HC Deb 19 June 1933 vol 279 cc489-97

Income from a pension granted to a widow for the loss of her husband as a result of war service shall be exempt from Income Tax (including Super-tax) and shall not be reckoned in computing income for any of the purposes of the Income Tax Acts for the year 1933–34, or any succeeding year of assessment.—[Mr. T. Smith.]

Brought up, and read the First time.


I beg to move, "That the Clause be read a Second time."

This is not the first time that this matter has been debated during the past eight or 10 years. In order to understand the proposal contained in the Clause, one has to bear in mind that Section 16 of the Finance Act, 1919, clearly laid it down that pensions for wounds, disablement, or disability granted on account of military service, etc., and allowances in respect of children granted by the Minister of Pensions to widows of members of the naval, military or air forces are exempt and should be omitted from the returns for Income Tax purposes. But a pension paid to the widow of a man who was killed or died as the result of wounds received in the War has to be taken into account. There has not been a great deal of controversy with regard to this matter for the last year or two, but the fact of the personal allowance being reduced to £100 has brought many war widows into the position of paying Income Tax for the first time. I have here a letter from a war widow drawing a pension of £132 a year who has for the first time to pay Income Tax amounting to about 12s. 6d. She has brought up a son, who is now out of work, and whose application for transitional payment has been turned down because of the mother's pension. She is, therefore, more or less suffering under a double burden. It may be argued that widows of ex-service men ought not to be treated differently from other persons. I should be the first to admit that the difficulty would be removed if the Chancellor of the Exchequer had seen his way clear to raise the personal allowance above £100, but he has resisted any alteration of that amount. I submit that there is a difference between war widows and other people receiving similar incomes. Parliament has recognised for a number of years that an ex-service man himself is entitled to this extra consideration, but the moment he dies this has to be taken into account for the purposes of his widow's pension.

3.35 p.m.


I beg to second the Motion.

I should like, first, to ask the Financial Secretary what approximately would he the cost of this concession. If he will tell the House that and the Lord President of the Council will allow a free vote, there is not a doubt as to the result of the vote if the hon. Gentleman should be stubborn, but I do not think from the smile on his face that he intends to be stubborn. While an injured husband still lives, his disability pension is not taxable, but the moment he dies the pension paid to the widow becomes taxable. If that is not an anomaly, I should like to know what an anomaly is. I hope that, in replying, the Financial Secretary will bear in mind the implications of the next new Clause on the Paper. Imagine a war widow in receipt of a pension of £135, with a son falling out of employment. He exceeds the period of normal benefit and applies to the public assistance committee for transitional payment, but is disallowed because the mother is in receipt of a widow's pension. The sum allocated out of the pension for the maintenance of the unemployed son is taken into consideration for Income Tax purposes and no allowance is made. A married man with one child is made a £40 allowance in respect of the child, but no allowance at all is made to a widow with an unemployed son. Clearly the Treasury are getting it both ways. It would be much more honest to reduce the widow's pension than to give it with one hand and take it back with the other. In all the circumstances, this seems to me a fair and legitimate proposal, and, in view of the fact that these widows are and must continue to be a diminishing quantity—obviously, there are fewer war widows than there were a few years since—it is a concession that the hon. Gentleman could make without upsetting the balance of the Budget. It is merely granting a measure of fair play to women who, though perhaps not suffering physical disability, are certainly suffering from a disability in so far as they have lost their husbands.


The Mover and Seconder seem to have made out a good case, but the Clause contains the phrase "including Super-tax," which rather detracts from it.


We put in "Super-tax" deliberately. We did not want a charge to be levelled against us that we merely wished to get concessions for those in the lowest ranks. If there should be a widow in receipt of a pension for the loss of her husband paying Super-tax we have no objection to her having the advantages of the same concession.

3.40 p.m.


The hon. Gentleman who moved the Clause so persuasively said that he had no doubt that if the matter were left to a free vote of the House the concession would be carried. That may or may not be the case. It is always possible to elicit sympathy on behalf of hardship. The House will observe that the hon. Gentleman, and the hon. Member for Don Valley (Mr. T. Williams) spoke in general terms. There are very few widows indeed dependent upon a pension who could possibly be affected by the Income Tax law? The poor widow living upon her pension has to have means in excess of £125 a year before she becomes assessable for tax. Only a small minority of the pensions granted to widows are in excess of that sum. The House will appreciate then that we are dealing with a very limited number of cases, and, as we are dealing only with a limited number of cases, I can answer the question of the hon. Gentleman as to the cost without shocking the feelings of the taxpayers, perhaps by telling him that the cost would be £80,000 a year.

I have said that only a very small class of persons would benefit if the Clause were carried. I see no ground of principle why the Clause should be carried. The hon. Gentleman reminded the House that year after year the Clause has been put down, and that successive Chancellors of the Exchequer of whatever political complexion have rejected it. An exemption from Income Tax is given to pensioners drawing a pension in respect of war wounds, which is to compensate them for their actual physical suffering. This, however, is a pension, pure and simple, and must be treated the same as any other pension. What would be the grievance of an ordinary widow, not a war widow, who had lost her husband in distressing circumstances and who would be deprived of the advantages which the hon. Gentleman wishes to concede to war widows? The fact is that, whether a woman has lost her husband in war or as the result of an accident, she is indeed suffering hardship if she is poor, and I do not think that it would be just for the Legislature to differentiate between two widows in exactly the same unfortunate circumstances. Once concessions such as this are made no limit can be put to them. There are a multiplicity of grievances in the community. There are heavy burdens to be borne, and what the Exchequer must do is to observe, as far as possible, sound principles and canons of taxation. Once we allowed privileges such as that which the hon. Gentleman suggests we should be deprived of any armour we might have to resist further concessions. Now that I have reminded the hon. Gentleman that successive Chancellors of the Exchequer of previous Governments have rejected the Clause, I trust he will not press it to a Division.

3.44 p.m.


The House will have noticed at once the difference in the attitude of the hon. Gentleman towards the proposed new Clause and his collapse under the pressure of his own party in connection with the previous Clause which he carried through the House a moment or two ago. If the pressure from his own party is strong enough at any time, the Treasury can make all manner of arrangements to carry through their Budget and balance it. The hon. Gentleman has given away the whole of his case. First of all, he said that we are asking for concessions that would cost £80,000 per annum. If it would only cost £80,000 per annum, how comes it that he resists the Clause when the Government gave £14,000,000 to the beer drinkers without any ado at all He talks about the canons of taxation and of the need of balancing the Budget, but if he resists a Clause involving a concession of £80,000 per annum when the Government have given away £14,000,000 so very easily, we cannot have very much regard for his suggestion about principles.

He made one observation with which I must deal. He discussed the difference between the poor widow who had lost her husband outside war service, and the widow whose husband fell in the War. Surely, there is an acknowledged difference there to start with, and the State has always recognised it. If the State had regarded all widows alike, then the allowance paid by way of Workman's Compensation to the widow of the collier who went to his death in the pit ought to be the same as the pension payable to the widow of the man who fell in the War. He said that this must be regarded as an ordinary pension. There is a widow. She has not suffered injury herself, but she has suffered the loss of her husband. I do not want to criticise the hon. Gentleman unduly on that score, but this fact has to be considered in that connection. Not only has she lost her husband, upon whom there was an economic value, but she has suffered something deeper than merely the loss of the earning power of her husband. What about the State granting her something by way of solace for pain suffered?

The hon. Gentleman has not done himself justice in resisting this new Clause. He asked what other widows would say? The difference in the treatment by the State of widows is already sufficient to warrant another anomaly if that be necessary in order to carry the proposed new Clause. I do not think that any widow would in the least complain if the Clause were carried in order to help the widows of men who fell in the War. I know of no one. Consequently, when we have the hon. Gentleman and the Chancellor of the Exchequer so freely giving £14,000,000 per annum to the beer drinkers, and resisting a concession of £80,000 per annum, we are entitled to press the Clause very much further than we have done already. There is another fact to bear in mind. When the hon. Gentleman talks of anomalies, let me call attention to the 7s. 6d. disablement benefit under the National Health Insurance Scheme. When the means test was applied by local authorities and public assistance committees, they disregarded the 7s. 6d. entirely, because they came to the conclusion that there ought to be consideration not only for the fact that the poor recipient had been disabled, but also for the fact that he was suffering pain and distress consequent upon having been placed outside industry for good. There is therefore no point of principle at all in the hon. Gentleman declining to accept the Clause, which is a very reasonable one. The hon. Gentleman said that Chancellors of the Exchequer of every political colour in the past had declined a Clause of this kind, but I do not remember any Chancellor of the Exchequer at one and the same time giving £14,000,000 to the beer drinkers and resisting such a Clause. Consequently, we are entitled to press the Government to accept our proposal. The total revenue of the country is £750,000,000 per annum, and we are told by the hon. Gentleman that a paltry sum of £80,000 per annum would upset the equilibrium of the Budget. I cannot believe it for a single moment.

3.49 p.m.


I hope that the Financial Secretary to the Treasury will re- consider his decision. I was somewhat amazed at the arguments he put forward' He told us that because certain widows of men who had lost their lives in other ways than in war do not obtain exemption from Income Tax, no War widow should have the exemption. May I remind him that two wrongs do not make one right. If he makes this one concession it will give some of us who believe that the other concession ought to be made an argument for gaining that other concession from the Chancellor of the Exchequer at another time or from some future Chancellor of the Exchequer.

The fact that the hon. Member regards this hardship as one of a multitude of hardships proves that he considers that it is a hardship. He says that to redress this hardship it would cost £80,000. That is a very small sum compared with the amounts that the Government have given away. It is estimated by the Chancellor of the Exchequer that the concession just made in respect of heavy oils will cost £100,000, but the estimate of those who have had experience in the operation of this tax puts the figure at a much higher sum. The Financial Secretary also says that if he grants this concession he will be deprived of his armour in resisting efforts to redress other injustices. It is rather a poor argument that if one hardship can be redressed he will be deprived of his armour in resisting other hardships when an application is made that the burden of those other hardships should be eased.

I hope he will take this matter back and consider whether some concession could not be made to the widows affected. May I remind him that the point he made with regard to two women losing their husbands, one being a war widow and the

other a widow whose husband lost his life in other hard circumstances, can be multiplied over and over again. There are many such cases. The hon. Member would not put that sort of an argument forward when we were considering the position of an old age pensioner, who will get his 10s. a week, and the pension of a Cabinet Minister. I suppose the hon. Member himself hopes that some day he will retire on a very high pension. It is ridiculous to talk about these anomalies in the way the hon. Member did, and to argue that his armour will be weakened in resisting any attempts to redress other hardships, if he agrees to redress this particular hardship.


The hon. Member has suggested that Cabinet Ministers receive high pensions. Will he say how many ex-Cabinet Ministers are receiving pensions at this moment?


I do not know any, but I know that they are entitled to receive pensions and I believe that many of them do. If I had the opportunity of making inquiries I might obtain definite information, but I believe there are now ex-Cabinet Ministers drawing pensions.


There is not a single ex-Cabinet Minister or Minister of any sort who is now drawing a pension. No such pension has been granted for many years.


Would it not have paid the country to have pensioned off all the Cabinet Ministers in the last Government?

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 19; Noes, 234.

Division No. 225.] AYES. [3.56 p.m.
Banfield, John William Grenfell, David Rees (Glamorgan) Smith, Tom (Normanton)
Batty, Joseph Lansbury, Rt. Hon. George Tinker, John Joseph
Brown, C. W. E. (Notts., Mansfield) Leonard, William Wallhead, Richard C.
Daggar, George Logan, David Gilbert Williams, Dr. John H. (Llanelly)
Davies, Rhys John (Westhoughton) Macdonald, Gordon (Ince) Williams, Thomas (York., Don Valley)
Dobbie, William McEntee, Valentine L.
Edwards, Charles Mainwaring, William Henry TELLERS FOR THE AYES
Mr. John and Mr. Groves.
Acland-Troyte, Lieut.-Colonel Applin, Lieut.-Col. Reginald V. K. Barclay-Harvey, C. M.
Adams, Samuel Vyvyan T. (Leeds, W.) Apsley, Lord Barrle, Sir Charles Coupar
Aitchison, Rt. Hon. Cralgie M. Astor, Maj. Hn. John J. (Kent, Dover) Beauchamp, Sir Brograve Campbell
Albery, Irving James Baillie, Sir Adrlan W. M. Beaumont, M. W. (Bucks., Aylesbury)
Allen, William (Stoke-on-Trent) Baldwin, Rt. Hon. Stanley Beaumont, Hon. R. E. B.(Portsm'th, C.)
Anstruther-Gray, W. J. Balfour, Capt. Harold (I. of Thanet) Belt, Sir Alfred L.
Benn, Sir Arthur Shirley Hacking, Rt. Hon. Douglas H. Ratcliffe, Arthur
Bernays, Robert Hales, Harold K. Rea, Walter Russell
Blaker, Sir Reginald Hall, Capt. W. D'Arcy (Brecon) Reid, David D. (County Down)
Borodale, Viscount Hamilton, Sir George (Ilford) Remer, John R.
Bossom, A. C. Hanley, Dennis A. Ropner, Colonel L.
Bowater, Col. Sir T. Vansittart Hartington, Marquess of Rosbotham, Sir Samuel
Bower, Lieut.-Com. Robert Tatton Harvey, George (Lambeth, Kenningt'n) Ross, Ronald D.
Bowyer, Capt. Sir George E. W. Harvey, Major S. E. (Devon, Totnes) Ross Taylor, Walter (Woodbridge)
Boyce, H. Leslie Haslam, Henry (Horncastle) Ruggles-Brise, Colonel E. A.
Boyd-Carpenter, Sir Archibald Haslam, Sir John (Bolton) Runge, Norah Cecil
Broadbent, Colonel John Headlam, Lieut.-Col. Cuthbert M. Russell, Alexander West (Tynemouth)
Brocklebank, C. E. R. Hellgers, Captain F. F. A. Russell, R. J. (Eddisbury)
Brown, Brig. -G en. H.C.(Berks., Newb'y) Henderson, Sir Vivian L. (Cheimsford) Rutherford, John (Edmonton)
Buchan-Hepburn, P. G. T. Herbert, Capt. S. (Abbey Division) Rutherford, Sir John Hugo (Liverp'l)
Burgin, Dr. Edward Leslie Hills, Major Rt. Hon. John Waller Salmon, Sir Isldore
Burnett, John George Holdsworth, Herbert Samuel, Sir Arthur Michael (F'nham)
Burton, Colonel Henry Walter Hore-Belisha, Leslie Samuel, Rt. Hon. Sir H. (Darwen)
Campbell, Sir Edward Taswell (Brmly) Horobin, Ian M. Sanderson, Sir Frank Barnard
Caporn, Arthur Cecil Howitt, Dr. Alfred B. Scone, Lord
Castlereagh, Viscount Hudson, Capt. A. U. M.(Hackney, N.) Shaw, Helen B. (Lanark, Bothwell)
Cayzer, Maj. Sir H. R. (Prtsmth., S.) Hudson, Robert Spear (Southport) Shuts, Colonel J. J.
Charlton, Alan Ernest Leofric Hurd, Sir Percy Sinclair, Maj. Rt. Hn. Sir A.(C'thness)
Clarke, Frank Hurst, Sir Gerald B. Smiles, Lieut.-Col. Sir Walter D.
Clayton, Sir Christopher Hutchison, W. D. (Essex, Romf'd) Smith-Carington, Neville W.
Cochrane, Commander Hon. A. D. Jackson, Sir Henry (Wandsworth, C.) Somerville, Annesley A. (Windsor)
Collins, Rt. Hon. Sir Godfrey Ker, J. Campbell Soper, Richard
Colville, Lieut.-Colonel J. Kerr, Hamilton W. Sotheron-Estcourt, Captain T. E.
Conant, R. J. E. Kimball, Lawrence Southby, Commander Archibald R. J.
Cook, Thomas A. Knox, Sir Alfred Spencer, Captain Richard A.
Cooke, Douglas Lambert, Rt. Hon. George Spender-Clay, Rt. Hon. Herbert H.
Cooper, A. Dull Leckle, J. A. Stanley, Lord (Lancaster, Fylde)
Courthope, Colonel Sir George L. Lennox-Boyd, A. T. Stanley, Hon. O. F. G. (Westmorland)
Cranborne, Viscount Locker-Lampson, Rt.Hn. G.(Wd. Gr'n) Steel-Maltland, Rt. Hon. Sir Arthur
Crooke, J. Smedley Lovat-Fraser, James Alexander Stewart, J. H. (Fife, E.)
Crookshank, Col. C. da Windt (Bootle) Lumley, Captain Lawrence R. Storey, Samuel
Crookshank, Capt. H. C. (Gainsb'ro) Mabane, William Stourton, Hon. John J.
Cross, R. H. Mac Andrew, Lt.-Col. C. G. (Partick) Strauss, Edward A.
Dalkeith, Earl of MacAndrew, Capt. J. O. (Ayr) Strickland, Captain W. F.
Davies, Maj. Geo. F.(Somerset, Yeovil) Macdonald, Capt. P. D. (I, of W.) Sueter, Rear-Admirel Murray F.
Davison, Sir William Henry McEwen, Captain J. H. F. Sugden, Sir Wilfrid Hart
Dawson, Sir Philip McKie, John Hamilton Summersby, Charles H.
Denville, Alfred Maclay, Hon. Joseph Paton Sutcliffe, Harold
Doran, Edward Macquisten, Frederick Alexander Tate, Mavis Constance
Dower, Captain A. V. G. Mallalieu, Edward Lancelot Thomson, Sir Frederick Charles
Drewe, Cedric Manningham-Buller, Lt.-Col. Sir M. Todd, A. L. S. (Kingswinford)
Duggan, Hubert John Margesson, Capt. Rt. Hon. H. D. R. Touche, Gordon Cosmo
Duncan, James A. L. (Kensington, N.) Marsden, Commander Arthur Train, John
Dunglass, Lord Martin, Thomas B. Tryon, Rt. Hon. George Clement
Eden, Robert Anthony Mayhew, Lieut.-Colonel John Turton, Robert Hugh
Elmley, Viscount Meller, Sir Richard James Vaughan-Morgan, Sir Kenyon
Emmott, Charles E. G. C. Merrlman, Sir F. Boyd Wallace, Captain D. E. (Hornsey)
Emrys-Evans, P. V. Mills, Sir Frederick (Leyton, E.) Wallace, John (Dunfermline)
Entwistle, Cyril Fullard Mills, Major J. D. (New Forest) Ward, Irene Mary Bewick (Wallsend)
Erskine, Lord (Weston-super-Mare) Mitchell, Sir W. Lane (Streatham) Wardlaw-Milne, Sir John S.
Eraklne-Bolst, Capt. C. C. (Blackpool) Molson, A. Hugh Elsdale Warrender, Sir Victor A. G.
Essenhigh, Reginald Clare Monsell, Rt. Hon. Sir B. Eyres Watt, Captain George Steven H.
Flelden, Edward Brocklehurst Morris-Jones, Dr. J. H. (Denbigh) Wedderburn, Henry James Scrymgeour
Fleming, Edward Lascelies Munro, Patrick Weymouth, Viscount
Fox, Sir Glfford Murray-Philipson, Hylton Ralph White, Henry Graham
Fuller, Captain A. G. Nation, Brigadier-General J. J. H. Whyte, Jardine Bell
Ganzoni, Sir John Normand, Wilfrid Guild Williams, Charles (Devon, Torquay)
Gillett, Sir George Masterman Nunn, William Williams, Herbert G. (Croydon, S.)
Gilmour, Lt.-Col. Rt. Hon. Sir John Oman. Sir Charles William C. Wills, Wilfrid D.
Goodman, Colonel Albert W. Ormsby-Gore, Rt. Hon. William G. A. Wilson, Lt.-Col. Sir Arnold (Hertf'd)
Gower, Sir Robert Peake, Captain Osbert Windsor-Clive, Lieut.-Colonel George
Graham, Sir F. Fergus (C'mb'rl'd, N.) Peat, Charles U. Withers, Sir John James
Grattan-Doyle, Sir Nicholas Perkins, Walter R. D. Wolmer, Rt. Hon. Viscount
Graves, Marjorie Pike, Cecil F. Womersley, Walter James
Gretton, Colonel Rt. Hen. John Power, Sir John Cesil Wood, Rt. Hon. Sir H. Kingsley
Griffith, F. Kingsley (Middlesbro', W.) Pownall, Sir Assheton Wood, Sir Murdoch McKenzle (Banff)
Grimston, R. V. Ralkes, Henry V. A. M.
Guinness, Thomas L. E. B. Ramsay, Capt. A. H. M. (Midlothian) TELLERS FOR THE NOES
Gunston, Captain D. W. Ramsay, T. B. W. (Western Isles) Sir George Penny and Mr.