HC Deb 15 June 1925 vol 185 cc201-9
Mr. DALTON

I beg to move, in page 10, line 7, to leave out the word "one-sixth," and to insert instead thereof the word "one-fifth."

This Amendment is to increase the earned Income Tax allowance from one-sixth to one-fifth. The millionaires have had their pound of flesh, and I now make a plea for the small wage-earners who come just above the Income Tax exemption level. The effect of the Amendment would be to give a very slight—compared with what the super-tax payers have just received—remission of Income Tax for that section of the community which works for its living. I do not propose to occupy much time in moving this Amendment, although we do propose to take a division on it in order that the country may be able to distinguish clearly between the attitude of the Government towards the super-tax payer and the attitude of the Government to- wards the wage-earner with £3 or £4 a week. I hope, however, a division may be rendered unnecessary by the Government accepting this very reasonable Amendment.

The FINANCIAL SECRETARY to the TREASURY (Mr. Guinness)

The hon. Member has moved to leave out "one-sixth" and insert "one-fifth." There is a second Amendment on the Paper by a Member of the Liberal Party to increase the allowance still further to one-fourth. The first proposal would mean a loss in revenue of £3,100,000 in a full year, but the proposal of the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) would cost a good deal more, because not only would he increase the allowance to one-fourth, but by a further Amendment, he would help the better-to-do class, giving them the benefit up to a higher level by raising the maximum, which is now £250, to £400. I do not think we need attach too much importance to this Amendment, seeing that this is the fourth year in succession that it has been moved.

Captain BENN

Will the right hon. Gentleman say what the proposal of the hon. and gallant Member for Hull (Lieut.-Commander Kenworthy) would cost?

Mr. GUINNESS

£9,750,000 in a full year, as against £3,100,000 in the case of the more limited Labour Amendment, which affects a smaller class of income-tax payers. The Amendment was first moved four years ago by the hon. Member for Rothwell (Mr. Lunn), who was Parliamentary Secretary, Overseas Trade Department, in the late Labour Government. The next year it was also moved by an hon. Member on the Labour benches. The following year it was moved by a Liberal, and the Labour Party, who had been so staunch in their support on two former occasions, when they had the opportunity of doing something definitely turned the Amendment down. That was the fact that consoled me when I heard the threat of the hon. Gentleman who moved the Amendment—that it would enable the country to distinguish between the attitude of the Government towards the richer or poorer classes. I should rather say that it will enable them to judge between the professions of the Labour Party when they are not responsible, and their performances when they are. The country will remember that whereas the Labour Party last year turned down the Amendment that they had supported when in Opposition we have brought forward a definite remission on earned income costing £7,500,000 in a full year.

Captain BENN

While I intended to move a later Amendment standing in the name of the right hon. and gallant Gentleman the Member for Central Hull (Lieut.-Commander Kenworthy), the issue can be fairly covered on the present Amendment;

therefore, I propose to say a few words on it. After all has been said as to the Labour Party moving this Resolution one year and opposing it the next, and the following year the Resolution being proposed and opposed, it leaves us here, that so far as I can see, the party with which I am associated has the only clean record on the matter. But the real point to consider is the balance of the Budget: whether the Budget has come to the relief of those who need it most by putting the burden on the strongest, or whether the reverse is true! Therefore, the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) seems to me to have a good answer, certainly as regards last year, because any remission of taxation that could be made was made in favour of the poorer people, and that was as much as could be done in one year. That is the real defence and the real reason that justifies the moving of this Amendment to-day, not the merits of this particular proposal, because there are many proposals, as the hon. and gallant Gentleman will see when the new Clauses are reached. But the real question is the balancing of the Budget. Does it justify us in asking that the poor should have same consideration? That is the case made by the Mover of the Amendment. Really, I was surprised at the courage of the Financial Secretary. He does not pretend to explain why it was better to give £10,000,000 to those who did not need it than £3,000,000 to those who did! He gave no justification whatever of his action. I do not think any hon. Gentleman opposite would care to get up and justify the Government's action.

Question put, "That the words 'one-sixth' stand part of the Clause."

The Committee divided: Ayes, 246; Noes, 119.

The following Amendment stood on the Order Paper in the name of Lieut.-Commander KENWORTHY:

In page 10, line 9, to leave out the word "one-sixth" and insert instead thereof the word "one-fourth."

The DEPUTY-CHAIRMAN

The Amendment standing in the name of the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) is covered by the decision of the Committee on the last Amendment.

Captain BENN

I beg to move, in page 10, line 9, to leave out the words "two hundred and fifty" and to insert instead thereof the words "four hundred."

I hope the Government will be able to accept this Amendment.

Mr. GUINNESS

I am sorry that I cannot satisfy the hon. and gallant Member's anxiety for the Super-tax payer in this respect. We have given all the remissions we can, and we do not think that we should be justified in granting such a large remission on earned income as is involved in this Amendment. I cannot understand how the hon. and gallant Member can reconcile moving this Amendment with the indignation which he just now expressed at our remission of taxation in the interests of the Super-tax payer. Anyhow we have not got the necessary resources to provide for the remission and we must ask the Committee to keep the Bill as it stands.

Captain BENN

I think the wording of the Clause is very obscure. It cer- tainly was not very clear to me. I shall not press the Amendment.

Amendment, by leave, withdrawn.

The following Amendment stood on the Order Paper in the name of Mr. H. WILLIAMS:

In page 10, line 14, after the word "he," to insert the words "or she."

The DEPUTY-CHAIRMAN

I shall not make up my mind whether or not to select the Amendment which stands in the name of the hon. Member for Reading (Mr. H. Williams) until he explains it a little more. I am not quite clear as to the effect it will have.

Mr. H. WILLIAMS

The object is to make it quite clear that the relief provided will apply to widows and spinsters. I understand that under the Interpretation Act the word "he" means "she," but in this particular case there is a reference to "his wife living with him" and I fear that it might lead to an interpretation of the word "he" that would not be in accordance with the wishes of the House. I understand, however, that my second Amendment—in line 14, after the word "or," to insert the words "in the case of a married man"—would give the necessary interpretation, and would not have a prejudicial effect in other cases where the word "he" is used to include the word "she."

The DEPUTY-CHAIRMAN

After the hon. Member's explanation, I think I shall be justified in not selecting the Amendment, leaving it to stand over for consideration until the Report stage.

Clause ordered to stand part of the Bill.