HC Deb 01 July 1937 vol 325 cc2269-77

Section nineteen of the Finance Act, 1920 (which, as amended by section twenty-two of the Finance Act, 1924, and section eight of the Finance (No. 2) Act, 1931, makes provision for a deduction in respect of relative or other person taking charge of widowers' or widows' children or acting as housekeeper), shall be extended so as to apply to a person resident with an unmarried person in the capacity of housekeeper, and in the said section the expressions 'widower' and 'widow' shall he deemed to include, respectively, a husband living apart from his wife and a wife living apart from her husband.—[Mr. Alexander.]

Brought up, and read the First time.

9.40 p.m.

Mr. Alexander

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

This Clause deals with a principle which we desire to see adopted, and which has been discussed upon previous Finance Bills. We desire to see extended to unmarried persons, carrying resident with them other persons in the capacity of housekeeper, the same rebate in regard to taxation already allowed under the law to those who, if they are widows or widowers, keep housekeepers living with them. The reform is obvious, and should speak for itself. I hope that we shall not get the kind of answer which we had from the late Financial Secretary to the Treasury, the present Minister of Agriculture, when he was replying last year, and when he said that it was impossible, in building up the law on taxation, to deal, in matters of this kind, with hard cases. If this Amendment were merely dealing with hard cases, one could expect a hard resistance to the reform for which we are asking, but it deals with a common case of oppressive grievance, which ought to be dealt with, existing throughout large classes of the population. For example, the position of the spinster has never received proper and sympathetic treatment from the Government of the day on this question.

I have here a letter from a woman in my constituency which emphasises, better than any speech of mine could, what the facts are. She was living in a household with her father, who was a widower. It was essential, from the point of view of the father and from that of this woman, who was engaged in a full-time occupation, that they should have a housekeeper. During the whole of the time that the father was living in that house, he was permitted by the Government a rebate of £50 of Income Tax, because it was necessary to keep a housekeeper for that establishment. The father is now dead. The young woman still has to keep her occupation, and she requires, as much as ever, the housekeeper for her house and the other commitments that she has, but she is denied the right of rebate of tax which was given to her father, in that very house and for the same housekeeper.

I could not put the case in a more direct way than by simply stating what that young woman has written to me, but we might multiply that case in other directions. The same position often arises in the case of a bachelor living with his widowed mother, when a housekeeper is kept chiefly for the sake of the mother. The widowed mother has been getting a rebate of tax, but directly she dies, the son, if he wants to keep the housekeeper, perhaps for the sake of the housekeeper herself who may have become a long-established friend as well, and to keep her in work and protect her from becoming a public charge, is denied the right of rebate of tax. I do not propose to prolong the argument. This seems to me a reform which is urgent and necessary, and eminently just. I hope that we shall not get the kind of formal answer which we got last year.

9.44 p.m.

Mr. Turton

I have on the Paper a proposed new Clause (Application of s. 19 of 10 and 11 Geo. V, c. 18), which I think would be covered by the one which has just been moved. As from the passing of this Act, section nineteen of the Finance Act, 1920, shall apply to a claimant whose marriage has been dissolved and who has been given the custody of any children of the marriage, so long as such children are under the age of sixteen years, as it applies to a claimant being a widower except that for the purpose of such a claim the words 'or of his deceased wife' shall not apply. I hope I shall be in order in referring to the case covered by my Clause. The right hon. Gentleman's Clause asks for a very wide concession, and I do not know how much that concession would cost. I think the case has been made out year by year for some sort of concession to be made in these cases. He has mentioned the housekeeper; I submit that there is also a very strong case where, by order of a court, an unmarried person has to look after children, and has to provide money to somebody to do so, but cannot get any relief under Section 19 as it is drafted to-day. There had been some uncertainty in this matter until the case of Kleman v. Winckworth was decided. When that case was decided, two or three years ago, it caused great hardship among those who had been through the divorce court but to whom the court had awarded the custody of the children.

If my hon. and learned Friend the Attorney-General will look at a proposed new Clause standing in my name on page 1,619 of the Order Paper, he will see that it extends Section 19 to cases where the claimant's marriage has been dissolved and he has been given the custody of any children of the marriage, and it limits the time of the claim to the time while those children are under the age of 16 years. It is now three years since I first moved an Amendment in some such form, and I remember that at that time the present First Lord of the Admiralty replied that my Amendment was not in order, because I did not then state for how long it was to continue, and that it was unfair for a man to claim relief when his children were over 16. That may have been a good drafting point, but it did not really meet the grave hardship in which the present state of the law results. Why should we have a position in which, if a man and a woman are happily married, they can get relief for their children, but in which, through the misfortune of one party and the guilt of another, the innocent party has to have the marriage dissolved but is allowed by the court to look after the children, he or she can get no relief at all? That is a strong case, and I hope the concession will be made.

9.48 p.m.

Mr. Tinker

I want to reinforce what has been said in support of this new Clause, and I think that most Members of this Committee know of cases of this sort. Take the case of two spinsters living together, one of whom goes out to work and the other keeps house for the two of them. The result is that they cannot get any allowance whatever, so far as Income Tax is concerned. This has been a burning grievance for many years past. We have repeated the arguments in favour of the Clause time after time, and we hope that some day or other some Government may see the wisdom of making this change and giving what is, after all, only a right thing to give.

9.49 p.m.

The Attorney-General

The right hon. Member for the Hillsborough Division (Mr. Alexander) hoped he would not get the same sort of speech in reply that he got from the Financial Secretary to the Treasury last year. He will not; he will not get such a good speech, and he will get one from a slightly different basis, if he accurately epitomised what my right hon. Friend the then Financial Secretary said. When this housekeeper's allowance was introduced, it was confined to cases where there were children to look after, and it was extended, I think in 1924, to widowers or widows whether or not there were children. It may have been that there was a certain lack of logic about that, but that anyhow is where it is at the moment and where, I suggest, it should be kept. My right hon. Friend last year put his opposition to this proposal on the ground that we cannot deal with hard cases, and that is perfectly true, but I will put it on different grounds.

It is a fundamental principle of the Income Tax law that you cannot affect your liability up or down by the way in which you spend your income. Take the case of an unmarried person. I was unmarried for a long time, but I never in fact had a house with a housekeeper. I lived in a flat. One person may choose to live in a flat or lodgings without a housekeeper, and another person may choose to have more of a home in the ordinary sense of the word, which involves a housekeeper. I quite agree that

there may be circumstances which are difficult to get out of, and which compel some people to live in a home rather than in a flat or lodgings, but that principle runs through the whole of the Income Tax law, that as a general rule you are not able to affect your liability up or down by the way in which you choose to spend your money. This housekeeper's allowance was originally confined to cases in which there were children, but it has been extended to widowers and widows. There may be something to be said for the claim that that extension impinged on the general principle which I have tried to enunciate, but we do not think, particularly at any rate this year—and in saying that I am not to be supposed as implying that the point may be ceded in any future year—when the financial condition of the country is what it is, we should change the law in this direction. As a matter of principle, I suggest that it would be better to leave this allowance where it is.

9.52 p.m.

Mr. Alexander

Is the Attorney-General absolutely right in his statement of principle? Is it a fact that the Income Tax law does take no account of how you spend your money? Do you not make an abatement because a man insures himself? If he makes a payment for insurance, he has an allowance made to him, and there are other examples in which the very basis of the abatement is that you depend to a large extent on the kind of expenditure that you choose, in the social as well as in the personal interest, to make. Therefore, we ask for the admission of no new principle in this case; it has already been established.

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

The Committee divided: Ayes, 127; Noes, 184.

Division No. 253.] AYES. [9.53 p.m.
Acland, R. T. D. (Barnstaple) Brown, C. (Mansfield) Davies, S. O. (Merthyr)
Adams, D. (Consett) Brown, Rt. Hon. J. (S. Ayrshire) Day, H.
Adams, D. M. (Poplar, S.) Buchanan, G. Dobbie, W.
Adamson, W. M. Burke, W. A. Dunn, E. (Rother Valley)
Alexander, Rt. Hon. A. V. (H'lsbr.) Cape, T. Ede, J. C.
Ammon, G. G. Charleton, H. C. Edwards, Sir C. (Bedwellty)
Attlee, Rt. Hon. C. R. Chater, D. Evans, D. O. (Cardigan)
Banfield, J. W. Cluse, W. S. Foot, D. M.
Barr, J. Cocks, F. S. Frankel, D.
Batey, J. Cove, W. G. Gallacher, W.
Bellenger, F. J. Cripps, Hon. Sir Stafford Gardner, B. W.
Benn, Rt. Hon. W. W. Daggar, G. Gibson, R. (Greenock)
Broad, F. A. Davies, R, J. (Westhoughton) Graham, D. M. (Hamilton)
Green, W. H. (Deptford) Leonard, W. Salter, Dr. A. (Bermondsey)
Greenwood, Rt. Hon. A Leslie, J. R. Sexton, T. M.
Grenfell, D. R. Lunn, W. Silkin, L.
Griffith, F. Kingsley (M'ddl'sbro, W.) McEntee, V. La T. Simpson, F. B.
Griffiths, G. A. (Hemsworth) McGhee, H. G. Smith, Ben (Rotherhithe)
Gibson, R. (Greenock) MacLaren, A. Smith, E. (Stoke)
Groves, T. E. Maclean, N. Smith, Rt. Hon. H. B. Lees- (K'ly)
Hall, G. H. (Aberdare) MacMillan, M. (Western Isles) Smith, T. (Normanton)
Hall, J. H. (Whitechapel) Mainwaring, W. H. Sorensen, R. W.
Harris, Sir P. A. Marshall, F. Stephen, C.
Henderson, J. (Ardwick) Mathers, G. Stewart, W. J. (H'ght'n-le-Sp'ng)
Henderson, T. (Tradeston) Messer, F. Strauss, G. R. (Lambeth, N.)
Hills, A. (Pontefract) Milner, Major J. Taylor, R. J. (Morpeth)
Holdsworth, H. Montague, F. Thurtle, E.
Hollins, A. Morrison, Rt. Hon. H. (Hackney, S.) Tinker, J. J.
Hopkin, D. Morrison, R. C. (Tottenham, N.) Viant, S. P.
Jagger, J. Naylor, T. E. Walkden, A. G.
Jenkins, A. (Pontypool) Noel-Baker, P. J. Walker, J.
Jenkins, Sir W. (Neath) Oliver, G. H. Watkins, F. C.
Johnston, Rt. Hon. T. Paling, W. Watson, W. McL.
Jones, A. C. (Shipley) Parker, J. Welsh, J. C.
Jones, Morgan (Caerphilly) Parkinson, J. A. Westwood, J.
Kelly, W. T. Pethick-Lawrence, Rt. Hon. F. W. Wilkinson, Ellen
Kennedy, Rt. Hon. T. Price, M. P. Williams, T. (Don Valley)
Kirby, B. V. Pritt, D. N. Windsor, W. (Hull, C.)
Kirkwood, D. Quibell, D. J. K. Woods, G. S. (Finsbury)
Lansbury, Rt. Hon G. Ridley, G. Young, Sir R. (Newton)
Lathan, G. Riley, B.
Lawson, J. J. Ritson, J. TELLERS FOR THE AYES.
Leach, W. Robinson, W. A. (St. Helens) Mr. Whiteley and Mr. John
Lee, F. Rowson, G.
Acland-Troyte, Lt.-Col. G. J. Duncan, J. A. L. McCorquodale, M. S.
Adams, S. V. T. (Leeds, W.) Eastwood, J. F. MacDonald, Rt. Hon. M. (Ross)
Agnew, Lieut.-Comdr. P. G. Edmondson, Major Sir J. Macdonald, Capt. P. (Isle of Wight)
Albery, Sir Irving Ellis, Sir G. Macmillan, H. (Stockton-on-Tees)
Anstruther-Gray, W. J. Elliston, Capt. G. S. Macnamara, Capt. J. R. J.
Apsley, Lord Emrys-Evans, P. V. Magnay, T.
Aske, Sir R. W. Entwistle, Sir C. F. Maitland, A.
Baillie, Sir A. W. M. Erskine-Hill, A. G. Makins, Brig.-Gen. E.
Baldwin-Webb, Col. J. Everard, W. L. Manningham-Buller, Sir M.
Balfour, G. (Hampstead) Fildes, Sir H. Margesson, Capt. Rt. Hon. H. D. R.
Balfour, Capt. H. H. (Isle of Thanet) Fremantle, Sir F. E. Mayhew, Lt.-Col. J.
Beauchamp, Sir B. C. Ganzoni, Sir J. Mellor, Sir J. S. P. (Tamworth)
Beaumont, Hon. R. E. B. (Portsm'h) Gledhill, G. Mills, Sir F. (Leyton, E.)
Boyce, H. Leslie Gluckstein, L. H. Mills, Major J. D. (New Forest)
Brass, Sir W. Goldie, N. B. Morrison, G. A. (Scottish Univ's.)
Briscoe, Capt. R. G. Gower, Sir R. V. Muirhead, Lt.-Col. A. J.
Brocklebank, Sir Edmund Grant-Ferris, R. Munro, P.
Brown, Rt. Hon. E. (Leith) Grettor, Col. Rt. Hon. J. Neven-Spence, Major B. H. H.
Brown, Brig.-Gen. H. C. (Newbury) Gritten, W. G. Howard Ormsby-Gore, Rt. Hon. W. G. A.
Bull, B. B. Guest, Lieut.-Colonel H. (Drake) Orr-Ewing, I. L.
Bullock, Capt. M, Guest, Maj. Hon. O. (C'mb'rw'll, N.W.) Patrick, C. M.
Butcher, H. W. Guinness, T. L. E. B. Peake, O.
Carver, Major W. H. Gunston, Capt. D. W. Peat, C. U.
Cary, R. A. Guy, J. C. M. Petherick, M.
Castlereagh, Viscount Hannah, I. C. Pilkington, R.
Cayzer, Sir H. R. (Portsmouth, S.) Hannon, Sir P. J. H. Ponsonby, Col. C. E.
Chamberlain, Rt. Hn. N. (Edgb't'n) Haslam, Sir J. (Bolton) Procter, Major H. A.
Clarke, Lt.-Col. R. S. (E. Grinstead) Heilgers, Captain F. F. A. Radford, E. A.
Cobb, Captain E. C. (Preston) Heneage, Lieut.-Colonel A. P. Raikes, H. V. A. M.
Colville, Lt.-Col. Rt. Hon. D. J. Hepburn, P. G. T. Buchan- Ramsay, Captain A. H. M.
Conant, Captain R. J. E. Hepworth, J. Ramsbotham, H.
Cock, Sir T. R. A. M. (Norfolk, N.) Herbert, Major J. A. (Monmouth) Rankin, Sir R.
Cooper, Rt. Hn. A. Duff (W'st'r S. G'gs) Higgs, W. F. Rayner, Major R. H.
Cooper, Rt. Hn. T. M. (E'nburgh, W.) Hills, Major Rt. Hon. J. W. (Ripon) Reid, J. S. C. (Hillhead)
Cox, H. B. T. Hoare, Rt. Hon. Sir S. Reid, W. Allan (Derby)
Craven-Ellis, W. Horsbrugh, Florence Rickards, G. W. (Skipton)
Croft, Brig.-Gen. Sir H. Page Hume, Sir G. H. Ropner, Colonel L.
Crooke, J. S. Hutchinson, G. C. Ross, Major Sir R. D. (Londonderry)
Crookshank, Capt. H. F. C. Keeling, E. H. Ross Taylor, W. (Woodbridge)
Cross, R. H. Kerr, J. Graham (Scottish Univs.) Rowlands, G.
Crossley, A. C. Lamb, Sir J. Q. Russell, S. H. M. (Darwen)
Crowder, J. F. E. Leckie, J. A, Salmon, Sir I.
Cruddas, Col. B. Lees-Jones, J. Samuel, M. R. A.
Dawson, Sir P. Leighton, Major B. E. P. Sanderson, Sir F. B.
Denville, Alfred Liddall, W. S. Savery, Sir Servington
Dixon, Capt. Rt. Hon. H. Llewellin, Lieut.-Col. J. J. Scott, Lord William
Donner, P. W. Loftus, P. C. Selley, H. R.
Dower, Major A. V. G. Lovat-Fraser, J. A. Shakespeare, G. H.
Drewe, C. Lyons, A. M. Shaw, Major P. S. (Wavertree)
Duckworth, W. R. (Moss Side) Mabane, W. (Huddersfield) Shaw, Captain W. T. (Forfar)
Dugdale, Captain T. L. MacAndrew, Colonel Sir C. G. Simon, Rt. Hon. Sir J. A.
Smith, Bracewell (Dulwich) Thomas, J. P. L. Wayland, Sir W. A.
Smith, Sir R. W. (Aberdeen) Thomson, Sir J. D. W. Wedderburn, H. J. S.
Somervell, Sir D. B. (Crewe) Touche, G. C. Wickham, Lt.-Col. E. T. R.
Somerville, A. A. (Windsor) Tryon, Major Rt. Hon. G. C. Williams, H. G. (Croydon, S.)
Southby, Commander Sir A. R. J. Tufnell, Lieut.-Commander R. L. Windsor-Clive, Lieut.-Colonel G.
Spens, W. P. Turton, R. H. Womersley, Sir W. J.
Strauss, H. G. (Norwich) Wakefield, W. W. Wood, Rt. Hon. Sir Kingsley
Strickland, Captain W. F. Walker-Smith, Sir J. Wright, Squadron-Leader J. A. C.
Stuart, Hon. J. (Moray and Nairn) Wallace, Capt. Rt. Hon. Euan Young, A. S. L. (Partick)
Sutcliffe, H. Waterhouse, Captain C.
Tasker, Sir R. I. Watt, G. S. H. TELLERS FOR THE NOES.
Mr. Grimston and Mr. Furness.