NEW CLAUSE.—(Allowance for cost of education.) (Hansard, 7 July 1927)

§ Major HILLS
I beg to move, "That the Clause be read a Second time."
The object is to increase the allowance for the education of children over the amount given by the Finance Act, 1920. By that Act, a parent was entitled to deduct £36 in the case of the oldest child, and £27 for every subsequent child. By my Clause I increase that amount, and allow the parents to deduct the whole cost of the education, or rather, the excess of the cost over the £36 and the £27, respectively. This affects all classes of Income Tax payers. I know that the Income Tax payer is not always a very popular character in this House, but would point out to the Committee that the census returns show that the birth rate of the skilled class is much lower than that of the unskilled class. As far as we can tell, from the census of 1921, the difference is being accentuated. The first point I want to bring to the notice of the Committee is that the birth rate of the more skilled class is falling. Unless a married couple have three children, the whole of the stock will 1526 perish, for three children is the smallest family than can keep the stock going. When a married couple, with an income of from £400 to £600 a year, have a dependent child, the cost of that child is at least 10 per cent. of the income. I think it is a good deal more, and that for an income of £600 the child costs more than £60. Put it at £60, or 10 per cent., and the present abatements on the lower incomes are round about 1 per cent. in value—I mean that the value of the abatements at a given time in respect of children works out at somewhere about 1 per cent. of the taxpayer's income for the lower income. Of course, when you come to the higher income, the abatement being a fixed sum the percentage is much smaller. I think the cost of education should be deducted from the assessable income. I want to see the birth-rate increased. Although the concession would not be a very big one, still it would be something, but I look more to its psychological effect; I look more to the effect which it would produce in the minds of the people who have children, the cost of educating whom will be made not so serious a charge upon their incomes. I do not want to stint the education of the children, and I would particularly point to the effect that the Amendment would have upon the cost of university education, of that valuable part of education which is given in the last years. Unless you take off from the assessable income the amount spent on the last part of education, the cost of university education, there is a great risk that the children will not be sent to the university, and a large part of what has been spent on their primary and secondary education would be wasted. I want to see all boys and girls who are suitable for it being enabled to go right to the end of their educational course; I do not want it to be stopped at the age of 14 or 16. Surely it would pay, and pay many times over, to submit to the small loss of revenue which this concession would involve if we could at the same time encourage the fertility of certain classes of the community who are not now contributing their fair quota of the population and encourage parents to continue the education of their children up to the university stage.
I hope my right hon. Friend the Financial Secretary to the Treasury may have 1527 some words of comfort for me. There is a very strong case for this concession. When the original concession was made in 1920, the Income Tax was six shillings in the £ and therefore the loss to the Revenue in taking off the amount which I now propose would be less than it was then. I do hope that my right hon. Friend will have some words of comfort for me and that he will make the concession which I propose.

§ Mr. McNEILL
My hon. and gallant Friend twice repeated that he hoped I would have some words of comfort for him, but I am sorry to have to tell him that I have none. I must point out that this new Clause has a fantastic aspect which he does not seem to suspect. The indisputable thing about it is that the advantage that it gives is in inverse proportion to the merits of the particular claimants. In addition to that, the wealthier the person is the more advantage he will get.

§ Major HILLS
But not in the percentage.

§ Mr. McNEILL
As far as I can gather, it would practically be of no advantage at all to the poorer classes who, in any case, cannot afford to send their children to the more expensive schools. My hon. and gallant Friend puts no limit, no maximum at all. Alter allowing for the existing deduction from the Income Tax, which is a very moderate sum, then the whole of the rest of the money to be spent on the education of the child is to be treated also as a deduction. That is to say, a man who sends his child to an expensive school, which might cost him £300 a year, claims his deduction, and, under my hon. and gallant Friend's Clause, he would get the advantage of sending that boy to Eton partly at the expense of the State. That appears to me to be a fantastic proposal. If he had suggested a limit or a maximum, there might have been something to be said for it; but, as it has been proposed, there is nothing to be said for it. It would actually mean, in many cases, that under the Clause the State would be contributing to the cost of the education of the wealthy. My hon. and gallant Friend says that the cost to the revenue would be trifling. How does he know that? We have not been able at the Treasury to form any estimate of what 1528 the cost would be, but it appears to me that, if the Clause were passed in the form in which it has been moved, the cost to the Treasury might be very considerable, and it would be given to those who least require help.

§ Mr. HAYDAY
I quite agree with the right hon. Gentleman who has just spoken. I feel that the hon. and gallant Gentleman who moved this new Clause has started from the wrong basis entirely. He spoke about the necessity of encouraging people who are not contributing their fair quota to the country, and he said that his proposal would be an inducement to them because it would free them from some financial liability. I would suggest to him that it would be much better if there was a greater amount allowed for the children at present existing. Let him start on that. It often happens that in the case of a brilliant child, who is one of a large family, where the income may bring the parent within the taxable limit, the margin is often so small and the sacrifice that is called for is so great, that the tendency is to yield to the temptation to put the boy or girl into industry at the earliest possible time. If the allowances for the children were sufficiently generous, with a little more sacrifice the parent would be anxious and ready to cultivate the educational tendencies of the child rather than to use him or her to augment a limited income.
There was a time when the spaces on the Income Tax papers were not sufficiently numerous for me to put in my claim. In a case of that sort, you would have been helping me, and people like me, with an income that brought them, apart from the number of children, within the taxable limit. If you had given us greater freedom by an increased allowance before Income Tax was demanded, there would have been a greater chance for those children as they grew up. If there is only one child in the family up to, say, 16 years of age, and the income was £300 to £400 a year, that child might be sent to an expensive school. It may be that a well-to-do middle-class parent with a small family responsibility may be able to give to one of his children an expensive education, and, under this proposal, he would get more in rebate than I would get with six children. It is too one-sided. If there is to be any variation 1529 in allowances to encourage the building up of our population, and to free the parent from anxiety when the child shows educational tendencies, you must give a larger allowance where the handicap on the parent is great, and not give so freely where the handicap is less.

§ Lieut. - Commander KENWORTHY
I think quite one-half of the speech of the hon. Member for West Nottingham (Mr. Hayday) was actually in favour of the proposed new Clause. I do not think that it was quite fair for the right hon. Gentleman—he is always very fair, but on this occasion I think he rather departed from his usual fairness—to bring in the case of parents sending their children to Eton. How many parents send their children to Eton? It is not a question of the limited few who send their children to the great public schools.

§ Mr. McNEILL
The hon. and gallant Gentleman ought to know that I mentioned Eton as a typical case. It does not refer in the least to particular individuals who go to that school. If he likes to substitute for Eton the words "an expensive establishment" he is welcome to do so.

§ Lieut. - Commander KENWORTHY
Let us say an expensive school. What of it? The idea of this Clause is to try to make up for the loss of child life in the country owing to the burdens that successive Governments have placed on the taxpayers. We sometimes hear from the advocates of birth control, that if only you raise the standard of life of the people it will not be necessary for those measures to be taken.