjournment of the House, under Standing Order No. 10, further Proceeding was postponed, without Question put.