HC Deb 14 June 1951 vol 488 cc2595-609

(1) If it is shown in the case of a person assessed to income tax under Schedule D or Schedule E in respect of any earned income that by reason of his being a disabled person he is obliged to incur and defray out of such earned income additional expense in travelling by a motor car invalid carriage or other mechanically-propelled vehicle between his residence and his work, the additional expense so incurred and defrayed shall be allowed as a deduction from the earned income in computing the amount of the assessment thereon, so however that not more than fifty pounds shall be so allowed in the case of any person in any year.

(2) If it is shown in the case of a person holding a public office or employment not being an office or employment of profit that by reason of his being a disabled person he is obliged to incur and defray additional expense in travelling by a motor car invalid carriage or other mechanically-propelled vehicle between his residence and his work or in travelling in the performance of the duties of the office or employment; the additional expense so incurred and defrayed shall be deducted from or set off against any income of that person for the year of assessment in which the additional expense is so incurred and defrayed and tax shall where necessary be discharged or repaid accordingly and the total income of that person for that year of assessment shall be calculated accordingly for all the purposes of the Income Tax Acts, so however that not more than fifty pounds shall be so allowed in the case of any person in any year.

(3) For the purposes of this section—

  1. (a) the expression "disabled person" means a person who, on account of injury, disease, or congenital deformity, is substantially handicapped in travelling between his residence and his work except by means of a motor car or invalid chair;
  2. (b) the expression "earned income" means earned income as defined in subsection (3) of section fourteen of the Income Tax Act, 1918;
  3. (c) the expression "public office or employment" means any office or employment 2596 belonging to any court of justice in the United Kingdom or under any public institution or on any public foundation of whatever nature or under any local authority or in connexion with any body of persons established for charitable purposes only.—[Sir I. Fraser.]

Brought up, and read the First time.

Sir Ian Fraser (Morecambe and Lonsdale)

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

Those of us whose names are attached to this new Clause have undertaken to discuss this matter as briefly as possible, and I hope that the Chancellor of the Exchequer and the Committee will not take that attitude of ours as indicating that we regard this as an unimportant case. On the contrary, to those concerned it is a very important case, but we have agreed to be very brief out of consideration for the Committee as a whole in the vast programme which it has ahead of it, and also because we feel that the disabled people for whom we speak would not wish in any way to take advantage of the Committee but rather to try and secure the good will of all parts of it. This is not in any sense a party matter, or perhaps I might say that it is an all-party matter—a matter in which Members of all parties will, I hope, feel that they are interested.

In a country where there is full employment, an ageing community and a shortage of all kinds of labour, it is in the community's interest to try and make sure that as many disabled persons as possible undertake a useful job of work. I mention the aspect of the benefit to the community first because that is perhaps the most important aspect of the case. If we can see at work a million people or half a million, or whatever the number may be, who would otherwise be doing nothing, living on the dole, pensions and charity of their neighbours and of the community, it is a very great accession to our earning power as a country and to our tax-paying power and our defence power.

No one put this view more strongly than the late Mr. Bevin. He was amongst the pioneers in bringing to aid the full employment of the disabled all the resources of the State. All those who cherish his memory and the exceptional services which he rendered in this field will perhaps listen with special attention to the plea I propose to make.

A very large number of disabled people—perhaps more than half of all of them—are able to undertake a job, and a few of them are only enabled to undertake a job if they can have a vehicle in which they can drive themselves to work. Whether it be a motor car provided by the Ministry of Pensions to a very limited number of special cases, or an invalid chair sometimes provided by the Ministry of Health, in several cases bought by the individual, or whether it be a motor car bought by the individual himself, there are a great many of these cases in which the only way they can get to work from home to office or factory is in their own transport. They cannot compete with the rush and bustle of public transport, and were it not for the motor car which they have saved up to buy, or which friends or organisations have helped them to get, they could not go to work.

7.30 p.m.

This Clause also deals with another group of disabled people—those who undertake voluntary work of different kinds. I would not try to measure the quality of work done which earns wages, salaries or fees with work done voluntary. Both are needed, both are important, and in both fields disabled persons have made, and can make, a very important contribution, whether it be on the bench of magistrates, in local political organisations, in the chairmanship of many local bodies in the villages and towns of our country or on local councils, or wherever it may be. There are a great many disabled people who do this work, and who can do it only if they are able to motor or to go by some kind of vehicle from place to place. That is why this Clause makes reference to these two kinds of people, those who earn and those who do not.

With Purchase Tax reaching its present height; with the Petrol Duty having been greatly increased, both this year and last year; with the cost of garages rising, whether one builds or hires or pays for a place in one; with repairs and tyres going to ever-higher prices, the cost of transport is a very real burden upon these people. Many of them, though employed, are not employed in as good a place or in as good work as they would have been if they were not disabled. We have put down this Clause because we think it a way in which some of the distinctions between disabled people may be blotted out.

This does not apply exclusively to ex-Service men, nor does it apply exclusively to those who have received gifts of motor cars from the State. It applies to all who have to use a vehicle because they are disabled. Though there are no precedents for an allowance of this kind, and it is therefore a new proposal, there are precedents for the method used in the drafting of this new Clause. To those precedents my hon. and learned Friend the Member for the City of Chester (Mr. Nield), should he catch your eye, Major Milner, will make what I believe to be convincing references.

At an earlier stage in the Bill, the Financial Secretary intimated that the Chancellor would give consideration to the case of a small number of persons who received their motor cars from the Ministry of Pensions, and would inquire whether the allowance they get is adequate. If he thought it was not, it is to be implied that he would authorise the Ministry of Pensions to increase it. This group to whom he is making this contingent concession, or at any rate this inquiry, is a group of some 1,500. The group to whom this Clause applies would be quite impossible to calculate. Clearly it cannot be more than a few thousand who are very deserving people.

On public and private grounds these individuals, battling away at a job of work against considerable physical difficulties, deserve the recognition of the community and the thanks of all of us. On those grounds I ask the Chancellor whether between now and the Report stage he will consider this matter, along with the other matter he has already promised to take into consideration, and will bring something to the House which will give very wide satisfaction among disabled people, and, I fancy, very wide satisfaction among taxpayers as a whole.

Mr. Wood (Bridlington)

I wish to emphasise some of the points made by my hon. Friend the Member for More-cambe and Lonsdale (Sir I. Fraser). I think I ought to declare an interest in this Clause, because I suppose if the Chancellor saw fit to accept it, or anything like it, I should be eligible for some benefit.

I feel that this Clause might be the best possible means of meeting the kind of case which both my hon. Friend and I put to the Financial Secretary on Clause 1. Also it might possibly be even more simple administratively than the kind of method or kind of suggestion we made on that occasion.

The third reason, and I think the greatest reason, for the Amendment is that I have been increasingly worried lately by the distinction which seems to be widening between those people who have been disabled in the wars and those other unfortunate people who have been disabled in their civilian occupation or by some accident. Although I think that a distinction to a certain extent is justified, I feel that we should be very watchful to see that that distinction is not drawn any wider. To illustrate this, I will read a letter which I received yesterday from a man who was disabled, but not in the war. He writes: Take myself for instance. I have both my right arm and right leg amputated, also my left ankle is very weak. I and my wife put all our savings into obtaining a small car to enable one to go to work, which I have to travel 13½ miles each way, my wages are not very large and to keep the car on the road with all the cost of running keeps us poor, yet there is no help for us fellows, and many of us would rather work than just laze around. I put to the Chancellor the same point as was made by my hon. Friend, that not the least in importance of the achievements of the late Mr. Bevin was his scraping of the barrel in the employment of all the disabled of the last war who could possibly be employed. I suggest that if the Chancellor sees fit to accept this Clause, or the spirit of it, on Report he will not only be treating all the disabled of both wars and the civilian disabled in the most equitable way, but he will give a great incentive to people like the writer of this letter who continue in employment despite the expense of travelling to and from their work in their own transport. He will also do the very greatest service to the disabled by maintaining as many as possible of them in full employment.

Mr. Messer (Tottenham)

For anybody to oppose this Clause would appear to be unsympathetic. I played some part in the passage of the Disabled Persons (Employment) Act and I think it would be considered that I am not unsympathetic to disabled people; but I am very doubtful whether the Clause, as worded, would accomplish what is required.

For many years I have realised that these disabled people are at a disadvantage, not only physically but financially. In the case of blind people, for instance, it is not merely the absence of sight but the fact that the absence of sight in itself presses most seriously upon their financial resources, because it is necessary for them to pay for assistance. One can visualise handicapped people, who have to wear splints and surgical boots, to whom walking any distance is a very great difficulty, and who are compelled to ride even small journeys at an expense which the ordinary person is not called upon to bear. But I should like to help all disabled people.

I wonder whether if this Clause would help. It says: If it is shown in the case of a person assessed to income tax under Schedule D…in respect of any earned income that by reason of his being a disabled person… Who is to decide that a man is a disabled person? What is the degree of disability which will enable a person to qualify? Under the Disabled Persons (Employment) Act, one must have a medical examination and be placed on the register. This Clause says nothing about the Register of Disabled Persons.

My view is that the way to meet this is not by remission of taxation but by a re-examination of the provisions of the Disabled Persons Employment) Act to see in what way the financial disadvantages which result from a disabled condition can be made good. It would be better that that financial hardship which is a consequence of a disability should be recognised, and that in a positive way compensation for that handicap should be given. But to do it by a remission of Income Tax would mean that some people would benefit and that those who do not pay Income Tax would still be at a disadvantage in comparison with a normal person. They would get no advantage from this provision.

In the circumstances, it would be unfair to those who do not pay Income Tax that they still should suffer a financial disability, but that those who are qualified to pay Income Tax should get a remission. Because of that, I think that the Chancellor would be justified in saying that this is a job which ought to be undertaken by one of the welfare Departments of the State and not by the Exchequer.

Mr. Basil Nield (City of Chester)

I am anxious to support as strongly as I can the case which has been made by my hon. Friend the Member for Morecambe and Lonsdale (Sir I. Fraser), in seeking a tax allowance for travelling expenses in respect of disabled persons. I am sorry that the hon. Member for Tottenham (Mr. Messer) does not feel that he can agree, at any rate fully, with this new Clause. I at once agree that he is sympathetic to the purpose of assisting these disabled persons, but he does not think that this is the right way to do it. In my remarks I think I can answer some of the points which he put to the Committee.

In order to assist the Treasury Bench I want to explain the background of the manner against which this Clause is drafted, so that it may be understood. In subsection (3) it will be noticed that various definitions are inserted. The definition of the expression "disabled person" comes from Section 1 of the Disabled Persons (Employment) Act, 1944. I think that answers one of the points raised by the hon. Member for Tottenham when he asked who was to decide who was a disabled person. It is defined, and the definition is drawn from that Statute of 1944. The definition of the expression "earned income" comes from Section 14 of the Income Tax Act, 1918. Finally, the definition of the expression "public office or employment" comes from Schedule E, rule 6, of the Income Tax Act, 1918.

As the Committee will be well aware, the general rule is that no deduction is normally allowed for the cost of travelling between a man's home and his place of work. My hon. Friend the Member for Morecambe and Lonsdale indicated that if I were fortunate enough to be able to address the Committee, I should mention that there is an example of a relaxation in regard to that rule which was introduced during the last war.

7.45 p.m.

By Section 26 of the Finance Act, 1942, it was provided that in the case of certain employed persons, if it is shown that their place of work, or their home, has been changed through circumstances connected with the war, and that the cost of travel has thereby been increased, an allowance should be made of up to £10 a year. That is still the position. That was a special case arising out of war conditions so, to that extent, we have one example of a relaxation of the general rule.

The issue which presents itself to the Committee is whether the circumstances which the new Clause contemplates warrant a further exception to the general rule in favour of disabled persons many of whom are disabled as a result of the war. I am most anxious to impress upon the right hon. Gentleman the Chancellor of the Exchequer the very strict limits within which this relief would be available. It is designed, in other words, to help the most deserving cases.

It will be noticed that four definite conditions must be fulfilled before the relief becomes available. The first is that the person must be assessed in respect of earned income; the next is that the person must be a disabled person; the third is that by reason of his disability he is obliged to incur additional expenses in travelling to and from his work; and the last is that this additional expense must come out of his earned income.

If a man has an additional expense by reason of his disability, then some relief by way of allowance should be granted. My hon. Friend the Member for Bridlington (Mr. Wood) has lent great weight to the argument which has been advanced. I believe that every Member of this Committee will rejoice that many disabled persons now have cars or special chairs which enable them to be much happier and more useful citizens. In many cases, Parliament has seen to it that that has been brought about.

I feel that the efforts of Parliament in this direction will be wasted if those who have these vehicles cannot afford to run and to maintain them. This proposal has been devised as a means of helping in these cases. I would with every earnestness commend it to the Committee as being a measure of relief which is right and just.

Mr. Gaitskell

I think that every hon. Member of this Committee has sympathy with the objects of this Clause. I entirely agree with everything said by the hon. Member for Morecambe and Lonsdale (Sir I. Fraser), and others about the desirability of disabled persons working. We can all take some pleasure in the fact that a good deal more is now done to secure that object as a result of the Act for which Mr. Bevin will always be remembered.

There would be, I am bound to tell the Committee, very great difficulties in accepting this Clause. I think that one can say there are three points of principle which are involved here, and I should like to take them one by one. First of all, there is the question whether or not there should be a special allowance to disabled persons on account of the additional expenses which, by reason of their disability, they have to incur. Second, there is the question whether or not there should be an allowance for travelling expenses between the residence and the place of work. Third, there is the question, to which I think the hon. Member for Morecambe and Lonsdale (Sir Ian Fraser) referred, of deductions from their total income of the cost of carrying out unpaid work.

To deal with the first question first—that is, the question of a special allowance for disabled persons—the difficulty is that this involves giving a special allowance because of the circumstances in which the individual taxpayer finds himself, and that, as it happens—I think the hon. and learned Member for the City of Chester (Mr. Nield) will remember—is a principle to which the Royal Commission of 1920 paid very special attention.

Some years ago, in 1944, the right hon. Gentleman the Member for Blackburn, West (Mr. Assheton), who was then Financial Secretary to the Treasury, was dealing with a Clause rather similar to this in respect of blind persons, and I make no apology for quoting, as he did then, what the Royal Commission of 1920 had to say on the subject. In paragraph 237, they said: We have been asked to recommend allowances for expenses arising out of illness or disability such as the travelling expenses of attendants of disabled persons; or to give compassionate rebate to persons who are compelled to maintain and pay personal attendants; or special relief to disabled persons in view of their decreased earning capacity. These claims, while differing in degree, all arise out of the personal or domestic circumstances of the taxpayer, and although we are conscious that in particular cases the operation of the general rule may result in individual hardship, we feel that we cannot advise any general relaxation of the principles on which the tax is levied. The right hon. Gentleman went on to say that, once you have strayed from this rule which the Royal Commission laid down, and to which all Chancellors have adhered ever since, he did not think it would be possible to avoid going down the slippery slope of concession after concession; the fact that there were hard cases did not necessarily mean that it was wise to alter the law.

I think he put it very well. Sometimes, we are accused of being very frightened of opening the door, but I think we have to be frightened at opening the door. In fact, some of the debates which we have had already show the great difficulty of making concessions without fully appreciating all that they imply, and this is a case in point.

There is the further point that, although the definition of "Disabled persons" is taken from the Disabled Persons (Employment) Act, 1944, that does not meet the point raised by my hon. Friend the Member for Tottenham (Mr. Messer), because what he was saying was that it would be impossible for the Inland Revenue to administer taxation on the basis of this definition. It would be very difficult, for example, for them to decide what was meant by "substantially handicapped." It would be left to them to make an individual decision in every case, and I do not think that one could possibly impose that upon them. After all, the ordinary Income Tax allowances are easy enough to determine—the number of children a man has, whether he has a wife or not, or a dependent relative and so on. Here, we would be imposing on them something quite different.

The second point of principle which is raised is the question of allowing Income Tax relief for travelling expenses; again, there is only one case where there was an exception, and that was a war-time one. Here again, the Royal Commission of 1920 went as far as to say: We are of the opinion that a general allowance for travellng expenses would result in very grave inequity. I think I should point out that some people live near their work and pay very much more in rent in order to do so, while other people live further away and pay less in rent but more for transport. I do not think that, even within the disabled category, we should find that there would be unanimity on a point of this kind, and it is quite contrary to the views, which I feel bound to uphold, of the Royal Commission and of all subsequent Chancellors.

Finally, there is the question of making an Income Tax allowance for the cost of carrying out unpaid duties. The hon. Member for Morecambe and Lonsdale asked me a Question on this subject not long ago—in fact, he asked me more than one—and I tried to point out to him that what he was asking us to do was to grant an allowance where no income was earned. I am afraid we cannot accept that. The allowances which are granted by the Income Tax authorities in the ordinary way must be in respect of earned income. They are expenses incurred in the earning of the money, and if no money is earned no allowance can be granted.

The remedy here is a very simple one. It is that the voluntary bodies for which this extra work is done can themselves pay the expenses, and they do in many cases. I should have thought that, in the case of disabled persons, they would obviously have the strongest incentive to do so. I hope the Committee will not misunderstand me or think that I am unsympathetic to the general view. I am very sympathetic, but this Clause is not the right way to deal with it. It would get us into very great difficulties in administering the law, and for that reason I am sorry to say that I cannot accept the Clause.

Captain Crookshank

I am sure that we all sympathise very much with the Chancellor in having to give the Committee this advice and not being able to hold out any hope at all that he will look at this again. I think all of us who were here when the debate on this Clause started must have been profoundly moved by the fact that the first and second speakers to the Clause are two hon. Members who fight against the most terrible disabilities, and that they have put the case, not on their own behalf of course, but on behalf of others who have suffered too.

The right hon. Gentleman has based himself largely, if not almost entirely, on the Report of the Royal Commission of 1920. I remember, as the right hon. Gentleman now finds out himself from personal experience, how that is bound to be the general answer which Chancellors are apt to give to anything which might smack of opening doors. I see that he has to put that case, but I think that on this issue, and possibly on some others, we have to remember that a quarter of a century has passed since that Royal Commission, and that, in this particular matter we are discussing today, there have been great changes.

The disabled of 1920 were not so numerous as they are now, owing to the second war from which we have all suffered. It is very true that, as a result of modern developments and not least the effects of the Act of 1944, it is fortunately the case that many more disabled persons are at work today, but the problem which presents itself now is very much larger than was the problem at the time when the Royal Commission of 1920 were considering it.

I realise that the right hon. Gentleman cannot do anything now, after the speech he has made, but I should like to ask him whether, on this and some similar points which were reported on in 1920, we do not require a re-assessment of this need in the changed circumstances of the time.

Mr. Houghton

Will the right hon. and gallant Gentleman allow me? I expected him to mention that there is now another Royal Commission on Income Tax which has already begun its work. May I suggest that this and some other matters might well be re-examined by that Royal Commission?

Captain Crookshank

I am surprised that the right hon. Gentleman did not use that argument, but, of course, since the hon. Member is no longer one of his advisers, it may have slipped out of the brief. I think that the Royal Commission might look into this in the light of the changes to which I have referred. That would be doing a useful piece of public work, I quite agree, and I suppose that in the meantime that is where the matter is going to be left.

It is quite true, and we all recognise it, that in the general case the particular personal and domestic circumstances of the taxpayer are very hard to bring within the ambit of the Income Tax law. The only point that ever turns up is whether the force of the argument in specific cases is so great as to be sufficient to overthrow the general rule. As my hon. and learned Friend the Member for the City of Chester (Mr. Nield) reminded the Committee, the rule has been broken in one specific instance, and I am happy to remember that it was in the Act of 1942 when I was concerned in these matters from the Treasury aspect. That was, of course, an exceptional wartime case.

8.0 p.m.

It may be that one should argue that this is an exceptional post-war case, but the hon. Gentlemen who moved and supported the new Clause made it quite clear that they would not wish this limited to war casualties. There, again, with the development and the possibilities of employment, coupled with the increasing use of the motor vehicle or chair for the purpose, that is a new development. Twenty-five years ago, these vehicles were not used to anything like the same extent as they are even at the high cost today, and if we were not hampered by the petrol tax and all the other difficulties on the motoring side, I have no doubt they would be used still more, and to the advantage of the disabled person.

I hope, therefore, that the Chancellor, though he clearly does not intend or find it possible to do it today, will cause instructions to be given to look at these matters again. I would not necessarily say that we should wait until the report of the Royal Commission now sitting became available, because unless they are going to do some interim reporting, all previous experience indicates that that would not be for a very long time. I hope that the matter will be looked at between now and then.

I trust that the Chancellor will not be carried away with what was, I think, the slightly fallacious argument of the hon. Member for Tottenham (Mr. Messer), who took the line that because there were other disabled people suffering other disabilities who could not come within the ambit of this scheme because of transport it should not operate, and I hope that that line will not be given too much weight. Because we cannot do good for everybody as we go through life, that is no argument why we should not sometimes be kind to some people if we can. That is the real case of that particular argument.

I am sure that all of us, wherever we sit in this Committee, have every sympathy with the cases put up. I would again reiterate that if it cannot be done, if the difficulties are such that the Chancellor does not see his way to do it, let him at least see that the matter is fully considered in the light of the speeches that have been made from all sides this evening before we get another Finance Bill, even though he may not be the Chancellor of the Exchequer to introduce it.

Sir I. Fraser

I wish to thank the Chancellor for the courteous and full manner in which he answered this plea, but, of course, I must express disappointment that he has found it impossible to hold out any hope that the matter will even be considered. I shall not go over the argument of my right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank). He pointed out that in 1942 the universal rule about travelling from your place of living to your place of work, and so on, was broken.

That involved inquiry into every case to ascertain what was the difference between the cost of going to work from one's new home over and above what it would have been had one not had to move. There is ample information and expert judgment available to enable the Inland Revenue authorities to assess these costs. As to their not taking an interest in anyone's private affairs, I may well ask why they should only take an interest when it is going to pay them, instead of taking this little bit of interest when it is not.

One final observation. In his Budget speech, the Chancellor said he could not find a few millions in order to deal with the widespread complaints made to him on many occasions about war pensions. His particular reason was, in one sentence, that most of these men were at work. But they are only at work with great difficulty, and my plea was to try and aid them in that difficulty to stay at work, and to be independent as far as possible of pleas to this House. This is a new idea which has not been voiced before in these terms. I am not surprised that with the onerous anxieties which the Chancellor has, he and his advisers have not had the full time to weigh a relatively small matter of this sort. I hope that no harm has been done to this cause by raising it this year and that, perhaps, next year we may have better luck. In that hope, I beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.