§ Subsection (5) of section fourteen of the Finance Act, 1952 (which relates to earned income relief), shall be amended by the substitution of one thousand pounds for four hundred and fifty pounds in the reference to subsection (1) of section two hundred and eleven of the Income Tax Act, 1952.—[Mr. Stevens.]
§ Brought up, and read the First time.1116
§ Mr. G. P. Stevens (Portsmouth, Langstone)
I beg to move, "That the Clause be read a Second time."
We regard this Clause as exceedingly important, because it seeks to do something which has not been attempted since before the war. It seeks to give taxation relief specifically and solely to those who direct and manage British trade, industry, commerce and professional life, the 1117 successful administration of which is essential for the benefit of all.
It is true that three post-war Chancellors of the Exchequer, the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton), the right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell) and my right hon. Friend the present Chancellor have all at one time or another increased the earned income allowance; but in every case a ceiling was put upon the allowance granted. The present ceiling, which is the maximum reached since the war at two-ninths of £2,025, is £450, so that the full earned income allowance can only be attained proportionately by those with earned incomes of £2,025 a year and below.
This relief is unique in that it is limited to those with incomes between £2,026 and £4,500. It is true that those taxpayers who have earned incomes up to £4,500 and above £2,025 have benefited by earlier earned income allowance increases, but they have not benefited proportionately. It is also true that these same taxpayers benefited by the reduction given in this Finance Bill of 6d. in the standard rate of Income Tax; but that benefit went to those in receipt of unearned as well as earned income—a thing with which I entirely and cordially agree but this concession differs in that respect.
I have four groups of reasons for believing that this new Clause is most desirable. Those groups can be stated under four main headings—incentive, saving, common justice and common sense. First, incentive. In the debate during the Committee stage the hon. Member for Sheffield, Park (Mr. Mulley) said:I am not convinced that any extension of earned income reliefs to those in the large income groups would have any effect on productivity. It would be a very sad thing if it did. If people who are benefiting by earning incomes of £4,000, £5,000 and £6,000 a year are not aware of the pressing need for the utmost productivity, and are holding back because they are having to pay to the Chancellor of the Exchequer what they regard as too much, they have a poor sort of patriotism."—[OFFICIAL REPORT, 11th June, 1953; Vol. 516, c. 543.]I have an exceedingly high regard for the ability, technical attainments and qualifications of the hon. Gentleman, but I do not think that I have ever heard the point 1118 so completely missed. The question of patriotism does not arise in any shape or form. I can best explain what I mean by a simple illustration. It so happens that it is a factual illustration but, for obvious reasons, I have changed certain details so that the specific case cannot be recognised.
Let us assume that there is a large industrial concern with head offices in London and branch offices throughout the provinces. The general manager, full of years, retires and in the normal course of events the assistant general manager is promoted to take his place. The board of directors then look around the managers of their provincial branches for the man to take the post of assistant general manager. Let us assume that they find what they consider to be a suitable man in the manager of their Birmingham branch, the brightest of all their branch managers.
That man—an excellent fellow coming from Birmingham—is considered by the Board to be the best man to fill the vacancy at head office. Perhaps the salary of the branch manager is £2,000 a year. The board decide to give him a fine increase in view of the responsibilities of the new post, so they offer him £3,000 a year. But he turns it down and says that it is not good enough, not because of any lack of patriotism but for good sound material reasons. Apparently he would get a gross increase of £1,000 a year, or 50 per cent. of the salary that he is getting.
But then my right hon. Friend the Chancellor comes along and takes away from that £1,000, because the man will have exhausted all his personal allowances: 9s. in the £ for Income Tax, 2s. in the £ Surtax on the first £500 and 2s. 6d. on the second £500. The total tax the man would have to pay from his additional £1,000 would be £562 10s., very much more than half, to leave him with a net increase of £437 10s. That may seem reasonable. He would have £8 a week extra in cash; but what does he have to meet for that extra £8 a week? First he has to leave the house which he may have in the suburbs of Birmingham at Sutton Coldfield or somewhere like that, and he has to find—somewhere in the suburbs of London, in 1119 Wimbledon, Putney or Hampstead, or wherever it may be—a house suitable for himself, his wife and family. It must be a house suitable to the post of assistant general manager of a large industrial concern.
That will cost at least £100 a year more with very little real gain. In addition, he will find travelling expenses greater. He will find that it will cost him more to eat. His amusements will cost him more. At least another £100 a year will go on things of that sort with no real benefit or advantage to himself. He will be left with about £5 a week in cash with which to maintain the greater dignity of a more senior post and as a reward and return for giving up those amenities which he, his wife and family may have known for perhaps 40 years or more, and trying to start life again in a new and different district.
We cannot blame the man who says, "No, thanks very much. I am quite happy where I am. Five pounds a week is not a sufficient inducement to make me go to London to this larger and more important post." The consequence is that, instead of the best man for the job being appointed for the post of assistant general manager, the board has to go to the second best and industry suffers. It may be an exporting industry and then the result is that the country suffers as well.
I do not know why right hon. Gentlemen opposite are grimacing. I have never found that grimacing is a good substitute for argument.
§ Mr. Gaitskell
We were wondering from which part of the country the second assistant general manager would come.
§ Mr. Stevens
My hon. Friend says Leeds. I think it is very possible; it is quite a reasonable suggestion.
I do believe that decreasing differentials are a tragedy. They have been for a number of years, and craftsmanship and standards of management will suffer if it is not worth a man's while to make these sacrifices on leaving his familiar and happy home ground, and if it is not worth a man's while to weary himself with the extra care and strain demanded by craftsmanship or the extra responsibility 1120 of more senior management, but that is the position we have reached today.
Secondly, savings. As far as savings are concerned, it is true that, however much real wages rise and standards of living may improve, the lower income groups will always be the marginal livers, and will not be able to save, the reason for that being that improved standards derive from increased prduction, which, in turn, means that the desirables of today become the necessities of tomorrow. Therefore, we have to turn to the higher income brackets for individual savings, and it is debatable whether individual saving is desirable. Indeed, the right hon. Gentleman the Member for Dundee, West (Mr. Strachey) has views on that subject, because, in that same debate on 11th June, he said:It does look as if under the old rate of taxation, very high indeed compared with our traditional rates, it was possible to produce by various means, Budget surpluses and the like, an adequate degree of saving for the purposes of real capital accumulation."—[OFFICIAL REPORT, 11th June, 1953; Vol. 516, c. 496.]I think that is a most dangerous half-truth. It is perfectly true as far as it goes, but it does not go far enough, for the simple reason that it entirely overlooks the human factor and the long-term result. I believe that the saving habit—what my father used to call thrift, which is a word we do not hear very often these days—is a valuable feature of a man's character. I believe that, if we take away a man's ability to save, his desire to save will also be lessened.
The right hon. Gentleman the Member for Dundee, West, in the same speech, also said that business was mostly run by limited companies. I am not sure how far he was right in that comment. There is a surprising amount of business in this country which is still carried on by unincorporated bodies, such as partnerships and firms, so that it is not entirely true to say that, in all cases, the limited companies are running the business of the country. They are acting as entrepreneurs. It is the directors who "entreprenne."
If it is the case that the director is a man who is a spendthrift in his private affairs, he will also be a spendthrift in the company's affairs, and, if he is, the company's savings will dwindle and so will vanish the Budget surplus and the national capital accumulation. The income groups which this new Clause will benefit have 1121 not lost the desire to save, and, so long as that remains, the National Savings of the present will be the national capital of the future. Unless the ability to save is restored before very long, the desire to save will fade away.
Thirdly, common justice. Certain pseudo-economists whom I know have said and still say that it is the workers who create the wealth of the world. [HON. MEMBERS: "Hear, hear."] Of course, hon. Gentlemen opposite say, "Hear, hear." They would say "Hear, hear," if I said that, unless a motor-car had four wheels, one at each corner, it would not move along the road, and that is very true, but even that motor would not go far unless it had an engine, in exactly the same way as a wheel-less car with an engine would not go very far. Both workers and managers are essential, and, whereas the workers have, in the last six post-war Budgets received incentives from those Budgets in the shape of tax reductions, I think it is common justice to suggest that the time has come for a proportionate concession to be made to the management.
The last heading is common sense. It is often said that we are living in the days of the managerial State, and there is no doubt a good deal in it. If that is true, surely, we need the best possible management, and, unless we pay those managers well, we shall not keep them in this country, unless we put an iron curtain round the country. No one benefits more from efficient management than the workers, so that it seems to me to be plain horse sense that we should take active steps to see that we have the best management.
Now one word on the cost of the concession. Obviously, I can only hazard a guess, but my guess is that the cost of this concession would be something of the order of £15 to £16 million. I agree that that is a substantial sum, but it is very much less than the very large sum involved in the concession to which we on this side are very much looking forward to in due time—a further reduction in the standard rate of Income Tax by 6d. or by 1s. 6d. That would be much more desirable, applicable to unearned as well as to earned income, but it would cost far more than my right hon. Friend can possibly spare this year, although we hope that, by reason of the 1122 success of his policy so far, next year we may see the realisation of that hope.
This concession may well cost about £16 million, but I believe it would be cheap at the price, because I think that the urge and stimulus which such a concession to the managers of the country would produce would result in such a leap in productivity that, in a very short time, the Chancellor would reap more than that £16 million from the taxation on increased profits which would accrue.
§ Mr. Erroll
I beg to second the Motion.
This new Clause proposes to place in the hands of certain moderately well-to-do people rather more spending money than they would get without it. I share the apprehensions which hon. Members opposite may feel—if a man cannot live well on £2,000 a year, why should he be given any more? Surely, they would say, he ought to be able to do his job on £2,000 a year when so many millions of people have to do their jobs on only £400 or even less a year.
I fully understand, and, in part, sympathise with, the feelings of hon. Members opposite, and I think they spring from deep and sincere origins, but I cannot agree with the equalitarian tendency which has been shown so clearly in the last two years by hon. Members opposite, because I think we are beginning to see in this country that it does not work out in practice, and we are essentially a practical country.
I have noticed that hon. Members opposite, both inside this Chamber and outside in the country, have frequently pointed out the essential need to reward a man for the job he is doing—the man at the bench, the man behind the plough and the man in the mine. In fact, it was a Labour Chancellor of the Exchequer who altered the rates of Income Tax in such a way as to reduce the incidence of Income Tax on those people getting overtime pay, because it was quite fully recognised that, if a man at the bench or in a mine was doing extra work, he ought to be able to keep a bit more of the extra reward which he earned.
If that principle holds good, and I am sure that all of us agree that it does, for men who toil with their hands, it surely must be accepted that it is a principle which holds good for those who 1123 toil with their brains. I know that toiling with one's brains looks cushy to the man who toils with his hands, and, if I was getting my hands dirty by working, I should think that the manager was having a cushy time in his office. Some of them do have a soft time, but many more tire themselves out in a harder way than the man at the bench. There are probably more deaths among general managers at an early age than there are among men who work at the bench.
If hon. Gentlemen opposite accept the principle of an increased retention of reward for manual or clerical workers in this industrial country, they ought to accept it for the salaried or managerial classes. It is not practical politics to say to a man who is a manager and is actuated by very much the same motives as the man who works in a lower status in the organisation, "The more you earn gross, the less you are to be allowed to keep." Human nature being what it is, he tends to ease off. He is not being unpatriotic. He says, "It's not worth the candle. Why should I wear myself out with extra work and responsibility if I can't keep a little of what I earn?"
It concerns not only himself but his wife and family. He has to make the choice between working extra hours, taking on greater responsibility, and perhaps more travelling, greater enjoyment and pleasure with his wife and family. He has the same feeling as some engine drivers who resist having to spend time away from home, even though they get overtime. A salesman may have to go abroad and be away from home.
§ Mr. Jack Jones (Rotherham)
When a salesman gets his expenses paid for doing a job abroad it is very unusual for those expenses to be shown in his Income Tax declaration. The driver of an engine gets his expenses in his wage packet and they are shown every week in his P.A.Y.E.
§ Mr. Erroll
As a matter of fact, this Conservative Government have just introduced a new form upon which expenses are shown, and as the result of it sales managers who go abroad will, in the normal course of events, have to show those expenses. They will be assessed to tax unless it can be shown 1124 that they have been wholly and necessarily incurred in the course of his duties. There is very little difference between their position and that of the sales manager. If the sales managers did not go abroad there might not be so many goods for the engine drivers to pull about in this country.
§ Mr. Frederick Gough (Horsham)
This subject is very important. I know of many cases of sales managers going abroad. When it comes to assessment they often get assessed on the savings they made in their housekeeping by going abroad. I know of many such cases.
I am very grateful to my hon. Friend for making that point.
I do not want to be diverted on to the subject of the expense allowance, although I shall be very glad to argue with the hon. Member for Rotherham (Mr. Jack Jones) at any time. The point I am making is that increased effort deserves an increased retention of the reward and it is no use insisting upon it in one case without agreeing to it in the other. If the equalitarian attitude of hon. Gentlemen opposite prevents the highest salaried workers from retaining an increasing share of their earnings the result will be what we all deplore, a preference for leisure rather than earnings which men cannot retain, particularly among the men at the top.
Such a man may say, "I hope that the money which I earn, and which is taken away from me in taxes, will be spent with the same care as I earned it. In the choice between leisure and hard work he may choose leisure because there is no reward to be gained in extra work. On the other hand, if he is of energetic disposition, he may say, "I will pack my bag and go abroad where I can not only earn money but can keep a bit more of it for myself." It is all right here provided one does not earn more than about £600 a year. As soon as one starts earning at the £2,000 or £3,000 a year level one is supposed to go on working indefinitely for a decreasing reward.
Our proposed new Clause seeks to remedy that state of affairs in a small way. I hope it will be received by hon. Gentlemen opposite with sincerity, as it is intended as a sincere contribution to a better life for Britain.
§ Mr. Roy Jenkins (Birmingham, Stechford)
The two hon. Gentlemen on the Government side of the House have advocated this new Clause with great correctness. The hon. Member for Langstone (Mr. Stevens) drew a most effective picture of the type of person who is to be allowed this concession. He spoke rather as though this particular group of people were left out from the Budget. As a matter of fact, this group more than any other group in the country have already done well out of the Budget.
§ Mr. Stevens
I am sure that the hon. Member would not like to misquote me. I said that they had proportionately been left out. That is a most important word.
§ Mr. Jenkins
With a cut of 6d. in the standard rate I would say that people at about £3,000 a year—the people concerned—have done very well both absolutely and in proportion to their total incomes. Their net income has gone up a great deal more than that of most other classes, so it can be assumed that we are dealing with people who have already done very well out of the Budget.
The hon. Gentleman's argument contained a non sequitur. He said that we wanted the best people to take the vitally important jobs and that we should not get them if the rewards left in their hands were too low. My right hon. Friend the Member for Leeds, South (Mr. Gaitskell) took the hon. Gentleman up upon a logical fallacy and asked why the second-rate people then took the jobs. Surely it could not be argued that the second-rate people are less affected by financial considerations and more attracted by responsibility than are the first-rate people. I should have thought that it was the other way round.
§ Mr. Stevens
Does not the hon. Gentleman think that the second-best men normally have second-rate judgment?
§ Mr. Jenkins
I do not quite follow that argument, unless it is to suggest that second-rate men cannot work out their tax liability in advance. All the responsible jobs are filled by somebody. It cannot be argued that a great number of highly paid jobs are open for many months of the year from inability to get people to go into them, either first-rate or second-rate people.
The hon. Gentleman's next argument was that the proposed new Clause would 1126 help savings. That is a bit contradictory. He argued the case with great force of somebody accepting much more responsibility with his salary raised from £2,000 to £3,000 a year—about £450 a year net—and referred to the expenses in which this man would be involved in getting a new house, etc. The result was that he could hardly manage. If we are by this proposed new Clause to help people who cannot manage and who desperately need money I cannot see how they will be able to save money. That is the difficulty in which the hon. Gentleman is placed. On the whole, I would have hoped that the Government would not accept the Clause.
There is a great deal to be said, as we argued during the Committee stage, for increasing the reliefs for earned incomes; but if the Government took the view—falsely as, I think, they did—in Committee that they could not accept the Amendment then moved by my right hon. Friend the Member for Bishop Auckland (Mr. Dalton), not merely to increase the limit, but to increase the amount for earned income relief throughout the whole scale, I think it would be highly undesirable to accept the Clause, which, as its sponsors have frankly said, would affect only those in an income range of between £2,025 and £4,500 a year. It would be quite wrong to accept the one without having accepted the other.
We were told that the Clause would cost only £15 million a year, whereas my right hon. Friend's Amendment during the Committee stage would have cost something like £50 million. This is, of course, a lesser figure, but, even so, £15 million is a great deal of spend each year on such a limited number of people as there must be within this income range.
If hon. Members on the other side are sincere, as, I have no doubt, they are, in their anxiety to help people with earned incomes as opposed to those with unearned incomes, it would be much more desirable to think in terms of a complete split between the standard rate of Income Tax on earned income and that on unearned income. That, it seems to me, would be a logical and helpful move.
At the present time, when we have a standard rate of 9s., we have a position in which people think they are paying more Income Tax than they are, in fact, paying. Nobody on an income of up to £2,000 a year pays tax at the rate of 1127 more than 7s. in the £. It would be much better to have the standard rate at 7s. in the £ and not to have any of this 9s. nonsense, which is psychologically disadvantageous in many ways. In addition, once the two rates were split, we could look at them independently of each other, and this also would be a great advantage.
§ Mr. Ian Horobin (Oldham, East)
At this stage of the Finance Bill I do not want, even on such an important Clause, to occupy very much time, and I shall concentrate briefly on one point. Before doing so, however, as the hon. Member for Stechford (Mr. Roy Jenkins) has endeavoured to convict my hon. Friend of illogicality, I may, perhaps, be forgiven for entering for a moment into the kindergarten stage and answering the point which he has made.
The hon. Member seems to have omitted the sad possibility that the second-rate man may take the job, realising that he will not be paid very much for it, with the full intention of not doing all the work that the first-rate man would have done, by deciding that if he expended that amount of energy and took on all that amount of work and responsibility, the game would not be worth the candle. Unfortunately, that is much too common in this sad world today, when jobs are being filled by people who are not really giving of their best, either because they cannot give what is required or because, although they could, they do not. That goes for all sections of society, and not only for the £2,000 to £5,000 a year man. That is the simple and sad answer to the hon. Member's remarks.
It is not really necessary to take a great deal of time on arguing and disputing what the Clause is intended to do. It is intended to help the managerial £2,000 to £5,000 a year man. There are people on the other side of the House who are prepared, at any rate, when it suits them, to pretend that that kind of man is not, apparently, even a worker within the definition. Hon. Members opposite are prepared to assume, contrary to all the evidence, not only in this country, but even in countries like Russia, that we can get that kind of rather scarce and very valuable work done by people for the same amount of money as we can get much 1128 commoner work done. We cannot. All experience is to the contrary. Therefore, it is not really worth while from a practical point of view arguing whether those people need to be paid or whether their contribution to economic welfare is important, for it obviously is. They really hold the key to our industrial future.
We can discuss the position of those men without in the least going into the wider issues of getting rid of great differences of wealth. We are not talking now about millionaires, or whether they ought to have money taken away and give to the wage earner. These men are a class of people who on no sensible description can be called the idle rich or the wealthy. They are the sort of people, incidentally, who, throughout the whole of their income, spend far more in doing for themselves what other ranks of society expect to be done by the ratepayer and by the taxpayer.
The whole point at issue is whether it is desirable to help those people more than they have been helped recently, and to help them only in the sense of leaving them a little more of the money that they themselves earn. For my part, and, I think, for the part of most people on this side of the House—and, I honestly think, a good many Members on the other side—there is a good deal of feeling that as and when it can be done, those people should be helped by tax reliefs.
This is the simple point I want to make to my hon. Friend the Financial Secretary. This proposal would cost some money. I do not know whether the figures that have been suggested are accurate, but the cost, obviously, would be substantial. If it was not, it would be no use. The whole point is that we are endeavouring to leave in the pockets of these people, on the grounds of equity and incentive, a substantial amount of the money that they earn.
If the Financial Secretary says that the Chancellor of the Exchequer has given away all the money that he has to give away this year and we cannot afford this proposal, then that, in this Budget, settles the issue for me. I felt already—I have said so during these debates—that the Chancellor has, if anything, gone to the limits of what he could safely afford and that it would be an ill service for this or 1129 any other section of society if we did anything which encouraged a return to inflationary tendencies.
If my hon. Friend simply says that this proposal is excellent but that the Chancellor cannot afford it this year, well and good. I hope, however, that he will feel able to say, if he cannot accept the Amendment this year on that ground, that he has no other ground for refusing it and that he will give a sympathetic consideration among the highest priorities when, in the development of the so far so successful financial administration of our affairs by the present Government, it is possible to give further reliefs.
There are few directions in which the real wealth produced in this country, for the benefit of all sections of society, could be more quickly increased than by relieving somewhat the burden upon the key section, the people who have to go out and get the orders, who have to compete with their counterparts in Germany, Japan and the United States, this section of society who, in the economic world, really are key men, just as much as—in some ways more than—some of the highly skilled craftsmen, whose wages, as we all rejoice to know, have in recent years been well advancing to the level of those in any other country.
The incomes of what we would, roughly, call the managerial section—this £2,000 to £5,000 section—have not been increasing; they have been falling back in the race compared with other countries. I believe that not only to their own advantage, but to the advantage of the firms that they run, and, therefore, to the advantage of the people they employ, there are few sections of society where reliefs of this kind could be invested in efficiency to greater advantage. Therefore, I very much hope that the Financial Secretary will be able to say that, if not this year, earnest attention will be given next year to the possibility of making some such relaxation in their burdens.
§ Mr. Jack Jones
I should have hesitated to enter into this debate except for the speeches made from the opposite benches. I was almost reduced to tears when I heard the story of the man who came to London and found himself in a better house, in better surroundings and with more responsibility, but that he did not have quite as much money as he had 1130 expected, although he still had an increase compared with what he had been getting and the opportunity to serve the country in a higher and more effective sphere.
These statements that we have had from the other side are a slander on the managerial classes. They are a slander upon them in this respect. We have been told illogically—I use ordinary workmen's logic in these discussions when I can—that if the Financial Secretary or the Chancellor were to accept this new Clause, immediately it became operative the production of this country would receive a tremendous upsurge. That is utter nonsense. If that is true the managerial section of the country stand indicted for not having done for the country what they should have done during the last few years, and particularly since the Tory Party have been in power.
It is wrong to suggest that all those engaged in industry look upon financial reward as the be all and end all of what they ought to do in industry. I speak as one who has been paid an incentive bonus for the whole of my working life. Every additional ton I produced was paid for at a less rate than the ton prior to it. Every ton over 200 and up to 3,000 was paid for at a less rate, but the aggregate wage earned was greater and the satisfaction I got was that I did a better job for my company and for my country. By the brown book agreement .004 of a penny is deducted for every ton over a certain amount.
The suggestion that sufficient financial reward will get us out of our economic difficulties is completely wrong. Reference has been made to the case of a man who was invited to come from Birmingham and take a job in London. He has proved that he is the best man for that type of job and has already given to his company and to his country the highest possible service. He and others like him are the sort of fellows we want these days of economic stress and strain—not the person who, because of advantages derived from a Clause of this sort, says "I shall get more than I have been earning and I shall be able to take things easy." That is the way to get less production.
I know the difficulties of this section of the wage earning group. All this talk about these people not being workers is nonsense. All managers are workers. The 1131 chairman of directors of the company for which I worked was not looked upon as a fellow who did no work just because he did not wheel a barrow or mix cement. We realised that he was a man who was working in a different sphere and that without him we would not have got very far, and of course without us he would not have been needed at all.
I know that if the Financial Secretary could be induced to believe by any stretch of the imagination—and he is not much of an imaginative person; he is very factual as a rule—that the acceptance of this Clause would increase production, he would certainly accept it. The suggestion that financial reward is the only inducement may sound all right, but it is not true. I wish people would stop condemning those persons in that sort of job as being the type who would have done better if they had been paid more in the past. It is wrong and it does not help the country to suggest that the managerial section are not doing what they could or should. We have had from the benches opposite today a slanderous statement, and it is wrong.
§ Mr. Frederick Mulley (Sheffield, Park)
I agree with my hon. Friend the Member for Rotherham (Mr. Jack Jones) that this is a strange debate in which we on this side of the House have to defend the managerial classes earning between £2,000 and £4,500 a year from the serious attacks that have been made on them from the benches opposite. I believe that there are some who are not doing as much in their various capacities as they might, but I would be very surprised to learn that this lack of a sense of responsibility is as widespread as has been suggested.
§ Mr. Mulley
I do not object to the distinction which is made between earned and unearned income. There is a good deal in the statement of my hon. Friend the Member for Stechford (Mr. Roy Jenkins) that if there is to be a further remission of taxation it should be in the earned rather than the unearned section.
§ Mr. Ralph Assheton (Blackburn, West)
Does the hon. Gentleman refer to earned income as income that has been earned in a certain year, or does he also 1132 refer to income which has been earned in the previous years and put aside?
§ Mr. Mulley
I do not want to go into the whole question of taxation on pensions and that sort of thing. I do not want to go into the peculiar position of barristers, although I understand they use this argument to some personal advantage. From the point of view of the Revenue, one has to take income earned in a particular Income Tax year. The Financial Secretary does not often agree with me, but I think he will agree that there would be considerable administrative difficulties in trying to get any other basis of assessment.
The point that I am making is that we cannot have this kind of reduction in taxation as well as a reduction in the standard rate. I understood that the thon. Member for Langstone (Mr. Stevens) who moved the Clause wants both. He wants remissions in the standard rate and at the same time he wants an extension of earned income relief.
§ Mr. Stevens
Is the hon. Gentleman referring to this year only or to next year? If there is a choice next year between a reduction in the standard rate or an increase in the earned income allowance, I do not think there will be any difficulty at all in choosing the standard rate.
§ Mr. Mulley
The hon. Gentleman is being frank. Those who speak for the unfortunate people earning between £2,000 and £4,500, should decide whether their £15 million should have prior claim to the £100 million which would go to companies if the standard rate were reduced by 1s. 6d. He should get his sense of priorities right. We on this side of the House would prefer, if there were to be a large reduction in taxation, that it should go to earned income rather than to unearned income.
I find it difficult to follow arguments based on incentives in this matter. An argument has been based on a gentleman in Birmingham. I shall not deal with it at length, but I would say that it is fortunate for the country and for the companies concerned if men of that character do hold back in Birmingham instead of taking jobs in London for an additional £1,000 a year. Clearly those people have no ambition, drive or anything else. If it is put to me that a 1133 man will not take an assistant manager's post with the prospect of becoming a general manager and receiving further advancement of £450 a year net as well, he is not the kind of man we want in any managerial position.
It seems odd, after hearing in these platitudinous debates about the virtues of private enterprise, that a man will not take a risk for £450 a year. What kind of money do we have to pay people in order to get a sense of adventure back into private enterprise again? If hon. Members opposite really believe in the case that they have put forward today in support of this Clause, they ought to join this party and say that we are too slow in dealing with private enterprise. There cannot be any enterprise left.
I know of many people at the lower managerial and working foreman level, who have taken promotion at a gross financial sacrifice in order to further their earning capacity in the future. If that attitude is prevalent among the charge hand and foreman level, it is a pity that those people are not promoted to the £2,000 and £3,000 a year jobs because they have the outlook that is wanted in a managerial community.
Is it supposed that by spreading £15 million among the managerial class we can make them work so much harder, when every one knows of the great need of this country for production and increased exports, which is preached repeatedly throughout the year by the Chancellor and the President of the Board of Trade, who incidentally I am glad to see in his place.
If that were the case the £15 million would be well spent, but what a terrible indictment of those people it would be, an indictment which I am sure is not justified. There may be odd characters here and there to whom the indictment applies and hon. Members opposite have the advantage over me of probably knowing such people, but I do not believe that the number is very great or that it is right to say that £15 million is required to buy them so that they will work for the national good as a result of having this additional advantage.
I would say to hon. Members opposite what was said to me by an American who was a fairly shrewd observer of the industrial scene in this country. He said, "The lower management levels in British 1134 industry are very good, but the trouble with your management people is that they work only to get an expense account and when they get it they are so busy entertaining their friends and reciprocating hospitality that they do not have time for management."
§ Mr. Mulley
I did not ask him, but certainly I think that he would have put as a priority in obtaining more production from managers the abolition of the expense account rather than putting up their earned income relief. If, however, hon. Members opposite would go so far with us as to support the abolition of the expense account we might go some way with them in supporting further Income Tax relief for this income group.
I do not believe necessarily that if people have the prospect of a larger net income they will want to earn more. There are many people who want a standard of living which is beyond their actual net income, but it may well be that in fields where their income is directly related to their energies, such as in the case of barristers, they might work less if they are able to maintain the standard to which they are accustomed without need to make extra effort. Therefore, half of this proposed expenditure of £15 million might go to people of that kind and the net effect would be a disincentive rather than an incentive to extra work. I therefore ask the Financial Secretary to the Treasury not only to reject this Motion this year but to use such influence as he has in the Treasury so that this proposal is never put forward either as an incentive or as a measure of social justice.
§ Mr. Stevens
Has the hon. Member ever studied the figures of emigrants from this country, and has he ever asked any of those emigrants why they were going out to different countries, and have any of them, in all income brackets, by any chance said, "To get higher real wages"?
§ Mr. Mulley
I have never stood on the dockside to take a Gallup poll, but if people will not come to London for an extra £450 they will hardly go to the Dominions.
§ Mr. Jack Jones
I have asked them and very often they have said, "I was denied an opportunity in this country owing to nepotism and other reasons."
§ Mr. John McKay (Wallsend)
I am surprised that any body of men should press a Motion which is likely to involve the Government in about £20 million of extra expenditure without putting forward some very strong argument in its favour. If we are in such a good position that the Government can afford to give about £20 million to any particular section of the community, one ought to ask what class of people should receive that benefit. If any argument has been put forward in this debate at all, it is that this proposal would be a good thing because it would be such a great incentive to the managerial class in this country and because, as a result of that incentive, something extraordinary would happen to the productive power of the country.
§ Mr. McKay
I think that my hon. Friend the Member for Rotherham (Mr. Jack Jones) dealt with that fairly emphatically. This proposal is a strong public condemnation of the people whom it is supposed to benefit. We have about 200,000 people in the managerial class in this country who receive high salaries and who have already received an incentive of at least £100 each in Income Tax relief this year. These are the people who want the workers to produce more and to put more energy into their work when those workers can hardly live on the money which they receive.
Like the old woman with the poker, I want to show what side I am on. If there are £20 million to give away I, like many others, believe that it is all wrong to offer it as an incentive to the managerial class, to men who go to their offices usually about 10 o'clock in the morning and then have about two hours for lunch and come away at about 5 o'clock. If a census were held and a close scrutiny made I do not suppose that it would be found that these 1136 men do more than 30 hours of real work a week. If we do have more production it will be because we have more men and material and machinery, and the men in managerial positions will merely direct the work as usual. As long as the labour power is used in a business-like way what we need for more production is not more incentive but more labour and machinery.
If and when we can consider giving away money and giving people relief we should look to the people who most need the relief. The Income Tax returns show that there are about 200,000 married people, with two or more children, who earn less than £5 a week. In the next income group there are about two million married people, with two or more children, whose average income is about £6 17s. a week. They are part of a middle-income group numbering nearly 10 million. It is estimated that it takes at least £7 7s. to provide a very low standard of economic life to a family of man and wife and three children.
In view of these facts, the proposal embodied in this Motion indicates that hon. Members opposite are not particularly anxious to raise the standard of life of the common man. In all their suggestions they are continuously trying to give more to the people who already have the money. There can be no question of supporting this new Clause.
§ Mr. Houghton
We ought not to decry the value of the work of our managerial classes. We must keep this question in proportion. It was a pity that the hon. Member for Langstone (Mr. Stevens) introduced the factor of incentives into his reasons for urging this additional relief. I do not believe that the cost to the Revenue would pay for itself in an increase of the national product. It is a tribute to the persons who would benefit under this Clause to say that they will go on working just as hard and as skilfully, and with just as much desire to help the country as well as themselves, whether or not we pass this new Clause.
I have had wide experience in the public service. It may be that rewards are more modest and standards of public duty are higher in the public service than outside; I would make no extravagant claim for that; but long experience has shown how rarely any person refuses 1137 advancement on account of economy or the domestic disturbance which follows that advancement. How many Members are dissuaded from coming here because it will cost them money to serve as Members? The truth is that men cannot resist enhanced esteem, prestige and power. Their wives cannot understand this. Many of them think that the game is not worth the candle, when they find their husbands are willing to pack up home, move long distances and take on additional responsibilities for a modest increase in remuneration and probably a net reduction in their standard of life.
I remember an officer in the Inland Revenue service—which is highly mobile—who was transferred from Northern Ireland to London. When all the consequences of that transfer, following his promotion, became visible to his wife, she said, "Look here, do not have any more promotions of that kind, because we are worse off after your promotion than we were before." But nothing will stop the ordinary man with vitality, ambition, and a desire to succeed, from wanting to do better. Nothing will dissuade him from enduring sacrifices in order to achieve his ambition.
The hon. Member for Langstone did a dis-service to the managerial class when he suggested that a relief costing £16 million to the Revenue would pay a dividend to the nation. We must rule out that suggestion. There is no question of principle involved. If we differentiate between earned income and unearned income for taxation purposes, I suppose there ought to be no limit to the point in the scale of earned income at which relief should stop. But it has been a feature of this form of earned income relief that there has been a limit to the amount of tax conceded. It is higher now than it has been for a dozen years, at least, and the amount of the relief is also higher than it has been previously.
We are in favour of giving reasonable relief, from Income Tax to earned income. That was shown in the Amendment we moved during the Committee stage, to increase the earned income relief from two-ninths to one-quarter, though we proposed to retain the existing ceiling to the relief, which this new Clause seeks to raise. We have to accept the fact 1138 that, in addition to the principle of differential rates of tax between earned and unearned income, there is another principle of fair distribution of the burden, and we have to harmonise the two.
There is probably no reason, in theory, why the Chairman of the Board of Inland Revenue should have half his earned income treated, for tax purposes, as if it were unearned income, whereas a subordinate officer, such as an assistant secretary in the same Department, has his whole income treated as earned income. There is no justification in principle for that differential. It exists because we have regard to the other principle of a fair distribution of the burden.
There is one point about earned income relief which is anomalous. Where a husband and wife are both working the same ceiling applies to both their earned incomes. I cannot see any justification for that. Where a man has earned income, his wife is in a job, and the two incomes, taken together, exceed the maximum amount to which the relief applies, there is a very aggravating entry on the P.A.Y.E. coding notice, called "Earned Income Relief Restriction." It is not easy to see why a wife's earnings should reduce the earned income relief of the husband, but that is one of the compromises between the principle of the relief itself and that of a fair distribution of the burden.
I must comment upon the suggestion made by my hon. Friend the Member for Stechford (Mr. Roy Jenkins), who raised the question of a differential rate of tax as between earned and unearned income, as distinct from the form of earned income relief that we have at present. His proposal would raise some administrative nightmares. The present method of allowing one income relief is undoubtedly the most convenient from an administrative point of view. I know that administration must not govern our desire for an Income Tax system that can be fully understood and is fair in its operation. I fully acknowledge the fact that many people mis-read their Income Tax notices and believe that they are paying at the highest rate of tax when, in fact, the earned income relief reduces the effective rate of tax, as is always shown in the tables in the Financial Statement at Budget time.
1139 No one pays at the standard rate of 9s. in the £ on any of his earned income. Earned income relief reduces the standard rate to a lower effective rate in all cases, and in some cases to a greater extent than others. I do not fall for the suggestion of my hon. Friend that, merely for the sake of clarity in the minds of the taxpayers, we should introduce further complications not only into its administration but into the intelligibility of the tax from the point of view of the taxpayer.
I want to clear up two misunderstandings which appeared to creep into the speeches of my hon. Friend the Member for Rotherham (Mr. Jack Jones) and the hon. Member for Horsham (Mr. Gough) Do not let us make Income Tax worse than it is. When a subsistence payment is made for a lodging turn, or for absence from home on business, that subsistence allowance is not taxable. I am astonished that the hon. Member for Horsham knows of cases where business men going on business trips abroad have had their Income Tax assessment raised on the ground of the hypothetical saving in domestic expenses at home. There are many complexities about these things and many anomalies, but those two matters are, happily, not part of them.
I think the sum and substance of it is, as the hon. Gentleman the Member for Langstone said, how much relief we can give to this group of taxpayers this time beyond that given already by the reduction in the standard rate and beyond the increase in the earned income relief given last year? Whether the ceiling of this relief should be carried further still, whether the amount of earned income relief should be further increased, are matters which have to be brought into the general balance of taxation when a fresh review of the whole situation falls to be made. At the moment, however, I am sure that the hon. Gentleman the Member for Langstone would not press his new Clause upon the House, because if he did, as I am sure he will not be surprised to hear, we should not support him.
§ Mr. Jay
Just in case the Financial Secretary has not yet made up his mind, I would advise him not to accept this Clause. The hon. Member for Langstone 1140 (Mr. Stevens), not, I am sure, a place from which second rate men come, put forward a persuasive argument on what is a very serious question. He wants quite openly and explicitly to give help to the class of people whose earned incomes are between £2,025 and £4,500 because he regards the managerial and other professional workers whose incomes come within those brackets as highly important and valuable members of the community.
We believe that it is desirable, other things being equal, and in its due priority, to make a reduction of direct taxation on earned incomes, and we should not wish to exclude from such reductions altogether those very important workers who fall into the bracket that the hon. Gentleman had in mind. But we do think that a reduction of this kind should not be confined to those whose incomes are above £2,000 a year, certainly at a time when they have already benefited more than most people from the reductions in tax that have been made in the Budget already.
I agree with the hon. Gentleman that I should have preferred the Chancellor to have made this change than to have made the positive differential in favour of unearned income that he did as a result of the changes he made in the Budget. I would also recall, what, I think, the hon. Gentleman did mention, that in the various Budgets of the Labour Government earned incomes of this kind did benefit on quite a number of occasions. I do think, however, that the hon. Gentleman fails to make his case when he now wants to confine his reduction to those with incomes above £2,000 a year.
Indeed, how confused the position of hon. Members opposite is on this matter of the earned income allowance. In the Committee stage they voted against and defeated our proposal to put the proportion at a quarter rather than the present two-ninths. The effect of that would have been to have helped everybody most of the way up the scale. Therefore, the combined result of the desire of hon. Members opposite first to defeat that proposal and second to push this one is, of course, deliberately to confine the benefit to those at the top of the scale.
§ Mr. Stevens
The proposal of the right hon. Gentleman did not include a suggestion to increase the ceiling. The ceiling, if I remember rightly, remained the same. Therefore, the benefit proportionately was less higher up the income scale, was it not?
§ Mr. Stevens
Surely, if the ceiling remains the same, even though we increase the proportion, the total allowance for a person over that ceiling would be exactly the same?
§ Mr. Jay
The same reduction in tax, I think the hon. Gentleman will agree, would be made, although, of course, it would be proportionately less than to those lower down.
However, the main point I want to make tonight is that we are opposed to this present proposal to confine the next benefits of tax reduction to those in the higher brackets of income. I think that, even if we lay aside the pure argument from equity that it is undesirable to give benefit to those whose incomes are larger than others farther down the scale, on the ground of incentive, on which the hon. Gentleman largely rested his case, there are at least three strong arguments against this proposal.
First of all, although it is very true that the managerial and professional workers whom the hon. Gentleman had in mind are exceedingly valuable and important members of the community, it is ridiculous to suppose that the manual workers' efforts and productivity are not also exceedingly important in our total production. I agree with the hon. Gentleman, from experience of such large organisations as those of which I have been a member, that the efforts of the key personnel, who are very often at the top of one department or another, are exceedingly important in the working of the whole. But I would not draw the inference from that that the productivity of those all down the line is of lesser importance.
Suppose we were to apply the hon. Gentleman's proposal, for instance, to the 1142 coal industry. I think it is probably true that the efforts of the comparatively few managerial, technical, planning workers and so on in the coal industry at the present time are of crucial importance to the industry. But surely we should not say that the efforts of the actual miners at the coal face are not also of enormous effect in deciding the total production of coal. Indeed, the attitude of hon. Members opposite here again seems to me slightly anomalous. They are inclined sometimes to join, when discussing the coal industry, in the rather prejudiced and ignorant outcry about the black coated or white collared administrative workers who, it is implied, are not making any valuable contribution as compared with the manual workers. But when we come to this question of taxation, they want to confine tax reductions and the argument from incentive to the managerial and administrative type of worker.
In our view there is a case for giving this concession and accepting, with a due sense of proportion, this argument in the case of both sections. I think it was the hon. Gentleman the Member for Lang-stone who spoke of the leap in productivity that might occur if his proposal were accepted. Surely he will agree that we should not in the coal industry get a leap in productivity merely by confining tax reductions to incomes of £2,000 a year and over.
§ Viscount Hinchingbrooke (Dorset, South)
I just wanted to make certain that the right hon. Gentleman is convinced on his own behalf and that of his party that if greater tax reductions were given to the ordinary coal miner, the man working at the face, and improved conditions and a greater increase of wealth in the home, we should have higher productivity of coal. Is he convinced of that?
§ Mr. Jay
I think there is some force in the argument so constantly put forward by hon. Gentlemen opposite, and, I think, by the noble Lord among others, that reductions in direct taxation would have some effect in an increase of production all along the line. In so far as this is true, I am arguing that it certainly extends to the manual workers as well as to those who are receiving higher incomes. I was going on to my second 1143 argument in criticism of the hon. Gentleman's thesis. Surely, as my hon. Friend the Member for Rotherham (Mr. Jack Jones) said, the motives of pride in work, of pride in responsibility, of prestige, influence and so on are not merely exceedingly important in many sections of the community, but, on the whole, have tended to be more important as we go higher up the scale.
In the very nature of the case, the attraction of responsibility, of power and so on must become stronger among those earning the higher incomes. I think that hon. Gentlemen are committing rather a slander on managerial and professional workers when they suggest that they are hanging back, not working, and refusing to accept promotion because they cannot earn quite as much net income as they might expect to do. After all, do we ever meet in the Civil Service, in industry or in the Services those people who are unwilling to accept promotion? I should have thought that was a completely unreal picture of the country in which we live, and that in actual fact we find remarkable anxiety and willingness to accept promotion in the Civil Service, in industry or whatever it may be.
I think, too, that the picture of managing directors leaving this country in order to earn higher incomes is equally far from reality, and is equally a reflection on the patriotism and sense of responsibility of the people concerned. The hon. Gentleman, introduced the question of emigrants, asked how often did one come across emigrants from this country going elsewhere in order to earn higher incomes. I think that argument really tells against his thesis because if we ask to which countries the average emigrant from the United Kingdom normally goes, we find that, on the whole, it is to those countries with comparatively higher rates of direct taxation. They go to Australia, New Zealand, Canada and, to some extent, to the United States. We do not find them going to countries like Spain, Italy and Egypt where there are very low rates of income tax. The fact of the matter is, of course, that it is not comparative taxation one way or the other—it is a quite different emphasis and argument which determines their decision in 1144 those cases. Therefore, again, I think, this argument cannot really be made out.
Thirdly and finally, I would add this in comment on the hon. Gentleman's argument. After all, if we are going to try by reduction in taxation on earned income to produce a stimulating and encouraging effect upon productivity throughout the country, surely we want to get the maximum effect for each £1 million of revenue which we forgo. I expect that the Financial Secretary will tell us that he cannot accept this Clause because he cannot suffer in revenue. We all agree that that is one of the considerations to which we have to look. If that is so, it is desirable to make the reduction as comprehensive as possible, because the more people affected, the greater is the likelihood that the influence on the production of the country as a whole will be greater.
For all these reasons, it seems to me that we cannot possibly make out a case for confining a concession involving so large an amount of money as £15 million—if that is the correct estimate—to such a very narrow group in the community. We on this side of the House are in favour, as and when it can be done, of reductions in taxation on earned incomes, and we recognise that there may be some argument on the ground of incentive for making such reductions when it can be done, but we emphatically do not think that this is the way to do it or that it should be confined to a narrow group at the top of the income scale.
§ Mr. Boyd-Carpenter
The effect of the Clause that my hon. Friend the Member for Langstone (Mr. Stevens) has moved, in his very agreeable and interesting speech, would be to raise to £1,000 the maximum amount of income which could be relieved by earned income relief or to put it another way, to allow the present 2/9ths scale to run from the present ceiling of £2,025 up to £4,500.
My hon. Friend did express with great clarity and force some of the reasons which impelled him to put down this Clause. Let me say at once that I fully appreciate the very serious effect which high taxation over a prolonged period has had on the professional and managerial classes. It is, I think, beyond doubt, both from a relative and absolute point of view, that they have suffered very 1145 seriously, and with a great deal of what he said as to the desirability of giving them as much relief as possible I would not for one moment quarrel. It is, of course, part and parcel of these ill-effects of too high taxation, too long maintained, which we discussed at an earlier stage of this Bill and on which I said at greater length something similar to that which I have said more briefly this evening.
There is a real problem, too, I think, in what my hon. Friend said as to the position which sometimes arises when it is desired to transfer on promotion some manager or other to a higher position. I think that my hon. Friend rather spoiled his case when having emphasised the type of man he had in mind—the first-rate type of man—he indicated that when he came to the London area he would want to settle in Wimbledon or Hampstead, when it is well known that when he comes to the London area he would want to live in the Royal Borough of Kingston-on-Thames or in the borough of Surbiton.
Apart from that trifling blemish in his argument, I think that most of us in our own experience have come across cases of that sort. I thought that it was a little unfair of one or two hon. Gentlemen opposite to suggest that by drawing attention to that difficulty my hon. Friend was suggesting a kind of "go slow" among the professional or managerial class. No one, I think, who has had any experience of the work which that section of the community has done in the difficult circumstances of war and in the post-war years would believe that for one moment. In assessing the burden of taxation that can be properly borne we must bear in mind the effect of that taxation, particularly when prolonged, on certain sections of the community. I do not propose, for reasons which I will give, to enter into discussion with my hon. Friend as to whether, assuming that this sum of money were available, this would be the best way for my right hon. Friend to make use of it.
I think, as my hon. Friend himself clearly understood, the difficulty which stands immediately in the way of this proposal is its cost. The actual figure of cost is not the £15 million which my hon. Friend suggested, or the £20 million suggested from the benches opposite, but, so far as I am able to ascertain, is of the order of £17 million a year. That is, I am 1146 afraid, when looked at on top of the reductions in taxation which my right hon. Friend has effected this year, more than can be afforded, because we have to bear in mind, not only that substantial concessions in taxation have been made this year but equally the fact that this country has to maintain and sustain a very large defence programme and a very large and complex system of social services. Therefore, I am sorry to have to say to my hon. Friend that the cost of his proposal does of itself make it impossible for my right hon. Friend to accept it.
I do not want to over-emphasise, but nonetheless it is fair to comment that the section of society to which I have been referring has certainly obtained some relief from my right hon. Friend's proposals, notably, as the hon. Member for Stechford (Mr. Roy Jenkins) pointed out, by way of the reduction in the standard rate. Thus, we are dealing with the question of relief to a section which, although heavily taxed, has not been denied some relief in the proposals in this Finance Bill.
I do not want to be led into an intellectual argument as to whether it is better to give relief by way of earned income allowance or alterations of the standard rate. In moving the proposed Clause, my hon. Friend went out of his way to say that he regarded the method embodied in the Clause as a second best and said that it was put forward on grounds of relatively lower cost. Some hon. Members opposite appear to take the other view. It is a problem which, when funds are available, ought to be looked at in the circumstances of the time. I do not think it would be particularly wise or sensible of me to give any wide general statement of opinion at the moment.
However, it may be of interest to hon. Members to note that both the earned income relief fraction of two-ninths and the maximum amount of income which can be relieved from tax in this way are at present higher than they have ever been. That is the direct result of the changes in respect of these reliefs which were effected in my right hon. Friend's proposals last year. Consequently, I say to my hon. Friend and to other hon. Members who have concerned themselves with the matter that we are at least starting on a basis where the relief, 1147 whether it be at the right level or the right limit or not, is actually bigger than it has ever been before. It is true that it is one way, but one way only, of bringing the relief which it is desired to bring.
I hope I may be allowed to say that we have had a very interesting and thoughtful debate. It has certainly indicated that, as and when funds become available for further tax relief, if funds do so become available, there will be no difficulty in finding suggestions as to the way in which they can be disposed of. It is equally clear that there is a very wide variety of views—I am sure, most sincerely held—in all quarters of the House as to the best methods of using such a surplus. But, as I have had to point out—as I can do with some confidence in view of the very large tax reliefs which have been conceded—my right hon. Friend has gone a long way in the direction of reliefs this year and it is just not compatible with his responsibilities to accept a further load.
One of my hon. Friends asked me to say something about this in connection with next year's Budget. The House will recall that even shortly before a Budget it becomes necessary for my hon. Friend the Economic Secretary and myself to stand at the Despatch Box at Question time and say that we regret that we cannot anticipate our right hon. Friend's Budget statement. I really do not think that, while we are discussing one Finance Bill, I can reasonably be pressed to anticipate the next.
§ Mr. Harold Wilson (Huyton)
At the same time, surely the hon. Gentleman would not want in any way to diminish the satisfaction, such as it is, in cinema circles by the degree to which his right hon. Friend anticipated his Budget speech of next year in relation to Entertainments Duty in the case of cinemas?
§ Mr. Boyd-Carpenter
I should certainly not wish to diminish the pleasure which my right hon. Friend has given in that direction, but the right hon. Gentleman is perfectly well aware of the terms of these observations and I do not think they are material to this very different and very precise suggestion as to a method of adjusting the Income Tax allowances.
1148 This interesting debate is on record and the views expressed will be available to my right hon. Friend or to others as and when circumstances arise in which the agreeable subject of relief from tax can again be considered.
§ Mr. Stevens
Having been very much impressed by the cogent arguments of my hon. Friend, rather than by the somewhat vulnerable arguments of right hon. and hon. Gentlemen opposite, and having regard to the fact that he accepts the idea underlying the Clause, I look to the future and beg to ask leave to withdraw the Motion.
§ Motion and Clause, by leave, withdrawn.