HC Deb 28 June 1938 vol 337 cc1769-78

(1) Section twenty-one of the Finance Act, 1920, which provides for deduction in respect of children, shall have effect as if the references in Sub-sections (i) and (2) thereof to a child receiving full-time instruction at an educational establishment included references to a child undergoing training by any person (hereafter referred to as "the employer ") for any trade, profession, or vocation in such circumstances that—

  1. (a) a child is required to devote the whole of his time to the training for a period of not less than two years; and
  2. (b) the emoluments, if any, receivable by, or payable by the employer in respect of the child while undergoing the training, do not exceed thirteen pounds a year, exclusive of any emoluments receivable or payable by way of return of any premium paid in respect of the training;

For the purpose of paragraph (b) of this Sub-section all emoluments at any time receivable by, or payable by, the employer in respect of a child in respect of whose training a premium has been paid shall be deemed to be receivable or payable by way of return of the premium, unless and except to the extent that the amount thereof exceeds in the aggregate the amount of the premium.

(2) In this Section the expression "emoluments" means any salary, fees, wages, perquisites, or profits or gains whatsoever, and includes the value of free board, lodging, or clothing.

(3) For the purpose of a claim in respect of a child undergoing training the surveyor may require the employer to furnish particulars with respect to the training and the emoluments of the child in such form as may be prescribed by the Commissioners of Inland Revenue.—[Mr. Tinker.]

Brought up, and read the First time.

5.50 p.m.

Mr. Tinker

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

The object of this Clause is that the rebate which is given in respect of children receiving instruction at educational establishments should apply also to young people who are undergoing courses of training in workshops and other forms of vocational training. Our idea is that the term "education" should not be taken as applying only to university education. I give one illustration which was referred to in a previous Debate on this subject. My hon. Friend the Member for Ince (Mr. G. Macdonald) mentioned then that in his own family there were two boys, one of whom was attending Manchester University while the other was being trained for a trade or occupation of a different kind. A rebate was granted in respect of the boy at the university but not in respect of the other boy because he was not in attendance at what is called an educational establishment. There we have a typical instance of how the present arrangement works. It may be said that in that case the parent is receiving the benefit in respect of the one child, but what about the case in which there is only one child who is receiving training of the sort which I now wish to have included? If education means anything at all, it means training in the broad sense and not in the narrow sense of university training.

We hope that this proposal will receive more recognition to-day than it has met with on previous occasions. The Clause tries to make it clear that proof has to be given in respect of earning capacity. Previously it was argued that young people who were receiving training of this kind might be earning money. We have put into the Clause a provision that the child shall be articled for at least two years and that the emoluments shall not be more than £13 a year. If the child receives more than £13 a year the parent will be excluded from the benefit of the Clause. Last year the Attorney-General and the Chancellor of the Exchequer were both in sympathy with the principle of the Clause but explained that it was a question of cost. Previously the Chancellor had said—I think he made a mistake which he admitted later—that it might cost from £1,000,000 to 12,000,000 per year.

The Chancellor of the Exchequer (Sir John Simon)

Not this proposal standing by itself.

Mr. Tinker

Afterwards the right hon. Gentleman made it clear that he was referring to the possibility that such a concession might lead to further claims which would bring the figure up to that total. Previous Chancellors have mentioned a figure of about £100,000 a year as the possible cost, but, whatever the figure may be, it appears to me that if we recognise one form of education in this way we ought to recognise other forms as well. I think we have moved on a little since the Act of 1920 was passed and that we are now adopting the broader view that education really means training in almost anything which is for the future benefit of the race. Training on the mechanical side is now recognised as a form of education. It is on those lines that we appeal to the Committee. We have made a similar appeal on previous occasions. When a previous Clause of this kind was discussed, the then Financial Secretary to the Treasury said that such a Clause had appeared on the Order Paper for five years in succession. The proposal which I am now advocating has been on the Order Paper for four years in succession and it is interesting to note the advance which it has made in favour year by year. In 1935, the majority against it was 135; in 1936, it was loo100; and last year it was only 32. So, it would appear that by progressive stages we are educating the House of Commons in the view which we hold on this matter.

I notice that other hon. Members have a Clause of a similar kind on the Paper. It is not very different from that which I am now asking the Committee to accept. In fact I would not be against that Clause but it so happens that ours has been called first and we hope that those Members who have put their names down to the other Clause will support us. To pass this Clause will be a step in the right direction. It will show the country that we desire parents to give their children all the education possible, and if they can afford it to keep their children, after the age of 16, at schools or at any other establishment suitable for their training. The man who tries to give his children additional education after the age of 16 is doing something not only for the benefit of his family and himself but for the benefit of the State and if the State recognises that fact by giving him a rebate on his Income Tax in the one instance, I cannot understand why other forms of education should be excluded from that recognition.

We submit this proposal on an educational basis and we believe that if the Committee examine the Clause in that sense they will agree with it. As to the question of cost, I say that a principle like this ought to be accepted on its merits and that the question of cost ought not to enter into the consideration of the matter at all. I ask the Chancellor of the Exchequer to listen to the plea which will, I am sure, be made in favour of this Clause from all sides of the Committee. Last year the hon. Member for Stone (Sir J. Lamb) and several other hon. Members joined in the appeal then made to the Chancellor. Those of us who believe in reforms of this kind go on advocating them year after year. We may be refused what we are asking for, but that does not remove from our minds the thought that what we advocate is right and will be accepted at some time or other. I ask the Committee in this case to grant the concession this year, if it is at all possible to do so.

6.0 p.m.

Mr. Ede

Each year since this Parliament has met, I have supported a proposal of this kind and have observed, with my hon. Friend the Member for Leigh (Mr. Tinker), the fact that the Committee is gradually coming round to an acceptance of the arguments which have been put forward, not from this side alone but from all parties. in support of that proposal. I desire to mention one or two issues which were not raised by my hon. Friend. There is no form of education which is less fairly distributed than technical education. One boy may live in a town and may be able to go to a technical school within a few miles of his home to receive his education. Another boy who happens to live in some other county or perhaps in some other part of that county which is remote from a school, cannot get this form of education, and his only way of acquiring technical skill and proficiency in his calling is to become apprenticed to some man in his village or town. It is ridiculous that the father of a boy who goes to a technical school to receive that form of instruction should receive exemption from Income Tax, whereas the father of the boy who is apprenticed does not secure such an advantage. If the question of the small payment which the boy receives is brought into account, it should be remembered that the boy attending a technical school may well receive the same amount as maintenance grant as the other boy receives during his apprenticeship. In many cases, therefore, these two boys are identical in everything except that, owing to the way in which formal educational opportunities are distributed, the one secures the benefit of this exemption for his father and the other does not.

There is another reason which ought to weigh with the Chancellor. We all deplore the way in which some parents send their boys into what turn out to be blind-alley occupations, merely because there is a comparatively high immediate wage paid when the boy leaves school. The parent who is prepared to look beyond the immediate advantage to the family and to make some sacrifice in order that his boy shall get a thorough training in a useful occupation which will give him a trade in future life, deserves every encouragement that he can receive at the hands of the State. I advocate this proposal also because I believe that we want to make people of this country in all walks of life realise that these youths, whose abilities are mainly mechanical, are just as much an asset to the State as those whose abilities are on the academic, the literary and the mathematical sides. The right hon. Gentleman himself is a distinguished ornament of our university system, and, apart from politics, I am sure we all esteem him very highly in that regard. We could have wished that he could have gone to a better university, but for what it is worth we do realise that even Oxford was unable quite to spoil him.

Those of us who have had the advantage or disadvantage of a university education ought to be the first to recognise that in this modern complex world those people whose gifts are practical engineering, who apply to metal, wood and other material substances the theories that are taught in institutions of learning, are equally with us citizens of this country and entitled to be held in honour if they are applying their particular gifts to the problems of to-day and to the maintenance of this complex civilisation of which we and they are both parts. Anything which seems to put these people into an inferior category is wrong to-day when, more than at any other time, it is essential that we should emphasise the fact of their equal importance in the State with people whose minds run on theoretical and general lines. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) has said that the late War was an engineers' war. Judging by what we can see going on around us on that side alone, the practical engineer is as important a man to-day as he was in 1914–18, and anything that we can do that will convince the people of this country that a person whose gifts are in the application of theory, even although they do not understand the theory, is equally important with the person who invents and teaches theory, is a good thing for the solidarity of the State.

The hon. Member for Hitchin (Sir A. Wilson), the hon. Member for South Salford (Mr. Stourton), the hon. Member for South Croydon (Mr. H. G. Williams), the hon. Member for Colchester (Mr. Lewis) and certain other hon. Members have on the Paper a new Clause which, I understand, achieves the same purpose as this Clause, except that it is in a different form of words. I had hoped that that would convince the Chancellor that this is not a matter which can be debated in the Committee in any party spirit, or that it is not put forward with any desire to benefit any particular class. It should be evidence that a feeling in favour of this proposal has spread in the Committee and that if he could make this concession he would be meeting the general view. If last year, when the majority for the Government on this issue fell to 32, it had been left to a free vote of the Committee, the new Clause would have been carried. I do not think that anything has happened that can alter the opinion of the Committee this year. If the right hon. Gentleman does not feel that he can give us the concession, I hope that he will leave it to the free vote of the Committee. The amount of money involved is so trifling that the right hon. Gentleman cannot plead that it would upset a Budget of r£1,000,000,000 to give a concession which, at the most, could not cost more than £2500,000.

If the argument is that if he gives way this year someone will ask him to give way next year on something else, or to make an extension, our experience on this side of the Committee is that the right hon. Gentleman has sufficient courage to refuse a concession when he does not want to give it; and I cannot see why a concession to argument this year should weaken him in any position he may have to adopt next year. I can think of no reason that can be adduced against this Clause that we have not heard in previous years. The Division last year indicated that the Committee, although it gave the Government a majority, was not convinced on the arguments that our case could be disproved. I hope, therefore, that to-day the right hon. Gentleman will find it in his heart to give the Committee—not my hon. Friend and those whose names are associated with him, but the Committee —the concession which three or four years of steady argument show it is entitled to receive.

6.10 p.m.

Sir J. Simon

I have personally taken a good deal of interest in this subject. I remember very well the discussion last year, and I am impressed by what has been said to-day. If I feel difficulty about it, it is not for want of any appreciation of much of the reasoning that has been adduced. I have been responsible this year in the Budget and the Finance Bill for increasing very substantially the total charge of Income Tax, and I felt that it was very necessary to consider how to ensure that that increase should not bear with too great hardship on the smaller Income Tax payer. The Committee will recall that the form which the relief took was that the first £135 after exemptions and abatements would be charged, not at one-third of the standard rate as had been done previously, which would have amounted to is. io10d., but at Is. 8d. That is, of course, a very material relief for the smaller Income Tax payer, and I justify it and defend it. It means relief in the sort of household of which the hon. Member for Leigh (Mr. Tinker) and the hon. Member for South Shields (Mr. Ede) have been speaking. It means that instead of paying a tax of is. 10d. on the first £135, they are to pay is. 8d. That is to that extent a relief to them which I am very glad to have been able to make. It is very material because it leaves some 2,000,000 taxpayers out of 3,500,000 unaffected by the increase.

I regard this as a thing that we should discuss together, although the responsibility is that of the Chancellor of the Exchequer. It would never be right for me to throw a question like this at the Committee, for I am answerable in the sense that some other people are not for making the accounts balance and meeting the bills of the country. Before deciding to give this relief I surveyed the whole series of proposals that were made last year and the year before for the relief of the small Income Tax payer, and I came to the conclusion that on the whole the course that would do most good would be to keep the charge at is. 8d. for the reduced zone of income.

At the same time, I must say that this particular corner of Income Tax law dealt with in this Clause gives me some concern because I entirely share the view that you do not want to draw a distinction between relief for one kind of education and relief for another. The proposal that was adopted some years ago by which the relief in respect of children did not stop, as it originally did, when the child became 16, but went on after the child continued in a school or college or the like for educational purposes, applied both for purely vocational training in a technical college as well as to literary training. The fact remains that, although it is not quite the same thing, I should very much like, if I could, to include the youth who is going through the ordered system of apprenticeship and is not bringing into the home anything more than a mere token amount, which, after all, is in some respects a very analogous case. It means in that case, as in the other, that probably there is a parent who is making a sacrifice for the future of the young man or young woman, instead of allowing the son or daughter to take some occupation which would give them some pocket money for a few years but leave them without any real permanent means of livelihood.

My difficulty in meeting these cases has really been that there is a distinct risk, I will not call it a danger, that if I make this concession I shall immediately have a whole number of cases like it pressed upon me in their turn as deserving of concessions, and find myself pressed to give away revenue which I really cannot afford to relinquish; but my own wish is to meet this "corner" if I possibly can. I could not accept the words of this new Clause without examining them very closely, but if I am given the opportunity I will see whether it would be possible, without sacrificing too much of the revenue which I must preserve, to find some suitable form of words to meet the case of the young apprentice who is not bringing into the home any substantial income but who is really carrying out his own education in a mechanical or engineering sense more or less analogous to that of the youth receiving other forms of education.

If I may be allowed to say so, I admire the pertinacity and the reasonableness with which my hon. Friend the Member for Leigh has tackled this question year after year. I have long been of opinion that there was a great deal of force in what he said, and my only reason for re sisting was that I did not see how we could afford the concession or, if we granted it, how we could stop any extension, and I would call upon hon. Members now not to use this concession hereafter as a reason why I should give all sorts of other concessions.

Mr. T. Smith

Does the statement of the right hon. Gentleman mean that between now and Report Stage he will give this matter consideration and if possible put down a suitable form of words?

Sir J. Simon

Yes, that is what I mean. I must look at the question with my advisers and if I can see a way of framing a watertight Clause which does not give away too much money I shall put clown that Clause.

6.19 p.m.

Sir Patrick Hannon

I think it ought to be said from this side of the Committee how much we appreciate the statement which the right hon. Gentleman has just made. Many of us who have had a good deal to do with the promotion of educational facilities for working-class people in the past have felt deeply the points made by the hon. Member for Leigh (Mr. Tinker) and the hon. Member who seconded his Motion. In this House our sympathies are always on the side of widening the opportunities for the children of the wage-earning class to reach the highest possible level of education, and I think the undertaking given by my right hon. Friend will receive sympathetic support throughout the whole country. The question has been debated upon every Budget for several years, and the news that the Chancellor is going to give it consideration and to see whether there is a possibility of meeting the request will give just as much satisfaction to Members on this side of the Committee as on the other.

Mr. Tinker

After what has been said by the Chancellor of the Exchequer I beg to ask leave to withdraw the Motion.

Motion, and Clause, by leave, withdrawn.