§ Income arising from a studentship or fellowship granted by a trust to a person exclusively for the purpose of his pursuing research studies under the auspices of any university in Great Britain shall be exempt from Income Tax (including Super-tax), and no account shall be taken of any such income in computing the amount of income for the purposes of the Income Tax Acts.—[Sir G. Butler.]
§ Brought up, and read the First time.
§ Sir GEOFFREY BUTLERI beg to move, "That the Clause be read a Second time."
This Clause does not seek to establish any new principle, but aims at clearing up doubt as to the application of a principle already admitted, because under Section 28 of the Finance Act, 1920, scholarships of various kinds are exempted from Income Tax if a person be receiving instruction at a university, college, school or other educational establishment. The Committee will notice that what is exempted up to date is a scholar receiving, so to speak, his ordinary education. If he has passed through the ordinary preliminary stage and taken up research work, I have never heard that the exemption from Income Tax was thereby lost. Certain individuals come into the picture only at the later stage. I can instance some important foundations, such as the famous 1851 Exhibitions, which have done so much in promoting scientific research, the Beit research fellowships and a few others. These are given to men and women after graduation. I find that the average sum is about £250 per 2172 annum, and I calculate there will not be more than 250 persons affected. One might well ask why such persons should not be exempted. I maintain the Government have admitted the case, because the grants for research training given by the Scientific and Industrial Research Board are already exempted. When I pointed that out to the Financial Secretary to the Treasury I received, as one would expect, a very kind letter which I cannot believe was framed by his luminous brain, but rather by a Treasury casuist, in which he argued that these were grants for training in research as opposed to research work and laid stress upon their eleemosynary character. The only comment I will make on that letter is that it would make a Venetian Jesuit of the 18th Century blush.
I make my appeal to the Chancellor on the very fact that it is pure and undiluted research work for which I ask exemption. One does have sometimes the impression that great discoveries spring full-fledged from the brain of an individual, and I think that nobody will contradict me when I say scientific advance nowadays is more often the product of a school of thought and that a great research worker is, beside being that, the organiser of an army, a kind of Chief of a general staff. The Germans realised that for about 100 years yet the weakness of the German system was that the professors and leading scientists sapped the strength of the assistant workers. That we have so far avoided in England, but we shall rival German research only in so far as we are able to keep it free from that tendency and keep a constant supply of men of first-rate ability flowing into the centres of research. It seems to me that wise legislation would aim at encouraging these young scientists just at a time when they have taken their degrees. It is a very poor outlook at this moment when he has to choose between academic work on one hand, and on the other a calling more remunerative. I have seen only this week a man of great ability who might have devoted himself to the purely scientific side, having to do scientific research work for commercial firms. It is very difficult when one has young people to advise to tell them to go in for scientific research. It is 2173 perfectly easy to say that the answer to this is to found bigger scholarships, but it is not really so, because then fewer men will be helped. It is an old principle that the Government should co-operate with private effort. We have just a few of these scholarships and foundations established. It is very difficult to get money. I do appeal to the Financial Secretary, whose mind I know to be a mixture of justice and mercy, and to the Chancellor of the Exchequer, who has exactly the same qualities. I am sorry to have kept the House so long, but the subject is so important. I do urge it in the name of a great many research workers who are working at a great disadvantage.
Mr. GRAHAMI find it very difficult to resist the appeal made by my hon. Friend, but, unfortunately, it is the painful duty of anyone who occupies this office to set facts without mercy before the Committee. The position as regards these scholarships is that, under the law as it stands, there is an exemption from Income Tax of the scholarship or whatever the form of the exhibition may be which is held by anyone receiving full-time instruction at a University, school, etc. Already there is a very large measure of exemption from Income Tax in the direction which the hon. Member has in mind. But he proceeds beyond that in this Clause, and in particular cites the case of those grants and exhibitions under the Department for Scientific and Industrial Research. I must take the responsibility for the reply which was sent from the Treasury, because these grants are given under certain definite Regulations, and they are not really of the nature of scholarships or awards in a kind of honorific sense. They are rather
§ grants to enable people who receive, them to postpone taking up paid work, and they are strictly related to the circumstances of the recipient, which rather emphasises—although I do not stress the point—their character. I feel, however, that, having regard to the two classes of exemptions which exist, it would be very difficult for any Chancellor of the Exchequer to make a further departure without a serious inroad upon recognised Income Tax practice. It does not matter very much who stands at this Box, or to which party he belongs, there are certain traditions and principles in the Income Tax by which he must abide. If we are going to assist the universities on educational research, or whatever it may be, in a sphere which we have all at heart, the way to do that is obviously by direct grant, and not by the indirect route. Our experience on the Royal Commission on Income Tax made it abundantly plain that the more you introduce exemptions into Income Tax, the more you exempt particular callings here and there, then the more you tend to break down the whole structure, and you only create a great mass of anomalies which inevitably give rise to the need for a Royal Commission doing its best to patch them all up. The logic of the situation points to a limitation of the concession to the extent to which it has already gone, and, accordingly, while having the greatest sympathy with the object of my hon. Friend, I am obliged to tell him that the Chancellor of the Exchequer is unable to accept this Clause.
§ Question put, "That the Clause be read a Second time."
§ The Committee divided: Ayes, 100; Noes, 185.
2175| Division No. 140.] | AYES. | [2.36 a.m. |
| Amery, Rt. Hon. Leopold C. M. S. | Cowan, D. M. (Scottish Universities) | Hacking, Captain Douglas H. |
| Baldwin, Rt. Hon. Stanley | Crooke, J. Smedley (Deritend) | Hall, Lieut.-Col. Sir F. (Dulwich) |
| Banks, Reginald Mitchell | Curzen, Captain Viscount | Hannon, Patrick Joseph Henry |
| Barnston, Major Sir Harry | Dalkeith, Earl of | Harland, A. |
| Becker, Harry | Davidson, Major-General Sir J. H. | Harmsworth, Hon. E. C. (Kent) |
| Birchall, Major J. Dearman | Davies, David (Montgomery) | Hartington, Marquess of |
| Bird, Sir R. B. (Wolverhampton, W.) | Dawson, Sir Philip | Harvey, C. M. B.(Aberd'n & Kincardne) |
| Blades, Sir George Rowland | Deans, Richard Storry | Hennessy, Major J. R. G. |
| Blundell, F. N. | Dixey, A. C. | Herbert, Dennis (Hertford, Watford) |
| Bowyer, Capt. G. E. W. | Eden, Captain Anthony | Hope, Rt. Hon. J. F. (Sheffield, C.) |
| Brittain, Sir Harry | Eyres-Monsell, Com. Rt. Hon. B. M. | Howard, Hn. D.(Cumberland, Northrn.) |
| Burman, J. B. | Ferguson, H. | Hughes, Collingwood |
| Butt, Sir Alfred | Gates, Percy | Inskip, Sir Thomas Walker H. |
| Chadwick, Sir Robert Burton | Gaunt, Rear-Admiral Sir Guy R. | Jackson, Lieut.-Colonel Hon. F. S. |
| Chamberlain, Rt. Hon. N. (Ladywood) | Gibbs, Col. Rt. Hon. George Abraham | Kay, Sir R. Newbald |
| Clayton. G. C. | Greene, W. P. Crawford | Kindersley, Major G. M. |
| Cope, Major William | Greenwood, William (Stockport) | King, Captain Henry Douglas |
| Courthope, Lieut.-Col. George L. | Guinness, Lieut.-Col. Rt. Hon. W. E. | Lamb, J. Q. |
| Lumley, L. R. | Remer, J. R. | Steel, Samuel Strang |
| Makins, Brigadier-General E. | Rhys, Hon. C. A. U. | Stuart, Hon, J. (Moray and Nairn) |
| Milne, J. S. Wardlaw | Richardson, Lt. Col. Sir P. (Chertsey) | Sunlight, J |
| Moore-Brabazon, Lieut.-Col. J. T. C. | Roberts, Samuel (Hereford, Hereford) | Tichlield, Major the Marquess of |
| Morrison-Bell, Majord Sir A. C. (Honiton) | Ropner, Major L. | Warrender, Sir Victor |
| Newman, Sir R. H. S. D. L. (Exeter) | Roundell, Colonel R. F. | Wells. S. R. |
| Nicholson, O. (Westminster) | Russell, Alexander West (Tynemouth) | Wheler, Lient.-Col. Granville C. H. |
| Nield, Rt. Hon. Sir Herbert | Samuel, A. M. (Surrey, Farnham) | Wilson, Sir C. H. (Leeds, Central) |
| O'Neill, Rt. Hon. Hugh | Sandeman, A. Stewart | Windsor-Clive, Lieut.-Colonel George |
| Owen, Major G. | Sassoon, Sir Philip Albert Gustave D. | Wise, Sir Fredric |
| Penny, Frederick George | Savery, S. S. | Wragg, Herbert |
| Percy, Lord Estate (Hastings) | Sheffield, Sir Berkeley | Yerburgh, Major Robert D. T. |
| Perkins, Colonel E. K. | Shepperson, E. W. | |
| Philipson, Mabel | Smith-Carington, Neville W. | TELLERS FOR THE AYES— |
| Pielou; D. P. | Somerville, Daniel (Barrow-in-Furness) | Sir Geoffrey Butler and Mr |
| Pownall, Lieut.-Colonel Assheton | Spero, Dr. G. E. | Balfour. |
| Raine, W. | Starmer, Sir Charles | |
| NOES. | ||
| Ackroyd, T. R. | Henderson, T. (Glasgow) | Palmer, E. T. |
| Adamson, Rt. Hon. William | Henderson, W. W. (Middlesex, Enfield) | Parkinson, John Allen (Wigan) |
| Adamson, W. M. (Staff., Cannock) | Hillary, A. E. | Pattinson, S. (Horncastle) |
| Alexander, A. V. (Sheffield, Hillsbro') | Hindle, F. | Perry, S. F. |
| Ammon, Charles George | Hirst, G. H. | Pethick-Lawrence, F. W. |
| Aske, Sir Robert William | Hobhouse, A. L. | Phillipps, Vivian |
| Attlee, Major Clement R. | Hodges, Frank | Potts, John S. |
| Baker, Walter | Hoffman, P. C. | Purcell, A. A. |
| Banton, G. | Howard, Hon. G. (Bedford, Luton) | Raffety, F. W. |
| Barclay, R. Noton | Hudson, J. H. | Ramage, Captain Cecil Beresford |
| Barnes, A. | Issacs, G. A. | Rathbone, Hugh R. |
| Batey, Joseph | Jackson, R. F. (Ipswich) | Rea, W. Russell |
| Birkett, W. N. | Jenkins, W. (Glamorgan, Neath) | Rees, Sir Beddoe |
| Bonwick, A. | Jenkins, W. A. (Brecon and Radnor) | Richards, R. |
| Briant, Frank | John, William (Rhondda, West) | Richardson, R. (Houghton-le-Spring) |
| Broad, F. A. | Johnston, Thomas (Stirling) | Romeril, H. G. |
| Bromfield, William | Johnstone, Hearcourt (Willesden, East) | Royle, C. |
| Brown, A. E.(Warwick, Rugby) | Jones, C. Sydney (Liverpool, W. Derby) | Scurr, John |
| Brown, James (Ayr and Bute) | Jones, Henry Haydn (Merioneth) | Seely, H. M. (Norfolk, Eastern) |
| Buckle, J. | Jones, J. J. (West Ham, Silvertown) | Sexton, James |
| Charleton, H. C. | Jones, Rt. Hon. Leif (Camborne) | Sherwood, George Henry |
| Clarke, A. | Jones, Morgan (Caerphilly) | Short, Alfred (Wednesbury) |
| Climie, R. | Jones, T. I. Mardy (Pontypridd) | Smith, Ben (Bermondsey, Rotherhithe) |
| Collins, Sir Godfrey (Greenock) | Jowitt, W. A. (The Hartlepools) | Smith, W. R. (Norwich) |
| Compton, Joseph | Kedward, R. M. | Snell, Harry |
| Comyns-Carr, A. S. | Keens, T. | Snowden, Rt. Hon. Philip |
| Costello, L. W. J. | Kennedy, T. | Spence, R. |
| Cove, W. G. | Kenworthy, Lt.-Com. Hon. Joseph M. | Spoor, B. G. |
| Crittall, V. G. | Kirkwood, D. | Stamford, T. W. |
| Darbishire, C. W. | Lansbury, George | Stranger, Innes Harold |
| Davies, Rhys John (Westhoughton) | Laverack, F. J. | Sturrock, J. Leng |
| Dickie, Captain J. P. | Law, A. | Tattersall, J. L. |
| Dickson, T. | Lawson, John James | Terrington, Lady |
| Dodds, S. R. | Leach, W. | Thomson, Trevelyan (Middlesbro, W.) |
| Duckworth, John | Lee, F. | Thornton, Maxwell R. |
| Dukes, C. | Lessing, E. | Thurtle, E. |
| Duncan, C. | Linfield, F. C. | Toole, J. |
| Edwards, G. (Norfolk, Southern) | Loverseed, J. F. | Tout, W. J. |
| Egan, W. H. | Lunn, William | Vivian, H. |
| England, Colonel A. | McEntee, V. L. | Wallhead, Richard C. |
| Falconer, J. | Macfadyen, E. | Ward, G. (Leicester, Bosworth) |
| Fletcher, Lieut.-Com. R. T H. | Mackinder, W. | Watson, W. M. (Dunfermilne) |
| Gardner, B. W. (West Ham, Upton) | Maclean, Neil (Glasgow, Govan) | Watts-Morgan, Lt.-Col. D. (Rhondda) |
| George, Major G. W. (Pembroke) | Mansel, Sir Courtenay | Webb, Rt. Hon. Sidney |
| Gibbins, Joseph | March, S. | Wedgwood, Col. Rt. Hon. Josiah C. |
| Gillett, George M. | Marley, James | Whiteley, W. |
| Gorman, William | Martin, F. (Aberdeen & Kinc'dine, E.) | Williams, A. (York, W. R., Sowerby) |
| Gosling, Harry | Martin, W. H. (Dumbarton) | Williams, David (Swansea, E.) |
| Gould, Frederick (Somerset, Frome) | Middleton, G. | Williams, Dr. J. H. (Lianelly) |
| Graham, W. (Edinburgh, Central) | Milis, J. E. | Williams, Col. P. (Middlesbrough E.) |
| Greenwood, A. (Nelson and Colne) | Mond, H. | Williams, Maj. A. S. (Kent, Sevenoaks) |
| Grenfell, D. R. (Glamorgan) | Morris, R. H. | Williams, T. (York, Don Valley) |
| Grundy, T. W. | Morrison, Herbert (Hackney, South) | Williams, Lt.-Col. T.S.B. (Kennington) |
| Hall, Fredk. (Yorks, Normanton) | Morrison, R. C. (Tottenham, N.) | Willison, H. |
| Hall, G. H. (Merthyr Tydvil) | Morse, W. E. | Wilson, C. H. (Sheffield, Attercliffe) |
| Harbord, Arthur | Mosley, Oswald | Wilson, R. J. (Jarrow) |
| Hardie, George D. | Moulton, Major Fletcher | Windsor, Walter |
| Harris, Percy A. | Murray, Robert | Wright, W. |
| Hartshorn, Rt. Hon. Vernon | Murrell, Frank | Young, Andrew (Glasgow, Partick) |
| Harvey, T. E. (Dewsbury) | Naylor, T. E. | |
| Haycock, A. W. | Nixon, H. | TELLERS FOR THE NOES.— |
| Hayday, Arthur | Oliver, P. M. (Manchester, Blackley) | Mr. John Robertson and M. |
| Henderson, A. (Cardiff, South) | Paling, W. | Warne. |