New Clause.—(SURTAX: MARRIED WOMAN'S EARNED INCOME.) (Hansard, 22 June 1960)

§ Brigadier Sir Otho Prior-Palmer (Worthing)
I beg to move, That the Clause be read a Second time.
The history of this tax arrangement is that from 1799, when it was first introduced, women were treated for tax purposes as imbeciles and lunatics and as if they had no personal rights of their own. It was introduced at a time when it was not the fashion for women to work and when men had full charge of all the financial matters in the family.
As we all know, the situation today is totally different from that. Very many women work and tax arrangements below Surtax level actually encourage women to go out to work. I hope that, unlike what happened on the last occasion when I raised this matter, hon. Members opposite will not say that the Clause is not drawn wide enough and that it should concern all tax ranges. If separate aggregation took place below Surtax levels, married couples would be worse off because they would lose money on their allowances and the Exchequer would gain. It is a question not of separate aggregation but purely of Surtax.
The situation is that if a husband is earning a certain amount of money and his wife goes out to work and earns a reasonable salary, she probably pays Surtax on the very first penny she earns. There is no doubt that that is acting as a deterrent to many married women of great ability and qualifications from giving their services to the country. Its illogicality is so absurd. Large sums of money are spent on training women teachers, scientists, doctors and dentists and then we lose their services when they get married because they cannot afford to carry on with their jobs.
613 As a result of raising this matter on a previous Finance Bill, I was inundated with letters from all over the country from married women giving examples of the way in which they were penalised and virtually prevented from going out to work. In this day and age, when we are so very short of scientists and technologists and when the dental profession, for instance, is so grossly undermanned, it is utterly wrong that people should be discouraged from carrying on with the job for which they have been trained at great expense.
The last time I raised this matter it was admitted by the then Financial Secretary to the Treasury that only a small sum was involved and that it would cost the country only £3½ million to implement. That is on record in HANSARD. The benefits which would accrue from adopting something like this—and, of course, I am not wedded to the wording of the Clause, which is virtually only a peg on which to hang an argument, and I would be perfectly prepared to accept his suggestion if the Financial Secretary proposed something which would have the same result—would outweigh that loss.
There is the other aspect of the matter which received great publicity on the last occasion that I raised it, but to which I do not attach very great importance. It is well known that there are cases where people do not get married hut raise families just to avoid this penal tax which occurs when an able woman wishes to go out to work.
Finally, I hope that hon. Members opposite will not bring up the argument that this should apply to all tax ranges, because it would not act to the benefit of those under the Surtax ranges: it would, in fact, act as a disincentive to go out to work. With those very few words I commend the Clause to the Committee.

§ Sir E. Boyle
I do not think that at this hour of the morning my hon. and gallant Friend the Member for Worthing (Sir O. Prior-Palmer) or the Committee would wish me to make a long exposition of the matter. Therefore, I will content myself with replying to my hon. and gallant Friend in a fairly short speech.
One has to remember that since the Royal Commission reported on this part of our tax system we have had the Budget of 1957, which, in my view, made 614 a most important reform by extending the earned income relief right up into the Surtax scale. We also had a very substantial reduction in direct taxation last year.
I think, therefore, that my hon. and gallant Friend will agree with me that the position today of married couples, where there are, perhaps, two professional people both doing jobs for the nation, is at any rate better than it was at the beginning of the present decade. At the same time, I take the point made by my hon. and gallant Friend, and I am sure that the whole Committee takes the point, that there is always the risk that Surtax liability will deter the wives of husbands with larger incomes from working and that, therefore, the country may be deprived of the services of women who are qualified scientists, doctors, teachers, and so on.
I am bound to say that in the middle of a period when we are having a rather rapid expansion of all our institutions of further education, universities and technical colleges as well, because a good many qualified women come out of these colleges, I think it very right indeed that the whole question of the taxation of married women's earnings should be very carefully considered.
I am going to make a suggestion to my hon. and gallant Friend tonight, and I word it pretty generally on purpose. I think that it would be out of the question this year to make the sort of concession that he proposes. I agree that it is not a big concession in terms of money, but in view of the concessions, the desirable reliefs, which my right hon. Friend has had to refuse this year, I do not believe that we could do this. I also think that it is a field in which we ought to do a lot of careful inquiry in order to make sure that we really are giving reliefs in exactly the right way. But I should like to tell my hon. and gallant Friend that my right hon. Friend is seized of the very great importance of the point raised tonight. Certainly between now and next year we will look at this part of our tax system very carefully. Perhaps with those words my hon and gallant Friend might be ready to withdraw his Motion.

§ Sir O. Prior-Palmer
The only thing that I should like to say about that is that precisely the same words were used 615 two years ago when the matter was then discussed. Of course, nothing has been done about it since then. There was, admittedly, a slight concession given in the last Budget.

§ Sir E. Boyle
There was also a reduction in the standard rate last year. The 9d. reduction has certainly some effect on the problem.

§ Sir O. Prior-Palmer
What I am asking for is that the benefits of the ordinary Income Tax system should be extended into the Surtax range. I hope that when we discuss these matters another year, whether we have a new Chancellor then or not, these words will be remembered and that something will really be done about the matter.
In view of what my hon. Friend has said, I beg to ask leave to withdraw the Motion.