Section twenty-one of the Finance Act, 1920, shall he amended as if the following Sub-section were added:—
(5) If the claimant proves that under the provisions of this Section he is entitled to the allowances provided in respect of any children as aforesaid there shall be allowed in addition to any such allowances the amount of any school tuition or university fees actually paid, by him in respect of the said children, provided that such sum in any event does not exceed two hundred pounds in respect of each child during any one year."—[Mr. Hogg.]
§ Brought up, and read the First time.
§ Mr. Quintin Hogg (Oxford)
I beg to move, "That the Clause be read a Second time."
This is a Clause which suggests a quesparents and adopted parents the allow-parents and adopted parents, the allowances in respect of school fees and other educational fees which they expend, up to a maximum. The position at present is that parents have the ordinary Income Tax allowances for their children, but these are calculated on the basis of what it costs to keep them and are not intended to cover the cost of their education. As a matter of principle, I submit that the Treasury ought to allow something towards the cost of their education. In his broadcast of 22nd March last year the Prime Minister clearly stated—as we should all agree—that, in the circumstances of modern life, only a highly educated community can survive as a great Power. The standard of education which is required involves two things. It involves a high and generally diffused standard of general education, and a high and generally diffused standard of technical and special education.
What is the situation for parents who desire to educate their children up to that standard and who thereby confer on a community at large, in addition to their children, a very large degree of benefit? They must pay the entire sum out of their taxed income, in addition to any degree to which their taxes are increased by provision for the children of others. I think it would be generally admitted, that parents who spend money on the 2182 education of their children are not confined to the very rich. They include people in all walks of society, from the humble crofter in the Highlands who starves himself to pay for a university education for his son, to working-class people in London, professional people, civil servants, and the like, all of whom often undergo great hardship in order to provide their children with something which is not merely of benefit to themselves, but is of lasting benefit to the community.
It is also true that this benefit would not be otherwise obtainable by the community. Even were it the case, that, in order to give these benefits to their own children, parents were withdrawing their children from the ordinary statutory system of education, there would be a negative benefit to the State because the cost of educating the children would be borne by the parents. But, in fact, that is not mainly the case, so far as the parents are concerned, with whom I am primarily dealing. The expenses they incur are largely for secondary, university and technical education. Let me give one or two examples. An institute in this city with which I am concerned—the Polytechnic Institute—largely provides adult technical education for young people. That education is very largely outside the ambit of the public system, and yet it is necessary for people of all classes to get the education which that Institute can give. Parents have to provide it out of their awn taxed income. I know of a case of two young men of a working-class family, both highly intelligent. Their parents were able to give only one of them a secondary education; the other had to go through life with only a primary education, although it was apparent to all who knew him that he could have benefited by the secondary education which his parents were unable to afford. I think of a case of someone in a rather different walk of life, a civil servant, who told me the other day that he was deliberately limiting his family, because he desired his two sons to have an education comparable to their intelligence, and to the state of life to which he wanted to bring them up. Is that to the public advantage? He said that life would be intolerable for people in his way of living, if the State did not do something by a tax concession in order to provide for the education of children.
2183 I am aware that certain arguments will be put perhaps from the other side of the Committee, and perhaps from this side, in opposition to what I am saying. It will be said that the right remedy is not the one which I propose, that the right remedy is to provide universal education for everybody, so good that nobody should go without. That may well be true. Let hon. Members try to put such a system into effect and I will be with them. But we all know that the day when such an educational system is introduced into this country is a long way ahead. No one who has gone through the Debates on the Education Bill, which is admitted on both sides to be a great educational advance, will doubt that the actual administration of that Bill provides for years of administrative progress, perhaps five, ten or fifteen years ahead. When every step envisaged by that Bill has been brought into law, a great field of education outside it will not yet have been touched.
I do not suppose there is a responsible Member of the party opposite who would dare to say that, even if his party was given complete power to-morrow, within 15 years there would not be parents in all walks of life who would be providing education for their children, over and above what the community provides. Whether that is desirable or not, I do not inquire, but it is the obvious and incontrovertible fact. If hon. Members opposite desire to oppose this concession, they should make it plain that, for 15 years, they are condemning parents to pay for what is largely of benefit to the community. It will be said that such a concession would perpetuate present class differences. Nothing is further from the case. What it would do is, perhaps, to take the child out of the ambit of political controversy. I do not consider that to be an undesirable objective. If hon. Members opposite have reforms to suggest, let them suggest them but, until those reforms are not merely suggested but have actually been put into effect, let them not deprive a single child, from whatever class he comes, of the education to which he is entitled, which his parents can afford to pay for and which is of lasting benefit to the community.
We are faced with a situation in which those who have led us to victory have very largely enjoyed education pro- 2184 vided by their parents. It is impossible to think that anyone with any sense of responsibility would state that if the needs of the country in doctors, in professional men, in civil servants of the higher grades are to be met for the next 15 or 20 years, they will not depend on the services which parents render in educating children at their own expense. The community needs this education. No responsible party believes that it can provide it at once in sufficient quantity to satisfy the needs of the community. In the days when those things are possible, no doubt it will no longer be necessary to ask for concessions of this kind, but until those days have come, let everyone realise that, by opposing concessions of this kind, he is ultimately the enemy of education and the enemy of the child. Let no one say that those who represent the great bulk of the professional classes have no right to live in the state of life to which they are accustomed. Let no one suggest that those a little above the bottom income level, skilled workers, professional men, shopkeepers, farmers, who desire to pay for their children's education, are not entitled to do so and to receive some concession from the State. I press this concession on my right hon. Friend. If he cannot give it now let him see whether he cannot give it by this time next year, because I believe that, if he does, this country, which is still a backward country in general and technical education, compared with some other countries, will, at last, do what his own country, Scotland, has done for many years and put the education of the child among the first necessities of his upbringing.
§ Mr. Benson
We have heard a very eloquent address which has succeeded in throwing a wonderful smoke screen about the hon. Member's proposal. He has suggested that it is a great educational reform, but it is nothing more than a financial concession to certain people who can afford to pay for their children's education. It will not increase the facilities for education. The Education Bill, as he says, is not likely to produce the results we want for many years to come, but that is not for lack of finance. It is not as if the universities and technical schools were half empty because parents could not afford to send their children. They are full, and merely to give additional financial aid to parents would not enable 2185 them to provide one additional place. This proposal would give financial help to people who can afford to send their children to universities, and I see no particular reason why that should be done. Everyone admits that it is really desirable that we should have a high standard of university education, but there is no particular reason why the State should facilitate the education of children whose parents can educate them. One of the advantages of an income above a certain level is that you can afford to give your children a better education than is now provided free. There is no reason why people who have this advantage of income, should receive any concession in this matter which is denied to people whose income is below the level which enables them to take advantage of higher education. If the hon. Member likes to take as his standard "Unto him that bath shall be given," well and good, but the Labour Party is more concerned to see that, unto him that hath not, shall be given. I oppose the Clause on the ground that it will not, in any way, increase the amount of higher education that is given, but will merely have the effect of giving additional advantages to certain people who are already fortunate.
§ Dr. Russell Thomas (Southampton)
I am rather inclined to agree with the hon. Member for Oxford (Mr. Hogg). There is a side to the question which should be considered and it was not considered by the hon. Member who has just spoken. Many people struggle to give their children education and they are frequently not people who are well off but, on the other hand, are filled with the spirit of enterprise, initiative and self-sacrifice. They want their children to do better than they have done and if relief can be given—I do not say that it can—those people should be encouraged. I trust that the Chancellor of the Exchequer will favourably consider the proposition, as far as he can do so.
§ Mr. Gallacher (Fife, West)
I think the young progressive Tory has a case, but I marvel at the passion with which he presents such a wrong and rotten argument. He tells us that the Education Bill will not come into practical operation for five, 10 or 15 years. The Education Bill is of the greatest importance in relation to this question and the Chancellor of the Exchequer must take note of it. It is going to give every child in the country a secon- 2186 dary education free. Children are to be retained at school until 16, as soon as we can get the age fixed at 16. Many of my own friends have lived on next to nothing in order to get their children educated and, when the age is raised, it will mean a heavy burden on fathers and mothers arid the country generally. There is some talk of a family allowance and that sort of thing, and I do not object to that. But the Education Bill says that every child shall get secondary education, and that that comes into operation in 1945, and, as soon as possible, the age will be raised to 16 and the avenues to the higher forms of education are to be opened wider and wider. It is not a case of the technical colleges and universities being half empty, because the people who are capable of sending their children do not send them. Many of the best people are not being sent there, because their parents cannot possibly afford to send them.
§ Mr. Gallacher
Any relief of this kind is going to be a relief to working-class families. It will be an encouragement 10 those parents who are trying to send their children to the higher institutions of education. The Chancellor himself has been brought up with a thorough understanding of what it has meant to families in Scotland. No one knows better from personal knowledge and experience the efforts that have been made, the tightening of the belt that has gone on throughout Scotland in order that the children should get a better education. The principal thing that I would direct attention to is to bring his concessions for children into line with the new principles of education set forth by his own Government.
§ Major Procter (Accrington)
I did not mean to take part in this Debate until I heard the representative of the Labour Party speak. He surely must have forgotten that the new class of taxpayer is the working man. How can he say anything against the working man getting a concession for his child? I must support the request to the Chancellor of the Exchequer to do something for these men and women who find it difficult to pay for the higher education which is the right of every child, irrespective of the kind of home in which he lives. Some of the hardest hit sections of society are the 2187 small shopkeepers and professional classes. They are between the upper and lower millstones. They have no trade union to speak on their behalf, they are not organised, and they have not the capital resources of the rich. The well-to-do are being gradually eliminated. With taxation up to 19s. 6d. in the it will not be long before we have no very rich people in the country at all. We do not need to do injustice to the rich people who paradoxically are the new poor, for a man's wealth consists not in what he possesses but in the fewness of his wants. The upper classes on which we relied in the past to pay for our social reforms are now living on their capital and ceasing to exist.
§ Major Procter
That is irrelevant to the point. Many of them will soon not have the reserves behind them that the Communist Party has. It is the working-class and the middle sections of society to which the Chancellor will have to look for his revenue in the future.
§ Mr. Gallacher
Will not the hon. and gallant Member understand that there can be no middle section if there are no rich left?
§ Major Procter
Those are mere sounding words that mean nothing. The hon. Gentleman knows exactly what I mean. The point I am trying to make is that all our reforms and our education schemes in the future must be paid for by an inroad on the workers' wages by means of taxation. Hon. Gentlemen opposite want the standard of life and wages of the working people to be increased and they should realise that the very fact of increasing their wages will make them more and more the future Income Tax payers. Therefore, I am right as a Conservative and as one who looks after the true interests of the working-people to support this new Clause. I have been a member of the working-class myself, and I know the difficulty of getting an education. I am not ashamed of the fact that I started as an apprentice engineer, and used my engineering skill, such as it was, to work my way through three universities until at last I became a Master of Arts and Doctor of Laws, but it was hard difficult work. My father was un- 2188 able to pay for my education. Now I want other fathers not to be handicapped as my father was with a large family and unable to pay for the education of his children.
I ask the Chancellor to look at this matter from the viewpoint of the working man's child and the viewpoint of the working man himself who wants to see that his child gets the best that the country can give him in the way of education. In what better way could he do that than by making the concession in this proposed Clause, and by saying to the new Income Tax payer, "The State is going to benefit from something that you will do. You are not going to put your child to work and take his wages. You are going to work harder and make more Revenue for me, and, therefore, I will make this concession so that you can educate your child." The Chancellor is a sympathetic man and, as a Scotsman, he values education. Therefore, I hope that he will, at least, give us the hope that he will consider whether some concession can be made to those people who have worked hard and who wish to see their children rise to higher places than they themselves reached.
§ Mr. Pethick-Lawrence (Edinburgh, East)
In spite of what has been said on both sides of the Committee the Labour Party, as such, has not any particular policy in this matter.
§ Major Procter
An hon. Member behind the right hon. Gentleman said that he was speaking on behalf of the Labour Party.
§ Mr. Pethick-Lawrence
Whatever has been said by the hon. Member who moved the new Clause, or whatever has been said behind me, the Labour Party has not expressed its views specifically on the new Clause, or on the principle that lies behind it. I want to make that clear. As for the merits of this proposal, the Labour Party have always pressed for high rates of allowance for children and have been successful with Governments in securing that reliefs, which started to apply only to children under 14, should be raised above that age where the parent was keeping a child at great expense to himself at some educational establishment. The Labour Party broadly favour concessions made on incomes for the purpose of enabling parents to keep their 2189 children in education. This particular new Clause is, of course, a matter for the Chancellor to decide. I was consulted on this point before I saw this Clause on the Paper, and I was bound to tell the person who consulted me that it was a matter which the Chancellor would have to consider with all its re-percussions. While it is right that a large allowance should be made to a man for keeping his child in education, we are brought up against the fact that there are other meritorious services which a man may perform for the community. He may keep an aged parent according to the circumstances of life in which he was brought up, and he may put up a case for spending £200 for keeping his aged mother. Although that case may not be as strong as that which applies in this new Clause, I can see that a considerable argument might be developed along those lines.
In general, the Chancellor does not make allowances to people because of the meritorious character of their expenditure. He makes them according to the size of their income. He makes certain allowances, which apply to the whole population for dependants and particularly for children, so that relief can be granted in respect of the great expenditure which the citizen incurs in feeding, clothing and sheltering his children and educating them. The Chancellor may well consider, either in this Bill or on some future occasion, whether the allowance that is made for a child is adequate. It is a great deal larger already than the proposed allowance that is likely to come under the Beveridge Scheme or whatever version of the Beveridge Scheme the Government put forward, but I recognise that there is an obligation on the State to a man who spends money to keep his child away from industry until the child is equipped for the best that it can reach. I would, therefore, look favourably on any proposal which the Chancellor may see fit to adopt at some future time for increasing the allowance for children in general and for children continuing their education at the expense of their parents. It is, however, a matter for the Chancellor to consider at the present time in view of the facts and of the repercussions that it must have in other fields of admirable expenditure which a private individual may incur.
§ Captain Duncan (Kensington, North)
Although I am not a member of the Tory Reform Committee, I should like to support my hon. Friend's new Clause on three general grounds, in addition to the argument that he has used. First, in future the taxpayers of this country will, broadly speaking, correspond with the population of the country. The Income Tax payers of to-morrow are not the Income Tax payers of pre-war days, and, therefore, the burden which Used to fall on the rich and the middle classes will be far more widely spread in future than in the past. Second, the rate of tax is far higher now than before the war. When Income Tax was 4s. 6d. and 5s. in the £ the people who sent their children to school were able to afford it. Now, with Income Tax at 10s. plus Super-tax, which is likely to continue, according to the Chancellor for many years after the war, it becomes a much greater burden on parents than it has ever been before. The hon. Member for Chesterfield (Mr. Benson) said this concession would not increase the number of university places, but it may well increase in the future the number of children to fill the existing places. Third, all the statistical pundits say that our birthrate is going down. It should, therefore, be the duty of this country to take greater care than ever before that the children who are born should be given the utmost possible assistance to increase their efficiency in the interests of the nation. It is a generally accepted fact that in many families to-day there is deliberate restriction of the number of children on economic grounds. We want, in the interests of the birth-rate, to avoid that restriction as much as we can, and one way is to see that if parents do have children they will be able to educate them in the best interests of the community.
§ Mr. Edmund Harvey (Combined English Universities)
Like hon. Members who have already spoken, I hope that the Chancellor will be able to accept the principle of the Clause, even though he may not be able to accept the Clause itself. I hope also that the right hon. Gentleman will show his support of the principle by making it clear that fuller provision will be allowed for parents who make real sacifices, in order to let their children go on with their education, through school and to a university. I appear to be the only Mem- 2191 ber in the Chamber at the moment representing a university. I should like to say how mistaken is the idea, sometimes held even by Members of this Committee, that students of universities come from comfortable or well-to-do homes. The majority of students, in the universities of Britain taken as a whole, have fought their way up from the elementary schools by means of scholarships, and they could not have done even that had it not been for the help of their parents, who are, very often, making great financial sacrifices in order to allow them to go on with their studies. It is a very heavy burden upon a student, to know, all the while, that his parents are making a big sacrifice in order to render it possible for him to continue.
§ Mr. Harvey
It means that for one member of the family to have this advantage, an opportunity may have to be withheld from other members of the family who deserve it almost equally. It would be a real help to many students, as well as to the happiness of their parents, if a substantial concession of this nature could be afforded to parents who make sacrifices in order to allow their children to have the fullest possible education, in the interests not just of the child but of the community as a whole. We ought to get the best out of all the children in this country in order that they may play their part as citizens for the good of the whole nation.
§ Sir J. Anderson
The proposer of this Clause supported his proposal by a very persuasive speech, the sort of speech that one would expect from him, and also a speech which came very appropriately, from one bearing a name which is honourably associated in all our minds, with an educational institution of outstanding merit. The speeches which have followed, have indicated the importance which this matter presents to hon. Members. Nevertheless, I must suggest to the Committee that the approach made by this proposal is not, in fact, the right approach. The mover said that this proposal involved a matter of principle; it certainly does, as a proposed amendment of Income Tax law. It raises a very important matter of principle, as my right hon. Friend the Member for 2192 East Edinburgh (Mr. Pethick-Lawrence) pointed out.
The principle which lies behind our system of Income Tax allowances is to give relief at a flat rate to every taxpayer in respect of his dependents, and not to attempt to measure the relief by reference to the actual expense incurred. That principle was examined very fully and thoroughly by the Royal Commission on Income Tax—and its Report is still a classic in regard to Income Tax matters—in relation to this very question of educational expenditure. The suggestion was made to the Commission that dependants allowances might be given as a percentage of income or varying with incomes, so that people with a higher rate of income who wished to maintain their dependants on a higher standard should have a larger allowance, but the Commission rejected such arguments altogether. They reported that, in their view, the fairer way is to regard the allowance for each dependant as an extension of the effective exemption limit, as a minimum which does not increase as the income increases; and I am bound to say, while having much sympathy with the observations that have been made in regard to educational expenditure in general, that, so far as Income Tax law is concerned, that principle still holds good.
We shall, indeed, get into difficulty if we begin to depart from it. For example, the high taxation which is inevitably associated with war conditions falls with special weights on parents who have commitments in regard to their children's education, but there are many other classes and sections who can claim with equal force that those very conditions have imposed upon them burdens which weigh very heavily and from which they cannot escape. Case after case could be brought forward to show that, as a result of war conditions, taxpayers have to incur expenditure which reduces their available income for ordinary spending to very narrow limits. If we cannot make special allowances for taxpayers who can show that the present conditions have imposed special burdens upon them from which they cannot escape, is it not very difficult indeed to make a case for giving special allowances in respect of expenditure which is discretionary, as this additional expenditure on education undoubtedly is?
2193 There is a further practical difficulty, a very real difficulty, and we must when we consider amendments of Income Tax law, consider the administrative aspects of the problem. I notice that in the proposed new Clause there is a maximum limit of £200. That is a high limit, but I suppose it was put in to meet the case of children who are being educated at boarding school. It is one thing to argue that a special allowance should be given in the structure of Income Tax law in respect of educational expenditure, but if the educational expenditure covers board and lodging, the case becomes certainly very much weaker, and the problem of trying to separate or break up the fees of boarding schools into what is properly to be attributed to tuition and what represents board and lodging would be very difficult. The position of tax inspectors would practically be impossible.
I am bound to say to the Committee that, whatever the case may be for making provision which will bring higher or special educational facilities more effectively within the reach of people in all classes of the community, this is not the appropriate way to do it, and that I could not agree to it without involving myself and my successors in difficulties with which they should not be confronted.
§ Mr. Hogg
It is clear from what the Chancellor has said that he does not accept the principle of this proposal. Despite its kindly nature, his speech, I am bound to confess, disappointed me considerably. I am driven to choose between the alternatives of acquiescing in his negative, or driving the matter to a Division. It has, however, always been my conviction that it is very wrong to vote against the Government, at any rate unless one warns them beforehand that one is going to do so, in order that they may whip up sufficient support to meet one. In this case, no such warning was given.
I was very much encouraged by the reception with which this proposal met, and I am not without hope that a succeeding Chancellor may be educated up to accepting a similar proposal. I, indeed, hope that it may even be the same Chancellor, because we hope to have him with us for a very long time. It is not true that this proposal is designed to benefit simply those who can afford this 2194 expenditure already; it will benefit a great number of people who could not afford it, apart from the concession. It cannot be in the interests of wise canons of taxation that a parent should he allowed to spend the same amount of money on lollipops for his children a he does to give them a decent education. It is not true or fair to compare the human commitment on a child which one educates, in the interests of the country as well as of itself, with the other financial burdens which a man has to undergo. The principle to which the Chancellor of the Exchequer referred is already infringed in connection with life assurance policies. If I ask leave now to withdraw the proposed new Clause, perhaps I shall have the honour on a subsequent occasion of moving it with more success.
§ Mr. Benson
I wish to thank the Chancellor of the Exchequer for standing firm on this matter. I am still entirely unrepentant. This method of meeting educational expenses is not the correct one, which is not to give Income Tax concessions. Income Tax concessions of this kind are definitely regressive. They mean that the higher the income the greater is the concession. I am as anxious as any other Member that education should be made accessible to the widest number of people. If we want to make education cheap, we should give direct grants. That is the proper way to do it. The hon. Member for West Fife (Mr. Gallacher) referred to crofters starving themselves to educate their children.
§ Mr. Benson
All honour to people who make these dire sacrifices to educate their children, but they are the people who would receive the least advantage under the proposed new Clause. [HON. MEMBERS: "No."] Oh, yes. If we want to enable the children of poor people to be educated, let either a definite grant be made to each child that is educated, or else cut the cost of education. Do not make the concession on a 2195 basis of income, which is regressive and gives a larger concession as the income rises.
§ Mr. Gallacher
Of course the hon. Member for Chesterfield (Mr Benson) is one of the most orthodox economists, if he can be called an economist, I have ever been called upon—
§ Sir William Wayland (Canterbury)
Is not the Question before the Committee whether the Clause should be accepted or not?
§ The Temporary Chairman (Colonel Sir A. Lambert Ward)
It is "That the Clause be read a Second time."
§ Mr. Gallacher
The hon. Member for Chesterfield got up to speak on a subject, and I followed him to speak on that subject. My first reference is to the hon. Member who preceded me. He got up in order with further arguments to stiffen the very poor case he put in the earlier part of the Debate. The Chancellor, in the argument he put forward, did not, I am certain, satisfy those who supported the proposed new Clause. Therefore, I am of the opinion that we should not be too ready to withdraw the Clause. We should endeavour to get the Chancellor to give it further consideration. It was the hon. Member for Oxford City (Mr. Hogg) who talked about the crofter starving owing to the fact that he sent his children to a university. I referred to it in passing to point out that crofters starve whether they send their children to a university or not; it is one of the tragedies of the Highlands of Scotland.
The Chancellor must bring his taxation into line with the new education proposals of the Government. It is not enough to say that the children will get their education free up to 16 and that the doors to the higher stages of education are to be widened. Greater allowances must be made to the parents of these children. I know only too well what it means to a working-class family when children have to be kept at school until 16 years of age. It is not enough to say that they are getting education free. Take any family who keep their children at school until the age of 16. The children are getting education free at the secondary school—those who pass the exarnination—but does anyone tell me that it is not a heavy burden on the parents to keep them in the second- 2196 ary school, that because the child goes to the secondary school and teaching, books, and this, that or the other are provided, that that is all the parent has to do?
The parent has to buy all kinds of books for the advancement of the study of the child, apart from those given at school. He has every kind of expense in order to keep that child going at the secondary school. Let anyone walk round the working-class districts and see the children of 14, 15 or 16 years of age who are going to secondary schools, and then go to their homes and see what their parents are actually expending. I insist that the Chancellor brings his concessions for children into line with the new decisions upon education. There must be a Considerable extension of the concessions. I think we should hear something further from the Financial Secretary before this proposed new Clause is withdrawn. May be he is more amenable than the Chancellor.
§ Question, "That the Clause be read a Second time," put, and negatived.