HC Deb 29 June 1943 vol 390 cc1556-61
Mr. Daggar

I beg to move, in page 8, line 17, after "him," to insert: or that he is entitled to relief under section twenty-two of the Finance Act, 1920, in respect of an aged or infirm relative. It would be interesting to discover the degree to which modern Chancellors of the Exchequer have observed the principles of taxation laid down by Adam Smith, although one might hesitate to accept the year 1776 as one of financial wisdom. Most of us believe that taxation should be justly distributed and that there should be equity or equality in taxation, and recognition of that principle is my own justification for moving the Amendment. Here may I be permitted to observe that concessions already announced by the Chancellor of the Exchequer and provided for in the Finance Bill regarding similar cases are fully appreciated by the persons who will receive the benefit, especially when it is realised that those benefits, expressed in money, are in the region of £2,000,000. If my Amendment were accepted, it would not involve so large an amount of money. The amount would be very small, but a measure of relief would be provided to the people on whose behalf I am acting.

I know of one case which illustrates a point which I wish to have considered by the Chancellor of the Exchequer. It is the case of a son who was never married, chiefly because of his widowed mother, who is also an invalid. He works at a local colliery and, because of his mother's indisposition, has to maintain his sister to attend upon his mother. He has discharged this obligation, or rather he has carried or accepted this responsibility, for over 14 years, and upon grounds of equity in taxation and in view of certain concessions already made in similar cases, I trust the right hon. Gentleman will accept the Amendment.

Mr. Clement Davies

I beg formally to second the Amendment.

Mr. Assheton

It is very refreshing to anyone at this Box to hear Adam Smith quoted, so seldom are we referred to sound canons of taxation these days. My hon. Friend has proposed an Amendment which has as its object to extend the new housekeeper allowance to cases where a female person is resident with, or employed by, the taxpayer to look after an aged or infirm relative. If my hon. Friend will look at Clause 14 and see the notes in the margin, he will observe that this Clause is intended to give relief where a person is employed or maintained to take charge of children. This Clause he seeks to enlarge. He will remember that the Chancellor made it quite clear in his Budget speech that the proposals he was making for widening the housekeeper allowance were solely concerned with cases where there were children maintained in the household.

I would draw my hon. Friend's attention to the fact that the sort of case he has in mind is met to some extent by the next Clause in the Bill, Clause 15, which deals with the question of allowances for dependent relatives. The taxpayer with a dependent relative has not been overlooked by my right hon. Friend in this Budget, and every person entitled to a dependent relative allowance receives some advantage from Clause 15 in this Finance Bill. I think my hon. Friend will appreciate that the proposal he makes is one which should be met by a Clause which deals with allowances for dependent relatives. It really has nothing to do with a Clause which seeks to give relief where a person is employed or maintained to take charge of children. In the case which he mentioned there is a son who has a widowed mother, and in that case, as far as I am able to understand my hon. Friend, the son maintains his sister to look after the mother when he is away. In that particular household I should imagine, though I should not wish to pledge myself without exact knowledge of the case, that there was a dependent relative allowance on account of the mother. It may well be said that dependent relative allowances are not enough. One hon. Member has said earlier that they ought to be as high as the personal allowance. They have in fact been increased by Clause 15 in this particular Bill. In these circumstances think my hon. Friend will recognise that something at any rate has been done to meet the case he has in mind.

Amendment negatived.

Mr. Daggar

I beg to move, in page 8, line 28, at the end, to insert: and (e) that he has contributed a sum under a court order for weekly payment to the maintenance of his wife and children not resident with and otherwise maintained by him. I think it is true to say that all Members of the House are familiar with the provision of the Finance Act which permits an allowance in the case of a married man whose wife is living with him of £140, and also of the same amount if the wife is not living with her husband, provided she is wholly maintained by him by means of a voluntary allowance. In other words, if his wife is wholly maintained by her husband by voluntary payment, he is allowed the sum of £140 upon which he pays no Income Tax. In the case of a man separated from his wife, and he makes payment for her maintenance under deed or court order, he is not entitled to an allowance of £140 but simply an allowance of go. This also applies in the case where there are children and, as I have already indicated, in the case where there are no children.

I have a case where a man pays to his wife—not a voluntary allowance—a sum of 32s. 6d. per week, which quite main- tains his wife and the children, and in addition he has to pay 25s. a week to another woman to attend to his requirements. I submit that whether the payment for maintenance is compulsory or voluntary, such a difference in the personal allowance ought not to exist. It is in order to meet the case I have cited that I move the Amendment.

Mr. E. J. Williams (Ogmore)

I beg to second the Amendment.

The Attorney-General

I have done my best to follow my hon. Friend on what he agrees is rather a difficult matter. Actually, of course, his Amendment as put down on the Paper would cut down very much the effect of this Clause. This Clause applies under (a), (b), (c) and (d) the four conditions which have to be fulfilled by a number of enumerated taxpayers who employ someone to look after children living with them. The Amendment proposes to add a new condition which, on the actual words, will have to be fulfilled in all cases, and say: that he has contributed a sum under a court order for weekly payment to the maintenance of his wife. … The effect of that would be to cut out of the Clause all except married people who are under court orders. That was not what the hon. Member intended. I think he has two points. He envisaged a case in which a man was under a court order to pay a sum to his wife for her upkeep and, I think, also in respect of children living with the wife. So far as that matter is concerned—the position of husbands who are under court orders--my impression is that it is already effectively allowed for Income Tax. Either the husband deducts tax from the payments and recoups himself in that way for the tax he must pay to the Revenue, or if he does not do that he normally, as I understand it, would be able to get a special allowance from the Revenue in respect of the payment on the ground that it is money which under the court order is the income of somebody else. I think that is all right.

The hon. Member went on to say that in such a case a man might have to pay someone to look after himself. If that is the point, the answer is in part the same as the Financial Secretary gave to the previous Amendment. This Clause, and the relief under it, as the Chancellor made quite clear in his Budget speech, is confined to concessions to those who have children living in the household. My hon. Friend's proposal would extend the concession to someone whose children are not living with him but whose children are provided for under the court order, and the allowance would be in respect of a man living by himself paying someone to look after him. That is outside the scope of the Clause, outside the limit of the concession to the group or class to whom this Clause gives relief, and my right hon. Friend cannot accept it.

Mr. Daggar

It is quite true that I cited the case of a man who, in addition to making provision for his wife, maintained to a considerable degree a housekeeper, in order to illustrate an additional hardship. The point I provided for in the Amendment is that the allowance of 140 should be allowed a man regardless of whether the payments are made for the complete maintenance of his wife or children either by deed or court order. The information that is circulated to the taxpayer when he is asked to fill in his form contains the information that the allowance of £140 is also given to a married man if his wife, though not living with him, is wholly maintained by him by means of a voluntary allowance, but that if he makes payment to her by deed or by court order he is not entitled to an allowance of £140 but merely receives the allowance of £80. What I want to stress is, whether the payment is made under a court order or deed or voluntarily, a man should be allowed the same in view of the fact that he makes the payment, and that the question as to whether the payment for wholly maintaining a wife is compulsory or voluntary ought not to prejudice the individual who pays to the extent of the difference between £140 and £80.

The Attorney-General

By leave of the House, I will make this observation. That is really a point quite outside this Clause, which deals with allowances for people who have children living with them. My right hon. Friend will read what my hon. Friend has said to see whether there is any point to look into.

Mr. E. J. Williams

May I ask whether the Chancellor might not be able to meet the point from the standpoint of the housekeeper's allowance? Perhaps he will consider that?

Sir K. Wood

I certainly will.

Mr. Woods (Finsbury)

I think the Chancellor should look into this, because it has been complicated by the present position and the calling-up of some of these women who have been housekeepers. Under this Clause an allowance can only be given if they are in residence. Many of these women are now being called up and the custodian of the children is in the position of having to make much more expensive arrangements to see that his children are properly safeguarded, because he is unable to get a woman, in the present state of the labour market, to reside there, and to take complete custody. He is now penalised twice, and the children are suffering. I hope the Chancellor will look at this problem.

Sir K. Wood

Yes, Sir, certainly.

Amendment negatived.