§ A, voluntary contributor under the National Health Insurance Act, 1924, or the Widows', Orphans' and Old Age Contributory Pensions Act, 1925, shall be entitled to a deduction of the amount of the annual contributions paid by him, or deducted from his salary or stipend, under either or both of those Acts, from any profits or gains in respect of which he is liable to be charged for Income Tax.—[Mr. Townend.]
§ Brought up, and read the First time.
§ Mr. TOWNENDI beg to move, "That the Clause be read a Second time."
This Clause is a simple one and the reasons for submitting it are perfectly simple. I have no doubt that the Financial Secretary to the Treasury has already received instructions to accede to this very simple request, so that there is no need for me to traverse a wide range of arguments. It will be noticed that the Clause deals with two sections of the community, namely, those who pay voluntary contributions for National Health Insurance and those who, in addition, have taken advantage of the recent legislation providing for assistance to widows and orphans and making further provisions in respect of Old Age Pensions. I want to pay tribute to the Treasury and the Ministry of Health for providing this legislation for the benefit of a most deserving section of the people. Under the Widows', Orphans' and Old Age Contributory Pensions Act, 1925, there is an extension of the principle of Old Age Pensions to those who were formerly denied them. Persons are enabled to make provision for their widows if, in addition to paying their own contributions, they pay the contributions, 1484 which are normally paid by the employers. That is to say, those whose salaries or wages exceed the £250 per annum mark and who were excluded from the provisions of the former Old Age Pensions Act can now, under the new legislation, make arrangements for themselves and their widows by paying both their own contributions and the contributions of the employer. Unfortunately, there is no relief provided in respect of these payments from Income Tax. When these persons make out their Income Tax returns and they pay premiums for endowment or insurance policies, they are entitled to relief from Income Tax in respect of such payments, but when it comes to the sums they pay in respect of voluntary contributions under the National Health Insurance Act or the Widows', Orphans' and Old Age Contributory Pensions Act, no allowance is made.
We suggest that, if it is justifiable to make allowances for insurance premiums, then there should be no difficulty whatever in the Government agreeing to the same principle being applied in respect of voluntary contributions made by those whose salaries are approximately £250 and over. The same principle applies in the case of payments for superannuation benefit. We know that, if a man pays 2½ per cent. or 5 per cent, of his salary to enable himself or his widow to tike advantage of the benefits that the superannuation fund provides, relief is granted by the Treasury, and such payments are free from Income Tax. We suggest that as superannuation contributions and endowment insurance contributions are exempt, the same privilege should be extended in respect of voluntary contributions under the Widows', Orphans' and Old Age Contributory Pensions Act. There is a further argument which might 1485 be submitted for the consideration of the Committee. The contributions which the employer makes in respect of Health Insurance and Widows' and Orphans' and Old Age Pensions are allowed to be included in the overhead charges of the business. They are exempt, therefore, from the payment of Income Tax. I suggest that these considerations might be taken to heart by the Treasury and that they should respond to the appeal that we are making in submitting this new Clause. The only difference is that, whereas the employer is provided with relief because of his being able to include the contributions in his overhead charges, the voluntary contributor becomes, as far as this payment is concerned, his own employer. If exemption or relief be provided in the case of the employer, such relief ought therefore to be enjoyed by the voluntary contributor.
The Financial Secretary to the Treasury knows that the granting of such a concession would cost the country very little. The members of the community who will benefit are those who have only just passed the £250 a year mark—the £5 a week man—and we know that if there be any section of the community which is carrying a heavy burden it is certainly this section. There is very little protection offered to the members of this class, who stand almost alone. Really, the Treasury ought to bear in mind that this section of the community which is so often said to be the backbone of the nation, stands appealing to them for assistance in the direction indicated. I hope that they will bear in mind that they are a very deserving section of the community. If the Treasury desire any encouragement, surely what they did on Tuesday should be an added inducement to them to assist these people, because, in response to the claims made by more powerful interests and by more cogent arguments than those I can advance, but yet with no stronger case, they made very valuable concessions to Members on the opposite side of the House. There are no more deserving cases than the cases I have submitted. Therefore, I hope the Financial Secretary will view this proposition favourably and that he will be empowered by the Treasury to accept it. Then this appeal will not have been made in vain.
§ Mr. McNEILLI am genuinely sorry to have to disappoint the hon. Member in regard to this particular Clause, which I am unable to accept, but, at the same time, I think he is under a little misapprehension as to the way in which his proposal would work out. I do not know whether he realises that, so far as contributions under the National Health Insurance Act are concerned, no relief as a deduction from Income Tax is allowed whether the contributions are compulsory or voluntary. The hon. Member now proposes that relief should be given in the case of voluntary contributions. Therefore, on that point alone, there is an objection. If this Clause were carried, the effect would be that the voluntary contribution would be a legal deduction from Income Tax whereas the contribution made by the compulsory contributor would not be. One can imagine that if there were a case for allowing a deduction in respect of voluntary contributions, there would be a very much stronger case for giving a reduction in respect of compulsory contributions.
§ Mr. TOWNENDIs it not a fact that the compulsory contributions paid by the employer are included in the overhead costs of the firm, and therefore not assessable for Income Tax at all? That is the point I desire to make, that the employer's proportion of contributions for Health Insurance is included in overhead and business costs, and is, therefore, not assessable for Income Tax as stated by the Parliamentary Secretary.
§ Mr. McNEILLThat is a different point.
§ Mr. TOWNENDThat was the point I was making.
§ Mr. McNEILLThat is not the point of my hon. Friend's Clause. What the Clause would do would be to enable the contribution of the voluntary contributor to be a deduction from Income Tax, whereas it would not make it so in the case of the compulsory contributor. I think that is a vital objection, though it is not by any means the only objection. I should have to ask the Committee to reject this Clause on other grounds beside that. Generally speaking, the contributions under the Widows and Orphans Pensions Act of last year, and those under the National Health Insurance Act, are contributions for the sake of obtaining certain medical and deferred 1487 annuity benefits. There benefits have at present an actuarial value, and I should like to tell the hon. Member what that value is. The actuarial value of the benefits secured by the voluntary contributor is substantially in excees of the 1s. 3d. or the 1s. 6d. a week which he pays. In the case of a man 40 years of age, who was a voluntary contributor on the 4th January, 1926, the benefits under the 1925 Act alone are at present such as would require a contribution of 2s. 8½d. per week, and in addition he receives benefits under the National Health Insurance Act. That is, of course, under another name a subsidy from the State, and I venture to submit to the Committee that no case is made out why there should be a further subsidy
§ to the voluntary contributor, especially as the effects of the new Clause would mean that the more well-to-do the voluntary contributor is, the more benefits he would receive. That I am certain is not the intention of the hon. Member. I do not know what the cost to the Exchequer would be if this new Clause were adopted, and I shall not attempt to give any figure at all, but I think it would be quite substantial. It is not on the ground of the cost to the State that I resist this new Clause, but on the principles I have submitted to the Committee.
§ Question put, "That the Clause be read a Second time."
§ The Committee divided: Ayes, 124; Noes, 258.
1489| Division No. 246.] | AYES. | [5. 50 p.m. |
| Adamson, W. M. (Staff., Cannock) | Hardie, George D. | Salter, Dr, Alfred |
| Alexander, A. V. (Sheffield, Hillsbro') | Harris, Percy A. | Scrymgeour, E. |
| Ammon, Charles George | Hayday, Arthur | Sexton, James |
| Atkinson, C. | Henderson, Rt. Hon. A. (Burnley) | Shaw, Rt. Hon. Thomas (Preston) |
| Attlee, Clement Richard | Henderson, T. (Glasgow) | Shepherd, Arthur Lewis |
| Baker, J. (Wolverhampton, Bilston) | Hint, G. H. | Shiels, Dr. Drummond |
| Baker, Walter | Hirst, W. (Bradford, South) | Short, Alfred (Wednesbury) |
| Barker, G. (Monmouth, Abertillery) | Hore-Bellsha, Leslie | Sinclair, Major Sir A. (Caithness) |
| Barnes, A. | Hudson, J. H. (Huddersfield). | Slesser, Sir Henry H. |
| Batey, Joseph | Hutchison, Sir Robert (Montrose) | Smith, Ben (Bermondsey, Rotherhithe) |
| Bowerman, Rt. Hon. Charles W. | Jenkins, W. (Glamorgan, Neath) | Smith, H. B. Lees (Keighley) |
| Broad, F. A. | Johnston, Thomas (Dundee) | Smith, Rennie (Penistone) |
| Brown, Ernest (Leith) | Jones, J. J. (West Him, Silvertown) | Snell, Harry |
| Brown, James (Ayr and Bute) | Jones, Morgan (Caerphilly) | Snowden, Rt. Hon. Philip |
| Buchanan, G. | Jones, T. I. Mardy (Pontypridd) | Spoor, Rt. Hon. Benjamin Charles |
| Buxton, Rt. Hon. Noel | Kelly, W. T. | Stephen, Campbell |
| Cape, Thomas | Kennedy, A. R. (Preston) | Stewart, J. (St. Rollox) |
| Cluse, W. S. | Kennedy, T. | Strauss, E. A. |
| Collins, Sir Godfrey (Greenock) | Kirkwood, D. | Sutton, J. E. |
| Compton, Joseph | Lansbury, George | Taylor, R. A. |
| Connolly, M. | Lawrence, Susan | Thorne, G. R. (Wolverhampton, E.) |
| Cove, W. G. | Lee, F. | Thurtle, Ernest |
| Cowan, D. M. (Scottish Universities) | Lowth, T. | Tinker, John Joseph |
| Crawfurd, H. E. | MacDonald, Rt. Hon. J. R. (Aberavon) | Townend, A. E. |
| Dalton, Hugh | MacLaren, Andrew | Trevelyan, Rt. Hon. C. P. |
| Day, Colonel Harry | Maclean, Nell (Glasgow, Govan) | Varley, Frank B. |
| Dennison, R. | MacNeill-Weir, L. | Viant, S. P. |
| Duncan, C. | Maxton, James | Wallhead, Richard C. |
| Edge, Sir William | Morris, R. H. | Watson, W. M. (Dunfermline) |
| Edwards, C. (Monmouth, Bedwellty) | Morrison, R. C. (Tottenham, N.) | Watts-Morgan, Lt.-Col. D. (Rhondds) |
| Edwards, J. Hugh (Accrington) | Mosley, Oswald | Wedgwood, Rt. Hon. Josiah |
| Evans, Capt. Ernest (Welsh Univer.) | Murnin, H. | Wellock, Wilfred |
| Gardner, J. P. | Naylor, T. E. | Welsh, J. C. |
| Garro-Jones, Captain G. M. | Oliver, George Harold | Williams, C. P. (Denbigh, Wrexham) |
| Gillett, George M. | Palin, John Henry | Williams, David (Swansea, East) |
| Graham, D. M. (Lanark, Hamilton) | Paling, W. | Williams, Dr. J. H. (Lianelly) |
| Graham, Rt. Hon. Wm. (Edin., Cent.) | Parkinson, John Allen (Wigan) | Williams, T. (York, Don Vallay) |
| Grenfell, D. R. (Glamorgan) | Potts, John S. | Wilson, R. J. (Jarrow) |
| Groves, T. | Richardson, R. (Houghton-le-Spring) | Windsor, Walter |
| Grundy, T. W. | Ritson, J. | Wright, W. |
| Hall, F. (York, W. R., Normanton) | Robinson, W. C. (Yorks, W. R., Elland) | |
| Hamilton, Sir R. (Orkney & Shetland) | Rose, Frank H. | TELLERS FOR THE AYES.— |
| Mr. Whiteley and Mr. Hayes. | ||
| NOES. | ||
| Agg-Gardner, Rt. Hon. Sir James T. | Apsley, Lord | Beckett, Sir Gervase (Leeds, N.) |
| Albery, Irving James | Ashley, Lt.-Col. Rt. Hon. Wilfrid W. | Bellairs, Commander Carlyon W. |
| Alexander, E. E. (Leyton) | Baldwin, Ht. Hon. Stanley | Bonn, Sir A. S. (Plymouth, Drake) |
| Allen, J. Sandeman (L'pool, W. Derby) | Balfour, George (Hampstead) | Bennett, A. J. |
| Amery, Rt. Hon. Leopold C. M. S. | Balniel, Lord | Bentinck, Lord Henry Cavendish |
| Applin, Colonel R. V. K. | Beamish, Rear-Admiral T. P. H. | Berry, Sir George |
| Bethel, A. | Glimour, Lt.-Col. Rt. Hon. Sir John | Nelson, Sir Frank |
| Blundell, F. N. | Glyn, Major R. G. C. | Newman, Sir R. H. S. D. L. (Exeter) |
| Bourne, Captain Robert Croft | Goff, Sir Park | Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld.) |
| Bowyer, Capt. G. E. W. | Gower, Sir Robert | Nield, Rt. Hon. Sir Herbert |
| Briggs, J. Harold | Grace, John | Nuttall, Ellis |
| Brittain, Sir Harry | Graham, Fergus (Cumberland, N.) | O'Neill, Major Rt. Hon. Hugh |
| Brocklebank, C. E. R. | Grant, Sir J. A. | Oman, Sir Charles William C. |
| Brooke, Brigadier-General C. R. I. | Grattan-Doyle, Sir N. | Ormsby-Gore, Rt. Hon. William |
| Broun-Lindsay, Major H. | Greene, W. P. Crawford | Penny, Frederick George |
| Brown, Col. D. C. (N'th'l'd., Hexham) | Grenfell, Edward C. (City of London) | Percy, Lord Eustace (Hastings) |
| Brown, Brig.-Gen. H. C. (Berks, Newb'y) | Gretton, Colonel Rt. Hon. John | Perkins, Colonel E. K. |
| Buchan, John | Grotrian, H. Brent. | Perring, Sir William George |
| Bull, Rt. Hon. Sir William James | Gunston, Captain D. W. | Peto, Sir Basil E. (Devon, Barnstaple) |
| Bullock, Captain M. | Hacking, Captain Douglas H. | Pilditch, Sir Philip |
| Burman, J. B. | Hannon, Patrick Joseph Henry | Power, Sir John Cecil |
| Burton, Colonel H. W. | Harrison, G. J. C. | Pownall, Sir Assheton |
| Butler, Sir Geoffrey | Hartington, Marquess of | Price, Major C. W. M. |
| Butt, Sir Alfred | Harvey, G. (Lambeth, Kennington) | Radford, E. A. |
| Cadogan, Major Hon. Edward | Hawke, John Anthony | Ramsden, E. |
| Caine, Gordon Hall | Headlam, Lieut.-Colonel C. M. | Rawson, Sir Cooper |
| Campbell. E. T. | Henderson, Capt. R. H. (Oxf'd, Henley) | Reid. D. D. (County Down) |
| Carver, Major W. H. | Henderson, Lt.-Col. Sir V. L. (Bootle) | Remnant, Sir James |
| Cassels, J. D. | Heneage, Lieut.-Col. Arthur P. | Rentoul, G. S. |
| Cautley, Sir Henry S. | Henn, Sir Sydney H. | Rhys, Hon. C. A. U. |
| Cayzer, Sir C. (Chester, Cltv) | Hills. Major John Waller | Roberts, E. H. G. (Flint) |
| Cayzer, Maj. Sir Herbt. R. (Prtsmth.S.) | Hogg, Ht. Hon. Sir D. (St. Marylebone) | Roberts, Sir Samuel (Hereford) |
| Cecil Rt. Hon. Sir Evelyn (Aston) | Hohler, Sir Gerald Fitzroy | Ropner, Major L. |
| Chadwick, Sir Robert Burton | Holt, Capt. H. P. | Russell, Alexander West-(Tynemouth) |
| Chamberlain, Rt. Hon. N. (Ladywood) | Hopkins, J. W. W. | Rye, F. G. |
| Chapman, Sir S. | Horne, Rt. Hon. Sir Robert S. | Salmon, Major I. |
| Charteris, Brigadier-General J. | Howard-Bury, Lieut.-Colonel C. K. | Samuel, A. M. (Surrey, Farnnam) |
| Christie, J. A. | Hudson, R. S. (Cumberland, Whiteh'n) | Sandeman, N. Stewart |
| Churchman, Sir Arthur C. | Hume, Sir G. H. | Sanders, Sir Robert A. |
| Clayton, G. C. | Hurd, Percy A. | Sanderson, Sir Frank |
| Cobb, Sir Cyril | Hurst, Gerald B. | Sandon, Lord |
| Cohen, Major J. Brunel | Inskip, Sir Thomas Walker H. | Sassoon, Sir Philip Albert Gustave D. |
| Colfox, Major Wm. Phillip? | Jacob, A. E. | Savery, S. S. |
| Colman, N. C. D. | James, Lieut.-Colonel Hon. Cuthbert | Scott, Rt. Hon. Sir. Leslie |
| Conway, Sir W. Martin | Jones, G. W. H. (Stoke Newington) | Sheffield, Sir Berkeley |
| Cooper, A. Duff | Kidd, J. (Linlithgow) | Shepperson, E. W. |
| Cope. Major William | Kindersley, Major Guy M. | Skelton, A. N. |
| Couper, J. B. | King, Commodore Henry Douglas | Slaney, Major P. Kenyon |
| Courtauld, Major J. S. | Kinloch-Cooke, Sir Clement | Smith, R. W. (Aberd'n & Kinc'dlne, C.) |
| Cowan, Sir Wm. Henry (Islington, N.) | Lamb, J. Q. | Smith-Carington, Neville W. |
| Craig, Capt. Rt. Hon. C. C. (Antrim) | Lane Fox, Col. Rt. Hon. George R. | Smithers, Waldron |
| Craig, Sir Ernest (Chester, Crewe) | Lister, Cunilffe-, Rt. Hon. Sir Philip | Spender-Clay, Colonel H. |
| Croft, Brigadier-General Sir H. | Lloyd, Cyril E. (Dudley) | Sprot Sir Alexander |
| Crooke, J. Smedley (Deritend) | Locker-Lampion, G. (Wood Green) | Stanley, Hon. O. F. G. Westm'eland) |
| Crookshank, Col. C. de W. (Berwick) | Long, Major Eric | Streatfelld, Captain S. R. |
| Crookshank, Cpt. H. (Lindsey, Gainsbro) | Lougher, Lewis | Stuart, Crichton-, Lord C. |
| Cunliffe, Sir Herbert | Lowe, Sir Francis William | Stuart, Hon. J. (Moray and Nairn) |
| Curzon, Captain Viscount | Lucas-Tooth, Sir Hugh Vere | Thom, Lt.-Col. J. G. (Dumbarton) |
| Dalkeith, Earl of | Luce, Maj.-Gen. Sir Richard Harman | Thompson, Luke (Sunderland) |
| Davidson. J. (Hertf'd, Kernel Hempst'd) | Lumley, L. R. | Thomson, F. C. (Aberdeen, South) |
| Davidson, Major-General Sir J. H. | MacAndrew, Major Charles Glen | Tinne, J. A. |
| Davies, Maj. Geo. F. (Somerset, Yeovil) | Macdonald, R. (Glasgow, Cathcart) | Tryon, Ht. Hon George Clement |
| Davies, Sir Thomas (Cirencester) | Macdonnell, Colonel Hon. Angus | Vaughan-Morgan, Col. K. P. |
| Davies, Dr. Vernon | Macintyre, Ian | Wallace, Captain D. E. |
| Davison. Sir W. H. (Kensington, S.) | McLean, Major A. | Warner, Brigadier-General W. W |
| Drewe, C. | Macmillan, Captain H. | Waterhouse, Captain Charles |
| Eden, Captain Anthony | Macnaghten, Hon. Sir Malcolm | Watson, Rt. Hon. W. (Carlisle) |
| Elliot, Major Walter E. | McNeill, Rt. Hon. Ronald John | Watts, Dr. T. |
| Ellis, R. G. | Macpherson, Rt. Hon. James I | Wells, S. R. |
| Elveden, viscount | Macquisten, F. A. | White, Lieut-Col. Sir G. Dalrymple- |
| England Colonel A | Makins, Brigadier-General E. | Williams, A. M. (Cornwall, Northern) |
| Erskine, Lord (Somerset, Weston-s. -M.) | Malone, Major P. B. | Williams, Com. C. (Devon, Torquay) |
| Evans, Captain A. (Cardiff, South) | Manningham-Buller, Sir Mervyn | Williams, Herbert G. (Reading) |
| Everard, W. Lindsay | Margesson, Captain D. | Wilson, R. R. (Stafford, Lichfield) |
| Fairfax, Captain J. G. | Marriott, Sir J. A. R. | Windsor-Clive, Lieut.-Colonel George |
| Falle, Sir Bertram G. | Meller, R. J. | Winterton, Rt. Hon. Earl |
| Fanshawe, Captain G. D. | Meyer, Sir Frank | Wise, Sir Fredric |
| Fielden, E. B. | Mitchell, S. (Lanark, Lanark) | Withers, John James |
| Finburgh, S. | Mitchell, W. Foot (Saffron Walden) | Wolmer, Viscount |
| Foster, Sir Harry S. | Mitchell, Sir W. Lane (Streatham) | Womersley, W. J. |
| Fraser, Captain Ian | Moles, Rt. Hon. Thomas | Wood, E. (Chest'r, Stalyb'ge & Hyde) |
| Gadie, Lieut-Col. Anthony | Mond, Rt. Hon. Sir Alfred | Worthington-Evans, Ht. Hon. Sir L. |
| Galbraith, J. F. W. | Monsell, Eyres, Com. Rt. Hon. B. M. | Yerburgh, Major Robert D. T. |
| Ganzonl, Sir John | Moore, Lieut.-Col. T. C. R. (Ayr) | Young, Rt. Hon. Sir Hilton (Norwich) |
| Gates, Percy | Moore-Brabazon, Lieut.-Col. J. T. C | |
| Gault, Lieut.-Col. Andrew Hamilton | Morrison. H. (Wilts, Salisbury) | TELLERS FOR THE NOES.— |
| Gibbs, Col. Rt. Hon. George Abraham | Morrison-Bell, Sir Arthur Clive | Major Sir George Hennessy and Captain Lord Stanley. |