§ Mr. Eric Fletcher (Islington, East)
I beg to move, in page 8, line 8, to leave out "or become bankrupt."
I venture to suggest that it may be convenient if, at the same time as we deal with this Amendment, we could deal with the consequential Amendment to page 8, line 20, to leave out from the beginning to "and," in line 21.
§ The Temporary Chairman
If that meets the convenience of the Committee, we will take the two Amendments together.
§ 7.30 p.m.
§ Mr. Fletcher
I am much obliged, Mr. Hoy, because that would enable me to explain the object of both these Amendments a little more fully than would have been the case if I had been required to make two separate speeches, one in respect of each Amendment.
In our consideration of the Finance Bill, we are now approaching the interest- 1822 ing topic of making further provision for the repayment of post-war credits, a subject on which there has been very considerable complaint from these benches for a long time past. Most of us here think that, if the Chancellor has now decided that he can make a start in making further provision for the repayment of post-war credits, there are other ways in which he might relieve a great many deserving classes of the community rather than in the way which he has selected in this Clause.
The whole question of post-war credits is a somewhat complicated subject, but I will try to explain to the Committee the precise object of the Amendment. As matters stand at present, post-war credits are repaid only to the persons who are actually entitled to receive them, provided that they have attained a particular age and also provided that those persons make personal application for the repayment of any post-war credit to which they are entitled. Due provision is contained in the original Act dealing with post-war credits to prevent the person entitled to the credit from assigning it to someone else, and to prevent it being negotiated by the person entitled to it to someone else.
Provision is also made that, if that person should die without having reached the age at which he would have been entitled to claim his post-war credit, the amount of the credit shall not fall into his estate for purposes of Estate Duty, but is kept quite outside the remainder of his estate. Owing to death having taken place below the required age, the right to claim passes to the beneficiary under the will, but that beneficiary is not in a position to claim the post-war credit until the beneficiary attains the age of either 65 or 60. The result of that has been that, in a great many cases in which death has occurred below the age limit of 65, the time for the payment of the post-war credit has been postponed more than once, resulting in great hardship being caused.
In his Budget, the Chancellor announced that he was proposing to make a start in dealing with the volume of complaints which have come from people in very necessitous circumstances who are entitled to post-war credits, but have been unable to cash them. I think the Chancellor has made a very niggardly beginning, and, even then, has done it in the 1823 wrong way. I am not quarrelling with the fact that he is now enabling people who are beneficiaries to receive payment without waiting until the age of 65, but what I am objecting to, and what seems to me to be quite wrong in principle, is that the Chancellor should single out, as a favoured class who are to get the benefit of post-war credits, people who have become bankrupt and their creditors. That seems to me to be entirely wrong in principle.
There are all sorts of other deserving classes of the community, some of them in very distressing circumstances, who have these post-war credits at the bank but are not allowed by the Chancellor to touch them, and yet, when he comes to make an attempt to remedy this state of affairs, he selects as the object of his niggardly generosity, as I regard it, bankrupts and their creditors. I find it very difficult to understand on what principle that can be justified.
It is desirable that the Committee should understand how the matter works out as provided in this Clause and in relation to the Amendment I am moving. The words which I am proposing to leave out are "or become bankrupt," and the effect will be that, if these words are eliminated, the concession which the Chancellor is giving to bankrupts and their creditors would, presumably, allow him to have an amount of money which would become available for some other, and as I think far more deserving, classes of person entitled to post-war credits.
I can quite well appreciate that the Chancellor may have found himself in some difficulty on the question of what is to happen to the post-war credit of a person who becomes bankrupt. The general rule is that the only person who is entitled to apply for payment of the post-war credit is the person who is entitled to receive it. What happens when that person goes bankrupt? Let us suppose that a person goes bankrupt over the age of 60. We have to consider separately the cases of people who go bankrupt over the age of 65 and those who go bankrupt under the age of 65, or, in the case of a woman, over and under the age of 60. Fortunately, as compared with men, there are not a great number of women traders who go bankrupt either over or under the age of 60, 1824 so I am sure that the Committee will approve if, for the purpose of this argument, I confine myself by way of illustration to men and treat the age as being 65.
Let us take a case of a person who, at 64 years, goes bankrupt. If, not having gone bankrupt, he had lived another year he would have been entitled to apply for his post-war credits and to receive them. In the case I am giving he becomes insolvent and a receiving order in bankruptcy is made against him a year before he attains 65 years.
What happens to the post-war credit? Here one must refer to Section 67 of the Finance Act, 1941, which has to be read in conjunction with the Bankruptcy Act. His claim to the post-war credit lapses first because he has not attained the age of 65, and secondly because he has gone bankrupt. It is therefore common ground between us that the effect of his bankruptcy is to deprive him, as an individual, of his claim to his post-war credit on his 65th birthday.
What happens today? The Financial Secretary will correct me if I am wrong but, as I read Section 7 of the Finance Act, 1941, the bankrupt's right would pass to a trustee in bankruptcy. It is, however, by no means clear from either subsection (1) or (4) of Section 7 of the Finance Act, 1941, that the trustee in bankruptcy would have any claim for the post-war credit on the original owner claiming on attaining his 65th birthday. As I understand it, the trustee would have no right at all. I do not think that it can be said that there passes to a trustee in bankruptcy either by assignment or by operation of law, the claim to something which can only be claimed by the original individual who would have been entitled to it if and when he became 65 years of age.
What do the Government propose in the Clause? They propose, and I am now reading the opening words of Clause 14 and omitting the irrelevant words relating to persons dying under 65:Where a man or woman who has…become bankrupt would, but for that, be entitled on making the proper application under section twenty-six of the Finance Act, 1946…to payment of a post-war credit to which that section applies then…the person for the time being having the title to the credit shall be entitled to receive the payment.1825 I presume that in framing that part of the Section the draftsman assumed that but for the bankruptcy the person who would be entitled to the credit would have been either the individual himself or his trustee in bankruptcy, but it is not clear which.
Nor is it made any clearer when one turns to the definitions in subsection (5), but I am prepared to assume, for the purpose of this argument, that the trustee in bankruptcy, when the original owner becomes 65, would be entitled to claim the post-war credit and that the object of this part of the Bill is to give the trustee in bankruptcy the right to claim the postwar credit, notwithstanding the fact that the original owner had become bankrupt before attaining the age of 65.
I am afraid that it has been necessary to state the matter in some detail. In passing may I, without criticism of the Financial Secretary, suggest that neither in his opening of the Second Reading Debate nor in the Chancellor's Budget speech was there a single word of reference to this matter. As far as I know there has not been a single explanation from any Government spokesman as to what is really meant by this particular part. I therefore thought it well, in all humility, and subject to correction, to say what I understand the effects to be.
I do not think that this is a sensible provision. I do not think that it is sensible for the Government to accelerate payments of post-war credits to trustees in bankruptcy and to creditors of bankrupts when there are very many deserving people anxious to cash these.
Hon. Friends of mine have a number of Amendments on the Order Paper in the form of new Clauses which ask, for example, that the age limits of 65 and 60 should be reduced each year—to 64 and 59, 63 and 58 and so on. We think that a start should be made in repaying the post-war credits. If that method does not appeal to the Government we suggest that they should make repayable the whole of the post-war credits in respect of the first year, 1940–41, and pay off those.
At any rate we think that they should approach this matter in justice and equity either by paying pari passu all post-war credits of a given year, or by reducing the age limits, or by having regard to the needs of particular classes of applicants. 1826 This proposal of the Government flies in the face of those sensible principles which a rational Government might have adopted.
I am not suggesting that there is anything necessarily reprehensible in a status of a bankrupt. In our commercial life there was a time when bankruptcy in itself, was almost thought of as a privilege. It did not necessarily connote anything dishonourable or disreputable. But surely it is stretching imagination very far to select bankrupts and their creditors as the class to benefit over all other classes from further provision with regard to post-war credits.
I have every sympathy with the creditors of a bankrupt, but I do not think that it can be said in ordinary terms that persons give credit to a trader because he may happen to have some post-war credits. It would be entirely far-fetched to suggest that anyone in the trading community has given credit to a trader on the strength of the fact that he may happen to have some post-war credits which he may one day enjoy if he reaches a particular age.
If, owing to the trader's misfortunes, he has gone bankrupt, surely his creditors are not entitled to say, "We relied on the fact that this man would get his post-war credits." That has only to be stated to show what arrant nonsense it would be. I can therefore see no justification for being particularly tender or merciful towards the creditors as a class of a bankrupt who would have enjoyed a post-war credit had he lived to a particular age.
I think that this is a most unfortunate feature of this very important Clause which deals with post-war credits. If, as I hope, the Government are going to make further provision for meeting the needs of those who are entitled to postwar credits I can think of many classes who deserve that benefit in priority to bankrupts and their credits.
§ Mr. Boyd-Carpenter
The Amendment seeks to delete from the Clause one comparatively small—in terms of money, very small—provision in it, and one which is, in a sense, distinct and separate from the main purpose of the Clause. The hon. Member for Islington East (Mr. E. Fletcher) is quite right in saying that this provision has not previously been 1827 discussed in our debates, no doubt because although it raises an interesting point, as the hon. Gentleman has succeeded in doing, it is not in terms of money at all substantial.
I cannot give the Committee a precise figure, but the cost of this provision is very small, and for that reason it is not necessary to consider it, as I think the hon. Gentleman was inclined to do, by way of alternative uses of the money involved. The money involved is so small that I cannot say that if this were not done it would be possible to make any substantial provision in any other direction. The money is being dealt with in this way largely because it seems that there exists, as I shall explain in a moment, a rather curious anomaly on this point.
It seems, therefore, right to deal with this anomaly in the course of a Clause which, as I think hon. Members will agree, deals with one of the major anomalies in the existing post-war credit system—that is to say, the anomaly by which the accident of death before reaching the qualifying age can deprive a family indefinitely of the benefit of their post-war credit. To some considerable extent, this is a Clause for the abatement of anomalies, and this is a comparatively small and outlying portion of that abatement.
I would not quarrel with anything that the hon. Gentleman said as to the effect of the present law. As I understand, under the present law a bankrupt's right to his post-war credit vests in his trustee in bankruptcy. As a consequence, when he reaches a qualifying age of 65, or in the case of a woman 60, he or she cannot claim their credits; they are no longer vested in them. Nor when the original holder of the credit reaches that age can the trustee in bankruptcy, because under Section 26 (1, b) of the Finance Act, 1946. for such a claim to be made the credit has to be held by the person holding it for his own use. A trustee in bankruptcy, of course, does not hold it for his own use.
Consequently, under the present law the position is that a post-war credit will never be paid unless there is on the one hand a general repayment of all outstanding credits by an order made under 1828 the original Act, or unless the bankruptcy is itself annulled on payment of 20s. in the £.
For practical purposes, therefore, we have a position which it seems to me is somewhat anomalous under which the fact of bankruptcy prevents the payment to anybody of a post-war credit otherwise payable. The effect of the Clause is to get rid of that anomaly, and, of course, the effect of the Amendment would be to preserve it. Therefore, there being no dispute on the facts of the matter and on the effect of the Amendment, we can now discuss the matter on the merits—that is to say, to use the hon. Member's phrase, whether this is a sensible thing to do.
§ Mr. E. Fletcher
I did not want by silence to appear to accept the view of the right hon. Gentleman that this was an anomaly. For all I know, it might have been intended originally that bankruptcy should deprive an individual and his creditors of post-war credits. I do not know, but I do not think the right hon. Gentleman should accept the assumption that this is an anomaly. He is changing the law. He says he is correcting an anomaly, but I am not sure.
§ 7.45 p.m.
§ Mr. Boyd-Carpenter
I do not think I should quarrel with the hon. Gentleman about that. I think I said that in my view it is in an anomaly. The hon. Gentleman is perfectly entitled to his view that a credit otherwise payable should not be payable by reason of the bankruptcy of the original holder. I say that in our view this is an anomaly, and I was proceeding to discuss the question which then arises as to whether we should correct what, in our view, is an anomaly, or, it may be in other views, a perfectly justifiable state of affairs.
The effect, as I say—and I would repeat it for the sake of clarity—is that the hon. Gentleman's Amendment would preserve the existing law under which bankruptcy is a bar to the payment of the credit on the original holder attaining the age of 65, and would also remain a bar to payment under the provisions of this Clause—that is to say, to people who claim from someone now dead who, had he lived, would now have reached the age of 65. An extreme example of what happened in one case is that a man who 1829 reached the age of 65, omitted as some people do on reaching that age to claim payment of his credit, subsequently became bankrupt and now cannot claim. That is an example from practice.
It seems to us—and this is a matter of judgment for hon. Members—that the mere fact of bankruptcy should not act as an all but permanent bar on the payment of the credit. It is a fact—and here again I agree with the hon. Gentleman in his interpretation of the provision—that the benefit of payment of credit in these cases will normally accrue to the creditors. It seems to me that that is perfectly fair. Indeed, it is a fact that from time to time when a post-war credit is paid in the ordinary way to a person who has not gone bankrupt, that person properly uses that money to pay off his creditors. That is a perfectly proper and normal use of the money. I do not really see why we should cause some detriment to the creditors of someone who has gone bankrupt, by holding up indefinitely the payment of the credit.
It is not a question, as I see it, of making a special acceleration of payment to creditors of the bankrupt, as the hon. Gentleman suggested. He based his argument on the ground that payment should not be accelerated in these cases when there are other people with as good or better claims to acceleration. All that it does is to provide that where the credit would in the normal way, but for the fact of bankruptcy, be paid either to a living man, or in respect of the estate of a deceased one, it should continue to be paid notwithstanding the bankruptcy.
Therefore, I would rather put it, not that we are accelerating payment to the creditors, but that we are cutting out the deceleration. This is largely a matter of the way in which one looks at it, but I am inclined to think that the way I look at it is the fair way. At any rate, this is a matter which in a very limited number of cases will accrue to the benefit of creditors of a bankrupt estate, that is to say of people who have lent money which they see little chance, at any rate at present, of getting repaid in full. There may be many reasons for giving credit to somebody who becomes bankrupt. They are not generally disreputable reasons; at any rate, I do not think that we can assume that they are such disreputable reasons that we are entitled 1830 to discriminate against such persons in the repayment of post-war credits.
It seems to me that this is one of those small but aggravating anomalies which have grown up inside our system of post-war credits, and that we should put it right. The amount of money involved is so small that there is no necessity for hon. Members to search their consciences and weigh the need to do this against the need to do many other attractive things which we should all like to do in the field of post-war credits if funds were available. This is a small matter in terms of money, but it carries out the major purpose of the Clause, which is the ratification of what seems to us to be an anomaly which can and does indefinitely delay the payment of a credit which would otherwise be paid when the qualifying age is reached.
§ Mr. Hugh Gaitskell (Leeds, South)
Will the Financial Secretary make it plain that under the Clause a bankrupt, or the trustee in bankruptcy acting for him, will not be able to get the post-war credit except when the bankrupt person reaches the age of 65 or 60, as the case may be, or, being deceased, would have reached the age of 65 or 60?
§ Mr. Boyd-Carpenter
I can certainly give that assurance. The bar which bankruptcy has previously caused to operate ceases, but no extra or additional privilege is given.
§ Sir Frank Soskice (Sheffield, Neepsend)
It seemed to me that the Financial Secretary did not deal with the real point which was made by my hon. Friend the Member for Islington, East (Mr. E. Fletcher), who began by pointing out that the Chancellor's proposals in this matter, where a great human need calls for treatment, are negative. My hon. Friend went on to say that in those circumstances the Chancellor had approached the question in a most unsatisfactory and inadequate fashion.
The Financial Secretary said that the proposal relating to bankruptcy is designed to cure an anomaly, and he pointed out that under the existing statutory provisions—because, as it were, of an accident in drafting—payment may be indefinitely postponed in the case of a taxpayer who becomes bankrupt. The Financial Secretary said that the object of the provision, which had not been fore- 1831 shadowed in the Chancellor's Budget statement, or in any other document, so far as I am aware, is simply and solely to remove that drafting anomaly.
§ Mr. Boyd-Carpenter
I really do not know whether this anomaly was created by an error in draftsmanship. I should not like it to be thought that I attributed any blame in that respect to my predecessors. It simply appears to us that an anomaly has grown up.
§ Sir F. Soskice
I do not wish to attribute blame in a matter of drafting intricate Clauses of this sort. I should not blame anybody for a drafting slip, if there is one, but the Financial Secretary has said that an anomaly exists and that under the present provisions payment may be indefinitely postponed in the case of a taxpayers who goes bankrupt.
Let it be conceded that it is desirable to provide that instead of being indefinitely postponed the tax credit certificates shall become payable in the event of a bankruptcy. The question we wish to ask is why, in that case, should it be paid to the trustee in bankruptcy for the benefit of the creditors? I am quite aware that only a small amount of money is involved, but the Chancellor had an opportunity, which he has used to some extent in this Clause, to come to the aid of small taxpayers who would feel it a very great help to be able to put their hands on their post-war credits. The amount of money involved may amount to anything between £50 and £100, and the receipt of that sum would make a considerable difference to many persons who stand in need.
Let us now assume that a taxpayer goes bankrupt, a trustee is appointed, and the amount due to the creditors is something between £250 and £1,000. The suggestion of my hon. Friend is that the very fact that the taxpayer has gone bankrupt indicates that his family is in considerable need. That family could very well do with some aid, even the modest amount of £75 or £100. In those circumstances we think that it is unreasonable to transfer that amount for division among the creditors of the taxpayer, and that it would have been infinitely preferable to provide that it should go to the relief of the taxpayer's family, in one form or another.
1832 It cannot be said that any great point of principle is involved. We believe that this is an example of some degree of thoughtlessness and, possibly, even heartlessness in the preparation of the Bill. We think that the matter would have been very much more satisfactorily dealt with on the lines we suggest. I do not know whether my hon. Friend desires to divide the Committee. Personally, as no great principle is involved, I rather hope that he will not. But we think it right to emphasise the point. It is a distinct and definite defect in the drafting of the Clause, and I hope that the Parliamentary Secretary and the Chancellor will be able to see their way to amend the provision at a later stage.
§ 8.0 p.m.
§ Mr. E. Fletcher
I am quite prepared to accept the suggestion of my right hon. and learned Friend that this is not a matter upon which it would be desirable or convenient to divide the Committee, but I hope that neither the Chancellor nor the Financial Secretary will draw any false conclusions from that statement. There was one singular omission in what the Financial Secretary said, and I think it right that I should draw attention to it, if only to enable the Government to reconsider the matter between now and the Report stage.
Has the Financial Secretary really considered the administrative inconveniences that will flow from this proposal if the Amendment is not accepted? When the right hon. Gentleman was speaking we had an exchange of views whether or not there was an anomaly in the existing procedure. He took the view that he was seeking to correct an anomaly; I took the view that he was seeking to change the law, and I said that it may very well have been intended from the outset that if a person went bankrupt he should lose the right to claim his post-war credits. The more I reflect on it the more I think that that very probably is the true explanation.
Either it was intended that a person, on going bankrupt before 65, should lose his post-war credit, or it was not. If it was intended he should lose it I do not think anybody could very well complain. He certainly could not; his creditors could not; I do not think the trustee in bankruptcy could complain. 1833 What, however, will be the administrative consequences if the Amendment is not accepted? In future, in the case of every trader who goes bankrupt, the whole of the mechanism of the administration of his estate in bankruptcy will either have to be kept in being, perhaps at great expense, for a number of years until the date when the bankrupt attains the age of 65, or else the apparatus of the bankruptcy, the distributing of the assets among the creditors, will have to be left in suspense; or, if it is not, new steps will have to be taken when he becomes 65.
Let us take the case of a trader aged 45 and entitled to a total of £300 or £400 of post-war credits. Let us assume that in a year or two the assets are distributed among his creditors. In the ordinary way the responsibility of the trustee in bankruptcy is to wind up the administration as soon as possible, collect the assets, pay whatever fees are payable, decide what dividend can be paid among the creditors, and distribute that diviend. Under the law as it stood the postwar credits would be forgotten, but by this change in the law what will happen in 20 years' time, when that bankrupt trader becomes 65?
Is the whole of the apparatus of the administration of his estate in bankruptcy, which has long been forgotten, to be brought alive again, for a comparatively small sum that creditors, after a long interval, may be entitled to? Is that intended? Or is it intended that the postwar credit should be assigned to some of the creditors?
If that is intended is it really to be supposed that some creditors will be satisfied with such an assignment, while other creditors are entitled to a cash distribution? I suggest to the right hon. Gentleman that by what he calls removing an anomaly he may be laying up in store not only for himself but for a great many trustees in bankruptcy a great many complicated and quite unnecessary troubles.
§ Mr. Boyd-Carpenter
It would be discourteous not to say a word in reply to the hon. Gentleman. His main point in the speech he has just made is the possibility of difficulty arising in the administration of bankrupt estates. It is, of 1834 course, possible to imagine an extreme case in which the bringing of a post-war credit might involve some delay, but I think that, if one looks at it broadly, one sees that it is very unlikely, except in very exceptional cases, that administrative difficulties of that sort will arise, and certainly they are not likely to arise sufficiently frequently as to counterbalance any administrative advantage of bringing in this additional asset.
The right hon. and learned Gentleman the Member for Neepsend (Sir F. Soskice), who is not in his place at the moment—I am glad to observe he was not in his place earlier when his colleague was called in question—asked, why not give the post-war credit to the bankrupt? As he knows far better than I do, under the operation of the ordinary law it vests in the trustee in bankruptcy. I should have thought it would have been unusual and very difficult to have justified a departure from normal bankruptcy law and to have transferred this asset from the place to which it would normally go, the trustee in bankruptcy, to the family.
I have listened most carefully to what has been said, but it seems to me that the case for righting what I regard even more strongly as an anomaly still stands, and although I have listened with great care to the arguments to the contrary I think we are right, as I judge it, to put this right.
§ Mr. W. T. Proctor (Eccles)
I think my hon. Friend the Member for Islington, East (Mr. E. Fletcher) and my right hon. and learned Friend the Member for Neepsend (Sir F. Soskice) have made a very substantial case, and I am sorry to hear what appears to be the last word on the matter from the Financial Secretary. He says the Clause will remove an anomaly, but I think it will create more than it will remove. Generally speaking, the procedure in the past was based on need. I do not think any substantial case has been made out to show that the creditors of bankrupts are the most needy people.
I think the Government could have been better employed than in removing the principle that these credits cannot be transferred from those on whose behalf they have been created, especially when the principle is removed to enable them to be paid to the creditors of bankrupts. 1835 The right hon. Gentleman says only a small amount of money is involved, but he has been unable to give us any estimate whatever of what the amount is. That shows that the matter has not been dealt with with the care we have learned to expect from the Treasury.
I hope that this is not the last word on the subject, and that, after examining what my hon. and my right hon. and learned Friends have said, the right hon. Gentleman will review it and produce some different proposal later. We are not to divide now, but I hope that my hon. and right hon. Friends will consider raising the matter again.
§ Mr. Cyril Bence (Dunbartonshire, East)
I understood the Financial Secretary to say that the post-war credit would be vested in the trustee in bankruptcy. Is that correct?
§ Mr. Boyd-Carpenter
Under the normal operation of our bankruptcy law the post-war credit is vested in the trustee in bankruptcy.
§ Mr. Boyd-Carpenter
I do not think the hon. Gentleman was in his place when I made my earlier speech, when I explained that under the existing law the post-war credit is vested in the trustee in bankruptcy; but the trustee does not hold it for his own use, and, therefore, under Section 26 of the Finance Act, 1946, it is not payable to him at any time, regardless of how old or young he may be.
§ Amendment negatived.
§ 8.15 p.m.
§ Mr. Houghton
I beg to move, in page 9, line 10, to leave out "ninth day of August," and to insert "thirty-first day of December."
This Amendment would postpone the earliest date upon which repayment of post-war credits under this Clause can begin. Under the Clause the date upon which repayment can begin is 9th August. The Amendment proposes to postpone that date until the end of December. It does not interfere with the date in July 1836 after which steps preparatory to repayment may be undertaken by the Inland Revenue Department.
No Member of this Committee wishes to delay the repayment of post-war credits. In my speech on the Budget, and again on Second Reading of the Bill, I expressed the view that the Chancellor had not gone far enough, and that he had chosen the last and the cheapest of all the ways of beginning to repay post-war credits.
At the same time, post-war credits do not repay themselves. Someone has to do the work. The purpose of the Amendment is to give those who have to do the work more time in which to do it. The date, 9th August, has not been fixed by reference to the state of work in the Inland Revenue but presumably by reference to the date by which this Bill may be expected to become law. That date takes no account of the difficulties of those who have to do the work.
There is no doubt that immediately after 9th August a great many beneficiaries under the Clause will begin to look for repayment. Many of the beneficiaries are not in urgent need of the money. We must bear in mind that the original holders are in all cases dead. There will be varying degrees of need among next-of-kin and legatees. Many of the beneficiaries, however, will be widows who will need the money, and all Members of the Committee will feel a special sympathy for them. None will wish to delay the work, which is considerable, if it can be avoided, but it is estimated that there will be half-a-million cases which is, on average, 800 cases for each local tax office throughout the country. There will be some difficult, intricate and possibly contentious questions to settle. The work will take a lot of time and effort
Some weeks ago, soon after the Finance Bill was published, it came to my notice that instructions had been issued by the Inland Revenue that all current work in all local tax offices was to be advanced to prepare the way for this extra load of work which would have to be done. It was said that if and where necessary the staff should be put on overtime.
No consultation took place between the Inland Revenue and the recognised and representative staff association concerned. 1837 Nobody was consulted as to how long this overtime would last, how many people would be expected to do it and what special difficulties might arise in asking staff to do overtime during the summer months in order to fulfil the promise held out by this Clause that repayment of postwar credits would begin on 9th August.
The failure of the Administration to take the normal, elementary step of consulting representatives of the staff was brought to the notice of representatives of the Inland Revenue a little later. There seemed to be a surprising ignorance at Somerset House as to who would authorise this overtime and why, and yet, in reply to a Question which I asked him on 20th May, the Financial Secretary stated that it will cost between £80,000 and £100,000 between now and the autumn to undertake this extra load of work in order to begin the repayment of post-war credits on 9th August.
In putting down this Amendment, I made it known to the Chairman of the Board of Inland Revenue that I intended to do so and I expressed grave concern that there should have been this lamentable failure to consult the staff on how the work will be done. Presumably, without asking anybody whether it could be done, the Chancellor stuck a date in the Bill—9th August—and hoped for the best.
§ Mr. Boyd-Carpenter
On a point of order. I should like your guidance, Sir Charles. As I understand him, the hon. Member is making an attack on the administrative arrangements concerning consultation with the staff in a certain Department of State. I do not seek to object to this, but I should like your guidance as to whether I shall be permitted to reply, in due course, or whether that would be regarded as out of order.
§ The Chairman (Sir Charles MacAndrew)
The Amendment deals only with a change of date. I do not think the question of the administration enters into it.
§ Mr. E. Fletcher
I take it that in supporting or speaking to the Amendment we are entitled to deal with the entire question of whether or not it ought to be possible for the Chancellor and his Department to fulfil their obligation in the Bill of paying post-war credits from 9th August or whether that date should be postponed. This is a very important 1838 decision for the Committee to reach, and in considering it we shall have to examine on both sides whether it is administratively possible to fulfil this obligation, and, if it is not administratively possible, whose fault that is.
§ Mr. Boyd-Carpenter
May I raise a further point for your guidance, Sir Charles, leaving aside that made by the hon. Member for Islington, East (Mr. E. Fletcher)? I should like to know whether I shall be permitted to reply to the allegations made about non-consultation prior to this Amendment being put down.
§ The Chairman
No. The Amendment simply alters the date and although hon. Members may touch on the question of the adminstration, it would be out of order to go into that in great detail.
§ Mr. Gaitskell
Surely the whole point arises from the administrative difficulties. The purpose of the Amendment is to alter the date. I am sure nobody regrets the necessity for moving it more than does my hon. Friend the Member for Sowerby (Mr. Houghton). The whole purpose of the Amendment is to alter the date because my hon. Friend believes that it is administratively difficult, if not impracticable, to carry out the repayment of post-war credits on the basis of the date in the Bill. I should have thought that it was perfectly reasonable for my hon. Friend to refer to questions of consultation which, after all, are relevant to the administrative practicability of carrying out this scheme.
§ The Chairman
The Amendment deals with the future. I do not think hon. Members can go at great length into what happened in the past, because that does not arise under the Amendment.
§ Mr. Houghton
I will pass on from the point of non-consultation to deal with the administrative difficulties connected with the proposal to begin repayment on 9th August. This Amendment proposes to postpone the earliest date at which repayment may begin. Why do I propose this postponement? I do so because of the administrative difficulties in fulfilling the terms of the Clause. I am describing the conditions leading up to the problem which I put before the Committee.
It would, I think, be unsatisfactory if I were to bring to the Committee prob- 1839 lems of administration which could be suitably discussed between the Board of Inland Revenue and the staff representatives, had there not been failure to carry out the normal machinery of consultation. It is that failure to which I have referred and it is because of that failure that it is necessary for me to bring this matter before the Committee at all. If things go on as they are, I am bound to say that administrative obstacles will exist to fulfilling the purpose of the Clause to begin the repayment of post-war credits on 9th August.
I want to explain what those obstacles are. As my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) said, no one regrets more than I that I have to bring this criticism forward and to explain the difficulties to the Committee. Usually, I am as good a champion of the Board of Inland Revenue as most folk and certainly much better than the Financial Secretary, who has recently got the Board of Inland Revenue in the mood of apologising too much and too soon for something which has never happened. The right hon. Gentleman cannot jump forward as a champion of the Board of Inland Revenue. I am that—and one of the privileges of a champion is to criticise, which is what I am doing.
§ Mr. Houghton
I am trying to explain to the Committee why I am moving the Amendment to postpone the date. There is only one reason for moving it and that is the difficulty of getting the work done in time. Surely I am entitled to say that that is a good reason to move the Amendment. I have no other reason whatever. I do not want to deprive any of the beneficiaries of their post-war credits for a minute beyond 9th August. There is only one reason for postponing the date and that is the difficulty of getting the work done.
What steps have the Inland Revenue taken to get the work done? They have put the staff on overtime. The overtime now imposed upon the staff during the summer months is an intolerable imposition upon them, and is an unwarrantable requisition of their private time without their consent and without consultation for 1840 the sole purpose of satisfying the intentions of the Chancellor under this Bill. No one is going to say that the Civil Service, and especially in the Inland Revenue, does not recognise its obligations to fulfil the reasonable hopes and expectations of the Chancellor and of the Committee in matters of this kind.
§ Mr. E. Fletcher
Would my hon. Friend tell us whether in the Inland Revenue Department the staff is compelled to work overtime on this matter, and, if so, whether this overtime is the work of the office or whether it is the kind of overtime that is worked at home?
§ Mr. Houghton
The answer to the latter part of the question is that this work is in addition to the work at home and can be performed at the office.
The answer to the first part is that there is a tradition—I call it a legend—that in the public service the Administration has the right to require the staff to perform overtime as a matter of the conditions of service and, if necessary, as a matter of discipline. I challenge that, but it is not necessary to pursue it in a debate on this Amendment.
I was drawing the attention of the Committee to the fact that every year since 1945 recoding has been necessary wholly or in part under the budgetary proposals. And much of the work already done has been done on overtime, so that overtime is a regular, annual experience with the staffs of the Inland Revenue, but that overtime has been usually confined to the weeks or months in the spring of the year immediately following the Finance Bill and in order to complete the recoding for the early pay weeks in June.
But this overtime during the summer is not only overtime in the summer months, but it comes on top of the extra hours which the staff have been working for the last 14 years. It comes at a time when the staff is naturally reluctant to undertake this additional work in its own time in the holiday period in order to get the repayments started by 9th August.
There could have been some discussion whether additional staff would help. There could have been some discussion whether the overtime should be concentrated in the early part to get the work done more conveniently or some other 1841 arrangements made which might have been suitable to get this job done. But the Inland Revenue Staff Federation, now in session at St. Anne's, is giving serious consideration to whether it should call upon its members to stop overtime at the end of July or before unless, by then, the Administration has approached the staff representatives for a review of the whole of the overtime worked between now and October.
It will be apparent now to the Committee why this date, 9th August, has special significance in connection with the present attitude of the recognised Federation. An additional aggravation which the Financial Secretary must know about, but which he completely ignored in the reply to the Question I asked him on 20th May, is the fact that we have 3,000 officers in the Inland Revenue—most of the people who will be doing this work—who are now taking a special taxation study course lasting a year at their own expense and in their own time. They are paying £6 a head and doing 10 hours of study of Income Tax each week in their private time, week in and week out, from October to this November. This overtime is now being imposed upon officers who are undertaking this work in the interests of efficiency and of the public service.
I would ask any hon. Member in the Committee whether he knows anywhere else, either in the public service or in private industry, where 3,000 of the staff are taking a tuition course to become more competent in their job, paying for it themselves and doing it in their own time? It is at that very moment that the Inland Revenue impose this overtime, which comes at a critical time in this course because the examinations are due to be taken in November. This step has been taken without a single word of consultation and without any consideration being given to the study undertaken.
§ Mr. Houghton
The result is that we are now having to consider postponing the examination, and extending the course at a great deal of inconvenience and expense all round merely because this overtime has been imposed upon us in this way. If the staff turn out to be in the intransigent mood in which I left 1842 them this morning, then the Inland Revenue and the Chancellor will have to reconsider the programme on this job.
I wish also to refer to the fact that for 14 years this staff, in common with other staffs in the public service, have been working in London seven hours a week longer than pre-war hours and getting paid for only three and half hours of it, and in the Provinces one and a half hours longer than the pre-war hours. That has been going on since the war without a break so that, although the amount of overtime to which the Financial Secretary referred and which may be bandied about in any discussion on this matter appears comparatively small in working hours, when added to the fact that these people are already working an additional seven hours in London and one-and-a-half hours in other centres, we find that the staff is working a 50½ hours week.
So far this summer, they would be indoors anyhow, but if they are to be indoors they would rather be indoors at home than in a fusty tax office. Is it reasonable, in the interests of trustees of charities and the like, that this job should be undertaken in this unsatisfactory way?
If this were an isolated instance—and the Committee will appreciate the feelings of the staff—there would be nothing to be said about it, but the curse of the Inland Revenue for 25 years has been under-staffing and overtime. Before the war, in my representative capacity I had to plead for a four-week rate of overtime in August of each year. We had to ask for a week's rest after each four weeks overtime had been worked.
§ 8.30 p.m.
§ The Chairman
Has the hon. Member finished or is he concluding? This is really going beyond the Amendment.
§ Mr. Houghton
I am trying to prove my case that the Chancellor cannot stick to 9th August and ignore these factors.
§ The Chairman
I would remind the hon. Member that the debate should be confined to the Bill and not to criticism of the administration. The hon. Member is really going beyond the Amendment now.
§ Mr. Glenvil Hall (Colne Valley)
Subsection (6) is extremely wide and deals almost exclusively with administration, and not only future administration but what has happened in the past and what may be happening now. It gives legal sanction to anything that might have been put down before 9th August and certainly before the final passing of the Bill. I put it to you, with respect, Sir Charles, that much if not all of what my hon. Friend the Member for Sowerby (Mr. Houghton) has said is in order in view of the very wide terms of the subsection.
§ The Chairman
We are not discussing the whole subsection, but only the Amendment to alter "ninth day of August" to "thirty-first day of December."
§ Mr. Houghton
Being a forgiving sort of fellow I am quite ready to spare the administration any further criticism, but I submit that I am entitled to explain the staff arrangements and the impediment to the fulfilling of the terms of this Clause. That is why I suggest that further time should be given to the staff to complete this work before public clamour for repayment begins.
I merely want to add that they are a long-suffering race of public servants and that they are in a really ugly mood at the moment. They are, first of all, gravely offended at what has been happening recently in matters to which reference has been made at Question time. They are concerned about this further impudent assumption that they will work further overtime without being asked, that it is to be voluntary where possible but compulsory where it is not. I ask the Financial Secretary, whose special responsibility it is, to take note of what I am saying, because I am going back to the conference tonight.
The conference will be in session tomorrow and the next day and will be considering a resolution with regard to the cessation of overtime. If overtime ceases then, clearly, the purpose of this Clause cannot be fulfilled. I say with full sense of responsibility that this is an unprecedented situation in my long experience of staff affairs in the Civil Service. It is unprecedented that we should be contemplating such a grave step.
1844 I ask the Financial Secretary to regard this seriously and to consider whether he can give an assurance that these matters will be fully attended to and gone into with a view to coming to an amicable and agreeable arrangement by which the work can be carried out, either by the suspension of other work or relaxation in some other direction. I ask the Financial Secretary to do something to ensure the accomplishment of the task which has been imposed upon these people in such grave circumstances. If he can do that it will greatly help to relieve the tension which exists. If, however, he is going to be indifferent, as I felt he was by the reply he gave to my Question on 20th May, he must not expect the response of the staff to come up to the expectations of the Chancellor. Indeed, he must expect more trouble than that.
Civil servants, like engineers, mine workers and others, claim to have some control over their private time and will not yield it up to the employer without agreement, without consultation and without some indication of good will and understanding of what is being asked of them. I am quite sure that nowhere else but in the public service could this sort of thing ever happen. That is because, in the public service, there has been no stay-in strike, no going slow and, so far, no ban on overtime. There has been none of those actions adopted by stronger trade unions in the industrial field when they encounter grievances of this kind to which a remedy does not appear to be forthcoming.
I greatly regret having to make this speech, but I am sure the Committee will understand that I do so only under the impelling responsibility which comes from contact with all the thousands of men and women directly concerned who, at this moment, are feeling very discontented. It all arises on this Clause because of the work which this Clause imposes upon them. It arises more so on account of the date of 9th August, which comes immediately after the August Bank Holiday. From then on the public will be saying, "What about these post-war credits? We are waiting for the money. What is holding you up? I am gravely in need." Widows will say, "If only I could have my post-war credit I could go straight away for a little holiday. I have not had one for years." 1845 The most moving appeals will be received by Income Tax officers up and down the country shortly after 9th August, asking for repayment of long awaited post-war credits. If there is to be any delay the public will suffer and, if the public suffers, the responsibility will rest on the right hon. Gentleman.
§ Mr. Proctor
My hon. Friend the Member for Sowerby (Mr. Houghton) has succeeded in bringing a homely atmosphere into the House of Commons. I thought I was back in a trade union branch meeting when I listened to his case. I congratulate him upon being able to ventilate the grievances of his members in such a splendid way. In anything I say I have no wish to defend the apparent ineptitude and inefficiency of Her Majesty's Government in this matter. But I am bound to point out that in the last moving passage of his speech my hon. Friend completely contradicted the Amendment he has on the Paper. He spoke of the needs of the widows and those who would be receiving these credits and said that moving appeals would be going in by 9th August—
§ Mr. W. R. Williams (Droylsden)
Can we have the situation made clear? Is my hon. Friend supporting the Amendment or not?
§ The Chairman
It is my business to call hon. Members who catch my eye, whether they speak in favour of or against Amendment.
§ Mr. Proctor
I am grateful to my hon. Friend for his intervention, but I will make my intention clear as I go along. The last phrase used by the mover of the Amendment in my opinion contradicted the Amendment because the needs of the widows and others who receive benefit under this Clause will be just as great on 9th August whether we change the date in the Clause to 31st December or not.
The House of Commons must find some other remedy, if there is a grievance in this Department, than that of postponing the date. I say that because my constituents, who are anxious to receive what benefits will come to them under this Clause, will want them on the date promised. I shall want some much more substantial reasons than the inefficiency of the Government in making adminis- 1846 trative arrangements or arrangements for joint consultation before I support the date of 31st December, instead of that proposed in the Bill.
I am alarmed at the intimation of the spirit moving in trade union circles which was given by my hon. Friend the Member for Sowerby, especially the indication that there is same form of guerrilla action anticipated in the Department. I suggest to my hon. Friend that in all these matters public opinion is an important factor and if what he has intimated concerned the collection side rather than the paying side there would be rather more support for that action.
I submit that the House of Commons cannot agree to postpone the date from 9th August to 31st December, as is proposed in the Amendment, on the grounds of administrative difficulty unless it can be proved to us that the matter cannot be dealt with in any other way. So far as the situation revealed here is concerned, I hope that the Financial Secretary will be able to indicate to us that he can deal with this matter in a more efficient manner than it has apparently been dealt with up to the present. I say, in the interests of those who are to receive this benefit, people who in many cases are sadly in need, as all of us are aware from letters in our postbags from people in difficulty, that we cannot agree to the postponement of the date on the grounds of the administrative inefficiency of Her Majesty's Government.
§ Mr. W. R. Williams
I should make it quite clear to my hon. Friend the Member for Eccles (Mr. Proctor) that I had no desire to try to intervene to prevent him from putting any particular point of view, although I may differ from him in what I have to say. I thought, mistakenly, that you, Sir Charles, might have been intending to call upon a Member to second the Amendment before calling upon any dissentients to it. That was my only reason for raising a point of order. I wish to explain that to you, Sir Charles, and to my hon. Friend.
There is no need for me to go into any great detail about this Amendment. My hon. Friend the Member for Sowerby (Mr. Houghton) has covered the ground very fully and adequately. He introduced one or two arguments about which I had difficulty in following him all the way, 1847 but I think he has done a service in giving an airing to a matter which is of great importance and substance to the whole of the Civil Service and is not confined to the Inland Revenue Staff Federation.
None of us wants to delay the payment of post-war credits. I have from time to time, as other hon. Members have done, received complaints from some constituent or other and remitted them to the Financial Secretary or the Chancellor direct. Therefore it would be quite inconsistent for us to delay the payment of any benefits which may accrue from the Budget statement by the Chancellor. We should, however, give this question of non-consultation on important issues an airing in the House because a large number of people in the Civil Service, as I know from my knowledge of it, feel that the Government sometimes consult everybody in regard to pending legislation except the people who have to give effect to the legislation when it is enacted.
I have had a long connection with the Post Office, and I know, for instance, that it seemed strange that everybody used to be consulted by the Postmaster-General and the Administration in former days except the staff organisation representing the men and women who had to carry out some of the impositions placed upon them by statute. I remember that in regard to the paying of pensions everybody used to be consulted as to how they should be paid, etc., but not the postal staff who actually had to do the work of paying them.
As a trade union official connected with the Union of Post Office Workers, I have argued times without number that at some stage the Chancellor of the Exchequer or the Postmaster-General should consult the staff before inserting a particular date in Bills similar to this. I would ask the Financial Secretary if the Inland Revenue Staff Federation was asked if 9th August was a reasonable date having regard to the amount of preliminary work to be undertaken. If it is not a reasonable date under those circumstances it should not have been included in the Bill.
Not only are the staff affected if an unreasonable date is included in a Bill, but the Service is brought into disrepute. If the Civil Service staff cannot rise to the 1848 occasion, if, as has been suggested by my hon. Friend, the work will take longer than was thought at the beginning, the blame automatically falls on the Civil Service staff; although, had they been consulted, they could have proved to the Chancellor that such was likely to be the case. Did the Financial Secretary or the Chancellor take the reasonable precaution of consulting the civil servants concerned on this occasion? Had this matter been connected with the mines or the railways I feel sure that there would have been such consultation, and I see no reason why it should not take place in this instance.
For some reason or other we seem to think that we can take advantage of the Civil Service staff because they are directly employed by the Government. But people working in the Civil Service have as much right to say how they are to work as have people in other industries. The House and the country is fortunate in its Civil Service. Were it not for the fact that our civil servants are willing as well as efficient a large amount of the legislation going through the House would not proceed as efficiently and smoothly as it does.
Why should we go out of our way to make difficulties for this friendly, efficient, willing and loyal staff? It is not a question of calling them from all the corners of the earth in order that consultation may take place, because there is a Whitley Council and there is no reason why the matter should not have been discussed. If the Financial Secretary says that there has been such discussion the whole of my case falls, but up to now he has not suggested that the information given by my hon. Friend is incorrect.
There comes a time when the imposition of too much overtime leads to inefficiency, and that is a matter which is worthy of consideration by the Financial Secretary and the Chancellor. A proportionately increased amount of efficiency is not obtained by multiplying overtime. If overtime is imposed at a most disadvantageous period so far as the staff is concerned it does not need much imagination to appreciate what effect that will have upon the work. I do not suppose my hon. Friend wishes the Committee to regard what he has said as anything more than a strong protest. But I should not like to be in his position of having to go to his conference tomorrow if the Financial Secretary does not now say how 1849 sorry he is that he has been so lax about dealing with this matter in a reasonable way.
If the right hon. Gentleman will come to the penitent's stool this evening and say, "We have erred in our ways and we shall try to make amends as from tonight," that would be a message which my hon. Friend would be very pleased to carry to his conference. Who knows but that as a result of the message which he would be carrying to them we might be able to get the work done satisfactorily and expeditiously?
I want to take advantage of this opportunity to do something which I have been dying to do in my other capacity for many years and that is to tell the Committee not to impose unreasonable, unnecessary hardships on the Civil Service. It is all very well to have the sniggering that goes on sometimes about working overtime. It may be that it is sometimes easier to work overtime on physical manual work than on some other kinds of work.
§ Mr. Charles Pannell (Leeds, West)
Does my hon. Friend know any form of manual work that does not require a degree of brain applied to it?
§ Mr. Williams
My hon. Friend knows me well enough to know that I should be the last to suggest that. I am surprised that such an evil thought should have come into his mind.
There are many hon. and right hon. Friends of mine who might find that after seven or eight hours of trying to decide some of these intricate problems of law they had had quite enough for the day. If they have already had a number of hours a week imposed upon them to meet a situation of emergency there might be still more reason for complaint about this additional overtime.
I can well imagine how the staff federation would feel. Here, they have gone out of their way to try to make themselves more efficient in their work. They are paying to be educated by private tutors in their own time to make them greater authorities on Income Tax. Yet at the very time when they have arranged to do that in the interests of their own Department, the Treasury come along and say, "You had better cancel all that and make it ineffective. We have already decided that you should do over- 1850 time as from a certain date so that our commitments to the House of Commons may be carried out, although we did not consult you." That is my protest.
Overtime may be good in its way. It is a way of dealing with emergency. It is not the usual thing; it is something to deal with an emergency. Today there is no emergency except the one created by the Chancellor and the Financial Secretary who should have consulted these people. Then perhaps the right date would have been inserted in the Bill.
§ Mr. F. H. Hayman (Falmouth and Camborne)
I had not intended to intervene, but the moving speeches of my hon. Friend the Member for Sowerby (Mr. Houghton) and my hon. Friend the Member for Droylsden (Mr. W. R. Williams) have been such as to remind me of the days I spent in local government service and of the extravagant overtime which local authorities often expected from their servants. I speak with deep feeling because I have suffered from the fact that overtime has been necessary because of understaffing in offices. Understaffing has existed in local government and undoubtedly in the Civil Service too, because of the silly criticism of newspapers and of people who ought to know better.
Posts in local government and the Civil Service are responsible jobs carrying a high degree of responsibility. I support the Amendment and I even wish that my hon. Friends might press it to a Division. I agree with my hon. Friend the Member for Eccles (Mr. Proctor) that there are many thousands—perhaps tens of thousands—who want these post-war credits. Perhaps later in our proceedings I might make some comments about that.
However, let us in this Committee be perfectly sane in the requests that we make to the Civil Service for overtime. I must admit that a few years ago when I got to know of the amount of overtime that was demanded in the offices of the Inland Revenue I was shocked. I hope that the protest which has been made tonight will lead the Chancellor to ensure that the Inland Revenue staffs are adequately manned and that no unreasonable demands in the way of overtime are made upon them.
§ Mr. Boyd-Carpenter
The Amendment gives rise to the first of the many discussions about post-war credits in which I have taken part in which delay in the payment of the credits is suggested. All the other discussions have rather emphatically been in the other direction.
I agree with the hon. Member for Sowerby (Mr. Houghton) when he says that these are payments which no one would wish to delay. I appreciate that his intention in moving the Amendment is, very properly, to bring forward the interests and well being of the staffs concerned, on whom we and all Governments depend for the carrying out of policies of this sort. It is quite proper that in our consideration of this proposal we should continue to give full weight to the strain which is likely to be imposed upon them in carrying out the wishes of the Committee and the House.
However, I join issue with the hon. Member in his desire to go much wider into questions, many of which, I understand, go back a good many years, affecting staff relations in the case of certain sections of the Inland Revenue staff. I join issue with him not because on an appropriate occasion, I should not be happy to debate the questions with him. The questions involve matters going back many years, but if we were to discuss them, I think it would be possible to make it clear that a good deal of what he said was somewhat ex parte and that there are other aspects of the matter.
Be that as it may, no one is concerned to dispute that the staff of the Inland Revenue, as, indeed, most other branches of the public service, have borne a very heavy strain during the years of war and the years of difficulty, for one reason or another, which followed the war. It is proper that we should appreciate that Government staffs generally have borne, and discharged most willingly and with a very high sense of public responsibility very heavy and onerous duties over a good many recent years.
It is right that we should say that. I fully agree with the hon. Member that it is very proper that we in this Committee should put on record our appreciation of and gratitude for the fine and devoted public work which all Governments have been able to command from their staff. I agree fully with him in saying that this country has the inestimable advantage of the finest public service in the world.
1852 I have strayed somewhat—in doing so, I think I have followed the example of one or two hon. Members who preceded me—from the rather narrower issue which is posed by the Amendment. The Amendment poses the issue whether it is necessary, out of concern for the staffs, to substitute 31st December for 9th August in subsection (6), which would have the effect that no payment authorised by the Clause could be made before the end of this year.
The hon. Member for Sowerby mentioned the Question which he asked me on 20th May, and in reply to which I Rave him the facts. As to the facts, I understand that there is no dispute between us. The payment of post-war credits, as I then told him, will involve between £80,000 and £100,000 in overtime, and that overtime will be worked over a period of months in the latter part of this year. I thought the hon. Member for Sowerby, who has a considerable knowledge of the subject, appeared to overlook the fact that the working of special overtime as the result of changes made in the Budget is not an innovation which my right hon. Friend the Chancellor has thought up for the first time.
The amount of overtime required in respect of the payment of post-war credits will be rather less than the amount of overtime required as the result of Income Tax changes in the Budgets of 1952 and 1953. I have no doubt, though I have not indulged in any research further back, that changes in taxation for which right hon. Gentlemen opposite were responsible had somewhat similar consequences in respect of overtime.
It is important, if we are to look at this matter with a proper sense of proportion that we should appreciate that the overtime with which we are concerned in this Clause is actually somewhat less than that which was required by the changes in Income Tax made in the two previous Budgets, as well as those in a number of others.
§ Mr. Houghton
May I remind the right hon. Gentleman that I said that this overtime would come in the holiday period and would impose a rather longer endeavour, than was the case last year, the year before or the year before that? The overtime worked previously generally ended by the middle of June.
§ Mr. Boyd-Carpenter
The hon. Gentleman must give me credit for that; I was coming to that aspect of the matter. We shall get on more quickly if he will allow me to put my case in my own way. The hon. Gentleman made a very long speech, he was not interrupted, and he must allow me to make my speech in my own way.
It is true that the timing may well be more inconvenient, but the amount of it, which the hon. Gentleman described as an intolerable interference with the lives of the people concerned, is less than that which was required in the two previous years. Some of it comes at a somewhat more inconvenient time, but it also has a compensating advantage in the fact that it will be rather more widely spread, which means that it will be more convenient and more capable of arrangement, having regard to the position of individual members of the staff. That is a factor to which the hon. Gentleman gave insufficient weight.
Equally, not all of it will fall within the holiday period, at least, if the hon. Gentleman and I construe the holiday period as meaning the same thing. It will be spread over a number of months in the latter part of this year. That, I think, puts the matter in proportion, and I need only deal with the hon. Gentleman's reiterated charge that no consultation has taken place about the arrangements for this overtime.
That is really not the case. Consultation took place as early as the day after Budget day, when the Chief Inspector met the Staff Side of his branch, and further consultation took place between a Senior Principal Inspector and members of the Staff Side on 26th April. Therefore, it is not true to say that consultation did not take place. Of course, it is quite natural to say that discussions of the right sort and with the right people did not take place, and that is a matter which we can argue about on another occasion, but, in fairness to the Board of Inland Revenue, and in view of what the hon. Gentleman said about the absence of consultation, it is right that I should say that.
Let us come to what is proposed by the Amendment. It is proposed to prevent any payment before 31st December, and I put that in this way for this reason. As it stands, the Clause does not say that every payment shall take place on 1854 9th August; it provides that that will be the first date. It is true that once that date has been passed the natural eagerness—to which the hon. Member for Eccles (Mr. Proctor) referred in what I thought were very moving terms—of many people to be paid will cause them to want payment without undue delay. Nevertheless, it is important to realise that we are here concerned only with the date before which payments may not be paid.
It is proposed that the claim forms shall be available in both tax offices and Post Offices early in July. I speak here only from memory, but my recollection is that the date at present is 5th July. Some of the cases in respect of which claims will be made will be quite simple. The simplest case of all, as I explained to the House on Second Reading, is that in which the beneficiaries of the person who has died have had new post-war credit certificates issued to them in their own names.
There is there very little administratively to do when the claim is put in, and there is no doubt that, in the normal way, some of those claims will be ready for payment on or shortly after 9th August. It really seems quite unreasonable that we should have, as we shall then have, claims ready for payment but be forbidden by this House to pay them. I think it is unreasonable to do that. I do not think that public opinion outside would regard it as being reasonable of us to impose such a prohibition.
Other cases will be more difficult; they will involve more work and will take longer. I do not want to say anything which will be construed outside as meaning necessarily that it will be possible to deal with very large numbers in the first few days, but some claims—particularly post-war credits of the character to which I have referred—will be ready for payment very soon after 9th August. It seems to me that the reasonable thing is to make the payments then, but this Amendment would forbid that.
Let me come to what I think is really the substance of the hon. Gentleman's complaint. The working of overtime, of course, affects different members of staffs in different ways. I think the hon. Gentleman will agree with me that some will frankly welcome the opportunity of the extra earnings. Others will no doubt be put to some inconvenience by having 1855 to work late. We must certainly give full weight to the needs and convenience of those public-spirited members of the staff who are engaged in taking the course to which the hon. Member referred. I agree with him that it is a most admirable thing that they should volunteer to fit themselves in this way even better for the work which they do.
We must take account of that. That is why, on 20th May, in reply to the Parliamentary Question to which the hon. Gentleman referred, I said:Consultation about detailed arrangements for overtime working will take place locally in accordance with the usual practice, and account will be taken as far as possible of the personal circumstances of individual officers."—[OFFICIAL REPORT, 20th May, 1954; Vol. 527, c. 137.]I said that on 20th May and I meant it.
It is the intention of the Board of Inland Revenue—subject, of course, to the necessary service which all public servants have to render to the public—to try to arrange the working of this overtime so that, as far as possible, it is done by those who welcome the opportunities to work overtime; where it cannot be so worked, to arrange the work so as to cause as little inconvenience as possible to the staffs concerned. That is the intention. It is intended to deal with this in a perfectly human and perfectly sensible manner. That to me seems a much more reasonable way to proceed than to suggest, as this Amendment does, that we should prevent any payments taking place before the end of this year.
I hope that with good will and good sense in the working out of individual arrangements locally—and I hope and believe that the hon. Gentleman will lend his own considerable influence to seeing that that proper and happy state of affairs develops—the staffs of the Inland Revenue will be able to discharge this task in the same public spirited way in which they have discharged other and much heavier ones that successive Governments have put upon them. I do not believe that the right thing to do in these circumstances is to abandon the attempt to pay these post-war credits as soon as they can be paid.
I think the hon. Member for Eccles (Mr. Proctor) was quite right in saying that there will be many people in humble circumstances who will be looking 1856 forward anxiously to the payment of these credits. Certainly, the letters which I have received from a number of hon. Members indicate that there are quite a lot of cases in which a considerable relief will be given by the early payment of these credits.
Balancing that very real and human consideration against the equally real and human consideration of the need to treat these staffs as well as we can treat them, and the need to handle this difficult question of overtime in a human, practical and reasonable manner, I would suggest that the right thing to do is to allow such payments as can be made on and after 9th August to be made, but, at the same time, we should all try to operate the system so that it does not place any undue and excessive strain upon the devoted and efficient staffs whose duty it is to carry out the decisions of Parliament.
§ Mr. Glenvil Hall
I am sure the Committee has listened to what the right hon. Gentleman has said with a great deal of interest, particularly those who have been here throughout this debate and heard the almost impassioned speech of my hon. Friend the Member for Sowerby (Mr. Houghton). There is not the slightest doubt that he was moved by a real sense of urgency, both by what he felt would be the situation later this year and by the undoubted sense of grievance that unfortunately exists among some of the members of the union to which he belongs and to which he has given such devoted service.
Here in this Clause we are doing something which I am sure hon. Members in all parts of the Committee devoutly wish to be done. I am one of those who took some small part in passing the Finance Act, 1946, when the then Parliament decided to pay postwar credits to men at the age of 65 and to women at the age of 60. That is eight years ago, and it is high time that we made a move to see that some others begin to get post-war credits. Here we are doing something quite small but extremely useful. If this Clause is accepted, we are going to pay to the beneficiaries of those who have died the post-war credits which would have gone to them had they lived.
The only question which divides the Committee now is whether we should insert 9th August or 31st December as 1857 the date at which payments shall begin, and my hon. Friend made it quite clear that he is all for 9th August, other things being equal. His fear is that the staffs of the Inland Revenue Department who have to deal with this matter will find it an impossible task, and therefore will be blamed, and, that, incidentally, Members of Parliament will get far more correspondence than they want from those who have sent in their forms and find that their claims are not being speedily met.
The right hon. Gentleman, although he was forthcoming in what he said just now, did not altogether allay the feeling that exists, certainly on this side of the Committee, that everythig will be done to see that these claims are expeditiously met once this date is put into the Bill.
I should like briefly to refer to that part of his speech which purported to be a reply to my hon. Friend's allegation that the Civil Service staffs concerned had not been consulted in this matter. The right hon. Gentleman indicated that they had been consulted on 6th April—the day after the Budget was introduced—and again on 26th April. The latter date was some time after the Bill had been prepared and published, because the date shown on it is 14th April, which is 12 days before the second consultation he mentioned took place. By that time the Government had not only made up their minds what they were going to do, but had put it into words in the Bill then available to all hon. Members in the Vote Office.
I know that the right hon. Gentleman did not make his Second Reading speech until 3rd May, when he made it clear that steps were already being taken to prepare for the payment of these post-war credits almost immediately after the Bill was likely to become law, early in August. He also at the same time indicated that not only would the work have been begun but that many of the payments would be ready, and would be made immediately after 9th August. Does not that rather contradict what he now says, namely, that most of the overtime to be worked will take place not during the summer but during the autumn and latter months of the year?
My hon. Friend's grievance is that during the summer months these staffs are going to be employed when they ought, 1858 like other people, to be expecting a holiday. Not only will they have to do their ordinary work, but overtime as well. The right hon. Gentleman countered this suggestion by saying that most of the work will be done in the autumn. But, that is not what he said in his Second Reading speech, and we should like to know which of his statements is correct.
§ Mr. Boyd-Carpenter
I do not think that the right hon. Gentleman completely understood me. All I said was that while I agree that some of this work will come within the normal holiday period, the rest of it will not, and some would have come in the preparatory stage, early in July.
§ Mr. Glenvil Hall
I accept what the Financial Secretary says, but it is clear that overtime will have to be worked. The point is that in a well organised State it is time that something was done to prevent this constant overtime work on the part of certain sections of the Civil Service. Year by year they find themselves, for months on end, engaged in work which keeps them long after other people have gone home and are enjoying a leisurely evening. The work is not of a mechanical kind; much of it is very complex. That fact ought to be considered, and the Government should now be seeking ways and means of preventing this periodic overtime.
On that ground alone my hon. Friend did right to move his Amendment in order to ventilate the matter. If members of the Civil Service have to work overtime month after month their work must eventually become slovenly. This means that there will be a sense of frustration among the staff, and it certainly means frustrated hopes on the part of those members of the public who are expecting payment but have to wait week after week for it. They will blame either the Civil Service or the House for the delay. If the Committee accepts the date in the Bill I hope that the right hon. Gentleman will make it quite clear, in any public announcements that are made, that although 9th August is the date inserted and payment will begin soon after that date in some cases, there must be unavoidable delay in others; and that being so, the Government hope that the public will realise the difficulties of the Civil Service in coping with this rush of work, and will make due allowance for it. 1859 As my hon. Friend has said, many people in the Inland Revenue Department have engaged to take at their own expense a course in taxation not only to assist them to attain greater proficiency but to help their country. They ought therefore not to be suddenly called upon to work overtime when they have work of that kind to do. I appreciate the tribute paid by the right hon. Gentleman to the Civil Service, but I should like to see it eventuate in something more tangible. I hope that by next year the Government, if they are still in office, which I doubt, will have made some attempt to prevent a recurrence of the difficulties that undoubtedly will arise this year for an excellent body of individuals who serve the country well, and to prevent their being obliged, year after year, to work long hours on work which, if the Department were run more efficiently, need not devolve upon them in this way.
I do not suppose that my hon. Friend will wish to carry this matter to a Division. Having ventilated his point of view and explained the feeling that we on these benches share about the matter he will probably be willing to withdraw his Amendment. But I hope that the Government will not take that as a sign of weakness. We on this side are anxious that payments should start at the earliest possible moment, and 9th August is about the earliest date at which they can be started; but I hope that the right hon. Gentleman will not think that means that we accept the present situation as one that cannot be helped, or one in which nothing can be done to prevent a reoccurrence.
§ Mr. Houghton
It was not my intention to ask any Members to support the Amendment in the Lobby. I quite agree with the right hon. Gentleman that if the Department can begin to make repayments on 9th August there is no reason why it should not. However, the right hon. Gentleman will probably appreciate that if the number of people wanting repayment exceeds the number who can be repaid those who want repayment sometimes prevent progress from being made by too many calls, too many knocks at the door, to make inquiries about what is happening. It is desirable that when the work does begin it should not lose momentum, and that there should be a 1860 reasonable and reassuring flow of repayments so that those expecting them will not have to wait too long, at least where no unexpected difficulties arise.
I cannot say, however, that I thought the right hon. Gentleman's reply was satisfactory. It was a typical Treasury speech. He did not seem to understand trade union consultation. He did not appreciate that there is a point of view on the trade union side that cannot be assuaged by references to patriotism or public spirit, or by patronising references to the work the staffs have done in the past. They believe they have certain rights, and they expect the Administration to recognise them.
Every other body of workers would do the same. Railway drivers do not feel any differently about lodging turns because the public think they are a wonderful body of men and because the public is most grateful for the service they render at all sorts of inconvenient times. No; they believe that they have rights, and when the summer schedules of London Transport are announced, sometimes even after they have been agreed by the unions, they can cause disturbance among the workers. Everybody rushes round to see what the trouble is and how it can be put right.
But not in the Civil Service. The indolence in the administration of the Civil Service is worthy of the most serious criticism. They do not think it matters. That is what is wrong with them: they do not think it matters. I am trying to impress upon the right hon. Gentleman that it does matter.
The right hon. Gentleman now says that there was consultation. On 20th May, I asked him why no consultation took place with the staff side before the instructions to work overtime went out. Did the right hon. Gentleman then say that there had been consultation? No, he did not. He said:The staff side has been kept informed of the need for extra duty."—[OFFICIAL REPORT. 20th May, 1954; Vol. 527, c. 137. ]That is all he said. Presumably, he was advised by the Inland Revenue before he answered the Question, and if he knew about consulation why did he not say so? The truth is that sometimes people do not know when they are consulting and when they are not, because they cannot observe the form of consultation. It is all too 1861 casual—dropping a word in the corridor instead of discussing the matter in a proper way. I deny emphatically that there was consultation within the meaning of the term, and I ought to know because I am secretary of the organisation concerned. Incidental references to overtime made to other staff representatives are not trade union consultation in the way in which I understand it.
I do not wish to detain the Committee for long. I have had the opportunity, with difficulty I will admit, of stating this matter to the Committee. There is only one thing missing from the right hon. Gentleman's reply which I had hoped and expected he would include. It is this: I expected him to say, "If these troubles exist I will see that the Inland Revenue and the staff representatives get together and thrash them out." But he did not say a word to that effect. He has left the position just where it was, and that means, I regret to say, that the staff, now in conference, will not find the satisfaction and the reassurance from the right hon. Gentleman's statement which I was hoping to take back to them tomorrow.
I will say no more about what they may decide to do in conference, but if, even now, the right hon. Gentleman will say that if these difficulties can be resolved at least an attempt should be made to do it; and if he will say that it will be his personal interest to ensure that the proper discussions take place and that the matter is placed fairly and squarely on the table to see what we can do over the remaining period of overtime this summer, I would accept that as an assurance that here will be a better feeling, more understanding and a more common sense approach to this matter.
I will give the right hon. Gentleman that opportunity if he wishes to take it. He cannot ride off with this sort of explanation: "You are complaining about this overtime, but you have worked lots more in the past and we have had no trouble." That is what happens. We let it go one year, and another year the presumption is that there is no need for consultation.
I impress upon the Committee the difference between overtime at an earlier stage of the year and overtime now. This is a problem of manpower in the Inland Revenue which needs serious consideration. We have homework, we have 1862 student labour employed in the long vacations, we have all sorts of expediencies adopted to keep the numbers of the staff down because the Chancellor put a ceiling on the number on 1st October, 1951. That is not a sensible way of going about the staffing of a major revenue gathering Department.
I hope that the Financial Secretary can now say that these troubles can be overcome and that he will take special and personal care to see that any reasonable accommodation which is possible is given so that this work may proceed without interruption.
§ 9.30 p.m.
§ Mr. Boyd-Carpenter
I am glad to respond to the hon. Gentleman's invitation. All the elaborate, normal channels of consultation, with which he is perhaps more familiar than I am, remain fully open, and any point, either of a major or a minor character, which the staff wish to raise, and which they have the constitutional right to raise, can be raised. I shall be very happy if they do raise it, because the more discussion there is on any of these matters, on which rightly or wrongly feelings may be aroused, the better. Consultation can continue and my own view is that it would be a good thing if it did continue. If it does I shall certainly follow it closely.
§ Amendment, by leave, withdrawn.
§ Motion made, and Question proposed, "That the Clause stand part of the Bill."
§ Mr. Gaitskell
I am very glad that the Financial Secretary has accepted the proposal of my hon. Friend the Member for Sowerby (Mr. Houghton). I am sure that it will be well received by the Staff Federation and it will do something to assuage the strong feelings that appear to have been raised by their treatment at the hands of the Treasury.
The fact that we have been discussing only two pairs of Amendments on this Clause should not be taken as evidence that there is no great interest in the Committee or in the country generally in what this Clause does. There are some 10 million people who hold post-war credits or, at any rate, bits of paper which entitle them to post-war credits under certain conditions and they may from time to 1863 time express considerable excitement and interest about the future of these post-war credits. Therefore, there is much concern at any proposals put forward by the Government to alter the circumstances and the conditions in which these credits are repaid.
I think it is as well that we should remind ourselves of the background of the whole situation in which we now find ourselves, because only if we do that can we pass judgment on whether the Government's proposals are really adequate to meet the situation. As the Committee will be aware, the idea of post-war credits was first put forward by the late Sir Kingsley Wood in the 1941 Budget. He was excessively cautious in the actual words that were used. He said, for example, in his Budget speech that year that these credits will be brought in as some compensation for the reduction in earned income and personal allowances which he was making in his Budget. The actual words he used were these:…the extra tax which any individual will pay by reason of the reduction in the personal allowances and earned income allowance will be offset after the war by a credit which will then be given in his favour in the Post Office Savings Bank."—[OFFICIAL REPORT, 7th April, 1941; Vol. 370, col. 1329.]It is of interest to notice that, in fact, no credits have ever been given in the form of deposits in the Post Office Savings Bank, and if we turn to the enactment itself it provides simply that there…shall be credited to him"—that is the taxpayer—on such date as may be fixed by the Treasury, being a date so soon as may be after the termination of hostilities in the present war.In other words, strictly speaking post-war credits do not exist as such. They are something which can be brought into existence at a certain date when the Treasury so desires.
I thought it was not unreasonable in the immediate period after the war that there should have been very great care taken about the immediate repayment of the sums of money which were levied during the war. After all, there was in the world generally a certain state of inflation, as I think has always been the case after every major war. Nobody would deny that, to use the well-known 1864 words of my right hon. Friend the Member for Bishop Auckland (Mr. Dalton), there was for a time too much money chasing too few goods.
It was, therefore, obviously highly undesirable that there should have been let loose upon the market a large flood of additional money in the form of postwar credits. Furthermore, had they been released at that date nobody would deny that the inclination on the part of those receiving them would probably have been to spend them, because the pent-up demand for goods of various kinds was very much in evidence. Therefore, their probably inflationary consequences cannot be denied.
That being so, I think equally it was reasonable that the system of repayment which was introduced should be limited to those who had reached the age of 65 or 60, as the case may be. In general, I think that the country was prepared to accept that situation in the post-war period, but now we are faced with the situation that if we go on at the present rate of repayment—and the small concession made this year does not much affect the figures—it will take something like 40 years to repay the total amount which is still outstanding. I believe that it is about £600 million.
I am sure that I take the Chancellor with me when I say I do not honestly feel that we can seriously contemplate that kind of period of repayments. It may not be legally wrong. As I said, Sir Kingsley Wood was very careful in the words he used and in the words which were put into the Act, but it would be morally indefensible and it would create a very bad impression so far as the public attitude to Government promises in matters of this kind is concerned. It may be already difficult, but it would make it quite impossible, if in future a Government wanted to contemplate such a thing, to introduce post-war credits in an emergency. In passing, I am not sure that I think it would be a very good thing to do so, but when one talks in terms of emergency situations it is just as well to preserve as much room for manoeuvre as possible.
Therefore, my first point is that I do not think we can leave things as they are now. Secondly, we are faced today with a very different situation compared with 1865 that which existed in the immediate postwar years. If one measures inflationary pressure, for example by the proportion between the volume of money and the national income, which is a device that the experts sometimes use, one finds that there has been a steady diminution in that direction. The proportion has been steadily falling ever since 1946 and has now reached approximately the same level as existed before the war.
As we all know, there has also been a substantial fall in world prices for the past two years or so and there has been equally—and the two things are closely bound together—a rise in personal sayings. The Chancellor told us this afternoon, in his interesting speech on the standard rate of Income Tax, that he believes that there is some spare capacity available in the country. He did not use those words, but I think that was what he intended to convey. I suggest to him that all these factors lead to two conclusions, first, that the risk of excessive spending is considerably less than it was and, secondly, that there is much less danger that any credits which may be repaid will in fact be spent.
That seems to justify examining once more whether some further steps cannot and should not be taken. I realise that it is difficult at this stage of the Bill for the Chancellor to make substantial alterations, but I think that, before parting with the Clause, we ought to hear from him some idea of his attitude to the problem generally and what he hopes he may be able to do. I suppose it is not essential to wait for next year's Budget in connection with the repayment of postwar credits, if he so decided, any more than the more urgent matter—in my view, I make that plain—of old-age pensions.
I suggest to the right hon. Gentleman the following as some of the alternatives which could be considered. It has been proposed by the Trades Union Congress recently that there should be a gradual deduction in the age at which the credits are repaid. One possibility would clearly be to double the rate of repayment by reducing the age for repayment by one year every year. That would mean repaying just about twice as fast. Another suggestion which has been frequently made is that these credits in future should be repaid when the owner dies instead of waiting, as even now under the Bill we are considering until 1866 he would have been 65. I realise that the initial impact of that would be heavy. All the same, I think that most people still feel there is something anomalous about the situation in which the credits are not repaid at death.
I am bound to say for my part that if the Chancellor feels reasonably sure that there is excess capacity and he is prepared to take what admittedly would be some degree of risk—I fully recognise he must be the judge of that—there is a great deal to be said, certainly on administrative grounds, for repaying by reference to the taxes actually paid in the years in question. For instance, he could take the first year taxes, for 1941–42, and repay them as a whole. That would involve a fairly large sum of money—£100 million I think—and it would be impossible if one really believed that it would all be spent. That would be my view and it would be my view that to realise that amount of additional funds might be going too far. But I do not for a moment believe that these credits would all be spent.
One has only to consider what the situation would be if the Government that originally introduced the scheme had decided to do it differently and had in fact decided to give people immediately after the war deposits in the Post Office Savings Bank with these post-war credits included in them. That would simply be an addition to the total of small savings now in existence. The effect they would have on consumption today would certainly be fairly marginal. We could probably fairly safely assume that only a fraction of what would be paid back, particularly if done in a certain form, would find its way into immediate consumption. I think the vast majority of people would take these post-war credits as a nest egg which they would add to their savings for drawing on certainly when there was an emergency, when there was hardship, but otherwise, very likely simply to be retained for some possible future use just like any other savings.
A number of other suggestions have been made. It has been suggested that special arrangements should be made in cases of hardship. We must all be sympathetic to the number of instances which have come our way from constituencies of people who are really in serious need 1867 have substantial credits available but cannot use them, cannot sell them, nor make any use of them at all. I must say, however, from this Bench that there are certainly great difficulties about making any general provisions for repayment on grounds of hardship. It would be silly to say anything else. We were repeatedly pressed, when we were the Government, to do that, and there are great difficulties.
I am not sure whether that quite applies to particular types of hardship. One case crosses my mind. It is proposed, both in the majority and minority Reports of the Royal Commission on Income Tax, that there should be a special tax allowance in future for 100 per cent. disablement. Probably it could be said that in that sort of case it would be administratively practicable to repay. We should, however, like to hear what the Government feel about this, whether they are completely adamant about any kind of repayment on grounds of hardship, or whether they would be prepared to go rather wider and repay at a more rapid rate.
Not long ago, some of my hon. Friends made the interesting suggestion that if the Government so desired they could make these certificates negotiable by making it perfectly plain that they would be paid automatically either on death or at the age of 65 or 60 years. That is an interesting idea—[Interruption.]—I believe it was put forward in the House by two of my hon. Friends in a debate some time in 1953, but this is not a matter on which we wish to claim any particular party advantage. It is a suggestion which has been put forward, and we should like to hear the views of the Government upon it.
My last point is to urge that the form of repayment should be looked at again. My own feeling is that in the case of rather larger amounts there is a good deal to be said for repaying them, not in cash but in some form of savings bond, savings certificate or savings deposit. The psychological effect of that would be quite considerable. Indeed, I do not see why there should not be, if the Government were prepared to repay perhaps the first year's credits, as I suggested, some special savings bond which might even draw a rather higher rate of interest so as to induce people to retain the credits 1868 as far as possible, and not spend them. I certainly think there is a lot to be said for giving the savings movement a psychological boost which I think would undoubtedly arise from repayment in that form.
It is obviously difficult if very small sums are being paid and might not be worth while if repayment is limited to £13 million, or whatever figure it is, a year. If we go beyond that, however, I urge direct conversion into small savings. I hope that the Government will listen to what is said in this debate. Many of my hon. Friends feel strongly on this subject and would like to see much more done. I hope that we shall not be given an entirely dusty answer but one which will encourage us and our constituents as well.
§ Mr. R. A. Butler
In reply to the request of the right hon. Member for Leeds, South (Mr. Gaitskell), although I do not wish to traverse the details—I intended to ask the Financial Secretary to reply to the details of the debate—I wish to say, following what I said in my Budget speech, and following what the late Sir Kingsley Wood said when he introduced these credits, that the Government fully realise the immense responsibility there is on any Administration in having this question of post-war credits hanging over them, so to speak. It is a very serious matter, and gives one a great moral sense of responsibility when one has to consider what one can do best immediately and the undoubted anxiety that is present.
The position has been before several Governments, and small steps have been taken prior to the step which I have taken in this Budget. The right hon. Gentleman referred to the position under this Budget and to the extent of the release we are making this time. In fact, it amounts to about £19 million in the first year and about £2 million thereafter. He also referred to my remarks about the extent to which we are using our resources. In that connection I should not be able to give any undertaking that in the near future we can, at any exceptional period of the year, undertake a further release of post-war credits. That does not mean that I have not listened to what he has said, but I thought it better to make that clear. Otherwise, false hopes might be raised. We must see through this 1869 operation and then see through whatever future operation we can undertake.
There are other classes of the community to be considered, as the right hon. Gentleman rightly says, and I certainly think that, for example, the claims of the old-age pensioners should come before any further step in considering the future of post-war credits. This is in direct answer to what the right hon. Gentleman said, because I thought he might like to know my mind on the matter.
The right hon. Gentleman referred to the hardship question. I have read the paragraphs he mentioned. My right hon. Friend will deal in detail with the question of hardship which causes so many administrative difficulties that they are almost impossible for a Government to overcome. If we could find a solution which does not provide those difficulties we should not close out minds to it.
After the speech of the hon. Member for Sowerby (Mr. Houghton) the administrative difficulties will have to be considered by the Government. I consider that his was a very serious intervention. I had knowledge of it. I was not in the Chamber all the time, but I heard what was going on.
§ Mr. Gaitskell
I think the Chancellor will agree that what my hon. Friend the Member for Sowerby (Mr. Houghton) was concerned about was a particular date put into this Bill which, he believed, would give rise to grave difficulties. I am sure, however, that the right answer is that if it is possible on other grounds to repay the credits I am sure the Chancellor would not allow administrative difficulties to develop.
§ Mr. Butler
No, but I was a little shocked by the speech of the former Financial Secretary, not because it was outrageous in any way, but because I was anxious that he should say what the right hon. Gentleman has said.
Now it has been said by the right hon. Gentleman, and I take it that it covers his right hon. Friend, namely, that the Opposition does not wish the administrative difficulties to stand in the way. If that is so we are all united. I do not think that they should stand in the way, but the fact that the right hon. Gentleman has now stated that is, I think, a help to us all. We can get the speech of 1870 the hon. Member for Sowerby in the right perspective and look into the points he raised. We must not allow administrative difficulties to stand in the way of the repayment of credits to many poor people who are looking forward to receiving them, and I welcome the remarks of the right hon. Gentleman.
§ Mr. Glenvil Hall
Do I understand that something I said contradicts what my right hon. Friend has said? I hope that it does not.
§ Mr. Butler
It would be impossible for the right hon. Gentleman the Member for Colne Valley (Mr. Glenvil Hall) ever to be disloyal either to one of his late colleagues or to a future colleague. In fact, he may even be the right hon. Gentleman's superior, in which case his words would carry even greater weight.
But I seemed to notice an anxiety over the administrative problem in the speech of the right hon. Gentleman which, I thought, was slightly overdone. Although we wish to handle the devoted workers in the union concerned and the administrative difficulties in as human a manner as possible, it is essential, if Parliament decides that a release is to be made to people who deserve it, that we should be served with the utmost loyalty by the servants of the State who have to carry out this work at whatever time.
§ Mr. Butler
Then we are all in sweet agreement upon this important matter. These statements from the right hon. Gentleman opposite are most valuable.
The right hon. Gentleman then raised the question of whether we can use the methods of savings certificates. I considered this method before I decided on the £19 million release and, frankly, I would like to have done so. Fundamentally, I think it a good idea. Unfortunately, we cannot be sure that this money will not be spent if that method is adopted. I thought that the right hon. Gentleman was most reasonable in saying that he did not think that it applied so much to a smaller figure such as this as it might to a large figure.
I would never exclude the system, but it must be remembered that when the Service release benefits were paid after the war—a precedent which was put 1871 before me—they were paid in the form of deposits in the Post Office Savings Bank. They amounted to £368 million and of this sum over 80 per cent. had been withdrawn in two years at a time when the rest of the savings movement was still showing a big surplus in new deposits over withdrawals.
I had that example before me in deciding what I should do and, to be quite honest, it rather put me off; but I do not think that the scheme is killed. If we could at any time find any method of doing it to coincide with a period when the savings movement was in the right sort of state upon which to float such an operation, it would always be worth examining. However, I warn the right hon. Gentleman that there are considerable administrative difficulties. If we are handling anything like the total residue of post-war credits which would involve 8 to 10 million people, that in itself would create a big administrative problem that we should have to handle. It would fall some way between the problem of the small reliefs in this Budget and that of the larger reliefs in the post-war Service release benefit scheme.
The right hon. Gentleman, in his observation on the Budget, referred to the possibility of a fair slice of post-war credits—perhaps the first one, by which I think he meant the first year—in the form of savings certificates. If it consisted of the first year then the sum would be about £100 million. That, I think, would be too big a release from the point of view of purchasing power at present, especially as I should find it difficult to do that particular sum by the savings certificate method.
The long and the short of my short intervention on this matter, leaving my right hon. Friend to handle the many points which other hon. Members may wish to put, is that any Government of whatever complexion who have this liability, so to speak, on their shoulders will endeavour to meet it to the best of their ability. We have taken a small step on this occasion which I think is an indication of good faith. It would be difficult to use this method on a large scale unless there are signs of a need for the release of considerable purchasing power, which was the object of the authors of the original exercise.
1872 At present, there is certainly no need for the release of a large amount of purchasing power; nor has the threatened American recession so developed as to make the release of a large amount of purchasing power so much a possibility as it might have seemed six months earlier. The news from America is that the recession is what is called "evening out" and we in the United Kingdom economy are riding the situation with our full employment, and the general standard of living is as well as or better than one could have hoped.
Therefore, there is no occasion at the moment for a very large release of purchasing power, but I should like the right hon. Gentleman and the Committee to know that this is a subject which is ever before us and that, in so far as I have been able to traverse the argument of the right hon. Gentleman, I think he will have seen that the Government are intensely and intimately concerned with this question.
§ Dr. Horace King (Southampton. Test)
My right hon. Friend the Member for Leeds, South (Mr. Gaitskell) and the Chancellor of the Exchequer opened the debate in a way which showed that they are possessed of the seriousness of the matter under discussion. I would only say about the remarks of the Chancellor when speaking of the debate we have just concluded that he missed half the point of that discussion, which was not that administrative difficulties among the Civil Service should prevent a piece of legislation from being carried out but that, if administrative difficulties did exist, full consultation with the Civil Service might induce a much better chance of coping with those difficulties.
Any modern Chancellor of the Exchequer must have a keen sense of humour if he is to survive a Budget debate and a Finance Bill debate. I enjoyed the references by the right hon. Gentleman this afternoon to the fact that the people of this country fail to appreciate the benefits which he has already conferred upon them in previous Budgets. I think he under-estimates the memory of the British electorate. We shall endeavour to remind him of some of the redistribution of income which has taken place under previous Budgets whenever we are attacking the Government.
1873 10.0 p.m.
But I certainly do not wish to attack this Clause. I sincerely welcome it in view of the contribution which it makes towards alleviating something which is rankling in the minds of the British people. It removes, at any rate, one injustice. Up to now it seemed possible not only that some people would never get their post-war credits back but also that their descendents would not get them back unless they managed to live to the appropriate age. While someone has been accused of visiting the sins of the fathers upon the children, it seemed that we were withholding the post-war credits of the fathers of this country from their children until the third and fourth generation. My right hon. Friend said that even now it will be nearly the end of this century before post-war credits are paid unless we do more than we are doing at the moment. But if it were not for the Clause it might be the end of the 21st or the 22nd century before all postwar credits were paid. Consequently, I sincerely congratulate the Chancellor upon removing one injustice.
I am sure that the Committee will agree that what matters about post-war credits more than anything else is the sense of injustice in the community. I believe that it was crazy to have introduced the scheme in war-time. People were prepared to make any financial sacrifice during the war years, and, indeed, would have been ashamed if they had not been ready to do so when they remembered the physical sacrifices which were being made by our boys across the sea. I regard it as one of the unfortunate pieces of war-time legislation. We might call it "Kingsley Wood's Folly." It is now an incubus on the back of any Chancellor, and the sooner we get rid of it the better.
Most people who are still waiting for their credit say that the Government are keeping from them their own money, on which no interest is paid, and that they cannot get it even if they need it severely and intensely. The sooner we pay out the post-war credits, the better it will be from the point of view of the happiness of the British people. I hope that my hon. Friend the Member for Itchen (Mr. Morley) will have an opportunity of speaking, because he has consistently pressed for the speeding up of the rate 1874 at which post-war credits are paid out, and I leave him to advocate that.
I want to link what I have to say with what the Chancellor has just said. Most of us will agree with the Chancellor that there are people earlier in the queue of priorities than those who have vast sums of post-war credits still to be paid. There are the old-age pensioners and also the disabled ex-Service men about whom we have spoken in debates this year. I still think it ought to be possible to link the two together. If anyone should go to the head of the post-war credits queue it should be the people who intensely need their credits. There are the widows.
I was interested in my right hon. Friend's suggestion that, having made a move in this Clause, we should go one further and say that when someone dies, his widow should automatically be able to claim his post-war credits. There are the sick, the disabled and the unemployed, and this irritation that must exist in the minds of widows, bereaved people, sick people and the unemployed, and the knowledge that somewhere there exists money which is theirs which the Government are withholding from them and which would be very useful to them at the moment, must add to the pain and suffering which they are enduring in the ordinary way.
I do not believe that the technical difficulties ought to be regarded as insurmountable. I feel that the Treasury is a most skilful body and that no technical difficulties stand in its way when it is a question of extracting money from the British public. I am one of those whose annual nightmare is filling up my Income Tax form, and my whole experience has been that, no matter what source of income one has, there is some place on the form on which it can be shown, but, on the single occasion when I tried to extract from the Treasury an allowance in respect of the academic gown I was wearing, I went to tremendous and complicated explanations to the Treasury 20 years ago in order to establish that claim for my academic gown, and still the Treasury has not been able to meet it.
I believe that if Members of the House of Commons, one the one hand, and Treasury experts, on the other, with the Whitley Council in the Civil Service, really got down to the problem, they could devise some scheme by which post- 1875 war credits could be paid at least to one category or another of the people whom I have mentioned.
One the last occasion when we debated this matter, a number of alternative suggestions were made as to means by which we could speed up payments of post-war credits. The Chancellor has shown, by his intervention in the debate tonight, that his mind is not closed to any of them, and I would appeal to him to keep first in his mind those who need the post-war credits most. I ask hon. Members of the Committee to remember the questions which they are asked at political meetings. I am quite certain that, if Mass Observation were to analyse the questions that are asked of Members of Parliament at public meetings, it would be found that the question which has most often been asked—
§ The Deputy-Chairman
I am afraid that the hon. Member can only discuss the actual provisions in the Clause at this stage.
§ Dr. King
In view of your Ruling, Sir Rhys, I can only say that I want to thank the Chancellor for what he has done in Clause 14 towards the repayment of post-war credits, and to express the hope that he will give earnest consideration to the pleas made in this debate for other payments, and especially to those in need
§ Sir Ian Fraser (Morecambe and Lonsdale)
It may surprise hon. Members of the Committee to know that there are other holders of post-war credits than individual persons. It has been brought to my notice that St. Dunstan's for example, possesses some £10,000 worth of post-war credits, and I do not doubt that Dr. Barnardo's Homes, the British Legion and other charities also hold some of these credits. These credits arise when a testator leaves the residue of his estate to charity, and possibly unknown to him the residue includes his post-war credits.
I put down a small Amendment which was not called. I make no complaint of that, because I suspect the reason to be the very good one that the Amendment 1876 was not necessary, but I wish to ask the Financial Secretary to give an assurance that this is so. From what I have heard I think it probably that for the purpose of this Clause a charity is a person. If that be so, it will enable the charities to obtain their credits, which hitherto they have not been able to do. In the past a charity, not being able to attain the human age of 65, has never been able to get the credit. We have never made any complaint, but now that this modest release is being made it does not seem unreasonable to ask if it applies to the cases I have mentioned.
On the general subject, I congratulate the Chancellor on taking this step to release some more of the credits. I appreciate his reason for choosing the particular limited cases included in the Clause, but I share with others in this Committee the view that the best way to deal with post-war credits over the next few years is to try to relate them to some form of hardship. That would give the persons holding them a choice. Those who did not need them would not need to call them; those who had some specific reason of hardship could call them.
I am in favour of giving people the right to call their own rights as far as possible. I think that there are definable classes of the community, and definable occurrences which happen to individuals, which would make it possible to let out £10 or £20 million a year where it would be most needed. It is not for me to judge what any Chancellor could afford at any moment, but I suggest that my right hon. Friend—or any other Chancellor afterwards—deals with the matter in that way rather than to say, "we cannot deal with it at all on the ground of hardship."
§ Mr. W. A. Burke (Burnley)
I wish to speak not on the general application of post-war credits, but on a specific point. I, too, had an Amendment on the Order Paper which was not called, and although I hope that that was because it is not necessary I would like to have the point cleared up.
I refer to the case of a branch of the Old-Age Pensioners' Association. I had correspondence with the Treasury about it last year. I put down a Question and the reply was that when the Chancellor was framing his Budget he would consider the matter. The matter has so far 1877 been considered with regard to persons holding post-war credits which have been left to them.
The case I have in mind is that of a man who used to attend concerts, which he apparently enjoyed very much, run by a branch of the Old-Age Pensioners' Association. He was 64 when he died in 1952 and he left three post-war credits. amount in all only to £30, to the local branch. Had he lived until he was 65 he could, of course, have cashed the credits himself. No one else is entitled to them. If they cannot be cashed by the secretary of this organisation. the Treasury will hold them for ever.
What I want to know is this. If an old-age pensioner can be included in this Clause asthe person for the time being having the title to the creditwill this organisation be entitled to draw the credits which the man would have had on attaining 65 years of age? In other words, can a branch of the Old Age Pensioners' Association be regarded for the purposes of this Clause as a person? I hope that I shall have a favourable reply from the Financial Secretary.
§ Mr. John Arbuthnot (Dover)
Anyone who rises to speak at this time cannot do so without being deeply conscious of the fact that the Financial Secretary has been here since half-past three listening to the speeches that have been made and replying with the customary urbanity, good sense and good humour with which we normally associate him.
I should like to take this opportunity of congratulating my right hon. Friend the Chancellor on this material step forward that he has taken in dealing with this vexed problem of post-war credits. because it is a problem which has exercised the minds of everybody and which we all meet on frequent occasions in our constituency. As I think my right hon. Friend knows, I should like him to go much further and make post-war credits negotiable. The suggestion that I have put forward on other occasions has been that they should bear the date on which the holder reaches the age of 60 or 65, whichever is applicable, and should then become negotiable.
I gather that there may be objections to this suggestion—first of all, that the 1878 taxpayer would be getting less than he is entitled to because when the credits became negotiable they would have to be transferred at a discount. But the disadvantage that the holder of a post-war credit now has is that he cannot cash it, whereas under this proposal he would be able to turn that disadvantage into monetary terms and would be able to cash the post-war credit at a discount, which would seem to be reasonable.
Another difficulty was put forward by my right hon. Friend the Chancellor when he said that it would prevent flexibility in the date of redemption if he wanted to pump more money into the economy—
§ The Deputy-Chairman
It is not clear to me that the hon. Member's argument comes within the provisions of the Clause a sit now stands.
§ Mr. Arbuthnot
I was really following the line of argument that was followed by previous speakers on the Question "That the Clause stand part of the Bill," and I was under the impression that the debate would be allowed to range sufficiently widely to enable me to do so.
§ The Deputy-Chairman
I do not think the debate can go beyond the provisions of the Clause when we are dealing with the Question "That the Clause stand part of the Bill."
§ Sir Richard Acland (Gravesend)
Sir Rhys, the right hon. Member for Leeds, South (Mr. Gaitskell) was suggesting various alternative ways in which rather more might be released from post-war credits.
§ The Deputy-Chairman
I did not hear the right hon. Gentleman's speech, but I think we are limited to what is in the Clause.
§ Mr. Arbuthnot
In view of your Ruling, Sir Rhys, may I make a plea for the holders of post-war credits, many of whom are in great difficulties and who need their post-war credits as soon as they can be made available to them? Many people would not spend these post-war credits on objectionable things, but would use them for the promotion of trade, and would put them into industry. I make a plea for post-war credits to be made available as soon as possible to their holders.
§ Mr. Morley
Like the Financial Secretary, I have been sitting here, with very 1879 brief intervals, since 3.30 p.m. in order to have an opportunity of making a contribution to this debate. I listened very carefully to what the Chancellor of the Exchequer said just now, with my usual admiration for the smoothness of his phrases and the eloquence of his language, but he did not seem to realise the great disappointment which exists amongst the people because he has given such meagre concessions in the field of post-war credits.
It has already been said that Sir Kingsley Wood probably acted unwisely in initiating post-war credits. As my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) said, it is not likely that any future Chancellor of the Exchequer would take a similar course in similar circumstances, but Sir Kingsley Wood did make a definite promise to the people. In his Budget speech on 7th April, 1941, he said:… the extra tax which any individual will pay… will be offset after the war by a credit which will then be given in his favour in the Post Office Savings Bank."—[OFFICIAL REPORT, 7th April, 1941; Vol. 370, c. 1329.]Sir Kingsley Wood said "after the war." He did not say "many years after the war," or "after the war, when a certain advanced stage has been reached."
§ The Deputy-Chairman
The hon. Member is taking his argument much wider than the provisions of the Clause.
§ Mr. Morley
I was seeking to show that the provisions in the Clause do not represent the promise made by Sir Kingsley Wood when he introduced postwar credits in 1941. The total amount of post-war credits outstanding was £800 million. Of that, I understand that about £210 million has already been paid out, leaving some £;590 million still to be disbursed. That means that only about a quarter of the outstanding post-war credits has been distributed amongst the people who should have received them. Surely that is a serious breach of public faith? These post-war credits were definitely promised to be paid out after the war, but successive Chancellors have neglected to do so.
My right hon. Friend the Member for Leeds, South suggested several ways in which this Clause might have been considerably improved. He suggested that instead of the meagre concession made 1880 under this Clause it might have been possible to introduce a scheme by which the eligible age for paying out post-war credits was reduced year by year, from 65 to 64, 63, 62, 61 and 60 years of age in the case of men and from 60 to 59, 58, 57, 56 and 55 in the case of women. That would have cost between £17 million and £18 million if it had appeared in the Clause. Surely, an expenditure of £17 million a year—
§ The Deputy-Chairman
I do not think it is in order, in discussing this Question that the Clause stand part of the Bill to discuss alternative methods of dealing with it. Hon. Members may criticise the Clause, but not suggest alternative methods.
§ Mr. Jay
Surely it is in order to discuss the arguments for and against this method of release as compared with other possible methods? It is a little difficult to assess the merits of this method unless we refer to the alternative methods. Moreover, I would observe, with respect, Sir Rhys, that that has been the way in which the debate has been conducted hitherto, and was followed by both my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) and the Chancellor of the Exchequer.
§ The Deputy-Chairman
I do not want to restrict the debate, and it is in order to criticise the provisions of the Clause, but it cannot be in order to put forward suggestions of alternative methods at this stage.
§ Sir R. Acland
Not only did my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) suggest alternative ways, but the Chancellor of the Exchequer at some length described his future intentions and the way in which he would deal with the various suggestions. He commented upon them, saying what they would cost, and so on. It seems a little hard if now we cannot say something about the merits of the different alternatives.
§ The Deputy-Chairman
I am only pointing out what the position is. There may be 100 different ways of dealing with this problem, but on the Question that the Clause stand part of the Bill we cannot discuss the alternative ways.
§ Mr. Morley
Perhaps I could put my point by saying that the concessions in the Clause are very meagre and will involve 1881 an expenditure of no great amount of money. An expenditure of £17 million a year for five or six years would not be very much in a national income of £14,000 million a year, and would not have any inflationary effect. As the Chancellor knows, we Members frequently receive letters from widows complaining that they are not able to draw their postwar credits. He knows that because the letters are forwarded to him or to the Financial Secretary. It would cost only about £30 million in the first year and £4 million in subsequent years to pay out post-war credits to poor widows.
The Chancellor in this Chamber and on public platforms has frequently said, that awing to his skilful navigation, he has brought the ship of State out of tempestuous economic waters into calm and sunny seas. Although he has done that the ordinary citizens do not see that they are approaching the Fortunate Isles. One of the reasons they do not is the long delay in distributing a greater number of post-war credits. The point I am trying to make, with some difficulty because of your Ruling, Sir Rhys, is that post-war credits could have been given to a larger number of people and that the expenditure would not have affected to any substantial degree the national economy at the present time. They could have been given out to a larger number of people at an earlier age without our encountering any danger of any substantial measure of inflation.
When the party opposite was in Opposition hon. Members belonging to it frequently criticised Chancellors of the Exchequer and Financial Secretaries in the two successive Labour Governments because they were not more generous in granting post-war credits. I remember that the hon. Member for Stratford-on-Avon (Mr. Profumo) said on one occasion that the failure to distribute postwar credits was the biggest swindle ever perpetrated on the people of this country by any Government of this country.
On another occasion, the hon. Baronet the Member for Worcestershire, South (Sir R. De la Were) said that the non-distribution of post-war credits was "most unsatisfactory." I know that the hon. Baronet has used that phrase in connection with other matters, but on that occasion he used it with even more sonority and with greater emphasis than 1882 usual. He evidently felt very deeply on the matter. I impress upon the Financial Secretary that there is a very strong feeling in the country on this matter, that there is a feeling that a promise has not been kept and that the payment of these post-war credits is the payment of a debt of honour.
I was always under the impression that the party opposite was the party of gentlemen, unlike the somewhat rough proletarians on this side of the Committee. I was also under the impression that gentlemen always paid debts of honour first before they paid their debts to tradesmen. This is certainly a debt of honour, something promised to the people by the Chancellor of the Exchequer. This Clause is a quite meagre concession. It will not satisfy the people. I hope that it will not be necessary to wait for another Budget and that before very long we shall have far more substantial concessions for the repayment of post-war credits than are given in the Clause.
§ Sir R. Acland
Two spokesmen from the benches opposite have congratulated the Chancellor and the Government on this Clause. Their speeches were in tune with speeches delivered by their leaders in the House of Commons and with leading articles on the subject in the Conservative Press. I should have thought that members of the Conservative Party would have dealt with the subject rather more in terms of apology than terms of congratulation, because the Conservative Party has promised time and again that these post-war credits would be repaid.
My hon. Friend the Member for Southampton, Itchen (Mr. Morley) referred to the way in Which hon. Members opposite, when they were in Opposition, taunted us about failure to repay, in terms which suggested that as soon as a different Government came into power there would be no doubt about it. I remember the rotund and dark-brown sherry voice of the Minister of Food coming over the wireless in the 1952 Election, and saying, "As to post-war credits, you have not had any of them." As those words rolled forth I thought, "That is another 100 votes gone from every Labour candidate in every constituency," because of the implied promise on behalf of his party that when 1883 it was returned to power they would be repaid.
§ Sir R. Acland
I am grateful for the correction.
Furthermore, the promise was given most explicitly when post-war credits were mentioned for the first time by a Conservative Chancellor, the late Sir Kingsley Wood. I disagree with my right hon. Friend the Member for Leeds, South (Mr. Gaitskell). This is possibly another small split in the Labour Party. My right hon. Friend spoke as though the then Chancellor had dealt with this matter cautiously. As I read his speech, he dealt with it with a calculated recklessness which left him and his party no loophole for escape.
Not only did he use the words already mentioned twice in this debate about the extra taxation he was demanding, but he went on to say:In other words, the individual citizen will have to pay the tax in full, but that part of the extra tax to which I have referred, while complying with our vital war-time necessities will constitute some provision for post-war difficulties …He did not mean those difficulties which would arise eight or 10 years after the war: he was referring, and was understood to be referring, to difficulties which would arise one or two years after it. He then proceeded to compare the post-war credits which he was initiating to war savings:The post-war credit is, of course intended to be in addition to and not in substitution of voluntary savings, and not only should existing contributions to War Savings be maintained, but every effort should be made to increase those contributions as I think it is quite within our capacity to do. Indeed, by providing the small saver with the promise of a substantial nest-egg we may well increase rather than diminish his desire for adding to it."—[OFFICIAL REPORT, 7th April, 1941; Vol. 370, c. 1329–31.]There were on that occasion two hon. Members who spoke in rather more cautious terms. One was the then right hon. Member for East Ham, South (Mr. Barnes). He said:The after-war liabilities which the Treasury are beginning to pile up are becoming very considerable. … We appear to be sliding into this policy of post-war commitments so easily and with such little thought that it 1884 is about time that some serious consideration were given to the problem of after-war repayment.I found to my surprise that that hon. Gentleman was followed by the present hon. Member for Gravesend, who was then hon. Member for Barnstaple. He said:I desire to follow the last speaker in his remarks about the alarming effect of post-war commitments into which we are entering. I want to consider the matter not in terms of finance, which to me is always an unreal subject, but in terms of goods—concrete goods. Month by month we are giving to more and more people the right to expect that as soon as the war is over they will have the power to command goods of one kind or another, because after all purchasing power is nothing more or less than the right to command goods. Are we quite sure that at the end of this war we shall have available enough goods—I do not say finance, but goods—to satisfy simultaneously all these claims?"—[OFFICIAL REPORT, 7th April, 1941; Vol. 370, c. 1363–65.]Reading those words of mine today I am amazed at the cautionary attitude I then took. But I was hardly unable to move the then Chancellor, who, having a further 48 hours to consider the matter with his advisers, said, in his concluding speech:The credits provided for in the Budget proposals will in effect form a relatively small element in the total situation, but will mean that the power of participating in post-war expenditure will be more fairly distributed than might otherwise be the case.He related the credits to the need for having some means of dealing with what he expected to be the situation of alarming post-war unemployment, and this shows how much reliance we can place on Conservative economics and on the calculations and advice offered by experts in the Treasury, because he went on to say:I hope that the Committee will be assured that I am confident about these proposals and others that were mentioned. They have been the subject of very anxious and serious consideration. In regard to these Budget proposals I have had the advice from many people outside the Treasury, and they have been subject to the very careful examination by myself and my officers for some time now. They were put forward deliberately after a good deal of consideration not only to deal with immediate matters but with an eye to the future and to the position which we will have to face when the war is over."—[OFFICIAL REPORT, 9th April, 1941; Vol. 370, c. 1661–63.]With such a wealth of deliberate calculation and a promise of immediate repayment it amazes me that Conservative back benchers, front benchers and 1885 leader writers should be dealing with the matter in terms of congratulation rather than apology. This shows the remarkably different way in which we deal with property, on the one hand, and life on the other. In that same Budget in which Sir Kingsley Wood initiated post-war credits for life, for the individual, the human being who pays his taxes, he also initiated the proposal of a post-war 20 per cent. repayment of the E.P.T. which was then being paid by companies.
The amazing fact is that the companies got all their money back—
§ The Deputy-Chairman (Sir Rhys Hopkin Morris)
The hon. Gentleman is going rather wide of the Cluase.
§ Sir R. Acland
I am astonished that I am not allowed to conclude the obvious point on which I was engaged, that we make the assumption that where a promise of post-war repayment has been made to property that must be punctually observed whereas when equally definite promises have been made to make repayments to human beings they can be disregarded and treated as if they had never been made.
I join with those who hope that if the Government survive another 12 months they will reconsider the moral obligations which they have assumed in so many different ways, and will make up their minds on a much more generous repayment to those who were induced to pay by the wild promises of the then Tory Chancellor.
§ Mr. Percy Shurmer (Birmingham, Sparkbrook)
I do not want my colleagues on this side of the Committee to think that I do not appreciate what they argue should be done. We should all like to see the repayment of more post-war credits to those in need; but as in the past I have suggested on one or two occasions that credits should be repaid to the dependants of those who died on the day they reached 65 or 60 years, as the case may be. I should like to take the opportunity to thank the Chancellor for what he has done to meet the point.
I have been amazed that his action has received so little publicity. In order to avoid having to put down a Question later, I wish to ask him now whether he 1886 will give as much publicity as he can to this matter. The sum of £19 million is involved, and that is not an amount to be laughed at. I understand that the sums will be available as from August, and I hope that wide publicity will be given to the matter. I suggest that it would be appropriate to place an announcement in the post offices where widows go to draw their pensions, and that it would also be desirable to place it in Government Departments so that the change can be widely known.
§ Mr. Hayman
I am not one of those who congratulate the Chancellor on the paltry concession which he has made. I should imagine from the tone of the Conservative Party conference last year that he will not receive the congratulations of that body at its next meeting. We have to consider the concession in relation to the details which the Chancellor gave when he put his Budget proposals before us.
He said that there was still owing £564 million worth of post-war credits. He said we were repaying them at the rate of £17 million per annum, and that this year the concession would involve £19 million. But after this year the concession will be only worth £2 million a year, a paltry sum altogether, and surely it ought to have been possible for the Chancellor, in a year in which the country is doing as well as he says it is, to have made a much greater concession to these people.
Attention has already been drawn in the debate to the millions of people who hold these post-war credits. In the main comparatively small sums are owing, and I hope that when this problem is tackled in the future it will be tackled from the point of view of dealing with hardship, particularly among the unemployed, the disabled and so on. It will mean a great deal of work for the Treasury. I hope that whatever is done in the future will be on a more generous scale, and that this paltry concession will not be taken as a standard.
§ Mr. Proctor
I cannot congratulate the Government upon their approach to this subject, because I think it is timid and insufficient. Those with whom this Clause deals, namely, those who have gone bankrupt and those who are heirs, are 1887 too limited a class. I hope that when we come to deal with this problem in the future it will be dealt with upon the basis of need, because most of the cases which are referred to hon. Members arise from extreme poverty and need on the part of those claiming the repayment of their credits.
There is one special problem I should like the Financial Secretary to the Treasury to consider. It could be dealt with in subsection (5). I am thinking of the question of repayment of the post-war credits to women qualifying for them because of their response to the national appeal to return to work in an industrial capacity to assist the nation in a time of need. They were informed by means of a circular that their claims, if they so desired, could be registered in their own names, but unless information was given to the Treasury within two months they would be registered in the names of their husbands.
Many women now find that they qualify for post-war credits only when their husbands attain the age of 65 because these credits have been registered in their husbands' names and they themselves are unable to draw them. The Clause could give the Chancellor an opportunity to remedy that situation, thereby allowing the women who have earned these credits by their own efforts in the war to receive payment in their own right, instead of having to wait until their husbands attain the age of 65. It is especially hard in the case of those who are older than their husbands. I have such a case in mind, where a woman, instead of drawing at the age of 60 the credit she earned by her own work, will have to wait until she is 68 years old. I am sure that something can be done to remedy such an unfortunate state of affairs.
§ Mr. Boyd-Carpenter
In reply to the last observation of the hon. Member for Eccles (Mr. Proctor) I am afraid that the provision that he has in mind is governed by the older Acts, and there is no proposal in this Clause to deal with it. It could not be dealt with administratively.
This Clause has had a reasonably healthy welcome. Indeed, it has been subjected to that most agreeable form of criticism, that is, regarded as a step in 1888 the right direction, though a number of hon. Members would very naturally like to see more done. But, whatever may be said, one or two adjectives of an unkind character were used, such as, for example, "niggardly." This proposal does, of course, involve more than doubling the rate of repayment of post-war credits and what is, perhaps, even more satisfactory is that it ends that rather substantial anomaly and source of ill-feeling which arose when a post-war credit could not be paid to a family because that family was unfortunate enough to have lost members of it in succession, by death, before they reached the qualifying age.
§ Mr. Hayman
I do not know if I have misunderstood the right hon. Gentleman, but did he say that this concession meant more than doubling the rate of repayment? Surely after this year the rate will be at only £2 million a year, whereas. in his Budget speech, the right hon. Gentleman the Chancellor said the rate of repayment generally was £17 million a year?
§ Mr. Boyd-Carpenter
I hope that the hon. Gentleman will let me finish what I was saying.
The rate of repayment is more than doubled. The figures are that repayment at the ages of 65 and 60 years costs the Treasury roughly £17 million a year; and this year, owing to the need to take up back cases, this Clause adds £19 million. What may happen in future years is outside our consideration of this clause, although a large part of the discussion within this Committee has been concerned with suggestions as to what might be done in future years. This concession does more than double the cost of repayment.
§ Mr. Boyd-Carpenter
There is no confusion; the figures are quite clear. This Clause adds £19 million to the current £17 million, which I have already explained to the Committee, and will add a further £2 million in subsequent years while the provisions remain as they are.
I do not know, Sir Rhys, how far the Ruling which has been given will permit of my replying in detail to certain 1889 points raised by the right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell) and others, but if I incur your displeasure, I have no doubt that you will indicate it in the usual manner.
§ The Deputy-Chairman
I can indicate it now. What is in the Clause is certainly subject to discussion; but there may be a hundred different ways of discussing this matter, and it would not be in order to discuss all of them.
§ Mr. Boyd-Carpenter
Thank you, Sir Rhys.
My right hon. Friend did give an undertaking that some of the points of detail would be dealt with and I will, subject to your Ruling, attempt to carry that out. One point which is certainly within the rules of order is that the amount of the credits outstanding, according to the right hon. Gentleman opposite, is about £580 million; but it may be of interest to him, and to the Committee if I say that the latest figure we have is £564 million. If we continue to repay them as at present, I think that sum will be repaid in slightly under the forty years to which he has referred.
There have been various alternative methods suggested for accelerating repayment in due course. The right hon. Gentleman the Member for Leeds, South, suggested repayment on death; but that would cost £75 million in the first year, and some £5,500,000 yearly subsequently. The reduction of the qualifying age by one year would slightly more than double the present annual cost of £17 million. That is because as one gets into the lower age groups there are slightly more people in them.
The repayment of credits in respect of 1941–42 would cost £104 million in the first year, and in later years would save about £3½ million. There is the obvious administrative difficulty that to adopt that method pays off completely practically no holders of post-war credits. The only ones completely paid off would be those of people who had credits only for that one year. That is not conclusive but is a factor which must be borne in mind. I do not think I shall be expected to add to what my right hon. Friend has said about the general intentions of the Government.
The right hon. Member for Leeds, South referred, as did the hon. Member 1890 for Southampton, Test (Dr. King) and my hon. Friend the Member for Morecambe and Lonsdale (Sir I. Fraser), to the possibility of payment on grounds of hardship. That has appealed to successive Governments as an attractive method, and the right hon. Gentleman himself made a suggestion connected with a particular recommendation of the Royal Commission. The difficulty which so far has prevented anything being done on those lines is the complexity of the alternatives involved.
One has to state a particular state of affairs and call it hardship. There is the obvious example of widowhood. It may not necessarily involve hardship—there are rich as well as poor widows. Or one tries to assess hardship objectively, in which case one is up against the difficulty of how to judge degrees of different types of hardship. That is most frightfully difficult to do fairly, and so far it has not been possible to find a means of assessing degrees of hardship.
§ Mr. Boyd-Carpenter
Physical disability is a very terrible thing. Where it was accompanied by poverty the payment of a post-war credit would give great relief; where it was not accompanied by poverty one would be up against the same difficulty of justifying the picking out the person concerned from so many other people. It is a very real problem, which successive Governments have approached sympathetically and understandingly, but I do beg the Committee to understand that it is not at all as easy as it sounds.
My hon. Friend the Member for Morecambe and Lonsdale hazarded the opinion that his Amendment had not been called because it was not necessary. It is not for me, Wing Commander Hulbert, to speculate on the reasons which cause you and your colleagues in the Chair to call or not to call any particular Amendment; but it is certainly the fact that, by coincidence, it does not appear to us to be necessary. I can assure my hon. Friend that it would add nothing to the Clause as drafted and that, in the circumstances he has in mind, 1891 charitable organisations would be entitled to payment of post-war credits.
I am glad that I can give the same answer to the hon. Member for Burnley (Mr. Burke). He also had an Amendment which, by coincidence, was not called and which, also by coincidence, was not, in our judgment, necessary. In our opinion the association he mentioned would be a person within the meaning of the Clause and when the original owner would have been 65 years old the association would be entitled to payment.
My hon. Friend the Member for Dover (Mr. Arbuthnot) sought to make an interesting argument on a proposal which I know he has very much at heart, and which he has pressed for some considerable time. That proposal is to date the post-war credits with the date on which the original holder would reach the qualifying age and to make them negotiable.
I have no doubt that I shall incur your displeasure, Wing Commander Hulbert, if I enter into any more ample discussion on that point than my hon. Friend did, but one of the great difficulties behind his proposal is that it would create—as it would be intended to do—a kind of market in post-war credits, the price of which would no doubt be affected by the present provision as to the age at which repayment is made.
It might make it very much more difficult for my right hon. Friend, in the future, to advance the date of payment if he knew that one of the effects would be to give a wholly uncovenanted benefit to speculators in post-war credits. It would also cause much more difficulty in circumstances in which it might be desirable to make larger releases. Therefore, although the proposal has obvious attractions, it is not possible to accept it.
I agree with the hon. Member for Southampton, Itchen (Mr. Morley) that the subject arouses very deep feelings. I appreciate the irritation which many people feel—indeed, I feel it myself—on seeing a bit of paper bearing certain attractive figures upon it, which they cannot transmute into money which they might well need. It is for that reason that it seems to us the more satisfactory 1892 that my right hon. Friend has been able in some degree to meet this feeling by the advance embodied in the Clause. I should not like the hon. Gentleman to feel that I appreciate any less than he does the very natural and proper public feeling on this subject.
The hon. Member for Sparkbrook (Mr. Shurmer) referred to the fact that from time to time he himself pressed the proposal embodied in the Clause, and he was perfectly entitled to make that point. I shall certainly follow up the point he made as to the desirability of ensuring that sufficient publicity is given to the arrangements for payment. I have no doubt that the discussions which have taken place in this Committee and in the House in the Second Reading debate will ensure that a considerable proportion of those entitled will know of this step. It is equally important, as the hon. Member for Sowerby (Mr. Houghton) said, not to raise public opinion to such a state of excitement that it resents the necessary time being taken for the making of the repayments. Subject to that, there is a great deal in the point made by the hon. Member for Sparkbrook, and I shall see that it is not forgotten.
As I said at the beginning of my few remarks, the Clause has had a good reception both in this Committee and outside. It is satisfactory that, despite all the difficulties of the time, my right hon. Friend is able to make this advance. The credits that will be paid will no doubt give very useful assistance to many people who need them a great deal. I think it will be thoroughly satisfactory if the Committee is able to pass the Clause and enable this advance in the payment of post-war credits to go forward.
§ Mr. Jay
I only want to ask the Financial Secretary one question. He has been almost entirely abandoned by his colleagues on the Front Bench—except for the Chancellor—and so far as I know he has had little, if any, food since 3.30 p.m. If he had had more assistance from the Solicitor-General and the Economic Secretary I might have felt tempted to ask rather more questions, because some are still unanswered, but my argument is based on my anxiety for the physical welfare of the right hon. Gentleman, and I shall, therefore, content myself with asking him a question which must be entirely in order. 1893 We have not really been told why the Government preferred this method of releasing further post-war credits to any of the possible alternatives. Was it the very simple fact that this proposal, after the first year, is much the cheapest from the point of view of the Treasury? The Chancellor has said that he regarded it as the best alternative, but did he, in fact, mean the cheapest from his point of view? If that was not the reason, can we be told what it was?
§ Mr. Boyd-Carpenter
I cannot reply fully without going over the alternatives which the right hon. Member for Leeds, South posed, and to which my right hon. Friend replied and I have tried to reply. One of the great attractions of this method is that it secures that the almost indefensible anomaly—although the right hon. Gentleman used to defend it—of the short-lived family is got out of the way. It really is difficult to defend the misfortune falling on a family when, because successive holders of the credit do not attain the qualifying age, the credit is indefinitely held back. That is one aspect of the system which it was very difficult to justify and which gave rise to a great deal of the feeling to which hon. Members have referred.
There is the smaller but not inconsiderable advantage that by making these credits definitely payable when the original holder would have reached the qualifying age had he lived we are able to deal with the anomaly in respect of charities. It therefore seemed to my right hon. Friend, after careful consideration, that, in the light of the amount of money he had available this year, this was the best of the innumerable alternative versions that, the right hon. Gentleman knows, have been put forward in the past, and, indeed, put forward in this debate. I do not think I can put the point more fully without indulging in repetition, which would be not only out of order, but tedious.
§ Question put, and agreed to.
§ Clause ordered to stand part of the Bill.
§ Mr. Gaitskell
I beg to move, "That the Chairman do report Progress and ask leave to sit again."
A moment or two ago my right hon. Friend the Member for Battersea, North (Mr. Jay) expressed his concern about 1894 the state of health of the Financial Secretary, and I, too, am very worried because he has not had any food for eight hours and has not been asleep for eight hours. I am also very much concerned about the Chancellor's health. He is looking very tired. I feel, therefore, that there is a good deal to be said for adjourning.
It is more than an hour past our normal time for rising. We have made quite good progress. I dare say the Chancellor feels that two Clauses of a Finance Bill are not enough for him, but he will readily agree, I know, that we cannot measure progress simply by the number of Clauses dealt with. That is not a suitable criterion. The first of the two Clauses dealt with the standard rate of Income Tax. We had an excellent debate, as I think everybody agrees, on that subject. The second dealt with post-war credits, a matter of vital concern to the people of this country.
I hope, therefore, that the Chancellor will feel that, in the circumstances, the day's work is sufficient, and that we can adjourn, and not try to embark on Clause 15 tonight. It is a highly complicated Clause, and it would be most unfair to impose on Ministers now the strain of replying to the very important Amendments that we shall move to the Clause.
§ Mr. R. A. Butler
The right hon. Gentleman seems unduly concerned about the physical state of Her Majesty's Ministers. It had been my intention to sit up all night, I feel in such excellent form. It was only out of regard for the somewhat languid address of the right hon. Member for Bishop Auckland (Mr. Dalton) and the very abbreviated efforts, due obviously to a state of collapse, and the pallid utterances of hon. Gentlemen opposite, that it crossed my mind to rise tonight at all. However, I feel that Clause 15, although crystal clear to the Government, needs a little further study by the Opposition, and I think it may be well to give them extra time to study it, and to go away and do their homework in time for tomorrow.
Seriously, though, we have a great deal of work before us. Some of the speeches today—I mention no names—were more suited to Second Reading than to Committee. One of them lasted three-quarters of an hour. There was no obstruction: it was interest. If, however, we go on at this pace we shall never get 1895 through our work. There are many Amendments proposed to Clause 15, and I want to make more progress than this because we have a time by which, according to tradition, we should finish our consideration of the Bill in Committee.
We want to give time between the Committee and Report stages so that hon. Gentlemen can look at the Bill. Therefore we must hurry on with this stage, and I must warn the Committee we shall have to sit very late tomorrow. It may very well be all night, because we must make progress, through Clause 15 and onwards, although I guarantee we shall not get to the stage at which hon. Gentlemen opposite have not prepared their work. I should like to make progress tomorrow, and that is not unreasonable in view of the great importance of Clause 15. With that warning, I am only too glad to accept the Motion.
§ Question put, and agreed to.
§ Committee report progress; to sit again Tomorrow.