HC Deb 06 July 1943 vol 390 cc1932-3
55. Sir Robert Young

asked the Chancellor of the Exchequer whether he is aware that, whereas payers of Income Tax are free from any payment of tax on the increment value of National Savings Certificates, the persons in receipt of noncontributory pensions have the annual increment value taken into account in deter- mining the amount of pension to which they are entitled; and why this penalty is imposed on one class of pensioner as against any other class?

Sir K. Wood

The position to which my hon. Friend refers is statutory, both as regards the exemption from Income Tax and as regards the calculation of means for the purpose of non-contributory old age pensions. The Income Tax exemption dates from the institution of War Savings Certificates during the last war, and no further class of security exempt from Income Tax has since been placed on general issue. I could not accept the suggestion that, because this exceptional concession in regard to Income Tax has been continued, capital invested in National Savings Certificates cannot fairly be taken into account in other connections.

Sir R. Young

As the increment of the interest is added monthly or annually, does that mean that these pensions are reviewed annually in so far as increments are concerned in investments of that character?

Sir K. Wood

Perhaps the hon. Member will allow me to look at that, and I will let him know.

Sir A. Lambert Ward

Is not the real reason why Saving Certificates are exempted from Income Tax that those are the terms under which they are issued?

Sir K. Wood

I think that is so.