HC Deb 02 July 1958 vol 590 cc1465-85

The following section shall be added to Part VIII of the Income Tax Act, 1952:— 228A. If the claimant proves that during the whole of the year of assessment—

  1. (a) he has been in receipt of a war disablement pension or an industrial injury pension granted by the Ministry of Pensions and National Insurance and determined by reference to one hundred per cent. disablement, or
  2. (b) though not in receipt of a one hundred per cent. disablement pension or industrial injury pension he nevertheless is disabled in manner and degree equivalent to one hundred per cent. disablement,
he shall be entitled to a deduction from the amount of income tax with which he is chargeable equal to tax at the standard rate on one hundred pounds".—[Mr. E. Evans.]

Brought up, and read the First time.

Mr. Edward Evans (Lowestoft)

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

Although for some reason my name is omitted from the list of names in support of the new Clause, I claim a very intense interest in this subject, and have had for many years. This new Clause, and, indeed, the one which follows it, which has not been selected and which relates to blind persons, can almost be described as a hardy annual, because for many years we have been striving to induce Conservative Chancellors of the Exchequer to unbend from the rigid attitude they have adopted in this matter.

I have myself on many occasions been a member of deputations to the Financial Secretary to the Treasury to present the case which we are now making for this relief, or something on similar lines. We have always had a sympathetic hearing, and very little more, with a promise that the matter would be examined with sympathy, but nothing has happened yet. I hope that tonight we are going to have from the Financial Secretary a much more accommodating response to our appeal. One would have thought, in view of the rising sympathy of the general public for the welfare of the disabled, as has been evidenced by the number of debates we have had in the House during the past year on the subject, and in view of the obvious merits of the case, that the Government would have relaxed a little. It is with this hope in mind that I have the temerity to move the Second Reading of this new Clause.

10.15 p.m.

We make our claim for disabled persons who are the victims of such grave disability that they are assessed on the basis of 100 per cent. disablement either through war service or industrial injury as defined in paragraph (a) of the new Clause. In addition, we urge consideration for another group of persons, namely, those who though not in receipt of a one hundred per cent. disablement pension or industrial injury pension are nevertheless disabled in manner and degree equivalent to one hundred per cent. disablement. We press the Chancellor to allow a deduction of £100 from the Income Tax with which such people are chargeable, a very modest sum.

The proposed beneficiaries under paragraph (a) are readily identifiable, but the Chancellor has, I believe, objected that it is not so easy to identify those mentioned in paragraph (b). On this matter, I make to the Financial Secretary the suggestion which was made about two years ago, when a similar Clause was brought before the Committee, for overcoming the difficulty. In the Blind Persons Act, 1920, there is a statutory definition of blindness. There is a register of blind persons. As far as I am aware, blindness is the only disability having a statutory definition. As the Committee knows, the welfare provisions of the National Assistance Act, 1948, make it the duty of local authorities, if they submit schemes for welfare services which are approved by the Minister, to maintain a register of handicapped persons, and a definition of a handicapped person is one "severely and permanently handicapped". When we were discussing not long ago a Private Member's Bill on a similar subject, that definition was embodied in it.

The persons covered by the new Clause fall into certain categories. There are the obvious ones—the blind, the deaf, the dumb, the physically handicapped, the crippled—this category embracing a large variety of disablements—spastics, polio cases, those suffering from muscular disorders, epilepsy, and so forth. I am convinced that these people will go on the local authority registers only after a strict examination of the extent of their disabilities. If the Minister has doubts about that, the safeguard could easily be reinforced by a medical endorsement as regards the degree of disability when a person was applying for a rebate. If the Minister is not prepared to accept those persons whose names go on to the local authority registers under the National Assistance Act, there is the disabled persons employment register, section 2 of which contains a long list of disabilities, sufferers from which are entitled to receive training and rehabilitation in a sheltered workshop.

It would be easy, on purely humanitarian grounds, to deploy a case for consideration by the Committee. We all know, probably intimately, severely handicapped persons who make a grand struggle to keep going.

I should like to present a case on economic grounds. We know that by National Assistance the Government recognise that blind persons and those suffering from pulmonary tuberculosis should have additional grants. That is because, of course, their disability causes added cost to their living amenities. This is equally valid in respect of those outside the scope of National Assistance. It applies with considerable force to those disabled persons who are not so handicapped that they are able to engage in remunerative work, some as employees and some as self-employed.

The proposed Clause aims to encourage disabled persons to work and to do as much to support themselves as possible. Very many of them do. But the numbers of disabled are increasing and there are many agencies, both voluntary and statutory, which help them to find suitable work. There are the blind employment factories which are run by voluntary societies and local authorities, the wonderful workshops at Leatherhead, and Remploy. All of these provide employment under sheltered workshop conditions. But there are many who work in competitive open industry in various skilled trades. There are many in professional and semi-professional life and they are making a very good contribution to the national economy.

For many years it has been the aim of successive Governments and voluntary societies and those of us who are interested in the handicapped person to provide facilities for education and training. The Ministry of Labour has a very fine record in this regard. The Piercy Committee, which last year presented its Report, and other bodies competent to give advice, stressed the value from a rehabilitation point of view of remunerative employment as a factor in building up, and, indeed, rebuilding, the morale of a handicapped person. It is tremendously vital that those suffering from a disablement, through accident or any other cause, shall feel that they are not cast aside by society after they have learned their trades, but are able to earn their living and thereby contribute to the national economy.

The Committee must be aware of the fundamental issue here. It must of necessity cost more for a 100 per cent. disabled person to live and work than it does for a normally endowed person. He requires more help, special apparatus and at times special drugs and surgical appliances, and in many cases adapted tools for his job. A blind person requires readers and Braille books, and if he is a professional man, such as a lawyer or physiotherapist, he will require special means to keep in contact with modern progress and modern legislation. The term "cripple" is a very embracive term, but in the wider sense cripples very often need special travelling facilities.

I was impressed during the bus strike to see how blind persons and crippled persons who had been used to a normal means of communication where they received the help of sympathetic conductors and public managed to get to their work. I was standing at the bus stop in Parliament Street when a blind woman came out of one of the Ministries. The conductor immediately recognised her, helped her on the bus and knew precisely where she wanted to go. But for the fact that this lady was working on a bus route her means of getting to work would have been very costly, as, incidentally, it was for me during the bus strike.

The modified domestic arrangements of disabled persons necessitate additional cost. How many disabled persons living alone, for instance, are able both to run their houses and go to work? My whole case depends upon the realisation that it costs more to be a handicapped person than a normally endowed person and that we, claiming as we do, to be humane and progressive, have our duties and obligations to these people. Many of them have suffered their disability through having fought for us. To have to pay Income Tax at the present rate is a handicap to them. Our duty is to try to make their life less irksome and to encourage them.

I shall bring to our aid the Second Report of the Royal Commission on the Taxation of Profits and Income, paragraphs 201 and 202. The Commission's recommendation was that these persons suffering from 100 per cent. disability should be granted what are, in effect, the terms of the two new Clauses, one of which has been called and the other has not been selected.

In paragraph 202, the Royal Commission stated: Our general conclusion is that grave disability"— it does not suggest 100 per cent. disability— ought to be the subject of allowance. Nothing could be clearer or more unequivocal. The Report continues: It presents itself to us as a personal circumstance that sets apart those who suffer from it and directly affects their relative capacity to pay. We do not mean that it affects their earning capacity. We are asking what we consider to be a reasonable concession and one which it is well within our power to give to those who deserve our sympathy, which is not all that we can give. We should give them real tangible help.

The Royal Commission said: What we are thinking of is a range of additional expense attendant upon the conduct of their normal life, not least upon the maintenance of their earning capacity, which yet goes unrelieved under the existing code. The idea underlying the Royal Commission's Report was that the granting of this concession would, help disabled persons to become a greater economic factor in our affairs. To deny them this con- cession does a disservice not only to the disabled but to the country.

As I understand it, the Royal Commission desired such relief as would enable the handicapped to maintain their capacity to work, to contribute by their industry to the national economy and so to make them feel that they are a useful and respected element in the community. We urge the Chancellor to give his most sympathetic consideration to the Clause. It cannot cost a great deal, but if conceded it would do something to make life for the handicapped a little more tolerable.

10.30 p.m.

Sir Eric Errington (Aldershot)

I support, if not in detail, the general principle of this new Clause. The situation was brought to my notice with considerable force through a constituent of mine who was blinded on the Woomera atomic range. He came back to Farnborough and has been employed in the Royal Aircraft Establishment there. As a condition under which he could fulfil his employment it has been necessary for him to obtain a guide dog. That guide dog naturally costs money.

We have heard a good deal about the expenses which are difficult to evaluate. In this case which I have in mind the evaluation of the expenses is quite simple and quite definite. If perchance my constituent's assessment were under Scehdule D instead of Schedule E he would be entitled to claim the expenses necessary for him to expend upon the guide dog. I think the amount is about £50 a year.

This new Clause deals with the general matter and fixes the figure, which may be too little or too much by the limitation to £100, but it seems to me complete nonsense that a man who, in order to do the work which fortunately he is capable of doing, has to expend money to do it, and who happens to be paid on the Schedule E basis, is unable to claim any relief at all from Income Tax.

There is on the Paper another new Clause, which I anticipate will not be called, in my name and the names of others associated with me, in which we ask that the allowance should be made in respect of expenses necessarily incurred by him by reason of his said disablement in the performance of his duties. Even if the difficulty of arriving at an appropriate figure for the Income Tax allowance is too great to overcome in the Clause under discussion, surely that would help the people of the type I have mentioned, who could be dealt with on the basis of Schedule D so that relief could be given in respect of their actual out-of-pocket expenses.

I ask the Government most seriously to consider this matter, because I believe all those who know of cases of this character are very much concerned as to the unfairness.

Mr. John Cronin (Loughborough)

I support the Motion moved by my hon. Friend the Member for Lowestoft (Mr. Edward Evans) in a very able and well-argued speech. We on this side of the Committee welcomed very much the intervention by the hon. Member for Aldershot (Sir E. Errington). It indicated that on both sides of the Committee there is a very strong feeling that something should be done on behalf of these very unfortunate people. We can say without doubt that everyone feels that the person who is 100 per cent. disabled is entitled to all possible assistance by the community, and it is a well-recognised fiscal principle that for anyone who has to earn his living and has to incur expenses which are essential to earn his living those expenses should be deductible from his income before it is assessed for Income Tax.

My hon. Friend has already pointed to the expenses of transport, of special attendance, of special housing, of special appliances, Braille, and so on. The Committee ought to bear particularly in mind the wide difference which exists between expenses which are incurred by 100 per cent. disabled persons, and expenses as known to the rest of the business community.

I am talking now of people like company directors, business men and industrialists. We on this side of the Committee think, for example, that a paralysed man who has to travel to work in a special invalid carriage deserves at least the same consideration as a company director who has to have a Rolls-Royce to take him to and from his various factories.

There are arguments in favour of enabling a 100 per cent. disabled man to earn a living. But it is sometimes not worth while for a 100 per cent. disabled person to go out to work because of the expenses incurred if he does not receive tax relief. The result is that the nation is deprived of that person's productive capacity.

There is another argument which should not be neglected. If a seriously disabled person finds himself unable to work, he feels rejected by the community. He develops psychological changes. He goes steadily downhill until soon the State has to find him a place in hospital or give him nursing assistance. The result is that the cost to the country is very much more than the cost of this concession.

There is nothing new in the principle of assistance for the disabled. We already give taxation assistance to the aged, and there is the curious anomaly that the 00 per cent. disabled person already receives this concession if he has an unmarried daughter living with him. The Royal Commission refers to this anomaly in its second Report. It seems absurd that only in that special situation does the 100 per cent. disabled man get the concession.

The Financial Secretary to the Treasury sits on the Front Bench armed with a formidable brief of arguments to deal with the new Clause. I shall attempt some rather crude clairvoyance and suggest some of those arguments in advance. The hon. and learned Gentleman will point out, first of all, that there are administrative difficulties. He will say that it is very difficult to ascertain what is a 100 per cent. disablement.

Mr. H. Wilson

Before my hon. Friend is put off by that argument—and I am sure that he will not be—will he consider how much more difficult it is administratively to say what is an overseas corporation, a subject on which we spent many days last year? I hope, therefore, that we shall not hear that argument tonight.

Mr. Cronin

I am glad that my right hon. Friend has pointed that out. When it comes to the administrative difficulties of the business community the mountains are moved and the difficulties are overcome rapidly, but when it comes to the administrative problems involving those who are less able to look after themselves, these difficulties appear to be very formidable indeed.

As has been pointed out, a large proportion of these cases are self-evidently 100 per cent. disabled, for example, those who are blind in both eyes or who are unable to walk. Surely it would not be at all difficult from an administrative point of view to draw up a schedule of prescribed disabilities which will be recognised as 100 per cent. and will automatically receive this tax concession.

Under the National Insurance Act there is such a table of prescribed 100 per cent. disabilities. There should be no difficulty in compiling a similar schedule for this purpose. Even for those people who would be outside such a schedule and who were not obviously 100 per cent. disabled, it would not be difficult to arrange examination by one of the medical boards of the Ministry of Pensions, or an industrial injuries medical board.

The Financial Secretary may suggest another difficulty. I hope he will forgive me for making his speech in advance. He may say there is difficulty in drawing the line at 100 per cent. disablement and ask why a person who is 80 per cent. disabled should not also have the concession. That at first may seem a reasonable argument, but it cannot be suggested that one category, the 100 per cent. disabled, should receive no helpful treatment because simultaneously we cannot include another category. We can do at least part of this good work even if we cannot do the whole of it. Is it really the case that we cannot do the whole of it? There should be no real difficulty in arranging a graduated tax concession for those less than 100 per cent. disabled. That would be going somewhat beyond this Clause, but it is important to emphasise it in order to deal with the argument that it is difficult to draw the line at 100 per cent. disablement.

It may be pointed out that age itself can cause 100 per cent. disablement. That argument can be dealt with by providing that a certain statutory age can be fixed as an age entitling one to the 100 per cent. disablement consideration for tax purposes. The Financial Secretary may point out that already many 100 per cent. disabled persons are receiving tax-free benefits and that confusion might be caused. That could be dealt with easily by giving such persons a choice between taking the tax-free benefit or this tax concession which would apply if this Clause were accepted.

Finally, it may be suggested by the Financial Secretary, as was suggested by the Paymaster-General in a debate on a similar new Clause proposed by my hon. Friend the Member for Sunderland, North (Mr. Willey) in 1954, that direct benefits are more satisfactory and that they should be made to 100 per cent. disabled persons. As everyone knows, a substantial proportion of the people who receive war disablement and National Insurance pensions are receiving direct disablement benefit, but a large proportion are not receiving any benefit at all. I do not think we on this side of the Committee can accept the idea that we should forgo this new Clause simply because these people can receive direct benefits, because we were told the same in 1954 and the Government have made no appreciable moves in that direction.

In view of the lateness of the hour, I do not wish to deploy these arguments further. This is a case to which the Government should give sympathetic attention.

Dame Irene Ward (Tynemouth)

I shall not detain the Committee by asking about the details of the proposal contained in this new Clause. I can appreciate that there are many difficulties, but I am anxious to ascertain from my hon. and learned Friend the Financial Secretary that we are really going to tackle the difficulties and see that they are eliminated.

After quite a long period spent in watching Chancellors of the Exchequer and Financial Secretaries dealing with new Clauses in Finance Bill debates, I have noticed that if they can call in aid of their arguments Royal Commission Reports they do so, but that if those Reports can be called in aid of a new Clause they do not do so. I have observed that, and consider it a deplorable technique. I agree about all the difficulties of the administration, and presumably the Royal Commission knew all about that when it made its recommendations. I am also alive to the fact that only in last year's Budget we were promised a comprehensive review of taxation, based on the Report of the Royal Commission, and although we have some concessions on the subject, we have very little attention being paid to these more humane recommendations. That seems to pass by the Parliamentary officers of the Treasury, and I want to know specifically why we do not have some really first-class recommendations made by the Royal Commission translated into legislation.

10.45 p.m.

I have also observed that when mistakes are made in taxation, if there is a powerful outcry, the Chancellor, who is a big-hearted and big-minded individual, immediately comes to the House and says he has made a mistake—and, hey presto, we have won the battle. When we come to discuss a question of this kind, on which both sides of the Committee feel extremely strongly, because of the Parliamentary procedure there is no national outcry, because no one knows what Clauses are to be selected by the Chair for discussion and, as discussion quite often takes place at a late hour, it is impossible to organise the support which would be forthcoming throughout the country on behalf of an imaginative scheme of this kind.

In a way, the new Clause is perhaps complicated. I accept that, but what I am waiting to hear from my hon. and learned Friend is what steps he is proposing to take to put into a proper form the germs of the idea which are included in the new Clause. Time and again I have said that I am heartily sick and bored with hearing how difficult it is to find anything to do for those who are living mostly on small fixed incomes. But here is something. It has the backing of the Royal Commission, of both sides of the Committee, and would have the backing of the vast number of organisations interested in the disabled.

I would remind my hon. and learned Friend that he had to withdraw that ridiculous Purchase Tax on baskets, etc., made by the blind because those in the country knew that it was unfair and unjust. What I want to hear from him now is not just an answer which is given year after year—and this was under discussion in 1954—but that the great brains of the Treasury have got down to the recommendations made by the Royal Commission. The Treasury Ministers have great brains, but if they do not put their great brains into operation I do not see what use they are to this section of the community, which has a right to use the brains of the Treasury.

We can find answers to the most complicated questions relating to the laws of inheritance, and taxes on inheritance. We had a case recently, when two people presumably died at the same time. In such cases we rightly take note of the situation and provide for it in our legislation, because all the newspapers are alerted to the great injustice involved. But I am much more interested in discussing these small and simple humane points, which affect people who are not as fortunate as many hon. Members.

It is no good my hon. and learned Friend continually turning over the pages of his brief; if it is going to be as nonsensical and inhuman as the briefs of the last four years have been, he would do far better to tear it up and throw it on the floor. What I want to know now is whether we are going to have a little bit of sound, humane common sense from him. How he ought to enjoy saying that he welcomes the recommendations of the Royal Commission, and that, of course, they will be embodied in legislation.

Mr. Victor Collins (Shoreditch and Finsbury)

The case for the Clause has been convincingly and comprehensively put by my hon. Friend the Member for Lowestoft (Mr. Edward Evans), and the possible administrative arguments against it have been answered in advance by my hon. Friend the Member for Loughborough (Mr. Cronin). I do not want to repeat what they have said, except to say that on the score of expense for disabled and blind people, it is not only the question of getting to work across London that is involved; often the act of getting across the room is a painful and expensive venture. There is no question that the Clause is entirely justified on the ground of the extra expense to which these people are subjected.

No mention has been made of the very low earnings of the vast majority of people with whom we are here dealing. I admit that if the Clause is accepted, since in many cases the taxable earnings of these people are marginal, it will mean that they will pay no tax at all, and I should be very happy about that, as I am sure all hon. Members would. We are all aware that many disabled people—blind telephonists, typists, liftmen, and so on—are able to earn the same wages as able-bodied people doing the same work, but the plain fact is that the earnings of blind people and Section II disabled people in sheltered employment are normally about one-third of those of able-bodied people doing similar work.

Their wages are made up to a more reasonable level by various forms of augmentation. Blind people receive an augmentation of about £150,000 a year; the House votes £2½ million annually for Remploy, and large sums are contributed to voluntary organisations by private people. All the sums contributed by private people are out of their already-taxed incomes, and the sums paid to local authorities by the Treasury for disbursing in augmentation to blind persons are paid by the Treasury out of the nation's taxed income, as is the £2½ million which goes to Remploy. Those sums are paid for the sole purpose of augmenting the admittedly inadequate earnings of these disabled people, up to a level which allows them a very modest standard of living, and a modest living standard in some cases makes them liable to taxation.

What possible or ethical justification can there be for submitting to taxation money which already in one way or another has been subject to tax from other quarters? It seems to me that if the taxpayers are willing to augment the earnings of disabled people in this way, it is impossible to justify taxation of the marginal excesses over their allowances. I hope the Financial Secretary to the Treasury will say that this will no longer be a hardy annual and that he will accept this new Clause.

Mr. Simon

I think all who heard the moving and humane speech with which this Clause was moved by the hon. Member for Lowestoft (Mr. Edward Evans), and which has been supported by other hon. Members, some of whom have devoted a great part of their lives to the help and relief of the sort of people with whom we are concerned, may have been reminded of a story that Lincoln once told about a small boy he found going up a hill with another boy, scarcely less small, on his back. He said to the boy, "You ought not to be carrying a burden like that." The boy replied, "This is not a burden this is my brother."

I think nobody in the Committee would argue against the proposition that the community as a whole has a responsibility towards the people who are severely disabled. The only question is how that responsibility is best discharged. Is it best discharged through the fiscal system or through the social services? We have the National Health Service, and I need not remind the Committee of the resources of the Service which are peculiarly adapted for the disabled. The same with the National Assistance Act. There are the tax-free pensions, which have the advantage that they are susceptible to infinite gradation according to the degree of disablement.

The hon. Member for Tynemouth (Dame Irene Ward) asked what had been done for these people since 1954. For one thing these tax-free pensions have been increased on more than one occasion. I submit that that is the better way of helping those with whom we are concerned.

The hon. Lady also asked about the Royal Commission and rather suggested that that was a matter of which the Government took no account. We have already this evening accepted one and a half recommendations of the Royal Commission. But, in point of fact, what the Royal Commission recommended in this sphere is not what is embodied in this Clause. It did recommend that there should be a disability allowance for 100 per cent. disablement, but went on to recommend that that should not be given in addition to a tax-free disability benefit.

The hon. Member for Loughborough (Mr. Cronin) suggested that that should be a necessary provision and that there should be an option to take either the tax-free benefit or the allowance. But that is not laid down in this Clause.

Secondly, the Royal Commission recommended the withdrawal of a number of existing allowances. That, again, is not laid down in this Clause. I do not make these observations in order to suggest that the Clause should not be examined on its merits, but it is impossible here to say that we are turning down a recommendation of the Royal Commission as if that ended it.

11.0 p.m.

I suggested just now that the way to discharge our responsibility to the disabled is by the direct social services rather than by means of fiscal methods; that is, by way of the social service benefits and pensions. The real reason is that the fiscal method is very much a matter of hit and miss; we may help some who admittedly need help, but also some who may not. We may not help those who most need it. For example, the hon. Member for Loughborough mentioned that we are concerned with the lower income groups; and his hon. Friend the Member for Shoreditch and Finsbury (Mr. Collins) mentioned the low earnings of those with whom we are concerned. But, if the earnings are really low, this proposed benefit will be of no assistance at all. Provided that the taxpayer is below the Income Tax limit, then this exemption is of no assistance. Those most in need do not benefit by this allowance and some of these cases may be those of the greatest relative hardship.

If the taxpayer has part of his income subject to the standard rate of 8s. 6d. on at least £100 of his income, the allowance would be worth £42 10s. That, in practice, would be the measure of the capricious incidence of this new Clause. If it ranked for Surtax, then the disparity would be greater still.

It was suggested by the hon. Member for Lowestoft and also by the hon. Member for Loughborough that extra expenses are incurred by the disabled. In many cases that is undoubtedly true, but it is not true in all cases. Here the allowance is tied to the 100 per cent. disability and not to the degree of extra expense incurred. It is not related even to the impairment of earning capacity.

The hon. Member for Shoreditch and Finsbury told us that many of the disabled bravely and industriously manage to earn their own livings, but they may incur no extra expense in so doing. So, in reality, if that argument has got some foundation and even although it is true that extra expense is incurred by many of the 100 per cent. disabled, this allowance is not tied to the expense, as I have already tried to show.

The extra expense is again better recognised, and better met, by the social services. For example, the hon. Member for Loughborough mentioned the war pensioner who had to use a motor car; but that is precisely one of the services which is supplied by the Ministry of Pensions to a disabled war pensioner in certain cases.

Mr. Edward Evans

Not all of them.

Mr. Simon

Not all, but in some cases.

Then there is the question, why should we stop at 100 per cent. disablement. I know it can be said that we must stop somewhere, but to draw a line at 100 per cent. disablement again demonstrates the complete capriciousness of dealing with the problem by allowances rather than by direct help. If a taxpayer has lost two legs below the knee, that ranks as 100 per cent. disablement, but what of the man who has lost one leg above the knee? That is a 90 per cent. disablement, but it can be just as severe and involve just as much extra expense; but it would not be covered by the Clause. If we moved from 100 per cent. disablement, we should find an infinite complication in the fiscal code. If we are to recognise the disablement in a taxpayer, why not in the taxpayer's wife, who may also be involved in extra expense?

I mention these things not to emphasise that we should do nothing but to show that the right way is not to move through the fiscal system; this would merely create anomalies, unfairness and inequities between one citizen and another. The right way is through the social services. In, addition, there are administrative difficulties into which I do not propose to go, although they are formidable. I refer, for instance, to medical assessment for those who are outside the 100 per cent. disablement register.

With all the sympathy which we should show in a tangible way to these people, the fiscal method is not the right method. There is a reported conversation between a Quaker and an acquaintance who was protesting that he too felt for the poor. The Quaker asked, "Friend, where do you feel? Do you feel in your pocket?" We should feel in our pocket, but the pocket in which we should feel is that of the social services and not that of the fiscal system.

Mr. Houghton

Those of us who know the Financial Secretary as a warmhearted and considerate man realise what a disagreeable job he had. My hon. Friend the Member for Loughborough (Mr. Cronin) tried to overlook what was in that fat file of briefs on the bench opposite. I am a little closer to it. It it entitled, "All the Reasons for Saying No." At the end of the long explanation of difficulties and anomalies and reasons for saying "No" is one phrase—I have seen it: "It is assumed that this new Clause will be resisted." The hon. and learned Member is running true to form as a Financial Secretary.

A moment ago he claimed some virtue in having accepted this day one and a half recommendations of the Royal Commission. The half has not a long history, but the one recommendation which he accepted was the subject of a Royal Commission recommendation in 1920, of the Codification Committee in 1936, of a debate in the House in 1952, of a recommendation of the Radcliffe Commission in 1955, and of an Opposition new Clause down today, in 1958. That is the history of the one Royal Commission recommendation which the hon. and learned Gentleman has accepted today. If he claims virtue in that, I say that he is easily satisfied.

The one and a half recommendations which have been accepted cost the Exchequer nothing. Although we shall be glad to see local Commissioners of Taxes who are not men of property, it will make no difference to the Exchequer. It may make some difference to the administration of taxation, and for that we shall be truly grateful.

The new Clause has been criticised on traditional lines. The moving speech of my hon. Friend the Member for Lowestoft (Mr. Edward Evans), out of the wealth of a lifetime of experience in this field, should surely have produced something more satisfactory than we have had from the Financial Secretary. The trouble with the Financial Secretary is that he has not been in the job long enough, nor has his right hon. Friend, to get clear of those ugly twins, one on either elbow—reactions and repercussions—who will kill his heart, curb his emotions and restrain his endeavour for advance and social progress. The whipping that he has had from the hon. Lady the Member for Tynemouth (Dame Irene Ward) seems to have made no impact on him at all.

The dividend strippers and the anti-retrospective legislators have knocked the Chancellor for six within a fortnight of his Budget statement. Yet the few hon. Members on the benches opposite with compassion left in their hearts can make no impact on the Front Bench. He has had two opportunities of giving taxation reliefs based on compassionate grounds, and it would be worthy to reflect in our system of tax allowances the claims of those who are the most unfortunate members of the community. I do not think that if these concessions were granted other taxpayers would carp and criticise and say "They have got this relief; we ought to have a corresponding relief."

The Royal Commission is composed, in making a unanimous recommendation, of exactly the same kind of people on whom the Chancellor of the Exchequer relied when introducing his proposals in Clause 20 for the unification of the Profits Tax. He thought the Royal Commission was composed of men of wit, intelligence and public service to back him on the Profits Tax, and yet we find their emphatic recommendation in this respect turned aside. The Royal Commission did in this respect emphasise its view about the need for this allowance.

As regards the problem of the 100 per cent. disability and nothing less, the Financial Secretary knows that the answer to that is in paragraph 203 of the Second Report of the Royal Commission, where it is stated: We thought it right to concentrate upon some extreme measure of disability, because, if there is to be an allowance at all, it should, at any rate initially, be related to personal circumstances which are reasonably capable of identification and which demonstrably set the person concerned apart from others. Another point that the hon. and learned Gentleman raised was the general principle that these circumstances should be met through the social services. But there are many people who would qualify for this relief and who are not taken care of by the social services. They have no disability pensions—either industrial or war disability pensions. They are ordinary members of the community who have suffered, either by birth or by accident, grave disability which they have to bear for their lifetime without the comfort of the social services.

The hon. and learned Gentleman mentioned that the Royal Commission had said that if the 100 per cent. disability cases had the advantage of this sort of relief they should forgo the tax-free allowances which they get in other directions. If those are the terms upon which the hon. and learned Member is prepared to introduce this disability relief, let him say so. We for our part would not suggest anything so mean as to deprive disabled persons of the allowances that they have as a condition of giving them tax relief They are entitled to all that we can give them to get them

through life with comfort, reassurance and happiness.

The administrative difficulties are perennial in all these matters. But, upon my soul, if one wants administrative difficulties, what about overseas trade corporations, double Income Tax relief, obsolescence allowances and Schedule E expenses? The whole paraphernalia of tax administration is riddled with difficulties, and these would be comparatively light because the numbers would be small and the Inland Revenue would be assisted by medical evidence.

We can only dismiss the hon. and learned Gentleman's arguments with regret and contempt, and with confidence ask the Committee to go into the Lobby to support us on this new Clause.

Question put, That the Clause be read a Second time:—

The Committee divided: Ayes 117, Noes 159.

Division No. 191.] AYES [11.15 p.m.
Ainsley, J. W. Houghton, Douglas Price, Philips (Gloucestershire, W.)
Albu, A. H. Howell, Charles (Perry Barr) Probert, A. R.
Allaun, Frank (Salford, E.) Hoy, J. H. Pursey, Cmdr. H.
Awbery, S. S. Hughes, Emrys (S. Ayrshire) Redhead, E. C.
Bacon, Mist Alice Hughes, Hector (Aberdeen, N.) Reynolds, G. W.
Bevan, Rt. Hon. A. (Ebbw Vale) Hunter, A. E. Rhodes, H.
Blackburn, F. Hynd, H. (Accrington) Roberts, Albert (Normanton)
Blenkinsop, A. Hynd, J. B. (Attercliffe) Roberts, Goronwy (Caernarvon)
Blyton, W. R. Irving, Sydney (Dartford) Robinson, Kenneth (St. Pancras, N.)
Bonham Carter, Mark Janner, B. Short, E. W.
Bottomley, Rt. Hon. A. G. Jay, Rt. Hon. D. P. T. Silverman, Julius (Aston)
Bowden, H. W. (Leicester, S. W.) Jeger, George (Goole) Skeffington, A. M.
Braddock, Mrs. Elizabeth Jeger, Mrs. Lena (Holbn & St. Pncs, S.) Smith, Ellis (Stoke, S.)
Broughton, Dr. A. D. D. Jenkins, Roy (Stechford) Sorensen, R. W.
Brown, Thomas (Ince) Johnson, James (Rugby) Soskice, Rt. Hon. Sir Frank
Champion, A. J. Jones, David (The Hartlepools) Sparks, J. A.
Chetwynd, G. R. Jones, Jack (Rotherham) Stones, W. (Consett)
Collins, V. J. (Shoreditch & Finsbury) Jones, J. Idwal (Wrexham) Summerskill, Rt. Hon. E.
Corbet, Mrs. Freda Lawson, G. M. Swingler, S. T.
Craddock, George (Bradford, S.) Lee, Miss Jennie (Cannock) Taylor, Bernard (Mansfield)
Cronin, J. D. Lever, Leslie (Ardwick) Taylor, John (West Lothian)
Crossman, R. H. S. Lewis, Arthur Thomas, George (Cardiff)
Deer, G. Mabon, Dr. J. Dickson Thomson, George (Dundes, E.)
Delargy, H. J. McAlister, Mrs. Mary Ungoed-Thomas, Sir Lynn
Diamond, John McCann, J. Wade, D. W.
Dodds, N. N. MacDermot, Niall Watkins, T. E.
Ede, Rt. Hon. J. C. Mahon, Simon Weitzman, D.
Edwards, W. J. (Stepney) Mallalieu, E. L. (Brigg) Wheeldon, W. E.
Evans, Edward (Lowestoft) Mallalieu, J. P. W. (Huddersfd, E.) White, Mrs. Eirene (E. Flint)
Fernyhough, E. Mann, Mrs. Jean Wilcock, Group Capt. C. A. B.
Fletcher, Eric Mitchison, G. R. Willey, Frederick
Fraser, Thomas (Hamilton) Neal, Harold (Bolsover) Williams, Rev. Llywelyn (Ab'tillery)
George, Lady Megan Lloyd (Car'then) Noel-Baker, Francis (Swindon) Willis, Eustace (Edinburgh, E.)
Gordon Walker, Rt. Hon. P. C. Oram, A. E. Wilson, Rt. Hon. Harold (Huyton)
Grenfell, Rt. Hon. D. R. Palmer, A. M. F. Winter-bottom, Richard
Grimond, J. Pargiter, G. A. Woodburn, Rt. Hon. A.
Hall, Rt. Hn. Glenvil (Colne Valley) Pearson, A. Yates, V. (Ladywood)
Hayman, F. H. Peart, T. F.
Herbison, Miss M. Pentland, N. TELLERS FOR THE AYES:
Holman, P. Popplewell, E. Mr J. T. Price and Mr. Simmons.
Holt, A. F.
Agnew, Sir Peter Amory, Rt. Hn. Heathcoat (Tiverton) Ashton, H.
Aitken, W. T. Anstruther-Gray, Major Sir William Atkins, H. E.
Alport, C. J. M. Arbuthnot, John Baldock, Lt.-Cmdr. J. M.
Baldwin, Sir Archer Hesketh, R. F. Partridge, E.
Barter, John Hill, Mrs. E. (Wythenshawe) Peel, W. J.
Batsford, Brian Hirst, Geoffrey Pickthorn, K. W. M.
Baxter, Sir Beverley Hobson, John (Warwick & Leam'gt'n) Pike, Miss Mervyn
Bell, Philip (Bolton, E.) Holland-Martin, C. J. Pilkington, Capt. R. A.
Bennett, F. M. (Torquay) Hornby, R. P. Powell, J. Enoch
Bishop, F. P. Horobin, Sir Ian Profumo, J. D.
Black, C. W. Howard, Gerald (Cambridgeshire) Ramsden, J. E.
Bossom, Sir Alfred Hutchison, Michael Clark (E'b'gh, S.) Rawlinson, Peter
Boyle, Sir Edward Hyde, Montgomery Redmayne, M.
Braine, B. R. Hylton-Foster, Rt. Hon. Sir Harry Rees-Davies, W. R.
Bryan, P. Irvine, Bryant Godman (Rye) Ridsdale, J. E.
Bullus, Wing Commander E. E. Jenkins, Robert (Dulwich) Robinson, Sir Roland (Blackpool, S.)
Butcher, Sir Herbert Johnson, Dr. Donald (Carlisle) Rodgers, John (Sevenoaks)
Carr, Robert Johnson, Eric (Blackley) Roper, Sir Harold
Clarke, Brig. Terence (Portsmth, W.) Joseph, Sir Keith Ropner, Col. Sir Leonard
Cole, Norman Kaberry, D. Scott-Miller, Cmdr. R.
Conant, Maj. Sir Roger Kerr, Sir Hamilton Shepherd, William
Cooke, Robert Kershaw, J. A. Simon, J. E. S. (Middlesbrough, W.)
Cooper-Key, E. M. Kimball, M. Spearman, Sir Alexander
Craddock, Beresford (Spelthorne) Leather, E. H. C. Stevens, Geoffrey
Davidson, Viscountess Leavey, J. A. Steward, Harold (Stockport, S.)
D'Avigdor-Goldsmid, Sir Henry Legge-Bourke, Maj. E. A. H. Steward, Sir William (Woolwich, W.)
Deedes, W. F. Legh, Hon. Peter (Petersfield) Stoddart-Scott, Col. Sir Malcolm
Digby, Simon Wingfield Linstead, Sir H. N. Stuart, Rt. Hon. James (Moray)
Donaldson, Cmdr. C. E. McA. Lloyd, Maj. Sir Guy (Renfrew, E.) Studholme, Sir Henry
Doughty, C. J. A. Lloyd, Rt. Hon. Selwyn (Wirral) Summers, Sir Spencer
du Cann, E. D. L. Lucas-Tooth, Sir Hugh Sumner, W. D. M. (Orpington)
Emmet, Hon. Mrs. Evelyn Macdonald, Sir Peter Taylor, Sir Charles (Eastbourne)
Finlay, Graeme Mackeson, Brig. Sir Harry Teeling, W.
Fletcher-Cooke, C. McKibbin, Alan Temple, John M.
Garner-Evans, E. H. Mackie, J. H. (Galloway) Thomas, Leslie (Canterbury)
George, J. C. (Pollok) McLaughlin, Mrs. P. Thompson, R. (Croydon, S.)
Gibson-Watt, D. Macmillan, Rt. Hn. Harold (Bromley) Thornton-Kemsley, Sir Colin
Glover, D. Macmillan, Maurice (Halifax) Turton, Rt. Hon. R. H.
Glyn, Col. Richard H. Maddan, Martin Tweedsmuir, Lady
Goodhart, Philip Markham, Major Sir Frank Vane, W. M. F.
Gower, H. R. Marlowe, A. A. H. Vickers, Miss Joan
Graham, Sir Fergus Marshall, Douglas Vosper, Rt. Hon. D. F.
Grant, Rt. Hon. W. (Woodside) Mathew, R. Wakefield, Edward (Derbyshire, W.)
Grant-Ferris, Wg Cdr. R. (Nantwich) Maudling, Rt. Hon. R. Wall, Patrick
Green, A. Nabarro, G. D. N. Ward, Rt. Hon. G. R. (Worcester)
Gresham Cooke, R. Nairn, D. L. S. Webster, David
Grimston, Hon. John (St. Albans) Nicolson, N. (B'n'm'th, E. & Chr'ch) Whitelaw, W. S. I.
Gurden, Harold Noble, Michael (Argyll) Wills, Sir Gerald (Bridgwater)
Harris, Reader (Heston) Oakshott, H. D. Wilson, Geoffrey (Truro)
Harrison, A. B. C. (Maldon) O'Neill, Hn. Phelim (Co. Antrim, N.) Woollam, John Victor
Harrison, Col. J. H. (Eye) Orr, Capt. L. P. S.
Harvey, John (Walthamstow, E.) Osborne, C. TELLERS FOR THE NOES:
Heald, Rt. Hon. Sir Lionel Page, R. G. Mr. Hughes-Young and
Heath, Rt. Hon. E. R. G. Pannell, N. A. (Kirkdale) Mr. Chichester-Clark.
Henderson-Stewart, Sir James