HC Deb 15 June 1944 vol 400 cc2206-16

Where a taxpayer through any circumstances is obliged to employ the services of a housekeeper the taxpayer shall be entitled to a tax allowance of fifty pounds per year.—[Dr. Russell Thomas.]

Brought up, and read the First time.

Dr. Russell Thomas

I beg to move, "That the Clause be read a Second time."

I do so in the unavoidable absence of my hon. Friend the Member for South Bradford (Sir H. Holdsworth), but first may I point out that there is another Clause which is practically on the same subject?

The Deputy-Chairman

I quite realise that there are two other Clauses of a similar nature. I do not expect that the Chair will call either of the others, but I express the hope that, if either of those Clauses is a little wider or narrower than this one we shall discuss it here, and not go any further into them.

Dr. Thomas

Normally, a widow or widower, with or without children, is allowed £50 per year, and we are asking that this shall apply, not only to a widow or widower, but to a person who is bound, say by infirmity, such as blindness and so on, to have someone as housekeeper. We think that the same relief should be given in such a case. We have heard a great deal to-day about the Royal Commission, and this matter also has been discussed by the Commission which has been referred to to-day. That Royal Commission decided that relief of this kind was analogous to an allowance in respect of medical expenses. I will read the two or three lines from the Report of the Royal Commission or at any rate give the gist of them. The Commission said that such an allowance is analogous to an allowance for medical expenses. They took the view that the burdens arising in special cases through the infirmity of the taxpayer are things for which no system of taxation can provide, and they went on to say that it is not possible in any scheme to adjust taxation so closely as to take into account the purely personal circumstances of each taxpayer. There may be other persons besides children who require someone to look after them, and the point is not in my opinion completely met by saying that it is analogous to medical expenses. I will put it in another way. We give an allowance to widows with children because the children are unable to look after themselves and because they are weak and not fully developed, as it were, and they require mental and physical attention until they reach a certain age. I think a blind or infirm person in a house is in a similar position, in that he or she is weak and requires the help of someone else. Therefore, I do not think that the Royal Commission's finding, when they say that this is analogous to an allowance of medical expenses, is quite correct, and I think the actual principle behind the whole thing, as regards infirm people when they have to have someone to look after them is very much the same as with children. I trust that we shall not hear that argument from the Financial Secretary. It was my intention merely to move formally the Clause on behalf of my hon. Friend, but I thought I would make this point.

Dr. Peters (Huntingdon)

I would like to support what my hon. Friend has said, but I would also like to call attention to the new Clause, later on the Paper, which I propose should be incorporated in the Bill. There I seek to bring into the Bill an allowance for a housekeeper in cases where persons suffer from blindness or chronic ill-health, such as rheumatoid arthritis and so on, people actually crippled, often, and unable to see after their households or children, and also other cases where either the taxpayer or his wife is a cripple. I am not concerned to argue the point with regard to Royal Commissions. We all know for what they stand. I always take the view that this House or Committee, upon the facts brought before it, is the proper body to decide what is to be done. We can always read the evidence in the Reports of Royal Commissions, but when all is said and done, it is not good enough for the Chancellor to wrap himself round with these Reports and come here and say, "I cannot do this, that or the other because of the Report."

There is a principle here which has already been in Finance Acts for several years, where an allowance has been made for a housekeeper in cases which my hon. Friend has mentioned. There is an allowance up to £50 in the case of children or of an adopted child. There is also an extension of that to a female relative, and, if there is no female relative willing or able to take the charge or care of the children, then any other person can be employed, and the allowance is granted. What difference is there between making a specific allowance in these cases and in cases where a person has to come into the home and take charge or care of a person who is blind or is a chronic invalid or a cripple? I am asking, therefore, not for sympathy, as sympathy without help is no sympathy at all, but for some consideration to be given to these cases and not merely on the ground of expenses. I remember, when quite a lad, that my mother was an invalid for 20 years and was five years in bed. There was the expense of doctors and what not, and it was necessary to have somebody there to see after us, and it is only reasonable that we should incorporate in this Finance Bill a provision of this kind which will give relief in such cases.

Mr. Bowles (Nuneaton)

I support the new Clause. I have two cases from my own constituency of miners who are working long hours, whose wives in both cases are bedridden, and they have small children. These men, whose wages are nothing like as high as is sometimes be- lieved, even by hon. Members, are put to the expense of employing somebody else to do the work in the house which their wives would do for them if they were well. I have communicated with the Chancellor on two or three such cases and he always takes the attitude referred to by the hon. Members who moved and supported this Clause. I agree with the hon. Member for Huntingdon (Dr. Peters) that it is not good enough to rely upon the findings of a Royal Commission some 10, 15 or 20 years ago. If that is the logic to be used in cases of this kind, obviously it prevents any progress being made at all.

I submit to the Chancellor that throughout the history of Income Tax law allowances and improvements have been made from year to year. I do not pretend to know how long it took before a Committee of this House decided that certain business men should be given allowances in respect of expenses which they had to incur in the ordinary course of their business, but the proposals must have been turned down year after year until ultimately the good sense of the House prevailed with the Treasury. The Committee should do something to deal with the cases where, owing to the unfortunate circumstances existing in these times, men are unable to benefit from the allowances that their wives obtain in the ordinary way and are forced to employ someone else to prepare their meals and look after their children and generally keep the house going because the wife is bedridden. The Clause is so worded that it puts the onus of proof on the taxpayer seeking the relief, and anyone Who has seen cases of this kind and has given the matter serious thought is bound to come to the conclusion that there is a case which the Chancellor should consider and concede.

Rear-Admiral Beamish (Lewes)

I should like to support what has been said on this Clause. I do not know when the housekeeping allowance was originally brought in. It must be of considerable antiquity, but in 1924 it was extended so that not only childless widows but also childless widowers were able to draw it. The late Chancellor of the Exchequer said that he was by no means sure that it was a wise decision. The decision was made in 1924 by, I presume, the late Lord Snowden. My attention has been drawn to this matter on several occasions. I have one particular case in mind of a teacher who has done 40 or 50 years' great service and is now elderly and infirm with a small pension. She informed roe that she is unable to do the housekeeping work for herself and therefore has to employ a housekeeper, and she feels that it is a great hardship and an anomaly that childless widows or widowers who live near her can get the housekeeping allowance quite easily and yet she is unable to do so. That is all I have to say on what seems to me to be an Amendment which is designed to remove an injustice.

Mr. R. C. Morrison (Tottenham, North)

May I add one or two sentences from a slightly different angle? I do not know what the Chancellor is going to say in reply to the discussion, but I hope that he is not going to turn down the whole thing, because there is a case that is worth looking into. The Statute lays it down definitely that, before an allowance can be given for a housekeeper, the housekeeper must be resident in the house. Perhaps the right hon. Gentleman would look at what that means nowadays under the more recent war-time legislation, and when a great multitude of working people have come under Income Tax for the first time in their Eves. A workman's wife dies and he has to get in a housekeeper to look after the children. In the ordinary working-class house there simply is no place where a housekeeper can sleep. It consists of a bedroom for a man and his wife and accommodation for the children. There is no separate bedroom for any-body else who happens to come along, and, therefore, it is impossible for the man to provide sleeping accommodation for a woman he has brought in as house-keeper.

If the Chancellor were to give way on this point, he is afraid, as he told me in correspondence, that it might open the door to further concessions. Surely it would be possible to give the Income Tax officers power in a case like this, where they know that it is genuine, to grant special exemption. I hope that he will look into that point.

Sir Robert Tasker (Holborn)

I would make an appeal to the Chancellor not only on behalf of the cases which have been cited, but on behalf of so many others which come under review by Members of this Committee. The type of case I have in mind is that of the ex-Service man who has been injured and suffers from increasing incapacity. Such a man must have assistance of some kind. One could multiply these cases hundreds of times, but such is not my intention, but rather to point out to the Chancellor that it must strike hon. Members as particularly mean to deny the ex-Service man assistance in a form equivalent to a few shillings a week, when the country can forgive certain other people some £250,000,000 of unpaid Income Tax. If Parliament can be so generous, I respectfully suggest that it can afford to be a little more generous to these people who suffer from such grave war disability.

Sir J. Anderson

The speech of my hon. Friend the Member for Holborn (Sir R. Tasker) serves to illustrate very clearly the difficulty of the line of argument that has been taken by some speakers in regard to this proposed Clause. He stressed the hardships of a case which must appeal to us all—the case of the disabled ex-Service man who requires the services of an attendant because of his condition. I feel bound to say, without any desire to appear unsympathetic, that a Finance Bill is not properly to be regarded as a vehicle for making all sorts of concessions and granting all sorts of subsidies and allowances to various classes of people whose cases are hard and excite our sympathy.

Take this very case stated by my hon. Friend. The case of the ex-Service man who is disabled and requires an allowance for an attendant is met, and very properly met, in the arrangements made by the Ministry of Pensions. In such a case, where there is a condition of total disablement and the services of an attendant are required, an attendant's allowance is provided. That line of approach, which I suggest is the appropriate one, the direct line, should be adopted for dealing with such cases, but you get nothing but confusion if you try to make some sort of parallel or supplementary provision by way of amendment of the Income Tax law. If the provision made by the Pension Warrant for such cases is not adequate, then it ought to be considered on its merits and, if this Committee thinks fit, it can be improved; but it ought to be one thing or the other and I, personally, feel, from every point of view, that the direct approach, wherever possible, is the appropriate one.

We have here a proposal which seeks to reopen matters all of which were discussed at great length in connection with last year's Finance Bill. I would say, first, a word about the wording of the Clause. It runs: Where a taxpayer, under any circumstances, is obliged to employ the services of a housekeeper. That word "obliged" is a very difficult word. I do not know what it means. Is it intended to refer only to such cases as those of a taxpayer whose incapacity, whose state of health, is such that he cannot get along at all without the services of a housekeeper, or would it be extended to include the case of a taxpayer, an unmarried taxpayer, who finds it more agreeable to live in a house and to have a housekeeper to look after him than to live in lodgings? I do not know. All these considerations are opened up by the use of the word "obliged." I venture to think, if the Clause were adopted, that the word "obliged" would have to become a dead letter. The test would be: Is the housekeeper, in fact, employed? The taxpayer no doubt would say, believing it or thinking it right so to do having regard to the wording of the law, "I employ this housekeeper because my circumstances oblige me to do so," and that would be the end of it.

I am bound to ask myself what is the history of this question of the housekeeper's allowance and what is the basis of the allowance? Let me remind hon. Members that, as the law stands, this housekeeper's allowance is given to a widower or widow who has a resident housekeeper, without any further test or check. It is also given to any other taxpayer who has a female person resident with him to look after a young child or young children for whom he gets the children's allowance, either the ordinary children's allowance or the adopted children's allowance. Here the point made by the hon. Member for Nuneaton (Mr. Bowles) comes in—the case of the man whose wife is a cripple, is disabled, and who has no children. He made the case sound very impressive, but, in fact, as the law stands, and as the result of a concession made, I think, last year, the married man whose wife is disabled throughout the Income Tax year and who has a child or children gets a housekeeper's allowance in addition to the allowance for the wife, so that case is met. [An HON. MEMBER: "What about the resident housekeeper?"] I am coming later to resident housekeepers because that point was raised by my hon. Friend the Member for North Tottenham (Mr. R. C. Morrison), and I will deal with that in a moment. At the moment I am dealing with the general case.

The housekeeper's allowance, so far as I have been able to ascertain, was originally intended for the widower who was obliged to hire someone to look after his young children. That was the ground on which this allowance, which is a comparatively recent innovation, was first granted. Following the recommendation of the Royal Commisson on Income Tax in 1920, an allowance was granted to a widower or a widow who had a female person living with him or her to look after young children, and it was granted, at the same time, to a single taxpayer who had a female relative living with him to look after a young brother or sister. In 1924 the requirement of young children was dropped in the case of the widower or widow, so that since that date a childless widower or widow has been able to get an allowance for a resident housekeeper. That improvement became, naturally enough, the starting point for further requests, further demands, for an extension of the allowance to cases where there were no children. In 1942, as my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) will remember, my predecessor undertook to review the whole question of the housekeeper's allowance with the result that in last year's Budget, in 1943, he announced proposals for widening the scope of the allowance so as to give relief in cases which had not previously been eligible, where the care of young children was involved.

It would, perhaps, not be out of place if I quoted from the speech my predecessor made last year, because nothing new has happened since then. The situation is exactly the same; the case for a further extension is neither stronger nor weaker than it was this time last year. What he said was this: The allowance for a widower or widow was originally given only where there were young children to be cared for, but in 1924 this condition was dropped, with the result that the widower or the widow obtained the allowance merely on the ground of the maintenance of a resident housekeeper. Although I do not propose to disturb it, I am not sure that this extension of 1924 was a wise one. It was a great source of complaint on behalf of other taxpayers that they had not the same allowance as the childless widower or widow if they employed a housekeeper. My proposal for widening the sphere for the housekeeper's allowance is founded particularly on the presence in the home of young children and the absence of a wife who has primarily the normal maternal duty of looking after the children. I propose, accordingly, to extend the scope of the housekeeper's allowance so as to grant it to any taxpayer who is entitled to the Income-Tax relief in respect of a child or adopted child or employs or maintains a resident housekeepr. There must be"— and this is the point— as the proviso that the taxpayer is either entitled to a single personal allowance or, if entitled to the married personal allowance, can show that the wife is permanently incapacitated and that he must, therefore, have a resident housekeeper." —[OFFICIAL REPORT, 12th April, 1944; Vol. 388, c. 956–7.] The change that was made by my predecessor last year had the effect of bringing in a single person with an adopted child or a divorced or a separated spouse having the custody of the child. Therefore, we are now in the position that the care of children is fully provided for—and that is quite apart from the fact that the housekeeper's allowance can be claimed by a childless widower or widow.

The further claims that may be made are of great variety: the case of the single taxpayer without dependants—I really do not think that is a strong case; the case of the aged or infirm taxpayer—that seems a somewhat stronger case; the case of the taxpayer with an aged or infirm dependant. But those are only particular instances of taxpayers who, for one reason or another—it may be one of an infinite variety of reasons—have special obligations and special expenses to meet out of their incomes. I find it extremely difficult to see where, as a matter of principle, if we start extending again and go further than my predecessor was able to go on a very careful and full review of the position only a year ago, we are going to stop. Finance Bills would then indeed become the vehicle, as I indicated at the beginning, for concessions to be made at the expense of the taxpayer for meeting all sorts of hard cases. I am very sorry to have to take that view but I think it is the only view that I, as the Minister responsible for Income Tax administration, can possibly take.

There remains the question of the nonresident housekeeper, with which I promised to deal. That question also was raised in last year's Debate. The case was made, just as it has been made to-day, that the circumstances of a household may make it impossible in practice, or extremely difficult, to provide accommodation for a housekeeper in circumstances in which the employment of a resident housekeeper would be absolutely justified. I am not going to deny for a moment that there is some force in that argument, but I venture to say—and my conclusion is the same as that of my predecessor who went into this matter—that you put the tax inspector in a very difficult position if he has to look at the circumstances of each individual case and make up his mind whether the taxpayer is pitching a tale, whether the facts are really as represented. Residence is a very good practical test where there are children; the case for a housekeeper is the case for having someone who can give motherly care all through the 24 hours. If this concession were made, it would really have to extend to every case where daily help is employed in running a house. That is what it would come to in practice. I hope the Committee will not press me to go further at this time, when there are no new arguments at all, than my predecessor, who made a very careful examination, felt justified in going a year ago. The situation has not changed in the last 12 months in a way which justifies us in doing something to-day which would not have been justified then.

Mr. McEntee

Does the right hon. Gentleman not consider that the conditions have changed very materially owing to the fact that a great number of houses have been destroyed, and that overcrowding is infinitely greater now than it was even last year? It is growing because no new houses have been built and a great number of houses have been destroyed. Families are compelled to live in a couple of rooms and a father who has lost his wife, and is left with three or four children, cannot bring in a resident housekeeper unless, of course, they occupy the same room, but that would not be the intention of the Income Tax law. You may have the case of two people living next door to each other. One man may have a whole house and one child and will be entitled, if he has a resident housekeeper, to the concession now given, while next door you may have a man living in two rooms, who is unable to get any other accommodation, having three or four or more children. There are many such cases. Surely some concession ought to be made now, because of those changed circumstances, to the man with the large family living in congested conditions?

Sir J. Anderson

I want to give the fullest consideration to every argument that may be brought forward, but I cannot really agree that since this time last year there has been any such change in actual conditions as would in itself justify a change.

Sir R. Tasker

According to my information and experience over some 25 years in connection with an institution, a disabled ex-Service man's pension is governed by the percentage of disability at the time of his examination. We have found that whilst some men respond to treatment, others get much worse and become totally disabled, and the latter are then told that they must prove that this extra disability is due to war service. I think the Chancellor has not made—

The Temporary Chairman (Sir Cyril Entwistle)

I do not think that question arises on this new Clause.

Question, "That the Clause be read a Second time," put, and negatived.