§ Rule 10 of Schedule E of the Income Tax Act, 1918, shall be amended so as to include as a deduction from the salaries of all nursing staff a sum in respect of board and lodging at a hospital, nursing home, hostel or other place at which such member of the nursing staff has necessarily to reside in the performance of his or her duties.—[Mr. Turton.]
§ Brought up, and read the First time.
This Clause is designed to deal with what I believe to be an anomaly in Income Tax law. Those nurses who live in hostels have deducted from their wages before they receive them a sum in respect of their hostel charges. They are assessed for Income Tax not on the net sum they receive but on their gross pay. I illustrate my argument by quoting details from a letter which I received on this subject, which says:
My daughter's May pay slip was as follows: gross wage, £16 13s. 4d., at the rate of £200 a year; less board £8 6s. 8d.; at the rate of £100 a year; less National Insurance £10s. 2d.; less subscriptions 14s. 2d.; less Income Tax 11s., on a wage of £200 a year.
For her month's work this nurse received £6 1s. 4d. I suggest that the nursing profession is not treated fairly in this respect. Apart from the fact that this young nurse is paid at the rate of only 30s. a week, it appears that she is being treated in an anomalous way. I raised this matter with the Chancellor of the Exchequer on 23rd May, and his reply was as follows:
I understand that the new scales of pay for nursing staff provide for payment of a gross wage, from which a deduction is made for board and lodging when it is provided by the employer. Income Tax is chargeable on the gross pay, and this new arrangement, far from being anomalous, puts nursing staff in the same position as the ordinary taxpayer who has to pay for his board and lodging out of income which has already borne tax."—[OFFICIAL REPORT, 23rd May, 1950; Vol. 475, c. 1853–4.]
While on that point, may I continue my quotation from the letter? My correspondent goes on to say:
I would point out that in the case of a shopkeeper employing his daughter at a wage of £2 a week and keeping her, the value of that keep is not added to the cash wages for Income Tax purposes.
He goes on:
You will be doing the nursing profession a great service if you could find time to pursue this matter fully.
§ I need not stop there. In the last Parliament, the Estimates Committee of the House of Commons examined the position of foreign workers who live in hostels—an entirely level case with that of nurses who live in hostels—when it was found—I quote from the evidence of a secretary of the Ministry of Agriculture—that foreign workers, as committee employees, get £4 14s., less 30s., and have Income Tax deducted on the net sum.
§ The Committee will recollect that the Estimates Committee of the House made a recommendation that the Treasury should investigate the whole position to see that those who lived in hostels were all treated in a similar manner. My new Clause merely asks the Committee to give the nursing profession the same justice as the Income Tax law at present gives to the foreign worker in agriculture. I want to say nothing against the foreign worker in agriculture, but I feel that the nursing profession has as great a claim on us in this Committee as have the European volunteer workers in the agricultural hostels. I think it only fair that they should be treated in a like manner.
May I remind the Committee and the Financial Secretary, who I believe is to reply, of the words of Rule 10 of Schedule E, which I am trying to expand to deal with the nursing profession. It says:
Where the Treasury are satisfied with respect to any class of persons in respect of any salary … payable out of the public revenue that such persons are obliged to lay out and expend money wholly, exclusively, and necessarily in the performance of the duties in respect of which such salary … is payable, the Treasury may fix such sum, as in their opinion represents a fair equivalent of the average annual amount laid out and expended … and in charging the tax on the said salary … there shall be deducted from the amount thereof the sum so fixed by the Treasury.
§ I should have thought that was clear authority that gave the Treasury power to deduct from the nursing profession those sums they had perforce to pay for their lodging in a hostel. Therefore, I have moved this new Clause in the hope that the Treasury will so expand Rule 10 that it will cover both cases in the same way. If the Financial Secretary will accept this new Clause, he will be doing 1582 justice to a very honoured and very deserving profession.
§ Mr. Basil Nield (City of Chester)
My purpose in intervening in this Debate is to support, as strongly as I can, the new Clause moved by my hon. Friend the Member for Thirsk and Malton (Mr. Turton) since it is designed to benefit this very splendid calling. My reasons for supporting it are that in recent times, in all quarters of this Committee, the highest tributes have been paid to the nursing profession. It has been recognised that they do work under conditions of very great difficulty when there is a shortage of staff involving long hours of work. Recruitment has been difficult, and it has also been recognised in all quarters of the Committee that the level of remuneration is scarcely adequate.
In these circumstances, the Committee probably will be quite united in their desire to provide some benefit, if it can be fitted into the present scheme of things. I congratulate my hon. Friend the Member for Thirsk and Malton upon finding a way of removing the type of anomaly which he has so clearly explained to the Committee. He has searched and found that under Rule 10 of Schedule E of the Income Tax Act, 1918, there is an opportunity to set right this wrong, as we conceive it to be.
As he has pointed out, the test there is whether persons are obliged to lay out and expend money wholly, exclusively, and necessarily in the performance of the duties in respect of which such salary is paid. As the new Clause is framed, these nurses would come within this category if the Clause were accepted. I think there will be great support in all quarters of the Committee for the new Clause, and I hope that the Government will accept it.
§ Mr. John Cooper (Deptford)
I hope this Clause will be rejected, because I do not think the hon. Member for Thirsk and Malton (Mr. Turton), who was being goaded on by good intentions, appreciates the greater anomalies this would create. I hope it is appreciated in this Committee that the standard of remuneration of nurses in the last few years has improved beyond all recognition, due mainly to the work of the Minister of Health. Many of us may feel the nurses are still not adequately paid; but there has been virtually a revolution in the wages, hours 1583 of work and working conditions of nurses, due to the work of the Minister of Health.
§ Mr. Turton
Does the hon. Member consider that £6 1s. 4d. a month net received by a young nurse adequate remuneration?
§ Mr. Cooper
I want to come to that. There are many workers in this country, who, after having paid for their board and lodging and laundry, would be very happy to be left with £6 per month. That is a proper comparison to make. There are many other responsible workers who have to pay for their board in this country, apart from the hospital worker and the nurse.
Let me quote one case in which an immediate difficulty would arise. Take the catering trade. Under the Catering Wages Board there are two sets of wages which are statutorily payable by the employer, set out side by side—one set for the worker who is not resident and who is not found accommodation, and the other set for the worker who is found accommodation. If this Clause went through it would mean that the person who is employed and lives in a hotel would pay less Income Tax than his colleague who happens to live outside the hotel, although actually they are both receiving in total the same aggregate remuneration.
I hope the hon. Member for Thirsk and Malton will accept my sincerity on this matter. For many years I have sat on wages boards dealing with the wages of hospital workers, and I admit that this is a problem, but the problem and the inequity which exists can only be based upon an unfair assessment of the value of the accommodation that is provided for the nurse. If that assessment is correct there is nothing to grumble about. If it is an unfair assessment there are joint wages bodies in this country which can alter it.
Let me point out the danger in this new Clause. Nurses in this country are entitled now to join and enjoy the benefits of superannuation schemes. If we are going to exclude the emolument value of their employment—that is, the value of board and lodgings—for the purpose of reducing their taxation liability, I say, as 1584 one who has negotiated on the position from time to time, that we cannot avoid the logical sequel, namely, exclude the valuation for pensions and do quite a lot of harm to the nurse herself.
This problem is not quite so simple as it appears to be. One might feel that one would be doing a good thing for the nurse, but the same problem is involved in many other trades and one would be doing a lot of harm to the nurse by reducing the very real value of accommodation and so on which has a great bearing on her own pensionable position.
§ Mr. John Edwards (Brighouse and Spenborough)
I would not have intervened, especially as this is the first time that I have spoken in the House since my absence, but for the fact that I was a good deal concerned with the changeover that took place some time ago in the methods by which nurses' salaries were paid. I say to the hon. Member for Thirsk and Malton (Mr. Turton) that however well intentioned he may be, it would be doing a great disservice to the nursing profession were this Clause adopted.
One of the things that stood in the way of nurses getting better remuneration was the old method of fixing some notional figure of emolument in respect of lodging and so on. With the co-operation of the associations concerned when I was Parliamentary Secretary to the Ministry of Health, I thought that we had done a very good thing indeed when we put the nurses very much on all fours with all other people. I am not talking about the pay of nurses as such; I am not arguing about whether the pay is high or low, but I am sure the nurses will do much better in their claims if they put them forward as pay claims rather than if they argue about this or that emolument.
I say to the hon. Member for Thirsk and Malton with all the good will in the world—and I hope that I did something, at any rate, to improve the conditions of service of nurses—that this is not the way to do it. In fact, if this Clause were accepted it would restore one of the greatest handicaps with which we had to deal before we could get nursing salaries on any proper basis.
§ The Financial Secretary to the Treasury (Mr. Douglas Jay)
I am sure we all recognise the good intentions of the hon. Member for Thirsk and Malton (Mr. Turton) in putting this Clause forward, but I agree with my hon. Friends that if we were to adopt the course he suggests we should, in fact, provoke worse anomalies than those now existing, and worse anomalies not only as between nurses and other sections of the population but as between one group of nurses and another.
It was previously the case that some nurses were paid a straight salary whereas others were paid a lower salary and accommodation was provided for them in kind. In those circumstances Income Tax was charged in the one case on the higher money salary and in the other case on the lower money salary, because there was no other way of doing it. That, of course, was unfair as between one group of nurses and another because those receiving the lower salary plus accommodation paid less in Income Tax.
I understand that that system was altered partly in order to correct this very anomaly. For the great majority of nurses the same money income is now paid and for those who live in a deduction is made from the salary to represent the boarding and lodging expenses. The Income Tax can now, therefore, be charged on the same money income in each case, and that is surely much better as between one group of nurses and another.
If we were to adopt the hon. Member's suggestion we should surely revive the anomaly because those nurses who were living in would be able to claim a deduction for Income Tax in respect of their boarding and lodging expenses, whereas those who were not living in but who were receiving exactly the same total income would not be able to claim deductions and would, therefore, pay more Income Tax. Indeed, I think it would create injustice between the one class of nurses and other members of the community because, after all, all workers and indeed all of us have boarding and lodging expenses which cannot be counted as a deduction for Income Tax purposes.
§ Mr. Turton
I have not heard the Financial Secretary deal with the anomaly which I mentioned to him—why European volunteer workers paid no Income Tax on hostel charges while nurses have to pay on their lodging expenses. That is an anomaly to which the Estimates Committees of the House directed his attention last August. I am surprised that he did not deal with it in his reply. If he wishes to deal with it now I shall readily give way to him and allow him to make a pronouncement upon it.
I have always realised that there were difficulties here which might create more anomalies and I am the last person to wish to create anomalies. I feel that this Clause has drawn attention to the fact that there is a great anomaly in the Income Tax treatment of nurses, on the one hand, and of European volunteer workers, on the other hand, and that it has also drawn attention to the fact that the net remuneration of many of these young nurses is quite inadequate at the present time. For that reason I feel that the Clause has served two very useful purposes. I beg to ask leave to withdraw the Motion.
§ Motion and Clause, by leave, withdrawn.