§ 6.55 p.m.
Mr. CREECH JONESI beg to move, in page 11, line 12, to leave out "one hundred and eighty," and to insert "two hundred and twenty-five."
I am encouraged to move this Amendment by some of the speeches which we have heard this afternoon in regard to the heavy burden falling on the middle and the lower middle classes and the reservoirs of wealth which still exist among those who enjoy the higher ranges of income. What the Amendment seeks to do is to get back to the position, which existed in 1931 when the figure of exemption in respect of personal allowance for married persons was £225. It is true that the Chancellor has made a concession this year by raising the figure from £170 to £180 and it may be true that the concessions which have been made to married persons with children outweigh the cost of the new taxation which they will have to bear, but I would point out that persons of this class are still very heavily burdened if not by new direct taxation at least by the increasing amount of indirect taxation. The people mostly affected by the Amendment constitute an important section of the community. They contribute very largely to the intellectual life and vigour of the community and we feel that the strain which is at present imposed on them ought in some degree to be relieved. 280 Therefore we ask that the figure of exemption should be restored to £225 as it was in 1931.
As has been pointed out, we on these benches strongly believe that instead of imposing further indirect taxation on this section of the community the Government ought to give them some relief and that heavier burdens should fall on the higher ranges of income. We believe that there are still large reservoirs of wealth which can be tapped and also that there is a considerable amount of expenditure at. present which is extravagant. We have heard a great deal about subsidies to various industries which involve heavy expenditure. That expenditure should be cut in certain directions and the additional money required for armaments should be secured by taxing those who are best able to bear that taxation. The speeches this afternoon have clearly indicated that among the well-to-do there is still a considerable amount of prosperity, and we feel that they ought to make an increasing contribution and help to provide a better standard of life for people on the lower ranges of income. I sincerely hope, therefore, that the Amendment will have the sympathetic attention of the Chancellor and the Committee.
§ 7.0 p.m.
§ Mr. TINKERI want to support this Amendment because I think that at the bottom of it there is a bigger principle than just asking for the increased amount. We on these benches hold that under our system of taxation there should be a standard for the household, and that then you should begin to tax people according to their means. We contend that £180 is not the point at which taxation ought to start for a married couple. £225 may not be the right amount; it may be that our claim is somewhat modest. We want to give married people a fair standard before taxation is levied. I am not very good as a mathematician, but I contend that we should be able to find the additional money from the higher ranges of income. We could establish a graduated system of taxation on higher incomes. The Chancellor of the Exchequer may reply, "Will the hon. Member tell me where I can get the money?" We have got to try and equalise it as well as we can. I 281 am satisfied from the figures given to me that there would be no difficulty in finding the additional money. If I could be satisfied that there was a doubt about that, then perhaps £180 would have to be the figure, but I am satisfied that we have enough surplus wealth throughout the country to enable this change to be made. The hon. and gallant Member for South Leicester (Captain Waterhouse) is smiling. I do not know his banking account. Probably he is one who is above the £225 limit, and he and his wife would have to pay more than they do now. Probably I should myself, but no one can object to paying a little more if they have the means.
Once I had the idea that thrift was a wonderful thing, but I question now whether it is in the interest of the nation, because when you are thrifty the money you save is stagnant, whereas when a man or a woman spends reasonably on the useful things of life—not extravagantly; I do not want a person to live in a way that will undermine his health—the money spent is being circulated, it is creating employment and is giving a greater measure of justice to all than does the hoarding of money. Therefore in this proposal we are doing something for the nation and it is creditable of the Labour Party to have made the proposal. Hon. Members opposite generally listen to our arguments but do not accept them for the time being. Later they say "There is something in what these people say" and they begin to accept it. On this occasion let them accept our proposal to-night; do not wait for a year or two. There is a great opportunity for the Chancellor to go down to posterity as a man of wise judgment if he will accept our Amendment.
§ 7.6 p.m.
§ Sir J. WARDLAW-MILNEI like always to be able to accept the arguments of the hon. Gentleman and his friends, and I do not suppose that there is any Member of this House who would not like in normal circumstances to support a proposal that these allowances be increased to £225. But I was amazed at the hon. Member's statement that he had passed the period when he believed in thrift. This is quite a new theory to me and I am glad to see that as a principle it is not accepted by any class of the community, as is shown by the 282 enormous increases in the deposits in the building societies and savings banks, which is a good thing for the country. I entirely agree with the hon. Member as to the desirability of circulating expenditure and that is why I have never been able to take part in some of the tirades of my Socialist friends against the alleged millionaire, a popular platform figure. To me the millionaire—
The DEPUTY-CHAIRMANI think that we might talk about this fascinating subject on a more suitable occasion.
§ Sir J. WARDLAW-MILNEI bow to your Ruling, but it has a pertinent effect on the point before the House, because, if it be argued that money given in this way will be circulated, I am entitled to say that those who have a great deal of money must circulate it or they will die with it, in which case we take most of it. Thus the millionaire has not worried me as much as he has some of my hon. Friends. All of us in ordinary circumstances would be delighted to support this proposal, but the people who would be affected mainly by this Amendment, are the only class of people who are benefiting by this Budget. The man with £500 a year and three children under the proposals of the Chancellor of the Exchequer will actually pay less next year than he paid last year. He will pay the large sum of £3 4s. 4d. in Income Tax, whereas last year he paid £6. This proposal of the Chancellor of the Exchequer is actually a tax on bachelors. The whole of his proposals are greatly in favour of the married man with two or three children. To that I have no objection at all, but in effect the tax is going to fall on those who are unmarried and with larger incomes.
§ 7.10 p.m.
§ Mr. BENSONThe hon. Member for Kidderminster (Sir J. Wardlaw-Milne) seemed rather amused at the statement of my hon. Friend the Member for Leigh (Mr. Tinker) when he said that he was not particularly convinced that thrift was the wonderful virtue which it was supposed to be in his younger days. I think that the last speaker did not quite do the hon. Member justice on this point. It has been discovered that a good deal of our economic troubles may be traced to the fact that the countries of the world at 283 the present moment are tending to apply too much of their annual income to saving, which ultimately goes into investment.
The DEPUTY-CHAIRMANI stopped the hon. Member for Kidderminster (Sir J. Wardlaw-Milne) when he tried to develop this point. We cannot go into it on this Amendment.
§ Mr. BENSONI want to suggest that here we are proposing to alter the incidence of this tax and proposing by our Amendment to exclude a certain group of individuals who have less than £225 a year. I propose not to develop very seriously the economic argument as to the effect of capital expenditure as against expenditure on consumers' goods, but I want to point out that the particular class we are proposing to exclude from taxation are a class who are not normally in a position to make very great annual savings. Any taxation which falls on them has an immediate effect in the curtailment of their expenditure on consumable goods. By our Amendment we tend to throw the taxation on the saving class of the community.
The DEPUTY-CHAIRMANThat is a permissible argument in the debate on the Budget, but we must keep to these Amendments as they stand. No Amendment has been produced to shift the balance of taxation. We cannot go into the other side and say how it can he made up.
§ Mr. BENSONAm I not entitled to anticipate the reply of the Chancellor, that he cannot afford the loss of revenue and, if not, can the Chancellor make that reply?
The DEPUTY-CHAIRMANThe hon. Member can suggest that something else can be done, but he cannot go into any elaborate argument as to how he would adjust taxation. We must keep to the Amendment itself.
§ Mr. BENSONIn that case I will only say that reduction of the taxation which falls on those with little saving capacity is worth while considering, and we hope the Chancellor of the Exchequer will take into consideration the need of the greater expenditure of the country on consumable goods. I am entitled to assume that the Chancellor of the Ex- 284 chequer will reply that he cannot afford the revenue. He may say that we have; already passed Clauses 12 and 13 and that no adjustment of tax is possible to meet the gap, but when we come to Clause 19 we shall have an ample opportunity of raising adequate revenue by stiffening up the proposals there against evasion, which will enable us to make good any revenue which he sacrifices by accepting our Amendment.
§ 7.15 p.m.
§ Mr. W. S. MORRISONI think any married man in the House must be grateful to the Mover and Seconder of the Amendment. The only criticism that I would make of the speeches of the hon. Members would be that I seemed to detect that the universality of their benevolence towards the married man was to some degree tempered with another sentiment towards the class of taxpayer to whom they referred as those with the higher ranges of income. The hon. Member for Chesterfield (Mr. Benson) was correct in his anticipation, and when I tell the Committee that this proposal would cost £8,000,000 in a full year, it will be evident that my right hon. Friend could not accept it without gravely imperilling the whole balance of his Budget.
I wish to call attention to the changed position now obtaining as regards the actual amount of Income Tax falling upon married people in particular as compared with what the burden was in 1931. The hon. Member for Shipley (Mr. Creech Jones) based some part of his argument for this Amendment upon the plea that we ought to get back to the pre-1931 position. My first point is that the actual figures now obtaining cannot be contrasted in that easy fashion with the 1931 figures, because there have been alterations in the other reliefs to which Income Tax payers of this class are entitled which completely alter the total burden falling upon them. The earned income relief, for example, is higher than it was before 1931, the child allowance is being raised by this Finance Bill to a higher point than it has ever reached before, and the reduction in the charge on the first slice of the taxpayer's income from a, half to a third of the standard rate which was effected last year—all these things have provided new and very substantial reliefs for this particular section of the taxpaying community.
285 I would give as an example of that one or two figures. The hon. Member for Leigh (Mr. Tinker) based a part of his argument upon what he considered was the starting point of a taxpayer's income, which he took at £225 if his Amendment were carried, and not £180 as at present. On account of these other reliefs to which I have drawn attention, however, the starting point is very much higher than £225 now. In fact, a married couple with three children, and subsisting on earned income, can earn, under this particular Finance Bill, as much as £450 a year without paying any Income Tax at all.
§ Mr. TINKERSurely I am not wrong in thinking that in the case of a married couple without children, their taxable income does not start at £180?
§ Mr. MORRISONI am dealing in the first place with the case of a married couple with three children, and I am telling the hon. Member that, on account of the changes which are being effected in this Bill, you have, as a matter of fact, an income of £450 coming into such a household and they are not paying any Income Tax at all. With regard to the married couple without children, and assuming that the income is earned income, such a couple can earn, as the hon. Member said, at the present moment £225 without paying any tax at all.
§ Mr. KIRKWOODWe say "Thank you" for that, but we want something more.
§ Mr. MORRISONI think I have demonstrated that, owing to the other reliefs which ought to be taken into consideration in comparing the position with 1931, this particular section of the taxpaying community is not so badly dealt with as has been indicated in some of the speeches that we have heard this evening. In fact, my hon. Friend the Member for Kidderminster (Sir J. Wardlaw-Milne) mentioned some figures and put the case of a married couple with three children. He was correct to a shilling in his assumption of what such a household would pay in Income Tax with an income of £500. The sum would be £3 3s. 4d., whereas before this particular Finance Bill it would have been £6. I submit, therefore, first, that the cost of this proposal is too great to permit of its acceptance and, secondly, that the case for it on the merits is not as strong as a mere comparison of the 1931 figures with the present-day figures would suggest, because one has to take into account the alterations in the tax effected by the other reliefs which fall upon these persons. For these reasons I regret that it is not possible to accept the Amendment.
§ Question put, "That the words proposed to be left out stand part of the Clause."
§ The Committee divided: Ayes, 202; Noes, 132.
287| Division No. 227.] | AYES. | [7.24 p.m. |
| Acland-Troyte, Lt.-Col. G. J. | Channon, H. | Emrys-Evans, P. V. |
| Agnew, Lieut.-Comdr. P. G. | Chapman, A. (Ruthergten) | Entwistie, C. F. |
| Allen, Lt.-Col. J. Sandeman (B'kn'hd) | Christie, J. A. | Erskine Hill, A. G. |
| Anderson, Sir A. Garrett (C. of Ldn.) | Clydesdale, Marquess of | Fildes, Sir H. |
| Aske. Sir R. W. | Colfox. Major W. P. | Findlay, Sir E. |
| Atholl, Duchess of | Collins, Rt. Hon. Sir G. P. | Fleming, E. L. |
| Baldwin, Rt. Hon. Stanley | Colman, N. C. D. | Fox, Sir G. W. G. |
| Balfour, G. (Hampstead) | Colville, Lt.-Col. D. J. | Furness, S. N. |
| Balfour, Capt. H. H.(Isle of Thanet) | Cook, T. R. A. M. (Norfolk, N.) | Ganzonl, Sir J. |
| Balniel, Lord | Cooke, J. D. (Hammersmith, S.) | Gibson, C. G. |
| Barclay-Harvey, C. M. | Cooper, Rt. Hn. A. Duff (W'st'r S. G'gs) | Gilmour, Lt.-Col. Rt. Hon. Sir J. |
| Beaumont, M. W. (Aylesbury) | Cooper, Rt. Hn. T. M. (E'nburgh, W.) | Gluckstein, L. H. |
| Beaumont, Hon R. E. B. (Portsm'h) | Courtauld, Major J. S. | Guest, Capt. Rt. Hon. F. E. (Drake) |
| Bernads, R. H. | Cranborne, Viscount | Gunston, Capt. D. W. |
| Birchall, Sir J. D. | Crookshank, Capt. H. F. C. | Guy, J. C. M. |
| Bossom, A. C | Croom-Johnson, R. P. | Hannah, I. C. |
| Bower, Comdr. R. T. | Crossley, A. C. | Harbord. A. |
| Boyce, H. Leslie | Crowder, J. F. E. | Haslam, H. C. (Horncastle) |
| Briscoe, Capt. R. G. | Culverwell, C. T. | Haslam, Sir J. (Bolton) |
| Brocklebank, C. E. R. | Davies, C. (Montgomery) | Hellgers, Captain F. F. A. |
| Browne, A. C. (Belfast, W.) | Davies, Major G. F. (Yeovil) | Hoare, Rt. Hon. Sir S. |
| Burghley, Lord | Dorman-Smith, Major R. H. | Holmes, J. S. |
| Burgin, Dr. E. L | Drewe, C. | Hope, Captain Hon. F. F. A. |
| Campbell, Sir E. T. | Duckworth, G. A. V. (Salop) | Hopkinson, A. |
| Cary, R. A. | Dugdale, Major T. L. | Hore-Belisha, Rt. Hon. L |
| Cautley, Sir H. S. | Duncan, J. A, L. | Horsbrugh, Florence |
| Cayzer, Sir C. W. (City of Chester) | Dunglass, Lord | Hudson, R. S. (Southport) |
| Cazalet, Thelma (Islington, E.) | Eckersley, P. T. | Hume, Sir G. H. |
| Cazalet, Capt. V. A. (Chipenham) | Elliot, Rt. Hon. W. E. | Hunter, T. |
| Chamberlain, Rt. Hn. Sir A. (Br. W.) | Emery, J. F, | Inskip, Rt. Hon. Sir T. W. H. |
| Chamberlain, Rt. Hn. N. (Edgb't'n) | Emmott, C. E. G. C. | Jackson, Sir H. |
| Jarvis, Sir J. J. | O'Neill, Major Rt. Hon. Sir Hugh | Somervell, Sir D. B. (Crewe) |
| Jones, H. Haydn (Merioneth) | Orr-Ewing, I. L. | Somerville, A. A. (Windsor) |
| Jones, L. (Swansea, W.) | Palmer, G. E. H. | Southby, Comdr. A. R. J. |
| Keeling, E. H. | Patrick, C. M. | Spender-Clay, Lt.-CI. Rt. Hn. H. H. |
| Kerr, H. W. (Oldham) | Penny, Sir G. | Stanley, Rt. Hon. Lord (Fylde) |
| Leech, Dr. J. W. | Percy, Rt. Hon. Lord E. | Stanley, Rt. Hon. Oliver (W'm'l'd) |
| Lees-Jones, J. | Perkins, W. R. D. | Strauss, E. A. (Southwark, N.) |
| Leighton, Major B. E, P. | Petherick, M. | Strickland, Captain W. F. |
| Liddall, W. S. | Pickthorn, K. W. M. | Stuart, Lord C. Crichton- (N'thw'h) |
| Little, Sir E. Graham- | Pilkington, R. | Stuart, Hon. J. (Moray and Nairn) |
| Llewellin, Lieut.-Col. J. J. | Pownall, Sir Assheton | Sueter, Rear-Admiral Sir M. F. |
| Lloyd, G. W. | Radford, E. A. | Sutcliffe, H. |
| Loftus, P. C. | Raikes, H. V. A. M. | Tasker, Sir R. I. |
| Lovat-Fraser, J. A. | Ramsbotham, H. | Tate, Mavis C. |
| Mabane, W. (Huddersfield) | Ramsden, Sir E. | Taylor, C. S. (Eastbourne) |
| Mac Andrew, Colonel Sir C. G. | Rathbone, J. R. (Bodmin) | Thomas, J. P. L. (Hereford) |
| McCorquodale, M. S. | Reed, A. C. (Exeter) | Thomson, Sir J. D. W. |
| MacDonald, Rt. Hn. J. R. (Scot. U.) | Reid, W. Allen (Derby) | Titchfield, Marquess of |
| MacDonald, Rt. Hon. M. (Ross) | Rickards, G. W. (Skipton) | Tryon, Major Rt. Hon. G. C. |
| Macdonald, Capt. P. (Isle of Wight) | Ropner, Colonel L. | Tulnell, Lieut.-Com. R. L. |
| McKle, J. H. | Rots, Major Sir R. D, (L'derry) | Turton, R. H. |
| Macmillan, H. (Stocktonon-Tees) | Ross Taylor, W. (Woodbridge) | Wakefield, W w. |
| Macnamara, Capt. J. R. J. | Rowlands, G. | Ward, Lieut.-Col. Sir A. L. (Hull) |
| Maitland, A. | Russell, A. West (Tynemouth) | Ward, Irene (Wallsend) |
| Margesson, Capt. Rt. Hon. H. D. R. | Russell, R. J. (Eddisbury) | Wardlaw-Milne, Sir J. S. |
| Mason, Lt.-Col. Hon. G. K. M. | Russell, S. H. M. (Darwen) | Warrender. Sir V. |
| Mayhew, Lt.-Col. J. | Salt, E. W. | Wells, S. R. |
| Mills, Sir F. (Leyton, E.) | Samuel, Sir A. M. (Farnham) | Williams, H. G. (Croydon, S.) |
| Mills, Major J. D. (New Forest) | Samuel, M. R. A. (Putney) | Windsor-Clive, Lieut.-Colonel G. |
| Moreing, A. C | Sassoon, Rt. Hon. Sir P. | Winterton, Rt. Hon. Earl |
| Morgan, R. H. | Scott, Lord William | Wise, A. R. |
| Morris-Jones, Dr. J. H. | Shakespeare, G. H. | Withers, Sir J. J. |
| Morrison, G. A. (Scottish Univ's.) | Shaw, Captain W. T. (Forfar) | Womerstey, Sir W. J. |
| Morrison, W. S. (Cirencester) | Shepperson, Sir E. W. | Young, A. S. L. (Partick) |
| Muirhead, Lt.-Col. A. J. | Shute, Colonel Sir J. J. | |
| Nail, Sir J. | Simmonds, O. E. | TELLERS FOR THE AYES- |
| Neven-Spence, Maj. B. H. H. | Simon, Rt. Hon. Sir J. A. | Sir James Blindell and Captain |
| Nicolson, Hon. H. G. | Smith, Sir R. W. (Aberdeen) | Waterhouse. |
| NOES. | ||
| Acland, Rt. Hon. Sir F. Dyke | Groves, T. E. | Oliver, G. H. |
| Acland, R. T. D. (Barnstaple) | Hall, G. H. (Aberdare) | Owen, Major G. |
| Adams, D (Consett) | Hall, J. H. (Whitechapel) | Paling, W. |
| Adams, D. M. (Poplar, S.) | Hardie, G. D. | Parker, J. |
| Adamson, W. M. | Henderson, A. (Kingswinford) | Parkinson, J. A. |
| Alexander, Rt. Hon. A. V. (H'lsbr.) | Henderson, J. (Ardwick) | Pethick-Lawrence, F. W. |
| Attlee, Rt. Hon. C. R. | Henderson, T. (Tradeston) | Potts, J. |
| Banfield, J. W. | Hills, A. (Pontefract) | Price, M. P. |
| Barnes, A. J. | Holland, A. | Pritt, D. N. |
| Batey, J. | Hopkin, D. | Outbell, D. J. K. |
| Bellenger, F. | Jagger, J. | Rathbone, Eleanor (English Univ's.) |
| Benson, G. | Jenkins, A. (Pontypool) | Riley, B. |
| Bevan, A. | Jenkins. Sir W. (Neath) | Robinson, W. A. (St. Helens) |
| Broad, F. A. | John, W. | Rowson, G. |
| Bromfield, W. | Johnston, Rt. Hon. T. | Seely, sir H. M. |
| Brooke, W. | Jones, A. C. (Shipley) | Shinwell, E. |
| Brown, Rt. Hon. J. (S. Ayrshire) | Jones, Morgan (Caerphilly) | Short, A. |
| Buchanan, G. | Kelly, W. T. | Simpson, F. B. |
| Burke, W. A. | Kennedy, Rt. Hon. T. | Smith, Ben (Rotherhithe) |
| Cape, T. | Kirby, B. V. | Smith, E. (Stoke) |
| Chater, D. | Kirkwood, D. | Smith, Rt. Hon. H. B. Lees- (K'ly) |
| Cluse, W. S. | Lansbury, Rt. Hon. G. | Smith, T. (Normonton) |
| Clynes, Rt. Hon. J. R. | Lathan, G. | Sorensen, R. W. |
| Compton, J. | Leach, W. | Stephen, C. |
| Cove, W. G. | Lee, F. | Stewart, W. J. (H'ght'n-le-Sp'ng) |
| Cripps, Hon. Sir Stafford | Leonard, W. | Strauss. G. R. (Lambeth, N.) |
| Daggar, G. | Leslie, J. R. | Taylor, R. J. (Morpeth) |
| Dalton, H. | Lunn, W. | Thorne, W. |
| Davies, D. L. (Pontypridd) | Macdonald, G. (Ince) | Tinker, J. J. |
| Daviet, S. O. (Merthyr) | McEntee, V. La T. | Viant, S. P. |
| Dobble, W. | McGhee, H. G. | Walkden. A. G. |
| Dunn, E. (Rother Vailey) | MacLaren, A. | Walker, J. |
| Edwards, Sir C. (Bedwellty) | Maclean, N. | Watkins, F. C. |
| Evans, E. (Univ. of Wales) | MacNeill, Weir, L. | Watson, W. McL. |
| Fletcher, Lt.-Comdr. R. T. H. | Mander, G. le M. | Westwood, J. |
| Gardner, B. W. | Marklew, E. | . Whiteley, W. |
| Garro Jones, G. M. | Marshall, F. | Wilkinson, Ellen |
| George, Megan Lloyd (Anglesey) | Maxton, J. | Williams, D. (Swansea, E.) |
| Gibbins, J. | Messer, F. | Williams, E. J. (Ogmore) |
| Graham, D. M. (Hamilton) | Milner, Major J. | Williams, T. (Don Valley) |
| Greenwood, Rt. Hon. A. | Montague, F. | Wilson, C. H. (Attercliffe) |
| Grenfell, D. R. | Morrison, Rt. Hon. H. (Ha'kn'y, S) | Young, Sir R. (Newton) |
| Griffith, F. Kingsley (M'ddl'sbro, W.) | Morrison, R. C. (Tottenham, N.) | |
| Griffiths, G. A. (Hemsworth) | Muff, G. | TELLERS FOR THE NOES.— |
| Griffiths, J. (Llanelly) | Naylor, T. E. | Mr. Mathers and Mr. Charleton. |
Motion made, and Question, "That the Clause stand part of the Bill," put, and agreed to.
§ Ordered, "That the Chairman do report Progress, and ask leave to sit again."—[Captain Margesson.]
§ Committee report Progress; to sit again To-morrow.