HC Deb 19 June 1951 vol 489 cc267-70

Subsection (1) of section twenty-two of the Finance Act, 1920 (which as amended by subsequent enactments provides that a claimant who is compelled by old age or infirmity to depend on the services of a resident daughter shall be entitled to a deduction of twenty-five pounds shall he amended by substituting the words "fifty pounds" for the words "twenty-five pounds."—[Mr. G. Longden.]

Brought up, and read the First time.

Mr. Gilbert Longden (Hertfordshire, South-West)

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

This matter was the subject of correspondence between the Financial Secretary and myself some time ago, and the upshot of it was to the effect that the Chancellor would bear the point in mind when framing his Budget. It is not a very big matter, but it affects a number of small people, and I wish to take this opportunity of bringing it to his notice once again. By inadvertence, which is wholly my fault, there are two words left out of the Clause as printed. The words "inter alia" should come after the word "provides" because, as we shall see, the relatives in respect of whom this claim can be made are more than three in number, and are not only of the type mentioned.

I can very briefly refresh the minds of the Committee about whom this Clause is intended to aid. Section 22 (1) of the Finance Act, 1920, allows a tax deduction: If the claimant proves that he maintains at his own expense"— and it is satisfactory to learn from subsection (3) that the male embraces the female—first, a relative of his or of his wife who is incapacitated by old age or infirmity from looking after themselves; or, second, his or his wife's widowed mother, whether incapacitated or not"— and in those two cases he must also prove that the income of the maintained relative does not exceed £50 a year—or, third, a resident daughter upon whose services he is compelled by reason of old age or infirmity to depend. In any of those cases he shall be entitled to a deduction of £25 in respect of each maintained relative.

If my Clause is accepted, in future such a person will be entitled to a deduction of £50. I have never been able to understand why this allowance is smaller than that allowed in similar cases under the same Act, and that is one reason why I propose it. Another reason is that, in 1920 the State did not think fit to tax quite so much of the taxpayer's income out of his pocket as now. Further, the value of money has been considerably reduced.

I cannot do better than repeat some words used during the Committee stage of the Finance Bill in 1920. They are as follow: We are dealing now with people who have to eke out an existence in these days of high prices, which make life intolerable to them."—[OFFICIAL REPORT, 7th July, 1920; Vol. 131, c. 1549.] I commend those words to the Chancellor and ask him to put himself in the place of these people. I ask the Chancellor to read the debate during the Committee stage in 1920, in which case he will see that concessions rained down like manna from a golden Treasury, and it would benefit us all if he would try to emulate that example. Whether it was that the then Chancellor had got tired of making concessions, or whether it was because the proposal was not sufficiently strongly advanced, I do not know, but it was not conceded. And that is why I now beg to move it again.

4.45 p.m.

Mr. Bowles (Nuneaton)

I wrote to my hon. Friend on behalf of a constituent of mine on the same point, and he kindly replied on 31st May, saying that my constituent was wrong in thinking that Sir John Anderson was responsible for the decrease in the allowance, and went on to say that this £25 relief had been granted ever since the Finance Act, 1920. My constituent has written to me again today, sending a stamped addressed envelope. [Laughter.] I find that the poorer people are the most generous and understanding, and I mention that fact because it shows that my constituent is serious about this.

He says: I thank you very much for taking the trouble to put my case before the Treasury. I should not have troubled you again on this matter hut for the fact that in the letter to you from the Treasury they say that I am under a misapprehension in thinking that Sir J. Anderson was responsible for decreasing the allowance for a daughter's services, and that it has stood at £25 since its inception in 1920. To that I say the allowance was £50 in the early '40s, and that I received it. I have not given my hon. Friend notice of this because I have only just received this letter, but I should be obliged if, in reply, he would explain the historical position.

The Financial Secretary to the Treasury (Mr. Douglas Jay)

The misunderstanding to which my hon. Friend has just referred may possibly arise from a confusion between this allowance and the housekeeper allowance, which is rather similar. The housekeeper allowance does stand at £50, and it is possible that my hon. Friend's constituent was eligible for that in the early 'forties. I will look into that further.

This particular allowance, which, as the hon. Member for Hertfordshire, South-West (Mr. G. Longden) has rightly pointed out, can be claimed by anyone who, by reason of old age or infirmity, is compelled to depend upon the services of a daughter resident with and maintained by him or her. That has stood at £25 ever since the Finance Act, 1920. The hon. Gentleman made a persuasive case for a change in this allowance and I wish to tell him quite frankly the difficulty we see in doing as he wishes.

This allowance is something of an anomaly; and, indeed, has long been recognised to be such. It is somewhat akin to the housekeeper allowance, because it is given in virtue of a daugther who is resident with and helps to look after an aged or infirm person. The housekeeper allowance is, in practically all cases, confined to a household in which there are young children, and that has always been recognised as the main justification for it.

This allowance, on the other hand, goes beyond that, and it is in this respect, I think, rather hard to defend. It can be claimed where the aged or infirm person depends on the services of the daughter; it is confined to a daughter and applies to no other relative. It could be argued with some force that if there is a case for giving it in the case of a daughter, there is an equal case for giving it for a niece, or perhaps for a granddaughter, and for that reason it has always been regarded as slightly shaky among Income Tax allowances.

The hon. Gentleman referred me to the Committee stage in 1920, when this allowance was first introduced. As a matter of fact, I had already looked at that when I saw this new Clause on the Order Paper, and I saw that the then Chancellor, Mr. Austen Chamberlain, more or less admitted in granting this allowance that there was not really a very good case for it. He said, in somewhat lukewarm language: I am not sure whether I am wise, but, if the Committee are pleased to accept this Amendment, I shall not oppose it."—[OFFICIAL REPORT, 7th July, 1920; Vol. 131, c. 1549.] It is quite clear that that was not a very enthusiastic blessing.

Mr. Oliver Lyttelton (Aldershot)

It is a form of words which I commend to the hon. Gentleman.

Mr. Jay

I take note of the form of words, but I am not sure that they are a very good precedent. However, we would not suggest, slightly shaky though the case may be, that it would be right to withdraw the allowance at present. We think that, on the ground I have suggested, this is not really the best allowance to pick out for an increase.

Question put, and negatived.