§ The Chairman
The hon. Member for Chesterfield (Mr. Benson) has an Amendment to this Clause on the Paper. Perhaps he will explain it; I think it is unnecessary.
§ Mr. Benson
I beg to move in page 18, line 40, to leave out from "annum," to the end of the Clause, and to add "such interest shall be subject to assessment to Income Tax."
If the Amendment is unnecessary then I have misunderstood the Clause. As I understand the Clause, it provides that contributions should be paid in advance less Income Tax at standard rate. I understand it is the idea of the Chancellor that he can borrow the contributions, as it were, at 2½ per cent. If anyone then sends a contribution, Income Tax can be deducted from the contribution. This seems an extraordinarily untidy way of doing things. Income Tax at the standard rate is paid only by a very small fraction of property-owners. One does not pay Income Tax at 8s. 6d. until one has £3,500 a year; and as soon as one's income has passed that figure, one pays a great deal more than 8s. 6d. The vast majority of Income Tax payers who pay in advance will have to pay at a much higher rate under this provision than they should do, while the wealthier people will get off more easily than they should. Also, I am advised that this provision will be extremely difficult to administer. There are various fluctuating factors: the rate of contributions is not fixed, and the rate of Income Tax is not fixed. Finally, the amount of trouble which this proposal, if widely availed of, would throw upon the Board of Inland Revenue is colossal. I, therefore, propose that any allowance of 2½ per cent. shall be charged for tax as if it were income in the ordinary way.
§ Sir K. Wood
There are administrative difficulties about this provision, as my hon. Friend is aware, which we would 982 be anxious to avoid. As I understand, there is no question of principle between us in this matter. My hon. Friend desires, if possible, to save us from certain administrative complexities; and, of course, a certain amount of cost. We are not satisfied with the form of the Amendment, but I will examine the matter, to see whether it is possible to deal with the point; and I will myself move an Amendment, or communicate with my hon. Friend.
§ Mr. Benson
Does the Chancellor really think it worth while including this provision in the Clause? I doubt whether many people would take advantage of it.
§ Amendment, by leave, withdrawn.
§ Motion made, and Question proposed, "That the Clause stand part of the Bill."
§ Earl Winterton (Horsham and Worthing)
Following the remarks of my hon. Friend the Member for Chesterfield (Mr. Benson), I venture to hope that many of the more wealthy owners will take advantage of this Clause. The Exchequer now is hardly the rich institution that it was in pre-war times, and there may be cases in which some of the smaller property-owners will not be able to pay their contributions in time. I hope that the vast majority of the great property owners will play their part, in order to make the fund as solvent as possible.
§ Question put, and agreed to.