§ The Deputy-ChairmanThe first and second Amendments to this Clause are not selected. I refer to the Amendment in the name of the hon. Member for Bucks, South (Mr. Bell), in page 9, line 28, at the end, to insert:
and the said section shall be further amended by the addition at the end thereof of the following words "and if he further proves that he is over sixty-five years of age and is not gainfully occupied, to a further deduction of sixty pounds, if he is otherwise entitled to a deduction under this section of one hundred and ninety pounds or of forty pounds if he is otherwise so entitled to a deduction of one hundred and ten pounds,and to the Amendment in the name of the hon. and gallant Member for Merton and 1273 Morden (Captain Ryder), in line 34, at the end, to insert:and at the end of the said subsection (1) there shall be inserted the following words 'provided that where the claimant is a widow, the allowance shall be ninety pounds.'
Miss. WardOn a point of order. Might I ask whether it would be possible for the Committee to divide on the first Amendment? It has been ruled that that Amendment dealing with the lower ranges of Income Tax cannot be discussed, but it occurs to me that after the discussion on the previous Clause it would be beneficial if there were a separate Division on the Amendment; otherwise, it will be impossible to discuss reliefs for the lower range of incomes, which to me and my hon. Friends is of vast importance, having regard to the speech made by the Chancellor of the Exchequer last night. We are interested in the relief for the lower range of taxpayers, and it seems rather unfair that we should be deprived of putting their case to the Chancellor.
§ The Deputy-ChairmanWe cannot have a Division unless an Amendment is called, and I do not intend to call that Amendment.
Miss. WardWill you reconsider your selection, Sir Charles? [HON. MEMBERS: "Oh."] Hon. Members do not want it, but will you reconsider your decision not to call that Amendment to give us a chance to divide on it?
§ The Deputy-ChairmanNo, I have said I have not selected it.
§ Mr. G. P. Stevens (Portsmouth, Langstone)I beg to move, in page 9, line 46, at the end, to insert:
and the words 'sixty pounds' shall be substituted for the words 'fifty pounds.'There is no class up to the present which in recent years has been hit so hard by two things, first, the increase in indirect taxes, Purchase Tax, Excise Duties and so on, and, secondly, by the fall in the purchasing power of the £, as the fixed income groups, more particularly the small fixed income groups, the pensioners, the small annuitants, the people whose sole income is a small dividend or interest bearing security and also, of course, those with no income at all. In those circumstances, they frequently have to rely upon other persons for their support. In years gone by that was not 1274 the case because, small though their pension or annuities may have been, they were sufficient to support the simple standards of the aged, or infirm, or the widowed, who at present are the recipients, the indirect recipients, of what is known as the dependent or relative allowance.6.0 p.m.
In subsection (2), the Chancellor of the Exchequer has looked after a different class of persons. He has looked after the young and fit married persons by increasing the marriage allowance from £180 to £190, so that a married couple with a joint income of £190 a year pay no Income Tax at all. The aged and infirm with small incomes do not benefit from this Clause directly in any way, though there is some indirect benefit in subsection (4) through their higher income limit.
I have used the words "aged and infirm" because they are used in the Finance Act, 1920, which first made provisions for the dependent relative allowance. The words used in Section 22 were:
If the claimant proves that he maintains at his own expense any person, being a relative of his or of his wife who is incapacitated by old age or infirmity from maintaining himself, or his or his wife's widowed mother, whether incapacitated or not …I make a special plea for the person upon whose financial support they rely, and upon whose financial support they are more than ever relying, due, as I said, to the increase in indirect taxation and the fall in the purchasing power of the £. Probably very few members of the Committee realise that the figure of £50, which is the present allowance, was fixed eight years ago, in Section 16 of the Finance Act, 1943. The cost of maintaining these aged or infirm persons has increased by at least a third since 1943, and my Amendment seeks to give at least partial recognition to the increased cost of maintaining these aged or infirm people.I may be told that the principle of the concession is accepted but that the cost is prohibitive. I have no accurate knowledge on that point. I can only make a guess. Having no access to the only records which would help me to make an intelligent guess, mine is entirely a shot in the dark, and the Chancellor or 1275 the Financial Secretary can if necessary correct me. I do not expect that the cost of such a concession as this would exceed £4 million in a full financial year. The number of cases concerned is not large, but each case is usually a very tragic one.
The cost to the Exchequer would be very small in relation to the Budget, so I ask the Chancellor to recognise, in the case of the aged and infirm, not some new principle, not something which is out of harmony with the Socialist Budget he introduced a month ago, but precisely what he has recognised in the case of the young, that is by increasing the dependent relative allowance from £50 to £60 a year.
§ Mr. Maudling (Barnet)The principle underlying this Amendment is the same as that which underlies several new Clauses standing in the names of certain hon. Members on this side of the Committee. It is a principle recognised by the Government in the Finance Act, 1920, namely that in considering the taxation of the breadwinner of the household, his household responsibilities as a whole must be considered. Those household or family responsibilities spread beyond taking care of his wife and children. They extend to the care of aged and infirm relatives, and, indeed, to a widowed mother.
As my hon. Friend has said, this dependent relative allowance was instituted in the Finance Act, 1920, along with the children's allowance. It is interesting to see how the two have varied since then, because there is a good deal to be said for the argument that the two move together. If the cost of maintaining a child increases, the cost of maintaining a dependent relative also increases at the same time. The children's allowance was originally £36 for the first child, and between 1920 and 1939 it varied between £50 and £60. It was £50 during the war. It was increased in 1947 from £50 to £60. and in this Bill it is being increased from £60 to £70.
The dependent relative allowance started at £25 and was increased in the Finance Act, 1943, to £50. It has not been increased since then. In 1947 the limits which apply to the income of the dependent if the dependent relative allowance is to be granted was raised by the 1276 Government, but the amount of the allowance has not been increased since 1943, although the cost of maintaining these people has obviously increased substantially.
In 1949, my hon. Friend the Member for Dorset, South (Viscount Hinchingbrooke), introduced an Amendment to the Finance Act which was designed both to raise the exemption limit and to increase the amount. The Financial Secretary replied on that occasion, and he rejected the proposal on three grounds. First, he said that the cost would be too high; it would be £7 million. On this occasion the cost must be substantially lower, because the Government have already done one of the things for which my hon. Friend the Member for Dorset, South, asked—they have raised the exemption limit. So the cost cannot now be £7 million. I imagine that £4 million or £5 million would be about the correct figure.
The second argument of the Financial Secretary was that it was too soon to raise this allowance again because it had twice been raised in recent years. Two further years have now passed. It is now eight years since there was any increase in the amount of the allowance. There was an increase in the income limit in 1947 but no increase in the allowance itself. That argument, which the Financial Secretary used in 1949, is considerably less strong than it was.
His third argument was that it would be difficult to raise the dependent relative allowance if at the same time nothing was done for the old age pensioners. That argument does not hold good any longer because on this occasion something has been done for the old age pensioners. On all these grounds it seems that the opposition offered by the Financial Secretary in 1949 to this proposal cannot any longer be continued.
There is no question that, just as the cost of maintaining children has increased, so the cost of maintaining aged and infirm relatives has increased. The Government have been wise and have acted properly in recognising the family responsibilities of the taxpayer, and in assisting him by raising the children's allowance. It would be consistent to follow through that principle and to recognise that the family is a unit which extends beyond children and wife to 1277 include infirm relatives in respect of whom a moral responsibility rests on the taxpayer; and so to accept this Amendment and increase the dependent relative allowance.
§ Mr. Henry Brooke (Hampstead)I hope that the Government can favourably consider this Amendment. I am sure that if it could be accepted its action would be popular on both sides of the Committee. We are dealing with a matter which vitally concerns a large number of families in which there is a person who cannot help himself or herself, and who, therefore, needs assistance from the breadwinner of the family, who thereby has to take on that additional responsibility. We all know how heavy any additional responsibility is in these days of severe taxation.
On previous occasions in Committee on Finance Acts, I have called attention to the anomalous arrangements which have been allowed to grow into existence in relation to a number of these Income Tax allowances. Here we are suggesting that an anomaly should be mitigated. There can be no reason whatever why, if it is right to modify the children's allowance from time to time, it should not be right to modify this similar allowance for another dependent person in the household. The figure of £50 arrived at in 1943 was, in a sense, an arbitary one then. It happened to fit in with the other allowances. Those other allowances have been changed, but this has not been altered, and on that ground it is quite obvious that the Committee and the Government should be prepared again to re-examine the matter.
I hope that the Government will not make any play with the argument that they are already doing something for these cases in the subsection and that therefore they are not called upon to do any more by accepting this Amendment. Let me point out that what they are proposing to do for such cases confers no benefit whatever on those families who are the hardest hit. The acute case is where the dependent relative has no income at all. What they are doing in the Bill is to assist the case where the dependent relative has some income and the need is not so great. What I have in mind is the instance where the need is acute and pressing because the dependent relative has nothing of his or her own, and costs are 1278 rising all the time. Surely this Committee should be prepared to make an effort to try to recognise the hardship which otherwise ensues.
§ Mr. JayThe hon. Member for Portsmouth, Langstone (Mr. G. P. Stevens), put his case persuasively, and the hon. Member for Barnet (Mr. Maudling) very ingeniously, for this Amendment. The question of the dependent relatives' allowance is one which, for the reasons given by the hon. Member for Hampstead (Mr. H. Brooke), we should all approach with sympathy. The proposal here is to raise the allowance from £50 to £60. As the hon. Member for Barnet said, it was placed at £50 in 1943; and limits were then set of £30 income for the dependent relative for the full allowance rising to £80, at which the allowance tapered off. In 1947, when the old age pension was raised, those limits of £30 and £80 were raised to £70 and £120 so as to ensure that anybody getting the 26s. old age pension got the full benefit of the allowance.
As was implied by the hon. Member for Hampstead—I think I am entitled to refer to it, even though he attempted to deter me from doing so—in Clause 15 (4) we are this year, in association with the further rise in the old age pension, raising the limit further to £80 and £120. That does give further benefit to a number of these persons, and I think it goes some way to meet the point of the hon. Member for Barnet, that in a year when we are doing something for the children we ought to do something for the dependent relative also.
6.15 p.m.
The hon. Member for Hampstead said that that was insufficient. We have to remember that all this entirely affects people within the Income Tax range. There are many, no doubt millions of persons, whose income does not rise to that level at all and they are naturally those in the most acute need. We have to see this matter in perspective. There is the £20 million to assist to increase the retirement pension and assistance rates to those very persons who almost entirely fall below the Income Tax range.
I agree that the proposal in this Amendment would be a high priority in an easier financial year, when we were not confronted with such budgetary difficulties; but it would cost £5¼ million—the 1279 figure of the hon. Gentleman was very nearly right—and I think we have to recall the general setting of the Budget, and the fact that we felt bound this year to impose charges on the Health Service. We must ask whether it would be justifiable, in all those circumstances, to concede, in addition to this other measure, a further £5¼ million for that purpose. On the whole, we cannot feel that a case has fully been made out. In our view the first priority this year must be concessions to the old age pensioner by way of increases in the National Assistance rates. Therefore, with regret I must announce that we cannot accept this Amendment.
§ Mr. Michael Astor (Surrey, East)I hope it is not too late for the Financial Secretary to reconsider his decision. After the Chancellor announces his Budget and the Finance Bill is published and subsequently discussed, all of us receive many letters from constituents asking for relief from either direct or indirect taxation to mitigate their hardship due at the moment principally to the rising cost of living. In my view there is no category of persons more in need of sympathy and sympathetic treatment in relief of taxation than the people referred to in the Amendment, the dependent relatives and particularly the person dependent on a fixed income for his or her means of livelihood.
In my constituency I probably have more than the average number of people dependent on fixed incomes, and I have a good opportunity to see how hard is their plight. In all our budgetary arrangements when we are discussing the case of, let us say, the lowest paid worker in the country, we should remember that he has, after all, some bargaining power behind him. He has behind him a union through which he can negotiate his wage claims. The category of persons we are now discussing not only have no union to represent their views, but no spokesman as such, and very little real bargaining power to support them. Therefore, it is incumbent upon the Government to give them more consideration than any other category.
The Financial Secretary has said this Amendment would cost £5¼ million. I realise that it is the responsibility of us all today, on both sides of the Committee, to see where we can find money and where 1280 we can cut down costs. I merely ask the Financial Secretary whether he really believes that £5¼ million is a high price to pay to mitigate the hardship of this kind of person, existing in circumstances for which no adequate allowance has been made during the last seven years.
Miss. WardI am very sorry that the Financial Secretary spoke so soon after this Amendment had been moved. Quite apart from his refusal to grant any concession, I should have thought that the hon. Gentleman would have cared to hear some of the arguments which could be put forward in support of this Amendment. I fully realise now that the hon. Gentleman does not want to hear the arguments. It would have been fairer to a wide section of the community if he had been prepared to listen and then to have given a considered reply to the arguments put forward.
§ Mr. JayI thought that the arguments had been so well put by the first three speakers that they could hardly have been improved upon.
Miss. WardThat may be so, but I have been long enough in politics to understand the Front Bench technique, even in my own party. Therefore, I am not prepared to accept that as a reason. As the hon. Gentleman saw that other hon. Members on this side of the Committee wished to take part in the debate, I am not prepared to accept what he said as a good reason for his intervention.
I want to put on record how much I regret that the Chancellor's speech last night is not available today in HANSARD so that I can quote from it. I will not pursue the subject, because I know that I should be out of order, but I want to comment on what the right hon. Gentleman said as a background to what I want to say. Last night the right hon. Gentleman delivered a tirade against this side of the Committee on the ground that presumably we were only interested in people who were paying Income Tax.
Today, when my hon. Friends and myself move an Amendment dealing with lower income groups, the Financial Secretary gets up and repudiates it in somewhat dulcet tones and with none of the vindictiveness which was displayed last night on the Treasury Bench. I hope that the country will take note of the fact 1281 that it is a Socialist Government which has refused to take note of what I call the second category of people who are seriously impeded by the ever-rising cost of living.
In the Budget account was taken of the position of old age pensioners and of those on the various scales of National Assistance, though I am afraid that it was not met with very great pleasure by the old age pensioners. We come next to dependent relatives who have no income but who are being provided for by those who, in many instances, have to work to maintain them. Those people are seriously in need of assistance from the Government. Therefore, I am extremely disappointed that the hon. Gentleman should refuse to find sufficient money to meet the Amendment.
I will give one example of where he can find the money, and I should be obliged if the occupants of the Treasury Bench would listen. I observe with interest that the Select Committee on Estimates has produced a Report about £8 million lost on hostels. People were living at hostels—
§ The Deputy-ChairmanI do not see how that can possibly arise under this Amendment.
Miss. WardNo, it cannot, but the hon. Gentleman did say that the money had to be found and he did not say where it was to be found. As hon. Gentlemen opposite are always taunting us with not making practical proposals, I thought that I should mention that. The Financial Secretary will know of the report and I need not proceed further with that subject. It is now on record. The money could be found from various sources. If the hon. Gentleman likes to invite me to come and tell him about that, I should be delighted to accept an invitation.
Another point I want to make is that I think that the hon. Gentleman has failed to take into consideration that both bachelors and spinsters—and I mix them together—[Interruption.] I find that I get much more support from my own colleagues if I talk about bachelors and spinsters together. The bachelors are rather self-conscious about the spinsters. I think that the hon. Gentleman ought to take into consideration that the spinsters are not getting equal pay, and yet they have to carry the burden—
§ The Deputy-ChairmanWe really cannot discuss equal pay on this Amendment.
Miss. WardNo, I will not. All this arises from the fact that the hon. Gentleman intervened too early in the debate. He did not give full consideration to the whole of this problem. There are people—and I will not talk about equal pay—who are maintaining dependent relatives and who do not get very high wages. They have to pay, by way of direct and indirect taxation, a contribution to the concessions which have already been given to married men with families. Therefore, the hon. Gentleman is doing no justice at all to this second category.
It is difficult to find a way of assisting people who are on a static income. Just as in the constituency of my hon. Friend the Member for Surrey, East (Mr. Astor), there are in my constituency a large number of people who maintain dependent relatives. It is most regrettable that apparently the Government do not understand their plight and are not prepared to do anything to assist them. I can only hope that, between now and the Report stage, this country will ring with the fact that the Socialist Government are not concerned with the position of those in the lower income groups. If this Amendment were accepted, we should be doing something for a most deserving group of people.
§ Mr. Douglas Houghton (Sowerby)Before the hon. Lady the Member for Tynemouth (Miss. Irene Ward) gets carried away with indignation, she should bear in mind that a large number of dependent relatives—probably the majority for whom an Income Tax claim is made—are already old age or retirement pensioners for whom a great deal has been done since the present dependent relative allowance was raised to £50 in 1943.
In 1943, the income limit of the dependent relative for whom an allowance was given was as low as £30. That was because the old age pension then was only £26 a year. Since then, the old age pension has been raised. First it was increased to 26s. a week, and it is now to be raised to 30s. a week. Notwithstanding that great improvement in the position of the old age pensioner, dependent relative claims will still be admitted where assistance is given to the relatives concerned, even though their income is 1283 so much higher. That seems to be an important point. The improvement in the provision for old age under the social services of the present Government must be looked at in relation to the dependent relative allowance. Surely, that is a point to be borne in mind?
6.30 p.m.
The second remark I would make about this, and I do it with great diffidence, is that I believe there is a very great deal of abuse of this Income Tax allowance. I hope that the Royal Commission, which will later consider this and many other Income Tax allowances, will review the possibility that, especially amongst overseas workers in this country, there is quite a considerable abuse of the dependent relative allowance for Income Tax purposes. It is really a question of priorities, and a question whether, having regard to the improvement in the position of the majority of old people which has taken place under the social services schemes, this dependent relative allowance has a prior claim at a time when we are having to increase taxation.
§ Mr. Pickthorn (Carlton)It is, no doubt, true, as the hon. Member for Sowerby (Mr. Houghton) has just reminded the Committee, that we must consider this question in relation to the general effect of the social services and so on upon the old people concerned; but so also must we consider it, surely, in relation to two other things. One is the falling value of money, and, presumably, the social services to which he referred were designed for a higher value of money than people are going to get in the year for which we are legislating. It is perfectly proper that that should have been taken into consideration.
The second general matter which seems to me proper, and which I do not think has yet been mentioned—if I may so far assume that the gentleman from Whitehall is not so omniscient as to believe there is no more to be said on the matter than he could imagine—there is one other consideration that ought to be taken into account, and that is what it is we are taxing. What it is that is being taxed here is benevolence and affection. What is being taxed is what need not be done but is done as a matter of affection, and I should like to ask him—because I 1284 hope he has not exhausted his faculties, as he has not exhausted his opportunities of speech—one question.
He told us that this would cost £5,250,000. Has any estimate been made in his office how much more or less than £5,250,000 would be thrown upon the public if all of this burden were disclaimed, were refused or rejected by the persons falling to be taxed—if they said "I am not bound to keep my aged aunt, or my imbecile and disgusting uncle, though he is my uncle, and I am not going to do it any longer"? How much more or how much less than £5,250,000 would be affected? Unless there was a fairly close estimate of that, I do not really think that he is in a position to use the argument which the Financial Secretary used a quarter of an hour ago.
§ Mr. Osbert Peake (Leeds, North)I hope, before we finish with this Amendment, that the Financial Secretary will be able to give us a little more encouragement than he did when he intervened a short time ago. He cannot resist either the logic or the justice of the Amendment moved by my hon. Friend.
So far as the justice of it is concerned, the hon. Member for Sowerby (Mr. Houghton) drew attention to the fact that many dependent relatives were in the old age pension class, and he took credit for the fact that they were now going to get the increase of 4s. in their weekly pensions, but he did not remind the Committee that that 4s. increase has been more than eaten up by the rise in the cost of living since the original pensions rates were fixed in 1946.
So far the logic of the claim is concerned, the Chancellor, in this Bill, is increasing the allowance in respect of the wife and in respect of the child, but he is not increasing the allowance in the case of the dependent relative. Hitherto, in years gone by, these three allowances, generally speaking, have all moved up together. So far as the wife and the child are concerned, they are liabilities which a man voluntarily takes upon himself. So far as a dependent relative is concerned, this is a liability which is nearly always thrust quite accidently upon certain individuals.
I am tremendously struck as I go about by the number of people I meet maintaining dependent relatives, who have undertaken the burden courageously, cheerfully 1285 and voluntarily. In a vast number of cases, the person maintained is not in the retirement age class at all. Innumerable examples come to one's notice, and I hope, in view of the fact that the logic and the justice of this Amendment cannot really be resisted, that the right hon. Gentleman will not try to get away with it simply on the ground that it would cost, as he says, £5,250,000. That is a point which ought to have been taken into consideration when the Budget was framed as a whole. When he decided to increase the allowance for the wife and
§ child, he ought to have considered also the cost of making this concession to the dependent relative, and, if the right hon. Gentleman cannot tell us, as I hope he still may, that he will consider this question again between now and Report stage, I would advise my hon. Friends that we should go into the Division Lobby in support of the Amendment.
§ Question put, "That those words be there inserted."
§ The Committee divided: Ayes, 282; Noes, 294
1289| Division No. 87.] | AYES | [6.38 p.m. |
| Aitken, W. T. | Darling, Sir William (Edinburgh, S.) | Hudson, Rt. Hon. Robert (Southport) |
| Alport, C. J. M. | Davidson, Viscountess | Hudson, W. R. A. (Hull, N.) |
| Amery, Julian (Preston, N.) | Davies, Nigel (Epping) | Hutchinson, Geoffrey (Ilford, N.) |
| Amory, Heathcoat (Tiverton) | de Chair, Somerset | Hutchison, Lt.-Com. Clark (E'b'rgh W.) |
| Arbuthnot, John | De la Bère, R. | Hutchison, Col. James (Glasgow) |
| Ashton, H. (Chelmsford) | Deedes, W. F. | Hyde, Ll.-Col. H. M. |
| Assheton, Rt. Hon. R. (Blackburn, W.) | Digby, S. Wingfield | Hylton-Foster, H. B. |
| Astor, Hon. M. L. | Dodds-Parker, A. D. | Jeffreys, General Sir George |
| Baker, P. A. D. | Donner, P. W. | Jennings, R. |
| Baldock, Lt.-Cmdr. J. M. | Douglas-Hamilton, Lord Malcolm | Johnson, Howard (Kemptown) |
| Baldwin, A. E. | Drayson, G. B. | Jones, A. (Hall Green) |
| Banks, Col. C. | Dugdale, Maj. Sir Thomas (Richmond) | Joynson-Hicks, Hon. L. W. |
| Baxter, A. B. | Duncan, Capt. J. A. L. | Kaberry, D. |
| Beamish, Maj. Tufton | Dunglass, Lord | Kerr, H. W. (Cambridge) |
| Bell, R. M. | Duthie, W. S. | Lambert, Hon. G. |
| Bennett, Sir Peter (Edgbaston) | Eccles, D. M. | Lancaster, Col. C. G. |
| Bennett, Dr. Reginald (Gosport) | Eden, Rt. Hon. A. | Langford-Holt, J. |
| Bennett, William (Woodside) | Elliot, Rt. Hon. W. E. | Leather, E. H. C. |
| Bevins, J. R. (Liverpool, Toxteth) | Erroll, F. J. | Legge-Bourke, Maj. E. A. H. |
| Birch, Nigel | Fisher, Nigel | Lennox-Boyd, A. T. |
| Bishop, F. P. | Fort, R. | Lindsay, Martin |
| Black, C. W. | Foster, John | Linstead, H. N. |
| Boles, Lt.-Col. D. C. (Wells) | Fraser, Hon. Hugh (Stone) | Llewellyn, D. |
| Boothby, R. | Fraser, Sir Ian (Morecambe & Lonsdale) | Lloyd, Rt. Hn. Geoffrey (King's N'rt'n) |
| Bossom, A. C. | Fyfe, Rt. Hon. Sir David Maxwell | Lloyd, Maj. Guy (Renfrew, E.) |
| Bowen, E. R. (Cardigan) | Gage, C. H. | Lloyd, Selwyn (Wirral) |
| Boyd-Carpenter, J. A. | Galbraith, Cmdr. T. D. (Pollok) | Lockwood, Lt.-Col. J. C. |
| Boyle, Sir Edward | Garner-Evans, E. H. (Denbigh) | Longden, Gilbert (Herts, S. W.) |
| Bracken, Rt. Hon. B. | Gates, Maj. E. E. | Low, A. R. W. |
| Braine, B. R. | Glyn, Sir Ralph | Lucas, Sir Jocelyn (Portsmouth, S.) |
| Braithwaite, Sir Albert (Harrow, W.) | Gomme-Duncan, Col. A. | Lucas, P. B. (Brentford) |
| Braithwaite, Lt.-Cr. G. (Bristol, N. W.) | Gridley, Sir Arnold | Lucas-Tooth, Sir Hugh |
| Bromley-Davenport, Lt.-Col. W. | Grimond, J. | Lyttelton, Rt. Hon. O. |
| Brooke, Henry (Hampstead) | Grimston, Hon. John (St. Albans) | McAdden, S. J. |
| Browne, Jack (Govan) | Grimston, Robert (Westbury) | McCallum, Major D. |
| Buchan-Hepburn, P. G. T. | Harden, J. R. E. | McCorquodale, Rt. Hon. M. S. |
| Bullock, Capt. M. | Hare, Hon. J. H. (Woodbridge) | Macdonald, Sir Peter (I. of Wight) |
| Bullus, Wing Commander E. E. | Harris, Frederic (Croydon, N.) | Mackeson, Brig. H. R. |
| Burden, F. A. | Harris, Reader (Heston) | McKibbin, A. |
| Butcher, H. W. | Harvey, Air Cdre. A. V. (Macclesfield) | McKie, J. H. (Galloway) |
| Butler, Rt. Hn. R. A. (Saffron Walden) | Harvey, Ian (Harrow, E.) | Maclay, Hon. John |
| Carr, Robert (Mitcham) | Harvie-Watt, Sir George | Maclean, Fitzroy |
| Carson, Hon. E. | Hay, John | MacLeod, Iain (Enfield, W.) |
| Channon, H. | Head, Brig. A. H. | MacLeod, John (Ross and Cromarty) |
| Churchill, Rt. Hon. W. S. | Headlam, Lt.-Col. Rt. Hon. Sir Cuthbert | Macmillan, Rt. Hon. Harold (Bromley) |
| Clarke, Col. Ralph (East Grinstead) | Heald, Lionel | Macpherson, Major Niall (Dumfries) |
| Clarke, Brig. Terence (Portsmouth, W.) | Heath, Edward | Maitland, Cmdr. J. W. |
| Clyde, J. L. | Henderson, John (Cathcart) | Manningham-Buller, R. E. |
| Colegate, A. | Hicks-Beach, Maj. W. W. | Marlowe, A. A. H. |
| Conant, Maj. R. J. E. | Higgs, J. M. C. | Marples, A. E. |
| Cooper, Sqn. Ldr. Albert (Ilford, S.) | Hill, Dr. Charles (Luton) | Marshall, Douglas (Bodmin) |
| Cooper-Key, E. M. | Hill, Mrs. E. (Wythenshawe) | Marshall, Sidney (Sutton) |
| Corbett, Lt.-Col. Uvedale (Ludlow) | Hinchingbrooke, Viscount | Maude, Angus (Ealing S.) |
| Craddock, Beresford (Spelthorne) | Hirst, Geoffrey | Maude, John (Exeter) |
| Cranborne, Viscount | Holmes, Sir Stanley (Harwich) | Maudling, R. |
| Crookshank, Capt. Rt. Hon. H. F. C. | Hope, Lord John | Medlicott, Brig. F. |
| Crosthwaite-Eyre, Col. O. E. | Hopkinson, Henry | Mellor, Sir John |
| Crouch, R. F. | Hornsby-Smith, Miss. P. | Molson, A. H. E. |
| Crowder, Capt. John (Finchley) | Horsbrugh, Rt. Hon. Florence | Monckton, Sir Walter |
| Crowder, Petre (Ruislip—Northwood) | Howard, Gerald (Cambridgeshire) | Moore, Lt.-Col. Sir Thomas |
| Cundiff, F. W. | Howard, Greville (St. Ives) | Morris, Hopkin (Carmarthen) |
| Cuthbert, W. N. | Hudson, Sir Austin (Lewisham, N.) | Morrison, John (Salisbury) |
| Morrison, Rt. Hon. W. S. (Cirencester) | Robinson, Roland (Blackpool, S.) | Thomas, J. P. L. (Hereford) |
| Mott-Radclyffe, C. E. | Robson-Brown, W. | Thompson, Kenneth Pugh (Walton) |
| Nabarro, G. | Rodgers, John (Sevenoaks) | Thompson, Lt.-Cmdr. R. (Croydon, W.) |
| Nicholls, Harmar | Roper, Sir Harold | Thorneycroft, Peter (Monmouth) |
| Nicholson, G. | Ropner, Col. L. | Thornton-Kemsley, Col. C. N. |
| Nield, Basil (Chester) | Russell, R. S. | Thorp, Brig. R. A. F. |
| Noble, Cmdr. A. H. P. | Ryder, Capt. R. E. D. | Tilney, John |
| Nugent, G. R. H. | Salter, Rt. Hon. Sir Arthur | Turner, H. F. L. |
| Nutting, Anthony | Savory, Prof. D. L. | Turton, R. H. |
| Oakshott, H. D. | Scott, Donald | Tweedsmuir, Lady |
| Odey, G. W. | Shepherd, William | Vane, W. M. F. |
| O'Neill, Rt. Hon. Sir Hugh | Smiles, Lt.-Col. Sir Walter | Vaughan-Morgan, J. K. |
| Ormsby-Gore, Hon. W. D. | Smithers, Peter (Winchester) | Vosper, D. F. |
| Orr, Capt. L. P. S. | Smyth, Brig. J. G. (Norwood) | Wakefield, Edward (Derbyshire, W.) |
| Orr-Ewing, Charles Ian (Hendon, N.) | Snadden, W. McN. | Walker-Smith, D. C. |
| Orr-Ewing, Ian L. (Weston-super-Mare) | Soames, Capt. C. | Ward, Hon. George (Worcester) |
| Osborne, C. | Spearman, A. C. M. | Ward, Miss. I. (Tynemouth) |
| Peaks, Rt. Hon. O. | Spence, H. R. (Aberdeenshire, W.) | Waterhouse, Capt. Rt. Hon. C. |
| Perkins, W. R. D. | Spens, Sir Patrick (Kensington, S.) | Watkinson, H. |
| Peto, Brig. C. H. M. | Stanley, Capt. Hon. Richard (N. Fylde) | Webbe, Sir H. (London & Westminster) |
| Pickthorn, K. | Stevens, G. P. | Wheatley, Maj. M. J. (Poole) |
| Pitman, I. J. | Steward, W. A. (Woolwich, W.) | White, Baker (Canterbury) |
| Powell, J. Enoch | Stewart, Henderson (Fife, E.) | Williams, Charles (Torquay) |
| Price, Henry (Lewisham, W.) | Stoddart-Scott, Col. M. | Williams, Gerald (Tonbridge) |
| Prior-Palmer, Brig. O. | Storey, S. | Williams, Sir Herbert (Croydon, E.) |
| Profumo, J. D. | Strauss, Henry (Norwich, S.) | Wills, G. |
| Raikes, H. V. | Stuart, Rt. Hon. James (Moray) | Wilson, Geoffrey (Truro) |
| Rayner, Brig. R. | Summers, G. S. | Winterton, Rt. Hon. Earl |
| Redmayne, M. | Sutcliffe, H. | Wood, Hon. R. |
| Remnant, Hon. P. | Taylor, Charles (Eastbourne) | York, C. |
| Renton, D. L. M. | Taylor, William (Bradford, N.) | |
| Roberts, Maj. Peter (Heeley) | Teeling, W. | TELLERS FOR THE AYES: |
| Robertson, Sir David (Caithness) | Teevan, T. L. | Mr. Studholme and Mr. Galbraith |
| NOES | ||
| Acland, Sir Richard | Cooper, John (Deptford) | Greenwood, Rt. Hn. Arthur (Wakefield) |
| Adams, Richard | Corbet, Mrs. Freda (Peckham) | Grenfell, D. R. |
| Albu, A. H. | Cove, W. G. | Grey, C. F. |
| Allen, Arthur (Bosworth) | Craddock, George (Bradford, S.) | Griffiths, David (Rother Valley) |
| Allen, Schofield (Crewe) | Crawley, A. | Griffiths, Rt. Hon. James (Llanelly) |
| Anderson, Alexander (Motherwell) | Crosland, C. A. R. | Griffiths, William (Exchange) |
| Anderson, Frank (Whitehaven) | Cullen, Mrs. A. | Gunter, R. J. |
| Attlee, Rt. Hon. C. R. | Daines, P. | Hale, Joseph (Rochdale) |
| Awbery, S. S. | Dalton, Rt. Hon. H. | Hale, Leslie (Oldham, W.) |
| Ayles, W. H. | Darling, George (Hillsborough) | Hail, John (Gateshead, W.) |
| Bacon, Miss. Alice | Davies, A. Edward (Stoke, N.) | Hall, Rt. Hon. Glenvil (Colne Valley) |
| Baird, J. | Davies, Harold (Leek) | Hamilton, W. W. |
| Balfour, A. | Davies, Stephen (Merthyr) | Hardman, D. R. |
| Barnes, Rt. Hon. A. J. | de Freitas, Geoffrey | Hardy, E. A. |
| Bartley, P. | Deer, G. | Hargreaves, A. |
| Bellenger, Rt. Hon. F. J. | Delargy, H. J. | Hastings, S. |
| Benn, Wedgwood | Dodds, N. N. | Hayman, F. H. |
| Benson, G. | Donnelly, D. | Henderson, Rt. Hon. Arthur (Tipton) |
| Beswick, F. | Driberg, T. E. N. | Herbison, Miss. M. |
| Bevan, Rt. Hon. A. (Ebbw Vale) | Dugdale, Rt. Hon. John (W Bromwich) | Hewitson, Capt. M. |
| Bing, G. H. C. | Dye, S. | Hobson, C. R. |
| Blenkinsop, A. | Ede, Rt. Hon. J. C. | Holman, P. |
| Blyton, W. R. | Edelman, M. | Holmes, Horace (Hemsworth) |
| Boardman, H. | Edwards, John (Brighouse) | Houghton, D. |
| Booth, A. | Edwards, Rt. Hon. Ness (Caerphilly) | Hubbard, T. |
| Bottomley, A. G. | Edwards, W. J. (Stepney) | Hudson, James (Ealing, N.) |
| Bowden, H. W. | Evans, Albert (Islington, S. W.) | Hughes, Emrys (S. Ayrshire) |
| Bowles, F. G. (Nuneaton) | Evans, Edward (Lowestoft) | Hughes, Hector (Aberdeen, N.) |
| Braddock, Mrs. Elizabeth | Evans, Stanley (Wednesbury) | Hynd, H. (Accrington) |
| Brook, Dryden (Halifax) | Ewart, R. | Hynd. J. B. (Attercliffe) |
| Brooks, T. J. (Normanton) | Fernyhough, E. | Irvine, A. J. (Edge Hill) |
| Broughton, Dr. A. D. D. | Field, Capt. W. J. | Irving, W. J. (Wood Green) |
| Brown, Rt. Hon. George (Belper) | Finch, H. J. | Isaacs. Rt. Hon. G. A. |
| Brown, Thomas (Ince) | Fletcher, Eric (Islington E.) | Janner, B. |
| Burke, W. A. | Follick, M. | Jay, D. P. T. |
| Burton, Miss. E. | Foot, M. M. | Jeger, George (Goole) |
| Butler, Herbert (Hackney, S.) | Forman, J. C. | Jeger, Dr. Santo (St. Pancras, S.) |
| Callaghan, L. J. | Fraser, Thomas (Hamilton) | Jenkins, R. H. |
| Carmichael, J. | Freeman, John (Watford) | Johnson, James (Rugby) |
| Castle, Mrs. B. A. | Gaitskell, Rt. Hon. H. T. N. | Johnston, Douglas (Paisley) |
| Champion, A. J. | Ganley, Mrs. C. S. | Jones, David (Hartlepool) |
| Chetwynd, G. R. | George, Lady Megar Lloyd | Jones, Frederick Elwyn (W. Ham, S.) |
| Clunie, J. | Gibson, C. W. | Jones, Jack (Rotherham) |
| Cocks, F. S. | Gilzean, A. | Jones, William Elwyn (Conway) |
| Coldrick, W. | Glanville, James (Consett) | Keenan, W. |
| Collindridge, F. | Gooch, E. G. | Kenyon, C. |
| Cook, T. F. | Gordon-Walker, Rt. Hon. P. C. | Key, Rt. Hon. C. W. |
| Cooper, Geoffrey (Middlesbrough, W.) | Greenwood, Anthony (Rossendale) | King, Dr. H. M. |
| Kinghorn, Sqn. Ldr. E. | O'Brien, T. | Strachey, Rt. Hon. J. |
| Kinley, J. | Oldfield, W. H. | Strauss, Rt. Hon. George (Vauxhall) |
| Kirkwood, Rt. Hon. D. | Oliver, G. H. | Stross, Dr. Barnett |
| Lang, Gordon | Orbach, M. | Summerskill, Rt. Hon. Edith |
| Lee, Frederick (Newton) | Padley, W. E. | Sylvester, G. O. |
| Lee, Miss. Jennie (Cannock) | Paget, R. T. | Taylor, Bernard (Mansfield) |
| Lever, Leslie (Ardwick) | Paling, Rt. Hon. W. (Dearne Valley) | Taylor, Robert (Morpeth) |
| Lewis, Arthur (West Ham, N.) | Paling, Will T. (Dewsbury) | Thomas, David (Aberdare) |
| Lewis, John (Bolton, W.) | Pannell, T. C. | Thomas, George (Cardiff) |
| Lindgren, G. S. | Pargiter, G. A. | Thomas, Iorwerth (Rhondda, W.) |
| Lipton, Lt.-Col. M. | Paton, J. | Thomas, Ivor Owen (Wrekin) |
| Logan, D. G. | Pearson, A. | Thorneycroft, Harry (Clayton) |
| Longden, Fred (Small Heath | Peart, T. F. | Thurtle, Ernest |
| McAllister, G. | Poole, C. | Timmons, J. |
| MacColl, J. E. | Popplewell, E. | Tomney, F. |
| McGhee, H. G. | Porter, G. | Turner-Samuels, M. |
| McGovern, J. | Price, Philips (Gloucestershire. W.) | Ungoed-Thomas, Sir Lynn |
| McInnes, J. | Proctor, W. T. | Usborne, H. |
| Mack, J. D. | Pryde, D. J. | Vernon, W. F. |
| McKay, John (Wallsend) | Pursey, Cmdr. H. | Viant, S. P. |
| Mackay, R. W. G. (Reading, N.) | Rankin, J. | Wallace, H. W. |
| McLeavy, F. | Rees, Mrs. D. | Watkins, T. E. |
| MacMillan, Malcolm (Western Isles) | Reeves, J. | Webb, Rt. Hon. M. (Bradford, C.) |
| McNeil, Rt. Hon. H. | Reid, Thomas (Swindon) | Weitzman, D. |
| MacPherson, Malcolm (Stirling) | Reid, William (Camlachie) | Wells, Percy (Faversham) |
| Mainwaring, W. H. | Rhodes, H. | Wells, William (Walsall) |
| Mallalieu, E. L. (Brigg) | Richards, R. | West, D. G. |
| Mallalieu, J. P. W. (Huddersfield, E.) | Robens, Rt. Hon. A. | Wheatley, Rt. Hon. John (Edinb'gh E.) |
| Mann, Mrs. Jean | Roberts, Emrys (Merioneth) | White, Mrs. Eirene (E. Flint) |
| Manuel, A. C. | Roberts, Goronwy (Caernarvonshire) | White, Henry (Derbyshire, N. E.) |
| Marquand, Rt. Hon. H. A. | Robertson, J. J. (Berwick) | Whiteley, Rt. Hon. W. |
| Mathers, Rt. Hon. G. | Robinson, Kenneth (St. Pancras, N.) | Wilcock, Group Capt. C. A. B. |
| Mellish, R. J. | Rogers, George (Kensington, N.) | Wilkes, L. |
| Messer, F. | Ross, William | Willey, Frederick (Sunderland) |
| Middleton, Mrs. L. | Royle, C. | |
| Mikardo, Ian. | Shawcross, Rt. Hon. Sir Hartley | Willey, Octavius (Cleveland) |
| Mitchison, G. R. | Shinwell, Rt. Hon. E. | Williams, David (Neath) |
| Moeran, E. W. | Shurmer, P. L. E. | Williams, Rev. Llywelyn (Abertillery) |
| Monslow, W. | Silverman, Julius (Erdington) | Williams, Ronald (Wigan) |
| Moody, A. S. | Silverman, Sydney (Nelson) | Williams, Rt. Hon. Thomas (Don V'lly) |
| Morgan, Dr. H. B. | Simmons, C. J. | Williams, W. T. (Hammersmith, S.) |
| Morley, R. | Slater, J. | Wilson, Rt. Hon. Harold (Huyton) |
| Morris, Percy (Swansea, W.) | Smith, Ellis (Stoke, S.) | Winterbottom, Ian (Nottingham, C.) |
| Morrison, Rt. Hon. H. (Lewisham, S.) | Smith, Norman (Nottingham S.) | Winterbottom, Richard (Brightside) |
| Mort, D. L. | Snow, J. W. | Wise, F. J. |
| Moyle, A. | Sorensen, R. W. | Woodburn, Rt. Hon. A. |
| Mulley, F. W. | Soskice, Rt. Hon. Sir Frank | Woods, Rev. G. S. |
| Murray, J. D. | Sparks, J. A. | Wyatt, W. L. |
| Nally, W. | Steele, T. | Yates, V. F. |
| Neal, Harold (Bolsover) | Stewart, Michael (Fulham, E.) | |
| Noel-Baker, Rt. Hon. P. J. | Stokes, Rt. Hon. R. R. | TELLERS FOR THE NOES: |
| Mr. Hannan and Mr. Wilkins. |
§ Sir Peter Bennett (Birmingham, Edgbaston)I beg to move, in page 10, line 15, at the end, to add:
(7) Subsection (1) of section fifteen of the Finance Act, 1925 (which, as amended by subsequent enactments, provides for a deduction of tax on an amount equal to one-fifth of the amount of the earned income but not exceeding four hundred pounds), shall have effect as if the words "five hundred pounds" were substituted for the word "four hundred pounds.While I naturally regret the way in which the last Amendment was received, I hope the Chancellor will regard this one in a different light, because it is of quite a different character. I am putting forward what I believe to be a business proposition which will produce results. This Amendment deals with the earned income relief, and, as the Committee knows, at the present time that relief extends only to incomes up to £2,000, and is itself limited to the sum of £400.1290 The Amendment makes a modest increase from £2,000 to £2,500 which would enable the recipients to have an increased allowance from £400 to £500. I move this Amendment because for a long time there has been a feeling that the earned income allowance was not high enough in the present changed conditions. The reduced value of money has reduced the value of the concession which was made. We are not concerned here with the high-salaried man, nor, on the other hand, is it a case of giving away something for nothing. This is a matter of increasing the incentive to people who have to do the work.
I can assure the Committee that the class of people affected by this earned income allowance includes some of the most important people in the country. They are ordinary managerial types employed to a large extent in industry, the 1291 ordinary professional man, the civil servant, the smaller business man—the type of person who is doing such a great deal at present to increase so enormously the productivity of the country and who has been responsible for a great many of the results to which hon. Members opposite are constantly paying tribute.
If a job is done well, one can depend upon it that there has been some very good staff work. I am always prepared to pay the highest tribute to our workers, but I know those workers are the very first to admit that their effectiveness depends to an enormous extent upon the leadership of the class for whom I am now pleading. That class, like every other section of the community, is very much affected by the rise in costs and the reduction in the value of money, and we are asking those people to carry additional burdens. I can assure the Committee that the burdens are enormous at the moment. It is hard work organising factories even with a supply of raw materials. It is a very difficult job to ask these people to increase production and then add to their task that of scouring the country for materials and buying scrap so that they can barter it. That is what is going on.
I feel that we are not asking too much in asking that these people should be recognised. It has been suggested that this earned income allowance might be very considerably increased. We have resisted that. We feel that in these days we want something more in the nature of a gesture, something to show that these people are being appreciated. We did not set the figure too high because we knew that in conditions as they are today, the Chancellor would be bound to turn down such a proposal and say he could not afford it. I maintain that we are not asking for something for nothing, and from my knowledge of what is happening I know that any concession would be amply repaid many times over. Hon. Members will know the old saying about not muzzling the ox that grinds the corn. I am asking that we should give a little more corn to the ox in order to get a great deal more food from him as he works.
§ Mr. Jenkins (Birmingham, Stechford)The hon. Member for Birmingham, Edgbaston (Sir P. Bennett), has certainly 1292 moved this Amendment with great frankness and moderation. It is important that we should understand exactly what is involved in it. It is that there should be a concession to drawers of earned incomes between £2,000 and £2,500. It would not be an enormous concession. I think that in the case of people earning exactly £2,500 it would be £47 10s. a year.
There are worse categories of people to whom to give concessions than those involved in this Amendment, but there are also better categories. There are certainly worse. Some of them are those we heard about from the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) last night when he hinted very strongly how he would like to abolish the Surtax altogether at the rate at which it falls on people at more than 15s. in the £; and there are also those people the hon. Member for Chippenham (Mr. Eccles) talked about this afternoon. In certain circumstances there may be a case for giving concessions to drawers of earned incomes in the category dealt with in this Amendment, but I cannot think that this year, when we have to impose many new burdens on other sections of the community, is really a year in which to make concessions to anybody earning more than £2,000 annually.
If we were to do it, even in future years, it should be done at the expense of drawers of big unearned incomes. One of the ways in which I should prefer to see this done, if it were to be done, would not be by an increase in the earned income allowance but by a separation between the standard rate for unearned income and the standard rate for earned income. I think we give a wrong impression by the way in which we express these things at the present time. People with earned incomes think they have been paying in the past at a standard rate of 9s. in the £ and that they will pay in the future at a standard rate of 9s. 6d. in the £; but in fact nobody with an earned income up to £2,000 possibly pays anything like that on the standard rate. The standard rate in the past for earned income has been about 7s. 2d. and not 9s. and as now increased will be about 7s. 7d. in the £ and not 9s. 6d. It would be better if we expressed it that way so that people do not feel they are paying a higher rate than they really are.
1293 I suggest to the Chancellor that the standard rate on unearned income should be separated entirely from the standard rate on earned income so that we can see the earned rate at the lower level and so that, as we might want to do one day, we can put up the unearned standard rate without putting up the earned standard rate. It might then be possible in an easier year to give concessions to drawers of earned incomes at the expense of drawers of big unearned incomes. It might be well worth considering doing that when we face easier circumstances than we are facing this year.
§ Mr. Summers (Aylesbury)I had no intention of taking part in the debate on this Amendment until I heard the hon. Member for Stechford (Mr. Jenkins). I think it would be most unfortunate if any silence with regard to his suggestions were to lead people to imagine one might support them. He appears to be under the impression that one can divide into two watertight compartments income deemed earned and income deemed unearned, whereas anybody who knows anything about the case must acknowledge that there are large numbers of people in this country who have contrived to save money in one form or another and have subsequently invested it. Those investments are labelled unearned income from the point of view of the hon. Member for Stechford and therefore should bear higher taxation.
§ Mr. JenkinsIf the hon. Member is arguing that one cannot effectively distinguish between earned and unearned income, how can he possibly support this Amendment, because precisely what the Amendment tries to do is to take the distinction already there and extend its importance.
§ Mr. SummersThe point is that it is quite obvious that the hon. Member for Stechford wanted to give a concession along the lines mentioned by my hon. Friend the Member for Edgbaston (Sir P. Bennett) at the expense of those whom he calls the recipients of unearned income. My point is that whether it be in the form of savings subsequently invested or in the form of a pension from a commercial company which a man might have served faithfully for many years, quite clearly from the definition now used by the Inland Revenue they 1294 will fall into the category of those whom the hon. Member for Stechford now suggests, should provide means to give taxation relief to those still working possibly in the same factory.
7.0 p.m.
The only point I want to add in support of my hon. Friend is that the Committee should appreciate the additional responsibilities and worries which are borne by those who hold senior administrative posts in the category to which this Amendment refers. I well remember a great friend of mine, who was a manager at the time, deciding that it would be in the interests of his job and of the firm for which he was working if he took six months off from his managerial responsibilities and spent a few weeks doing every job in the factory for which he was responsible. Whether it meant stripping to the waist and sweating, or doing some other form of job, for six months he did it, and whether he was on the six to two shift or the two to ten shift or the ten to six shift, it made no difference. He said that he had not had such a holiday in his life, because when he came out of the factory he ceased to have any worries about his job.
Scores of people affected by this Amendment know quite well that when they leave the factory, if they are not at all sure about a decision which they have to make the following day or a decision which they have already made, they have an additional worry outside working hours, which is not the case with those who earn substantial sums—and good luck to them—by piece work or other methods. In addition, very often people with managerial responsibilities have a seven-day week, for they have to go and supervise the plant on Sunday mornings. I am pleading for these technicians who, as my hon. Friend quite rightly said, are making a valuable contribution to the increase in productivity which we welcome, and I hope the Chancellor will recognise that contribution by accepting this Amendment.
§ Mr. John McKay (Wallsend)I listened attentively to the speech of the hon. Member for Edgbaston (Sir P. Bennett). He referred to the question of incentive, and it would appear that that question cannot be avoided in our discussions, no matter what are the 1295 terms of the Amendment we happen to be considering.
The hon. Gentleman also said that the purpose of this Amendment was to help the small business man. It has already been explained that this Amendment will affect only those who are earning more than £2,000 a year, so I would say that he is not such a small business man after all. It seems to me when people speak of small business men that what is meant by "small" depends entirely upon one's outlook on life. To me, £2,000 a year is rather a large income, and I look askance at any Amendment which seeks to relieve in an exceptional way one class of the community, while ignoring the poor man who is scarcely able to live. I do not favour this Amendment in any shape or form.
The hon. Member for Edgbaston said we should remember that the workers depend upon the managerial type of man. That kind of talk in these days is out of place, out of fashion and, indeed, I might almost say rather unintelligent—
§ Sir P. BennettThank you!
§ Mr. McKayIn a comparative sense, I mean. How can we possibly separate these people? Just as the worker depends upon the managerial type, so does the so-called technical leader depend upon the workers.
§ Mr. SummersOf course.
§ Mr. McKayThey all have to work together; we cannot separate one section from another. When we are dealing with the Budget, which is supposed to be an instrument for meeting the social needs of the people, I always consider it from the point of view of how it helps the poor man.
Some people will say—indeed, it has been argued in this Committee today—that in so far as we have lots of men with high incomes, to that extent we can say that our society is on a good foundation. I regard the matter from the opposite point of view. I say that to the extent that the mass of our fellow countrymen are on a higher standard of life than they used to be, then to that extent the country is progressing—and much more so than when there is a small section of 1296 the community advancing from a lower stage to a higher one. I think that is a logical argument which is difficult to refute.
What exactly does this Amendment amount to? It is to relieve the men who are earning more than £2,000 a year. Three or four years ago I was trying to find out how many men in the country were earning less than £5 a week. I wrote to several trade union leaders, but they could not tell me. They could only tell to some extent, and then just approximately, what was happening in their own industry. They had no knowledge of how many people were working for less than £5 a week. But, accidentally, I came across the information, or sufficient information upon the subject to give me rather an eye opener. The information related to the position which existed according to the Inland Revenue Returns in 1949.
These Returns are obtainable from the Vote Office, and they show that in April, 1949, we had 2,800,000 married couples living on less than £5 a week. To me, that was amazing. I never dreamt that the number was so high. The information also indicates that these people have nearly 4 million dependants—children and so forth. Therefore, there are 8 million people living on less than £5 a week.
§ Mr. Frederic HarrisDid the hon. Member say that there are 8 million workers in this country living on less than £5 a week?
§ Mr. HarrisI was going to ask whether that included children and so forth?
§ Mr. McKayI said it included 2,800,000 married couples plus their dependants, children and so forth. If the hon. Member will look in the Returns he will find the information.
§ Lieut.-Commander Gurney Braithwaite (Bristol, North-West)I apologise for interrupting the hon. Member, but we on this side of the Committee are anxious to follow his argument. Does that figure of 2,800,000 consist only of those who are in employment, or does it include old age pensioners?
§ Mr. Joynson-HicksMay I put one point to the hon. Gentleman? Do I understand that the figures he has given relate solely to the actual cash receipts of the married couples in question? For instance, in the agricultural industry the minimum wage at the time of which he is speaking was below £5, but that would not include any emoluments received.
§ Mr. McKayThey relate to the income given in the Income Tax returns. Let us take the case of the man earning £2,000 a year. He receives £400 by way of relief on earned income—one-fifth of £2,000; and he receives an allowance of £190 if he is married and an allowance of £140 if he has two children, making a total of £730 free of Income Tax altogether. Thus, members of this section of the community, which the Amendment seeks to relieve apart from all others, have at least £730 free of Income Tax altogether.
Let us next take the case of the worker—the higher paid worker, with £10 a week. He receives a relief of £104 for earned income, £190 as a marriage allowance and £140 for two children, making a total of £434. Thus, although he receives only £10 a week he has to pay Income Tax. Yet the Amendment seeks to relieve a higher paid section, as though they were specially in need of relief, more than the ordinary working man. In my mind that it is not the right way to look at the situation today. The country is having a difficult time. The cost of living is going up. Is this the time to begin to step up reliefs from taxation for this class? We must bear in mind that millions of working people in various grades are not paying Income Tax at all because their incomes are so low that they have only sufficient on which to live. To my mind the object of the Amendment is entirely wrong and should not receive any enthusiastic support.
The amount of incentive the Amendment would give is not very great. When I hear hon. Members opposite day in and day out emphasising this question of incentive, I begin to wonder what kind of people they represent. Are they representing the people who put them into power? They think they are.
§ Mr. Nabarro (Kidderminster)We are not in power.
§ Mr. Mellish (Bermondsey)Shame! They should be locked up—the lot of them. [Laughter.]
§ The Deputy-ChairmanI am sure the people who sent me to Parliament would like the hon. Gentleman to keep more to the Amendment.
§ Mr. McKayLike most hon. Members I try to stick to the subject before the Committee. I always do. [Laughter.] Sometimes, of course, we go astray; that is a common weakness of Members of Parliament when they are speaking. This Amendment was placed on the Order Paper on the ground that it would give a greater incentive to this section of the community. If that be so—and the hon. Member for Edgbaston (Sir P. Bennett) has admitted it—I should have thought that I was in order in dealing with the question of incentive. I may be wrong.
I believe that the ordinary man has more moral quality than hon. Members opposite seem to think. I believe that the man who is making £2,000 a week—[HON. MEMBERS: "He would be a millionaire."]—we all make mistakes; the man who is earning £2,000 a year, the ordinary reasonable Englishman—[HON. MEMBERS: "What about the Scotsman?"]—has some idea about his own fellow-man and wants to help his own fellow-man. Hon. Members may talk about the incentive which this Amendment would give, but I have sufficient faith in humanity and in Englishmen to know that a very large section of these people will do their best in their job in the interests of themselves and of this country.
§ 7.15 p.m.
§ Colonel J. R. H. Hutchison (Glasgow, Scotstoun)If a Scotsman may be allowed to reply to comments which have been directed primarily to the criticism of Englishmen, I should like to show the unity between the two countries by taking up the cudgels. The hon. Member for Wallsend (Mr. McKay) based his argument, at the end of his speech, upon an inherent fallacy about which we have 1299 heard a good deal today—that people are not actuated by a profit motive. It may be that in the millennium we shall find individuals who are prepared to ignore the purchasing power of money, but at present it is nonsense to pretend that that state of affairs exists.
Exceptional cases can, of course, be found, but the great majority of ordinary individuals regard the amount they earn and the amount they have to spend as something very important in their lives. That feeling sometimes takes the form of demands for higher wages or it may take the much less desirable form of seeking out perquisites and privileges; but it is there in one form or another with the great majority of the citizens of this country. Let us put aside the falacious idea that we can legislate for a situation which does not exist and let us quite firmly and frankly face the fact that money does count.
The hon. Member for Wallsend seemed not to realise that, if it is to be successful, industry must consist of a balanced team. He used the words, "Let us now get down to the workers"; and he spoke of the man who earns about £5 a week. Is that the hon. Gentleman's conception of the only people who work, the only people who play a part in turning the great industrial machine? Is the whole of legislation to be considered only in relation to them and in relation to that scale of earnings?
The hon. Gentleman further asked whether this is the time—when the cost of living is going up—to do what is suggested in this Amendment? But it is precisely because the cost of living is going up that this Amendment has been moved. Other sections of the community have benefited much more rapidly than has the white-collared class—if hon. Members like to call them that—the earners of something like £2,000 a year. Statistically the wage rates have gone up faster, and that particular part of the team has been lagging behind.
The hon. Member for Stechford (Mr. Jenkins) talked about this "concession." Concessions can take two forms. They will be found in both forms throughout the whole of our discussions on this Bill. There are concessions made for equity and justice and concessions that pay dividends. My hon. Friend the Member for 1300 Edgbaston (Sir P. Bennett) showed, I think, successfully—he certainly showed it successfully to my mind—that this is a dividend-paying concession, and that it is only fair, if we are to ask part of that balanced team to work harder to produce more, that we should give them an incentive to do it. It is not fair that the costs of everything should be going up and that one particular section of this team should be left out. Therefore, I urge the Chancellor to consider whether this Amendment should not be regarded in the light in which my hon. Friend the Member for Edgbaston put it forward, as a dividend-paying Amendment, and that he should accept it.
§ Mr. Jack Jones (Rotherham)Before the hon. and gallant Gentleman sits down, would he mind answering a question? I have not taken part in the debate, although I have listened very carefully to it, and I am particularly interested in the question of incentives to production, as the Committee knows. Would the hon. and gallant Gentleman be good enough to tell the Committee what, in his opinion, would be the effect on the millions of lower-paid workers if they knew that one particular group—and I agree they are workers, too—were getting a concession, while the lower-paid workers were getting nothing likewise—the millions of workers for whom, at the moment, the Opposition are not asking anything?
§ Colonel HutchisonI think the workers have had their concessions. Not only that; they are fair minded enough to agree that if there is somebody who is part of the team and who is being left behind amid gradually amounting costs, he should be brought up. They will accept the situation, and recognise the part which he plays as being a valuable one, as the hon. Member, in fact, said it is.
§ The Chancellor of the Exchequer (Mr. Gaitskell)As the Committee appreciates, this Amendment would affect only those with earned incomes of over £2,000 a year. It would give partial benefit to those with between £2,000 and £2,500, and, of course, the full amount to those with more than £2,500 earned income. I am not in principle at all opposed to the idea of increasing the differentiation between earned and unearned income, nor 1301 am I opposed to the idea—again in principle, and in suitable circumstances—of extending rather further up the income scale differentiation as compared with the present position. However, I am bound to say that in present circumstances it is really not possible for us to make the change proposed in this Amendment. It would cost £5,500,000 in a full year.
§ Viscount HinchingbrookeA bagatelle.
§ Mr. GaitskellIs it a bagatelle? I am sorry that hon. Members opposite, who continually criticise me for not cutting down expenditure, should believe that £5,500,000 is a bagatelle.
§ Viscount HinchingbrookeSurely, compared with the total size of the revenue of £4,500 million, £5,500,000 is a bagatelle?
§ Mr. GaitskellI think myself that it is a very dangerous phrase to use, and I certainly would not wish to be associated with it.
There is also another and, as I think, serious objection to the Amendment, and it is that it does, of course, affect only those with over £2,000 a year. If it were introduced we should have this curious and, as I think, quite unsatisfactory situation that, for example, a man with a wife and two children, and earning anywhere between £2,260 and £3,170 a year, would pay less tax this year, whereas the man with £2,000 a year, who, of course, is not affected by this, would continue to pay, as he will do under the proposals of the Bill, £18 more than last year. I think it would be very difficult to justify a situation in which we reduced the taxation for people in exactly similar circumstances if they just happened to be over the £2,000 a year limit, while those with £2,000 a year, and, of course, the many others under that limit, would pay the full tax.
As to the position of the salaried classes, for whom the hon. and gallant gentleman the Member for Scotstoun (Colonel Hutchison)—
§ Captain Crookshank (Gainsborough)Would the right hon. Gentleman repeat those figures? I am trying to pick them up.
§ Mr. GaitskellA man with a wife and two children and with between £2,260 1302 and £3,170 would pay less tax, whereas the man with £2,000 a year would pay £18 more, as he does.
The hon. and gallant Member for Scotstoun (Colonel Hutchison) suggested that, whereas wages had gone up, salaries had not been affected in the same way. I do not know whether one can say that generally. Some salaries of professional workers, I agree, tend to be rather fixed for long periods. They do not move so frequently. Everybody will recognise that. However, so far as industry is concerned—and the hon. Member for Edgbaston (Sir P. Bennett), who moved the Amendment, spoke in terms of industry—there is a remedy.
If, in fact, the managements and the directors of the firms feel that their chief technicians, engineers—the people of the class of which the hon. and gallant Member for Scotstoun was speaking—really are under-paid, there is nothing to prevent them from increasing their salaries and putting the matter right that way. [An HON. MEMBER: "What about the Civil Service?"] We are not talking of just one class. The Civil Service, as a matter of fact, in any case had a rather substantial increase not long ago. However, we are concerned here with the whole body of taxpayers falling within that class.
I am concerned with one point—and it is a perfectly valid one—that we cannot throw upon the State the burden of helping those people, if they need helping. We must expect the employers to see to their interests as well, and I have no doubt that they will do so. While I am not unsympathetic to the general idea of the hon. Member's proposal, I am afraid that this year we cannot afford it, and in the circumstances, I must ask the Committee to reject the Amendment.
§ Mr. Ian L. Orr-Ewing (Weston-super-Mare)The right hon. Gentleman mentioned the professional aspect of this matter. It is not really a question of additional wages or salaries being paid. Would he consider the professional aspect of it?
§ Mr. GaitskellI am not clear what the hon. Gentleman is thinking of. We are concerned here with the tax position of persons with over £2,000 a year—one section. I do not know what the hon. Gentleman means by the "professional aspects" of it.
§ Mr. Orr-EwingThe professional worker. Where it is not just a question of some employer or some firm paying a higher rate of salary in order to meet the case, but a case of a professional worker being unable to obtain more for the services he performs, would the right hon. Gentleman refuse this concession to give additional assistance to him to meet the increasing cost of living and the additional commitments which he has?
§ Mr. GaitskellThe Amendment would go far outside the professional class so far as those with over £2,000 a year are concerned, and would not touch others with under £2,000 a year, and so it is singularly ill adapted to helping the professional classes.
§ Sir Ralph Glyn (Abingdon)I rather gathered from what the Chancellor said that he is not altogether unsympathetic to the idea behind the Amendment but realises that it may go possibly rather farther than hon. Members realise at the moment. I ask the Chancellor to consider this point. Recently some of us have had to go with some care into the question of the salaries being paid to executives, and there is no doubt that they are suffering tremendously because of the pressing demands of the steep rise in the cost of living. Many of them do not know how they can continue to educate their children.
I wonder whether the Chancellor would be agreeable, if a ceiling were put into the Amendment, to considering it on Report, because there is one aspect of the re-armament programme to which I do want to draw his attention. It is absolutely vital, if we are to get the re-armament programme carried through successfully, that the managerial side should be properly manned with people suitable to be employed in conjunction with those on specialist work.
7.30 p.m.
There is a great shortage of technical people, of engineers, just now, and something must be done to make those positions more attractive, because it will not be of assistance to the workpeople to have indifferent people in the management. It is vital to have the best people, people who are trusted by the workmen, and who have real knowledge of how to deal with the problems which arise. I beg the Chancellor to realise that some of the poorest 1304 people are those well fitted for the task of management; we want to encourage them to step up the ladder of progress, to work up to the higher positions, and it will not be attractive to do so unless there is some tax concession.
§ Mr. I. J. Pitman (Bath)I should first like to address myself to the question raised by the Chancellor, of the recent increases given to higher paid civil servants.
§ Mr. GaitskellI was replying to an interjection. Somebody said "What about the Civil Service?" and I replied. I did not introduce it into my speech, but I think I was entitled to reply to the interjection.
§ Mr. PitmanHis was a perfectly fair remark; I am not saying it was not. The higher paid civil servants have had a recent increase in salary, but anybody who has studied the history of the Chorley Report, the delay with which it was implemented, and the very considerable reservations made by the Chorley Committee in regard to the inadequacy of the increase even then, would agree that it is not right that this Committee should approach this Amendment in the frame of mind that civil servants have had such a big increase in salary that it is quite proper for them to bear the increased tax which this present Budget requires, and that they should not have the increased allowances for which this Amendment asks.
One of the main reasons there was such an acrimonious discussion on the last Clause in regard to the high rates of expenses and servant's wages paid for high officials in the Coal Board, and other places, was because we are so cutting down the remuneration, after tax, of those in these jobs that they are unable to pay their servants and to live at the level of expenditure expected of them. In the old days His Majesty's Judges, and Cabinet Ministers, were paid £5,000 a year, and were expected to run, and did run, their own cars or carriages. One of the undoubted effects of this very high rate of taxation on earned income is that there is a vicious circle, which has to be cut somewhere, and it is being cut on this—I think we might almost say—racket of expenses. At the expense of their firms, or of the Government, people are incurring items of expenditure which, 1305 while completely justifiable in themselves, were formerly and, I would say, more properly borne by themselves out of their own income, but they cannot now be so borne.
In the old days the Prime Minister had his own carriage and paid for it out of his own salary, and he probably retired having saved something. Let us face the fact that he cannot do that under our present taxation arrangements. I think that the Committee ought to do everything it can to make earned income lose less in the process than it does under this particular provision, and this Amendment is designed solely for that purpose.
The Chancellor said it would mean that a man earning £3,170 a year, with a wife and two children, would pay less. I am not suggesting the right hon. Gentleman is trying to mislead us, but the situation is that the increased taxation which that man would be paying would be no more than offset by the remission given under this Amendment. This Amendment by no means increases taxation for the £2,000 a year man. It gives a needed relief to the man with £3,170, and it is purely irrelevant—and I expect the figures were chosen because it is at that point that it happens—that what the man pays in increased taxation under the other provisions are about balanced by the saving, and the rightful saving, he would make if this Amendment were accepted.
§ Mr. Jack JonesI did not intend to take part in this debate, but I am provoked to do so after listening to the discussion during the last hour or so. As the Committee knows, I am particularly associated with incentives and payment by results, and I listen with some care to what the hon. Member for Edgbaston (Sir P. Bennett) has to say, because we recognise in him a person who knows the situation at shop and factory level.
I am rather surprised that he should put forward the argument that in "X" works "Y" personnel, given an incentive in this form, will increase production, and that the concession will be returned a hundredfold. It will do nothing of the sort. Today, the workers are watching the incidence of taxation with great care. They are a much better informed democracy than ever before in our history, and they watch with meticulous care the incidence of P.A.Y.E., what the boss is getting, and why.
1306 If in any particular works it became known that the manager, through this concession, if granted—although I have every reason to believe it will not be—were to receive £50 or £100 a year more, and were thus encouraged to drive still further the men who were remaining static, then the reverse of what this Amendment is supposed to achieve would happen. Today men will not be driven by people who receive more because of an Amendment to an Act of Parliament, while they themselves are expected to remain where they were before the concession was made.
The hon. Member for Edgbaston knows full well that today executives have it within their own power, within their own board rooms, to make whatever concessions they think fit to offset what they consider to be a hardship to any of their employees. I know that they have not the same facilities as members of trades union, but with the understanding of management that we now have we know that the executive, the hierarchy, can easily arrange, through expense sheets—it is done, and we all know it is done—and through increases in salary, to offset any hardship. I submit that to give such a concession, in this year of rearmament, to men earning £3,170 a year while leaving those they are expected to drive where they were, would be a wrong step.
§ Major Legge-Bourke (Isle of Ely)The Chancellor suggested that if the people we are considering were really in such difficulty it would be perfectly possible for the businesses concerned to raise their salaries. I do not know what experience the right hon. Gentleman has had of running a business. I do not profess to have a very lengthy experience myself, but for the last year or so I have been trying to run a business, and I have found that one of the things we are up against, day after day is overheads versus turnover. Are we running efficiently? Are we able to bring our costs down as much as we ought in order to meet the demands which the Chancellor is frequently making—to bring down costs, and to make goods more readily accessible to those who want to buy them, particularly overseas?
What he is suggesting this evening is that overheads should be put up rather than that the Chancellor himself should try to bring down the expenditure of the 1307 Government in order to make room for this £5 million. It is not a fair argument when the right hon. Gentleman says that he is surprised that we on this side of the Committee should suggest an increased expenditure of £5 million at a time like this. He is the man who is spending the money, and he should save that £5 million. If he did save it, I think that he could go some way to meet this Amendment.
I see considerable force in what he said and in the comparative figures which he gave, and I think that the suggestion made by the hon. Member for Abingdon (Sir R. Glyn) is one which he might very well pursue a little further to see whether he cannot fix a ceiling, in order to make certain there is no inequity. The hon. Member for Rotherham (Mr. Jack Jones) is a Member of the House to whom I listened with very great interest because I feel that he says what he thinks, and that is what we are sent here to do. I sometimes wonder whether he is right in interpreting the general minds of the workers of this country as being such that when anyone is given any concession by the Government they automatically say, "I want that concession, too." I do not believe that is the general run of it. I do not believe that this country was built up on envy, hatred, malice and uncharitability.
§ Mr. Jack JonesI know the hon. and gallant Gentleman does not wish to misrepresent me. I did not say that the worker asked to be given the same. I said that the worker would feel upset if "X" manager received a concession while "C" remained where he was.
§ Major Legge-BourkeThat is what I thought the hon. Gentleman said, and I believe him to be wrong. I do not believe that today in any works where the workers are as educated as the hon. Member was trying to make out—and I agree that they are taking a more intelligent interest than in years gone by in the general running of this country—they have not appreciated the fact that the people whom this Amendment is designed to help are the people who not merely are vital to industry but are needed in industry today to meet the demands which the Government are putting upon them.
1308 One might say that the vast majority of these people—obviously there would be some exceptions—are people who have homework almost every night—who work overtime very often and get far too little sleep. These are the people who deserve more consideration from the Chancellor than he is apparently prepared to give them. I hope that by my remarks I have persuaded him to look at this matter again, even if he cannot go the whole way with my hon. Friend the Member for Edgbaston (Sir P. Bennett).
§ 7.45 p.m.
§ Mr. Frederic HarrisA large proportion of industry today, particularly manufactoring industry, has found costs rising very fast indeed during the last few years, and is finding it extremely difficult to maintain markets because the public has a limited amount of money, which is becoming of less value all the time. Instead of being able to buy five items people are now able to buy only four, because prices are being forced up. Therefore, much of manufacturing industry today is having to cut its costs very considerably. They certainly cannot take advantage of the Chancellor's suggestion of rising managerial salaries in order to meet the additional burdens with which their managers may be confronted.
Many people in industry today are finding that their workers are coming to them for increased salaries because they are finding difficulty in buying cigarettes and beer and in maintaining their previous standard of living. The companies concerned are endeavouring to meet the pressure which is being put upon them, and to meet their increased costs. I would point out to the Chancellor that many companies are, unfortunately, not in a position to help their people. In many instances they are tempted to cut their managerial staff to the danger limit and even to the detriment of the companies concerned.
The result is that those with incomes such as we have been discussing in this Amendment are in a position that they cannot obtain any relief whatsoever. They are not in the position of the lower-paid workers who can bring pressure on industry to try to get some alleviation of the difficulties with which they are faced by taxation and the high cost of living. From what the Chancellor has said, I feel that he has some sympathy with this 1309 problem. I know that many of the higher-paid officials in the Civil Service and in local government employment are today succeeding in getting increased salaries. The money for that has to be found in one form or another from the taxes. I put it to the Chancellor that in much of our industry today it is not possible to do that for the reasons which I have given to him.
There are a large number of persons in a managerial capacity in industry today who are finding it very difficult to make ends meet under present monetary difficulties and unfortunately they are liable to have cuts in their salaries. It is those people whose earned income would be relieved if this Amendment were accepted. I hope that I am right in believing that the Chancellor recognises that this problem is mounting. I can assure him from my own knowledge that it is a problem which is affecting many important people in industry who are not only responsible for the progress of industry in this country but in our markets overseas.
I suggest to the Chancellor that, if he cannot see his way to find an answer to this problem now, it is one which he will have to face in the near future. It is a very serious matter indeed, because unless something is done for these people they will be forced to look elsewhere for higher remuneration in order to keep up even a limited standard of existence. They can in many instances find posts abroad, and industry today is finding that it is losing excellent managerial executives who are obtaining posts abroad, or posts in public services, to the detriment of industry as a whole. That is not a good thing for the future of our industry in developing trade here and in looking for markets abroad. I hope that the Chancellor will recognise that this is an issue for his further consideration, and one to which, I hope, he will give serious consideration at an early date.
§ Mr. HoughtonIt surprises me that hon. Gentlemen do not realise that this Amendment is badly timed. There are many of us on both sides of the Committee who are not only in favour of the existing differentials for taxation purposes between earned income and unearned income, but who would like to see the differential carried much higher than it is. For myself, I should like to see it carried right the way through so that the differential 1310 ascends the scale. But hon. Gentlemen have not appreciated the difficulty of doing anything in this direction this year. How can hon. Gentlemen opposite defend an Amendment which would produce this result—that a married man with two children earning £2,000 a year would be asked this year to pay more tax, whereas a married man with two children getting £3,000 a year would be asked to pay less tax?
If hon. Gentlemen opposite could see in their minds how the graph of taxation changes this year works, they would see that, if this Amendment were carried, the relief given to the family man in the lower income would start the graph fairly low. It would then rise at the middle range of income and as it got higher and still higher, it would fall. The result would be that the family man in the lower income range would pay less, the family man on the middle range of income would pay more and the family man in the higher range of incomes would pay less. That would be extremely difficult to defend in a year of increased taxation.
§ Mr. PitmanWe all know that the hon. Member for Sowerby (Mr. Houghton) is well informed on this subject and we all very much respect his views. However, instead of thinking of a graph of allowances, I suggest that he thinks of a graph of the taxation borne or better still the net income left in the hands of the recipient. The fact is that what we are proposing in this Amendment is not the sort of graph which he is describing but a much more reasonable one. If it is looked at in that light, it will be seen that a fairly steep increase in taxation takes place as income goes up to the point of £2,000 a year and then there will be a change at the critical point of £2,000 where a super-steep curve will be seen.
§ Mr. HoughtonI am sure that most hon. Members look at this in relation to how much less has to be paid, and that is the material point from a political aspect. I conclude by saying that the effect of this Amendment would be to reduce Surtax on earned incomes, and I am sure that hon. Gentlemen opposite would agree that that is politically inexpedient this year.
§ Mr. Watkinson (Woking)I would not have intervened in this debate but for 1311 a remark which was made by the hon. Member for Rotherham (Mr. Jack Jones). I always listen to him with interest, because he is very objective in his views, but I should like to ask him whether he will not reconsider the remark which he made that executives found it necessary to drive their employees to greater efforts.
§ Mr. Jack JonesI am sure the hon. Member would not wish to misrepresent what I said. It has been argued that, in order to give the executives an incentive to produce more, some remission of taxation would be necessary. It has been said that the present level of taxation is not getting the best from the management, but if concessions are granted as an incentive to managements to produce more, they can only do it by driving the workers harder to get it.
§ Mr. WatkinsonThat point of view is 50 years out of date.
§ Mr. WatkinsonAt least it is entirely rejected on this side of the Committee. I speak as one who has spent most of his life in industry, and I entirely refute the idea that there is any question of anyone being driven in any way. As one hon. Member opposite said today, it is a question of team work. That brings me to the one point upon which I should like to make a few remarks. I do not disagree with the remarks of the hon. Member for Sowerby (Mr. Houghton), and what we are fighting for on this Amendment is a question of principle. Perhaps if we cannot get it this year, we may get it at some future date. This question also refers to the remarks of the hon. Member for Rotherham.
If we work as a team in industry, we each have our part to play. If the workers are successful in increasing output in any enlightened industry today, except the nationalised industries, the workers will share in that increased output, and therefore in the increased earnings. The departmental manager or executive, who is on a fixed salary, will not share. Therefore, I think the Amendment moved by my hon. Friend the Member for Edgbaston (Sir P. Bennett) raises a very important point. Some regard should be paid to the fixed-salary people, who carry a very 1312 heavy weight, as everybody in the Committee agrees, and work long hours. Such people should have a chance to share in increased productivity. Normally that is difficult to arrange, and reasonable arguments have already been put forward why it is not possible or fair to increase their salaries in an ad hoc manner to ease any taxation burden they may have to bear. I do not agree with the hon. Member for Rotherham when he says that he did not mind very much if they got it on the side but he objected if they got it in an open and above-board sort of manner.
All I can say to the Chancellor is that if this principle, or something like it, cannot be accepted this year, at least we hope he will turn his mind towards the problem of the executive and managerial people in industry, who carry an enormous weight of responsibility, who have high technical ability and who do not share sufficiently in the reward for increased productivity, as do the workers today in every industry. The only way that I can see to meet the genuine need of these people is by a remission in the scales of earned income. Therefore, I sincerely support the Amendment. There is a great deal of substance in it, and I hope the Chancellor will agree at least that it should be given very serious consideration, if not this year then in another year.
§ Mr. Jack JonesWill the hon. Member answer this question? Is it not a fact that where increased productivity occurs, the directors themselves can give the manager concerned a fair share in the results of that increased productivity in the same way as the workers get their fair share?
§ Mr. WatkinsonYes, I do not disagree with that at all. It is a perfectly fair point, which has been answered by my hon. Friend the Member for Croydon, North (Mr. F. Harris), who gave cogent reasons why it is not possible to make multilateral increases in the salaries of executives and technical men to meet that particular point. In any case, I am not concerned with that. I am merely concerned with the fairness of the case as a whole, and if we want increased productivity—and I hope the hon. Member for Rotherham, if he does not agree with me in anything else, does not dissent from that—both sides have got 1313 to be considered. If the workers increase their productivity, they increase their earnings, and jolly good luck to them. I ask the Chancellor to turn his mind towards the problem of whether he cannot give a little incentive to the executives and the technical men in the way that we have suggested.
§ 8.0 p.m.
§ Captain CrookshankWe have had a considerable amount of discussion of this Amendment in which, unexpectedly, a considerable number of Members behind the Government have taken part—a rather rare phenomenon. We welcome their appreciation of the value of debate in general, and of debate in particular on this Amendment.
§ Mr. Jack JonesTeam work.
§ Captain CrookshankA case has definitely been made for the Amendment. The Chancellor as much as admitted it himself when he said that he was not opposed to differentiations in tax rates between earned and unearned income, and had no objection to the levels at which the differentiation was most effective being raised.
§ Mr. GaitskellWhat I said—I was rather careful about it—was that at a suitable moment I had no objection in principle. I think I said I was broadly sympathetic towards extending the differentiation upward.
§ Captain CrookshankI thought that was what I had said. At any rate, that merely accentuates that the right hon. Gentleman thinks it is a reasonable thing to do. I do, too. It is certainly much more reasonable than the alternatives which have been put up from behind the Chancellor. One hon. Gentleman said that the answer was to increase the salaries or expenses. I thought that the Chancellor himself had for some time been against that particular form of remedy. In fact, in recent Finance Bills we have been dealing with the question of checking allowances. It seems a very odd answer to come from Labour benches that the problem should be dealt with by increasing allowances.
The right hon. Gentleman himself said that the answer was not to do anything in the way of re-arrangement of this tax structure. It may well be. I cannot carry the graph in my head any more than can 1314 the hon. Member for Sowerby (Mr. Houghton). For one reason, I have not seen it. It happens in all sorts of odd places in the Income Tax schedules that there are difficulties, particularly where we move from one branch to another. We all know that special marginal arrangements have to be made. The particular point which was raised by the hon. Member and by the Chancellor is not conclusive against the proposal in the Amendment. Possibly some way out can be found to deal with it, but if it cannot, then it is just one of those things in the difficult and complicated schedules of the Income Tax.
The Chancellor suggested that the other alternative was to put up salaries. I was rather surprised at that. I thought that we were still in the period when he was not encouraging the increase of salaries.
§ Mr. GaitskellI am obliged to the right hon. and gallant Gentleman for giving way. I did not, of course, suggest that there should be a general increase in salary. [An HON. MEMBER: "Yes."] Oh, no. I must make this point clear to hon. Members opposite. There is undoubtedly an inflationary danger if we have continued increases in wages and salaries. The point that was made opposite was that certain technicians in individual businesses were far too low-paid in relation to other people. I was dealing with that particular point and not with the general position of wages and salaries.
§ Captain CrookshankI certainly do not want to misrepresent the right hon. Gentleman—I am sure that he will acquit me of that—but that was the impression I had. Even so, he is still left with the proposition that there are some people whose salaries, in order to get over the difficulty with which this Amendment aims at dealing, might be raised. I thought that even that was against the general trend of the right hon. Gentleman's policy. In the end, something of this kind has to be done.
The right hon. Gentleman has taken up a completely non possumus attitude. Several suggestions have been made. My hon. Friend the Member for Abingdon (Sir R. Glyn), and the hon. Member for Woking (Mr. Watkinson), made suggestions, but the right hon. Gentleman says: "No, we cannot do it." We just do not believe that, in the difficult situation in 1315 which these particular people find themselves at the present time. We think something might well be done. I do not accept, any more than my hon. Friends have accepted, what the hon. Member for Rotherham (Mr. Jack Jones) tried to tell the House, which was that workmen were very jealous and that if somebody got some tax advantage they would enormously resent it. It is not the ordinary experience of people that this envious attitude is common.
§ It is not what the hon. Member for Rotherham said which matters at the moment, but what is to happen about this Amendment. The right hon. Gentleman has taken up such a non possumus attitude that if my hon. Friend proposes to press his Amendment to a Division, I will support him.
§ Question put, "That those words be there added."
§ The Committee divided; Ayes, 281; Noes, 302.
1319| Division No. 88.] | AYES | [8.5 p.m. |
| Aitken, W. T. | Davies, Nigel (Epping) | Hutchison, Lt.-Cont. Clark (E'b'rgh W.) |
| Alport, C. J. M. | de Chair, Somerset | Hutchison, Col. James (Glasgow) |
| Amery, Julian (Preston, N.) | De la Bère, R. | Hyde, Lt.-Col. H. M. |
| Amory, Heathcoat (Tiverton) | Deedes, W. F. | Hylton-Foster, H. B. |
| Arbuthnot, John | Digby, S. Wingfield | Jeffreys, General Sir George |
| Ashton, H. (Chelmsford) | Dodds-Parker, A. D. | Jennings, R. |
| Assheton, Rt. Hon. R. (Blackburn, W.) | Donner, P. W. | Johnson, Howard (Kemptown) |
| Astor, Hon. M. L. | Douglas-Hamilton, Lord Malcolm | Jones, A. (Hall Green) |
| Baker, P. A. D. | Drayson, G. B. | Joynson-Hicks, Hon. L. W. |
| Baldock, Lt.-Cmdr. J. M. | Dugdale, Maj. Sir Thomas (Richmond) | Kaberry, D. |
| Baldwin, A. E. | Duncan, Capt. J. A. L. | Kerr, H. W. (Cambridge) |
| Banks, Col. C. | Dunglass, Lord | Kingsmill, Lt.-Col. W. H. |
| Baxter, A. B. | Duthie, W. S. | Lambert, Hon. G. |
| Beamish, Maj. Tufton | Eccles, D. M. | Lancaster, Col. C. G. |
| Bell, R. M. | Eden, Rt. Hon. A. | Langford-Holt, J. |
| Bennett, Sir Peter (Edgbaston) | Elliot, Rt. Hon. W. E. | Leather, E. H. C. |
| Bennett, Dr. Reginald (Gosport) | Erroll, F. J. | Legge-Bourke, Maj. E. A. H. |
| Bennett, William (Woodside) | Fisher, Nigel | Lennox-Boyd, A. T. |
| Bevins, J. R. (Liverpool, Toxteth) | Fletcher, Walter (Bury) | Lindsay, Martin |
| Birch, Nigel | Fort, R. | Linstead, H. N. |
| Bishop, F. P. | Foster, John | Llewellyn, D. |
| Black, C. W. | Fraser, Hon. Hugh (Stone) | Lloyd, Rt. Hn. Geoffrey (King's N'rt'n) |
| Boles, Lt.-Col. D. C. (Wells) | Fraser, Sir Ian (Morecambe & Lonsdale) | Lloyd, Maj. Guy (Renfrew, E.) |
| Boothby, R. | Fyfe, Rt. Hon. Sir David Maxwell | Lloyd, Selwyn (Wirral) |
| Bossom, A. C. | Gage, C. H. | Lockwood, Lt.-Col. J. C. |
| Boyd-Carpenter, J. A. | Galbraith, Cmdr. T. D. (Pollok) | Longden, Gilbert (Herts, S. W.) |
| Boyle, Sir Edward | Galbraith, T. G. D. (Hillhead) | Low, A. R. W. |
| Bracken, Rt. Hon. B. | Garner-Evans, E. H. (Denbigh) | Lucas, Sir Jocelyn (Portsmouth, S.) |
| Braine, B. R. | Gates, Maj. E. E. | Lucas, P. B. (Brentford) |
| Braithwaite, Lt.-Cr. G. (Bristol, N. W.) | Glyn, Sir Ralph | Lucas-Tooth, Sir Hugh |
| Braithwaite, Sir Albert (Harrow, W.) | Gomme-Duncan, Col. A. | Lyttelton, Rt. Hon. O. |
| Bromley-Davenport, Lt.-Col. W. | Gridley, Sir Arnold | McAdden, S. J. |
| Brooke, Henry (Hampstead) | Grimston, Hon. John (St. Albans) | McCallum, Major D. |
| Browne, Jack (Govan) | Grimston, Robert (Westbury) | McCorquodale, Rt. Hon. M. S. |
| Buchan-Hepburn, P. G. T. | Harden, J. R. E. | Macdonald, Sir Peter (I. of Wight) |
| Bullock, Capt. M. | Hare, Hon. J. H. (Woodbridge) | Mackeson, Brig. H. R. |
| Bullus, Wing Commander E. E. | Harris, Frederic (Croydon, N.) | McKibbin, A. |
| Burden, F. A. | Harris, Reader (Heston) | McKie, J. H. (Galloway) |
| Butcher, H. W. | Harvey, Air Cdre. A. V. (Macclesfield) | Maclay, Hon. John |
| Butler, Rt. Hn. R. A. (Saffron Walden) | Harvey, Ian (Harrow, E.) | Maclean, Fitzroy |
| Carr, Robert (Mitcham) | Harvie-Watt, Sir George | MacLeod, Iain (Enfield, W.) |
| Carson, Hon. E. | Hay, John | MacLeod, John (Ross and Cromarty) |
| Channon, H. | Head, Brig. A. H. | Macmillan, Rt. Hon. Harold (Bromley) |
| Churchill, Rt. Hon. W. S. | Headlam, Lt.-Col. Rt. Hon. Sir Cuthbert | Macpherson, Major Niall (Dumfries) |
| Clarke, Col. Ralph (East Grinstead) | Heald, Lionel | Maitland, Cmdr. J. W. |
| Clarke, Brig. Terence (Portsmouth, W.) | Henderson, John (Cathcart) | Manningham-Buller, R. E. |
| Clyde, J. L. | Hicks-Beach, Maj. W. W. | Marlowe, A. A. H. |
| Colegate, A. | Higgs, J. M. C. | Marples, A. E. |
| Conant, Maj. R. J. E. | Hill, Mrs. E. (Wythenshawe) | Marshall, Douglas (Bodmin) |
| Cooper, Sqn. Ldr. Albert (Ilford, S.) | Hill, Dr. Charles (Luton) | Marshall, Sidney (Sutton) |
| Cooper-Key, E. M. | Hinchingbrooke, Viscount | Maude, Angus (Ealing S.) |
| Corbett, Lt.-Col. Uvedale (Ludlow) | Hirst, Geoffrey | Maude, John (Exeter) |
| Craddock, Beresford (Spelthorne) | Holmes, Sir Stanley (Harwich) | Maudling, R. |
| Cranborne, Viscount | Hope, Lord John | Medlicott, Brig. F. |
| Crookshank, Capt. Rt. Hon. H. F. C. | Hopkinson, Henry | Mellor, Sir John |
| Crosthwaite-Eyre, Col. O. E. | Hornsby-Smith, Miss. P. | Molson, A. H. E. |
| Crouch, R. F. | Horsbrugh, Rt. Hon. Florence | Monckton, Sir Walter |
| Crowder, Capt. John (Finchley) | Howard, Gerald (Cambridgeshire) | Moore, Lt.-Col. Sir Thomas |
| Crowder, Petre (Ruislip—Northwood) | Howard, Greville (St. Ives) | Morrison, John (Salisbury) |
| Cundiff, F. W. | Hudson, Sir Austin (Lewisham, N.) | Morrison, Rt. Hon. W. S. (Cirencester) |
| Cuthbert, W. N. | Hudson, Rt. Hon. Robert (Southport) | Mott-Radclyffe, C. E. |
| Darling, Sir William (Edinburgh, S.) | Hudson, W. R. A. (Hull, N.) | Nabarro, G. |
| Davidson, Viscountess | Hutchinson, Geoffrey (Ilford, N.) | Nicholls, Harmar |
| Nicholson, G. | Roper, Sir Harold | Thompson, Kenneth Pugh (Walton) |
| Nield, Basil (Chester) | Ropner, Col. L. | Thompson, Lt.-Cmdr. R. (Croydon. W.) |
| Noble, Cmdr. A. H. P. | Russell, R. S. | Thorneycroft, Peter (Monmouth) |
| Nugent, G. R. H. | Ryder, Capt. R. E. D. | Thornton-Kemsley, Col. C. N. |
| Nutting, Anthony | Salter, Rt. Hon. Sir Arthur | Thorp, Brig. R. A. F. |
| Oakshott, H. D. | Savory, Prof. D. L. | Tilney, John |
| Odey, G. W. | Scott, Donald | Turner, H. F. L. |
| O'Neill, Rt. Hon. Sir Hugh | Shepherd, William | Turton, R. H. |
| Ormsby-Gore, Hon. W. D. | Smiles, Lt.-Col. Sir Walter | Tweedsmuir, Lady |
| Orr, Capt. L. P. S. | Smithers, Peter (Winchester) | Vane, W. M. F. |
| Orr-Ewing, Charles Ian (Hendon, N.) | Smyth, Brig. J. G. (Norwood) | Vaughan-Morgan, J. K. |
| Orr-Ewing, Ian L. (Weston-super-Mare) | Snadden, W. McN. | Vosper, D. F. |
| Osborne, C. | Soames, Capt. C. | Wakefield, Edward (Derbyshire, W.) |
| Peake, Rt. Hon. O. | Spearman, A. C. M. | Wakefield, Sir Wavell (Marylebone) |
| Perkins, W. R. D. | Spence, H. R. (Aberdeenshire, W.) | Walker-Smith, D. C. |
| Peto, Brig. C. H. M. | Spens, Sir Patrick (Kensington, S.) | Ward, Hon. George (Worcester) |
| Pickthorn, K. | Stanley, Capt. Hon. Richard (N. Fylde) | Ward, Miss. I. (Tynemouth) |
| Pitman, I. J. | Stevens, G. P. | Waterhouse, Capt. Rt. Hon. C. |
| Powell, J. Enoch | Steward, W. A. (Woolwich, W.) | Watkinson, H. |
| Price, Henry (Lewisham, W.) | Stewart, Henderson (Fife, E.) | Webbe, Sir H. (London & Westminster) |
| Prior-Palmer, Brig. O. | Stoddart-Scott, Col. M. | White, Baker (Canterbury) |
| Profumo, J. D. | Storey, S. | Williams, Charles (Torquay) |
| Raikes, H. V. | Strauss, Henry (Norwich, S.) | Williams, Gerald (Tonbridge) |
| Rayner, Brig. R. | Stuart, Rt. Hon. James (Moray) | Williams, Sir Herbert (Croydon, E.) |
| Redmayne, M. | Studholme, H. G. | Wills, G. |
| Remnant, Hon. P. | Summers, G. S. | Wilson, Geoffrey (Truro) |
| Renton, D. L. M. | Sutcliffe, H. | Winterton, Rt. Hon. Earl |
| Roberts, Maj. Peter (Heeley) | Taylor, Charles (Eastbourne) | Wood, Hon. R. |
| Robertson, Sir David (Caithness) | Taylor, William (Bradford, N.) | York, C. |
| Robinson, Roland (Blackpool, S.) | Teeling, W. | |
| Robson-Brown, W. | Teevan, T. L. | TELLERS FOR THE AYES: |
| Rodgers, John (Sevenoaks) | Thomas, J. P. L. (Hereford) | Major Wheatley and Mr. Heath. |
| NOES | ||
| Acland, Sir Richard | Corbet, Mrs. Freda (Peckham) | Grenfell, D. R. |
| Adams, Richard | Cove, W. G. | Grey, C. F. |
| Albu, A. H. | Craddock, George (Bradford, S.) | Griffiths, David (Rother Valley) |
| Allen, Arthur (Bosworth) | Crawley, A. | Griffiths, Rt. Hon. James (Llanelly) |
| Allen, Scholefield (Crewe) | Crosland, C. A. R. | Griffiths, William (Exchange) |
| Anderson, Alexander (Motherwell) | Crossman, R. H. S. | Grimond, J. |
| Anderson, Frank (Whitehaven) | Cullen, Mrs. A. | Gunter, R. J. |
| Attlee, Rt. Hon. C. R. | Daines, P. | Hale, Joseph (Rochdale) |
| Awbery, S. S. | Dalton, Rt. Hon. H. | Hale, Leslie (Oldham, W.) |
| Ayles, W. H. | Darling, George (Hillsborough) | Hall, John (Gateshead, W.) |
| Bacon, Miss. Alice | Davies, A. Edward (Stoke, N.) | Hall, Rt. Hon. Glenvil (Colne Valley) |
| Baird, J. | Davies, Harold (Leek) | Hamilton, W. W. |
| Balfour, A. | Davies, Stephen (Merthyr) | Hannan, W. |
| Barnes, Rt. Hon. A. J. | de Freitas, Geoffrey | Hardman, D. R. |
| Bartley, P. | Deer, G. | Hardy, E. A. |
| Bellenger, Rt. Hon. F. J. | Dodds, N. N. | Hargreaves, A. |
| Benn, Wedgwood | Donnelly, D. | Hastings. S. |
| Benson, G. | Driberg, T. E. N. | Hayman, F. H. |
| Beswick, F. | Dugdale, Rt. Hon. John (W Bromwich) | Henderson, Rt. Hon. Arthur (Tipton) |
| Bevan, Rt. Hon. A. (Ebbw Vale) | Dye, S. | Herbison, Miss. M. |
| Bing, G. H. C. | Ede, Rt. Hon. J. C. | Hewitson, Capt. M. |
| Blenkinsop, A. | Edelman, M. | Hobson, C. R. |
| Blyton, W. R. | Edwards, John (Brighouse) | Holman, P. |
| Boardman, H. | Edwards, Rt. Hon. Ness (Caerphilly) | Holmes, Horace (Hemsworth) |
| Booth, A. | Edwards, W. J. (Stepney) | Houghton, D. |
| Bottomley, A. G. | Evans, Albert (Islington, S. W.) | Hoy, J. |
| Bowen, E. R. (Cardigan) | Evans, Edward (Lowestoft) | Hubbard, T. |
| Bowles, F. G. (Nuneaton) | Evans, Stanley (Wednesbury) | Hudson, James (Ealing, N.) |
| Braddock, Mrs. Elizabeth | Ewart, R. | Hughes, Hector (Aberdeen, N.) |
| Brook, Dryden (Halifax) | Fernyhough, E. | Hughes, Moelwyn (Islington. N.) |
| Brooks, T. J. (Normanton) | Field, Capt. W. J. | Hynd, H. (Accrington) |
| Broughton, Dr. A. D. D. | Finch, H. J. | Hynd, J. B. (Attercliffe) |
| Brown, Rt. Hon. George (Belper) | Fletcher, Eric (Islington, E.) | Irvine, A. J. (Edge Hill) |
| Brown, Thomas (Ince) | Follick, M. | Irving, W. J. (Wood Green) |
| Burke, W. A. | Foot, M. M. | Isaacs, Rt. Hon. G. A. |
| Burton, Miss. E. | Forman, J. C. | Janner, B. |
| Butler, Herbert (Hackney, S.) | Fraser, Thomas (Hamilton) | Jay, D. P. T. |
| Callaghan, L. J. | Freeman, John (Watford) | Jeger, George (Goole) |
| Carmichael, J. | Freeman, Peter (Newport) | Jeger, Dr. Santo (St. Pancras, S.) |
| Castle, Mrs. B. A. | Gaitskell, Rt. Hon. H. T. N. | Jenkins, R. H. |
| Champion, A. J. | Ganley, Mrs. C. S. | Johnson, James (Rugby) |
| Chetwynd, G. R. | George, Lady Megan Lloyd | Johnston, Douglas (Paisley) |
| Clunie, J. | Gibson, C. W. | Jones, David (Hartlepool) |
| Cocks, F. S. | Gilzean, A. | Jones, Frederick Elwyn (W. Ham, S.) |
| Coldrick, W. | Glanville, James (Consett) | Jones, Jack (Rotherham) |
| Collindridge, F. | Gooch, E. G. | Jones, William Elwyn (Conway) |
| Cook, T. F. | Gordon-Walker, Rt. Hon. P. C. | Keenan, W. |
| Cooper, Geoffrey (Middlesbrough, W.) | Greenwood, Anthony (Rossendale) | Kenyon, C. |
| Cooper, John (Deptford) | Greenwood, Rt. Hn. Arthur (Wakefield) | King, Dr. H. M. |
| Kinghorn, Sqn. Ldr. E. | O'Brien, T. | Strauss, Rt. Hon. George (Vauxhall) |
| Kinley, J. | Oldfield, W. H. | Stross, Dr. Barnett |
| Kirkwood, Rt. Hon. D. | Oliver, G. H. | Summerskill, Rt. Hon. Edith |
| Lang, Gordon | Orbach, M. | Sylvester, G. O. |
| Lee, Frederick (Newton) | Padley, W. E. | Taylor, Bernard (Mansfield) |
| Lee, Miss. Jennie (Cannock) | Paget, R. T. | Taylor, Robert (Morpeth) |
| Lever, Leslie (Ardwick) | Paling, Rt. Hon. W. (Dearne Valley) | Thomas, David (Aberdare) |
| Lewis, Arthur (West Ham, N.) | Paling, Will T. (Dewsbury) | Thomas, George (Cardiff) |
| Lewis, John (Bolton, W.) | Pannell, T. C. | Thomas, Iorwerth (Rhondda, W.) |
| Lindgren, G. S. | Pargiter, G. A. | Thomas, Ivor Owen (Wrekin) |
| Lipton, Lt.-Col. M. | Parker, J. | Thorneycroft, Harry (Clayton) |
| Logan, D. G. | Paton, J. | Thurtle, Ernest |
| Longden, Fred (Small Heath) | Pearson, A. | Timmons, J. |
| McAllister, G. | Peart, T. F. | Tomnoy, F. |
| MacColl, J. E. | Poole, C. | Turner-Samuels, M. |
| Macdonald, A. J. F. (Roxburgh) | Popplewell, E. | Ungoed-Thomas, Sir Lynn |
| McGhee, H. G. | Porter, G. | Usborne, H. |
| McGovern, J. | Price, Philips (Gloucestershire, W.) | Vernon, W. F. |
| McInnes, J. | Proctor, W. T. | Viant, S. P. |
| Mack, J. D. | Pryde, D. J. | Wade, D. W. |
| McKay, John (Wallsend) | Pursey, Cmdr. H. | Wallace, H. W. |
| Mackay, R. W. G. (Reading, N.) | Rankin, J. | Watkins, T. E. |
| McLeavy, F. | Rees, Mrs. D. | Webb, Rt. Hon. M. (Bradford, C.) |
| MacMillan, Malcolm (Western Isles) | Reeves, J. | Weitzman, D. |
| McNeil, Rt. Hon. H. | Reid, Thomas (Swindon) | Wells, Percy (Faversham) |
| MacPherson, Malcolm (Stirling) | Reid, William (Camlachie) | Wells, William (Walsall) |
| Mainwaring, W. H. | Rhodes, H. | West, D. G. |
| Mallalieu, E. L. (Brigg) | Richards, R. | Wheatley, Rt. Hon. John (Edinb'gh E.) |
| Mallalieu, J. P. W. (Huddersfield, E.) | Robens, Rt. Hon. A. | White, Mrs. Eirene (E. Flint) |
| Mann, Mrs. Jean | Roberts, Emrys (Merioneth) | White, Henry (Derbyshire, N. E.) |
| Manuel, A. C. | Roberts, Goronwy (Caernarvonshire) | Whiteley, Rt. Hon. W. |
| Marquand, Rt. Hon. H. A. | Robertson, J. J. (Berwick) | Wilcock, Group Capt. C. A. B. |
| Mathers, Rt. Hon. G. | Robinson, Kenneth (St. Pancras, N.) | Wilkes, L. |
| Mellish, R. J. | Rogers, George (Kensington, N.) | Wilkins, W. A. |
| Messer, F. | Ross, William (Kilmarnock) | Willey, Frederick (Sunderland) |
| Middleton, Mrs. L. | Royle, C. | |
| Mikardo, Ian. | Shawcross, Rt. Hon. Sir Hartley | Willey, Octavius (Cleveland) |
| Mitchison, G. R. | Shinwell, Rt. Hon. E. | Williams, David (Neath) |
| Moeran, E. W. | Shurmer, P. L. E. | Williams, Rev. Llywelyn (Abertillery) |
| Monslow, W. | Silverman, Julius (Erdington) | Williams, Ronald (Wigan) |
| Moody, A. S. | Silverman, Sydney (Nelson) | Williams, Rt. Hon. Thomas (Don V'lly) |
| Morgan, Dr. H. B. | Simmons, C. J. | Williams, W. T. (Hammersmith, S.) |
| Morley, R. | Slater, J. | Wilson, Rt. Hon. Harold (Huyton) |
| Morris, Hopkin (Carmarthen) | Smith, Ellis (Stoke, S.) | Winterbottom, Ian (Nottingham, C.) |
| Morris, Percy (Swansea, W.) | Smith, Norman (Nottingham, S.) | Winterbottom, Richard (Brightside) |
| Morrison, Rt. Hon. H. (Lewisham, S.) | Snow, J. W. | Wise, F. J. |
| Mort, D. L. | Sorensen, R. W. | Woodburn, Rt. Hon. A. |
| Moyle, A. | Soskice, Rt. Hon. Sir Frank | Woods, Rev. G. S. |
| Mulley, F. W. | Sparks, J. A. | Wyatt, W. L. |
| Murray, J. D. | Steele, T. | Yates, V. F. |
| Nally, W. | Stewart, Michael (Fulham, E.) | |
| Neal, Harold (Bolsover) | Stokes, Rt. Hon. R. R. | TELLERS FOR THE NOES: |
| Noel-Baker, Rt. Hon. P. J. | Strachey, Rt. Hon. J. | Mr. Bowden and Mr. Delargy |
§ 8.15 p.m.
§ The Temporary Chairman (Mr. Diamond)Before calling the next Amendment, in the name of the hon. Member for Runcorn (Mr. Vosper), might I suggest to the Committee that it would be convenient if that Amendment and the one which follows, in the name of the hon. Member for Cornwall, North (Sir H. Roper), in page 10, line 15, at the end, to add:
(7) Subsection (2) of section fifteen of the Finance Act, 1925, shall have effect as if the words 'seven-twelfths' were substituted in the said subsection (2) for the words 'five-eighths.'were discussed together?
§ Mr. Vosper (Runcorn)I beg to move, in page 10, line 15, at the end, to add:
(7) In subsection (2) of section fifteen of the Finance Act, 1925 (which, as amended by 1320 subsequent enactments, provides, in a case where an individual or his wife has attained the age of sixty-five years and his total income does not exceed five hundred pounds for a deduction of tax on an amount equal to one-fifth of his income), the words "six hundred pounds" shall throughout be substituted for the words "five hundred pounds.I am glad that this Amendment and the one standing in the name of my hon. Friend the Member for Cornwall, North (Sir H. Roper), are to be taken together, because they represent similar methods of achieving the same object, which is to afford a measure of relief to elderly people in times of rising costs. It is a matter to which the Government have recently given some attention, and I believe that the case we are now discussing is a deserving one.The Finance Act, 1925, provided among other things that those with an income 1321 not exceeding £500, even though that income was not earned in the true sense of the word, could treat it as being earned for a measure of relief, and up to that £500 ceiling the earned income allowance, which today stands at one-fifth, applies. It also provided that where the income exceeded £500 a measure of marginal relief should be allowed, but this was a matter of diminishing returns, and today no income which exceeds £750 benefits under the provision as it now stands in the Finance Act, 1925. It is to that aspect of the problem that the hon. Member for Cornwall, North, is directing his Amendment.
My Amendment seeks to raise this ceiling, which I think it would be better to call the optimum point, of £500 beyond which the relief begins to diminish. It is a fact that this optimum point, which was fixed at £500 in the 1925 Act, has not been varied in the 26 years that have since elapsed despite the change in the value of money in those years. It is also a fact that under the Finance Act, 1925, the true earned income allowance which was then introduced allowed for a total remission of £250. The figure today stands at £400, as we have just heard. Had the previous Amendment been accepted it would have been raised to £500. As it is there is an increase of 60 per cent. in the true earned income allowance. It would therefore seem logical that Section 15 (2) of the Finance Act, 1925, should show an increase of similar proportions.
It is important to remember that although this is called unearned income, and is therefore not altogether in favour with Members opposite, in a great number of cases—it is impossible to produce figures of how many—it is income that has been earned, it is savings that have been put aside, diverted from consumption expenditure, which is what the Chancellor particularly wishes. Had the people concerned been in industry where a pension scheme existed they would, I believe, have been able to claim the whole of the earned income relief and would have obtained up to £400 remission of tax. But if the income is unearned it is not pension, and they are limited by this £500 ceiling.
I think it reasonable to anticipate the difficulties that may be found in accepting the Amendment. It may be said 1322 that other allowances have not varied very much from 1925. The marriage allowance stands today at approximately a similar figure, but surely the cases are entirely different. The married allowance is in most cases supplementary to wages and salaries, which have multiplied two or three times during the last 26 years. But this particular allowance is supplementary to income, which has increased but slightly during that period. The amount that investment income has increased over the years depends on the source, but obviously it cannot be more than 50 per cent., and therefore this particular allowance does come in a very different category.
It may also be suggested that some improvement has been effected because in 1948, I think it was the hon. Gentleman himself who introduced it, an Amendment was made to the Finance Bill which did vary slightly the marginal provisions. But that was three years ago, and there has been a very great change during those three years in the condition of these people. Although that relief was slightly improved in 1948 by altering the marginal provisions as opposed to the ceiling, people with incomes of £600 or thereabouts benefited only slightly. It benefited the higher and not the lower range. It is people who in 1925 had an income of, say, £400 and whose income cannot have been raised to more than £600 today with whom I am particularly concerned.
I do not know whether hon. Gentlemen opposite feel that an unearned income on retirement of £600 is excessive, but surely it is the sort of income that a doctor on retirement might seek to have, or any other professional man. It is the sort of income which a man in an industry where there is no pension scheme should be entitled to, or a man who is in trade, or even a farmer. Hon. Members receiving a salary of £1,000 a year, part of which is subject to an expense allowance, who hope to obtain an income on retirement of £600 if they are fortunate in receiving on retirement anything in the form of a pension from trade or elsewhere, will get the full relief allowance on the £600; and if that is the case my Amendment might affect them.
The Chancellor of the Exchequer told us that the rich must expect some cut in 1323 their luxuries. I do not know whether he considers people who get £600 or £700 to be rich. I do not think he does. It is not a question of luxury so far as these people are concerned. They are people who have held responsible positions in industry or elsewhere and maintained certain standards and have had to cut those standards. There seems no reason why they should cut their expenses by giving up holidays or selling their car or house, but that is, in fact, happening at the moment, and I believe that in the interests of social justice, about which we hear so much, there is a case for levelling up this relief.
If this relief cannot be given in the form I have suggested, or in the form to which my hon. Friend the Member for Cornwall, North, will refer, even the raising of the figure from £500 to £550 will be of some benefit. It is the principle with which we are mainly concerned, the bringing up of this allowance, which after all had the support of hon. Gentlemen opposite, because they did help slightly in 1948.
This Amendment is designed not to favour any one section of the community, but to do for the old people what has already been done for others. The alternatives which face people with these incomes are possibly to cut their standards still further or, even worse, to use some of their capital, and that is what some people are doing. When they do that they damage not only themselves but the rest of our economy. It is in that light that I hope the hon. Gentleman will consider this Amendment.
§ Sir Harold Roper (Cornwall, North)The Amendment which stands in my name is closely related to the Amendment of my hon. Friend the Member for Runcorn (Mr. Vosper). I have full sympathy with everything my hon. Friend has just said. The purposes of our Amendments are similar. Both are designed to help old people. In the Budget some relief was given to married couples. I suggest that the old people are another section of the community who deserve consideration. This section of the community includes a number of married couples, but perhaps it is mainly composed of single persons, a very large proportion being widows or widowers. That 1324 is why we should give this question serious consideration.
The incomes of these old people are often derived from the proceeds of life savings, which come almost in the category of earned income. Usually, the habits of these people are set. As my hon. Friend has said, many of them own their own houses. During their life they have worked and reached a certain income level with a certain standard of living. They want to maintain that standard, but they are hit hard by high taxation and the steady rise in the cost of living. My Amendment applies a remedy in a slightly different way to that suggested by my hon. Friend.
From the Chancellor's point of view, the remedy I propose has the merit that it would cost a good deal less than my hon. Friend's suggestion. The law provides for age relief on the basis that an income of up to £500 is treated as earned income. Above £500 there is a marginal range of income. If the income falls within that margin, partial benefit from the age relief provision is obtained. Above the upper limit there is no relief at all.
8.30 p.m.
At the present time, the top limit of that margin for the married man is £763, and for a single man it stands at £816. Within that margin at present, the taxpayer, under the terms of the Act, pays the sum of two figures—the tax on an income of £500 a year plus five-eighths of the total marginal income above £500. On the income which falls within this range of approximately £300, he pays five-eighths of the total of that income, and that amount, if worked out in cost per £, is equivalent to Income Tax on that marginal level of income at 12s. 6d. in the £.
I maintain that 12s. 6d. in the £ is a very high figure for a man to pay on an income of that approximate level, or even on part of his income, and the effect of my Amendment is to reduce the rate of Income Tax on that marginal range from 12s. 6d. in the £ to 11s. 8d. Incidentally, it also has the effect of raising the upper limit of the margin, in the case of a married man to £864, and in the case of a single man to £938. If it takes up to £938 before the full benefit of the age 1325 relief provision tapers off to nothing, in these days of the high cost of living I do not thing we need fear the effect of that or regard it as in any way extravagant.
The cost of my Amendment, as given to me in an answer to a question two months ago, is £500,000, which is probably no more in the global amount than these same people are being asked to pay in the extra Income Tax at 6d. in the £. It is a very modest Amendment and I deliberately put forward a modest one, in the hope that the Chancellor may be able to accept it. Perhaps the fairest criticism of it may be that it is too modest, but, just because we have to face the re-armament bill, I have preferred to suggest a remedy which will give to the taxpayer less than, or about the same as, the amount which the Chancellor is taking from him.
I am very pleased to have the opportunity of putting my case before the Chancellor has made up his mind on this matter, because, if he is unable to accept the Amendment, it may be that he dislikes its form but is encouraged by the fact that the cost of conceding it is as modest as it is. If he feels that way, may I ask him, certainly before giving me a negative reply, to consider carefully some intermediate Amendment which he might move on the Report stage, maybe on the lines of the Amendment moved by the hon. Member for Runcorn, but on a lower scale?
May I just mention the effect of it? Supposing we raised the standard for age relief from £500 to £510. On that last £10, the married man would pay Income Tax at the rate of 5s. 6d. Under the present age provision he pays, not 5s. 6d. but 12s. 6d. Therefore, by granting that £10 the married man would gain to the extent of £3 10s. a year—a very modest figure—and, similarly, the single man would gain 30s. a year.
I hope that the Minister, instead of giving a negative reply tonight, will look at the matter before the Report stage to see whether he can do something to help the old people who have done their life's work and cannot be regarded as being in the luxury class, for, unless something of this kind is done, there is nothing to prevent their standard of living from 1326 steadily declining as the cost of living goes up.
§ Mr. Bell (Bucks, South)I rise to support my hon. Friends the Members for Runcorn (Mr. Vosper) and Cornwall, North (Sir H. Roper). These Amendments are designed to serve an extremely deserving cause, and I hope that the Financial Secretary has been given authority to accept the principle underlying them. I do not know whether my hon. Friend the Member for Cornwall, North, was a little optimistic in thinking that the Financial Secretary had not already prepared his speech on this point. In another capacity, I had the experience of addressing a judge who was clearly writing out his judgment while I was doing so.
It may be that, whatever is said in this debate this evening, the Treasury have already decided that these Amendments cannot be accepted. I hope that is not so, however, because there is no doubt that the rise in the cost of living, or the fall in the value of money, whichever way one prefers to put it, has created a very severe problem for the old people who have retired and who are no longer in the position by their own efforts to adapt themselves to the new and expensive world in which we live.
In his Budget speech, the Chancellor said, speaking of this problem, that he must remind the Committee again that those dependent on small fixed incomes which they have difficulty in increasing suffer most from the price increases imposed upon us from outside and which are aggravated by the rise in internal costs. I think that hon. Members on both sides of the Committee will have the greatest sympathy with people who are no longer in a position to take any remedial action. We who are younger may also suffer some hardship from the fall in the value of money, but at least we are in a position to do something about it by, possibly, increasing our earnings.
§ Mr. HoughtonI hope the hon. Gentleman is not assuming that all the people who claim age relief are on fixed incomes, and that he will not overlook the fact that people living on investments have had substantial increases in their incomes in the last five years.
§ Mr. BellThat is one of those statements which can neither be proved nor refuted. No doubt some of the old people 1327 whom these Amendments are designed to help are living on the proceeds of investments which they could exchange, and, possibly, thereby derive some increased income from them.
There are other considerations which ought to be taken into account. First, there is this extremely important one. When a man is retired from work, possibly from a salaried position, he is not necessarily any longer—and why should he be asked to be—in a position in which he can manipulate and change his investments from month to month so as to increase the income from them. It is reasonable to say that when a man is retired from active participation in the tasks of life he should be entitled to put his money in Government securities to secure the fixed income and stop worrying. It may not be difficult for us who, if I may use the expression, are "in play" and can take an active part in these things, but in the majority of cases people over 65 or 70 or 75 are no longer able to cope with what has happened to them and to their income since they retired. That is why I think this is such a deserving class.
A person, of course, may be in a form of occupation from which when he retires he derives a pension, or he may be entitled to a pension under a superannuation scheme. I think I am correct in saying that in that case he is entitled as of right to the normal earned income allowances. But if he has been in one of those forms of occupation where no pension is provided, then during his working life he has to accumulate such a capital sum of savings that he can live on the income from it as his pension on retirement. I cannot see any reason in equity why the income from that sum should not be treated in every way as earned income.
I see no moral case against an Amendment applying the ordinary earned income allowance, which I think has a maximum of £400 a year, to income from the savings of a retired person of that kind. But this is an extremely modest Amendment. For some reason or other the relief given to a person in that position at present is limited by law to £500. That is to say, his total income must not exceed £500 and the relief he 1328 gets on that is only one-fifth or the £500. If he has £600 or £700 by way of income from his savings, then the extra £100 or £200 is treated as unearned income and, as my hon. Friend the Member for Run-corn pointed out, is taxed at the full rate of taxation without any relief whatever.
I think the Committee will agree that that is a real anomaly. It creates a distinction between those who have pensions and those who rely upon savings, and it creates a distinction between those who are still working and those who have retired. Inasmuch as under present conditions of inflation it is precisely those who have retired who are most in need of the indulgence of the legislature, how wrong it is that they should be the people to be discriminated against by the present system of taxation.
I have no particular preference for the method which is to be used to grant this relief to those people, whether it is the method proposed in this Amendment by my hon. Friend the Member for Runcorn or the alternative and apparently cheaper method proposed by my hon. Friend the Member for Cornwall, North, which possibly, from the fact that it is cheaper, one ought to adduce gives less relief. I myself tabled an Amendment to this Clause which you, Major Milner, in your discretion have not selected. That Amendment offered a third method of giving additional personal relief to retired people so as to assist them with this problem of dealing with the rise in prices to which the Chancellor so rightly and sympathetically referred in his Budget statement.
8.45 p.m.
I am very sorry that the Government this year have felt it right to confine any practical result of their sympathy to those who are in receipt of old age pensions. I fully concede that those are the people who are most hard hit, but there is a group of people who just do not qualify for National Assistance and yet who have very small incomes, say £300, £400, or £500 a year, who are in the greatest difficulty in living and who also would have been worthy objects of relief in this Bill in one of the three ways which have been proposed.
I ask the Financial Secretary not merely to look at the cost of these proposals, modest though it is, but to regard it as one of those matters of equity and justice 1329 which are completely unanswerable. I can see no logical answer at all to the case for these Amendments. Why should not a man who is living upon the proceeds of his savings have earned income allowance? Of course, while he is working and in receipt of his pay or salary the income from his savings may be regarded as a sort of extra.
§ Mr. HoughtonBut they may not be his savings.
§ Mr. BellOf course, they may be the savings of his parents or something which has been left to him; that is perfectly true, but I would point out that both these Amendments would confer no appreciable benefit to people with large private incomes. The merit of the Amendments is that their benefit, proportionately at any rate, is concentrated upon those lowest income groups above National Assistance level who, I think, are a most deserving category of people.
I was saying when the hon. Gentleman interrupted me that while people are still earning one may regard the income from their savings as an addition and a supplement to their earnings which ought to be taxed at the standard rate. That is a perfectly tenable point of view, though it is not necessarily the one I hold. But once those people have ceased to earn, then I say it is right that the income from their savings should be regarded in a different light and should receive a different form of treatment from the Treasury. For those reasons, I hope that the Government will accept one of these proposals—I do not ask them to accept them all—and that if they do not the Committee will make them do so.
§ Mr. H. BrookeMy hon. Friend the Member for Buckinghamshire, South (Mr. Bell), in his excellent speech, speculated on what the Treasury might decide about these two Amendments. Whatever the Treasury may decide, I hope that Parliament will insist upon one or other of them being written into the Bill. The changes embodied in these Amendments would both be improvements in the law.
My three hon. Friends who have spoken have all stated cogently the humanitarian case for taking some kind of action, and that must have appealed to hon. Members in all quarters of the Committee. We are considering the difficulties of 1330 people who, because of their age, have little chance to improve their incomes by harder work and enterprise or in any way except the most improbable way that the hon. Member for Sowerby (Mr. Houghton) suggested, when he conjured up a fiction of some of these old ladies and gentlemen examining "The Financial Times" every morning and ringing up their brokers to see if their money could be more profitably invested. Most of the ordinary people who come into the sort of category which we are discussing now—old people with a little over £500 a year—do not speculate with their investments. A great deal of that money of theirs, for safety's sake has to be in fixed interest securities, which nowadays bring in a low return.
It is not simply on humanitarian grounds that I commend these Amendments. An hour or two ago I spoke about the anomalies which creep into the Income Tax allowances unless we constantly keep them under review. Things have changed so much in 25 years, the value of money has changed so much, the whole of our Income Tax structure has changed so much, that if £500 was the right limit 25 years ago at which to stop the aid for old people, it cannot conceivably be the right limit any longer. That is a point which we should all bear in mind, and we are indebted to my hon. Friend the Member for Runcorn for having brought it before the Committee.
Secondly, the working of these marginal reliefs must surely trouble the hon. Member for Sowerby a great deal. He it was who introduced into our debates this evening the idea of looking at the graph, and if he looks at the graph he will see that from £500 onwards there is an astonishingly steep rise in the rate at which these elderly people are called upon to pay tax. I doubt whether there are more than one or two hon. Members present at the moment who, before the debate tonight, realised that on the section of their income immediately above the £500 limit these old people are called upon to pay tax at 12s. 6d. in the £. That is a rate which does not fall on anybody else until his income rises above £3,000 a year. It is only then that such a heavy incidence begins to cut into a man's extra income. The result in this case is that, whereas under the Government's proposals the overall rate of tax falling on 1331 old people with incomes of £500 a year will be 3s. 3d. in the £, the overall rate then rises, unless we do something about it now, at an altogether unjustified pace until at £600 a year it is 4s. 9½d., and so on. I will not weary the Committee with figures.
The point on which I think we must concentrate is the anomalous working of the present system of marginal relief which, unless we do something on the lines so ingeniously suggested by my hon. Friend the Member for Cornwall, North (Sir H. Roper), imposes this 12s. 6d. rate of tax on the band immediately above £500. There is a need for us to take action of some sort in this case because, believe me, the people we are discussing have long ago had to give up thinking about running cars; they have reached the stage at which they are wondering how they can get along at all.
They had looked forward to an old age of simple needs and to the continuance of small enjoyments which they had possessed throughout their lives but, owing to the weight of modern taxation, they find that a great deal on which they had counted has been swept entirely away from them. And there is nothing whatever they can do about it. They must suffer, whereas we who are younger may still have opportunity of improving our position. Unless we can find some means of relieving their need, we are allowing cruelty to be inflicted on those people. This Committee surely never wishes to be cruel, and we must find some means of alleviating such a genuine hardship and grievance.
§ Mr. JayBoth these Amendments would give relief to persons over 65 years of age living on an investment income of more than £500 a year, and what I have to say will mostly apply to both of them. Clearly, I think, one approaches these proposals with sympathy, and indeed, had there been no Korean war and had there been no need for a re-armament programme, we should, no doubt, have had a festive Budget which would have been able to include many reliefs of this kind. Unhappily, however, those hopes have gone the way of all flesh, as, no doubt, many other such hopes will so long as human beings quarrel with one another on this planet.
1332 Therefore, in the circumstances which in fact confront us, I am afraid we are forced to the conclusion that this concession is not practicable in relation to our other commitments, mainly for the reason that the two suggested concessions together would cost £3,500,000. As the hon. Gentleman the Member for Cornwall, North (Sir H. Roper) quite rightly said, his own proposal would cost £500,000 and the much larger proposal would cost £3 million.
The old age relief is, of course, an allowance by which a small unearned income gets the earned income relief, on the ground, as an hon. Gentleman has said, that it is, in a sense, equivalent to a pension. This relief, like the Petrol Duty, is a financial child of the Leader of the Opposition. It was the Leader of the Opposition who, when he introduced it, set the limit to the size of the income at which the relief would operate. [HON. MEMBERS: "When was that?"] That, I think, shows that in his mind the distinction was clear between a reasonably small unearned income which could be justifiably regarded as the equivalent of a pension and a much larger unearned income which, as my hon. Friend the Member for Sowerby (Mr. Houghton) said, would not reasonably result from the savings of the individual concerned.
§ Mr. Frederic HarrisHow long ago did the Leader of the Opposition say that?
§ Mr. JayThis relief would also, of course, benefit those with incomes of over £500 a year. That is, I fully agree, a modest income, but we have to deal at the moment, of course, with people of even more modest incomes than that. Incidentally, the proposal of the hon. Member for Runcorn (Mr. Vosper), who moved the first Amendment, would have a rather anomalous effect on the arithmetic. According to the Government's proposals, all the individuals eligible for this age relief on incomes of £500, £600 and so on upwards will pay more after this Budget than they have paid previously. Under his proposal a single person, or indeed a married couple, with an income of £500 a year would pay more than they did previously, whereas somebody with an income of £700 or £800 a year would actually pay less. That, I 1333 think, is rather an anomalous effect which he may not have realised.
9.0 p.m.
We must also recognise that those whose situation we are discussing are, of course, eligible for the various other Income Tax reliefs. The marriage allowance, children's allowance, dependent relatives' allowance, and so on, are all available to persons over 65 with more than £500 a year. If they have no dependants, we must be guided by the general principle of this Budget—that in time of rising prices and rising profits the main extra burden of taxation should be placed on profits and on the higher incomes—and the reliefs we are able to give this year must go, as the Committee has already decided on the Government's proposal, to the old age pensioners and to those in receipt of National Assistance. For those reasons, we are sorry to have to come to the conclusion that we cannot conscientiously advise the Committee to accept these proposals this year.
§ Mr. VosperThe Financial Secretary said that this proposal would benefit only people with incomes of over £500 a year. Will he not agree that it equally benefits people with under £1,000 a year?
§ Mr. Sidney Marshall (Sutton and Cheam)Will the hon. Gentleman also explain how higher profits can affect the incomes of people who have fixed incomes?
§ Lieut.-Commander BraithwaiteThe disappointment caused by the remarks of the Financial Secretary will, I am certain, not be confined to this side of the Committee. I thought that when my hon. Friend the Member for Runcorn (Mr. Vosper) moved his Amendment—and may I say how honoured we who sit on the back benches are to have this temporary ascent from Olympus, in a brief respite from his normal task of flagellation—he spoke in such agreeable and convincing terms that the Government would hasten to accept this proposal. Indeed, it was obvious while the Financial Secretary was on his feet that he himself was far from convinced by the utterance he was forced to deliver.
1334 I hope the Financial Secretary will not take it amiss—he did a year ago when I made the same suggestion, but he has been longer in office now and is more hardened to criticism—when I say that I was pessimistic from the outset, because my experience tells me that when concessions are to be made the Chancellor of the Exchequer comes into the Chamber in person and dons the mantle of Santa Claus, but when a rebuttal awaits us it is the unfortunate Financial Secretary who has to do it; and he does it with an obvious lack of conviction, as he did on this occasion.
None the less, I feel that we should press this matter, because those who would benefit from this Amendment, unlike those who fell within the previous Amendment moved by my hon. Friend the Member for Edgbaston (Sir P. Bennett), cannot by any conceivable flight of imagination be described as rich. I think we can return here for a moment to a topic I mentioned during the general debate on the Budget Resolutions. When I mentioned it, many hon. Members opposite, in the language of the OFFICIAL REPORT, "indicated assent." I hope I can once again carry the Committee as a whole with me on this matter, because I am sure that on reflection hon. Members will feel that this is not a party point. I even hope to carry with me the hon. Member for Sowerby (Mr. Houghton), because I am confident that at heart he is a kindly character.
§ Lieut.-Commander BraithwaiteI intend to give my reason for saying that. There was a time when he used to deliver a series of soothing broadcasts entitled "Can I Help You?" It is only when he returns to his political capacity as a Socialist Member of Parliament that, like Pharaoh, he hardens his heart whenever there is any suggestion of relief to taxpayers in any category. None the less, I submit that there is a very strong case here indeed.
The hon. Member for Stechford (Mr. Jenkins) earlier this evening made what I thought was a most interesting speech, although I was not able to agree with his final conclusion, on the subject of earned and unearned income. He said that he himself would favour a sharper distinction 1335 between the two. I am speaking only for myself, but I have said before, and I am on record as having said it, that I would support a distinction between earned and unearned income during all stages of taxation, including Surtax.
When the hon. Member for Stechford says that, I do not differ from him if we both mean the same thing by unearned income, because I think that it has emerged during the last couple of hours of discussion—the point has been well made by one or two of my hon. Friends already—that to describe the savings of a life-time and the consequences of thrift over a long period of years as unearned income, is really a harsh definition. I do not think that this is a party point at all.
I should like to see our whole code of taxation altered in such a way as to make possible that definition, because I think that even if one is a Socialist and a devoted disciple of the Welfare State, one would still believe—I think that hon. Members opposite believe it in their heart of hearts—that the man who is self-supporting in these days is a benefactor of the State, if only because he takes himself off the shoulders of the various welfare schemes to which the taxpayer subscribes.
Therefore, I would urge that the savings of a lifetime are not in the real sense of the word unearned income. When the hon. Member for Bucks, South (Mr. Bell), was speaking a few moments ago, the hon. Member for Sowerby (Mr. Houghton) made one of his interventions, and suggested that the unearned income upon which many of these old people live did not consist of their savings at all, but might have been handed down to them by their parents. Of course, that may be so.
I do not know how many there are, and I doubt if the hon. Gentleman does, but obviously there are people who would fall within that category; but surely the State has not done badly out of that money already. It has attracted Death Duties before it reached these people. It may, of course, have attracted Death Duties in the days when they were lighter than they are today. None of us have control over the age in which we are born, the circumstances in which we have to live, or the taxes which we have to pay.
1336 When the Financial Secretary told us—and I think that he soared rather into the stratosphere of imagination—that these people between the ages of 60 and 70 benefited from children's allowances, I thought that he was paying a charming compliment to their virility. But I thought that his argument lacked force, because surely the children of these people have now become adults and, in many cases, parents themselves.
§ Mr. Jay indicated dissent.
§ Lieut.-Commander BraithwaiteThe hon. Gentleman shakes his head. But it will take more than such oscillations to convince me. After all, statistics are available, and I have a good mind to put down a Question to the Minister of Health on the subject of whether there has been a sharp rise in the birth rate between the ages of 60 and 70. That shows the length to which the Treasury have to go in the year 1951 in order to be mean. If that argument is not laughed out of the Committee. I hope it will be voted out in a few moments.
While the hon. Member for Sowerby was right when he said that there were certain investments for some, I thought one of my hon. Friends was equally correct when he said that these people had to play for safety. Those with money in fixed interest securities, who have entrusted it during the last five years to His Majesty's Government, have found that something like one-third of the capital has now gone with the wind. I will not give a long list of the securities to prove that, but hon. Members opposite must be familiar with them.
§ Mr. FollickSome of them have increased in value.
§ Lieut.-Commander BraithwaiteThe hon. Member is wrong. I know he is an expert on various foreign countries, but I am not prepared to listen to him on this particular subject. I happen to know a good deal about it. When we come to tooth brushes I shall listen to the hon. Member with the closest attention, but not on the yield or capital value of Government securities which, in fact, have fallen sharply since the palmy days of the inflationary boom of the present Minister of Local Government and Planning.
1337 Those who live either on fixed interest securities or are—I think this is a section of the community for whom the Committee should have the greatest sympathy—servants of the State, be they ex-members of the Fighting Services or—and these are a different class of people—civil servants, who contract on entering Government service that at the end of a certain number of years they will draw a certain pension composed of some percentage of their salary at the time of retirement—
§ Mr. Arthur Colegate (Burton)One-eightieth for each year.
§ Lieut.-Commander BraithwaiteI am grateful to my hon. Friend the Member for Burton (Mr. Colegate). Those who go out of the Fighting Services are in a stronger position, because they generally come out, say, from the Navy—and I am talking of those on the lower deck—in the forties, where they will fall within the definition of the Financial Secretary with regard to reproduction, and are able to supplement their Service pensions by undertaking other work of a remunerative nature. We all know cases where gentlemen with pensions from the Services take other employment to supplement those pensions. Civil servants are not covered by that. It is at 60 or 65 that they retire, and at that age they are unable to keep in step with those who are fighting the cost of living by wage increases and the like.
Once again I come to the case for this concession. Usually about this period of the Finance Bill, the Financial Secretary—perhaps we have not got to that stage yet—commences to do a certain amount of addition. He then gets up and says that if all the Amendments moved by the Opposition were accepted the cost to the Exchequer would be £100 million, £150 million or the like. That is not a valid argument. It may look well in the newspapers, but it is not valid, because hon. Members on both sides of the Committee know perfectly well that this stage of the Finance Bill is the occasion for putting forward a whole list of easements which hon. Members think desirable.
Last year I called it the annual parade, and Sir Stafford Cripps seemed somewhat contemptuous of that definition. I do not know why. It is the annual parade or deployment of certain easements of taxation which the Opposition think desirable, 1338 and not only the Opposition but some Members on the Government side too. I wish that they would put down some Amendments with a view to easing the burden of taxation. I hope some of them will support this Amendment, for I know that they are all sympathetic. We might appreciate support from the hon. Member for Ealing, North (Mr. J. Hudson). I noticed he disappeared yesterday when we were discussing some concessions to the wine trade, but I hope that was on conscientious grounds. I hope that he will support this Amendment. I am sure he sees the point of it and is sympathetic towards it.
9.15 p.m.
It is not too late for the Government to think again. I was a little sorry that my hon. Friend the Member for Cornwall, North, carried out a strategic retreat very early in this Debate, when he said that he hoped that the matter might be considered between now and the Report stage. It is the Amendment of my hon. Friend the Member for Runcorn which should be pressed. Cannot £3 million be found, in this vast expenditure of £4,000 million, from some source or another? It is a very small concession to make. I am sorry that the Government have taken up this extremely hard-hearted attitude. I should like them to divest themselves of the Sowerby mentality which so affects them. Next time the hon. Member for Sowerby goes on the air to advise the people, the title of his broadcast ought to be "Can I hinder you?"
I hope that my right hon. Friend the Member for Aldershot (Mr. Lyttelton), will not allow this negative reply from the Government to go unchallenged. I hope that the Amendment will be pressed so that the people of the country may see who it is that is endeavouring to relieve their burdens through the acid test of a Division.
§ Mr. Oliver Lyttelton (Aldershot)My hon. and gallant Friend the Member for Bristol, North-West (Lieut.-Commander Braithwaite) said that when the Financial Secretary to the Treasury rose to speak his blood ran cold, because he knew that we were going to get nothing. I had the same feelings, for slightly different reasons. The Financial Secretary began by saying that he had the deepest sympathy with the object of the Amendment. That always means that the sympathy is 1339 not going to be followed up by any cash. That is exactly what has happened on this occasion.
During the debate on another Clause, the Financial Secretary used the phrase that some of my hon. Friends had lived long and learned little. Those words have now come home to him in a very obvious way. He pointed out that the £500 limit was originally imposed by my right hon. Friend the Leader of the Opposition, but that happened 25 years ago.
§ Mr. LytteltonThat is a delicious piece of the old Adam rising in the brain-not the breast—of the Financial Secretary, I was going to say that nothing had happened in the last 26 years to make my right hon. Friend change his opinion about what the appropriate limit should be in this case. That is the first point, which was cogently argued by my hon. Friend the Member for Hampstead (Mr. H. Brooke).
The next thing, which I am sure came to many hon. Members as a surprise, was
§ the very steep rise in the rate of tax which these poor people—I say that advisedly—have to pay after the limit has been reached. I think many hon. Members were surprised to know that it is as much as 12s. 6d. as much as in the case of people who get £3,000 a year.
§ The case for the Amendment has not only been overwhelmingly upheld by speeches from this side of the Committee but it has been reinforced by the speech of the Financial Secretary himself who, after looking through all the Treasury portfolios, could find no answer except to say that the country, in a time of rearmament, could not find £500,000 a year to relieve this necessitous case, much less £3½ million. If a Division is challenged I shall have great pleasure in voting for this Amendment and trying to get some reasonably generous treatment from the Treasury to accord with that sympathy they say they feel with the objects of the Amendment.
§ Question put, "That those words be there added."
§ The Committee divided: Ayes, 284; Noes, 295.
1343| Division No. 89.] | AYES | [9.21 p.m. |
| Aitken, W. T. | Carr, Robert (Mitcham) | Erroll, F. J. |
| Alport, C. J. M. | Carson, Hon. E. | Fisher, Nigel |
| Amery, Julian (Preston, N.) | Channon, H. | Fletcher, Walter (Bury) |
| Amory, Heathcoat (Tiverton) | Churchill, Rt. Hon. W. S. | Fort, R. |
| Arbuthnot, John | Clarke, Col. Ralph (East Grinstead) | Foster, John |
| Ashton, H. (Chelmsford) | Clarke, Brig. Terence (Portsmouth, W.) | Fraser, Hon. Hugh (Stone) |
| Assheton, Rt. Hon. R. (Blackburn, W.) | Clyde, J. L. | Fraser, Sir Ian (Morecambe & Lonsdale) |
| Astor, Hon. M. L. | Colegate, A. | Fyfe, Rt. Hon. Sir David Maxwell |
| Baker, P. A. D. | Conant, Maj. R. J. E. | Gage, C. H. |
| Baldock, Lt.-Cmdr. J. M. | Cooper, Sqn. Ldr Albert (Ilford, S.) | Galbraith, Cmdr. T. D. (Pollok) |
| Baldwin, A. E. | Cooper-Key, E. M. | Galbraith, T. G. D. (Hillhead) |
| Banks, Col. C. | Corbett, Lt.-Col. Uvedale (Ludlow) | Garner-Evans, E. H. (Denbigh) |
| Baxter, A. B. | Craddock, Beresford (Spelthorne) | Gates, Maj. E. E. |
| Beamish, Maj. Tufton | Cranborne, Viscount | Glyn, Sir Ralph |
| Bell, R. M. | Crookshank, Capt. Rt. Hon. H. F. C. | Gomme-Duncan, Col. A. |
| Bennett, Sir Peter (Edgbaston) | Crosthwaite-Eyre, Col. O. E. | Gridley, Sir Arnold |
| Bennett, Dr. Reginald (Gosport) | Crouch, R. F. | Grimond, J. |
| Bennett, William (Woodside) | Crowder, Capt. John (Finchley) | Grimston, Hon. John (St. Albans) |
| Bevins, J. R. (Liverpool, Toxteth) | Crowder, Petre (Ruislip—Northwood) | Grimston, Robert (Westbury) |
| Birch, Nigel | Cundiff, F. W. | Harden, J. R. E. |
| Black, C. W. | Cuthbert, W. N. | Hare, Hon. J. H. (Woodbridge) |
| Boles, Lt.-Col. D. C. (Wells) | Darling, Sir William (Edinburgh, $.) | Harris, Frederic (Croydon, N.) |
| Boothby, R. | Davidson, Viscountess | Harris, Reader (Heston) |
| Bossom, A. C. | Davies, Rt. Hon. C. (Montgomery) | Harvey, Air Cdre A. V. (Macclesfield) |
| Bowen, E. R. (Cardigan) | Davies, Nigel (Epping) | Harvey, Ian (Harrow, E.) |
| Boyd-Carpenter, J. A. | de Chair, Somerset | Harvie-Watt, Sir George |
| Boyle, Sir Edward | De la Bère, R. | Hay, John |
| Bracken, Rt. Hon. B. | Deedes, W. F. | Headlam, Lt.-Col. Rt. Hon. Sir Cuthbert |
| Braine, B. R. | Digby, S. Wingfield | Heald, Lionel |
| Braithwaite, Lt.-Cr. G. (Bristol, N. W.) | Dodds-Parker, A. D. | Henderson, John (Cathcart) |
| Braithwaite, Sir Albert (Harrow, W.) | Donner, P. W. | Hicks-Beach, Maj. W. W. |
| Bromley-Davenport, Lt.-Col. W. | Douglas-Hamilton, Lord Malcolm | Higgs, J. M. C. |
| Brooke, Henry (Hampstead) | Drayson, G. B. | Hill, Dr. Charles (Luton) |
| Browne, Jack (Govan) | Dugdale, Maj. Sir Thomas (Richmond) | Hill, Mrs. E. (Wythenshawe) |
| Buchan-Hepburn, P. G. T. | Duncan, Capt. J. A. L. | Hinchingbrooke, Viscount |
| Bullock, Capt. M. | Dunglass, Lord | Hirst, Geoffrey |
| Bullus, Wing Commander E. E. | Duthie, W. S. | Holmes, Sir Stanley (Harwich) |
| Burden, F. A. | Eccles, D. M. | Hope, Lord John |
| Butcher, H. W. | Eden, Rt. Hon. A. | Hopkinson, Henry |
| Butler, Rt. Hn. R. A. (Saffron Walden) | Elliot, Rt. Hon. W. E. | Hornsby-Smith, Miss. P. |
| Horsbrugh, Rt. Hon. Florence | Maude, Angus (Ealing S.) | Smithers, Peter (Winchester) |
| Howard, Gerald (Cambridgeshire) | Maude, John (Exeter) | Smyth, Brig. J. G. (Norwood) |
| Howard, Greville (St. Ives) | Maudling, R. | Snadden, W. McN. |
| Hudson, Sir Austin (Lewisham, N.) | Medlicott, Brig. F. | Soames, Capt. C. |
| Hudson, Rt. Hon. Robert (Southport) | Mellor, Sir John | Spearman, A. C. M. |
| Hudson, W. R. A. (Hull, N.) | Molson, A. H. E. | Spence, H. R. (Aberdeenshire, W.) |
| Hutchinson, Geoffrey (Ilford, N.) | Monckton, Sir Walter | Spens, Sir Patrick (Kensington, S.) |
| Hutchison, Lt.-Com. Clark (E'b'rgh W.) | Moore, Lt.-Col. Sir Thomas | Stanley, Capt. Hon. Richard (N. Fylde) |
| Hutchison, Col. James (Glasgow) | Morris, Hopkin (Carmarthen) | Stevens, G. P. |
| Hyde, Lt.-Col. H. M. | Morrison, John (Salisbury) | Steward, W. A. (Woolwich, W.) |
| Hylton-Foster, H. B. | Morrison, Rt. Hon. W. S. (Cirencester) | Stewart, Henderson (Fife, E.) |
| Jeffreys, General Sir George | Mott-Radclyffe, C. E. | Stoddart-Scott, Col. M. |
| Jennings, R. | Nabarro, G. | Storey, S. |
| Johnson, Howard (Kemptown) | Nicholls, Harmar | Strauss, Henry (Norwich, S.) |
| Jones, A. (Hall Green) | Nicholson, G. | Stuart, Rt. Hon. James (Moray) |
| Joynson-Hicks, Hon. L. W. | Nield, Basil (Chester) | Studholme, H. G. |
| Kaberry, D. | Noble, Cmdr. A. H. P. | Summers, G. S. |
| Kerr, H. W. (Cambridge) | Nugent, G. R. H. | Sutcliffe, H. |
| Kingsmill, Lt.-Col. W. H. | Nutting, Anthony | Taylor, Charles (Eastbourne) |
| Lambert, Hon. G. | Oakshott, H. D. | Taylor, William (Bradford, N.) |
| Lancaster, Col. C. G. | Odey, G. W. | Teeling, W. |
| Langford-Holt, J. | O'Neill, Rt. Hon. Sir Hugh | Teevan, T. L. |
| Leather, E. H. C. | Ormsby-Gore, Hon. W. D. | Thomas, J. P. L. (Hereford) |
| Legge-Bourke, Maj. E. A. H. | Orr, Capt. L. P. S. | Thompson, Kenneth Pugh (Walton) |
| Lennox-Boyd, A. T. | Thompson, Lt.-Cmdr. R. (Croydon, W.) | |
| Lindsay, Martin | Orr-Ewing, Charles Ian (Hendon, N.) | Thorneycroft, Peter (Monmouth) |
| Linstead, H. N. | Orr-Ewing, Ian L. (Weston-super-Mare) | Thornton-Kemsley, Col. C. N. |
| Llewellyn, D. | Osborne, C. | Thorp, Brig. R. A. F. |
| Lloyd, Rt. Hn. Geoffrey (King's N'rt'n) | Peake, Rt. Hon. O. | Tilney, John |
| Lloyd, Maj. Guy (Renfrew, E.) | Perkins, W. R. D. | Turner, H. F. L. |
| Lloyd, Selwyn (Wirral) | Peto, Brig. C. H. M. | Turton, R. H. |
| Lockwood, Lt.-Col. J. C. | Pickthorn, K. | Tweedsmuir, Lady |
| Longden, Gilbert (Herts, S. W.) | Pitman, I. J. | Vane, W. M. F. |
| Low, A. R. W. | Powell, J. Enoch | Vaughan-Morgan, J. K. |
| Lucas, Sir Jocelyn (Portsmouth, S.) | Price, Henry (Lewisham, W.) | Wade, D. W. |
| Lucas, P. B. (Brentford) | Prior-Palmer, Brig. O. | Wakefield, Edward (Derbyshire, W.) |
| Lucas-Tooth, Sir Hugh | Profumo, J. D. | Wakefield, Sir Wavell (Marylebone) |
| Lyttelton, Rt. Hon. O. | Raikes, H. V. | Walker-Smith, D. C. |
| McAdden, S. J. | Rayner, Brig. R. | Ward, Hon. George (Worcester) |
| McCorquodale, Rt. Hon. M. S. | Redmayne, M. | Ward, Miss. I. (Tynemouth) |
| Macdonald, A. J. F. (Roxburgh) | Remnant, Hon. P. | Waterhouse, Capt. Rt. Hon. C. |
| Macdonald, Sir Peter (I. of Wight) | Renton, D. L. M. | Watkinson, H. |
| Mackeson, Brig. H. R. | Roberts, Maj. Peter (Heeley) | Webbe, Sir H. (London & Westminster) |
| McKibbin, A. | Robertson, Sir David (Caithness) | Wheatley, Maj. M. J. (Poole) |
| McKie, J. H. (Galloway) | Robinson, Roland (Blackpool, S.) | White, Baker (Canterbury) |
| Maclay, Hon. John | Robson-Brown, W. | Williams, Charles (Torquay) |
| Maclean, Fitzroy | Rodgers, John (Sevenoaks) | Williams, Gerald (Tonbridge) |
| MacLeod, Iain (Enfield, W.) | Roper, Sir Harold | Williams, Sir Herbert (Croydon, E.) |
| MacLeod, John (Ross and Cromarty) | Ropner, Col. L. | Wills, G. |
| Macmillan, Rt. Hon. Harold (Bromley) | Russell, R. S. | Wilson, Geoffrey (Truro) |
| Macpherson, Major Niall (Dumfries) | Ryder, Capt. R. E. D. | Winterton, Rt. Hon. Earl |
| Maitland, Cmdr. J. W. | Salter, Rt. Hon. Sir Arthur | Wood, Hon. R. |
| Manningham-Butler, R. E. | Savory, Prof. D. L. | York, C. |
| Marlowe, A. A. H. | Scott, Donald | |
| Marshall, Douglas (Bodmin) | Shepherd, William | TELLERS FOR THE AYES: |
| Marshall, Sidney (Sutton) | Smiles, Lt.-Col. Sir Walter | Mr. Vosper and Mr. Heath. |
| NOES | ||
| Acland, Sir Richard | Bottomley, A. G. | Cove, W. G. |
| Adams, Richard | Bowden, H. W. | Craddock, George (Bradford, S.) |
| Albu, A. H. | Bowles, F. G. (Nuneaton) | Crawley, A. |
| Allen, Arthur (Bosworth) | Braddock, Mrs. Elizabeth | Crosland, C. A. R. |
| Allen, Scholefield (Crowe) | Brook, Dryden (Halifax) | Crossman, R. H. S. |
| Anderson, Alexander (Motherwell) | Brooks, T. J. (Normanton) | Cullen, Mrs. A. |
| Anderson, Frank (Whitehaven) | Broughton, Dr. A. D. D. | Daines, P. |
| Attlee, Rt. Hon. C. R. | Brown, Rt. Hon. George (Belper) | Dalton, Rt. Hon. H. |
| Awbery, S. S. | Brown, Thomas (Ince) | Darling, George (Hillsborough) |
| Ayles, W. H. | Burke. W. A. | Davies, A. Edward (Stoke, N.) |
| Bacon, Miss. Alice | Burton, Miss. E. | Davies, Harold (Leek) |
| Baird, J. | Butler, Herbert (Hackney, S.) | Davies, Stephen (Merthyr) |
| Balfour, A. | Callaghan, L. J. | de Freitas, Geoffrey |
| Barnes, Rt. Hon. A. J. | Carmichael, J. | Deer, G. |
| Bartley, P. | Castle, Mrs. B. A. | Delargy, H. J. |
| Bellenger, Rt. Hon. F. J. | Champion, A. J. | Dodds, N. N. |
| Benn, Wedgwood | Chetwynd. G. R. | Donnelly, D. |
| Benson, G. | Clunie, J. | Driberg, T. E. N. |
| Beswick, F. | Cocks, F. S. | Dugdale, Rt. Hon. John (W. Bromwich) |
| Bevan, Rt. Hon. A. (Ebbw Vale) | Coldrick, W. | Dye, S. |
| Bing, G. H. C. | Collindridge, F. | Ede, Rt. Hon. J. C. |
| Blenkinsop, A. | Cook, T. F. | Edelman, M. |
| Blyton, W. R. | Cooper, Geoffrey (Middlesbrough, W.) | Edwards, John (Brighouse) |
| Boardman, H. | Cooper, John (Deptford) | Edwards, Rt. Hon. Ness (Caerphilly) |
| Booth, A. | Corbet, Mrs. Freda (Peckham) | Edwards, W. J. (Stepney) |
| Evans, Albert (Islington, S. W.) | Lee, Frederick (Newton) | Robens, Rt. Hon. A. |
| Evans, Edward (Lowestoft) | Lee, Miss. Jennie (Cannock) | Roberts, Goronwy (Caernarvonshire) |
| Evans, Stanley (Wednesbury) | Lever, Leslie (Ardwick) | Robertson, J. J. (Berwick) |
| Ewart. R. | Lewis, Arthur (West Ham, N.) | Robinson, Kenneth (St. Pancras, N.) |
| Fernyhough, E. | Lewis, John (Bolton, W.) | Rogers, George (Kensington, N.) |
| Field, Capt. W. J. | Lindgren, G. S. | Ross, William |
| Finch, H. J. | Lipton, Lt.-Col. M. | Royle, C. |
| Fletcher, Eric (Islington, E.) | Logan, D. G. | Shawcross, Rt. Hon. Sir Hartley |
| Follick, M. | Longden, Fred (Small Heath) | Shinwell, Rt. Hon. E. |
| Foot, M. M. | McAllister, G. | Shurmer, P. L. E. |
| Forman, J. C. | MacColl, J. E. | Silverman, Julius (Erdington) |
| Fraser, Thomas (Hamilton) | McGhee, H. G. | Silverman, Sydney (Nelson) |
| Freeman, John (Watford) | McGovern, J. | Simmons, C. J. |
| Freeman, Peter (Newport) | McInnes, J. | Slater, J. |
| Gaitskell, Rt. Hon. H. T. N. | Mack, J. D. | Smith, Ellis (Stoke, S.) |
| Ganley, Mrs. C. S. | McKay, John (Wallsend) | Smith, Norman (Nottingham, S.) |
| Gibson, C. W. | Mackay, R. W. G. (Reading, N.) | Snow, J. W. |
| Gilzean, A. | McLeavy, F. | Sorensen, R. W. |
| Glanville, James (Consett) | MacMillan, Malcolm (Western Isles) | Soskice, Rt. Hon. Sir Frank |
| Gooch, E. G. | McNeil, Rt. Hon. H. | Steele, T. |
| Gordon-Walker, Rt. Hon. P. C. | MacPherson, Malcolm (Stirling) | Stewart, Michael (Fulham, E.) |
| Greenwood, Anthony (Rossendale) | Mainwaring, W. H. | Stokes, Rt. Hon. R. R. |
| Greenwood, Rt. Hn. Arthur (Wakefield) | Mallalieu, E. L. (Brigg) | Strachey, Rt. Hon. J. |
| Grenfell, D. R. | Mallalieu, J. P. W. (Huddersfield, E.) | Strauss, Rt. Hon. George (Vauxhall) |
| Grey, C. F. | Mann, Mrs. Jean | Stross, Dr. Barnett |
| Griffiths, David (Rother Valley) | Manuel, A. C. | Summerskill, Rt. Hon. Edith |
| Griffiths, Rt. Hon. James (Llanelly) | Marquand, Rt. Hon. H. A. | Sylvester, G. O. |
| Griffiths, William (Exchange) | Mathers, Rt. Hon. G. | Taylor, Bernard (Mansfield) |
| Gunter, R. J. | Mellish, R. J. | Taylor, Robert (Morpeth) |
| Hale Joseph (Rochdale) | Messer, F. | Thomas, David (Aberdare) |
| Hale, Leslie (Oldham, W.) | Middleton, Mrs. L. | Thomas, George (Cardiff) |
| Hall, John (Gateshead, W.) | Mikardo, Ian. | Thomas, Iorwerth (Rhondda, W.) |
| Hall, Rt. Hon. Glenvil (Colne Valley) | Mitchison, G. R. | Thomas, Ivor Owen (Wrekin) |
| Hamilton, W. W. | Moeran, E. W. | Thorneycroft, Harry (Clayton) |
| Hannan, W. | Monslow, W. | Thurtle, Ernest |
| Hardman, D. R. | Moody, A. S. | Timmons, J. |
| Hardy, E. A. | Morgan, Dr. H. B. | Tomney, F. |
| Hargreaves, A. | Morley, R. | Turner-Samuels, M. |
| Hastings, S. | Morris, Percy (Swansea, W.) | Ungoed-Thomas, Sir Lynn |
| Hayman, F. H. | Morrison, Rt. Hon. H. (Lewisham, S.) | Usborne, H. |
| Henderson, Rt. Hon. Arthur (Tipton) | Mort, D. L. | Vernon, W. F. |
| Herbison, Miss. M. | Moyle, A. | Viant, S. P. |
| Hewitson, Capt. M. | Mulley, F. W. | Wallace, H. W. |
| Hobson, C. R. | Murray, J. D. | Watkins, T. E. |
| Holman, P. | Nally, W. | Webb, Rt. Hon. M. (Bradford, C.) |
| Holmes, Horace (Hemsworth) | Neal, Harold (Bolsover) | Weitzman, D. |
| Houghton, D. | Noel-Baker, Rt. Hon. P. J. | Wells, Percy (Faversham) |
| Hoy, J. | O'Brien, T. | Wells, William (Walsall) |
| Hubbard, T. | Oldfield, W. H. | West, D. G. |
| Hudson, James (Ealing, N.) | Oliver, G. H. | Wheatley, Rt. Hon. John (Edinb'gh E.) |
| Hughes, Emrys (S. Ayrshire) | Orbach, M. | White, Mrs. Eirene (E. Flint) |
| Hughes, Hector (Aberdeen, N.) | Padley, W. E. | White, Henry (Derbyshire, N. E.) |
| Hynd, H. (Accrington) | Paget, R. T. | Whiteley, Rt. Hon. W. |
| Hynd, J. B. (Attercliffe) | Paling, Rt. Hon. W. (Dearne Valley) | Wilcock, Group Capt. C. A. B. |
| Irvine, A. J. (Edge Hill) | Paling, Will T. (Dewsbury) | Wilkes, L. |
| Irving, W. J. (Wood Green) | Pannell, T. C. | Wilkins, W. A. |
| Isaacs, Rt. Hon. G. A. | Pargiter, G. A. | Willey, Frederick (Sunderland) |
| Janner, B. | Parker, J. | Willey, Octavius (Cleveland) |
| Jay, D. P. T. | Paton, J. | Williams, David (Neath) |
| Jeger, George (Goole) | Peart, T. F. | Williams, Rev. Llywelyn (Abertillery) |
| Jeger, Dr. Santo (St. Pancras, S.) | Poole, C. | Williams, Ronald (Wigan) |
| Jenkins, R. H. | Popplewell, E. | Williams, Rt. Hon. Thomas (Don V'lly) |
| Johnson, James (Rugby) | Porter, G. | Williams, W. T. (Hammersmith, S.) |
| Johnston, Douglas (Paisley) | Price, Philips (Gloucestershire, W.) | Wilson, Rt. Hon. Harold (Huyton) |
| Jones, David (Hartlepool) | Proctor, W. T. | Winterbottom, Ian (Nottingham, C.) |
| Jones, Frederick Elwyn (W. Ham, S.) | Pryde, D. J. | Winterbottom, Richard (Brightside) |
| Jones, Jack (Rotherham) | Pursey, Cmdr. H. | Wise, F. J. |
| Jones, William Elwyn (Conway) | Rankin, J. | Woodburn, Rt. Hon. A. |
| Keenan, W. | Rees, Mrs. D. | Woods, Rev. G. S. |
| Kenyon, C. | Reeves, J. | Wyatt, W. L. |
| King, Dr. H. M. | Reid, Thomas (Swindon) | Yates, V. F. |
| Kinghorn, Sqn. Ldr. E. | Reid, William (Camlachie) | |
| Kinley, J. | Rhodes, H. | TELLERS FOR THE NOES: |
| Kirk wood, Rt. Hon. D. | Richards, R. | Mr. Pearson and Mr. Sparks |
| Lang Gordon |
§ 9.30 p.m.
§ Mr. Selwyn LloydOn a point of order, Major Milner. I thought the 1344 Division which has just taken place was on the Amendment in the name of my hon. Friend the Member for Runcorn (Mr. Vosper) which, if it had been aceepted, would have cost 1345 approximately £3 million. There is also the Amendment in the name of my hon. Friend the Member for Cornwall, North (Sir H. Roper), which would have cost about £500,000. It was agreed that those should be discussed together, but surely we have a right to vote on the other?
The ChairmanI assumed that the one covered the other. [HON. MEMBERS: "No."] If right hon. and hon. Gentlemen desire a Division, that is perfectly in order.
§
Amendment proposed: In page 10, line 15, at end, add:
(7) Subsection (2) of section fifteen of the Finance Act, 1925, shall have effect as if the words "seven-twelfths," were substituted in the said subsection (2) for the words "five-eighths."—[Sir H. Roper.]
§ Question put, "That those words be there added."
§ The Committee divided: Ayes, 285; Noes, 295.
1349| Division No. 90.] | AYES | [9.35 p.m. |
| Aitken, W. T. | Davies, Nigel (Epping) | Hutchison, Col. James (Glasgow) |
| Alport, C. J. M. | de Chair, Somerset | Hyde, Lt.-Col. H. M. |
| Amery, Julian (Preston, N.) | De la Bère, R. | Hylton-Foster, H. B. |
| Amory, Heathcoat (Tiverton) | Deedes, W. F. | Jeffreys, General Sir George |
| Arbuthnot, John | Digby, S. Wingfield | Jennings, R. |
| Ashton, H. (Chelmsford) | Dodds-Parker, A. D. | Johnson, Howard (Kemptown) |
| Assheton, Rt. Hon. R. (Blackburn, W.) | Donner, P. W. | Jones, A. (Hall Green) |
| Astor, Hon. M. L. | Douglas-Hamilton, Lord Malcolm | Joynson-Hicks, Hon. L. W. |
| Baker, P. A. D. | Drayson, G. B. | Kaberry, D. |
| Baldock, Lt.-Cmdr. J. M. | Dugdale, Maj. Sir Thomas (Richmond) | Kerr, H. W. (Cambridge) |
| Baldwin. A. E. | Duncan, Capt. J. A. L. | Kingsmill, Lt.-Col. W. H. |
| Banks, Col. C. | Dunglass, Lord | Lambert, Hon. G. |
| Baxter, A. B. | Duthie, W. S. | Lancaster, Col. C. G. |
| Beamish, Maj. Tufton | Eccles, D. M. | Langford-Holt, J. |
| Bell, R. M. | Eden, Rt. Hon. A. | Leather, E. H. C. |
| Bennett, Sir Peter (Edgbaston) | Elliot, Rt. Hon. W. E. | Legge-Bourke, Maj. E. A. H. |
| Bennett, Dr. Reginald (Gosport) | Fisher, Nigel | Lennox-Boyd, A. T. |
| Bennett, William (Woodside) | Fletcher, Walter (Bury) | Lindsay, Martin |
| Bevins, J. R. (Liverpool, Toxteth) | Fort, R. | Linstead, H. N. |
| Birch, Nigel | Foster, John | Llewellyn, D. |
| Black, C. W. | Fraser, Hon. Hugh (Stone) | Lloyd, Rt. Hn. Geoffrey (King's N'rt'n) |
| Boles, Lt.-Col. D. C. (Wells) | Fraser, Sir Ian (Morecambe & Lonsdale) | Lloyd, Maj. Guy (Renfrew, E.) |
| Boothby, R. | Fyfe, Rt. Hon. Sir David Maxwell | Lloyd, Selwyn (Wirral) |
| Bossom, A. C. | Gage, C. H. | Lockwood, Lt.-Col. J. C. |
| Bowen, E. R. (Cardigan) | Galbraith, Cmdr. T. D. (Pollok) | Longden, Gilbert (Herts, S. W.) |
| Boyd-Carpenter, J. A. | Galbraith, T. G. D. (Hillhead) | Low, A. R. W. |
| Boyle, Sir Edward | Garner-Evans, E. H. (Denbigh) | Lucas, Sir Jocelyn (Portsmouth, S.) |
| Bracken, Rt. Hon. B. | Gates, Maj. E. E. | Lucas, P. B. (Brentford) |
| Braine, B. R. | George, Lady Megan Lloyd | Lucas-Tooth, Sir Hugh |
| Braithwaite, Sir Albert (Harrow, W.) | Glyn, Sir Ralph | Lyttelton, Rt. Hon. O. |
| Braithwaite, Lt.-Cr. G. (Bristol, N. W.) | Gomme-Duncan, Col. A. | McAdden, S. J. |
| Bromley-Davenport, Lt.-Col. W. | Gridley, Sir Arnold | McCorquodale, Rt. Hon. M. S. |
| Brooke, Henry (Hampstead) | Grimond, J. | Macdonald, A. J. F. (Roxburgh) |
| Browne, Jack (Govan) | Grimston, Hon. John (St. Albans) | Macdonald, Sir Peter (I. of Wight) |
| Buchan-Hepburn, P. G. T. | Grimston, Robert (Westbury) | Mackeson, Brig. H. R. |
| Bullock, Capt. M. | Harden, J. R. E. | McKibbin, A. |
| Bullus, Wing Commander E. E. | Hare, Hon. J. H. (Woodbridge) | McKie, J. H. (Galloway) |
| Burden, F. A. | Harris, Frederic (Croydon, N.) | Maclay, Hon. John |
| Butcher, H. W. | Harris, Reader (Heston) | Maclean, Fitzroy |
| Butler, Rt. Hn. R. A. (Saffron Walden) | Harvey, Air Cdre. A. V. (Macclesfield) | MacLeod, Iain (Enfield, W.) |
| Carr, Robert (Mitcham) | Harvey, Ian (Harrow, E.) | MacLeod, John (Ross and Cromarty) |
| Carson, Hon. E. | Harvie-Watt, Sir George | Macmillan, Rt. Hon. Harold (Bromley) |
| Channon, H. | Hay, John | Macpherson, Major Niall (Dumfries) |
| Churchill, Rt. Hon. W. S. | Headlam, Lt.-Col. Rt. Hon. Sir Cuthbert | Maitland, Cmdr. J. W. |
| Clarke, Col. Ralph (East Grinstead) | Heald, Lionel | Manningham-Buller, R. E. |
| Clarke, Brig. Terence (Portsmouth, W.) | Henderson, John (Cathcart) | Marlowe, A. A. H. |
| Clyde, J. L. | Hicks-Beach, Maj. W. W. | Marshall, Douglas (Bodmin) |
| Colegate, A. | Higgs, J. M. C. | Marshall, Sidney (Sutton) |
| Conant, Maj. R. J. E. | Hill, Dr. Charles (Luton) | Maude, Angus (Ealing S.) |
| Cooper, Sqn. Ldr. Albert (Ilford, S.) | Hill, Mrs. E. (Wythenshawe) | Maude, John (Exeter) |
| Cooper-Key, E. M. | Hinchingbrooke, Viscount | Maudling, R. |
| Corbett, Lt.-Col. Uvedale (Ludlow) | Hirst, Geoffrey | Medlicott, Brig. F. |
| Craddock, Beresford (Spelthorne) | Holmes, Sir Stanley (Harwich) | Mellor, Sir John |
| Cranborne, Viscount | Hope, Lord John | Molson, A. H. E. |
| Crookshank, Capt. Rt. Hon. H. F. C. | Hopkinson, Henry | Monckton, Sir Walter |
| Crosthwaite-Eyre, Col. O. E. | Hornsby-Smith, Miss. P. | Moore, Lt.-Col. Sir Thomas |
| Crouch, R. F. | Horsbrugh, Rt. Hon. Florence | Morris, Hopkin (Carmarthen) |
| Crowder, Capt. John (Finchley) | Howard, Gerald (Cambridgeshire) | Morrison, John (Salisbury) |
| Crowder, Petre (Ruislip—Northwood) | Howard, Greville (St. Ives) | Morrison Rt. Hon. W. S. (Cirencester) |
| Cundiff, F. W. | Hudson, Sir Austin (Lewisham, N.) | Mott-Radclyffe, C. E. |
| Cuthbert, W. N. | Hudson, Rt. Hon. Robert (Southport) | Nabarro, G. |
| Darling, Sir William (Edinburgh, S.) | Hudson, W. R. A. (Hull, N.) | Nicholls, Harmar |
| Davidson, Viscountess | Hutchinson, Geoffrey (Ilford, N.) | Nicholson, G. |
| Davies, Rt. Hon. C. (Montgomery) | Hutchison, Lt.-Com. Clark (E'b'rgh W.) | Nield, Basil (Chester) |
| Noble, Cmdr. A. H. P. | Ropner, Col. L. | Thompson, Lt.-Cmdr. R. (Croydon, W.) |
| Nugent, G. R. H. | Russell, R. S. | Thorneycroft, Peter (Monmouth) |
| Nutting, Anthony | Ryder, Capt. R. E. D. | Thornton-Kemsley, Col. C. N. |
| Oakshott, H. D. | Salter, Rt. Hon. Sir Arthur | Thorp, Brig. R. A. F. |
| Odey, G. W. | Savory, Prof. D. L. | Tilney, John |
| O'Neill, Rt. Hon. Sir Hugh | Scott, Donald | Turner, H. F. L. |
| Ormsby-Gore, Hon. W. D. | Shepherd, William | Turton, R. H. |
| Orr, Capt. L. P. S. | Smiles, Lt.-Col. Sir Walter | Tweedsmuir, Lady |
| Orr-Ewing, Charles Ian (Hendon, N.) | Smithers, Peter (Winchester) | Vane, W. M. F. |
| Orr-Ewing, Ian L. (Weston-super-Mare) | Smyth, Brig. J. G. (Norwood) | Vaughan-Morgan, J. K. |
| Osborne, C. | Snadden, W. McN. | Wade, D. W. |
| Peake, Rt. Hon. O. | Soames, Capt. C. | Wakefield, Edward (Derbyshire, W.) |
| Perkins, W. R. D. | Spearman, A. C. M. | Wakefield, Sir Wavell (Marylebone) |
| Peto, Brig. C. H. M. | Spence, H. R. (Aberdeenshire, W.) | Walker-Smith, D. C. |
| Pickthorn, K. | Spens, Sir Patrick (Kensington, S.) | Ward, Hon. George (Worcester) |
| Pitman, I. J. | Stanley, Capt. Hon. Richard (N. Fylde) | Ward, Miss. I. (Tynemouth) |
| Powell, J. Enoch | Stevens, G. P. | Waterhouse, Capt. Rt. Hon. C. |
| Price, Henry (Lewisham, W.) | Steward, W. A. (Woolwich, W.) | Watkinson, H. |
| Prior-Palmer, Brig. O. | Stewart, Henderson (Fife, E.) | Webbe, Sir H. (London & Westminster) |
| Profumo, J. D. | Stoddart-Scott, Col. M. | Wheatley, Maj. M. J. (Poole) |
| Raikes, H. V. | Storey, S. | White, Baker (Canterbury) |
| Rayner, Brig. R. | Strauss, Henry (Norwich, S.) | Williams, Charles (Torquay) |
| Redmayne, M. | Stuart, Rt. Hon. James (Moray) | Williams, Gerald (Tonbridge) |
| Remnant, Hon. P. | Studholme, H. G. | Williams, Sir Herbert (Croydon, E.) |
| Renton, D. L. M. | Summers, G. S. | Wilts, G. |
| Roberts, Emrys (Merioneth) | Sutcliffe, H. | Wilson, Geoffrey (Truro) |
| Roberts, Maj. Peter (Heeley) | Taylor, Charles (Eastbourne) | Winterton, Rt. Hon. Earl |
| Robertson, Sir David (Caithness) | Taylor, William (Bradford, N.) | Wood, Hon. R. |
| Robinson, Roland (Blackpool, S.) | Teeling, W. | York, C. |
| Robson-Brown, W. | Teevan, T. L. | |
| Rodgers, John (Sevenoaks) | Thomas, J. P. L. (Hereford) | TELLERS FOR THE AYES: |
| Roper, Sir Harold | Thompson, Kenneth Pugh (Walton) | Mr. Vosper and Mr. Heath. |
| NOES | ||
| Acland, Sir Richard | Corbet, Mrs. Freda (Peckham) | Grenfell, D. R. |
| Adams, Richard | Cove, W. G. | Grey, C. F. |
| Albu, A. H. | Craddock, George (Bradford, S.) | Griffiths, David (Rother Valley) |
| Allen, Arthur (Bosworth) | Crawley, A. | Griffiths, Rt. Hon. James (Llanelly) |
| Allen, Scholefield (Crewe) | Crosland, C. A. R. | Griffiths, William (Exchange) |
| Anderson, Alexander (Motherwell) | Crossman, R. H. S. | Gunter, R. J. |
| Anderson, Frank (Whitehaven) | Cullen, Mrs. A. | Hale, Joseph (Rochdale) |
| Attlee, Rt. Hon. C. R. | Daines, P. | Hale, Leslie (Oldham, W.) |
| Awbery, S. S. | Dalton, Rt. Hon. H. | Hall, John (Gateshead, W.) |
| Ayles, W. H. | Darling, George (Hillsborough) | Hall, Rt. Hon. Glenvil (Come Valley) |
| Bacon, Miss. Alice | Davies, A. Edward (Stoke, N.) | Hamilton, W. W. |
| Baird, J. | Davies, Harold (Leek) | Hannan, W. |
| Balfour, A. | Davies, Stephen (Merthyr) | Hardman, D. R. |
| Barnes, Rt. Hon. A. J. | de Freitas, Geoffrey | Hardy, E. A. |
| Bartley, P. | Deer, C. | Hargreaves, A. |
| Bellenger, Rt. Hon. F. J. | Delargy, H. J. | Hastings, S. |
| Benn, Wedgwood | Dodds, N. N. | Hayman, F. H. |
| Benson, G. | Donnelly, D. | Henderson, Rt. Hon. Arthur (Tipton) |
| Beswick, F. | Driberg, T. E. N. | Herbison, Miss. M. |
| Bevan, Rt. Hon. A. (Ebbw Vale) | Dugdale. Rt. Hon. John (W. Bromwich) | Hewitson, Capt. M. |
| Bing, G. H. C. | Dye, S. | Hobson, C. R. |
| Blenkinsop, A. | Ede, Rt. Hon. J. C. | Holman, P. |
| Blyton, W. R. | Edelman, M. | Holmes, Horace (Hemsworth) |
| Boardman, H. | Edwards, John (Brighouse) | Houghton, D. |
| Booth, A. | Edwards, Rt. Hon. Ness (Caerphilly) | Hoy, J. |
| Bottomley, A. G. | Edwards, W. J. (Stepney) | Hubbard, T. |
| Bowden, H. W. | Evans, Albert (Islington, S. W.) | Hudson, James (Ealing, N.) |
| Bowles, F. G. (Nuneaton) | Evans, Edward (Lowestoft) | Hughes, Emrys (S-Ayrshire) |
| Braddock, Mrs. Elizabeth | Evans, Stanley (Wednesbury) | Hughes, Hector (Aberdeen, N.) |
| Brook, Dryden (Halifax) | Ewart, R. | Hynd. H. (Accrington) |
| Brooks, T. J. (Normanton) | Fernyhough, E. | Hynd, J. B. (Attercliffe) |
| Broughton, Dr. A. D. D. | Field, Capt. W. J. | Irvine, A. J. (Edge Hill) |
| Brown, Rt. Hon. George (Belper) | Finch, H. J. | Irving, W. J. (Wood Green) |
| Brown, Thomas (Ince) | Fletcher, Eric (Islington, E.) | Isaacs, Rt. Hon. G. A. |
| Burke, W. A. | Follick, M. | Janner. B. |
| Burton, Miss. E. | Foot, M. M. | Jay, D. P. T. |
| Butler, Herbert (Hackney, S.) | Forman, J. C. | Jeger, George (Goole) |
| Callaghan, L. J. | Fraser, Thomas (Hamilton) | Jeger, Dr. Santo (St. Pancras, S.) |
| Carmichael, J. | Freeman, John (Watford) | Jenkins, R. H. |
| Castle, Mrs. B. A. | Freeman, Peter (Newport) | Johnson, James (Rugby) |
| Champion, A. J. | Gaitskell, Rt. Hon. H. T. N. | Johnston, Douglas (Paisley) |
| Chetwynd, G. R. | Ganley, Mrs. C. S. | Jones, David (Hartlepool) |
| Clunie, J. | Gibson, C. W. | Jones, Frederick Elwyn (W. Ham, S.) |
| Cocks, F. S. | Gilzean, A. | Jones, Jack (Rotherham) |
| Coldrick, W. | Glanville, James (Consett) | Jones, William Elwyn (Conway) |
| Collindridge, F. | Gooch, E. G. | Keenan, W. |
| Cook, T. F. | Gordon-Walker, Rt. Hon. P. C. | Kenyon, C. |
| Cooper, Geoffrey (Middlesbrough, W.) | Greenwood, Anthony (Rossendale) | King, Dr. H. M. |
| Cooper, John (Deptford) | Greenwood, Rt. Hn. Arthur (Wakefield) | Kinghorn, Sqn. Ldr. E. |
| Kinley, J. | O'Brien, T. | Strauss, Rt. Hon. George (Vauxhall) |
| Kirkwood, Rt. Hon. D. | Oldfield, W. H. | Stross, Dr. Barnett |
| Lang, Gordon | Oliver, G. H. | Summerskill, Rt. Hon. Edith |
| Lee, Frederick (Newton) | Orbach, M. | Sylvester, G. O. |
| Lee, Miss. Jennie (Cannock) | Padley, W. E. | Taylor, Bernard (Mansfield) |
| Lever, Leslie (Ardwick) | Paget, R. T. | Taylor, Robert (Morpeth) |
| Lewis, Arthur (West Ham, N.) | Paling, Rt. Hon. W. (Dearne Valley) | Thomas, David (Aberdare) |
| Lewis, John (Bolton, W.) | Paling, Will T. (Dewsbury) | Thomas, George (Cardiff) |
| Lindgren, G. S. | Pannell, T. C. | Thomas, Iorwerth (Rhondda, W.) |
| Lipton, Lt.-Col. M. | Pargiter, G. A. | Thomas, Ivor Owen (Wrekin) |
| Logan, D. G. | Parker, J. | Thorneycroft, Harry (Clayton) |
| Longden, Fred (Small Heath) | Paton, J. | Thurtle, Ernest |
| McAllister, G. | Peart, T. F. | Timmons, J. |
| MacColl, J. E. | Poole, C. | Tomney, F. |
| McGhee, H. G. | Popplewell, E. | Turner-Samuels, M. |
| McGovern, J. | Porter, G. | Ungoed-Thomas, Sir Lynn |
| McInnes, J. | Price, Philips (Gloucestershire, W.) | Usborne, H. |
| Mack, J. D. | Proctor, W. T. | Vernon, W. F. |
| McKay, John (Wallsend) | Pryde, D. J. | Viant, S. P. |
| Mackay, R. W. G. (Reading, N.) | Pursey, Cmdr. H. | Wallace, H. W. |
| McLeavy, F. | Rankin, J. | Watkins, T. E. |
| MacMillan, Malcolm (Western Isles) | Rees, Mrs. D. | Webb, Rt. Hon. M. (Bradford, C.) |
| McNeil, Rt. Hon. H. | Reeves, J. | Weitzman, D. |
| MacPherson, Malcolm (Stirling) | Reid, Thomas (Swindon) | Wells, Percy (Faversham) |
| Mainwaring, W. H. | Reid, William (Camlachie) | Wells, William (Walsall) |
| Mallalieu, E. L. (Brigg) | Rhodes, H. | West, D. G. |
| Mallalieu, J. P. W. (Huddersfield, E.) | Richards, R. | Wheatley, Rt. Hon. John (Edinb'gh E.) |
| Mann, Mrs. Jean | Robens, Rt. Hon. A. | White, Mrs. Eirene (E. Flint) |
| Manuel, A. C. | Roberts, Goronwy (Caernarvonshire) | White, Henry (Derbyshire, N. E.) |
| Marquand, Rt. Hon. H. A. | Robertson, J. J. (Berwick) | Whiteley, Rt. Hon. W. |
| Mathers, Rt. Hon. G. | Robinson, Kenneth (St. Pancras, N.) | Wilcock, Group Capt. C. A. B. |
| Mellish, R. J. | Rogers, George (Kensington, N.) | Wilkes, L. |
| Messer, F. | Ross, William (Kilmarnock) | Wilkins, W. A. |
| Middleton, Mrs. L. | Royle, C. | Willey, Frederick (Sunderland) |
| Mikardo, Ian. | Shawcross, Rt. Hon. Sir Hartley | Willey, Octavius (Cleveland) |
| Mitchison, G. R. | Shinwell, Rt. Hon. E. | Williams, David (Neath) |
| Moeran, E. W. | Shurmer, P. L. E. | Williams, Rev. Llywelyn (Abertillery) |
| Monslow, W. | Silverman, Julius (Erdington) | Williams, Ronald (Wigan) |
| Moody, A. S. | Silverman, Sydney (Nelson) | Williams, Rt. Hon. Thomas (Don V'lly) |
| Morgan, Dr. H. B. | Simmons, C. J. | Williams, W. T. (Hammersmith, S.) |
| Morley, R. | Slater, J. | Wilson, Rt. Hon. Harold (Huyton) |
| Morris, Percy (Swansea, W.) | Smith, Ellis (Stoke, S.) | Winterbottom, Ian (Nottingham, C.) |
| Morrison, Rt. Hon. H. (Lewisham S.) | Smith, Norman (Nottingham, S.) | Winterbottom, Richard (Brightside) |
| Mort, D. L. | Snow, J. W. | Wise, F. J. |
| Moyle, A. | Sorensen, R. W. | Woodburn, Rt. Hon. A. |
| Mulley, F. W. | Soskice, Rt. Hon. Sir Frank | Woods, Rev. G. S. |
| Murray, J. D. | Steele, T. | Wyatt, W. L. |
| Nally, W. | Stewart, Michael (Fulham, E.) | Yates, V. F. |
| Neal, Harold (Bolsover) | Stokes, Rt. Hon. R. R. | |
| Noel-Baker, Rt. Hon. P. J. | Strachey, Rt. Hon. J. | TELLERS FOR THE NOES: |
| Mr. Pearson and Mr. Sparks. |
Question put, and agreed to.
§ Motion made, and Question proposed, "That the Clause stand part of the Bill."
§ 9.45 p.m.
§ Captain Ryder (Merton and Morden)As the Amendment standing in my name and those of some of my hon. Friends has not been called, I should like to take this opportunity of calling attention to it and of giving some explanation why we put it down. I think I can do so briefly by drawing a comparison, and the particular comparison which I would like to draw is between the family of a married man with no children, who has a personal allowance of £190 under this Bill, and a family of different composition but of the same size, namely, a widow with a child, whose aggregate personal allowance amounts to £110 for herself and £70 for the child, making up £180 in all, or £10 less than the married man with no children. I quite see that it may be argued 1350 that young people cost less to feed and clothe, but very often they eat a great deal, and, of course, the more they eat, the quicker they grow out of their clothes.
When we consider the general position and the financial strength of these two families, we see that the married man with no children is in a far stronger position, because, in most cases, both he and his wife are in a position to go out and earn a full wage, whereas the widow with a child to tend will undoubtedly find it very much more difficult to earn even a single full wage. I feel, therefore, that it is very wrong that the widow with her child should be more heavily taxed than any other section of the community, and the remedying of that situation was, briefly, the object of our Amendment.
On the subject of personal allowances, the person who seems to come out best 1351 is the man who, having selected his prospective wife, then refrains from going through any of the normal forms of marriage. In that case, the couple would have an aggregate personal allowance of £220, or £40 more than the widow with her child. I should like to know what peculiar ramification of the Treasury mind gives the man living in sin the most favourable form of tax relief, and the unfortunate widow with her child the highest rate of tax. I ask the Committee to consider this matter between now and Report stage.
I believe that this anomaly can best be remedied by increasing the allowance for the child of the widow, and that is how we sought to do it in our Amendment. I should be grateful if the Financial Secretary would consider this matter and would let us know what it would have cost the Revenue to concede what we were asking for in the Amendment, and, also, if he would consider the matter between now and the Report stage.
§ Mr. PitmanI should like to take this opportunity to say a few words in regard to the children's allowance. That allowance has been raised to £80 per child. That is an excellent thing, but I think we ought to take cognisance of the fact that £80 is still far too low. If we really take seriously what has been found by the Royal Commission on Population, then we ought to do everything we can to make the lot of the parents of the children of the coming generation as tolerable as possible. The Royal Commission have found that the tendency will be for a steady fall of population, and they have drawn careful attention, in a very fine way indeed, to the way in which the cost of families is keeping down the rate of reproduction of the people of this country.
There is an excellent summary of that Royal Commission's Report published by the "News Chronicle." A short passage from that summary says:
The progressive raising of the school leaving age is an obvious way in which a social improvement operates to handicap larger families. With the raising of the age to 16 in the future, a working-class family of three children will experience an income loss greater on average than the gain they will derive over the period of the children's dependency from the payment of family allowances.1352 It is perfectly true that, in so far as it refers to family allowances, that is out of order, except that the family allowances, as the Committee will know, are brought back into the income of the parent and he has to pay his Income Tax on the family allowance when he receives it. Therefore, at our present rate of 9s. 6d.—I will not worry the Committee with the fractional calculations—anybody who pays the full rate of tax is not receiving 5s. a week for the second child but only 2s. 6d. a week.The consequence of what we are talking about is very well set out in a publication by "Political and Economic Planning" called "Population Policy in Great Britain." In that book published in April, 1948, there is on page 188 a table showing the net result after family allowances, taxation and the estimated cost per child. I have re-worked it out having regard to the changes that have taken place in the marriage allowance and in the children's allowance—both of which have improved the situation—in the earned income allowance, and also in the increased cost of living.
That table gives figures for a man with no children, a man with one child, a man with two children and a man with three children, and of course the ages of the children are assumed to vary fairly considerably; that is, a man with three children has some who are older, and, judging by my own family, fairly voracious eaters and fairly destructive of clothing, and naturally in that table the cost of the child goes up. They have done their very best in their surveys to find out what the people of this country spend on their children. They have found—and we quite understand it—that as a man's wages go up and his family income increases, he likes to spend a little more on his children. He likes to give his children the very best he can, and in consequence, with each raising of his "take home" pay, he is paying a larger sum out of his income to his children.
The extraordinary situation which arises is that, even after allowing for the increased allowances which this Budget contains and after taking into account a 5 per cent. increase for each of the four years for maintaining children, we still get a very serious situation. With a salary of £260 a year—that is to say, £5 a week—the father and mother with three children 1353 have only £166 per annum left for themselves after paying tax and after feeding and clothing, but not educating, their children. On the other hand, the married couple with no children whatever have a net spendable income of £257. In other words, we are penalising the father and mother with three children to the extent of £91 a year, and £91 a year is a very heavy penalty on somebody who is drawing only £5 a week.
It may be said that that particular level of wages is not relevant to this Clause because people at that level are not paying Income Tax at all if they have three children. But the moment we consider salaries of about £9 12s. a week, we find the same sort of thing happening. We find a penalisation of the man and woman with three children of no less than £140 10s. a year, and when we get to the figure of £750 the penalisation there is as high as £266 3s. a year.
Any taxation system ought to be adjusted to the ability to pay. That is what we have always prided ourselves upon in our Income Tax system and in our Finance Acts, and I do not think we ought to let this Clause pass without realising that we are denying that very principle of the ability to bear taxes. The Financial Secretary will appreciate that my argument becomes stronger with the more children involved, but I have limited myself to a calculation of the effect of the new rates of tax based upon the table in this book which I have obtained from the Library.
I ask the Chancellor of the Exchequer to consider carefully the question of raising the children's allowance to such a height that within the terms of this very fair calculation we do not impose a higher burden on the father and mother with a big family and that we do not, therefore, discourage large families, and put a high premium on families with no children at all.
§ 10.0 p.m.
§ Colonel J. R. H. HutchisonMy hon. Friend the Member for Bath (Mr. Pitman) has pointed out an anomaly and an imperfection in this Clause. I think he was right to point it out, and I should like to draw attention to another imperfection. I hope that the Financial Secretary will realise that this is a discrepancy or an anomaly which has escaped the eye 1354 of scrutiny of the Treasury and which they never intended to continue. It may be that the hon. Gentleman will have time to look at it before the Report stage, but if not I hope that he will look at it before next year.
I think the Committee will agree that we must in no way discourage a young man about to enter industry from becoming skilled in that industry and from taking up an apprenticeship in the proper way. Such people form one of the components of a successful industrial machine. Under the Finance Act, 1920, which was later amended, a parent was allowed a deduction of £60—which was later raised to £70—from his chargeable income for any child under 16, provided that child had not in his own right £70 a year.
I wonder if I could have the hon. Gentleman's attention for a moment; I shall not keep the House long; possibly the Financial Secretary knows the story already, but I do not believe he does. The same allowance can be obtained for a child over 16 who is continuing to carry on full education in an educational establishment. In that case the father is still entitled to a taxation deduction of £70 for his child, if the child is not in possession of £70 a year of his own. But if the child becomes an apprentice, being over the age of 16, then he is allowed to have an income of only £13 a year before his father begins to lose the deduction from his chargeable income.
That is clearly quite wrong. In the case of the child going to a university, who is entitled to have his education free by bursary or scholarship, he is entitled to £70 income of his own; whereas, on the other hand, we have the case of another child of the same age—both being over 16—who is trying to learn a trade and who has become a skilled apprentice; and in that case the father is discouraged from allowing his son to become an apprentice because of the fact that he is deprived of the tax allowance. I do not believe this was ever intended. As a result, the tendency is for the father to urge the child to go into a dead-end job instead of becoming an apprentice—which is the very thing we wish to avoid at the present time.
May I leave the matter in the hands of the Financial Secretary, because I believe it is an anomaly which has not 1355 been spotted? I tried to put down an Amendment on the subject, but, because of my uninstructed method of writing Amendments, it was out of order. Had it been in order I should have had a better opportunity of arguing the whole case. I will leave the matter with the Financial Secretary, asking him if he will look into it, if possible before the Report stage and, if not, at any rate before another Budget.
§ Major Legge-BourkeThere is one other point I should like to leave in the Chancellor's mind before we pass from the Clause. All of us look upon this Clause as extremely important, because it gives facility to the right hon. Gentleman to try to ease the burden where it is almost too heavy to bear. When hon. Members opposite in their party publications, as for example the Labour Party Handbook for 1951, say:
The main burden of direct taxation is placed fairly on those who can best bear itwe can only assume that they believe it; but we certainly speak truthfully when we say that we know of many cases in our own constituencies of people who are suffering real hardship and who are not those who can best bear it.There is one category which I ask the Committee, and particularly the right hon. Gentleman, not to forget. There are some people who, when the National Insurance Act of 1946 came into operation, were not qualified to receive an increased old age pension or, indeed, in some cases were not qualified to receive any old age pension at all because they had not paid the necessary number of contributions or had not started to pay at the right date, whatever it may have been. Some of these people are also widows or widowers and, as matters stand today, they cannot obtain the allowance to which a married person is entitled, even though many of their married responsibilities still continue. It is those people, I believe, who are having a very hard time indeed today.
I am not saying that they are necessarily in the lowest income groups in the country, but I think that, although hon. Members opposite feel that it is desirable that everybody should have exactly the same income, they would agree that today incomes are not all equal and that, therefore, comparative values are very im- 1356 portant when considering this matter, and that if someone has had a very reasonable expectation of a certain standard of living at the end of his or her life there is very great bitterness and very great hardship suffered if, for reasons purely of taxation, that person is unable to enjoy that standard of living.
I have a particular case in mind of a man aged 67. He has a daughter. He has pointed out to me that if he were prepared to employ his daughter as his housekeeper he would get some slight relief for that, but that if he were to do so it would be a gross injustice to her, because she can earn a far higher income elsewhere than he is able to pay her for working for him. He is trying to do his best for his daughter, and he is not employing her as his housekeeper. She is employed elsewhere. He is finding the cost of maintaining the house he saved up to buy—I know that in the opinion of some hon. Members opposite that is a cardinal sin these days—harder and harder to bear. He has a fixed pension by virtue of his employment, and its value is getting less and less. That man is suffering—and many people in the same category are suffering—very severely.
Judging by what the right hon. Gentleman has been able to do for us so far in this debate, it does not appear that we have yet reached that stage at which he is prepared to distribute that little bit he has got in reserve. We have understood from past Chancellors in the last Parliament and in this that a Chancellor keeps something in reserve to try to meet particular hardships brought to light in debates on Finance Bills. Apparently, we have not reached the right stage yet at which the right hon. Gentleman can help, and, therefore I suppose that the right hon. Gentleman will not be able to do very much about this sort of hardship that I have mentioned.
In the light of that, I hope the Committee will forgive me if I call attention to one very important feature of our political activity that is going on at the moment, and that is the work of the Royal Commission which was announced by the Prime Minister on 27th July last year—the Royal Commission looking into taxation problems. The Royal Commission has sent out a questionnaire—though to whom it has been sent out I am not quite certain. It has formulated a list 1357 of questions which it would welcome evidence, and one of the questions—No. 11—is:
Are alterations necessary in the rules governing personal and other allowances?If the right hon. Gentleman were to argue that while this Royal Commission is sitting we really cannot alter personal allowances, I should say that there may be some force in that argument; but I do not think it would ever absolve him from his responsibility of doing something to rectify a real hardship or injustice which is noticed and is proved beyond all doubt. If he has any doubts about the measure of the injustice which I have tried to indicate to him, I hope that anyone in circumstances similar to those of the person I have mentioned will take the opportunity of putting his or her case before the Royal Commission.I should like to see that Royal Commission inundated with paper. Every post should be a bumper post for that Royal Commission, because one knows from going round one's constituency that there are 101 cases of hardship—all of them with slightly different features, but all of them disclosing a very real hardship or a very real grievance. It seems to me that this Royal Commission should be better known. I very much doubt whether 10 per cent. of the country realise that that Commission is sitting at the moment. If the Chancellor is not able tonight to give any satisfaction in this matter, will he at once take steps to ensure that every taxpayer is made aware of this Royal Commission, which has invited observations on present tax injustice, because judging by the number of pieces of paper the tax office sends to me—
§ The Deputy-Chairman (Colonel Sir Charles MacAndrew)The hon. and gallant Gentleman is now going beyond the terms of Clause 15.
§ Major Legge-BourkeI appreciate that if I had made the main burden of my case what the Royal Commission ought to do and ought not to do, I should have been out of order. What I am trying to do here is to put before the Committee what I believe to be a genuine grievance, and to suggest one way in which the Chancellor might help to overcome that grievance. It is a grievance arising out of something in the Clause, namely, per- 1358 sonal allowances, and I am trying to suggest how the Chancellor might rectify this matter.
§ The Deputy-ChairmanThe hon. and gallant Gentleman cannot now discuss grievances, which are not in the Clause. He can discuss only what is in the Clause, and there is nothing in it about the Royal Commission. I have been very generous to him so far, but I must ask him now to confine his remarks to what is in the Clause.
§ Major Legge-BourkeSurely if an hon. Member has a suggestion about how to overcome a grievance which arises out of the Clause under discussion, it is his duty to put forward that suggestion.
§ The Deputy-ChairmanOn the Question "That the Clause stand part of the Bill" nothing can be discussed except that which is in the Clause. I have already been very generous in allowing the hon. and gallant Gentleman to go far beyond that.
§ Major Legge-BourkeI will do my best to abide by your Ruling.
I have put before the Chancellor what I believe to be a genuine grievance. I believe that the personal allowances, which have been increased as a result of this Clause, are by no means adequate. The Clause leaves out a section of the community which deserves more consideration, and I believe that the Chancellor has a duty to those people to use some of the paper sent out by the tax offices to let them know how they can air their grievances before the Royal Commission.
§ Mr. Butcher (Holland with Boston)After the well-reasoned statements of the hon. Member for Bath (Mr. Pitman) and the hon. and gallant Member for Scotstoun (Colonel Hutchison), surely the Committee is entitled to at least the courtesy of some reply.
§ Mr. JayI did not wish to take up the time of the Committee, but out of courtesy to the hon. and gallant Member for Merton and Morden (Captain Ryder), I should like to answer one question which he put to me. He asked what would be the cost of the Amendment standing in his name, which unfortunately for him was not called, affecting child allowances 1359 for widows. The cost would be £1 million in a full year. Secondly, I should like to assure the hon. and gallant Member for Scotstoun (Colonel Hutchison) that the point he raised concerning apprentices will not be overlooked.
§ Clause ordered to stand part of the Bill.
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cc1359-575
- Clause 16.—(SUSPENSION OF INITIAL ALLOWANCES.) 90,425 words, 11 divisions cc1575-8
- Clause 17.—(ACQUISITION OF NEW SOURCES OF INCOME UNDER CASE III. IV OR V OF SCHEDULE D.) 874 words c1578
- Clause 20.—(ARMED FORCES, ETC.) 164 words cc1578-625
- Clause 23.—(POWER TO OBTAIN INFORMATION AS TO INTEREST PAID OR CREDITED WITHOUT DEDUCTION OF TAX.) 19,658 words, 3 divisions