Section eighteen of the Finance Act, 1920 (10 and 11 Geo. V., c. 18), shall be read as if after the words "the claimant," in the first line thereof, there were inserted the words "if a widow, or."—[Mr. Cautley.]
§ Brought up, and read the First time.
§ Mr. CAUTLEY
I beg to move, "That the Clause be read a Second time."
The Royal Commission on Income Tax did its work so well that I feel a little temerity in asking the Committee to reconsider one decision at which it arrived. The point of my Amendment is this. As the Committee is aware, every married man and woman who are living together are entitled in the assessment for Income Tax to a free allowance of £225 a year. Every single man and single woman in the assessment of Income Tax are allowed only a free assessment of £135, or £90 less, and then the Royal Commission provided, and the Finance Bill founded on that Report provided, that a widower and a widow should be treated exactly in the same way as if they were single. The result is that a widow is only entitled to a free allowance in the assessment of the tax upon her of £135, in place of the £225 which they had got 2140 when her husband was alive. So far as a widower is concerned, I think that is a perfectly right and proper decision, but, so far as a widow is concerned, it seems to me to raise a very grave hardship, and this is a point of very great importance in principle, because it applies to every widow in the country who pays Income Tax. It is hardly necessary to point out that as soon as a woman becomes a widow, in the ordinary case, except where they are living on unearned incomes, the whole of the revenue of the household, so far as it is earned by the breadwinner, the husband, disappears, and it is just at that time, when the obligations on the woman become so heavy, when she is left with her family and her children to educate, and the bulk of her means of livelihood is taken away, that the Income Tax gatherer steps in and says, "We will make the tax harder on you than it was when your husband was living, and when you had his income to draw on to pay the tax."
I put this before the Committee as a very grave hardship indeed, and I have raised the matter because from my own constituency I have had so very many glaring cases of it, and so many widows who are placed in this unfortunate position and who suffer from it writing to me about the hardship of their particular case. It will be obvious to the Committee that on the husband's death, where there are children, the whole expenses of the household remain practically the same. Of course, if the husband's earned income is a large one, the widow may have to go into a smaller house, but the trouble and cost of education and the expenses connected with her family remain just the same. In the case of a widower it is different, because his income continues, he is able to go on with the same house, and he has the same income pretty well as he had before, but with this very serious reduction in income, it is extremely hard on the widow. I commend this Clause, therefore, to the Committee as being right. I have been unable to find any ground of this particular finding of the Royal Commission, and I cannot imagine that there can be any real objection to this Amendment. I have little doubt the Chancellor will say that he cannot afford the money, but to my mind that is no answer where there is a grave case of hardship on people 2141 who cannot protect themselves who are left in this unfortunate position. My new Clause is, I think on consideration, drawn too widely, and I would be very glad, if the right hon. Gentleman will ameliorate the hardship of this case, that it should be limited to those widows who are left with children under the age of 21 years.
§ Sir R. HORNE
The hon. and learned Member for East Grinstead (Mr. Cautley) has made a very strong appeal for the consideration of this particular case, but I have to remind the Committee, as I have had to remind them so often, that the whole scheme of the Royal Commission on Income Tax involves the interrelation of all its parts, and if you begin to make an alteration in this particular case, I am quite certain it will be impossible to resist a consideration of other cases as well. If my hon. and learned Friend has been listening to the Debate in this Committee during the last two days, I am sure he will recognise that other cases just as hard have been put from the Benches opposite and from the Labour Benches and that there is no possibility of differentiating between the embarrassing conditions in which some people are situated. To my mind, if we were to grant what is asked in this particular instance we should immediately rip up very many of the provisions which have been made as a result of the considerations of the Royal Commission.
Let me state what the particular position is. A widow is put in the same position, in regard to the allowance granted, namely, £135 a year, as is a widower, a spinster, or a bachelor, even although the spinster or the bachelor may have people who are just as much dependent on them as are the children of a widow upon her. Infinite cases could be brought up, to my certain knowledge, of a character just as impressive as the case which my hon. Friend has presented. The suggestion is, that the widow should get £225 a year allowance in the same way as if her husband were still alive. In most cases, no doubt, the husband is a source of support to his wife while he is there; in many cases he is not. If you begin to talk about hard eases, you could immediately conceive of a case, which might be presented to raise a particular situation, in which a wife is living at home 2142 with her husband and where, so far from being a help, that husband is an embarrassment. So, if a widow is entitled to get an allowance of £225 a year, how much ought she to be allowed if she has got to support her husband? There would be no answer to such an argument. You must draw the line somewhere. We should give the scheme of the Royal Commission a fair chance of operation for a period which will give every opportunity for a discussion of its merits and not begin, when it has been so shortly in operation, to make changes in it. This proposal would cost the Exchequer £250,000 a year. For that, amongst the other reasons I have suggested, I do not think the Clause can be accepted.
§ Question, "That the Clause be read a Second time," put, and negatived.