HC Deb 14 June 1951 vol 488 cc2668-71

In subsections (1) and (4) of section fifteen of the Finance Act, 1943, the words "sixty pounds" shall be substituted for the words 'fifty pounds."—[Mr. Remnant.]

Brought up, and read the First time.

Mr. Remnant (Wokingham)

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

This is an equally serious matter, though of rather a different character. I make no apology for this incursion into the complicated matter of tax allowances. Those with whom I am concerned have, after all, considerable experience of the painful extraction of taxation. If I had any fears in this, I should be reassured by the knowledge that the hon. Member for Sowerby (Mr. Houghton) is present and will keep his eye on me to see that I do not misquote any of the Income Tax Rules and Regulations. I hope that perhaps I may go even further than that and enlist his support, because I am not on this occasion dealing in any way with tax evasion.

I think that the object of this Clause is probably well known, but I should like briefly to refer to its history. Section 20 of the Finance Act, 1920, provided an allowance for a housekeeper, but the provision was then restricted to a female relative, or a stranger employed by, and resident with, a widower to take charge of any children of his, or in the capacity of housekeeper. That was altered by the Finance Act, 1943, by Section 15, which extended the allowance to any taxpayer employing or maintaining a resident housekeeper to have charge of a child resident with the taxpayer.

It is illuminating to see that the Inland Revenue, in its notes on the preparation of a taxpayer's annual return of income, refers to this allowance for a person employed or maintained to take charge of a child, and refers to it as being applicable to a taxpayer not entitled to the £180 personal allowance and having a person to look after his children. It goes on to state that to qualify for the allowance the child must be resident with the taxpayer, and the taxpayer must be entitled to claim the children's allowance.

Such a taxpayer is surely as vulnerable to the effects of rising costs in relation to the upbringing of children as a married man. Therefore, this Clause suggests that the allowance of £50 already in existence should be raised by £10 in the same way as the married allowance. I am certain that the whole of the Committee will have the utmost sympathy with anything that conduces to the benefit of children and their upbringing. This is not a big matter—I have been unable to ascertain what the cost would be, but I cannot think that it would be a very big one—and there is no precedent involved and no new allowance suggested. The allowance can be taken as being accepted for the last 30 years.

There has been no increase in the allowance for the last eight years. The Chancellor and the Financial Secretary, I presume, agree that there was justification for the increase in the married allowance, and this is, in effect, only doing the same thing. I suggest that this is the appropriate time when quite a considerable amount of help and satisfaction could be given in a small way to these people. This is an occasion when we might go farther than merely give sympathy. I hope, therefore, that the Financial Secretary will agree to make this additional advance.

Mr. Jay

The hon. Member asks us to increase the housekeeper allowance from £50 to £60. I agree with him that in a period of rising prices some case can be made out for a change in this allowance; indeed, it is one of the things one would wish to do had we been in easier financial circumstances this year. As he, I think, rightly pointed out, the housekeeper allowance can be claimed either by a widow or widower who is without small children or in the case of anybody else only by those who have children already receiving the children's allowance.

There are really two reasons why we do not feel able to accept this proposal this year. The first is, of course, that as we have increased the children's allowance this year and as all those receiving this allowance, except for the widows and widowers, would be therefore getting the benefit of the increased children's allowance in any case, I think it can be justly said that we have done something to meet the problem in the majority of cases.

Secondly, we are of course, in reviewing all the possibilities before us, bound to count the cost and to see in relation to one another the various possible forms of relief both in income tax and elsewhere. The hon. Gentleman's proposal would cost £2¼ million in a full year, and that is not an altogether inconsiderable sum.

The hon. and gallant Gentleman the Member for Bristol, North-West (Lieut.-Commander Braithwaite) rightly said both this year and last year that many of these proposals are put forward as a sort of parade so that we can look at them all and judge them next year. There is truth in that, and in much the same way we have to look at them before the Budget on their comparative merits and decide, in relation to the resources available, where the case is strongest. We did that this year, and we thought that the little relief we were able to give should be allocated to the children's allowance and the marriage allowance. Therefore, I am afraid that we cannot give that amount over this year.

Mr. Maudling (Barnet)

I did not cherish many hopes that the Financial Secretary would accept this Clause, but I did hope that he might have brought forward better arguments. His first argument was that there was no case for increasing the allowance because the children's allowance had been increased and that having received the benefit of that allowance, there was no strong case for an increase for those looking after the children. But we were making out a case that this was analogous to the increased marriage allowance. The married man gets the increased children's allowance and an increase for his wife. The analogy is precisely there, and therefore his first argument falls to the ground.

His second argument was based on cost. I was very surprised at the figure of £2,250,000 which he quoted. The increase is only £10 in respect of any employed person, so that the maximum any taxpayer gets is £5. That means that the Exchequer considers that over 400,000 people will be able to claim the benefit of this new Clause. I find it very difficult to believe that figure. Perhaps the Financial Secretary is reading from the brief relating to the next new Clause, which I understand has not been selected. I am afraid it seems unlikely that the Financial Secretary will be prepared to change his mind on this matter, but I am sorry that he could not find more respectable reasons for turning it down.

Mr. Remnant

In view of the Financial Secretary's reply—which was extremely disappointing—I beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.