HC Deb 11 June 1934 vol 290 cc1427-34

So much of sections eighteen, nineteen, twenty, twenty-one, twenty-two, twenty-three, twenty-four, twenty-five, twenty-six, twenty-seven, thirty, and thirty-three of the Revenue Act, 1869, as relates to excise duty chargeable in respect of male servants, and to the taking out of a licencie for the employment of a male servant, and to the provisions and regulations observable in re- spect of such employment, and to the penalties recoverable for the non-observance thereof is hereby repealed, and the said excise duty shall cease on the thirty-first day of December, nineteen hundred and thirty-four, and section thirteen of the Motor Car Act, 1903, and section ten of the Finance Act, 1921, which define, limit, or modify the meaning of the term "male servant" shall cease to have effect after the said date.—[Sir A. Powmall.]

Brought up, and read the First time.

7.18 p.m.


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

This Clause, which stands in my name and that of my hon. Friend the Member for Gravesend (Mr. Albery) and my hon. Friend the Member for Moseley (Mr. Hannon), has regard to the duty on male servants, and I wish to relate it to some extent to the new theory of canon law as explained a moment ago by the Financial Secretary to the Treasury. He said that the Chancellor of the Exchequer had laid down that the first thing that had to be done was the restitution of the cuts of 1931, and he treated that as being a canon. I submit that this does not infringe upon the principle of canon law, because it has direct relationship with the amount of unemployment at the present time. The particular duty is really obsolete in its form, as was the window tax of two or three generations ago which was imposed at a time of big households and when there was relatively no unemployment at all. At the present time, unfortunately, we have 1,000,000 or 1,500,000 men unemployed, and I suggest that this particular taxation stops a certain number of people who might otherwise employ temporarily a male servant from doing so, because, in addition to the ordinary wages, there is this extra 15s. and the trouble of taking out a form, which has to be done by the individual concerned. Although the money involved—185,000 licences which cost roughly £140,000—is not very much, far less than the surplus for which the right hon. Gentleman has budgeted, it is a distinct deterrent to the employment temporarily of people who might otherwise find themselves back at work for the time being. I suggest to my right hon. Friend that he can relate this to what I call canon law when the sum involved is relatively small. I think I am right in saying that, while he had £600,000 or £800,000 left when he balanced his Budget, he has made no inroads at all upon that sum, and I suggest that this is a suitable opportunity for making a small hole in the surplus which he anticipated. It would lead directly to the employment of an appreciable number of men who are not now employed.

7.21 p.m.


I have put my name down to this Clause, because I genuinely believe that it has some effect on the unemployment question. There are a great many people who occasionally give jobs to men out of work, and, when they find that by so doing they are taxed, they cease to do it. It is not so much the amount of the tax as the worry of the thing and the question of having to take out a form. Apart from that fact, the tax is altogether out of date and ought to have been wiped out long ago. I have procured one of the forms supplied for those who have to pay this duty, and one has only to read it to realise how out of date it is. How many of us to-day keep masters of the horse, grooms of the chamber and clerks of the kitchen, and those sort of people? This tax was put on many years ago with the idea of preventing certain people from having too many personal retainers, but such circumstances no longer exist. If the Chancellor of the Exchequer wishes to do a really useful thing he should transfer this tax to the wearers of political liveries and those who wear red shirts or black shirts, and take it off the harmless body of people who to-day employ gardeners, chauffeurs and various other persons.

7.22 p.m.


I join in the appeal to the Chancellor of the Exchequer to consider the incidence of this tax. In a great many cases employers who would take on men servants for a short period are prevented from giving employment to a particular person because of the irritating conditions, apart from the tax itself. I think that in many instances temporary jobs would be secured for men out of employment if this condition was not imposed. The antiquity of the tax is something which really ought to receive the consideration of the Chancellor of the Exchequer. We are living in an age in which new articles of taxation are arising almost every day both in volume and quantity, and an old tax of this kind, imposed in generations past, should be reconsidered by the Treasury in the light of present circumstances.

7.23 p.m.


I rise to speak entirely for myself, though I think one or two of my hon. Friend take the same view upon this matter. I regard this tax as entirely an anachronism in these modern times, and I would ask the Chancellor of the Exchequer in this discreet way to get rid of it.


I have long thought this tax to be obsolete. A constituent of mine wrote to me to the effect that he had given employment to an unemployed man in his garden, and the next thing was that he received a demand note for the payment of 15s. tax. He asked me: "Is this the way to encourage us to employ the unemployed?" I certainly think it is not, and I hope that my right hon. Friend will see his way to sweep away this obsolete charge.


I should like to add my voice to those of hon. Members who in such admirably persuasive speeches, have urged the Chancellor of the Exchequer to repeal this obsolete tax. The fact that the Financial Secretary to the Treasury who has firmly refused every concession so far has retired from our deliberations and that the gracious figure of the Chancellor of the Exchequer has re-appeared upon the scene is, I think, a hopeful portent, and I hope that the Chancellor of the Exchequer will see his way to yield to the representations of hon. Members in all parts of the Committee on this subject.

7.24 p.m.


I also should like to support the Clause. I do so noticing that it will bring about greater equality between the sexes. It has been suggested that if the tax were removed it would help the unemployment problem. I agree, but I do not think that many people who have spoken to me on this subject need have fear that men will take the work at present done by women. I believe that it would help the unemployment problem because people might take on a man whom they have not employed before to do extra work. I do not think that these people will compete with women, who will be able to hold their own in this class of work. I appeal to the Chancellor of the Exchequer to consider this concession, which, I think, will bring back more men into employment, and in no way take away from the chances of women getting employment and keeping it.

7.25 p.m.


There is one other class which I should like to mention to the Chancellor of the Exchequer. There is the ex-service man, who though perhaps not fit for heavy work, could, with his wife, take a joint situation in domestic service. These people are unable to get employment of this kind, because em- ployers are rather against taking cut this licence.

7.26 p.m.


I did not know what this Clause really meant before the discussion began. I gather that it means that anybody who employs a man servant has to pay 15s. as excise duty. One hears from all sides what a wonderful difference it will make if the tax is taken off. Surely we are a patriotic people, and I take it that there are many such who support this Clause. If it be only a question of 15s., is that fact likely to prevent any of them employing a man and so relieving unemployment? One would never have thought that such an argument as that would have been brought forward. If it be only a question of 15s. payable by people who are in a position to give employment, one would have thought that we should have been directing our attention to something better than trying to get such a provision repealed. I do not want it to be thought that everybody is in agreement with this Clause. I am not. The Budget surplus could be put to much better purpose than relieving people who are wealthy enough to be able to employ servants, and who ought not to be given a relief from taxation on these grounds.

7.27 p.m.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)

Those who have supported from so many quarters of the House the Clause which we are now discussing have adduced two arguments in favour of it. The first is that the tax stands in the way of employment which would otherwise be given to the unemployed, and the second is that it is an obsolete and irritating form of tax. As to the first, I must say I find it extremely difficult to believe that any great impression could be made upon our unemployment problem by relieving persons of the necessity of paying 15s. a year. With regard to the second, I do not think that I am disposed to dispute with my hon. Friends that this tax is in the nature of a survival from conditions which have passed away, that the amount of revenue which it brings in is exceedingly small, and that it does probably give rise to an amount of annoyance which is disproportionate to the revenue. But when I come to the practical question of what is to be done, I observe that no one who has yet spoken has alluded to the demand as anything other than a payment into the Exchequer. My hon. Friend who moved the Clause is well aware that it is not a tax which falls into the Exchequer at all. It is a local taxation duty, and the proceeds of this tax fall into the exchequer not of the Chancellor of the Exchequer, but of the county councils and the county borough councils. If this tax is to be repealed, how is the Chancellor of the Exchequer to give compensation to the county councils and county borough councils for the revenue of which they will have been deprived. There are very few of those councils where the amount of the revenue derived from this tax exceeds £3,000 a year, and how to find any formula which would enable one to compensate each county council and each county borough council for the revenue that it would lose if the tax were repealed, compensation which would fully meet the claims of the councils year by year, with changing conditions, passes my comprehension. I might perhaps remind my hon. Friend who has addressed his appeal to me that in February, 1934, the County Councils Association addressed a letter to the Chancellor of the Exchequer on this subject, in the course of which they said that they had unanimously passed the following Resolution: That the Parliamentary and General Purposes Committee of the Association are not prepared, having regard to the opinions and information at their disposal, to recommend the abolition of the Male Servants' Licence Duty at the expense, of the rates. A return was compiled from a questionnaire which was sent to the county councils of England and Wales, which showed that while there were 20 councils in favour of the repeal of the tax, without compensation, 37 were opposed to it, and three expressed no opinion. This is a matter to which I have given some consideration, because I should like to see the tax repealed, but I find it extremely difficult to find a way of doing it, and at the same time to keep the county councils and the county borough councils in the good temper in which we all desire to see them. I think that the best chance of making an arrangement which would be agreeable to both sides would be when the time comes for reconsideration of the block grants. I would suggest to my hon. Friend that that consideration takes place in. 1937 and that at some appropriate time before then he might raise the matter again, when it might be possible to give it more practical consideration than I can see my way to give to it to-day.

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


The next Clause that I have selected stands in the name of the hon. Member for Farnham (Sir A. M. Samuel)—(Relief in respect of renewal of lease of business premises.)


In the absence of the hon. Member for Farnham I beg to move, "That the Clause be read a Second time."


The hon. and gallant Member cannot move a new Clause on behalf of an absent Member.