§ Motion made, and Question proposed, "That the Clause stand part of the Bill."
§ Mr. Harold Wilson (Huyton)
This Clause involves a considerable number of estimable people who so far have been free from taxation. The Clause involves them in Income Tax and I should have thought that the Treasury Bench would have been good enough to give the Committee at least a brief indication of the way in which it has come about that this Clause has been included in the Bill, before the several hon. Members who want to take part in discussing the Clause seek to intervene. Perhaps, therefore, the Financial Secretary, or the Economic Secretary, or the Chancellor who has just returned to the Chamber, can tell us something about the reason which led the Government to impose Income Tax taxation in the Isles of Scilly.
§ Mr. G. R. Howard (St. Ives)
In intervening for a short time, I should like to say first how much the Islanders appreciated the way in which they were received by the Chancellor and the time he devoted to listening to their case. I should like to take a few moments to ask a few questions of the Chancellor on certain points. First of all, why was this tax imposed? How many times had it been considered in the past, and if it had been considered—which I believe is the case—why was no action taken?
I believe that in the brief presented to the Chancellor when he received a deputation it was stated that the anomalous position of the Islands has for many years been recognised by Parliament and that the wording of many Acts dealing with local government functions have left it with the Minister concerned to decide how much of each Act should apply to the Islands. I believe that imposition of Income Tax was considered before and it was decided that no action was to be taken.
I should like to know the estimated yield of such a tax and from what type 1099 of persons the returns are to come. I believe that there has been some misapprehension on the part of certain hon. Members that the case of the Isles of Stilly was a repetition of that of the Channel Islands where people went to evade Income Tax. That is not so. As many hon. Members know, there is only one landowner in the Islands, namely the Duchy of Cornwall. The land is held under long lease from the Duchy. There is one other largish landowner, but the land is farmed mainly by small people or owned—in the case where there is ownership—in Hugh Town, in the main Island of St. Marys, which was sold some time ago by the Duchy.
In the case of the one large leaseholder, what would be the result of the imposition of tax? I happen to know that he has made considerable losses for some years, but as he was not paying tax on his Island income he could not claim for those losses. I understand that he will now be able to do so with a consequent loss to the Treasury. How many extra people will be required to administer this tax? I know it has been said that it will be administered under the West Penwith area, but if these people are to be subject to Income Tax there must be an increase of staff to deal with it, and how many men would this entail?
Is it worth upsetting the Island's economy? I think the Chancellor would agree that the leader of the deputation made a very moving case and was able to show the Chancellor that a very considerable tax on living is already imposed on those in the Islands. In my first speech on this subject I tried to show how this tax would fall especially heavily on the people in the off-Islands. The cost of taking something from Penzance to St. Marys is £1, and there is an additional cost of 10s. if that same item has to go to the off-Islands.
How are teachers going to be replaced? It has been pointed out that in two cases teachers who were coming have said that they will not come now. With the low amenity value in these Islands the main inducement was the fact that there was no Income Tax, but will teachers be attracted to the Islands now? There has been some talk of the doctor leaving. I hope it is not true, because he is a very good doctor, but no doctor can increase his clientele beyond a certain limit. If 1100 the doctor goes, who will produce another one? Will the Minister of Health do so? Before the incidence of taxation there was for some years a question of the construction of a new steamer. If taxation comes to the Islands what will happen about her? Will the Islanders be in a position to pay for her?
Now I come to the absolute crux of the whole problem. If taxation is imposed, will there be an increase in freight costs? Wherever one goes and however one looks at the question, the cost of freight is the absolute kingpin upon which the whole economy rests. Those who have studied the recent debate in connection with the MacBrayne Steamship Company know how important their contract is.
It has been said that our case is the same as that of the Western Isles and that we should therefore not be treated differently. Is that so? First, the Western Isles have not their own county council. Secondly, the steamship service to the Western Isles has a very large Government subsidy, whereas our steamer is entirely self-supporting. It is run, financed and paid for by the Islanders themselves and by the people who visit the Islands in the summer. There is no subsidy from the Government. If we are to be treated, in the same way as the Western Isles it would surely be fair for us to ask for the same treatment with regard to a subsidy, for which the taxpayers will have to pay.
Is there a chance of depopulation? I understand that the census figures for the Western Isles have been steadily falling. I am informed that at the 1911 census the figures were 46,732 and that in 1951 they were 35,592. Is that going to be the same with us? What are the possible effects? It has been suggested that people have been too apprehensive about the effect of this tax and that it may not affect them as much as they think. But if there is an increase in freight charges, it will affect everybody in the Islands whether they pay tax or not. How will it affect the labour position in the Islands because to a great extent labour is not indigenous. If the tax is introduced and the farmer has to turn his man off, the man may say, "I am going to the mainland. I am not staying here; my inducement for staying here was the fact that I could save a little more because I paid no tax."
1101 People ask, "Why should they not pay tax when they get the benefits of National Insurance?" But it is not merely a bus ride away from a hospital. I know of the wife of a working man who had some trouble with her ankle and went to the local hospital; and, on instructions from the hospital, she went to Redruth for further treatment. I know her treatment cost her £40, because it is only in special cases that free transport is provided. Once on the mainland, the weather may change and for 24 hours one has to put up at a hotel and pay for the accommodation. Those costs do not have to be met by other people. Lack of amenities, too, makes it difficult to get nursing sisters to the Island. They will not stay there because of the lack of amenities.
Now that the Chancellor has had time to consider the case made by the deputation, I hope he may give some indication of his courage, which I am sure everyone recognises, by saying that this action was rather hasty and can be corrected. Perhaps there could be a delay in the imposition of the taxation pending further inquiries, and perhaps there can be consideration on the part of the Chancellor of the question of a subsidy for the steamship company. I hope the Chancellor will be able to assure the islands that he has considered the case sympathetically. It is for that reason that I have sought to give him an opportunity to let us know his intentions, and I am reserving whatever action I think necessary for the Report stage.
§ Mr. Grimond
I feel that I should say something in sympathy with and support of the other end of Britain. I should like to start by warning the hon. Member for St. Ives (Mr. G. R. Howard) not to put too much faith in county councillors. We have two, and they have singularly failed to keep the Chancellor of the Exchequer out of my constituency. Indeed, I sympathise with the hon. Member only too much about the incursion of the Treasury, but it is something from which we have had to suffer for many years.
It will be generally agreed, I think, that this is a thoroughly reactionary proposal —the sort of proposal that one must expect from the Treasury when it is manned, if I may use the word, by one 1102 right hon. Gentleman from the flatter part of the Eastern Counties, one hon. Member from the calmer backwaters of the Thames and one hon. Member from the shadows of the Home Counties. None of them has had any experience whatsoever of the difficulties of living in islands.
I can support everything which the hon. Member for St. Ives has said. Let the Chancellor of the Exchequer come and break his leg on one of the outlying rocks of my constituency and see how long it takes him to get any benefit out of the National Health Service. [An HON. MEMBER: "Leg or neck?"] I said leg. We start with the legs and work upwards. Many of us hoped for a very long time that a high officer of the Treasury would slip on our rocks, but so far in vain.
What makes this Budget all the harder for islanders is that this Budget has been hailed as a great gala event for the nation, as a great incentive Budget. Excess Profits Tax is to be abolished, but unfortunately we cannot make excess profits. There is to be a reduction in Purchase Tax on electric fires, which seems to trouble the conscience of at least one hon. Member of the Labour Party, but many islanders have no electricity. Television may come, but not to the islands. The final blow, so far as I am concerned, is the concession to cricket. The Chancellor of the Exchequer attaches an almost religious significance to this, but we in our islands are unable to play it, because the ball will not bounce. Our great summer game is football.
§ The Temporary Chairman (Colonel Gomme-Duncan)
I must remind the hon. Gentleman that we are not discussing Orkney and Shetland, and must confine ourselves to the Scilly Isles, although passing references by way of illustration are permissible to other islands.
§ Mr. Grimond
These are merely passing references, Colonel Gomme-Duncan. However, I do not want to delay the Committee unduly even on this interesting topic. I do not know what the national game of the Scilly Isles is.
§ Mr. G. R. Howard
I hope we shall have visitors to come and find out some of the games enjoyed by the islanders.
§ Mr. Grimond
Whatever they are, they will not have benefited by this Budget. The Chancellor of the Exchequer, as so often, is moving in the wrong direction. Instead of extending the tax to the Scilly Isles in this way, he should extend the concession rightly given to them to other islands. If he says it is rather difficult for him in present circumstances and the state of the nation to extend the concession all at once to all the islands, let him make a beginning by working round the coast, beginning with the Isle of Wight, and continuing on.
There is a great deal to be said for tax concessions for islanders, fair shares for all of them. Let this happy position be spread as widely as possible. Whatever may be our views about the pirates of Penzance, I hope that the hon. Gentleman the Member for St. Ives will show a free spirit and vote against this proposal, and if he will not vote against it, at least secede to France.
§ Lieut.-Colonel Marcus Lipton (Brixton)
I should not like the discussion to conclude without at least one voice being raised from the Labour benches to provide some semblance of all-party support for the plea put forward by the hon. Member for St. Ives (Mr. G. R. Howard). If anything, he understated the merits of the case that he was seeking to advance.
The Scilly Isles are a very poor, an almost poverty-stricken, part of the United Kingdom. The hon. Member for St. Ives did not point out that the total rateable value of the Isles amounts only to something like £6,300, and that a 1d. rate brings in only £28, and that the present rate of 21s. 6d. produces only £6,700. Out of that the rural district council, which is responsible for the local government of the Scilly Isles, has to face all the responsibilities of a fully fledged county council. It has to bear the cost of education, National Assistance, National Health and other county and rural functions. That already imposes a not inconsiderable burden upon the population of these islands.
The hon. Member for St. Ives quoted some figures in relation to the population of the Western Isles. It is also quite clear that the population of the Scilly 1104 Isles is falling, because the figures I have been able to obtain show that according to the census of 1901 the population was over 2,000, whereas now it is only 1,800. If a further burden of taxation is imposed, the population of these islands' may well be further depleted.
I should like to quote one other example to show that there is not a vast sum of money available to the local government authorities in the Scilly Isles, which I think can best be borne out by the fact that the Clerk of the Council is also the Coroner, the Welfare Officer, the Registrar, the Employment Officer and the Education Officer; besides which he is also in private practice as a solicitor.
§ Lieut-Colonel Lipton
That does not seem to indicate a very high level of prosperity. Here we have a population of 1,800 people, not all of whom can by any stretch of the imagination be liable to Income Tax when it is imposed. In order to collect this tax the Chancellor will either have to send an Income Tax collector from Penzance or open an Inland Revenue office on the islands. In any event, it seems to me that he will have to offer some additional inducement to the tax collector, either by way of danger money or subsistence allowance, to enable him satisfactorily to discharge the duties that will be imposed on the local Income Tax collector when the Clause goes on to the Statute Book. What does the Chancellor anticipate will be the profit on this transaction? How much does he expect to raise by imposing Income Tax on this tiny population? Will the gain really be worth the candle?
The hon. Member for St. Ives has referred to the various disabilities and disadvantages from which the population of the Scilly Isles suffers. Some people are under the impression that the islanders make vast sums of money out of the production of early flowers and vegetables. The fact is that it costs very much more to send 1 cwt. of flowers from St. Mary's to Covent Garden than from Penzance. From St. Mary's I understand it costs 25s. 2d., whereas from Penzance it is only 13s. 2d., so they have these additional charges in respect of distribution costs both ways, which is an additional disadvantage from which they suffer.
1105 I therefore hope the Chancellor will not adopt too stony-hearted an attitude. He will have to convince me that the additional expenses he will incur will be more than amply repaid by the revenue he is likely to raise. I think the Committee are entitled to know what the Chancellor has in mind as to the possible product of imposing Income Tax upon this outpost of the United Kingdom. It is rather curious that the present Government should suddenly be so impressed with the need for uniformity that they should seek to include the Scilly Islanders within their fatal financial embrace. I hope that the Chancellor will view with some sympathy the plea which has been put forward by the hon. Member for St. Ives, supported, as it has been, by two Members of the two other political parties represented in this Committee.
§ 10.0 p.m.
§ Mr. H. Wilson
I think that hon. Members on both sides of the Committee will greet this Clause with at least some sentimental regret, even if we recognise that we have to bow to financial inevitability. The hon. Member for St. Ives (Mr. G. R. Howard) said that the Scilly Isles did not represent an area to which a large number of people had gone for the purpose of avoiding taxation, even if, in some of the examples which he gave in his speech, he came perilously near to suggesting that there were individuals there who wanted to leave, or he had heard so, and that there was a danger of important offices becoming vacant and the danger of those who were about to go there deciding not to do so because of the Chancellor's announcement.
§ Mr. Howard
I wished to show that in my mind there was a difference between a tax dodger and offering someone an inducement which might make up for the lack of amenities consequent on living on those Isles.
§ Mr. Wilson
I am bound to say that there are some very considerable amenities, certainly from the point of view of the attractiveness of the Isles, but I agree with what, I think, was his main point, that this has not been a haven for tax dodgers.
I was interested to see in one of the local papers—and perhaps the hon. Gentleman will tell me that he was mis-reported—that he did at the time of the 1106 Budget speech complain that the Chancellor had made his announcement without consulting the hon. Gentleman. I have never heard any suggestion that the Chancellor of the Exchequer went so far as to consult any interests before framing his Budget, even the most powerful of them, let alone the hon. Gentleman. I can understand that the hon. Gentleman has been active since the Budget in making clear to his constituents there that he intends to fight this matter.
§ Mr. Howard
I was given to understand that in the case of my predecessor and in other cases various consultations had taken place. After all, this was a thing which could be generally discussed, without disclosing Budget secrets, as to the proper course to be taken, and various advice sought through the local Member of Parliament.
§ Mr. Wilson
I should be very surprised to think that any Chancellor of the Exchequer would be consulting a local Member of Parliament before introducing a tax to cover the area concerned.
It has been said about the Scilly Isles that for many years these Islands have been immune from taxation. All the books call them the "Fortunate Isles" or the "Isles of the Blest," which I think, was originally meant, not from the point of view of their immunity from taxation, but with reference to an ancient legend that these were the areas where the souls of the departed went to find permanent bliss. It was argued that King Arthur was amongst those who believed so, and that of the very many resting places from which he had to select he finally decided on this one.
In recent years this title has been referred to in relation to their immunity from the activities of the Chancellor. There is undoubtedly, as the hon. Gentleman has said, a strong feeling on the Islands, and it is quite obvious there is a lot of sympathy in all quarters of the Committee for their point of view. I am glad that the hon. Member for Orkney and Shetland (Mr. Grimond) stressed some of the similarities between the islands in the North and the Isles of Scilly.
It would be difficult for us to vote against the Clause, though if the hon. Member for St. Ives is going to consider his position on the Report stage in the 1107 light of the Chancellor's reply tonight we shall all be very interested to hear what he has to suggest then. It is probably true, unless the Chancellor is able to show us that he has learnt a lot from the deputation which the hon. Gentleman took to see him, that the simple view that the Income Tax law should be extended automatically to the Scilly Isles does not take full account of many of the factors mentioned by the hon. Gentleman, particularly the high cost of transportation.
The Chancellor will no doubt reply that the high costs of transportation, of raw materials, of equipment and tools and other things enter into the costs of the economic activities in computing the income which is finally taxed and that that reduces the net income subject to tax; but the necessarily high cost of transportation and certain other services on the Island means that the real value of the income after taxation must be very much less and the imposition of taxation at this stage means that many people on the Island will be enjoying a lower standard of life than their opposite numbers on the mainland.
It is also true that the income of those who will be paying tax is not at all easily earned. There is very little suggestion that this is an area to which large numbers of holidaymakers go, thus furnishing an easy and large source of revenue. There is a scarcity of accommodation and a relative shortage of travelling facilities. I know how difficult it is to book flying accommodation there, even many months ahead. It means that the numbers going to the Islands are very much smaller than the numbers who would want to go once they had seen what the Islands are like. The income from fishing must be very small, and it is dangerously earned, as we know from certain tragic incidents which occurred last August.
The flower industry, to which reference has been made by my hon. and gallant Friend the Member for Brixton (Lieut.-Colonel Lipton), is not only subject to the vagaries of the weather, transport difficulties and the high cost of transport, but is not as profitable as it might be owing to the vice-like grip held over the flower industry in the Scilly Isles by the Covent Garden dealers. That means that 1108 although large profits are made out of the Scilly Islands by Covent Garden, relatively small profits, and in some years no profits at all, are made from the flower industry in the Islands themselves.
I hope the Chancellor will not have excessive illusions about the high tax yield from the Scilly Islands. Perhaps he will tell us what his expectations are. Perhaps he will tell us that his main reason is to secure equality of treatment between the Islanders and those on the mainland and some other islands which have been mentioned. I hope the Chancellor will watch the cost of tax collection, especially the travelling expenses of the officials of the West Penwith division. I am not suggesting that public servants would be likely to seek to travel more than is necessary for the purpose of their official duties, but the officials of this division will be subject to very great temptation to go over to the Islands personally rather than conduct their business by correspondence whenever there is a difficult case to be settled.
I will conclude by saying that I think we all feel that when something old and rather quaint like the immunity of the Scilly Isles from Income Tax gets caught up by the long arm of the tax gatherer, it must always be a matter for regret. We obviously cannot vote against the Chancellor's proposals. I hope he is going to tell us a good deal more as to why he made the decision this year after the frequent consideration that has been given to it in previous years, and what changes have come about to lead him to take this action at this time. We cannot oppose it, but I think it right that we should not let it go without an expression of our very great feeling.
§ Mr. F. H. Hayman (Falmouth and Camborne)
As a Member for the constituency which borders that of the St. Ives Division, I should like to support the hon. Member for St. Ives (Mr. G. R. Howard) and to emphasise, even at the risk of some repetition, the high costs which have been borne by the Islanders through the transport of necessary items to the Islands. I should also like to emphasise the initiative and grit of the people in the Islands, who during the present century have built up a special economy for themselves, and I think have fired the imagination of most people who have any knowledge of them.
1109 I should also like to stress the high cost it is for them to go to hospital. As the hon. Member for St. Ives said, it is a considerable expense indeed, even if they have only a slight accident, if they have to go to the mainland for ordinary treatment which costs comparatively little to the people who live near hospitals. For those reasons, I hope that the Chancellor will give an explanation, and perhaps decide, after all, not to insist on this tax.
§ Commander C. E. M. Donaldson (Roxburgh and Selkirk)
I wish briefly to speak on this matter, but I do not wish to repeat any of the arguments put forward. This is an occasion when there is complete unanimity in the Committee, and I am sure it does not frighten my right hon. Friend the Chancellor of the Exchequer that this unanimity is on something which appears to be in disagreement with his Budget statement.
My constituency does not border the Scilly Isles, and I intervene only in virtue of the fact that my ancestors all came from Cornwall. I was born in Penzance and I have a natural interest in the Scilly Isles. I have followed their history ever since I was a boy, and I think it is as well that we should have this unanimity for a people who live in these islands and whose ancestors have been there for many generations. These people take little thought of political activities and such things which interest those on the mainland.
It must have come as a great bombshell to them when it was announced that Income Tax would be extended to them, as it did undoubtedly to my hon. Friend the Member for St. Ives (Mr. G. R. Howard). It is only right that we should have this sympathetic support from hon. and right hon. Gentlemen in the Labour Party, in the Conservative Party and in the Liberal Party. I am sure I am expressing the feelings of all Cornishmen or half-Cornishmen who live in many parts of the world when I say we should like to hear of a generous gesture from my right hon. Friend, and I trust that we may have it tonight before leaving this Clause.
§ Mr. R. A. Butler
We have had an interesting debate on this subject, like many others. I think the right hon. Gentleman the Member for Huyton (Mr. 1110 H. Wilson) is right in saying that it is virtually impossible for a Chancellor to enter into consultations, except under very prescribed rules and regulations, before introducing his Budget. If the islanders think they should have been consulted, I am afraid I must plead precedents for having had to reserve my counsel upon this matter, which has been so difficult for them. Other hon. Members have joined in to make their contribution but we should all wish that I should devote my attention to the speech of the hon. Member for St. Ives (Mr. G. R. Howard), who has done so much to represent the views of the islanders who are in his own constituency.
In the first place, I should like to say what a pleasure it was for me to meet the deputation from the Isles and how impressed I was by their demeanour and the case they put to me. In particular, I was impressed by the families who come from some of the outer islands, Tresco and Bryher particularly, and of the life that is led on all the islands, especially in the winter months.
The hon. Member for Orkney and Shetland (Mr. Grimond) hopes very much that I shall break my leg or my neck on a pier or stone in his constituency——
§ Mr. Butler
For that relief much thanks. I was equally delighted with the prospect of spending a winter on one of the outer islands of the Scilly Isles which I was assured I should find somewhat difficult to sustain.
§ Mr. Butler
I am afraid that Her Majesty's business is keeping me in the more salubrious climate of the capital.
The hon. Member for St. Ives asked me the reasons why this had been decided upon and why it had not been done before. The reason was that there has never been an Income Tax Division, a general body of Income Tax Commissioners, with jurisdiction in the islands, and therefore there has been no machinery for the assessment and collection of Income Tax on income arising in the Scilly Isles to Scilly residents. Of course we have been able to deal with those who are involved in the ordinary 1111 taxation of the mainland. It involves not only companies and persons with large incomes but, as has been seen from the popular Press, which has devoted a considerable number of columns to this subject, it also involves one or two officials of the Post Office who pay tax.
The reason this subject came up was that it arose in the ordinary range of activity of the Commissioners of Inland Revenue. The reason they brought it up was that it has been under consideration for a very long time. There is no doubt that there have been representations, particularly from the mainland not too far from the Scilly islanders that, for example, those who grow flowers on the mainland want to know why they should pay tax and why the islanders should not. In fact, although I am unable, under the ordinary arrangements between the Chancellor of the Exchequer and the Revenue, which must of their nature be confidential, to give further particulars, I must say that there was sufficient evidence which made it necessary for me to take a decision.
The Committee may well say that I could have taken a decision not to pursue this matter but, after conscientious thought, I came to the conclusion that there was no reason which I could sustain that would prevent me from applying the same law to the Scilly Isles as applies to the less fortunate or more fortunate, whichever way hon. Members like to see it, residents on the mainland just opposite. In particular, from the purely human point of view, the matter has been brought rather more to the front lately because there were rather bad flower seasons on the mainland and the islanders have been able, owing to the earlier climate which fortunately favours their bulb and flower industry, to come in and make a living while some of their less fortunate competitors on the mainland, subjected to tax, have not done so well, largely for weather reasons.
That gives an example of how the subject has come up. It has been decided on the highest principle, namely, that there is no apparent reason why this one island or section of islands under the United Kingdom should be free from tax while all others are taxed, including the constituency of the hon. Member for Orkney and Shetland, including the 1112 Western Isles and including every single island except Lundy. The Island of Lundy is not subjected. There, however, there are only at the maximum in the very best possible weather 20 inhabitants, and it has been decided that it is impossible to levy tax on so small a community.
§ Mr. Butler
The Isle of Man, of course, has its own administration and Income Tax, and the Channel Islands also have their own administration and their own method of Income Tax. That means that in logic, once the matter had been submitted to my judgment, there was no other decision Which I could conscientiously have taken.
The second question of the hon. Member for St. Ives was about the amount that is likely to be collected. I cannot give an appreciation or estimate of the total that is likely to be collected. It depends, in short, on what we collect. It therefore would be difficult for me to give a general all-round figure, and I think it would be contrary to ordinary precedent for me to do so. But the fact is that we think it worth while collecting, otherwise this decision would not have been taken.
That leads me to the third question of the hon. Member—what kind of person will pay the tax? I have tried, as the hon. Member probably realises, to take a most conscientious interest in this matter. I have before me an account of the topography of the island. The main acreage of bulb land, leaving aside the grassland, is in the island of St. Mary's, but there are other small amounts of bulb land, the largest being in the island of St. Martin's and smaller amounts in St. Agnes, Bryer and Tresco. It is from that bulb land that it is most likely that the requisite incomes will be made which can be submitted to the shears of the tax gatherer.
There are in St. Mary's five hotels and licensed premises, which would be likely to yield a certain amount. There are, of course, the owners of the launches and there are many residents, to one of whom the hon. Member referred. Of course, if they have made a loss, we shall not make anything out of it. If they have made a profit, we shall. That leads me to the 1113 main observation about the nature of the Income Tax which I want to make: namely, that we cannot levy tax if there are no profits from which to levy tax. To that extent the Income Tax and Profits Tax are an equitable instrument.
Looking at the position from the point of view of labour, to which the hon. Member referred—I am trying to follow each of his points—I do not think that the working population of the islands, judging by the representative of the working population who came with a deputation to see me, are likely to suffer very much from the imposition of P.A.Y.E. or Income Tax. A married man with two children earning £500 a year will pay only £1 2s. 2d. a year, and as I anticipate from the account given me by the representative of the working people of the islands that the general wage level is not as high as that, it is very unlikely that many of them will pay any tax at all. In fact, I know very few who will.
The position, therefore, is that there are severe limits to the amount of tax we shall be able to raise. There are, of course, profitable concerns, notably those engaged in the bulb land and flower industry, who, we think, ought to be treated on an equality with those who work on the mainland.
The hon. Member for St. Ives raised various other points. He raised the question of the teachers, the doctor and the steamer. I have in my possession complete accounts of the administration of the islands in respect of education, in respect of the equalisation grant total under the Ministry of Housing and Local Government and in respect of the steamer, its finances, its age and the period of its replacement. I have examined most carefully whether there is any possibility of meeting some of the islanders' anxieties and doubts on these various scores.
In the matter of the teachers, I do not think that this change is the sole one which makes their position difficult. If I thought it was the sole reason why the hon. Member and the county council were having difficulty with teachers, I should be even more concerned than I have been by his representations. In the case of the doctor, I do not believe that his future is governed solely by a consideration of tax or no tax. In the case of the steamer, which I have examined 1114 with the greatest possible care, it does not appear that for the immediate future of this gallant steamer, the "Scillonian," the company which runs it are likely to need to renew its services.
I am watching the position, but I must tell the hon. Member that if we are to introduce the principle of a subsidy for the "Scillonian" to steam between the mainland and the islands we would have to do the same for the Orkneys and Shetlands, which do not get a subsidy, and the same for Northern Ireland, where we have already had long conversations which have resulted in the non-provision of such a subsidy. As the hon. Member will have observed, there is a subsidy in the Western Isles under the MacBrayne contract, but for various reasons I find it very difficult to copy that example. Therefore, with the best will in the world, I cannot see my way to accede to the proposal of the hon. Member about that. There are alternative transport services to the island, namely, the air service, and I would certainly not be prepared to envisage a subsidy for that. I am brought back to the very real difficulty of making any proposal at present which will be of particular value to the islanders.
The hon. Member concluded his speech by asking for delay in which an inquiry could be made. I have also thought of that, but I frankly do not need an inquiry. Therefore, if I proposed further delay in introducing this measure, I should only be deluding the hon. Member and his friends in the islands. We know what to do in regard to the assessments. We cannot possibly give an accurate assessment of the total until the individual assessments are made and it would be wrong and dishonest if I suggested that an inquiry would put that right. The hon. Member asked me about the possibility of a steamer subsidy and I have given reasons against that.
This provision will not operate for another year in respect of P.A.Y.E., which will not start to be levied until the next financial year. The Profits Tax and other levies will not be levied until the year after because of the assessment and Surtax, which is always a year late, will not be taken until the year after that. I have thought of the possibility of delaying the whole for another year, but I do not think that would make the position 1115 very much better for the islanders if, in the end, they are to be taxed.
I cannot give any undertaking to the hon. Member. If he can introduce any further argument which will make me consider the matter between now and the Report stage I will listen to what he says, but I must ask the Committee tonight to agree to this Clause being passed. We should do it in the spirit of sympathising with the islanders, but I am afraid that in the spirit of logic and also of justice I cannot interpret my difficult duties in any other way than to proceed with this proposal.
§ Mr. Ede (South Shields)
We have just listened to the modern version of the Walrus and the Carpenter, "I weep for you, I deeply sympathise," but, as far as any help is concerned, there is nothing doing at all. He will eat them every one.
I am very sorry to see this anomaly disappear, because the Scilly Isles have played no small part in social experiments in this country. They were the first part of England and Wales to have compulsory education provided by the benefactor and owner of the islands, who in those days was an unhyphenated Mr. Smith. He arranged compulsory education on a sound financial basis which ought to appeal in a historical way to the Chancellor of the Exchequer. If a child made a full attendance during the week the parents paid 1d. but, if he stayed away at all, the parents paid 2d.
There are a great many anomalies in regard to these places. They get no highway grants from the Ministry of Transport. Their motor vehicles, in consequence, pay no tax. But motor vehicles, taxed or untaxed, destroy the roads. When I was there in 1947, as Home Secretary, they were faced with the difficulty that the few motor vehicles they had were destroying the roads and so the council proposed that there should be a voluntary payment of 5s. a wheel by each owner of a mechanically-propelled vehicle. Six motor car owners agreed to pay £1 each, and the others said, "We will wait to see what you do with the £6 before we pay anything."
As Home Secretary I doubled the size of the police force in Cornwall. I have no doubt that will be helpful to the right hon. Gentleman when this project comes 1116 into effect. At the same time I halved the cost by creating a joint police authority for Cornwall and the Scilly Isles. They used to have one policeman. Now they have two, but they cost the islands about half of what one would have cost.
I was hoping that the hon. Member for St. Ives (Mr. G. R. Howard) would have had a more sympathetic answer. In the first flush of the great Liberal victory of 1906, Sir Henry Campbell Bannerman said at the National Liberal Club that he had won the country from the Scilly Isles to the isles which were far from Scilly. We have heard an hon. Member for what he regarded as the latter part of the country speak in support of this claim tonight.
I do not share the universal desire for complete tidiness in these matters. These people occupy islands where it is very difficult to get a living and where great things have been done in the past. I sincerely hope that on Report the right hon. Gentleman will be able to show not merely sympathy but appreciation of their position.
§ Mr. G. R. Howard
I am grateful to the Chancellor for saying that he is prepared to consider further representations. I hope that he will be able to give some indication of how much he expects to raise and what will be the cost.
Like the right hon. Gentleman the Member for South Shields (Mr. Ede), I feel it is a great pity that we should be too logical. After all. two wrongs do not make a right. If other people have been unfortunate enough to have experienced the incidence of taxation over a good many years, and rather slowly, it seems hard on these unfortunate Islanders that they have to have not one tooth pulled, but. as it were, practically their entire denture extracted at one go.
The Chancellor said he saw no reason why the "Scillonian" should not be replaced. I understand she is due for replacement in a few years' time. He mentioned the question of alternative freight, but I think he would find on inquiry that the cost of the transport of flowers and other commodities would be so prohibitive as to make it impossible except by steamer.
In view of the Chancellor's assurance that he is prepared to consider other 1117 representations, I hope to be able to submit further evidence to him later as to why we should not be too logical in this unfortunate decision.
§ Question put, and agreed to.
§ Clause ordered to stand part of the Bill.