New Clause.—(VICTORIA CROSS.) (Hansard, 11 July 1956)

§ Lieut.-Colonel Marcus Lipton (Brixton)
I beg to move, That the Clause be read a Second time.

§ Mr. Hector Hughes (Aberdeen, North)
On a point of order, Sir. I was not aware that my hon. and gallant Friend was moving the Second Reading of a new Clause. I should like to draw your attention to the following proposed Clause standing on the Notice Paper in my name and in the name of my hon. and gallant Friend the Member for Brixton (Lieut.-Colonel Lipton)—Reduction of duty on publicans' licences: As from the fifth day of April, nineteen hundred and fifty-six, a reduction of twenty-five per cent. of the amount which would have been payable apart from this section shall be made (either by repayment or by remission of duty) in the licence duty in respect of a publican's or beer house licence: Provided that this section shall not have effect in relation to a licence granted in respect of any such licensed hotel or restaurant premises as are mentioned in the Fourth Schedule to the Customs and Excise Act, 1952. While I would not dream of contesting your discretion with regard to selection, Sir, may I ask is my Clause not being selected?

§ Mr. Speaker
No, the hon. and learned Member's Clause is not being selected.

§ Lieut.-Colonel Lipton
The object of the Clause I have moved is to exempt from Income Tax the annuities and additional pensions paid to holders of the Victoria Cross. I am obliged to the 36 hon. Members in all parties in this House who added their names in support of the proposed Clause.
413 As I understand, the position is as follows. In all Services holders of the Victoria Cross below commissioned rank, or below warrant rank in the case of the Navy, receive an annuity of £10 per annum plus an additional 6d. a day by way of addition to any other Service pension to which they may be entitled. In the case of a person who wins a bar to the Victoria Cross—only one is living at the present time—he, if he is an other rank, receives an additional £5 a year.
My next point is that the only persons holding the Victoria Cross who are entitled to this annuity of £10 a year are persons who won the award while they were serving in the ranks and not as officers. The number of people who are affected by this Clause is, therefore, extremely limited. It can apply only to other ranks who gained the Victoria Cross and who are now living in this country. So far as I have been able to ascertain, the number of persons affected cannot be more than about 100 all told. In those circumstances, the cost to the Exchequer cannot exceed about £300 or £400 a year.
4.0 p.m.
Only a short time ago we celebrated the centenary of the Victoria Cross. It was a shock for me to learn, in the course of those centenary celebrations, from the holders of the Victoria Cross that the £10 annuity is liable to tax. I hope that the Government will take advantage of the occasion to agree to make this concession. It must be quite the smallest monetary concession which the Treasury has been asked to make in the course of the long proceedings on this year's Finance Bill.
I want to allay the anxieties of the right hon. Gentleman the Chancellor of the Exchequer to this extent, that if, unfortunately, he has to say "No" to this Clause, I do not propose to divide the House. I think that a concession of this kind should be made with grace and not as a result of a Division, a snap vote with Members tramping through the Lobbies and that sort of thing. I know that other financial rewards are paid to holders of other decorations in certain circumstances, but I believe that if the Chancellor makes this concession he will not be opening wide the flood gates to a large number of demands, because it will be agreed that the Victoria Cross can be easily distinguished and the distinction is 414 accepted by everybody. In those circumstances, I hope that the Chancellor will find it possible to accept the Clause which, as I have indicated, is supported by hon. Members in all parts of the House.

§ Sir Frank Medlicott (Norfolk, Central)
I beg to second the Motion.
I am glad that the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton) has stressed the comparatively small cost which will be involved in this concession, but I should still have supported it even if a substantial amount of money were entailed. It is rather undignified that a great nation has to snatch at such small amounts of revenue from sources such as this. When one recollects the kind of imposition made in the past—Purchase Tax on hearing aids for the deaf and on sticks for the blind—one wonders what kind of people they are who think up this kind of taxation and what kind of people we in the House are to allow such taxes to be imposed.
It might be said that it is difficult to know where to draw the line, but I suggest that part of our responsibility is to draw lines, and to draw them in the right places. It might also be said that a question of principle is involved and that all income must be taxed. However, if we are to deal with this matter on the basis of principles of taxation, I venture to quote from what is surely the fountain head, namely, what Adam Smith said in his "Wealth of Nations". He said that the first principle of taxation was that The subjects of every State ought to contribute towards the support of the State as nearly as possible in proportion to their respective abilities. If it is a question of contributing towards the support of the State, how better can a man do that than by fighting for it to the last degree of heroism? What else can a man do to support the State?
Adam Smith went on to say, on this question of principles, that subjects should also contribute … in proportion to the revenue which they respectively enjoy under the protection of the State. Here it is not so much the State protecting the heroes; it is they who protect the State. There is not one of us who would be here if it were not for the heroism and sacrifice of countless men who fought in two wars and of whom the holders of the Victoria Cross are the 415 supreme and magnificent symbol. It is right—or, at least, it is necessary—that we should levy taxation upon the earnings of enterprise and business and on salaries, wages, profits and dividends, but surely, as a nation, we are not so poor in resources or in spirit that we have to place taxation upon heroism.

§ The Chancellor of the Exchequer (Mr. Harold Macmillan)
I am very grateful for the way in which this Clause has been moved and seconded. I very much appreciate what the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton) said when he indicated that he did not regard this as a matter suitable for dividing the House. I think that he was right about that. Perhaps I might be allowed, for the record, to state the facts a little more completely.
Holders of the Victoria Cross below commissioned rank are granted a State pension of £10 a year with an additional pension of £5 a year for each bar to the decoration as from the date of the act of bravery for which the decoration was gained. Those with a Service or disability pension may also receive an additional pension of 6d. a day over and above the £10. The pension may be increased to £75 per annum in the event of the pensioner being unable to earn a livelihood in consequence of age or infirmity.
As regards commissioned ranks, an officer who has been awarded the Victoria Cross and who is unable from age or infirmity to earn a livelihood may be granted an annuity not exceeding £75. These pensions are liable to Income Tax under Schedule E as pensions payable by the Crown, or out of public revenue. Those are the facts. It is also true that grants may be awarded to holders of the Military Cross which, of course, is a very much more widely held decoration and to holders of the Distinguished Flying Cross and the Distinguished Conduct Medal.
This is very much a matter in which the House must make a decision as the House of Commons. I would not attempt to guide it contrary to what I thought might be its general view. In logic, in law, and having regard to the possible claims that might be made in respect of other similar decorations, I think it would be my duty to advise the House to reject the Clause, but I am bound to say that I find it difficult to do so. If the House 416 should wish, as an act of all Members of all parties, to make this signal gesture in this great year in the history of the Victoria Cross, I could not advise the House to put logic or strict legality above sentiment.
I would ask the House, however, to say, as it will affect all future Chancellors of the Exchequer, that if this decision is made today, our successors should enter into a self-denying ordinance and not quote this as an example for turning almost all pensions of the Crown, which are all earned by an act of good service and merit, into a reason why the law should be put into abeyance in other cases.
What is the reason that we should do this—openly and knowingly do it, contrary to strict logic or legality? I think we might permit ourselves this act of sentiment in this year for this reason: it is not a bad thing, I think, that we should sometimes go outside the strict rules which we have to follow in so many cases, nor would it be a bad thing for the House at this moment to declare its sense of gratitude and honour to men who fight for their Queen and country and who make the kind of heroic acts which are signalised by this unique decoration which is known throughout the world as one without parallel.
That is not to say—and perhaps this is the experience of many here—that we have not known men and comrades who might have been recommended for the Victoria Cross. It is not to deny that we have served alongside and seen acts which no one has ever reported and which were never brought to attention because of the fury of battle or the death of those who might have been the recorders.
If I may add this in the spirit in which the hon. and gallant Member moved the new Clause, not as Chancellor of the Exchequer but as an old Member of the House who has taken part in war, I think it would be a noble thing that we should make this little act of tribute both to what this decoration means and to the spirit which lies behind many hundreds of thousands of men who feel honoured at having been comrades of holders of the Victoria Cross.
Contrary, therefore, to what I ought to do, I should like us to pass this new 417 Clause in this hundredth year of the Victoria Cross, in memory of a great Queen and in honour of our present Queen.

§ Mr. Hugh Dalton (Bishop Auckland)
I was very happy to hear the Chancellor's speech. I am sure that in all parts of the House, particularly among those who have memories of either of the two past wars, through which we came with shocking sacrifice of the flower of our manhood to a victorious end, hon. Members will be happy if all sections of the House agree to follow the line which the Chancellor has so eloquently indicated.
The Chancellor has spoken with a fine choice of language and an appeal to emotions which we all share, and I do not wish to elaborate the theme further than to say that we on these benches welcome both what he said and how he said it and hope that there will be no opposition in any part of the House to the acceptance of the new Clause moved by my hon. and gallant Friend the Member for Brixton (Lieut.-Colonel Lipton).