NEW CLAUSE.—(Easter Offerings.) (Hansard, 3 June 1943)

§ Mr. Ivor Thomas (Keighley)
I beg to move, "That the Clause be read a Second time."
In doing so, I should like to clear away a misapprehension which may exist in some quarters. This new Clause is not intended to benefit the clergy of the Established Church alone. Its terms show clearly that its benefits could be claimed, and no doubt would be claimed, by ministers of all denominations. If it should lead to a wider appreciation of the significance of Easter among all denominations, I think the Clause would be doubly blessed. I hope that the Chancellor of the Exchequer, as a good 390 Wesleyan, will appreciate that point. The Clause is designed to remove a grievance which has become more acute as the screw of taxation has been tightened. Easter offerings are wholly voluntary gifts made to an incumbent by such of his parishioners as feel so disposed, and it is a general principle of our law of taxation that gifts are not subject to Income Tax. If the Chancellor of the Exchequer in a mood of cherubic benevolence were to hand me a £1 note over the Table, or even a few units of "bancor," I should be under no obligation to include that in my Income Tax return; but if I, out of my heavily-taxed income, give a £1 note to the vicar of my parish at Easter, then the vicar would be subject to all the rigours of the law if he did not include that in his Income Tax return. In practice, if I wish to give a £1 note to 'the vicar of my parish at Easter, I am obliged at the same time to give an Easter offering of £1 to the Chancellor of the Exchequer, which is not my intention at all.
The assessment of Easter offerings for Income Tax thus contradicts a fundamental principle of our law of taxation. It discriminates against a body of men who render great service to the community, often for very meagre returns. How has this paradox come about? So far as can be seen, it was not the intention of the House that Easter offerings should be taxed. The law under which they are taxed is judge-made law. I do not dispute that judge-made law is as authoritative as Statute law, but I hope to show that there are at least elements of doubt about the grounds upon which the learned judges came to their decision. Income Tax was reintroduced in 1842 by an Act which made provision for levying a duty in respect of offices, employments or pensions on all salaries, fees, wages, perquisites or profits whatever, accruing by reason of such offices, employments or pensions. It is extraordinary, if the case for taxing Easter offerings is so obvious, that the astute officials of the Inland Revenue thought for over 6o years that this provision did not cover Easter offerings. These obviously are not "salaries, fees or wages." They are not "perquisites" within the legal meaning of that term, nor in any rational meaning of the word can they be regarded as "profits." But the 391 tax-gatherers' net has been spread ever more widely, and about 1905 the Inland Revenue made a determined effort to get Easter offerings into the bag.
The attempt caused dismay among the clergy, and the Easter offering at East Grinstead was made a test case. It has come down into history as Blakiston v. Cooper, and is the sole basis on which Easter offerings are taxed. The Income Tax Commissioners decided that the sum of 06 then collected was not subject to tax, and, in the lower court, Bray J. confirmed that decision; but the decision was reversed by the Court of Appeal and another place upheld the Appeal Court's decision. That is the basis on which Easter offerings have been taxed ever since. As it has been decided in another place that this is the law, it is the law, whatever Members of this House may have intended in 1842. But what the judges have done this House can undo. It has often happened that a Statute, as interpreted in the courts, brings consequences which this House never intended.
If the Committee will bear with me, I will give some reasons why in this case the law as interpreted in the courts should now be amended. As I have said, it is a general principle of taxation that gifts are not to be regarded as income. More precisely, according to Halsbury's "Laws of England," "gifts or voluntary allowances are not income in the hands of the recipient unless they are attached to and form part of the emoluments of an office, employment or vocation." The contention behind this proposed new Clause is that Easter offerings are not part of the emoluments of an office. They are gifts made to an individual in virtue of his personal qualities. The parishioner is absolutely free to give anything or nothing; to make a gift one year and to withhold it the next; to make a gift to one man he likes and withhold it from his successor whom he dislikes. The Rev. A. D. Light may get a bumper offering, but his neighbour the Rev. 0. Howe Boring may not even care to ask for one. In codnsidering his gift the parishioner will take into account such qualities as the incumbent's skill in preaching or the number of orphreys on his chasuable, according to his standards. If the parishioner is a Tory and the incumbent preaches Beveridge, the parishioner will 392 probably give nothing. If the parishioner is a Socialist and the incumbent puts Empire Day on a level with Ascension Day, he will probably give nothing. The mellifluousness of his voice, his attitude at the sick bed, the degree 'of his friendliness with the Girls' Friendly Society—these are the kind of qualities that induce the making of gifts. In short, the parishioner makes the gift to the vicar as a man and not to the vicar as a vicar. If I may make a subtle distinction in the Latin of the courts, it is true that the gift is made to the clergyman because he is a clergyman, but the fact that he is a clergyman is a causa sine qua non and not a causa causans. A present of grouse may be made by a patient to a doctor because he is a doctor, but the doctor would not be required to show it in his Income Tax return.
I hope I have said enough to prove to the Committee that Easter offerings are a personal gift to the man and not "profits accruing from an office." If not, my contention can be supported by a comparison of Eastern offerings with other emoluments of the clergyman's office. I refer to the fees which he receives from such rites as churchings, marriages and funerals and such grants in augmentation of his income as he may receive from the Additional Curate Society and similar bodies. These fees and grants are paid in respect of the office and not in respect of the man, and, as such, they are properly subject to tax. The fee paid for a funeral, for example, is a fee paid for services rendered, and the personality of the clergyman does not arise. A grant made by the Additional Curate Society for a second curate in a parish is a grant in respect of the office, and the curate may not even be appointed when it is made. I believe I have only to cite these facts to make it clear to the Committee that Easter offerings belong to an entirely different category.
I am not without hope that the Chancellor of the Exchequer, being a reasonable man, will accept this argument. But, like all Chancellors, he will not agree that two' and two make four unless he sees what use. We are going to make of the concession. He is afraid that if he opens the door someone will take it off its hinges. I hope that the limit of £50 mentioned in the Clause will, in this case, dissipate all his fears and remove all pos- 393 sibility of abuse. This limit, which is the amount of a fair Easter offering, is intended to ensure that the benefits of the Clause will be effective only as regards bona fide Easter gifts, such as were in existence before Income Tax was invented—and for those not familiar with the procedure, I should say that Easter offerings have not sprung up since Income Tax was. introduced for the purpose of evasion, but were in existence for hundreds of years before Mr. Pitt introduced the tax. I would also like to say that this limit distinguishes Easter offerings from the case of the Metropolitan of Thyateira which was in the courts recently.
In making concessions, Chancellors of the Exchequer are haunted by another consideration, namely, that the loss of revenue must be made good from some other source. The concession now sought, though important to the persons concerned, is a very small item in the national accounts. There are about 12,000 incumbents in the Church of England. On the assumption that each of them receives an Easter offering of at least £50a a year, and that this is subject to tax at the full standard rate, the loss in Revenue would be £300,000 a year; but each one of these assumptions is very much exaggerated, and in practice the loss to the Revenue would hardly exceed £150,000 a year. Moreover, it is my contention that this revenue ought never to have been collected, but we will excuse the Chancellor from repaying the back money.
There are a few incidental considerations which I would like to urge. The present law—again. "I refer to "Halsbury"—puts Easter offerings in relation to Income Tax in the same category as tips to a waiter, permitted commissions, or presents by owners of racehorses to winning jockeys. But there is this difference between them. When the law says that Easter offerings are liable to tax, they are taxed; but when the law says that tips are liable to tax, they are not taxed. I wonder whether the Chancellor would tell us what is the total return under the heading of "tips" in the Income Tax Returns; and if he can produce a jockey who has made a return of a present paid to him by the owner of a horse, I expect the jockey's name to be George Washington. Another consideration is that the taxation of the Easter offerings can be very easily avoided. 394 Perhaps I ought not to use the word "avoided," because it is no more avoidance of taxation than teetotalism is avoidance of taxation. Since we put this Clause on the Paper I have received a large number of ingenious suggestions on the subject, all absolutely watertight so far as I can see; and I personally should see no impropriety in making my gift in such a form as not to attract taxation. If the Chancellor does not make a concession that is bound to happen on an increasing scale; but I do not see why laymen should be forced to vary this ancient and laudable custom of Easter offerings, and I hope that he will concede gracefully what he is bound to lose in any case: In answer to a Question in the House, the Chancellor said that the Royal Commission on Income Tax had considered this matter and had recommended against an increase. I would point out that the Commission dealt with the subject most inadequately, in only nine lines, and the reason given would operate against all gifts of any sort—that the person who received the gift has a greater taxable capacity than the person who does not. That would apply to gifts of every kind.
I have not based this argument on the poverty of the clergy. That poverty undoubtedly exists, but it would be contrary to the interests of religion to ask for the subsidisation of clerical incomes out of the Revenue, and I do not ask for it. I ask the Committee to approve this Clause in order to remove an injustice which ought never to have been imposed. But having, as I hope, proved the justice of the case, I do not hesitate to use the poverty of the clergy as an argument for acting, and for acting quickly. These men belong to a class of whom the Chancellor observed in the Beveridge Debate: Some of the hardest and most cruel cases I have heard of come from that section of the community.''—[OFFICIAL REPORT, 17th February, 1943; col. 1829, Vol. 386.] Here is an opportunity for the Chancellor to be as good as his word. We owe much in our national life to the homes of the clergy. The country parsonage, which gave us Nelson in a former day of trial, has in this war given us Lieut.-Commander Beatty, V.C., the hero of St. Nazaire, and even General Montgomery himself. The austerity of the parsonage may be a necessary part of their training, but do not let us convert that austerity into a chilling penury by unjust taxation.

§ The Chancellor of the Exchequer (Sir Kingsley Wood)
I do not want to curtail the Debate at all, but I have to leave the Committee for a few minutes as quickly as possible, to attend a meeting that cannot avoid, and I would like to say a few words. I wish to congratulate my hon. Friend upon his excellent speech, but I confess that I thought it rather weak in logical argument. This matter has been often discussed in this House, and even in times of peace, when one could perhaps look at such matters more favourably, the proposal has been consistently rejected. My hon. Friend gave only a partial account of the history of the matter. Not only is the fact that Easter offerings are subject to taxation well-founded law, but I think it is well-founded good sense—which I agree is not always the same thing. It is worth looking at what the Lord Chancellor said when the case of Cooper versus Blakiston was before the House of Lords, when this matter was very fully considered. That was in I999, a good many years ago. The Lord Chancellor said: In my opinion, where a sum of money is given to an incumbent substantially in respect of his services as incumbent, it accrues to him by reason of his office. Here the sum of money was given in respect of those services. Had it been a gift of an exceptional kind such as a testimonial or a contribution for a specific purpose as to provide for a holiday, or a subscription peculiarly due to the personal qualities of the particular clergyman, it might not have been a voluntary payment for services but a mere present. In this case there was a continuity of annual payment"— as is the case in all these Easter offerings— apart from any special occasion or purpose, and the ground of the call for subscriptions was one common to all clergymen with insufficient stipends urged by the bishop on behalf of all alike. What you choose to call it matters little. The point is what was it in reality. It is natural and in no way wrong that all concerned should make this gift as like a mere present as they could, but they acted straightforwardly as one would expect and the real character of what was done appears clearly enough from the papers in which contributions were solicited. This matter has been discussed on another occasion since that case, and the same opinion was held. My hon. Friend quite rightly reminded the Committee that the matter was the subject also of careful attention by the Royal Commission on Income Tax, and that they were unable to recommend any alteration, although I have no doubt that they would be sympathetic to proposals of this kind.

§ Captain Strickland (Coventry)
When my right hon. Friend speaks of the continuity of gifts from year to year, has he given due consideration to the fact that a congregation changes individually from year to year, and that it could never be held that a gift made by A. is similar to a gift made by B. in the succeeding year, when A. has left the parish and B. has come in?

§ Sir K. Wood
I do not mean continuity of the same persons. I had a discussion with a clergyman on the subject only a few months ago, and he told me of his particular position, and what he was in fact getting. He quite rightly calculated what would be the average amount that he would receive in respect of the Easter offering for the particular church to which he was attached.

§ Mr. Driberg (Maldon)
There is possibly continuity within a single incumbency, but there is not continuity from incumbency to incumbency. The offering may rise or fall quite drastically according to the incumbent's popularity or otherwise, and is therefore surely a personal gift not attached to the office.

§ Sir K. Wood
I do not think there is any doubt that but for the office the gift, in fact, could not be made.

§ Mr. Ivor Thomas
Does not the right hon. Gentleman appreciate the distinction I made between the causa sine qua non and the causa causans? It is not made to the clergyman because he is a clergyman but made to a vicar because of his qualities as a man and not the incumbent of a particular parish.

§ Sir K. Wood
I do not accept that for a moment. It is true that a clergyman who may be more popular than his predecessor might obtain a larger sum but it is impossible to argue in fact that the gift is not given to him by virtue of the office he holds. If he did not have that office, he would not be getting any Easter offering. In all these cases, the clergyman makes an inquiry, as he should properly do, and no one would complain about that. If a certain living were offered to him, one, of the first questions he would ask would be, "What is the general amount I am likely to receive, including the sum I shall in all probability obtain by way of Easter offerings? "That undoubtedly is the case, and if you asked 397 any clergyman he would say that that would be the inquiry, he would put before accepting a particular living. The Royal Commission said: While it is no doubt true that the amount of the Easter offering in any particular parish may depend in part upon the personal circumstances or the personal popularity of the clergyman, yet it is, in our opinion, impossible to ignore the plain sense of the position, which is, that Easter offerings are paid to a clergyman because he is a clergyman and only so long as he remains a clergyman. Of two incumbents, with emoluments and incomes otherwise equal, one of whom receives £100 from Easter offerings and the other nothing, to pretend that the taxability of the first is not greater than that of the second is to shut one's eyes to realities and to give undue weight to a natural sentiment. That is a very fair statement of the position.

§ Mr. Thomas
We do not pretend that, but that would operate against all gifts of any character because they increase the taxable capacity of the person in receipt of them.

§ Sir K. Wood
No, there have been a considerable number of decisions in the courts of law which carefully distinguish between what one might call the casual gift and the contribution such as is made by a particular church in relation to Easter offerings. I have a record here of a number of these cases. Take the case of Reed v. Seymour, where it was held that the proceeds of a benefit match arranged for a professional cricketer, together with subscriptions made to him by the public on that occasion, were not taxable income. The courts very carefully distinguish between a gift given on a special occasion of that kind which is not a regular repeated gift given every year and those which are the subject of the decisions to which I have already referred.

§ Sir Herbert Williams (Croydon, South)
I take it then, that if we have a bazaar every five years and give the vicar a lump sum payment, he will escape taxation? It would be regular.

§ Mr. Goldie (Warrington)
Is it not the case that the professional cricketer receives a benefit match and the professional footballer does not?

§ Captain Strickland
Would that man have received that benefit match had he not been a cricketer? He is a popular man as well as a cricketer, but had he 398 not been a cricketer he would not have received it. A clergyman may happen to be popular or unpopular, but, incidentally, he is a clergyman.

§ Sir K. Wood
I will refer to what the Lord Chancellor said on that occasion. He pointed out that the terms of the cricketer's employment did not entitle him to a benefit; but that in practice a benefit was usually given towards the close of a cricketer's career and in order to provide an endowment for him on retirement; that except in a very special case it was not granted more than once; and that its purpose was to express the gratitude of his employers and of the cricket-loving public for what the cricketer had done and their appreciation. of his person qualities. Lord Phillimore, who was not only a distinguished Judge, but was well-known for his interest in the Church and ecclesiastical matters, devoted a very large proportion of his speech to distinguishing this particular case from the Easter offerings case. He pointed out that the Easter offering might be voluntary, but it was not spontaneous, and in the Easter offerings cases there was an element of recurrence which distinguished them from the case of a single gift to an employee. The practical distinction between the professional cricketer's case and Easter offerings is that the benefit moneys come to the cricketer on one occasion towards the end of his cricketing career and that Easter offerings, on the other hand, represent a recurring annual contribution for the personal use of the recipient. I could give instances of other cases in which this matter has been discussed.

§ Sir Francis Fremantle (St. Albans)
Is not that affected by the fact that, since that decision was given, the 1919 Church Assembly Act was passed, and these offerings are under the control of the parochial church council, who may in any year say "We will" or "We will not have an Easter offering devoted to this subject"? In the case of livings which are above the poverty line that is very likely to be the case, and it is done, and does not that break the whole argument of continuity?

§ Sir K. Wood
If that is the case it shows more and more that it does not rest merely with the person but that the matter is taken into account by the Church authori- 399 ties and according to My hon. Friend is being dealt with by them. I cannot think of a more substantial example of support for the views the judges have taken than that statement, if in fact that represents the practice. If it is true that the Church authorities are now intervening and taking the money and treating it in that way, it shows more than ever that it is being dealt with and must be considered on the lines that the judges have laid down.

§ Mr. Driberg
I think the right hon. Gentleman misunderstood what has just been said. The Church authorities are not taking the money and applying it perhaps for other purposes. But the churchwardens can say, if it is a large living or the vicar is a man of substantial private means, that obviously there is less need to give him an actual cash present.

§ Sir K. Wood
If that is so, the churchwardens are now intervening and taking the matter into their hands and dealing with it as a Church affair.

§ Mr. E. P. Smith (Ashford)
Supposing the Easter offering was not given at Easter but, on the incumbent's birthday, a sum was given by the parishioners individually, would that be subject to Income Tax?

§ Sir K. Wood
I should certainly say so. That leads me to another point, and I am glad my hon. Friend has reminded me of it. Why Easter offerings only? Why is this taken to be an exception and a matter for special consideration as far as taxation is concerned? Take the case of the Roman Catholic Church. Very considerable voluntary offerings are given to priests in the Roman Catholic Church, apart from Easter offerings, and they include, I am informed, offerings for particular services of the ministry. In the Catholic Church there are offerings not only at Easter, but at Christmas. If you say, "I will pick out Easter offerings," it would be proper for the Roman Catholic Church to say, "If it is to be Easter offerings, we have offerings at Christmas as well, and therefore, we must have the Christmas offerings exempted." [An HON. MEMBER: There is a limit of £50."] I know, but there may be some who only get money in that particular way. My hon. Friends are optimistic if they think that if the House says it is to be £50, it will stop at that. That has 400 not been my experience in taxation matters. It is a proper and in fact very substantial answer to make that you cannot, if you embark on a matter of this kind, apply it to Easter offerings only. There may be some special circumstances surrounding Easter offerings but some people would quite properly say that it cannot stop there and would say that obviously it must apply to other special offerings given at Christmas, or, in the case of the Roman Catholic Church, to offerings for particular services.

§ Captain Strickland
Does not the Chancellor accept a fixed sum with regard to personal allowance? If you make the personal allowance so much it does not mean that it varies from year to year.

§ Sir K. Wood
It does very much, and if my hon. and gallant Friend were in my position he would know of the constant pressure brought upon me to vary these allowances. Therefore, my first answer is that the law is quite plain and has been laid down for a very considerable period. It is not only quite plain but very good common sense. Secondly, if you once say that there is to be a special dispensation given for Easter offerings, you cannot stop there. You cannot take the practice of a particular Church and say that in that respect only benefit is to be given by way of relaxation of taxation. You have to look at the position of other Churches who have the right to come forward and say, "If you admit the principle of Easter offerings, we demand that the same principle should be applied to other offerings given at Christmas." I would also say to the Committee that there may be Churches in which there are no Easter offerings. The ministers of these may say, "We do not go in for the practice of Easter offerings. Our stipends are paid in a different way. Why should the clergyman belonging to the Church of England receive special consideration at the hands of Parliament because the remuneration of a clergyman happens to be paid by way of Easter offerings?" That would be a most difficult position and most unsatisfactory to ministers of other denominations. I would also add for the consideration of the Committee that I do not think that to-day of all occasions—this has been objected to many times in the past—Parliament should assist this particular section of the community and give relief 401 by way of taxation. I think that the country would not understand it.
There is a large number of claims I have had to reject from different sections of the community which have been put forward on practically the same basis. A few minutes ago I had a telegram, evidently an echo of a by-election which is now going on, asking me if I would say why over-time should not be relieved from taxation. Well, I can give a proper answer to that as I can to this. People would say, "You are giving a special dispensation to various ministers of religion in respect of Easter offerings, but you will not give a special dispensation to workers on over-time." I have had other schemes to consider on the same basis; for instance, there was a claim which would appeal to many people—to exempt that portion of a merchant seaman's money which is called "danger money." That has a strong sentimental appeal, but if you once begin—as I explained to them and as they understood—to cut up various components of people's remuneration, you will never finish.

§ Sir H. Williams
My right hon. Friend has said that he could not exempt part of the remuneration of a member of the Mercantile Marine. In fact he does so, because the man is paid a substantial amount in kind, which is not taxed.

§ Sir K. Wood
We intend to deal with the question of kind when we come to one of the new Clauses later in the day. But that in no way affects the argument I am putting before the Committee, namely, that if one began to differentiate between different elements of, a person's total emoluments it would really be impossible to refuse others. I must maintain the position which has always been maintained in this House. In conclusion, I would like to point out that there would be difficulties, injustices and inequalities between one minister in the Established Church and another who might not have any Easter offerings. I appreciate the position of many ministers of the Established Church—I read a report of theirs the other' day in which proposals were put forward to make things better and more equal—and I would like to see an improvement in the position of many of them, but for the reasons I have given I do not think it would be fair and right to accept this new Clause.

§ Mr. Willink (Croydon, North)
Before the Chancellor leaves the Committee will he consider the matter from this point of view? It is really quite futile to say that the law is plain. This is a question of altering it. The law as it stands arises from the application of legal principles. This may give rise to a position contrary to the general feeling. This has been felt for decades to be repugnant to common sense.

§ Sir K. Wood
I stated quite definitely that not only was this the law but that it was common sense as well. I also said that Parliament has always accepted this position.

§ Mr. Higgs (Birmingham, West)
When Income Tax was 6d. in the £.

§ Sir K. Wood
Yes, when it was much smaller than it is to-day. My hon. and learned Friend the Member for North Croydon (Mr. Willink) must not say that opinion has been such that this matter has caused resentment and feelings of injustice among the great majority of the people. It may be true that it has caused such feelings among a certain number of people—as we have seen in this House to-day—but for the reasons I have given I cannot make any special exemption for a certain section of the community in this respect.

§ Mr. Boothby (Aberdeen and Kincardine, Eastern)
I would like to support this new Clause. Skilful and adroit though the Chancellor's speech was, it was wholly unconvincing. He did not make any attempt to deal with the principle underlying this Clause, which is a simple one, namely, are these offerings a gift or not, and are they a voluntary gift or not? If they are voluntary, they ought not to be subject to Income Tax; if they are part of the ordinary remuneration of a minister or clergyman, then they should be subject to the tax. I do not think any other point really matters. I cannot persuade myself that they are in essence anything more than a voluntary gift made by a congregation to their minister or priest as- an individual because they like him and for the services he has rendered to them personally. There is no element of compulsion about it whatsoever; there is not even an obligation. I cannot agree with the Chancellor that in these circumstances you can describe these annual gifts as emoluments apper- 403 taining to a particular office or Church. The Chancellor himself made no attempt to deny that they vary greatly in amount from year to year and from individual to individual or that congregations also vary greatly at the same time. There is nothing permanent about these annual gifts except that they take place annually. If they were made more sporadically, every two years or every two and a half years, and at a different time from Easter, I am not at all sure that they would be subject to Income Tax.
If a gift to a clergyman or minister of religion is used for the specific purpose of taking his family to a seaside or purchasing a motor car, I understand that the gift is not subject to tax, but if it is used to implement the exiguous salaries paid to the vast majority of clergymen in this country in order to help pay for the bare necessities of life, what do the Treasury do? They come along, take half the money out of the plate and pocket it. There might have been something to be said for that when Income Tax was 6d. or 9d. in the £, but there is nothing to be said for it now, when Income Tax is 10s. in the £ I do not believe that many members of congregations fully realize that 10s. in the £ is taken from their gifts by the Chancellor. I am sure that if this question was left to an open vote, we should get a close vote, because there is a strong body of opinion that does not think it right that this should happen. I cannot think it is right to take money from men who are clearly overworked and underpaid and turn what is a thank-offering into a commercial proposition. That is what the Treasury is doing now. The Chancellor, in his speech, quoted the law as laid down by Lord Chancellor Loreburn. But he expressed his views in 1909, when Income Tax was 9d. or a 1s. in the £ At any rate, if we think it is not right, we are perfectly entitled to alter the law. Even if nothing can be done on this occasion I hope the Financial Secretary will give the Committee an assurance that in view of the anxiety which is being expressed this whole matter will be carefully considered between now and the introduction of the next Finance Bill.

§ Mr. Moelwyn Hughes (Carmarthen)
I rise to express the hope that the Government will not accept this new Clause. 404 There is no class of people in this country who do such a considerable amount of valuable work as clergy and members of the ministry, and they do it for very' little pay. If by any means their position could be eased, I should be only too glad to see it done, for I know something about it, because my father was a minister. We have been using legal terms in this discussion, but looking at this matter from a common sense point of view these- gifts are collections of money given in order to maintain and assist the ministry at a particular church. It is not only on Easter Sunday that the collection plate is passed round for the minister in Nonconformist churches. The whole of a Nonconformist minister's livelihood depends upon an accumulation of offerings, spreading from Sunday to Sunday. They are all gifts. There is no compulsion to make them—I am quoting from arguments used in favour of the Clause—and they vary from chapel to chapel. There is no constancy about them. The minister's salary is not a fixed salary.

§ Mr. Ivor Thomas
Almost every Nonconformist minister is paid a fixed salary. It is true that it is received in the form of gifts which may exceed the amount, and then it is diverted to some other purpose. I cannot defend the idea that a person should receive all his income in the form of gifts, because that would mean evasion of taxation.

§ Mr. Hughes
I was just about to point out that, although most Nonconformist ministers go to a chapel with the figure mentioned, that figure is not final. I know plenty of cases where the accumulated offerings of the year and the collections towards the ministry are always kept distinct from other collections and if the accumulated Easter offerings exceed the amount that has been mentioned more has been paid. I know cases of ministers who have had year after year to accept less, because, owing to altering conditions of population or whatever it may be, the accumulated offerings have not come up to it. To describe a minister's remuneration as a salary, and to regard it as something equivalent to a commercial contract, is to make a vast mistake. What a minister gets is an accumulation of Easter offerings. If the principle contended for by the Clause 405 is right, no Nonconformist minister should pay a penny of Income Tax. [Interruption.] If the principle justifies the £50 in the one case, it justifies the whole of the offerings in the, other. Nonconformist ministers are probably a saintlier body of men than we here, but they are not in my experience quite so saintly that they like to pay any more Income Tax than is necessary. But in fact they do, and although they do not desire to pay taxation any more than anyone else, I am glad to think that I know of no body of Nonconformist ministers who have ever approached the Chancellor of the Exchequer with the request that they should be completely exempt from paying their share of tax on the ground that all that they receive comes entirely from free and voluntary gifts. On that ground alone, and not because I wish to deprive a worthy body of men of any concession, I resist the Clause.

§ Mr. Higgs
I have very great respect for the Chancellor of the Exchequer, but I do not think he ever put up a worse defence. He referred to the legislation of 1909, and my hon. and learned Friend the Member for North Croydon (Mr. Willink) said, "We know the law. We want the law altered." The Chancellor will not have many friends in this matter. He referred to Christmas offerings and so forth, but there is a £50 limit in the next Clause. We are appealing for these people, who comprise the worst paid members of any profession. They have no trade union. The clergy are human, and they want material comforts. They are not in a position to increase their remuneration, as other sections of the community are. Prices are rising, but they are receiving no consideration whatever. The Clause is not tabled solely on behalf of the clergy of the Church of England. It is for all ministers of religion. A career in the Church in any case is a black outlook from the financial standpoint. While people in other walks of life have opportunities of supplementing their income by other forms of employment, that opportunity does not arise for the clergy. The Chancellor made a great point that it would be creating a precedent if he granted this concession. Does he suggest that there are no anomalies at present in the laws of taxation? I cannot see his argument. If all ministers of religion were taken into account, the cost to the Exchequer would not exceed £500,000.

§ Mr. Ivor Thomas
It would not be anything like that, because, even if Nonconformist ministers availed themselves of it, it is not money that is now going into the Revenue. The total cost to the Revenue would not exceed £150,000.

§ Mr. Higgs
I hope the Clause will be taken to a Division, and, if we do not carry it, it will be defeated by Members in the smoking room who are not familiar with the problem. I appreciate that the Chancellor is paid to look after the public purse, but to refuse this concession is niggardly. A lot of people who contribute to Easter offerings and so forth are not aware that half of it goes to the Chancellor of the Exchequer.

§ Mr. Butcher (Holland with Boston)
I think the Chancellor's arguments were completely irrelevant. He told us accurately what the law is, but the whole purpose of this House is to look at the laws that we have and, if we do not like them, to change them. In regard to the remuneration of the clergy, that has been done twice since 1909. Two Tithe Acts have been passed in the intervening period, both of which reduced the remuneration received by the clergy. I think the Chancellor entirely fails to appreciate the position that the ordinary men and women who want to pay a token of respect and regard to the clergy of any denomination are equally anxious that the Chancellor shall not get a 50 per cent. rake-off, and we are moving this Clause to make sure that, when it is said that a collection will be taken on behalf of the incumbent of the parish, it means what it says and it does not mean that a collection shall be taken on behalf of the Chancellor of the Exchequer. I hope this will be taken to a Division.

§ Sir H. Williams
The Chancellor of the Exchequer told us that this has been frequently discussed, but I think he is inaccurate. The last discussion was in June, 1925. On that occasion my hon. Friend was in the opposite Lobby from me, because I voted against the Government and he supported it. I welcome him as a sinner come to repentance. The Chancellor's speech was about the worst that he has ever made. There was only one worse, and the hon. and learned Gentleman who made it has left the Chamber to have a meal. Some of us know how badly many ministers are fixed. I was a churchwarden for some years at a church 407 a mile away from here, and I know something about church accounts. If I were a churchwarden to-day, I could get round it without the slightest difficulty. There are dozens of methods. It is a pity that Church authorities and the clergy should be asked to adopt methods for the avoidance of taxation, but it is only necessary to present a piece of jewellery to the vicar's wife and she has only to take it to the jeweller and sell it. It is a perfectly legal transaction. Or they could arrange to buy the vicarage grocery, or they could do as the Archbishop of York has done. His stipend is £9,000 a year. He has arranged with the Ecclesiastical Commissioners to pay the whole maintenance of his office and his castle, and is in future to receive a salary of £4,250 subject to taxation: He and the Ecclesiastical Commissioners have gone through a delightful process for the avoidance of taxation. [An HON MEMBER: "Not avoidance of taxation, but of Surtax."] The Archbishop will pay less in future than in the past. I do not blame him. I think the transaction perfectly honourable. But it contravenes the moral principle of Section 35 of the Finance Act, 1941. I hope it will temper some of the speeches the Archbishop makes in future in discredit of other people. His Grace of York is now travelling in bad company, it seems to me. It is a week-end competition who can talk the most economic nonsense.
Why continue this injustice? Robin Hood was much more respectable. Here you have the Chancellor robbing the poor. Anyone who has taken the plate round on an Easter Sunday knows that the poorest members of the congregation make an extra effort to contribute. Those who as a rule put a penny in put 6d. in on Easter Sunday, and, of their extra effort, a half is taken by the Chancellor. I think there is an overwhelming case for this Clause. The Chancellor's speech had no relevance to it. This is not a payment in respect of a contract of service. When we last discussed this, Colonel Guinness, now Lord Moyne, was Financial Secretary to the Treasury, and he put up the Government case. You can find most of the Chancellor's, speech to-day in Hansard for June, 1925, in the words of Colonel Guinness. He was so ineffective that he could not convert his own brother, who went into the Lobby against him. On that occasion the only reason why the 408 Government won was that the people who had not heard the Debate flocked 'in to the Government Lobby. It is those who vote blind on these occasions who are the salvation of the Government in their difficulties, as the Government are at this moment in difficulties. One speech in their support was so inconsequential and irrelevant that as soon as the hon. and learned Member had delivered it he left the Chamber as though he could not bear to hear the echoes of it.
The Financial Secretary is a great ornament of the Church Assembly, and he makes eloquent speeches there. He is the admired of the bishops and the lower orders of the clergy. Surely he is not going to make his presence in that Assembly in future almost impossible by forcing them to point the finger of scorn at him and say, "That is the man who robbed the children's money box." I hope he does not want to go down to fame as the man who, in the absence of the Chancellor of the Exchequer at some important gathering, had to do this really dirty deed, because honestly it is a miserable thing he is asking of us. I hope that he will repent as the hon. Member for East Aberdeen (Mr. Boothby) has repented. He did not sin last time, because he was not here. If he sins to-day, it will be the first time.

§ Sir Frank Sanderson (Ealing)
I support this new Clause if for no other reason than that the tax on these offerings is unjust in its incidence. It penalises the poorer parish against the more wealthy parish. In the poor parish the only method by which the vicar receives his Easter offering is by the coppers and silver which are dropped into the collection plate. On this the vicar derives no benefit in taxation relief. In the larger and more wealthy parishes it is well known that it is the custom not to put the Easter offering in the collecting box but to send it direct to the vicar in such a way that it is not subject to. Income Tax. Therefore, as the law now stands we are penalising the poorer clergy as against the wealthier ones. If for no other reason than that we should not penalise one section of tile clergy against another, I support this new Clause.

§ Mr. Hannah (Bilston)
I did not want to interrupt the Chancellor when he was speaking, because so many people were doing that. It seems to me that the Chan- 409 cellor's speech will almost certainly be historic in making an excellent suggestion to the Church. The only thing that has to be done—and it is an exceedingly English solution—seems to be to change the name. Instead of calling this thing an Easter offering, the Church has only to make a gift to the vicar or rector for the purpose of repairing his residence, educating one of his children, helping him to take a holiday or something of that kind, and no tax will be payable. There is an unfortunate tradition in this country that nobody can be a Minister of the Crown whose voice can be heard more than 10 yards from where he is standing. The result to-day was that I did not hear everything that the Chancellor said. I would like to know, therefore, whether the whole matter cannot be satisfactorily got over in the way I have indicated, that is, by giving the vicar an offering for some particular purpose. I might draw the Chancellor's attention to the widow's mite. It is rather unsatisfactory that part of such very small gifts should be taken by the Exchequer.
I wish we could have had it made clear how the nonconforming Churches stand in this matter. I can only say that when I was born I had no fewer than seven relatives in holy orders. I have three sons, and two of them are clergymen. How I survived I do not know, but I did survive somehow or other, and I am much more familiar with the financial arrangements of the Church of England than those of the nonconforming bodies. We should have had made perfectly clear how this new Clause would affect them.

Mr. McKie (Galloway)
I should like to point out to my hon. Friend that there is another established privileged Church in Scotland which observes no Christian year and in which there is no system of offerings to the clergy such as the Easter offering.

§ Mr. Hannah
I am quite familiar with the arrangements of the Church of Scotland. I am in the position of having to pay part of the salary of a Church of Scotland minister, though I am not a member of that Church.

§ Mr. Ivor Thomas
As I was brought up as a Nonconformist I can give the hon. Gentleman the information he requires about the Nonconformist Churches. The Free Church ministers are paid salaries on a contractual basis, and these salaries 410 are raised by the gifts of the congregations. I have no doubt that if this new Clause became law the Nonconformist Churches would make a practice of taking an Easter offering so that ministers might avail themselves of these benefits, up to £50 a year.

§ Sir George Schuster (Walsall)
I should not have intervened except for the fact that the Chancellor of the Exchequer seemed to be basing himself on what he thought to be the opinion of the Committee. I should like, therefore, to express my opinion. First, I want to record the view that it is a mistake to accuse the Chancellor of stinginess in a matter of this kind or to ask him to be generous. The Chancellor cannot be generous with other people's money; he is merely trying to do what is the right thing. I want to support this new Clause because I feel that the existing position is unjust and contrary to the public interest. I am not arguing it as a matter of law. I will try to express what is in my mind about it in this way. The Church, according to the law, can be regarded as a subject for a charitable gift. If I were to contract to pay to the Church a sum for seven years, it would escape all Income Tax. Therefore, if I, as an ordinary Income Tax payer, contract to pay to the Church £1 a year from my taxed income, the Church will get an income of £2 a year. On the other hand, if I put £1 into a church plate for the Easter offering the incumbent will get only 10s. It seems to me that there must be something wrong in that enormous difference. It will be argued that I have not made the placing of £ into the plate for the Easter offering the subject of a seven-year covenant. On the other hand, the whole of the Chancellor's argument was based on the fact that somehow or other the incumbent is receiving the benefit of a contractual obligation in taking the Easter offering. I feel that somehow or other there is something wrong about it. Of course, if my contributions under a seven-year covenant to the Church were used to pay a definite agreed salary to the incumbent, he would have to pay Income Tax on that. But then at least he would get £1 out of the £1 I gave out of my taxed income. At present he gets only 10s.

§ Mr. Benson (Chesterfield)
I do not quite follow my hon. Friend's argument 411 that if under a seven years' contract he gave £1 the incumbent receive £1. Surely he would receive £1 less tax?

§ Sir G. Schuster
My argument was that if I contracted to pay £1 a year out of my taxed income, the Church would in fact get If it used that £2 to pay a regular salary to the incumbent he would get £2 gross, from which if he was a full taxpayer he would get £1, less tax. I need not follow out now the full logical consequences of these considerations. It is enough for my present purpose to say that the net result creates in my mind the impression that a great injustice is being done. As I also feel that in the public interest it is desirable to do something to improve the position of the wretchedly paid clergy, I put my name to this new Clause, and I propose to vote for it.

§ Professor Savory (Queen's University of Belfast)
I am sure the Committee greatly appreciates the learned and eloquent speech made by the hon. Member for Walsall (Sir G. Schuster), who put forward clearly the difference between a contractual obligation and a voluntary offering. That distinction was also suggested to my mind by the speech of the hon. Member for Carmarthen (Mr. Moelwyn Hughes). He laid stress upon a point which in a great many churches is not applicable. He said that in the case of Nonconformists, their offerings being voluntary, they made an Easter offering every Sunday in the year and therefore no difference could be made between the usual Sunday offering and the Easter offering. The hon. Member may know Wales, but he does not know Northern Ireland. My hon. Friend the Member for Galloway (Mr. McKie) may speak for Scotland but I challenge his right to speak for Northern Ireland. In our churches there we have every Sunday a little paper bag which is numbered and dated. We contract that we shall put in, say, half-a-crown every Sunday. That is a definite obligation. When it comes to Easter, in addition to putting the half-crown into the little bag for that Sunday, we make a voluntary offering for the clergy. Is there not an immense difference between the contractual obligation to pay every Sunday and the purely voluntary gift which we make to the clergy on Easter Day?
The point which moves me in this matter more than any other is that we 412 have heard over and over again of the immense rise that has taken place in the wages of certain members of the working classes, for instance of those engaged in munition factories and those employed in aerodromes. In fact cases have actually come before the court of people who have been brought up for being drunk and disorderly. I remember a magistrate saying to a man who was little more than a boy and was earning £7 a week, "You must be working in a gold mine." The clergy are not working in any gold mines. They have not had their stipends raised on account of the increase, roughly amounting to 90 per cent., of the cost of living.
In the North of Ireland we have in our Church a rule that unless the congregation can guarantee £400 a year, the clergyman shall cease when a change in the incumbency takes place to have the title of rector. It is with very great distress that I have seen a number of clergymen who formerly would have been rectors reduced when the living became vacant to the status of curates in charge. That is not due to Any lack of generosity ,on the part of the people. It is due to the fact that there has been a very large migration from the country into the towns. The clergy who bear an enormous increase in the cost of living and an enormous augmentation in Income Tax have not, so far as my experience goes, had their ordinary stipends raised. I think the Chancellor should bear in mind that a clergyman has to meet a great deal of expenditure on obligations which do not fall upon the ordinary individual. A clergyman with whom I was intimately acquainted—he was my own father—was expected in accordance with the custom of the parish to provide out of his own pocket the entire cost of the Sunday school treat. Would the Chancellor of the Exchequer have allowed him to deduct that considerable sum for Income Tax purposes? It was, further, the custom that at Christmas time the clergyman should give a piece of beef to all the old people. Would he have been allowed to deduct that for Income Tax purposes? The clergy are in a very peculiar position in this respect in having to meet a great many charges which the ordinary layman does not have to meet.
When pressure is brought to bear by a large part of the electorate, the Chancellor of the Exchequer makes such enormous concessions as he did last year when 413 influence was brought to bear upon him to exempt from Income Tax a large part of the sum earned by married women. He did that at a cost to the Exchequer of £25,000,000. According to my hon. Friend on my right the concession we are asking for will cost a bare £150,000, but the clergy are a very small part of the electorate and cannot threaten to change the course of a by-election which would disturb the mind of the Government., But are they any the less worthy of consideration on that account? Should not the Chancellor of the Exchequer, a fair-minded and just man, take into consideration this very deserving class? I should be very sorry as a representative of one of loyal Ulster's constituencies to have to vote against the Government, but I feel so strongly on this matter that I hope my hon. Friend the Member for Keighley (Mr. Ivor Thomas) will carry his new Clause to a division, when I shall certainly give him my support in the Division Lobby.

§ Sir Stanley Reed (Aylesbury)
I hope that my hon. Friends will carry this Clause to a Division, when I shall unhesitatingly go into the Lobby with them. I shall do that with no disrespect to my right hon. Friend the Chancellor of the Exchequer, but really with a lingering sense that I am doing him a justice and a kindness. I join with those who say that as Chancellor of the Exchequer he has no option but to take the view which he has taken on this matter, and if I criticise the rather strained arguments which were used in support of that attitude, I feel convinced in my own mind that he did not like the task which was thrust upon him in his capacity as Chancellor. Therefore, if there is any chance of this Clause being carried I think no one will be more pleased than the Chancellor himself. But I support the Clause particularly for a reason which was given, but which has not been developed in the Debate, by the hon. Member for Ealing (Sir F. Sanderson). There are a dozen ways of getting out of paying or thrusting upon the incumbent the paying of this tax. It is not the large contributions which pay the tax. Anybody who can afford to give a note to the vicar at Easter time so that the vicar has to pay tax on it is either ignorant or foolish. It can be done and is being done, and I hope always will be done. As the hon. Member for Ealing said, this tax is really a tax on the sixpences and shillings, and not on the five-pound notes, 414 and I think it is wholly wrong that we should be forced into practices which are perfectly legitimate but which are slightly irregular in order to get behind a gross injustice. Therefore, I shall do my very best to render the greatest service I can to the Chancellor by voting for this Clause, and an equal service, I hope, to the Financial Secretary, because I feel it will be the sorriest hour of his life when he gets up to attempt to justify the unjustifiable and to inflict a burden which he knows in his heart should not be inflicted and which he would like himself to see swept away.

§ Mr. Ralph Etherton (Stretford)
Much has been said by many hon. Members about those for whom all of us must have very much sympathy. I think it was the hon. and learned Member for North Croydon (Mr. Willink) who said that we all know the law and if the law needs to be changed it was for Parliament to do it. That is, of course, a truism, but I hope Parliament will not decide to change the law unless there is a logical and proper case for a change, and I venture to think that if this matter is examined dispassionately, however much our sympathies may be with the clergy, we cannot but come to the conclusion that the law as it stands is proper and just. After all, the Easter offering is a normal emolument which comes to the clergy in the ordinary way of their business as clergy, and I cannot see the logic of providing a special exemption for this particular part of their emolument. If we are to exempt this part of their income we are creating a new anomaly. It has been said that the clergy are badly paid, and that is well known, but it has also been said that they pay 10s. in the £ tax on these Easter offerings, but in most cases that is quite untrue. The Easter offering is part of their ordinary income, and as such is subject to the ordinary deductions which normal income attracts, and so far from paying 10s. in the £ on Easter offerings they pay considerably less than that unless their income if married and with two children exceeds approximately £450 a year.
Let us examine the matter in a logical way from the start. In the first place they get a deduction of 10 per cent., as does everybody else for earned income. Then a married man gets the deduction of the first £140, and a further £165 is taxed only at 6s. 6d. in the £ If he has two 415 children he would get a further allowance of £100. Thus, until his income reaches approximately £240 it would not be attracting tax at all, so that it is quite idle, if I may say so with great deference to hon. Members, to try to excite sympathy on the ground that this Easter offering attracts Income Tax at 10s. in the £ In the case of a married man with two children it will not do that until his income exceeds £450. Bearing all those considerations in mind, while we may have great sympathy for the clergy we should treat this matter in a logical way and not exempt from tax a particular portion of a clergyman's emoluments when everyone else in the country is taxed in the ordinary way on the whole of his income.

§ Major Gates (Middleton and Prestwich)
I should have to oppose this Clause, for the following reason, that although I have been in complete sympathy with the speeches in support of it so far, I doubt very much whether the Clause carries out the desires of those who are supporting it. The Chancellor is maintaining, and the hon. Member for Stretford (Mr. Etherton) is maintaining, that the Easter offering is a normal emolument. I deny that, because it has never been a normal emolument with me. I never subscribed to the little bag to which reference has been made. The clergy are my friends, and I go to them quite frankly—Easter is generally the time to do it—and say, "I want to give you my sincere casual gift in token of the magnificent work you have done during the last year. I am not going to put anything into the bag, because I have no desire to make a casual gift to the Chancellor of the Exchequer." I am quite sure that if congregations knew they were making a casual gift to the Chancellor of the Exchequer, they would not do it, and it is one of the dangers of this Debate that now that the matter has received publicity they may not contribute as they Dave done. If the Clause is pressed to a Division and if it were a question of "Do you sympathise with the clergy or not?" naturally I should vote with the "Ayes," and I am sure that if I make a casual spontaneous gift to somebody that is not liable to taxation, but I would ask the hon. Member for Keighley (Mr. I. Thomas) whether the reference in the Clause to a maximum of £50 means that I can never give anybody more than £50.

§ Mr. Thomas
In that case only the first i5o would be exempt from tax. On the more substantial point, if there are any legal flaws in the Clause there need be no difficulty about that, provided the Chancellor is prepared to accept it, because between now and the Report stage he could no doubt get a form of words which would be suitable to his advisers.

§ Major Gates
That is my point I want to support the principle that we may continue making our free gift to our good friends the clergy without the Chancellor of the Exchequer putting his hand in the plate, because that is repugnant to us, and I think the whole Committee are agreed that it must stop. I hope that the hon. Member will not press this matter to a Division, because I do not think I could support his Clause in its present form with the maximum figure of £50;. We have heard that Nonconformist clergymen are paid almost entirely by gifts, and their taxable income would start at £50 if the Clause were carried. If we are to challenge the Chancellor to a Division, I would like to have a slightly differently worded Clause before I could follow the hon. Member into the Lobby.

§ Lieut.-Commander Joynson-Hicks (Chichester)
I feel I ought to apologise. to the Committee for intervening in this Debate, as my duties elsewhere have prevented me from being present during the whole Debate, but I feel very strongly on this point. I am anxious, if possible, to support the proposed new Clause and to encourage the Mover to press for a Division upon it, if necessary. I think we all agree with what was intended by my hon. and gallant Friend who has just sat down, but I cannot agree with the conclusions which follow from his argument. If we are to achieve any relaxation of the present law on this subject, the only way we can do it is by pressing for a Division when opportunity is offered. I gather that the appeals which have been addressed to the Chancellor of the Exchequer have not shown evidence so far of being successful. I am certain that he would be the first on personal grounds to wish to alleviate the hardships which this additional tax causes to the most poorly paid professional class in this country; but, on the other hand, it has already been pointed out that the relaxation for which we are asking would result in only 417 a very insignificant diminution of the national income.
Upon that ground I feel that the proposal should appeal to the right hon. Gentleman to a very great extent. By sacrificing such a very small diminution of the national income he would please and give hope and confidence to a very wide circle of people, very much wider than the circle of people who would actually benefit. There is not the least doubt that, since it became known that Easter offerings were subject to tax, it is a matter which rankles in the hearts and consciences of a great number of people who feel that it is fundamentally wrong that voluntary offerings made in church should be subject to taxation. It may be right or wrong, but I submit that that fact is there. I understand that the right hon. Gentleman has said that that is the law, but it is worth pointing out that it was not realised until comparatively recently that that was the law. The effect of the law is of quite recent origin.
I would point out another aspect of the matter which might commend itself to the Chancellor. Most relaxations of the law are really the thin ends of wedges. They open wide the doors to appeal for further relaxations in favour of other parties. I do not think that argument can be used in this case. The present proposal is not the thin end of a wedge at all, because if this relaxation were granted there is no other professional class who could argue that they also ought to have the benefit of it. It is the law, but it is inadvertently the law, and it has been found by many people to be repugnant to the national conscience at the present time. Therefore I submit that it is up to us to take cognisance of that fact and press for the law to be amended or annulled in the only place in which that step can be taken. This is the time and the opportunity to do so.
My final word is with regard to the utterance which has recently been addressed to the Committee stating that it is not the standard rate of tax which is necessarily suffered by incumbents and other clergy in this matter. In so far as it is correct—and it is mostly correct—it is a strong argument in favour of the relaxation. It means that all those people are already so poorly paid that they do not receive what the Chancellor considers upon financial grounds to be a standard rate of income. If the law could be 418 amended it would bring great relief to a great number of people. The only argument I can see against the proposition is that the whole method of increasing the income of the clergy by Easter offerings is wrong, but that is not a view to take on the present occasion. Easter offerings are an ancient and honourable custom, and a Christian custom, which this Committee would do well to recognise. I hope that the Committee will take cognisance of it and recognise it, if necessary by pressing this Clause to a Division.

§ Mr. Benson (Chesterfield)
I do not think that my hon. Friend the Member for Keighley (Mr. Ivor Thomas) has helped the Church by raising this matter or that the way in which hon. Members have conducted the Debate in favour of the Clause has added to the dignity of the Church. The Committee has agreed—or at least there was a murmur of assent—when it was stated that the legal interpretation of the position on Easter offerings was correct, and that they were income, [An HON. MEMBER: "No."] Certainly. It has already been settled by the highest tribunal in the land. The point to be established before the proposed new Clause should be accepted would be, Why should a regular annual sum of money, which is admitted and decided as income, be free of tax merely because it is contributed in a certain way? The hon. Member who last spoke suggested that it rankled in the consciences of churchgoers that the small incomes of the clergy should be taxed 10s. in the £ The best method of dealing with that problem is to raise the salaries of the clergy rather than trying to get a tax concession. For what reason should a clergyman of the Church of England get a tax concession just became his salary is low?

§ Mr. Boothby
The hon. Member seems to accept it as axiomatic that this Committee has to accept the decision of the House of Lords upon what is income. Our case is largely based upon our view that Easter offerings are not income.

§ Mr. Benson
There is no appeal from a decision of the House of Lords. We have to accept it. [HON. MEMBERS: "No."] This House can pass a law to exempt Easter offerings, but until it has done so they remain income. Nobody, in reality, has disputed that they are income.

§ Mr. Ivor Thomas
I dispute it. If Easter offerings were given to the incumbent in the form of War Savings Certificates they would be capital, and would escape taxation.

§ Mr. Benson
I am afraid that my hon. Friend is entirely wrong in his law. If incumbents were paid with War Savings Certificates, payments in kind or any other way which had a cash value, those payments would be income.

§ Mr. Thomas
No.

§ The Attorney-General (Sir Donald Somervell)
Apart from the question which is raised by a later Clause about board and lodging, money's worth is treated at its worth as income, just as much as money. You could not avoid the payment of Income Tax merely because you got your employer to pay you in War Savings Certificates.

§ Lieut.-Colonel Acland-Troyte (Tiverton)
Does that mean that if I give my parson a dozen eggs for breakfast he has to pay Income Tax on them?

§ Lieut.-Commander Joynson-Hicks
We are here dealing with Easter offerings and not with household sustentation.

§ Mr. Benson
It does not matter what you put into the Easter offering. If it is possible to turn it into cash, it is income. As a matter. of fact, hon. Members have been pointing out that Easter 'offerings' have been a source of income, not since 1909 only, but for hundreds of years. It is no use quibbling. If Easter offerings are not income, why have hon. Members not the courage of their convictions? Why do they not propose to exempt the whole of the Easter offerings from taxation? Why put in the limit of £50?

§ Captain Strickland
Suppose a parson made himself very unpopular on the Sunday before the Easter offerings, and no, Easter offerings were put in; could he sue on that? If he could not sue, it is not income.

§ Mr. Benson
A barber cannot sue on his tips, but they are income and are taxable.

The Áttorney-Genera
A barrister can- not sue for his fees.

§ Mr. Benson
I thank the right hon. and learned Gentleman very much for giving me that information.

§ Mr. Thomas
The real analogy is with the fees that the clergyman receives for churchings, marriages and funerals. The Easter offerings are in a quite different category. We put in the limit of £50 to prevent abuses.

§ Mr. Benson
If Easter offerings are not income, it is no abuse to exempt the whole amount. As a matter of fact, the £50 limit shows a bad conscience on the part of the hon. Member for Keighley arid other hon. Members who are trying by tax concessions to subsidise parsons wages because those wages are low. [HON. MEMBERS: "No."] Certainly. Anyhow, it is obvious that we cannot reach agreement on this point. I think some of the suggestions made have been most undignified. Hon. Members have said, "Well, we can get round it this way. We can add parsons of the Church of England to the body of tax dodgers who use questionable means of avoiding taxation." [HON. MEMBERS: "No."] Most certainly. Member after Member has got up and said that. The hon. Member for Aylesbury (Sir S. Reed) said, if I remember. rightly, that his £5 was not taxed and was not going to be taxed. Other members have suggested one way and another way, and there has been right through that undercurrent of suggestion that if the Chancellor does not give way, other methods will be adopted to. make up the parson's salary without making it liable to tax.

§ Mr. Butcher
Is it not a fact that there is a legal decision that a man has a right so to arrange his income as to attract the smallest amount of tax?

§ Mr. Benson
That is perfectly true, and that is a dictum which has been condemned and held up to contempt in this House every time it has been quoted. I am astonished that it should be quoted by someone, apparently a member of the Church of England, who is supporting this Clause. That is the very attitude I am complaining about, that you are attempting to increase the salaries of clergymen in the Church of England and using as an argument all the arguments that the tax dodgers use, and even threatening tax dodging.

§ Mr. Butcher
Why should it generate so much heat when I quoted one judgment?

§ The Deputy-Chairman (Mr. Charles Williams)
We have had a very long 421 Debate on this Clause. There is a good deal of Business to do, and I think that if one Member at a time made his speech and finished, it might be batter.

§ Mr. Benson
I have not much more to say. The hon. Member asked me why so much heat is generated. Is he not aware that it is traditional in this House that anything which attaches to clerical and religious matters invariably generates heat. We have passed sums of thousands of millions in Votes of Credit with three, four or five Members sitting here. Here is a little trifling question yet we have at least 50 Members here. Of course heat is generated. I am protesting vigorously against this atmosphere, against this attitude of tax dodging. Although I am not a member of the Church of England, I object to this undignified kind of argument, which is an attempt to blackmail the Chancellor, coming from members of a religious body which ought to support a more principled attitude towards the Exchequer and taxation.

§ Sir William Davison (Kensington, South)
The acceptance or rejection of this Clause depends upon whether or not Easter offerings are income, that is, are a regular source of income to the clergymen. Earlier in the Debate the hon. Member for St. Albans (Sir F. Fremantle), who was sitting below me, asserted that under the Church Assembly Act power was given to the Church authorities that in the case of clergy whose income was considered adequate it would be in the power of the Church authorities to ask them to pay over part of their Easter offerings. If that is so, I would be glad if whoever is going to reply would say whether there is some such provision in the Act referred to, for if there is a provision of that kind in that Act it is surely conclusive that Easter offerings must be considered as forming part of the clergyman's income. Therefore, it seems to me if that is so that the argument of the Chancellor is a very strong one, and is supported by the Church authorities themselves.
The other matter to which I would like a reply is that the Chancellor in his speech said that the law as regards gifts to the clergy, was quite clear and established, and that if we exempted income up to £ 50 in the case of Easter offerings from taxation, it would be necessary to exempt gifts given to clergy or ministers at Whitsuntide or Christmas, as is the case in 422 certain other denominations. Do I understand from that that all gifts to a clergy. man are to be considered as liable to Income Talc? Supposing a clergyman gives a very good set of Whitsuntide addresses and two or three of his parishioners say, "That was a splendid set of addresses which the rector gave. He is not very well paid. We should like to give him a little present," and they collect £15 or£20 and hand it over to him as a present. Is that subject to Income Tax or is it not?

§ Mr. E. P. Smith
I put a very similar question to the Chancellor earlier in the discussion, and asked him whether gifts given individually to a priest or minister on his birthday by members of his congregation would be liable to Income Tax. He answered me in the affirmative.

§ Sir K. Wood
We must not be under any misapprehension. I would like before I gave an authoritative reply to look at the facts in each case.