HC Deb 01 July 1941 vol 372 cc1235-44

If it is shown in the case of a weekly wage earner assessed to Income Tax in accordance with Rule 2 of the rules applicable to Cases 1 and 11of Schedule D that his place of work or his residence has changed through circumstances connected with the present war and that in consequence he is obliged to incur and defray out of his wages additional expense in travelling between his residence and his work, the additional expense so incurred and defrayed by him in the half year, up to five pounds, shall be deducted from the wages to be assessed for the half year. —[Sir K. Wood.]

Brought up, and read the First time.

Sir K. Wood

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

This new Clause I have placed on the Paper as the result of representations made by some of my hon. Friends opposite including the hon. Member for Ince (Mr. G. Macdonald) supported by Members in other parts of the House. This is one of the occasions on which I have thought it right and proper to make a concession which involves certain financial commitments. The New Clause provides that some allowance should be made for travelling expenses in cases where manual workers have been obliged to incur exceptional and additional expense in getting to work. The Clause applies to weekly wage-earners and relates to additional travelling expenses which the worker has been obliged to incur owing to a change in the place where he works or in his residence, due to circumstances connected with the war and the amount of the allowance is limited to £10 per annum. I make this concession because I think it will assist our war effort. In the belief that it is justified by the circumstances of the time and will help towards the end which I desire, I am making this allowance at some financial sacrifice.

Sir Herbert Williams (Croydon, South)

Perhaps the right hon. Gentleman will explain precisely what is meant by the words: "weekly wage-earner" Does this term cover the very large number of girl clerks working in offices in London, or does it apply only to people engaged in manual work? That is a point of considerable significance.

Mr. Gordon Macdonald (Ince)

I am sorry not to appear more grateful about this new Clause, but it will be generally agreed that a dissatisfied person seldom shows much gratitude, and I certainly am dissatisfied in this case. When I withdrew my proposal during the Committee stage, I did so in the expectation of a fairly substantial concession. I understand now that the Chancellor of the Exchequer is unable, for financial reasons, to make the concession a substantial one. I welcome the Clause as far as it goes and as far as certain people will benefit by it, but I must point out, at the same time, that it will create considerable friction in certain areas. I put to the right hon. Gentleman for his consideration one or two cases which arise in my division. There are men who, before the war, were paying heavy travelling expenses. There are other men who, finding their colliery closed because of the war, have had to seek work at other collieries elsewhere. Men of both classes may now be employed at the same colliery travelling in the same bus and incurring the same travelling expenses. The new Clause will give the benefit to one section of them, while denying it to the other. These men who travel together day by day will compare notes and those to whom the concession is denied, will not be very pleased about it. I do not say that they will feel vexed because somebody else has got what is denied to them, but they will find it very difficult to understand why the differentiation has been made. Then there are women who, in response to the appeal of the Minister of Labour, have gone into industry and who were not in industry before. They are incurring heavy travelling expenses. They will, I expect, be excluded from the scope of the Clause because they were not in employment previously.

I do not wish to belittle the offer which the right hon. Gentleman has made, but in the circumstances we can hardly feel satisfied with it. At the moment he is paying millions in assisting people to get to their work. A large number of men and women are employed in munition factories who incur expenses of anything from 1os. to 15s. a week for travelling. The right hon. Gentleman, through the Minister of Labour, has said to these people "You will be called on to pay only 3s. a week of the 15s. and the Exchequer will find the remainder" I am not begrudging, nor would the workers in my division begrudge those men and women the concession which has been made to them. To ask them to pay the full expenses would be unreasonable. But it is also unreasonable for the right hon. Gentleman to say that for financial reasons, he cannot give the small concession for which we ask when he is making such a substantial concession to another body of workers whose earnings are on the same level. I appreciate the Chancellor's difficulties, and I hope he appreciates mine too, although I want to say that since a number of people will benefit by this concession, it is not for me; to deny them that benefit.

Mr. Craven-Ellis (Southampton)

Will the employer have to arrange with the employéas to what is to be the allowance for travelling expenses, because, if so, it will put a great deal of work on employers?

Mr. Price (Forest of Dean)

I too, like others, am disappointed that the Chancellor has not seen his way to go as far as we would have liked him to go. Many of us who supported him in Amendments on the Committee stage went very far to make up his revenue, and we felt we would press this Clause because the amount involved was so small. If the Chancellor went as far as my hon. Friend the Member for Ince (Mr. G. Macdonald) wanted him to go, I do not think it would make a serious hole in the revenue. However, this will be of some benefit to some of my constituents, who, since the outbreak of war, have had to go long journeys to work by bus and have incurred considerable expense. It will relieve them, but only if they did not incur expense like this before. In the case of my constituents that can be proved, but I would like to ask the Chancellor how proof can be furnished. What machinery will be set in motion?

Mr. Edmund Harvey (Combined English Universities)

I think the Chancellor is to be congratulated, at the least, on having recognised the principle which is recognised in this Clause, and I hope very much that he will take into account, possibly for a future Budget, what has been said by my hon. Friend the Member for Ince (Mr. G. Macdonald). However, I would like the Chancellor to explain why he has fixed the sum at £5 for each half-year. That means a daily allowable expenditure of about 8£d., and in many cases a considerably larger sum than that is actually expended. Having recognised the principle, I hope the Chancellor will at some future date consider extending the amount from £5 per half-year to something like £8 or £10 per half-year, which would cover a large part of the expenditure incurred. Although he has not gone as far as we would have liked him to go, the Chancellor has gone a good way in having recognised this principle.

Mr. Mathers (Linlithgow)

I am concerned about the equitable working of this Clause as it has been drafted, and I would like to refer to the point put by the hon. Gentleman the Member for South Croydon (Sir H. Williams) as to how the definition of a weekly wage earner is to be interpreted. There are colleagues of mine in the railway service who, although they have a nominal salary and receive a certain amount per year, are paid weekly. Will that bring them within the definition of weekly wage earners? There is, too, this consideration to be taken into account. In many cases these people are not in a position to earn as much as those who come within the heading of. normal weekly wage earners, or, as the Chancellor put in, manual workers. In view of the desirability of applying this new principle equitably—I am not at the moment questioning the amount of the relief—I hope he will allow a wide interpretation of the term "weekly wage earners"

Mr. Woods (Finsbury)

I would like to add my appreciation, because I am afraid that the Chancellor may imagine that having made a concession to the demand he has landed himself into a lot of trouble. I hope he will not look at it from that viewpoint but will look at it from the point of view of an equitable deal for the bulk of the working class of this country. If one does a thing, it is always well to do it decently, but this is a paltry step, and the Chancellor must take the responsibility of having encouraged these criticisms. This affects the bulk of the workers in the City of London. If I might give an illustration, suppose two men are working side by side on the same basis. One does his duty by the country and has a family, and to provide accommodation he has had to go fairly well out into the suburbs. His colleague is a single man, in third-rate "digs" in the City, and he is bombed out. He has to go further into the country. The family man, however, will get no concession, because he was compelled formerly to take up residence in a suburban area. I think this will involve the Chancellor in difficulties. The statement that this is a new principle is altogether wrong. The time has come when the Chancellor should say definitely that all people should be put on the same basis and that the actual allowance they receive should be less the inevitable expenses incurred in making their income.

This is the basis on which business firms are dealt with: they can put against their profits all that they pay their travellers who go round the country obtaining their orders, and if you make a concession like that, why should you not allow it to the ordinary salaried person? Take, for instance, a doctor who has his patients scattered over a wide area. He is allowed to deduct from his income maintenance for a car, and many are allowed maintenance for a chauffeur. This is no innovation. You are only doing now for the average wage-earner what you have done for the doctor. Members of this House who come from various parts of the country to Westminster are provided with free travel tickets. To be logical, the Chancellor should modify the arrangement and add to the income of Members the cost of their travelling and allow them a deduction of —5 per half-year. He will find that the arrangement outlined in this Clause will cause innumerable anomalies and increasing discontent because of its inequitable working.

Mr. Graham White (Birkenhead, East)

I wish to express my great satisfaction that the Chancellor has seen his way to go so far to meet a very serious grievance, although I think it would have been. better if he had gone further and said that all travelling expenses which could be properly so described should be free of Income Tax. I want to impress upon my right hon. Friend that this matter is definitely not so much one of pounds, shillings and pence, as one of psychology. It is one among a number of matters which are of serious consequence to the production of the country at the present time. One frequently hears asked the question, "Why should I pay Income Tax on my travelling expenses? —It costs me 10s. 6d. or more in travelling expenses each week, since I was blitzed out" People ask why they should pay Income Tax on their travelling expenses when they cannot choose where they will work, as they did in normal times when they had a free choice. They ask why they should work overtime when the Chancellor takes a considerable part of the money they earn in that way; they ask why they should work overtime when there is nothing to buy in the shops.

I assure my hon. Friend that in the aggregate these things are having a most important effect upon production. I ask him to avoid any strict rigidity in the administration of this provision, and to see that nothing is done which will be a great exasperation at a time when people's nerves are tending to get a little bit frayed. One other thing I want to ask my right hon. Friend is that the Ministry of Information, or whoever deal with these things, should make plain to the people who are paying Income Tax for the first time what is the purpose of Income Tax, so that all the questions that are in their minds at this time will be answered, and answered in the right way. If these things are not made clear, great mischief may be done. Some body of people of ability and energy ought to explain these matters, remove doubts, and bring home to the citizens their responsibility in a matter of great consequence at the present time.

Sir K. Wood

In making a few observations in reply to hon. Members who have spoken, I should like to remark first how little gratitude there is in this world; and, not desiring to dwell upon the matter any further, I will proceed immediately to reply to some of the questions that have been put to me. My right hon. Friend the Member for Southampton (Mr. Craven-Ellis) asked about the position of employers in regard to this matter. They will not be concerned, and will not be put to any further difficulty or trouble. As to the definition, it is as follows: Weekly wage earners employed by way of manual labour in respect of the wages arising from that employment, and does not apply to persons employed as clerks, typists. …" etc. A substantial amount of criticism has been expressed by hon. Members. It is a criticism which it is easy to make. I would point out that I have made this concession in very exceptional circumstances, and that it represents a cost of £3,000,000 or £4,000,000. All the time I have to look around to see where I can obtain further money. As I reminded hon. Members on a former occasion, if it were a question of our having to deal with the end of the war, things would be different, but I have to look to the future, and hon. Members must stand by me in my efforts to get finance for the war. I have made this concession, which I believe is connected with the war effort, in the hope that it will promote and maintain good feelings in this matter. I have been bound to limit the concession to additional travelling expenses arising out of the war. Let hon. Members reflect for one moment what would be my position if I were to make the concession in respect of travelling expenses generally. At this time, I could not possibly make such a concession. The only concession which I can make, in justice to people, rich and poor, who have to pay taxes at this time, is one which has relation to the war effort. That, indeed, is what hon. Members suggested in the new Clause which they proposed. They did not suggest that I should give an allowance for travelling expenses generally, but that it should be made when the travelling expenses arose as a result of enemy action, the economic circumstances of an industry, and so on. They endeavoured to limit the allowance, and quite rightly so; and I also have had to limit the concession.

It may well be that there will be cases such as those mentioned by the hon. Member for Finsbury (Mr. Woods). I think the answer to be given is that this concession is made to meet the case of those people who have been put to extra expense on account of travelling. It is true that if two men are working together, one may get an allowance which the other does not, but the one who does not get the allowance will not have been put to the extra expense. Hon. Members opposite will be able to say that they have pressed for general concessions about travelling expenses. They will be able to tell their constituents that they have urged these concessions on me, and that I have refused to make them. They will be in the happy position of being able to say that they have obtained from me as much as they could get, that they foresaw that difficulties would arise, and warned the Chancellor of those difficulties, and they can say that, knowing the Chancellor— they can, if necessary, describe the Chancellor—one could not expect anything better from him. Hon. Members will be able to give that explanation, and I. think that they will have to say that while the present Chancellor is in office, and while he is faced with the difficult circumstances which now confront him, this is the best he can do. It is in that spirit that I hope hon. Members will accept the new Clause, recognising that in the difficult circumstances of the present this is the utmost I can do.

Sir John Mellor (Tamworth)

Will my right hon. Friend say why clerks and typists should be excluded?

Sir K. Wood

I have confined the concession to manual workers because I think there is a special case for them. They are more accustomed to living near their work. Clerks and typists are not in that special position. Frankly, I have been bound to put some limit to the new Clause.

Mr. Evelyn Walkden (Doncaster)

Will the Chancellor say whether shop workers and dairy roundsmen will be included within the definition?

Sir K. Wood

It applies to weekly wage earners employed by way of manual labour in respect of wages arising from that employment, and does not apply to persons employed as clerks, typists, draughtsmen, or any similar capacity.

Mr. Lathan (Sheffield, Park)

Does the Chancellor realise that non-manual workers may be placed in precisely the same position in regard to this inevitable expenditure? The proposal will mean that manual workers who are receiving £10 or £12 a week as skilled engineers will have relief, whereas non-manual workers who are receiving less than half that wage will have nothing. That is the iniquity and injustice of the arrangement which we ask him to reconsider, and I hope he will not close his mind on that point.

Mr. E. Walkden

I only wish to ask the Chancellor whether he will review the definition he has just read to the House. I am concerned with three sections of the distributive trades. In the case of shop workers, owing to men being called up, people are transferred from shop to shop which may be anything up to a distance of 10 miles. They may be transferred for two or three months only, but nevertheless they are put to considerable travelling expense. They are certainly contributing to the war by helping their employers and distribution generally. In the case of dairy roundsmen, they may be on one round for one week and then transferred 10 miles away. I could quote the case of one organisation in London whose trade extends almost 25 miles from Charing Cross. In that case a man may be transferred in the interest of his firm five or 10 miles away, and if such an arrangement were not made, obviously London's milk services might collapse. I ask the Chancellor to review these classes of workers and see whether they cannot be brought within the terms of the definition he has submitted to the House.

Mr. Collindridge (Barnsley)

The right hon. Gentleman has not been unfair in accepting this principle. I travelled in a workers train this morning, and I saw two trains arrive at the munition centre where I have to make my connection. In the constituency I represent thousands of workers who were unemployed before the war have now been harnessed to the war effort—and we are glad of that— which has resulted in these people travelling 20 or 30 miles to and from their work. They are in the position of not being able to be housed near their work, and consequently we must face the fact that throughout the war they must meet these heavy travelling expenses out of their meagre wages. These men told me this morning that they were spending on an average between 9s. and 10s. a week on travelling expenses. We all express pleasure at the Chancellor's concession, but I hope he will not close his mind entirely to making it a little more generous. My constituency is a mining district, and because of its nature we are precluded from having any heavy munition works. We are precluded from that by reason of the service of the mining industry to the country, and the fact that subsidence makes it impossible for munition industries to be established there. The workers are, therefore, forced to travel lengthy distances, and I hope the right hon. Gentleman will see our point of view and make this concession a little more generous.

Mr. Leslie

The Chancellor indicated that this provision referred to workers who have been affected by enemy action. I would point out that there is a considerable number of shop workers who are considered to be non-manual workers who have been affected by enemy action. Many of these people have been blitzed out of their homes. They have been forced to move a considerable distance away to take the place of men who have been called to the Colours. I think that some concession ought to be made in cases of that kind.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.