HC Deb 11 July 1938 vol 338 cc1065-70 In section twenty-one of the Finance Act, 1920, after the words "educational establishment" there shall be inserted the words "or since the age of sixteen years has been prevented from working by disability however arising."—[Mr. H. G. Williams.]

Brought up, and read the First time.

10.31 p.m.

Mr. H. G. Williams

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

In moving this new Clause, I am not an optimist, because experience has taught me never to be an optimist on the first occasion one presents a new Clause in regard to an Income Tax allowance. Nevertheless, I hope that the problem I am presenting to the House will receive some consideration from the Treasury. At the present time, there is, in respect of the first child, an Income Tax allowance on assessment of £60. There is an allowance in respect of a dependent relative of £25. I am visualising the case of a child who never becomes a dependent relative in the ordinary sense. I know that there are not very many cases of the sort I have in mind, but there is a certain number. I put down this new Clause because of a hard case in my constituency, and as a result of putting it down, I learned of a certain number of other cases. I am visualising the case of a child who, up to the age at present stipulated, qualifies for the maximum child's allowance, but ho does not become capable of working, and in the ordinary sense never becomes an adult, by which I mean someone capable of earning for himself or herself. I am visualising the case of a child who, in fact, remains a child throughout life.

I propose that until such a person reaches that state of health in which he can start earning, he should be regarded as a child; in other words, I am proposing an increase in the allowance for such a person from £25 a year to £60 a year. There is a moderate number of such persons, and they represent great hardship to those who are called upon to maintain them. Parents love their child, however disabled that child may be, and from whatever disabilities he or she may suffer; and if the circumstances are such that a child, born it may be with a congenital disability or having a disability arising from disease during childhood or from an accident, is never able to do what an ordinary child looks forward to doing, to get a job, such a person should continue to be regarded as a child throughout life, or at any rate until he or she recovers from the disability, and should receive the full child's allowance. I think the case for this new Clause is a clear one. My right hon. and gallant Friend the Financial Secretary may say that he is very much impressed by what I have said, but that he is sorry it cannot be afforded this year. That is a very common reply in the case of many of these new Clauses. If that be the reply, I hope he will add that the problem will be looked into, in the hope that next year or the year after the Treasury may be able to meet the case I have put forward.

10.35 p.m.

Sir John Mellor

I beg to second the Motion.

I wish to commend this new Clause to the House, because it is a very simple provisions, and I suggest that the merits of it are obvious. The only objection which I anticipate is that of the cost to the revenue, an objection whiche we must always regard with the greatest respect. But I think that in this case the cost to the revenue will not be very severe, and I hope that my right hon. Friend will see his way to accept the proposal.

10.36 p.m.

Captain Wallace

I am afraid that the House will now have begun to think that when my right hon. Friend the Chancellor gets up, it means that there is some possibility of concession, but that when I intervene it means that there is "nothing doing." I am sorry to disappoint my hon. Friend the Member for South Croydon (Mr. H. G. Williams) who moved this new Clause with, if he will forgive me for saying so, unusual brevity, but I cannot hold out any hope to him that this point will be conceded. Like every proposal put forward by my hon. Friend, it has certain merits but there are some very strong arguments against it. Section 21 of the Finance Act, 1920, provides, as he said, for an allowance £60 in respect of any child who is either under the age of 16, or who, if over the age of 16, is receiving full-time instruction at any university, college, school or other educational establishment.

Before 1919 no Income Tax allowance was given in respect of any child over 16. In that year the allowance was extended to cover the case of the child who, though over 16, was receiving full-time instruction at an educational establishment. The undoubted object of Parliament in giving this extended allowance was to recognise and encourage advanced education. It put on record the fact that Parliament did not mean that education should end at the age of 16. The new Clause seeks to incorporate in that provision a relief which has no essential connection, either with young children or with adolescent education. It would bring within that extended allowance all incapacitated sons and daughters of whatever age. As the hon. Member has admitted, there is already a provision in the Income Tax law to deal with dependent relatives. That is the allowance of £25 to the taxpayer who maintains at his own expense any relative of his or his wife's who is incapacitated by old age or infirmity. There is no age restriction in that relief where the ground is infirmity, and the class of persons for whom my hon. Friend is seeking to legislate get the £25 allowance. This new Clause proposes, in effect, to increase the dependent relative allowance from £25 to£60 in the case of a selected class of dependent relatives. I think the House will see that if we were to pass the Clause it would be impossible to maintain the distinction, and limit the concession to this particular selected class. There is no ground for differentiating between an incapacitated son or daughter and any other incapacitated relative—for example, an infirm mother or an invalid brother or sister. Therefore my right hon. Friend thinks, and I believe that the House on reflection will agree, that the acceptance of this proposal would at once give rise to claims, which would be practically irresistible, to increase the allowance from £25 to £60 for all dependent relatives.

Mr. H. G. Williams

How does my right hon. and gallant Friend explain that? They must have been disabled from the age of 16.

Captain Wallace

You might have an infirm mother or brother or sister—

Mr. Williams

If she was a mother she could not have been disabled from the age of 16; otherwise she could never have become a mother.

Captain Wallace

I do not think that necessarily follows. It is not possible to consider a concession of this kind this year. The actual amount involved in my hon. Friend's proposal is not perhaps as large as some of the proposals we have been dealing with, but if the concession were made, other concessions would have to follow, and we estimate that the cost to the Exchequer would be some £2,500,000 per annum. That is a sum which my right hon. Friend is not prepared to give up and I am sure that my hon. Friend does not expect that he should.

Mr. H. G. Williams

May I ask how the Treasury have succeeded in discovering how many people in this country have been continuously disabled since the age of 16? As one who has studied statistics I am satisfied that no statistics are available to enable that calculation to be made.

Captain Wallace

I do not think that my hon. Friend has been listening. I did not suggest that this particular concession would cost £2,500,000 or anything like it. I said that this was a concession which would be used by hon. Members in all parts of the House as a jumping-off point in order to secure other concessions, which, once this concession was made, could be so powerfully supported that no future Chancellor would be able to resist them. I must point out again that any increase this year of the allowances granted to Income Tax payers would be out of harmony with the general lines upon which this Budget is planned. My hon. Friend is thinking of the small Income Tax payers. Very few people seem to bother about the larger payers. In the case of the smaller taxpayers 2,000,000 people will not have to pay more tax owing to the increase in the standard rate, and if a concession of this kind were made it would mean giving a favour to a selected class of small Income Tax payers who would pay even less Income Tax this year than they paid last year. That is a situation which would not accord with the general situation of the country or with the principles upon which my right hon. Friend has framed his Budget, and in these circumstances I must regretfully ask the House to refuse the concession.

Mr. H. G. Williams

In view of the somewhat confused explanations of the Minister, and realising the fact that I cannot get this new Clause and expressing a little surprise that he should have referred to the unusual brevity of my speech because I never speak at length, I beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.