HC Deb 15 June 1925 vol 185 cc209-12
Mr. D. GRENFELL

I beg to move, in page 11, line 20, to leave out the words "and every subsequent year."

The object of this Amendment is to ensure that this new practice of half-yearly assessments shall not be continued if it is found to be prejudicial to the interests of the wage earners and an incumbrance to the tax inspectors. We find that the incidence of the tax, owing to the fall in wages and irregularity in employment, has now passed away from a very large number of workers who were called upon to pay each quarter. If this proposal be carried, it may involve hardship on a workman who is in regular employment for six months and without regular employment for the next half-year. For that reason we say that this should not be adopted as a permanent practice. If the right hon. Gentleman desires to adopt it, he should watch very closely the number of wrong assessments which are made in the half-year as compared with the number under the present system. We ask him not to establish this as a permanent Measure, but that it should be only for the year 1925–26.

Mr. GUINNESS

I think the hon. Member's apprehension has no real foundation in fact. The reference to future years is in no way binding, and it will always be open at any future time to put it right if hardship is found to arise. In view of the reduction of the rates of Income Tax, coupled with the fall in the earnings of weekly wage-earners, the cost of collection in these cases has become quite out of proportion to the return, and, if the Committee will allow us to collect Half-yearly instead of quarterly, we shall save £100,000 a year. There will really be no hardship, because, although we quite appreciate that the weekly wage-earner is not in a position to meet big bills, yet, under this system of half-yearly collection, he will actually be called upon, in every case except that of the single man with an income of more than £350, to pay a less lump sum down at the end of his half-year than he used to pay for a quarter in the days when this was first started, and when the Income Tax rates were higher. On the lower scale it works out in this way: A married man without dependants only reaches the half-yearly obligation to pay a week's wages if his income is over £501. In that case the obligation and the weekly wage are £9 12s. In 1919–20 the man with that same income on a weekly basis, namely, £9 12s. 11d., had to pay, not £9 12s. 11d. for a half-year, but £10 4s. 5d. for a quarter, and, if he was able to find that burden bearable by means of the machinery of stamps and so on, I do not think hon. Members opposite need have any apprehension that any real difficulty will be found under this new arrangement.

Mr. D. GRENFELL

I am afraid I did not make myself clear. My point of view was with regard to an annual instead of a six-monthly assessment. The explanation of the right hon. Gentleman, however, satisfies me that the arrangement is not intended to be permanent, and I am prepared to withdraw the Amendment.

Captain BENN

No. I think the hon. Gentleman is carrying concession too far when he proposes to withdraw his Amendment. What the right hon. Gentleman wants to do is to settle this question now and bury it. The Income Tax is an annual tax, and, if the right hon. Gentleman takes out these words, it will mean that he will have to come to the House each year to justify this procedure, which is what my hon. Friend desires. We only desire a one year's test. The right hon. Gentleman tells us that we can move Amendments next year, but we know what that means from experience in the past, when our Amendments have had no success. If this Amendment is justifiable—and a case has been made for it—I cannot see why it should not be accepted, and why The Financial Secretary should not come forward himself next year and justify any other course that may then be necessary.

12 M.

Mr. HAYDAY

I hope the Financial Secretary will reconsider the position he has taken up, and will agree with this Amendment. One must admit that there has been some concession in the departure from the quarterly assessments, but these quarterly assessments were instituted during a war period, when wages were abnormal and there was more or less continuity of employment for persons engaged in industry. The position now is that seasonal trades are back again, and it is possible for persons to be employed in a seasonal trade, as they are in large numbers, and while during one period of six months they may reach the taxable limit, during the next four or five months they may have a depreciated income, and then it is for them to apply for a refund of any payment they may have made. But there are great difficulties in the way, and I think it will be appreciated that the average workman very often gives up all chance of recovering, when he takes up correspondence with the tax-collecting people, any refund that may be due to him. If the right hon. Gentleman will agree to strike out these words, the Government could then come forward next year, after their experience. If the experience is bad, there will be no need to raise the question again, while if it is good, and a case is made out, the position will be strengthened. If, however, it is left to a minority to move an Amendment on what may appear to be a quite subsidiary matter, of less importance than the larger points that are involved in a Budget, their difficulties are much greater in getting an Amendment through than would be the case if the Chancellor of the Exchequer came forward to justify the continuance of the arrangement in such circumstances.

Mr. TREVELYAN THOMSON

We on these benches think that a reasonable case has been made out for this Amendment. Apart from the merits of the case, surely it is only right that the Committee itself should keep control over its procedure by requiring these words to be struck out, so that next year the House will have its say as to whether it is desirable that they should be put in or not. In the first place, it is a practical suggestion, in connection with this new-working of the collection of Income Tax, that we should see how this new arrangement works; and, secondly, on the constitutional point, we should have the control ourselves.

Mr. CHURCHILL

This is a very limited point, and, if it can be so handled as to be satisfactory to the general body of the Committee, I should be very anxious to take that course. I think, myself, that there will be no hardship or difficulty in this matter, and, as has been pointed out by the Financial Secretary, the amounts to be paid, as a general rule, on the half-yearly assessment, will be less than they were on the quarterly assessment only two or three years ago. That is due to the very large remission which has been effected, with general concurrence, in regard to this class of taxpayers. I do not think there will be any hardship or difficulty, but still, if the Committee feel that they would like to keep this matter under review for another year, I should be willing to meet that wish and leave out the words "and every subsequent year," it being understood that if things go right next year we should then insert the words and leave them in, because we do not want each year to have a large number of small points coming up in connection with taxation; we want to get matters settled as much as possible. We are ready to have a year's trial before asking the Committee definitely to commit themselves.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.