§ 4.5 p.m.
§ The Financial Secretary to the Treasury (Sir Edward Boyle)
I beg to move,That the Post-War Credit (Income Tax) Amendment Regulations, 1960, a draft of which was laid before this House on 4th April, be approved.As I think the House is well aware, in the present state of the economy my right hon. Friend the Chancellor of the Exchequer felt that this year he could not propose any very large acceleration of the rate of repayment of post-war credits. But, during the months I have been in my present office, I know that there has been a great deal of concern in all parts of the House over the possibility of a further release of credits in hardship cases, particularly to the long-term sick. I recall many Questions on this subject from both sides of the House. My right hon. Friend felt that he could this year bring in some new classes which it is practicable to include in the operation of repayment of these credits.
I think that it might be helpful to the House if I reminded hon. Members of the categories included in these new Regulations. First, let me deal with the long-term sick—that is to say, persons who, for a continuous period of 26 weeks ending after 4th April, 1960, have been receiving sickness or injury benefit, or have been in-patients in hospitals or nursing homes. The second category covers persons who, after 4th April, 1960, are receiving war or industrial injuries disability pensions in respect of assessments of 100 per cent., or an allowance under the Workmen's Compensation and Benefit (Supplementation) Act, 1956, or the Workmen's Compensation (Supplementation) Act (Northern Ireland), 1956. The third category covers persons who, for a continuous period of 26 weeks ending after 4th April, 1960, have been registered as unemployed. The final category covers any person who, at any time after 4th April, 1960, is a widow.
We gave considerable thought to the question of widows, and I am very glad that we have been able to bring all widows into the repayment scheme this year, because it is my impression—and I think that I shall not be alone in the House in this matter—that a great many 1098 widows, particularly those with parental responsibilities, have not an easy time in our society at present. I am, therefore, glad that we have been able by this means to do something for a number of very deserving people.
I should now like to say a word about the cost of these proposals. They will cost about £9 million this year, and the number of new claimants will be about 300,000, in addition to the 350,000 cases repayable under the existing law. Roughly speaking, there are about 160,000 long-term sick, and the repayment of their post-war credits will cost about £6 million. Only about 7,000 people come within the disability category which I mentioned and the repayment of their credits will cost about £250,000. About 40,000 come within the unemployed category and they will cost about £1¼ million. Finally, 80,000 widows will receive repayment at a cost of £1½ million.
Next, I think that it would be helpful if I were to say a word about the timetable that we propose. I am sorry, in a sense, that we have had to trouble the House so soon with these Regulations, after a week during which we have had something of an orgy of economic debate, but, as the House will realise, we were keen to speed up the procedure as fast as we reasonably could. The intention is that claim forms under the new release will be available in post offices from 16th May, and claims can be made from that date.
As hon. Members will have seen, the Regulations provide that no repayment of credits is to be made before 13th June. This interval between 16th May and 13th June is necessary to enable the Revenue to have the new claims certified by the appropriate authority. The interval between the passing of the Regulations and 16th May is needed partly to enable the Stationery Office to do the printing and the Post Office to distribute the claim forms to many offices up and down the country, and partly so that the Inland Revenue Department can get on with the work caused by the Budget proposals for alterations in the personal allowances. One must never forget the work that the Inland Revenue has to do at this time of year, as the hon. Member for Sowerby (Mr. Houghton) will know much better than I.
1099 To give publicity to the new classes who will qualify this year, it is my right hon. Friend's intention that we should insert advertisements in the local and national newspapers nearer the time when the claim forms become available. These advertisements will be in addition to those which are being inserted this week, which are designed merely to prevent disappointment and to stop people from making premature applications. There will be a new set of advertisements in the local and national Press nearer to 16th May.
As the House will have seen, the Regulations are subject to affirmative Resolution procedure. The whole work of printing will not start until the draft Regulations have been approved by this House. Plans have, however, been made and forms have been provisionally drafted on the assumption that my right hon. Friend's proposals will be acceptable to the House. Today, hon. Members have a full opportunity of considering the Regulations before, as it were, any irrevocable step about them is taken.
I believe that we have now gone as far as we can go in the Budget in isolating particular hardship categories. My right hon. Friend the Chancellor of the Exchequer very much hopes that in future years it may be possible to continue the repayment of post-war credits. We must, however, do this henceforward as economic circumstances allow. We must do it on a general basis and not by trying to isolate new hardship categories. The House will realise that when trying to proceed by specific hardship categories it is essential that those categories should be objective, so that there can be clear and objective tests as to who is included and who is not. Otherwise, we should get into a good deal of injustice and inequity.
Hon. Members will recall that all post-war credits now bear compound interest as from 1st November, 1959, at the rate of 2½ per cent. free of tax. This makes post-war credits a perfectly reasonable investment to hold, certainly at a time when, we very much hope, we shall continue price stability. It means that except for those who are desperately in need of the money to spend at once, there is now, perhaps, not quite the same ultimate hardship in waiting for repayment of post-war credits.
1100 I know that in many cases which have been brought to my attention by hon. Members, people have been anxiously awaiting the repayment of their credits, and that in hardship cases people might not want to apply for National Assistance, and feel that to be able to cash their credits when they are ill would just make all the difference. I am glad that we are now able to deal with a considerably increased number of hard cases.
I realise the disappointment which must still be felt by those who are not able to cash their credits. Perhaps, however, we should remember that the reason why we have had this economic problem of repaying post-war credits is precisely because we have had such a greater and higher level of prosperity since the war than anybody guessed at the time that the scheme of post-war credits was devised.
When post-war credits were originally devised, it was thought by many economists that the main trouble of the country after the war might be a general deficiency of purchasing power, and that these credits might be a useful cushion if ever unemployment threatened. It is worth remembering that the sole reason why people have had to wait so long for the repayment of their credits is simply the general level of prosperity, and the fact that we have been threatened, not by unemployment, but constantly by excess pressure on our resources.
My right hon. Friend has taken the right decision about repayment of credits this year, and it is with pleasure and confidence that I commend the Regulations to the House.
§ 4.15 p.m.
§ Mr. Douglas Houghton (Sowerby)
The Financial Secretary to the Treasury has introduced the Regulations in his usual lucid and agreeable manner and I am sure that the House agrees with a good deal of what he said about the proposals of his right hon. Friend the Chancellor this year. These Regulations are the second which have been laid before the House under the Income Tax (Repayment of Post-War Credits) Act, 1959.
Last year's Regulations contained a much more generous repayment of postwar credits than the Regulations which are before us this afternoon. The Financial Secretary has referred to the fact 1101 that last year the Regulations provided for a reduction in the age limit for men from 65 to 63 and for women from 60 to 58 to qualify for repayment of credits without any hardship conditions. Another feature of last year's Regulations, which was fairly costly, was the repayment in all cases of death up to that time. In fact, the estimated repayment in cases of death was almost as much as the cost of repayment at the lower age limits.
The hardship cases that were included last year are three in number. First, there were those who had been on National Assistance for 12 weeks; secondly, the registered blind; and, thirdly, those receiving constant attendance allowance or unemployability supplement under war pensions instruments, Industrial Injuries Acts, and so on, or alternative benefits.
It is worth considering what happened on cost last year, because I shall have something to say about the possibility of the Chancellor having done something earlier this year than today. Last year's estimated expenditure on post-war credits was £89 million. Only £64 million was repaid. The Chancellor, therefore, saved £25 million of his estimate of expenditure on post-war credits last year. It is also worth reminding ourselves that there is still £340 million to be repaid.
As the Financial Secretary has pointed out, under last year's Act post-war credits attract 2½ per cent. compound interest. The hon. Gentleman said that they are not a bad investment, and that is true, but, nevertheless, it is a compulsory investment. On the whole, investors are not as pleased at the conditions of an investment when it is compulsory as when they have voluntarily undertaken it. We must take his praise of post-war credits being a good investment with just that little pinch of salt.
In today's Regulations, we have an extension only of the hardship categories. For the reasons mentioned by the Financial Secretary a moment or two ago, the Chancellor has not been able this year to include in the Regulations a reduction in the age limits at which postwar creditors might claim repayment. I do not propose to dwell on that omission—
§ Mr. Speaker
I hope that the hon. Member, whom I regret to interrupt, will 1102 not dwell on any omission, because that would be out of order. I have to say this to keep the debate in order.
§ Mr. Houghton
Thank you, Mr. Speaker. You anticipated me by a split second. I was just about to say that it would not be in order. In any case, the debates on the Budget dealt with the wider aspects, including the repayment of post-war credits.
It is the hardship groups comprised in the draft Regulations which we now have to consider. The first and most important of the new hardship groups is the first, that of the prolonged sickness cases. On this side of the House we pressed upon the Chancellor last year the special claim of this group of holders of post-war credits. In the OFFICIAL REPORT, 21st April, 1959; c. 224, there is a report of the debate that we had on an Amendment to the Bill to include the prolonged sickness cases. There were all sorts of reasons why this could not be done last year, but in the Regulations this year we are very glad to see the prolonged sickness cases included in the list.
The Financial Secretary has estimated that there are 160,000 cases and that the cost is likely to be about £6 million. I know how difficult it is to make reliable estimates in this respect, but I recall that last year we were told to expect 200,000 cases at a cost of between £7 million and £8 million. The annual cost is likely to be less than that. We must bear in mind that this is a continuing charge, because repayments will fall due on new cases of prolonged sickness as well as in respect of those who, unhappily, have already been on sickness benefit for some time.
The then Financial Secretary, the present Solicitor-General, told the Committee on the Bill last year that prolonged sickness cases would be one of the very early classes to be considered for future relief. The other cases on the list are also very deserving, and we on this side of the House are very glad too to see that all widows will now be included within the scope of repayment. We have a special feeling for their difficulties and sorrows, and I am sure that this provision for repayment to all widows will be most gratefully received. It will be a comfort to many women, who, in other circumstances, have felt 1103 that the world is dealing rather hardly with them.
I want to ask the Chancellor why he has left until now the introduction of Regulations to include these new hardship groups. I have already pointed out that the Chancellor saved £25 million on his estimate of post-war credit repayments last year. So he would have known that by the close of the year the repayments that were being made during the peak period of June to October last year were falling short of his estimate. It seems to me that, as things turned out, the Chancellor could have included the long-term sick some months ago in Regulations laid before the House, without any financial embarrassment.
When the Income Tax (Repayment of Post-War Credits) Act, 1959, was passed, one of the reasons given for it was that it would give the Chancellor greater freedom of movement on the repayment of post-war credits. If any repayments were tied up with the Finance Bill he would be prevented from acting, first, before the Finance Bill become law, and, secondly, between one Finance Bill and another. It is true that by Regulations under the Act last year and by the use of Regulations under the Act this year, repayments will be made somewhat earlier than they could have been had the provision been made only in the Finance Bill for this operation. We fully appreciate that.
The Financial Secretary has explained the timetable to us, which clearly provides for repayment earlier than would have been possible had it been necessary to have a Clause in the Finance Bill. It seems surprising that, so far, the Chancellor has been able to use the powers, given by the Act to lay Regulations, only on the occasion of the Budget. Last year, I could understand that—large-scale repayment was involved. This year, it was on a very much smaller scale and there was no reason why the Chancellor should wait until his Budget statement to announce a further extension of hardship cases when he had saved the money —and more than saved the money last year—and could have laid Regulations to extend the hardship group to one or more of those now proposed.
The right hon. Gentleman could have laid Regulations at any time for long sickness cases which were so strongly 1104 urged upon him a year ago, and the statement then made by the Financial Secretary was so hopeful that I was very confident that the Chancellor would do something about the prolonged sickness cases much earlier than this.
I know that last year the right hon. Gentleman asked us especially not to press him to extend the hardship groups he then proposed, I think for all sorts of reasons—the forms were ready for printing; but we are assured now that they are in draft only—the wheels have not started turning. One point I make, then, is: why not earlier? That is not to criticise the action of the Chancellor now, but in all hardship cases to get repayment earlier rather than later is obviously to be desired.
Another aspect of this matter which I hope the House will forgive me if I mention is that of administration. Had the Chancellor taken earlier steps for repayment of post-war credits in these hardship cases he would have avoided piling up two lots of extra work on his Department just now. There is work to be done arising from the Budget Resolutions and the extending of certain personal reliefs, and also this additional work of repayment of post-war credits, although, I must freely admit, the amount of work involved in the repayment of post-war credits this year is only a fraction of that of last year.
Nevertheless, it means, on the estimate of 300,000 cases, about 250,000 hours of overtime which has to be linked with 350,000 hours of overtime on coding changes, which means that over 500,000 hours of overtime altogether to be spread over the staff likely to do this work will amount to about ten hours' overtime a week for four weeks spread over the period in which this work has to be done between now and the end of June. I do not want to make too much of a song about this, but I think that the Chancellor must always have in mind—I am sure that he has—the effect on administration of proposals that he brings to the House.
It is particularly galling when the staff finds that a mistake out of well over 1 million post-war credits last year is blown to national Press proportions and they are made to look close-fisted and inefficient because, unhappily, two postwar creditors of the same name get mixed 1105 up and one man receives a larger amount than he is entitled to. The conditions under which the work was done were bound to lead to some faults, unhappily, in isolated cases.
The Financial Secretary says that the Chancellor has come to the end of the hardship groups. I think that it will be admitted that he has come almost to the end of the hardship groups which satisfy the test of verification and certification for the purpose of authority to the Inland Revenue to repay. I think that it will be agreed on both sides of the House that one of the essential conditions that claims on hardship grounds must satisfy is a reasonable test of authenticity, and so far all the hardship cases have been available for certification by appropriate authorities of one kind or another, whether the Ministry of National Insurance or, as now, the Ministry of Labour and the National Assistance Board, and so on.
One of the big points made in the debate last year, and again today by the Financial Secretary, was that it was necessary to have a firm basis upon which the title to repayment could be easily proved, so that the Inland Revenue would not be left in the position of being a kind of unofficial National Assistance Board, still less an unofficial medical board. But I have two marginal groups which I wish to mention. I gave the Chancellor, a few days ago, advance notice of one of them.
I refer, first, to the wives of men who would be entitled to the repayment of post-war credits under all the hardship groups. The concession under last year's regulations and under the draft Regulations now before us applies only to the holder of the post-war credits who, in most cases, will be the husband. There are some cases, however, where the wife of a beneficiary will have a small post-war credit of her own, and there is no provision for her to obtain payment in circumstances which, so far as her husband is concerned, are acknowledged to justify the repayment of post-war credits.
§ Mr. Speaker
The hon. Member is suggesting that another category should be included, unless I have misheard him. I am sorry to remind him of his intentions, which were good.
§ Mr. Houghton
It seems to me, if I may say so, that by facilitating the freedom of movement of the Chancellor of 1106 the Exchequer we have seriously restricted our own freedom in debate. We have given it away, as it were, to the right hon. Gentleman to produce draft Regulations under the Act, and by the rules of order we are strictly circumscribed in our discussion of the categories in the draft Regulations.
It is a lesson which we shall have to bear in mind for the future—that if we want to criticise what the Chancellor is proposing on post-war credits we must not leave it until the draft Regulations come before the House. We shall have to shout loud during the Budget Resolutions, because that will be the last chance that we shall have; for there will nothing in the Finance Bill on the matter.
I do not want to split hairs, Mr. Speaker, but what I was raising a few moments ago was not so much a new category of hardship cases as the wives of those who are already in the hardship groups, and I suggested that the Chancellor should consider this point. The Financial Secretary said that no final steps had been taken, that the forms were in draft but were not being printed. The House still has the power, but now it seems that all that the House has the power to do is to approve the lot or throw out the lot, which scarcely gives the House very much room to manŒuvre. If that is all we can do, the Financial Secretary might just as well go on printing the forms before he submits the draft Regulations to the House, because he can be confident that we shall not be able to alter them.
§ Sir E. Boyle
I agree that today we can only discuss what is in the Regulations, but presumably there is nothing to prevent any hon. Member raising this matter on the Adjournment at a later date if he thinks that a further category should be included, because it does not involve any matter of legislation in the House.
§ Mr. J. T. Price (Westhoughton)
On a point of order. Will you give us some assistance in this matter, Mr. Deputy-Speaker? I do not want to make heavy weather of it, but, obviously, there are certain categories of hardship which are not clearly defined as far as the Financial Secretary's statement has gone. We are not trying to introduce new categories, but we want to elucidate how the formula 1107 for deciding hardship cases is applied under the Regulations. May I put a question to illustrate the point?
§ Mr. Deputy-Speaker (Major Sir William Anstruther-Gray)
I find myself in a little difficulty in replying to that on a point of order. May I take, first, the point put by the hon. Baronet the Financial Secretary? Yes, it will undoubtedly remain in order for anybody to raise on the Adjournment any point here. No question of legislation will debar that.
As for the second point, I find it difficult to accept the argument of the hon. Member for Westhoughton (Mr. J. T. Price) on a point of order. I feel that it could be argued in a different way.
§ Mr. Houghton
Further to that point of order. Would it be in order for me to say that I strongly criticise the draft Regulations now before the House because they omit certain categories or shades of difference which, to me, it would be necessary to include to make the Regulations fully acceptable?
§ Mr. Deputy-Speaker
As long as the hon. Member confines himself to regretting the omission, well and good, but if he argues the merits of these other cases we shall be in difficulty again.
§ Mr. Houghton
I am very much obliged Mr. Deputy-Speaker, because now I can be full of regret. I regret the omission from the Regulations of provision for the repayment to the wife of a beneficiary within the hardship groups. I do not think that I need press that matter further, because, obviously, the Financial Secretary knows what is involved here. In all these cases there is not only an element of personal hardship, but an element of domestic hardship. Therefore, the matter should be treated as far as needful on a domestic basis.
I also regret the failure of the Regulations to attempt to deal with the totally incapacitated person who is non-employed under the National Insurance scheme. I know that there is a problem of certification here, but one must regret, in passing, that there are some left out of the Regulations who have a claim to repayment on the ground of total incapacity if that incapacity could be certified by an appropriate authority, 1108 and because it cannot they are out. I hope that the Financial Secretary will not give up that matter in despair and say that it cannot be done.
I come to my conclusion by making one or two comments on the situation generally. I think that the House will agree that it would be a mistake to regard the repayment of post-war credits as a social payment, or at least as only a social payment. After all, this is repayment of Government debt, and in agreeing to repay it in the case of these hardship groups, the Government are taking compassion on certain of their creditors. To put it another way, they are virtually coming to an arrangement with their creditors to relieve hardship.
The Government say that for economic reasons they are unable to discharge their full liability on this occasion; they are not "broke", but they have not the money to spare. Therefore, the extension of repayment must be confined to those who would suffer hardship on account of the delay in general repayment. As the hon. Baronet said, there is no doubt that the solution to this perennial problem is the repayment of post-war credits as a whole. That time will no doubt come, but in the meantime we are relieving hardship in this way.
I hope, however, that our approach to the repayment of post-war credits will not lose sight of the ultimate liability nor slacken our interest in getting the whole repaid. Otherwise, these repayments on hardship grounds become a kind of supplement to, or substitute for, social welfare payments and pensions of one kind or another, and that is not really desirable as a fixed and long-term policy on this important matter.
With those qualifications, we on these benches welcome the decision of the Chancellor to expand the hardship groups this time, we are fully confident that his programme will be fulfilled, and that, if he carries out his promise to publicise widely the grounds for claim, there should be few people who do not know of their rights a few weeks' from now.
§ 4.42 p.m.
§ Mr. A. E. Cooper (Ilford, South)
I wish to emphasise the remarks of the hon. Gentleman the Member for Sowerby (Mr. Houghton), namely, that 1109 the repayment of post-war credits must in no circumstances be considered as a social payment. As he rightly said, this is repayment of debts incurred by the Revenue. In fact, it would be interesting to know if the Revenue would be able to treat with the taxpayer in the reverse situation. I doubt very much whether that would be so.
I want to offer my thanks to my right hon. Friend the Chancellor of the Exchequer for these new concessions. I have assumed that the first classification of sickness includes multiple and disseminated sclerosis, a sickness with which I have been concerned for some time and about which I have had correspondence with my right hon. Friend.
I find two anomalies in the Explanatory Note which accompanies the Regulations. It will be seen from paragraphs (a) and (c) that repayment can be made in the first case only to persons who have had a continuous period of sickness for 26 weeks ending after 4th April. In other words, they do not qualify unless they have been sick for six months, which takes them right up to October of this year.
§ Sir E. Boyle indicated dissent.
§ Mr. Cooper
That is how it reads. Paragraph (c), which deals with unemployment, states:Persons who have been registered as unemployed for a continuous period of 26 weeks ending after 4th April, 1960.I would like a better understanding of these paragraphs. Am I to understand that in the first case, if somebody has been receiving sickness benefit for 26 weeks ending 5th April, 1960, he will qualify for repayment of post-war credits and, in the second case, that somebody who has been unemployed for 26 weeks ending 5th April will then qualify for repayment?
§ Mr. Cooper
Then I am satisfied.
On the question of publicity, which is all-important in these matters, my right hon. Friend referred to the use of the local and national Press. I hope that he will not overlook television, which is probably more widely looked at than even some of our newspapers. I am sure 1110 that both the B.B.C. and the I.T.A. would give him all the help that he needed in this respect.
§ 4.46 p.m.
§ Mr. J. T. Price (Westhoughton)
The Financial Secretary made an agreeable statement, and, therefore, in the few moments in which I shall detain the House I do not want to be too critical of what he said. At this stage, however, we are entitled to some clarification of his statement, particularly in relation to the point brought out by my hon. Friend the Member for Sowerby (Mr. Houghton).
There is undoubtedly in this country a wide range of people holding post-war credits who could not qualify for benefit under the National Insurance Act. I do not want to suggest on this occasion that we bring in new classes, but the definition which is being used in the Regulations, and which has been referred to by the Minister in his statement, assumes that the persons concerned must have been in receipt of either unemployment or sickness benefit for a period of 26 weeks.
May I remind the Minister of what happened last year on the modified concessions then made? What happened was related to the qualification for National Assistance benefit. In other words, to establish a claim for payment on hardship grounds, under the previous Regulation, a person had to show that he was in such a deplorable state of hardship that he had been forced to apply for National Assistance benefit. That was prior to the new statement made in this year's Budget. We objected on many occasions. I did so and I raised particular cases of constituents with the right hon. Gentleman's Department, which were considered but could not be dealt with at that time.
If we are now to relate these new qualifications only to people who can certify that they are entitled either to unemployment or sickness benefit over a period, we shall still be leaving out of account, unless this matter is clarified, a large number of spinsters and others who may have been holding credits but who will not be entitled to benefit under this Act because they have not been employed recently. Will the Minister clarify that point when he replies to this short debate?
1111 My second point, which I mention in passing, concerns the payment of interest. Quite rightly, in my opinion, the Government have agreed to acknowledge payment of interest at the rate of 2½ per cent. on the outstanding credits. One has to remember that these are social debts, in the true sense, between the Treasury and the people. Whether they were regarded merely as debts of honour, or as debts which could be enforced in a legal sense, is a matter not to be debated on this occasion. Nevertheless, they were incurred at a time when the value of money was much higher than it is today. Therefore, everybody who holds these certificates on the Treasury, which are to be encashed, will receive in actual cash now something of much less value than it was when the debt was incurred.
We cannot deal with that, because it is the result of inflation, but when we deal with the question of interest we are entitled to make the following point. These debts have been left outstanding —for a number of valid reasons, I am prepared to admit—due to the economic circumstances of the country, for over twenty years. Then the Chancellor of the Exchequer agrees to pay interest at the rate of 2½ per cent. on a debt which is standing now at about £340 million—
§ Mr. Deputy-Speaker
Order. I fear that the hon. Member is getting too far from the point. I do not think that this is all included in the Regulations which we are now discussing.
§ Mr. Price
I am much obliged to you, Mr. Deputy-Speaker. I hoped that I was keeping strictly within the terms of order. Indeed, I thought that on this matter of the interest payment I would be in order, because the Financial Secretary made specific reference to it when he addressed the House a short time ago. I merely wish to draw attention to the fact that this year, on a simple calculation, the interest amounts to about £8½ million. If this sum is allowed to stand, and is not substantially reduced over the next ten or fifteen years, the amount of interest which will have to be shouldered by the Treasury will bear a big relationship to the total sum then outstanding, and, accordingly, will greatly inflate the 1112 payments made by the Treasury to people who have post-war credits outstanding.
Finally, is the Chancellor satisfied that of all the millions of our fellow citizens who hold these certificates even a small fraction of them could produce them on demand? I fear that the greater the period of time that elapses since the end of the war—twenty years have already passed—the fewer will be the number of people who will be able to produce the certificates. I doubt very much whether I could find mine. I have certainly got a few lying about somewhere. They do not represent a very material amount, but, nevertheless, they might be cashable some day.
Unless a very definite statement is made and widely publicised through the Press and, as has been suggested, through television, that the mere failure to produce the certificates does not invalidate a citizen's claim to have the money repaid, the more likely it is that we shall get the sort of situation that we have this year.
One of the items in the Budget this year consisted of £25 million that had not been used for the repayment of post-war credits under last year's arrangement and which the Chancellor expected to pay out. I would hazard the guess that a great many have not been repaid because the people concerned cannot find the certificates and, therefore, think that they have no grounds upon which to claim repayment from the Treasury.
I would welcome some more widespread publicity being given to the fact that all the necessary records are in the records of the Inland Revenue Department, that it is only necessary for the person who thinks that he has a claim to repayment to make that claim and that the mere failure to produce the certificate does not put him out of court.
I welcome the Financial Secretary's statement. It represents a step forward. However, I think that we must take serious note of the need to repay postwar credits much more quickly in the next few years than they have been repaid over the last twenty years.
§ 4.54 p.m.
§ Mr. A. E. Hunter (Feltham)
I am glad to have the opportunity of supporting the points put forward by my hon. 1113 Friend the Member for Sowerby (Mr. Houghton) and also by my hon. Friend the Member for Westhoughton (Mr. J. T. Price). I have raised the question of the repayment of post-war credits in the House on many occasions, and last year I was pleased that the Chancellor made another start in increasing the rate of repayment. I am glad that the Financial Secretary has introduced these Regulations today, because it means that the Chancellor is extending the grounds of hardship on which post-war credits can be repaid.
Last year, the Chancellor lowered the repayment age to 63 for men and 58 for women, respectively, and also for the repayment of post-war credits to widows whose husbands had held the certificates. That was a step forward. I remember that during the Committee stage of the Income Tax Bill my hon. Friend the Member for Sowerby moved an Amendment which I supported and which, I believe, included every one of the hardship Regulations that the Financial Secretary has moved today.
My hon. Friend the Member for Westhoughton stated that post-war credits to the value of £25 million estimated to be repaid during the past year had not been repaid. Therefore, had the Chancellor last year accepted my hon. Friend's hardship Amendment that amount could have been repaid and this year we could have gone even a step further in the matter of repayment.
These Regulations extend the hardship cases to holders of post-war credits who have been in receipt of sickness benefit for 26 weeks. That is a long period. I had hoped that the Chancellor could have gone further and made it 13 weeks. After all, 26 weeks is six months. In the same way, they extend the hardship cases to holders of post-war credits who have been continuously unemployed for 26 weeks and to persons who are in receipt of a 100 per cent. war disablement or industrial disablement benefit. I am pleased that this year the Chancellor is including these cases in the Regulations for repayment. As I say, it is a step forward and in the right direction.
There have been several tragic cases in my constituency of people holding post-war credits who were not entitled 1114 to repayment under the previous Regulations. Last year, there was the case of a man in receipt of a 100 per cent. disablement benefit and who would never work again needing the repayment of his post-war credits in order to get a small amount of capital, but who was unable to obtain repayment. That was a case which should have been included in last year's Regulations, and I am pleased that it will be included in these Regulations.
Another sad case was that of a man who had been sick and unable to work for two years. Because his wife went to work and the man was not on National Assistance, his post-war credits were not repaid. If the wife had not gone out to work and if the man had been on National Assistance he could have claimed repayment of his post-war credits last year. That, to my mind, is an anomaly which should never have been allowed. Both these cases were, I believe, unfairly left out of last year's Regulations, but the Regulations which the Financial Secretary has moved today will definitely make amends.
Many post-war credits have now been owing for seventeen or eighteen years. One can quite understand the feedings of a person who has been ill for two years and who, because his wife has been going out to work, is not eligible to have them repaid. I hope very much that on hardship grounds we shall be able to proceed even further than we are doing at the moment
I wish to refer to the point made by my hon. Friend the Member for Sowerby on family hardship. It seems to me that both the Financial Secretary and the Chancellor should give the point prompt attention. If a husband is the holder of post-war credits he is entitled after 26 weeks of sickness or 26 weeks of unemployment to the repayment of those credits. In the same way, if he is in receipt of a 100 per cent. war disablement benefit or industrial disablement benefit he is also entitled to repayment. I take the view that if the wife of such a man is the holder of post-war credit in her own right she, too, should be entitled to their repayment on grounds of family hardship. I trust that the Chancellor will give sympathetic consideration to that point.
There are no further points that I wish to put forward, but before sitting 1115 down I want to support what was said by my hon. Friend the Member for Westhoughton, that post-war credits should not be regarded as social benefits. These credits were compulsorily deducted from the wages of men and women during the war, and these persons have been waiting many years for their money. It is true that they will now receive interest, but the interest began only in October, 1959. I hope very much that next year the Chancellor will not only clear up all hardship cases but lower the ages for repayment much below 63 for men and 58 for women.
§ 5.0 p.m.
§ Mr. David Weitzman (Stoke Newington and Hackney, North)
I suppose that we ought to be very grateful to the Chancellor for paying back, although very late in the day and almost by way of instalment, some of the debts incurred many years ago, and I suppose that it would be wrong of me not to show a fitting sense of gratitude, although I do not feel very grateful about it. I think that we have been wrong in the way that we have dealt with the matter.
I believe that, because of the rules of order, I am prevented from dealing with the various categories of hardship, but perhaps I might be allowed to say this. I have on a number of occasions written to the Treasury giving details of what I regarded as extreme cases of hardships where repayment ought, in my judgment, to be made. I have often received the reply, "We are very sorry, but they do not come within the categories of hardship and, therefore, repayment cannot be made."
I wish that there were some common-sense attitude about this matter. I wish that there could be some discretion on the part of the Treasury, so that in a fitting case of hardship repayment might be made.
§ 5.2 p.m.
§ Sir E. Boyle
If I may speak again by leave of the House, I think that it would be only courteous if I replied to hon. Members who have spoken.
The hon. Member for Sowerby (Mr. Houghton) asked, first, why we could not have had the regulations in advance of the Budget. The simple answer is that my right hon. Friend realised from the 1116 very earliest weeks of this year that our resources were becoming fully extended and that there was the danger of incipient overstrain of our economy, and, therefore, that any concession that he could make in respect of the economy should be considered along with other possible concessions in the Budget. The short answer to the hon. Gentleman is that the expansionist policies of the Government have proved perhaps even more effective in the early months of this year than my right hon. Friend expected when he introduced his Bill and the Regulations last year.
The hon. Member also raised the matter of the shortfall last year. I do not want to weary the House with too many details about why last year's Bill cost less money than we expected—it was in part due to the failure of a number of people to claim their credits—but there is one interesting reason, and an important one, that I think the House should bear in mind. What are inelegantly called by the Revenue "death cases" were extremely difficult to estimate, and an over-estimate may have arisen because in a proportion of cases the relatives who inherited the credits were themselves over 65 or 60 and had already been able to claim repayment in their own right. That is an administrative problem arising from an overlapping of categories which makes estimating and forecasting genuinely difficult.
I can also tell the hon. Gentleman that the fact that we have introduced Regulations at the time of the Budget this year does not in any way commit the Government about when Regulations may be introduced in future years.
The hon. Member for Westhoughton (Mr. J. T. Price) asked two questions which I should like to answer. He raised first, the matter of spinsters, and said that it might be all right for people who were in employment, but what about people who were not in work? He asked how the long-term sick would in those cases be repaid. The sickness category extends to those who have been sick for a continuous period of 26 weeks as in-patients in hospitals or nursing homes. I can assure the hon. Member that it will not be only people who are employed who will be able to benefit from being in this hardship category.
§ Mr. J. T. Price
I am much obliged for what, the hon. Gentleman said, but how will he secure certification in respect of the many cases of chronic sick people who are lying in bed in their own homes? I have several such cases in my constituency, and their plight is such that I have drawn the matter to the attention of his Department. That is a difficult case to classify properly, but it is just as much a case of hardship as is that of persons who are receiving sickness benefit or National Assistance.
§ Sir E. Boyle
That is a matter which we shall consider with the Ministry of Health. I shall certainly be in consultation with my right hon. and learned Friend the Minister of Health and the hon. Lady the Parliamentary Secretary about it. I want the hon. Member to be assured that we realise the problem, and I believe that, administratively, we shall be able to do a good deal in this respect.
Reference was also made to the man who has lost his certificates. I can assure the hon. Gentleman that what he said is right and that such a man need not worry, because the Inland Revenue will repay when a claim is made without the certificate necessarily being produced. This matter was referred to last year, and is referred to again this year, in the claim form.
I will not develop this point, Mr. Speaker, but I do not quarrel with the hon. Gentleman's point that the rate of compound interest may prove something of an encouragement to Governments to bear this question in mind in future years.
§ Sir E. Boyle
We need not indulge in elaborate calculations, but the hon. Gentleman's point is a fair one.
I have a note of the points addressed to me by the hon. Member for Feltham (Mr. Hunter). There were no special ones to which I need reply now.
The hon. and learned Member for Stoke Newington and Hackney, North (Mr. Weitzman) said that it was rather monstrous that people had been kept waiting for their money for so long. Let us remember—in a sense I am repeating what I said in my earlier speech—the difficulties which have occurred in our economy because of the very heavy pressure on our resources since the war. We 1118 have had to make room for far more claims on our economy than anybody could ever have guessed at the time when the post-war credits scheme was being devised. I understand why Chancellors faced with problems of inflation, balance of payments, and so on, have felt nervous about adding to the sum total of purchasing power, but I will gladly give the hon. and learned Gentleman this point— and, indeed, emphasise it to the House— that we must all bear in mind that the Government are still in debt, as it were, to some of their citizens to the extent of some hundreds of millions of pounds, and I should like, without making any promise for the future at all, to remind the House that, as we always have done, we still regard the sum total of these postwar credits as an obligation that must never be overlooked.
§ 5.7 p.m.
§ Mr. Donald Wade (Huddersfield, West)
There was one point with which I thought the Financial Secretary would deal. I am sorry if I have misunderstood him. I think that I can best deal with it with mentioning a case of a man which came to my knowledge a year or two ago. He was suffering from chronic bronchitis and it was clear that he would never be able to work again. His wife went out to work. So long as she was earning he was ineligible for National Assistance. He was advised by his doctors that he must live in a milder climate than Huddersfield, which, I must admit, has a climate which is not regarded as suitable. His wife was too proud to give up work, an attitude which, I think, is understandable.
If I interpret the Regulations aright, the man will now be able to qualify if the post-war credits are his. However, if they are his wife's, I take it that there will be no chance of his qualifying to obtain the capital necessary to move to another district.
§ 5.8 p.m.
§ Sir E. Boyle
Perhaps I might answer that point now. The hon. Member for Sowerby raised, quite fairly, the question of the wife, having credits in her own right, of a man who comes within the hardship category. I have taken a note of the hon. Gentleman's point, and I can certainly say, without entering into any commitment, that my right hon. Friend will consider the suggestion carefully.
1119 All I would say to the House—I hope that I am not out of order in making the point—is that one of the difficulties I see is that there could still be representations on behalf of other members of the household, a qualified person such as a sister looking after a sick brother. The matter raises issues which go beyond the case of a husband and wife. A number of hon. Members have referred to this subject, and I can assure them that it will be carefully looked at.
§ Question put and agreed to.
That the Post-War Credit (Income Tax) Amendment Regulations, 1960, a draft of which was laid before this House on 4th April, be approved.