Section twenty-three of the Finance Act 1920 (which provides for a reduced rate of Income Tax on the first two hundred and twenty-five pounds of taxable income) shall have effect as if there were added the following:
The rate on which the next two hundred pounds of the taxable income of an individual shall be charged to Income Tax shall he two-thirds of the standard rate of tax, and the rate on which the next following two hundred pounds of the taxable income of an individual shall be charged to Income Tax shall be five-sixths of the standard rate of tax."—[Mr. Trevelyan Thomson.]
§ Brought up, and read the First time.
Mr. T. THOMSONI beg to move, "That the Clause be read a Second time."
This Amendment does not, I claim, seek to upset the well-considered and well-designed scheme to which the Chancellor has referred. I have approached this on rather more general grounds than the more particular and special cases that we have been considering earlier in the evening. This new Clause seeks to extend the principle of graduation that is embodied in the present system of Income Tax which was recommended by the Royal Commission but which, I submit, has not been carried out to the extent to which it is desirable. No matter how correct a scheme may look on paper, practical experience of the working of it indicates directions in which it may he amended—in accordance with the general principles on which it was founded. This new Clause seeks to extend the principle graduation which will make the incidence of the Income 1463 Tax more equitable. People of moderate and fixed incomes have been most hardly hit in recent years, and this new Clause seeks to give these people some relief on the lines of increased graduation.
§ Sir L. SCOTTThe hon. Gentleman who moved the new Clause said that this Amendment had the advantage of not being obnoxious or open to the criticisms applied to the preceding Amendments—that it upset the scheme of the Royal Commission. Unfortunately, the hon. Gentleman is wrong in that—
§ Sir L. SCOTTThis would upset the very carefully thought-out scheme of effective graduation of the Income Tax, from the lowest point upwards, which was advised by the Royal Commission (page 28 of the Report), and which is embodied in the existing statutory scheme of graduation. That is the first objection. My second objection is that it would cost the Government nearly £12,000,000. Perhaps the Committee will agree that these two reasons are sufficient.
§ Mr. N. MACLEANI hope that the Chancellor of the Exchequer and the Solicitor-General are going to alter their minds in regard to the position they have taken up on this question. We have already, by the scheme of the Finance Bill, introduced the principle of graduation. This new Clause seeks to lighten the graduation upwards until it reaches the amounts laid down by the Royal Commission on Income Tax. In these days, when we are being told by everybody that taxation is pressing most severely upon the lower middle classes, surely it would be well for the Government to consider those whom they look upon as their strongest and most consistent supporters. We believe in a graduated Income Tax, and I hope the right hon. Gentleman will carefully consider our Amendments. The Solicitor-General told us that this pro-
§ posal would cost £12,000,000. His other objection was that it was contrary to the recommendations of the Royal Commission on Income Tax. The whole history of the Government on this point is a denial and a repudiation of such art argument, and nobody knows that better than the two right hon. Gentlemen in charge of this Measure. For this reason I trust that argument will not be taken as one of any weight.
§ As for the argument that £12,000,000 would be lost to the revenue, I am not going to challenge those figures, because it is impossible for us to go into an actuarial calculation as to exactly how much it is going to cost. Nevertheless, we appeal for some abatement of taxation in regard to the lower classes and the lower middle classes. On this matter we have always had masses of figures thrown at as as to the number of millions which this particular abatement we are asking for would cost the country. Before we accept the figures given in the bald statements made by the Solicitor-General and the Chancellor of the Exchequer we should have some further details placed before us as to how they arrive at that cost. So far as I can calculate the number of millions which the Government say will be lost by the adoption of these various Amendments, they will amount to a larger sum that is likely to be realised by the whole of this tax. I hope therefore the Chancellor of the Exchequer and the Solicitor-General will take this Clause again into consideration and see if something cannot be done on the lines suggested in the Amendment. They have already undertaken to consider many Amendments which might involve bringing in a new Bill altogether, and I trust that in the course of that consideration this Bill will not be lost sight of.
§ Question put, "That the Clause be read a Second time."
§ The Committee divided: Ayes, 59; Noes, 185.
1465| Division No. 173.] | AYES | [11.37 p.m. |
| Acland, Rt. Hon. Francis D. | Davison, J. E. (Smethwick) | Hayday, Arthur |
| Adamson, Rt. Hon. William | Edwards, C. (Monmouth, Bedwelity) | Hayward, Evan |
| Ammon, Charles George | Entwistle, Major C. F. | Hirst, G. H. |
| Banton, George | Finney, Samuel | Rogge, James Myles |
| Barker, G. (Monmouth, Abertillery) | Gillis, William | John, William (Rhondda, West) |
| Bromfield, William | Graham, D. M. (Lanark, Hamilton) | Jones, J. J. (West Ham, Silvertown) |
| Brown, James (Ayr and Bute) | Griffiths, T. (Monmouth, Pontypool) | Jones, Morgan (Caerphilly) |
| Carter, W. (Nottingham, Mansfield) | Grundy, T. W. | Kennedy, Thomas |
| Collins, Sir Godfrey (Greenock) | Guest, J. (York, W.R., Hemeworth) | Kenworthy, Lieut.-Commander J. M. |
| Davies, A. (Lancaster, Clitheroe) | Hall, F. (York, W. R., Normanton) | Lawson, John James |
| Davies, Rhys John (Westhoughton) | Halls, Walter | Lunn, William |
| Maclean, Nell (Glasgow, Govan, | Sexton, James | Walsh, Stephen (Lancaster, Ince) |
| Murray, Hon. A. C. (Aberdeen) | Shaw, Thomas (Preston) | Waterson, A. E. |
| Myers, Thomas | Short, Alfred (Wednesbury) | Watts-Morgan, Lieut.-Col. D. |
| O'Grady, Captain James | Sltch, Charles H. | White, Charles F. (Derby, Western) |
| Parkinson, John Allen (Wigan) | Smith, W. R. (Wellingborough) | Whitingham, Margaret |
| Raffan, Peter Wilson | Spencer, George A. | Young, Robert (Lancaster, Newton) |
| Richardson, R. (Houghton-le-Spring) | Sutton, John Edward | |
| Robertson, John | Swan, J. E. | TELLERS FOR THE AYES.— |
| Rose, Frank H. | Thorne, G. R. (Wolverhampton, E.) | Mr. Newbould and Mr. T. Thomson. |
| Royce, William Stapleton | Thorne, W. (West Ham, Plaistow) | |
| NOES | ||
| Agg-Gardner, Sir James Tynte | Goff, Sir R. Park | Parry, Lieut.-Colonel Thomas Henry |
| Ainsworth, Captain Charles | Gould, James C. | Pease, Rt. Hon. Herbert Pike |
| Amery, Rt. Hon. Leopold C. M S. | Grant, James Augustus | Peel, Col. Hon. S. (Uxbridge, Mddx.) |
| Armstrong, Henry Bruce | Green, Albert (Derby) | Pennefather, De Fonblanque |
| Baird, Sir John Lawrence | Green, Joseph F. (Leicester, W.) | Percy, Lord Eustace (Hastings) |
| Balfour, George (Hampstead) | Greenwood, William (Stockport) | Pickering, Colonel Emil W. |
| Banbury, Rt. Hon. Sir Frederick G. | Green, Sir Harry | Pollock, Rt. Hon. Sir Ernest Murray |
| Barlow, Sir Montague | Greaton Edward Charles | Pratt, John William |
| Barnett, Major Richard W. | Grattan, Colonel John | Randles, Sir John Scurrah |
| Barrand, A. R. | Gritten, W. G. Howard | Rankin, Captain James Stuart |
| Bell, Lieut.-Col. W. C. H. (Devizes) | Guest, Capt. Rt. Hon. Frederick E. | Remer, J. R. |
| Bellairs, Commander Carlyon W. | Hallwood, Augustine | Richardson, Sir Alex. (Gravesend) |
| Benn, Sir A. S. Plymouth, Drake | Hall, Rr-Admi Sir W.(Liv'p'l,W.D'by) | Roberts, Rt. Hon. G. H. (Norwich) |
| Benn, Capt. Sir I. H., Bart.(Gr'nw'h) | Hannon, Patrick Joseph Henry | Roberts, Samuel (Hereford, Hereford) |
| Bennett, Sir Thomas Jewell | Harmsworth, C. B. (Bedford, Luton) | Robinson, S. (Brecon and Radnor) |
| Bird, Sir R. B. (Wolverhampton, W.) | Harmsworth, Hon. E. C. (Kent) | Robinson, Sir T. (Lancs., Stretford) |
| Borwick, Major G. O. | Harris, Sir Henry Percy | Rodger, A. K. |
| Bowyer, Captain G. W. E. | Henderson, Lt.-Col. V. L. (Tradeston) | Roundell, Colonel R. F. |
| Brassey, H. L. C. | Herbert, Dennis (Hertford, Watford) | Samuel, A. M. (Surrey, Farnham) |
| Breese, Major Charles E. | Hilder, Lieut.-Colonel Frank | Samuel, Samuel (W'dsworth, Putney) |
| Bridgeman, Rt. Hon. William Clive | Hinds, John | Sanders, Colonel Sir Robert Arthur |
| Brittain, Sir Harry | Hood, Sir Joseph | Scott, A. M. (Glasgow, Bridgeton) |
| Broad, Thomas Tucker | Hope, Lt.-Col. Sir J. A. (Midlothian) | Scott, Sir Leslie (Liverp'l, Exchange) |
| Brown, Brig.-Gen. Clifton (Newbury) | Hopkins, John W. W. | Seddon, J. A. |
| Bruton, Sir James | Horne, Edgar (Surrey, Guildford) | Shaw, Hon. Alex. (Kilmarnock) |
| Bull, Rt. Hon. Sir William James | Horne, Sir R. S. (Glasgow, Hillhead) | Shortt, Rt. Hon. E. (N'castle-on-T.) |
| Butcher, Sir John George | Howard, Major S. G. | Smith, Sir Allan M. (Croydon, South) |
| Casey. T. W. | James, Lieut.-Colonel Hon. Cuthbert | Smith, Sir Harold (Warrington) |
| Chamberlain, Rt. He. J. A. (Birm. W.) | Jodrell, Neville Paul | Stanley, Major Hon. G. (Preston) |
| Clay, Lieut.-Colanel H. H. Spender | Johnstone, Joseph | Stanton, Charles Butt |
| Clough, Sir Robert | Jones, Henry Haydn (Merioneth) | Stephenson, Lieut.-Colonel H. K. |
| Coats, Sir Stuart | Kellaway, Rt. Hon. Fredk. George | Stewart, Gershom |
| Cobb, Sir Cyril | King, Captain Henry Douglas | Sturrock, J. Leng |
| Cockerill, Brigadier-General G. K. | Larmor, Sir Joseph | Sugden, W. H. |
| Colfax, Major Wm. Phillips | Lewis, Rt. Hon. J. H. (Univ., Wales) | Surtees, Brigadier-General H. C. |
| Colvin, Brig.-General Richard Beale | Lewis, T. A. (Glam., Pontypridd) | Sutherland, Sir William |
| Conway, Sir W. Martin | Lindsay, William Arthur | Sykes, Sir Charles (Huddersfield) |
| Cope, Major William | Locker-Lampson, G. (Wood Green) | Thomson, F. C. (Aberdeen, South) |
| Cory, Sir J. H. (Cardiff, South) | Locker-Lampson, Com. O. (H'tlngd'n) | Thomson, Sir W. Mitchell- (Maryhill) |
| Curzon, Captain Viscount | Lorden, John William | Tryon, Major George Clement |
| Davidson, J. C. C. (Hemel Hempstead) | Lort-Williams, J. | Turton, Edmund Russborough |
| Davies, Thomas (Cirencester) | Lyle, C. E. Leonard | Waddington, R. |
| Davies, Sir William H. (Bristol, S.) | Macdonald, Sir Murdoch (Inverness) | Walters, Rt. Hon. Sir John Tudor |
| Dawson, Sir Philip | McLaren, Robert (Lanark, Northern) | Walton, J. (York, W. R., Don Valley) |
| Doyle, N. Grattan | Macpherson, Rt. Hon. James I. | Ward, Col. L. (Kingston-upon-Hull) |
| Du Pre, Colonel William Baring | Malialleu, Frederick William | Watson, Captain John Bertrand |
| Edge, Captain Sir William | Marriott, John Arthur Ransome | Wheler, Col. Granville C. H. |
| Edwards, Major J. (Aberavon) | Matthews, David | White, Col. G. D. (Southport) |
| Eiveden, Viscount | Mond, Rt. Hon. Sir Alfred Moritz | Willey, Lieut.-Colonel F. V. |
| Evans, Ernest | Moore-Brabazon, Lieut.-Col. J. T. C. | Williams, C. (Tavistock) |
| Eyres-Monsell, Com. Bolton M. | Morden, Col. W. Grant | Willoughby, Lieut.Col, Hon. Claud |
| Falle, Major Sir Bertram Godfrey | Moreing, Captain Algernon H. | Windsor, Viscount |
| Flides, Henry | Murchison, C. K. | Winiertan, Earl |
| Fisher, Rt. Hon. Herbert A. L. | Murray, Rt. Hon, C. D. (Edinburgh) | Wise, Frederick |
| Flannery, Sir James Fortescue | Nall, Major Joseph | Wood, Hon. Edward F. L. (Ripon) |
| Ford, Patrick Johnston | Neal, Arthur | Wood, Sir H. K. (Woolwich, West) |
| Forestler-Walker, L. | Newman, Sir R. H. S. D. L. (Exeter) | Worthington-Evans, Rt. Hon. Sir L. |
| Forrest, Waiter | Nicholson, Brig, Gen. J. (Westminster) | Young, Sir Frederick W. (Swindon) |
| Fraser, Major Sir Keith | Nicholson, Reginald (Doncaster) | |
| Frece, Sir Waiter de | Norris, Colonel Sir Henry G. | TELLERS FOR THE NOES.— |
| Fremantle, Lieut.-Colonel Francis E. | Norton-Griffiths, Lieut,-Col. Sir John | Colonel Leslie Wilson and Mr. |
| Ganzonf, Sir John | Oman, Sir Charles William C. | McCurdy. |
| Gilmour, Lieut.-Colonel Sir John | Ormsby-Gore, Hon. William | |
| Glyn, Major Ralph | Parker, James |
Question put, and agreed to.