HC Deb 21 April 1943 vol 388 cc1764-80

Twelfth Resolution read a Second time.

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."

Mr. Pethick-Lawrence

There are one or two points in the matter of Income Tax to which I would like to make reference to direct the attention of the Chancellor to them. Since we had our Debate on the Committee stage I have had a good deal of correspondence from people on several points I raised, and on several others. I propose to tell the Chancellor what has been represented to me. In the first place, it has been suggested, not, so far as I can see, on any reliable authority, that in respect of many persons who are in the habit of receiving a good deal of their income in cash there may be at any rate a certain amount of leakage. I do not suppose the Chancellor of the Exchequer will deny that that may be the case. I only want to ask whether he is satisfied that his officials are doing all they can to make that leakage as small as possible. The Chancellor will understand the class of people to whom I am referring, people who are in the habit of having fees in cash, sometimes people taking money over the counter in cash. All those people are subjected to the temptation of pocketing their money and spending out of that pocket without ever accounting for it in any way which would render it liable to Income Tax. I should like to be satisfied, and should like to know whether the Chancellor is satisfied, that everything possible is being done to keep that evasion down to the smallest possible limit.

Another point refers to the time of payments. The first point that I made in the course of my speech the other day during the Committee stage was that the payment of Income Tax after a period of time, sometimes over 12 months, is bound to lead to great difficulties in the future when the ordinary workman retires from work. I know the attitude the Chancellor of the Exchequer takes towards that matter. He is inclined to say that when the time comes no doubt we can consider where we stand. That no doubt is an answer up to a certain extent, but what I would present to him to-day is what I have been told, that is, that this matter of what will happen when working life comes to an end is already causing a considerable amount of worry and anxiety to the most conscientious people in the community.

It may be that there are feckless people who say, "Live one day at a time. When I have spent all my money and no more wages are coming in, the Chancellor cannot get blood out of a stone." But the most reliable and responsible people who are doing their best to play straight by the nation are the people most affected. They see their powers ebbing away and that the day is not far off when they will have no income, and they are anxious and worried as to what their future will be when their earning life ends and they are at that time in debt to the Treasury, to what is to them quite a considerable extent. Therefore, though I am not asking the Chancellor of the Exchequer to do anything about the matter in this Budget, that is an added reason why he should consider a change of the nature of the tax, which I think will have to be very comprehensive when it comes.

Further to that matter of the pay-as-you-earn principle, I have had some correspondence over temporary civil servants. Their position, as I think the Chancellor already knows, is an exceedingly difficult one, because in their previous avocation they have been paying tax a year after the event, and when they become temporary civil servants they find their tax being demanded from them for the current year, and so are in the position of being called upon to pay two taxes in one year, sometimes, I gather, even three. The result is very disastrous to them and places them in an exceedingly awkward position. Further, they may, owing to patriotism, have very well reduced their income by taking up work as temporary civil servants. Therefore, with a reduced income they are subjected to double, and sometimes more than double, tax in the course of a single year. It may be answered to them that in those circumstances the Inland Revenue will not press them very hard, and that they can postpone their payment until later on.

I understand that some of them do not feel that that entirely meets their case. Therefore I put it to the Chancellor of the Exchequer that he will—and I think as the years go on it will be increasingly necessary for him to do so—reconsider this question of the date of payment of taxation, because when taxation was only 1s. or 2s. in the £ it was not a very big matter anyway, but when taxation begins to reach the dimensions which it certainly does reach at the present time, for those people who have no capital but who are really dependent on their income it becomes a very serious matter.

The last question I want to refer to is one which has brought me a good deal of correspondence, that is, what I have said during the Committee stage with regard to cripples. It has been pointed out to me—the Chancellor of the Exchequer will no doubt say "repercussions"—that cripples do not stand alone. There are also other people who have, in consequence of some form of disability, to provide themselves with artificial aids, and the most important of this class are the deaf. A deaf persons needs for his or her ordinary life an instrument that costs not merely an original sum but costs a considerable amount in upkeep. It may be that the Chancellor of the Exchequer cannot see his way—and I am not suggesting it for this year in any case—to allow a person who is not in active work any allowance on account of an instrument, whether it is for hearing or anything else. But a great many of these people are earning their livings, and out of the money they earn they are paying Income Tax, and they claim, with what seems to me to be an indisputable right, that these instruments which they are forced to use are necessary in order that their living may be earned, that in fact without them they would be quite unable to obtain any income at all. Therefore, as I have said before, if a workman is entitled to deduct for his tools which are necessary for him to carry out his job, so in the case of a typist who may have a hearing instrument in order to do her work and earn her income which yields its tax to the Revenue, I do think there is quite a strong case which the Chancellor might consider for another year. The very fact that the tax is now at such a high figure makes this all the more necessary. That is why I do not think it is an answer to say that this must wait until better days. It is because the tax is so high that these considerations become of special importance. I am sure the Chancellor will be reasonable and give this his full consideration. I have received quite a number of letters on this point, and I have thought it desirable to add to what I said last week some points which have been brought to my attention in the intervening interval, with the assurance that the Chancellor will give it, I will not say his favourable, but at any rate his sympathetic, consideration.

Mr. Woodburn (Stirling and Clackmannan, Eastern)

I would like to put a very short point with regard to the post-war credits. My right hon. Friend, in answer to a question recently, agreed in regard to the post-war credits which were now being allocated to workers' accounts that after the war these would be regarded as savings so far as the Determination of Needs Act was concerned. He said it would be necessary to consider how this was to be achieved, whether by regulation or by some Amendment to the Finance Bill. I would like to ask him today whether he has made any decision in regard to that, and when this is likely to be made part of the law or part of the regulations, because it still causes a little bit of concern, and a great many workers are still, I am sorry to say, a little sceptical about the post-war credits scheme. It would do something to confirm the reliability of the promises made with regard to this if it was made clear that this had been achieved in regard to the post-war credits. I hope that he will be able to give some information to-day as to when and how he proposes to achieve that.

Lieut.-Colonel Marlowe (Brighton)

There are just three points I want to raise. I want to draw the attention of the Chancellor to another aspect of the post-war credits. It is felt by a number of elderly people in this country that they may not survive long enough to draw their post-war credits. I suggest that my right hon. Friend should apply some sort of means test in relation to those people; and if he finds people who are very hard pressed for money, and who have no great faith that they will survive to draw post-war credits, he might give special consideration to the question of providing relief for them. The second point relates to income and Income Tax, so far as it affects civil servants. The question of civil servants' income was touched upon by my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence). My attention has been drawn to the fact that there are a number of lower-grade civil servants such as messengers, doorkeepers and others of that category, of over 60, who before the war were put on a salary basis which was intended to induce early retirement. Their salaries were reduced year by year to encourage them to retire. A number of them have been brought back into the Service, and the same principal still applies. It is true that they get the war bonus, but so do those who are under 60. It is a matter of considerable grievance to many of these people that they are coming back to do war work, the same work as is done by others who are under 60, and that they receive a lower income than the others do.

The third point is that in the whole of this discussion two extreme points of view have been put forward. There has been the point of view of the artisan, the working man, particularly in relation to the payment of income as he earns. On the other hand, there has been the point of view of big business. There is in this country a very large middle class, to whom some relief should be given. The members of that middle class get none of the advantages of free education, free medical attention, and those benefits which go to the lower income classes. I have no sympathy with the big business section, which I am sure is able to look after itself, but I would ask for some further relief to be given to the large body of middle-class people. The small professional men, the shopkeepers, and people of that kind are the people upon whom the heaviest burden has fallen. They have not benefited to the same extent as other classes have from the general prosperity. They still have to pay heavy school fees and heavy medical expenses. I hope that the Chancellor on future occasions will bear them in mind. Their broad backs have borne the burdens of the present situation very well so far, but some of them, with many children to provide for, are finding things very difficult, and I hope that the Chancellor will see his way to afford them some relief.

Mr. Price (Forest of Dean)

I want to refer to another aspect of the question of Income Tax, particularly with regard to workers' wages. This tax is becoming, one might almost say, the sheet anchor of our finance. The Chancellor has raised from it over £1,000,000,000 this year, and he will raise more. He told us that £300,000,000 has gone to post-war tax credits, all of which will give the wage earners of this country a very important stake in this country. That is not a bad thing, because it tends towards stability. I am sure that the workers as a whole accept their responsibility and are glad to make their contribution to the financial stability of the State, but there is considerable feeling about the method of collection. The Chancellor referred to this subject in his Budget speech, and I will refer to it again, if you will permit me to do so, Sir. What is causing the bitterness is the method of assessing the tax on one year's income and collecting it on the subsequent year's income. That, of course, is a system under which people with higher incomes have suffered. The other day I came across a case of a smallholder, who was working on a large farm, putting in extra work with a farmer at potato pulling, haymaking and harvesting, and the same time making an income from his smallholding. There are thousands of such people up and down the country. Their earnings are uneven. Generally the bulk of the earnings come in the summer and autumn. They are not being taxed then. The Chancellor comes along at the dead time of the year, and calls for a large sum of money. In this case the man got so upset that he decided not to work any more on the large farm, but to devote all his time to the smallholding. Perhaps it will be said that for him to spend more time on his holding will be just as good in the national interest, but I think that this matter could be handled satisfactorily if the Chancellor would only look into it. He has said that his mind is open.

I do not see why there should not be a fixed deduction made while the man earns. Then, if on a later calculation it is found that too much has been taken, the excess can be refunded; and if not enough has been taken, the worker can then be called upon to pay more. It has been objected that this will mean more work for the Chancellor's officials. I know that everybody is overworked, but I cannot see that this will cause any greater difficulty, because in any case the various allowances have to be settled. Therefore I do not see how the matter that I am suggesting would throw any greater burden upon the shoulders of his officials. I hope that he will continue to keep his mind open and that between now and the next Budget he will really get some scheme going that will deal with this matter. It will be easier to collect the tax in the long run and not lead to such feeling as there is in the country if something on the lines that I suggest is done.

Sir K. Wood

I do not want to cut short the Debate, but I have to leave for a short time on a matter which I cannot very well avoid, and the Financial Secretary will reply later on. But I would like to make a few observations on the points already put by my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) and others. He raised the question of the considerable amount of sums in cash and in people's pockets being used in all sorts of ways and asked me whether I was satisfied that everything was being done as regards Income Tax to see that the State was getting its fair proportion and share. This matter, as I have told the House before, has been under constant examination and attention by my advisors and myself. We are doing everything we can to protect the interests of the Revenue. I cannot say that I am happy or satisfied with the position. There are people about who undoubtedly are paying all their transactions in notes of large dimensions, and we are considering whether any further steps can be taken, as to which I may possibly have to make a statement to the House very soon. I assure my right hon. Friend that we are not unmindful of the situation, and we are doing what we can to safeguard the interests of the taxpayer who pays properly and honestly and to the full extent.

I also note what has again been said on the question of the deduction of tax from wages. I am seized of the position. I went to a lot of trouble last year in circulating a White Paper in order to reassure the House that the matter had had very careful examination indeed. I would invite anyone who thinks that the matter is easy again to peruse that White Paper, which was drafted and drawn up with great care and showed an appreciation of many of the arguments that have been put forward to-day. The House should be warned of the experience—not that I can speak of it to the full—of other countries of this pay-as-you-earn idea. In the last few weeks in America there has been considerable division of opinion in this matter, and the actual scheme which was brought before Congress was defeated after a good deal of discussion and argument. I also indicated to the Committee on the Budget Resolution itself the sort of proposals put forward in Canada, which involve the supply of returns twice a year by the wage-earners and the assessment of tax to a very large extent by the employers, which are matters that I must carefully study before I commit myself in respect of this country. Throughout I have been acting in consultation with the Trades Union Congress and the British Employers' Confederation. But having said all that, I do not want the House to think that I am lightly setting the matter on one side. I appreciate the anxieties and feelings of a good many of the wage-earners, and I can understand their feeling of apprehension as to the future. I again assure the House that the Board of Inland Revenue are now looking into this matter again and are aware of the desires of the House, and that if there is any possibility of some sort of solution, they are the expert body to provide such a scheme. I have had several conversations with them on the matter.

As far as civil servants are concerned, which matter was raised by my right hon. Friend the Member for East Edinburgh, arrangements, I understand, are being made for payments to be spread over a number of years. If my right hon. Friend will let me have any case where that method is not being applied, I shall be very glad to take it up. I noticed what he said about cripples. I went a long way to meet him that time, and I will in the interim period ponder over any further proposals he brings to me. If he and I are still going going on, I wonder what else he will bring forward when that has been successfully accomplished, if at all.

The hon. Member for East Stirling (Mr. Woodburn) raised again the question of post-war credits. He will remember that I have already made a definite announcement in the House that post-war credits will be regarded as war savings for the purposes of the Determination of Needs Act, and I do not think that there is any further doubt about the reality of this assurance. The issue of the certificates has done a great deal in that connection. I have also on a previous occasion explained to my hon. Friend that the precise legal form in which effect will be given to this position will have to be decided when the time comes, but I will bear his point in mind, and if I see an opportunity of making the position still more clear, I shall be very glad to do so. I would say in reply to my hon. and gallant Friend the Member for Brighton (Lieut.-Colonel Marlowe) that I cannot begin to anticipate the payment of these post-war credits. Directly I begin to break into that condition I am getting into a very great difficulty. Anyone who knows what happened in America in the last war, when payments were made through people being allowed to anticipate sums of this kind, will know that it is not always of benefit and that while you may be meeting one particular case of difficulty, you may bring a lot of harm to other people. I think it is the wisest thing for me to maintain the present position with regard to the payment of post-war credits.

My hon. and gallant Friend the Member for Brighton also raised the question of remuneration of civil servants brought back into the service, and I will examine that matter and communicate with him. I agree with my hon. and gallant Friend and with my hon. Friend the Member for the Forest of Dean (Mr. Price) in many of the observations they have made. I appreciate the heaviness of the burden on the middle section of the community. I hope that many of the proposals we are making, to which I do not think they gave due credit, should go to the advantage of the middle section of the community. While I can understand their position, I must not be unmindful that our stabilisation policy has been of considerable advantage to that particular section. I have wanted to make these observations, not by way of interfering with the Debate, but because I want to say to my hon. Friends who have raised various points that I will carefully examine them and will have regard to what is said in this Debate.

Mr. Benson

I think we shall all agree that if it were possible to introduce a scheme of pay-as-you-go, it would be ideal, but so far no one has suggested any such scheme that would be really practicable. I think the whole question is tending to become somewhat of a fetish. The objection to the system of assessment on one year's income and payment out of the next rests largely on the assumption that the two incomes will vary very considerably. There was great difficulty in the early years of the war when incomes were changing, when incomes in the summer were a great deal higher than in the winter, When the incidence of the tax collected varied considerably from period to period there was hardship. An ad hoc attempt was made by the Chancellor to adjust the periods, make allowances and set limitations so that the incidence of collection should be as equal as possible throughout the year. I do not know whether it is too early yet for the Financial Secretary to say, but perhaps he can tell us how far the Chancellor has succeeded in making the incidence of collection more or less equal throughout equal periods. If he can, I think it will show how far the Chancellor has been successful in removing the major objection of assessment one year and collection the next.

If you have a stabilised income—and I think incomes are tending to become more stabilised—it does not matter very much if you are paying on last year's assessment out of this year's income, because the two are the same. If you make the adjustment the Chancellor has made and you get in effect this payment of assessment out of equal income, there is little or no objection. If the Chancellor has achieved that, I think the case for the pay-as-you-go system—which would be extremely difficult to evolve—largely falls to the ground. One objection often raised to the present system is that when working life ends, when a man finally ceases employment, he will still be owing a year's tax. It may well be that the Chancellor, in order to maintain his present method of collection, will have to face up frankly to the fact that the final year's tax may not be collected. On the other hand, it must not be forgotten that there is no system of pay-as-you-go which can be instituted which does not mean that the Chancellor will have to forgo one complete year's tax. The institution of a pay-as-you-go scheme means that the Chancellor on weekly incomes definitely surrenders the right to last year's tax. [An HON. MEMBER: "No."] Yes, last year's tax is payable out of this year's income under the present law. If you are also to make this year's income taxable in this year, either you have two years' tax payable in the one year—that is, last year's tax and this year's tax as well—or you have to wipe out last year's tax. That is perfectly clear. There is no other way out.

Mr. Messer

Is it not possible to take last year's tax by weekly payments out of present income?

Mr. Benson

That is exactly what you are doing now. Last year's tax is being collected by weekly payments out of this year's income. If you say we will institute a system by which this year's tax is based on this year's income, you have to pay last year's tax and this year's tax out of one income. That is impracticable, and one year's tax must be remitted. But if the Chancellor is to forgo one year's tax, it does not matter to the Chancellor whether it is last year's or some future year's tax. In any case, he will definitely lose one year's tax.

Mr. Woodburn

It may mean that he would lose the difference, if there was a difference, between this year's tax and what it would have been if it was taxed on last year. Eventually, maybe, he will lose one year's tax.

Mr. Benson

That is true so far as the practical effect is concerned. As the Chancellor is bound to lose one year's tax, it does not really matter which, and those critics who argue against the present system, that the Chancellor will ultimately have to forgo large amounts of tax when the earning capacity of the workers is lessened, are using an argument which may be theoretically valid but which is cancelled out by the fact that the system they advocate must produce an identical loss. The real problem is: Has the Chancellor succeeded in equalising the incidence of the collection of earnings and have earnings stabilised themselves sufficiently to remove any hardship which assessment in one year and payment the next makes? If the Financial Secretary can give us any information on that point, I shall be glad.

Mr. Evelyn Walkden

I do not propose to follow my hon. Friend the Member for Chesterfield (Mr. Benson), and I know he will forgive me, because I am not an expert on how Income Tax is collected nor the various Income Tax systems, but, speaking as an old grocer, and one who has had considerable experience in making returns as to profits and transactions, I feel it is my duty to ask the Chancellor to consider the changed systems that are obtaining in the wholesale fruit and vegetable markets, which have led to the wholesale evasion of taxation. It is two years since I began to inquire into this matter. I am astonished at what has happened, and I am wondering whether the Treasury inspectors have reported on the widespread changes that have become operative, particularly in recent months.

Let me give the House a simple illustration. In the North of England we in the retail trade have always recognised that in the purchase of any commodity that involves payment of £2or over the payment should be by cheque. Consequently, we always had a record which was open to inspection by an inspector or auditor or any person who cares to make an inquiry. That was a system which I always understood and was a code of honesty which was generally accepted throughout the trade, certainly by, grocers. I always thought the same thing applied to the wholesale market generally, but I find that I was a mere innocent lad. After what has happened in recent months in the fruit and vegetable market, I recommend to the Chancellor that he should take into account the representations which have been made by certain Members in all parts of the House that all big transactions should be paid for, and recorded by, cheque.

Let me give a simple illustration. I am satisfied that at most fruit and vegetable markets at the present time there are transactions involving hundreds of pounds a day, thousands of pounds a week, and possibly tens of thousands of pounds a year, in which no receipts are given. There are cash payments for all goods sold. When I am told that this Resolution affects individuals whose total income exceeds £1,500 a year, I wonder what check the Chancellor can possibly have on these people who have deliberately changed their method of bookkeeping by keeping no books at all. They are deliberately evading taxation. The average weekly wage earner cannot evade anything; he has got to pay and cannot cheat in any way. Cheating on a wholesale scale runs right through the markets of this country. There are many reputable firms which have continued with their codes, and their business methods would bear examination by anybody; but there are scores of firms which have deliberately designed their business methods to evade taxation. For instance, a small greengrocer goes to the fruit and vegetable market to purchase £50 worth of greengroceries. He has his pockets packed with £1 notes. He goes to the market and makes his purchases, but he cannot show any receipts because he has not got any.

I would emphasise that this is not the black market. It is the ordinary legitimate wholesale fruit and vegetable market. It is the common practice. I am not an expert in devising ways and means of trapping cheats, but I suggest that a simple method could be adopted to put a stop to this practice. Could not the Chancellor bring in a small Measure providing that all transactions in the wholesale markets shall be made under an official receipt, no matter how small those transactions may be? That ought to be some kind of regulation which imposes upon the wholesaler, the buyer and the seller, the keeping of a record one way or the other, or in both ways. I ask the Chancellor to make a careful investigation of this problem. I ask him to make investigations in the markets. If he does this I feel sure he will be astonished by what he finds and astonished by the results that will accrue to the Treasury if only he can force all the cheats into the net and make them play the game by the Treasury and the nation.

Lieut.-Commander Gurney Braithwaite (Holderness)

I wish to refer to the very interesting speech of the hon. Member for Chesterfield (Mr. Benson), who shook the faith of some of us who advocate the pay-as-you-go system, if it can be made workable. I think the majority of opinion in the House and in the country is in favour of that system if we can get the machinery to work it The hon. Member made a very strong point when he said that in any case the Treasury was going to lose a year's revenue in this matter, but is that really so? I have not noticed at the Treasury an atmosphere of benevolence. When a person comes to the end of his working life, or when he is confronted with a heavy assessment on a good year followed by a year in which he is floundering, what happens is that the Treasury officials are helpful and allow the back payments to be made over a period. I want to ask the hon. Member for Chesterfield whether, even if he is right in his statement—I do not think he is, but there may be cases in which he is right—the argument is not in favour of a transition now to a pay-as-you-go system.

Mr. Benson

It depends from what point of view the hon. Gentleman is asking the question. If there is a transition now to the pay-as-you-go system, the Treasury must necessarily give up a year's revenue. It cannot hold over to 1950 or 1960 a tax which was assessable in 1942. If there is no change in method, the Treasury does not in any way surrender its right; it only becomes impracticable to collect when an individual no longer earns.

Lieut.-Commander Braithwaite

The hon. Member has anticipated the point I was about to make. I suggest it is not impracticable to make the transition and to keep the revenue. I think that if the matter is put fairly to the country, there will be no objection at this moment, when wage standards are good, to collecting the back revenue. I think the country would appreciate the point. The difficulty of many wage earners, who are now paying Income Tax for the first time, will not come at the end of their working life. The difficulty will come at the conclusion of hostilities We cannot foresee what will be the circumstances then, but it may be that a large number of factories on war production will have to close down for some months in order that the plant may be switched over to peace-time activities. It may be that at the end of the war, when people are confronted with an Income Tax claim for the last year of hostilities, it will be a frightful burden upon them. They may be unemployed at the time. It is better to face these difficulties now, at a time when employment is good and wage standards high, than to put them off to a time when the post-war situation may be very difficult. I do not think it is beyond the ingenuity of the Treasury to work out this matter. If is not a new problem. Although it may be a new one to many people, there are many business men who have known years in which their profits were nil and who have been confronted with demands for both Income Tax and Surtax on the previous year's profits, which were good. I would also remind the House that at the beginning of the war many men who were conscripted into the ranks had Income Tax demands made upon them for the year 1938–39, which was a prosperous year in which their incomes may have been £700 or £800, or even have reached four figures. In the interests of the whole community, employers and wage earners, it would be better to face the problem now, and even if it meant a few anomalies, to make an alteration in the machinery now.

The Financial Secretary to the Treasury (Mr. Assheton)

The Chancellor of the Exchequer has, I think, answered nearly all the points that have been raised, but I should like to say a word with regard to that just mentioned by the hon. Member for Doncaster (Mr. E. Walkden). It was raised earlier by the right hon. Gentleman the Member for East Edinburgh (Mr. Pethick-Lawrence), and the Chancellor of the Exchequer made it clear that he was keeping a most careful eye on this question of the possibility of evading tax by cash payments. But I will draw his attention to what the hon. Member said, and, if there is anything further that can be done, done it must be. I hope, however, that the House will not form the impression that the taxpayers as a body are trying to evade their taxes. I think on the whole the Income Tax paying community are making a very gallant effort to pay their taxes and to pay them to time. It is interesting to observe that it is not 100 years ago since John Stuart Mill said that Income Tax was an impossible tax because people were so dishonest they would never make a true return of their income. We have had Income Tax for a good many years, and I do not think the standard of honesty can be said to be falling.

The hon. Member for Chesterfield (Mr. Benson) raised two points. One was the question of pay-as-you-go. My hon. and gallant Friend the Member for Holderness (Lieut.-Commander Braithwaite) has to some extent answered his point. The Chancellor has already said that the Board of Inland Revenue is now engaged in examining the matter afresh. I think it would be inappropriate if I attempted to discuss the matter in detail or debate the points that have been raised. Particularly can I assure the House that the question of the possible loss of a year's, or part of a year's, revenue is not one of those questions that will be overlooked either by the Inland Revenue or by the Treasury or by the Chancellor himself. The hon. and gallant Member asked how far the reforms that have been introduced in administering this tax have improved the position. I am glad to say that it has undoubtedly improved and that the arrangements made by the Board of Inland Revenue have gone a long way to meet the difficulty. But there are some that cannot be met in that way, and my hon. and gallant Friend the Member for Holderness drew attention to examples of them which occur, when a man who has been earning a substantial income, for instance, goes into the Army and draws a small amount of pay. As the House knows, my right hon. Friend is looking into the whole matter again. He is anxious to see if some way can be found of meeting these real difficulties, and, if a way can be found which is not open to any serious objection, he will no doubt communicate it to the House.

Question, "That this House doth agree with the Committee in the said Resolution," put, and agreed to.

Thirteenth Resolution agreed to.