HC Deb 21 June 1922 vol 155 cc1462-5 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.


I 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 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.


The 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—


The principle!


This 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.


I 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.

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)
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.