§ 11.5 p.m.
§ Colonel Gomme-Duncan (Perth and East Perthshire)
I beg to move,That an humble Address be presented to His Majesty, praying that the Fire Services (Conditions of Service) (Scotland) (Amendment) Regulations, 1950 (S.I. 1950, No. 887), a copy of which was laid before this House on 31st May, be annulled.196 It will be recalled that within the last two or three weeks the contents of these Regulations were discussed in similar Regulations relating to England and Wales. That was on Statutory Instrument No. 686, 1950, and the Debate was on 22nd May, 1950. Briefly the matter is that firemasters in Scotland, who are the equivalent, I believe, of chief officers in England and Wales, are entitled to their pay plus quarters, or, if there are no quarters available, they are entitled to allowances in lieu. The officer with quarters is not taxed on them, and the one who has the allowance in lieu is taxed on it.
Unfortunately the Under-Secretary of State for Scotland will not be able to 197 answer the questions we are going to put to him because it is a matter for the Treasury, as was emphasised on the occasion the English Regulations were debated. I am particularly sorry, too, on this occasion to see that there is no Treasury representative on the Government Front Bench, and I am afraid that the Under-Secretary of State for Scotland will be in the same quandary as was the Under-Secretary of State for the Home Department.
This matter is really reduced to ridicule if one bears in mind that the man who draws an allowance in lieu of quarters is taxed on it, but in order that he should not be the loser a supplementary allowance is made to make up for that Income Tax, and on that supplementary allowance Income Tax is charged. Therefore, a supplementary allowance is issued in order that the Income Tax which was required for the first supplementary allowance against the Income Tax originally charged may be balanced up again. I read recently in the "Budget of Paradoxes" published in 1850 by Professor De Morgan:Great fleas have little fleas upon their backs to bite 'em,And little fleas have lesser fleas, and so ad infinitum;And the great fleas themselves in turn have greater fleas to go on,While these again have greater still, and greater still, and so on.Written in 1850, these lines are just as applicable to 1950.
The Chancellor of the Exchequer, on the Committee stage of this year's Finance Bill, emphasised in the case of the Services that if it was considered that they should have greater remuneration to meet their costs of living, it should be done by increases in pay and not by a change in the method of taxation. He also mentioned miners, and re-emphasised again his attitude to Service allowances. But tonight we have a determined effort on the part of the Secretary of State for Scotland, in collusion with the Secretary of State for the Home Department—who tried the same thing the other night and got away with it—to dodge the Chancellor's edict. How else can we explain these Regulations?
Now, does the Chancellor—and it really is intolerable that no Treasury representative is here tonight—intend that these senior officers of the fire services in 198 Scotland and England should have special treatment over that given to miners, sailors, soldiers or airmen? What does he say on this matter? I will, with permission, read a word or two from the OFFICIAL REPORT of 20th June last. When asked by my hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) why he would not deal with this question, as between the fire services and the Fighting Services, the Chancellor said:The basis of these supposed equivalents was with the knowledge and understanding that they were taxed. That is the whole fallacy. The whole of this structure is based upon the assumption that these three types of allowances would be taxed; the figures and everything else have been fixed in relationship to that state of affairs. Obviously, therefore, it would not be right to disturb that state of affairs, upon which the whole structure has been erected."—[OFFICIAL REPORT, 20th June. 1950; Vol. 476, c. 1170–1.]Well, that is what he said in relation to the Fighting Services. Does he say that similar conditions should not apply in the case of firemasters? If not, why not?
This is, without exaggeration, a clear case of discrimination between two kinds of taxpayers faced with the same problem. Both get allowances to meet what is not available in kind. That is important to remember. It is not available in kind, so they are paid an allowance in lieu. Both of them pay tax but one only is reimbursed for that tax. Now why is that?
When debating the English Regulations the Under-Secretary of State for the Home Department said, on 22nd May:Under the Income Tax law, a man occupying free quarters 'as a necessary consequence of his employment'"—and that applies both to the Fighting Services and to firemasters—does not pay Income Tax on the value of those quarters. The man who received rent allowance instead did pay Income Tax on that rent allowance. I stress again that in the case of firemen, this necessary consequence of their employment, is a factor of the greatest importance.It is in the case of firemasters and also in the case of the Fighting Services.To make it fairer, therefore, those who got rent allowance were given this extra compensatory grant to cover the Income Tax they paid. That grant, like the rent allowance itself, was taxable. A compensatory grant may not have been, or may not be in the case of chief officers"—that is, firemasters in Scotland— 199who are still to be covered by it, the ideal solution of what is admittedly an extremely difficult fire brigade problem …. what alternatives were there? If we increased the rent allowance to take account of the average amount of Income Tax paid it would mean making a flat rate of increase which would ignore the particular man's liability"—and—it would most likely cause great hardship.Then my hon. Friend the Member for Kingston-upon-Thames again asked whether this would not apply to the Fighting Services, and the Under-Secretary said:I ask the hon. Member to consider the nature of the fireman's job in relation to the quarters he must occupy as a necessary consequence of his employment."—[OFFICIAL REPORT, 22nd May, 1950; Vol. 475, c. 1803.]Well, where do we stand in this matter? Here we have two diametrically opposed schools of thought, one on the part of the Chancellor who says it must not be and the other on the part of the Home Secretary and the Secretary of State for Scotland who say it shall be. I think it is not unreasonable to say that the House and the country are entitled to know which is correct and what is Government policy on this very important matter. Is the Chancellors' method correct or is that of the Secretary of State for Scotland and his right hon. Friend the Home Secretary? One thing is quite certain: they cannot both be right, because they are diametrically opposed to each other.
It is the fantastic rate and state of taxation which is responsible for this. We have the dreadful state of affairs that the rate of taxation is so high that Ministers are driven to think and say and write that a man must be given some compensation because taxation is intolerable. But that one man doing the same job in the same service as another should be treated differently is a poisonous and dangerous policy—and not only that, it is stupid. It is maddeningly irritating to the persons concerned. Most important, I believe it to be entirely unjust.
§ 11.16 p.m.
§ Mr. Boyd-Carpenter (Kingston-upon-Thames)
I beg to second the Motion.
I have a good deal of sympathy with whichever one of the Under-Secretaries of State for Scotland is to reply, because he will be in the position of a man who has 200 to defend, as many of us have to do, interests for which he is responsible against the policy of his colleagues. I think the case which the Under-Secretary of State for the Home Department made on the English Regulations a few weeks ago is really unanswerable, but it is unfortunately one which the Chancellor of the Exchequer none the less tried to answer.
The difficulty with which right hon. Gentlemen opposite are faced is this: Is it, or is it not, the policy of the Government that allowances of this kind should be paid subject to tax? While there are arguments in favour of their being tax-free, there are arguments in favour of submitting them to tax. Surely there is no justification whatever for treating differently senior officers of the fire services and officers of the Armed Forces of the Crown? As my hon. and gallant Friend the Member for Perth and East Perthshire (Colonel Gomme-Duncan) said, both policies cannot be right, and I am the last man to attack Regulations because they are contrary to the policy of the Chancellor of the Exchequer. I must confess that the fact that they are contrary to the right hon. and learned Gentleman's policy is to me prima facie evidence that they are right.
None the less, it cannot be administratively justifiable for the Home Office and the Scottish Office to take one line of action and the War Office, the Air Ministry and the Admiralty to take another. I hope that when the hon. Gentleman replies he will not confine himself to justifying these Regulations, but will recall that he is a member of a Government which in many respects is taking an opposite line and that every argument he adduces in favour of his own Regulations is a damning condemnation of the Chancellor of the Exchequer.
§ 11.19 p.m.
§ Mr. Messer (Tottenham)
It is difficult to understand why this Prayer has been moved. It has been well known in local government that emoluments have never been subject to tax. I can well understand that if certain principles apply to officers of the Armed Forces and different principles are being applied to officers of the fire services, they ought to be adjusted, but the attempt to adjust them on these grounds seems to me strange.
201 We are to have resident firemasters and under the Income Tax law the rent for the premises they occupy is not counted. We shall also have firemasters for whom we cannot find accommodation, and they are to be granted a sum of money in lieu of accommodation; but, by virtue of the fact that it is a sum of money, it becomes taxable. We therefore find that the two firemasters or chief officers are placed in the position that the one who occupies premises that are part of his office or emolument, would be better off, unless there was some compensatory grant made to the other one, who is occupying premises for which he must pay rent. It seems elementary justice that a compensatory grant should be made.
§ Mr. Boyd-Carpenter
If it be elementary justice in the case of the firemaster, why is it not elementary justice in the case of the soldier?
§ Mr. Messer
I think that question should be directed to the Service Department and not to the Scottish Office or the Home Office, who are doing the right thing.
§ Mr. A. R. W. Low (Blackpool, North)
Will the hon. Gentleman tell the House how he voted on a new Clause which we debated earlier in the day?
§ Mr. Messer
There is no relevance in that at all. The hon. Gentleman might imagine that I voted in ignorance. If he does, I would retort by saying that for the period he has been in the House, he has displayed more ignorance than I have in the 20 years I have been here.
§ 11.22 p.m.
§ The Joint Under-Secretary of State for Scotland (Mr. Thomas Fraser)
I think the mover and seconder of the Motion have made it clear in their remarks that they do not expect me to reply to them. Indeed, it would be wrong, on the Fire Services (Conditions of Service (Scotland) (Amendment) Regulations, 1950, if we were to start to discuss the whole Income Tax law of this country. I am sorry if hon. Gentlemen opposite are going to be disappointed, but I do not propose to discuss it. I would just say. however, that the hon. and gallant Gentleman who moved the Motion described these compensatory grants in language that amused the House 202 and said they went on ad infinitum. I commend him to read paragraph 26, from which he will see that they come to an end in the year 1951–52 and that they are compensatory grants to cover the period from 6th April to 31st May this year.
§ Colonel Gomme-Duncan
Will the hon. Gentleman forgive me? I am not suggesting they go on year after year, but it is a matter of tax, grant; tax, grant, and so on.
§ Mr. Fraser
So far as the Regulations are concerned, it is not tax, grant; tax, grant; tax, grant, at all. It is only until the new Regulations come into effect on 1st June, and the grant is in respect of that tax and for the year following, and if the hon. and gallant Gentleman reads paragraph 26 he will find that is correct. We do not require a system of tax, grant; tax, grant, for the firemasters in Scotland, because we have only 11, all of whom are living in quarters provided by the fire authorities. Not one has to have an allowance of cash in lieu of tax. In the circumstances, I do not really think there is anything further I can say.
§ Sir John Mellor (Sutton Coldfield)
What is the purpose, then, of making these complicated Regulations? The hon. Gentleman has not really finished his speech, for he has not explained the object of making the Regulations, and he ought to do so.
§ Mr. Fraser
I have not been told by the mover or seconder of the Motion, or by any other hon. Member, why they have prayed against the Regulations.
§ 11.25 p.m.
§ Mr. Henry Strauss (Norwich, South)
I understood from my hon. and gallant Friend who moved this Motion that the reason he put down this Prayer was that he objected to the provisions found on page 13, relating to compensatory grants. Do I understand the Under-Secretary's reply to be that in fact these provisions for compensatory grants do not apply to anyone? If that is so, why make the Regulations? Surely, if they have no application of any kind, that is a very good reason for not making them. If they do apply to someone, then my hon. and gallant Friend deserves a reply. I hope that the Under-Secretary, who invariably is the most courteous and 203 reasonable of Ministers, will explain what he means by the extraordinary statement that though we have this whole page of this document, with its complicated provisions, there is no one in Scotland to whom they apply.
If, on reconsideration, he comes to the conclusion that the reason that the provisions were put into the Regulations was that there were people in Scotland to whom they would apply, has he any assurance from the Chancellor of the Exchequer that the benefits will not be taken away from the men who will receive them by retrospective legislation?
§ 11.27 p.m.
§ Mr. Fraser
I am very sorry for the hon. and learned Member. It is always a disability for an hon. Member to speak upon Regulations which he has not read. If the hon. and learned Member had read them, he would have appreciated that we have many firemen, not firemasters, in Scotland who hitherto have lived in houses provided by the fire authority, and for which they did not pay rent. He would also have gathered from the Regulations that, as from 1st June this year, every fireman, and everyone, apart from firemasters, who lives in a house provided by the fire authority, will pay rent and will not get any additional allowance to enable him to pay that rent beyond the salary or wage laid down in the Regulations. The firemen will not get a compensatory grant, but those who were given, between 6th April this year and 1st June, an allowance in lieu of a rent-free house, and who would have received on an average about 13s. a week from the fire authority, will be taxed on that allowance and, at the end of the present financial year, will be given a compensatory grant.
I have explained that the grant will not require to be repeated, because there will be no such allowances after 1st June this year. The only other members of the service who are provided with accommodation without payment of rent are the firemasters who, if they were not 204 given accommodation, would have to be paid an allowance in lieu thereof. I have explained that we have only 11 fire-masters in Scotland, that all have accommodation provided by the fire authorities, and that none of them in the circumstances requires any allowance in lieu thereof.
§ 11.29 p.m.
§ Colonel Gomme-Duncan
I am obliged to the hon. Gentleman. [Interruption.] If hon. Members opposite are satisfied with his tergiversations in his efforts at an explanation, I can only consider that they are the best reason I can offer for having moved this Motion. His explanation was a far better reason for this Prayer than anything I have said. We do not wish to divide the House on this matter. [Interruption.] Hon. Members may go to bed now, so far as we are concerned, but I do not know what the Patronage Secretary will say to that advice.
I consider that it was reasonable to move this Prayer because no explanation was given previously by the Under-Secretary of State for the Home Department. This same thing was then brought forward for Scotland, and pushed by without the agreement of a National Joint Council such as was in existence in the case of England and Wales. But we are now told that none of these fire-masters comes into this category, except between 5th April and 1st June. [Interruption.] My hon. Friend tells me that nobody comes into it. Well, here we have 14 pages of Regulations, and we are told that the provisions apply to nobody.
We did not wish that this admirable and excellent body of men should be penalised by our action; but the relationship of these allowances between the Fighting Services and the fire service is still unjust, and I can only say that I hope the hon. Gentleman will send a note to his right hon. and learned Friend the Chancellor of the Exchequer. I beg to ask leave to withdraw the Motion.
§ Motion, by leave, withdrawn.