HC Deb 02 July 1962 vol 662 cc226-37

(1) Subject to subsection (3) below, if a claimant proves—

  1. (a) that he is a married man who for the year of assessment has his wife living with him, and that one of them was, and the other not, throughout the year a registered blind person; or
  2. (b) that, not being such a married man, he was throughout the year a registered blind person;
and also proves that the amounts of any tax free disability payments receivable in the year by him or, as the case may be, by his wife living with him are such that seven-ninths of the aggregate thereof is less than one hundred pounds, 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 an amount equal to one hundred pounds reduced by seven-ninths of the aggregate of any such payments so receivable.

(2) Subject to subsection (3) below, if a claimant proves—

  1. (a) that he is a married man who for the year of assessment has his wife living with him; and
  2. (b) that throughout the year both he and his wife were registered blind persons; and
  3. (c) that the amounts of any tax-free disability payments receivable in the year (whether by him or his wife) are such that seven-ninths of the aggregate thereof is less than two hundred pounds;
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 an amount equal to two hundred pounds reduced by seven-ninths of the aggregate of any such payments so receivable.

(3) Unless a claimant who is entitled to relief for the year of assessment under section two hundred and seventeen of the Income Tax Act, 1952, in respect of the services of a daughter relinquishes his claim to that relief he shall not be allowed relief under subsection (1) or (2) above for that year.

(4) In this section— registered blind person" means a person registered as a blind person in a register compiled under section twenty-nine of the National Assistance Act, 1948, or under any corresponding enactment for the time being in force in Northern Ireland; taxfree disability payment" means a periodical payment receivable by a person on account of his blindness and not falling to be treated as income for the purposes of income tax.

(5) In subsection (1) of section fourteen of the Finance Act, 1957 (under which, as amended by the Finance Act, 1960, certain reliefs specified in paragraphs (a) to (d) thereof by reference to the enactments conferring them are allowable for purposes of surtax), at the end of paragraph (d) there shall be inserted the following— and (e) subsection (1) or (2) of the section of the Finance Act, 1962 (relief for blind persons);". (6) The Income Tax Acts, and in particular Part VIII of the Income Tax Act, 1952, shall have effect as if subsections (1) to (4) of this section were contained in the said Part VIII between sections two hundred and eighteen and two hundred and nineteen.—[Mr. Selwyn Lloyd.]

Brought up, and read the First time.

Mr. Brooke

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

Mr. Speaker

May I say something about selection? I had thought that it would be for the convenience of the House if, with this new Clause, we were to take the new Clauses—"One hundred per cent. disabled", "One hundred per cent. disablement pensions: relief", "Relief for grave disability" and "Extension of relief under Finance Act, 1960, s.17", since which, to meet what I understand to be the wishes of the Opposition, I have agreed that I would select the new Clause—"One hundred per cent. disabled"—so that a Division could be taken upon it. I hope that that will not have the result of necessitating a second debate on the wide subject.

Mr. Callaghan

We can give that assurance, Sir. I take it that the Division on that new Clause will take place not now, but when it is reached in due time.

Mr. Speaker

Yes, I am obliged. I am sorry that I had to interrupt the right hon. Gentleman the Chief Secretary.

Mr. Brooke

My task is to explain the Government new Clause, although the debate could range wider than that.

It will be within the recollection of the House that in Committee, a month or more ago, we discussed a variety of proposals embodied in new Muses concerning tax relief for the disabled. I had to resist them on grounds to which I shall revert in a moment, but I promised in the course of my last speech on that occasion to tell my right hon. and learned Friend what had been said in the debate; to convey to him that views were strongly expressed on both sides of the Committee, and that if a solution could be found, the Committee would welcome it. I carried out that undertaking and the new Clause is the result of my right hon. and learned Friend's consideration in the light of that debate.

Perhaps I may go back to the general difficulty with which any Chancellor of the Exchequer must be faced in connection with a claim for tax relief for the disabled, a claim which obviously elicits the strongest sympathies. As I said in Committee and as my right hon. and learned Friend would confirm, it is and continues to be his view that the right way to deal with this problem, this tragedy of disability, is not by tax relief but by direct social benefits. We have an extensive system of those benefits in this country now.

Secondly, the weakness in all the new Clauses which were offered to the Committee was that they did not take into account the two recommendations of the Radcliffe Commission which, while arguing for a tax relief for the disabled, stipulated that a disabled person should not be put in a position to take advantage simultaneously of tax relief under the Finance Acts and of benefits in respect of his disability which were paid to him tax-free. Furthermore, the Radcliffe Commission argued that any new tax reliefs for the disabled should take the place of the present daughter's services allowance of £40 which Lord Radcliffe and his colleagues agreed to be an anomaly in the tax laws. The new Clause takes account of those recommendations, and is thus distinguished from those that we were discussing in Committee.

A further difficulty about the main Radcliffe recommendation—which was the recommendation on which the Clauses submitted to us in Committee were avowedly founded—was how to determine who qualified. The hon. Member for Cardiff, South-East (Mr. Callaghan) fairly admitted that the administrative difficulties which I described on that occasion were real. He said that they should be overcome, but he did not seek to argue them out of existence.

There is not only the question whether one can have a general relief which is confined to those who are 100 per cent. disabled, without going further and extending it to those who are 90 per cent. disabled, or 75 per cent, disabled as one of the new Clauses on the Notice Paper would do. There is also the problem of identifying just who would qualify for a general tax relief for the disabled. There is no difficulty with those who are in receipt of war disablement pension, or industrial injury benefit, but those are just the cases which, under the Radcliffe recommendations, would not be likely to qualify for tax relief because a tax allowance of, say, £100 would be likely to be substantially less than the tax free benefit which they receive for their war disability or for industrial injury.

Therefore, for any general relief far the disabled, one would have to inaugurate a system of specialist medical examinations of a great many people who would claim the new tax relief because of a disability not arising out of war, and not arising out of industrial injury. This would be a new field of medical examination. It would, of course, be needed in the case of all kinds of ailments, to use a general word, not arising from injury. There would be claims from people who suffered from a severe form of disease of one kind or another. One would have to set up standards of assessment, because I think it would be common acceptance that there would have to be either 100 per cent. disability, or a high percentage of disability, and at present we have no standards of assessment of that kind. If one is to take war pensions as a pattern for this, there would also have to be provision for appeals.

I do not want to swell up this administrative apparatus into anything more formidable than it would be, but it would be a considerable apparatus. This in itself may not be an overwhelming objection if the result would be good, but I submit to the House that at the end there would be a great deal of feeling of unfairness about where the line precisely fell. Inevitably, there would he many people who would sincerely believe that they were so disabled by some ailment or other that they should be entitled to get the tax relief if it was a general one for disablement, and yet they would find that they fell just on the wrong side of the line. The House must therefore appreciate that, however well and skilfully we try to legislate for this matter and to administer the legislation, it is not likely that it will give the general satisfaction which is in the minds of all hon. Members on bath sides who have addressed themselves to the problem.

1.0 a.m.

These objections to the idea of a general tax relief for the disabled remain as valid as ever. There are the difficulties about settling how far one is to go—if one goes at all—beyond relief for 100 per cent. disablement; the difficulties of medical assessment; the essential fact that one ought not to enable people to have tax-free benefits from more sources than one—that is to say, from a Finance Act provision and from a social service—and, behind it all, what I believe to be the general conviction of all of us that the primary way to help those who are disabled is by social benefits and not by the more artificial method of tax relief.

Nevertheless, my right hon. and learned Friend did thoroughly consider what was said in Committee, and he was anxious to find some means of meeting the sense of the Committee. In doing that he found himself particularly lm-pressed by the arguments put forward by my hon. Friend the Member for Plymouth, Devonport (Miss Vickers), that the blind formed a special and, indeed, a unique category. It is difficult to think of any other disablement which one would more dread to suffer from oneself than blindness. Not only that; the blind are a clearly identifiable class, because, as my hon. Friend said, they are already registered as blind persons.

The fact that they can be identified by an objective test of that kind removes one of the difficutlies which I have mentioned. The Chancellor has therefore decided to put before the House this new Clause, which provides a tax-free allowance of £100 to a registered blind person if he or she is not receiving tax-free disability payments or augmentation allowances, or anything of that kind, of greater value than the tax-free allowances he proposes, and also on condition that the £40 daughter's allowance is not drawn at the same time. In those respects the new Clause corresponds closely with what the Radcliffe Commission recommended.

The House will appreciate that the people most likely to benefit from the provisions of the new Clause are blind persons who are seeking, despite their disability, to earn their living in the open market, so to speak—blind men and women who are earning their living as teachers, musicians and in other walks of life which, with great courage, they have managed to lay open for themselves.

It is true that a person of that kind may find that at present the State does nothing for him or her. Yet it taxes him or her like a sighted person although their taxable capacity must be in some degree lessened by their blindness. If a man has gone blind as a result of injury, whether in war or industrial occupation, he is not likely to get the benefit of this Clause because he will already have a greater tax-free benefit. If he is a successful claimant for National Assistance, he will obtain National Assistance at a special rate because he is blind. The category is recognised as such under National Assistance. Yet, if that blind man is doing his utmost to live as a normal member of society, moving about and going to his work, acting as a professional man—as a teacher or whatever it may be—it may well happen that in present circumstances he receives nothing from the State.

On all these grounds the Chancellor felt that it would be right, and he would like to propose to the House, that we should recognise the blind as a unique case. At this hour of the night I do not want to develop the matter further, but I hope that anyone who reads my speech will appreciate that this Clause will overcome or avoid the various difficulties to which I had earlier to invite the attention of the Committee. I hope that the House will accept this as a genuine endeavour by the Chancellor to meet the sense of the Committee and to do justice. I think, too, that it may be a further encouragement to blind persons to take the bold step of going out into the world and seeking to earn their living in the open market, recognising that if they are in that position Parliament will henceforth vote them a special tax allowance.

Miss Joan Vickers (Plymouth, Devonport)

I wish to thank the Chief Secretary, and through him, my right hon. and learned Friend, for this concession. It has been requested to the House ever since 1939 and I have been only one of the people interested in the matter, but it came to me to put forward the new Clause at a time when we were fortunate enough to have this concession made to many people, including the National Institute for the Blind. I appreciate what has been given to them tonight.

As the Chief Secretary said, the people we are thinking about are in a category which is not receiving any social benefit. I have led two deputations to the Treasury and I wish to express my thanks to the Economic Secretary to the Treasury for the way in which he received the last deputation and for the thought which has been put into a very complicated new Clause. It will benefit many people and will be an encouragement to others to go out and earn their living in an independent manner.

The reason we particularly wanted this benefit was the extra expense a blind person has to provide against. He has to obtain a guide, take more taxis than sighted people and give extra tips for the help given by strangers. Blind people do not want to feel that they are an obligation on anyone and, therefore, their life is a little more expensive than that of others. For this reason, I think that the new Clause will confer a benefit on many people and I express the thanks of the many who have been with me on deputations to the Chancellor for what he has given us tonight.

Mr. Houghton

We on this side of the House welcome, of course, the concession which the right hon. and learned Gentleman has been able to introduce by this new Clause. I regret that this debate comes on so late that we are not able to spend the time on it that it deserves, because the debates in Committee went much wider than this, and if the Chancellor was trying to get the feeling of the Committee he must have realised that although on both sides we were greatly concerned about blind persons as a unique section of disabled persons, our sympathy and our desire for tax relief went beyond the blind. We had in mind, particularly, the gravely disabled, usually defined as 100 per cent. disabled.

As I listened to the Chief Secretary to the Treasury, so obviously impressed with the merits of the matter, I wondered why we had made such small impact on the mind of the Government in all the years we have been pressing this question in the past. The first proposal came after the publication of the Second Report of the Radcliffe Commission in April, 1954, and we have debated the blind and the gravely disabled on many occasions since, we on these benches swiftly took the matter up in the Finance Bill of 1954. We debated it in 1956, 1958, 1959, 1960 and 1961, and in all those years we failed to get any sympathetic response from the Government.

We are glad that at last, and apparently on the strong case put up by the hon. Lady the Member for Plymouth, Devonport (Miss Vickers), the scales have been tipped in favour of the Chancellor doing something this year. We are glad that he has done so, but I draw attention to the fact that the Royal Commission said much more on this question than tax relief for the blind. But before dwelling for a few moments on that, I want to point out one or two matters in relation to the proposal before the House. The relief is to give a tax allowance of £100. That is the figure mentioned in the Radcliffe Report of 1954. At the end of paragraph 203 the Commission says: The figure of the allowance that we envisage, while not capable of any precise formulation, is a figure of not less than 100". That was the figure mentioned by the Royal Commission when the personal allowance for a single person was £120 —and it is now £140; when the allowance for a dependent relative was £50, and it is now £75; when the allowance for a child under 11 was £85, and it is now £100. All personal allowances have gone up since 1954, and yet the Chancellor proposes to stick to the figure mentioned by the Royal Commission eight years ago—and they mentioned it as a minimum of not less than £100. A tax relief on £100 is rather low having regard to the changes which have taken place since the figure was mentioned in 1954.

1.15 a.m.

Secondly, although the Chancellor relieves the blind person from the difficult choice of whether he shall retain tax-free disablement payments or take the tax relief, he proposes to take into account in connection with this relief the amount of any tax-free disability payments received. I regret that the right hon. and learned Gentleman has felt it necessary to do that. For this small category of disabled persons I should have thought that the Chancellor could have been simple, generous and clear. However, that is not to be. The relief is not given to a blind person who is receiving tax-free disability payments seven-ninths of which exceed the amount of £100. If seven-ninths of his disability payments amount to less than £100, the seven-ninths are deducted from the £100 and tax relief is given on the difference. That is very complicated for blind persons to understand and goes unnecessarily into the refinements of the matter.

A further proviso is that a blind person who is claiming this relief must forgo the relief for a daughter looking after a disabled parent where that allowance is drawn. That is tax relief on £40. There are very few of them in payment at present. I know that the Royal Commission recommended that that relief should be withdrawn. I would not dissent from the Chancellor deciding that further allowances of that kind should not be given, but to require a blind person to forgo that relief to get the new one is unnecessarily cheese-paring in giving an allowance to this unique category of persons.

On these two counts one can reasonably criticise the practical proposals which the Chancellor makes. It is a commentary on the complexity of our tax system that it takes a whole page of the Notice Paper to give a simple relief to a small category of taxpayer. I thought that the Chancellor was making a drive for simplicity. I thought that he was anxious to make Income Tax understandable by the people. But he has got into the clutches of the Board of Inland Revenue on this and is in those clutches on almost everything he considers in relation to Income Tax. If he remains there he will make more complications and not simplify the tax system. A broader brush is necessary if we are to have simplification.

It is a pity that in giving this relief the Chancellor had to be niggardly in his approach to this disablement allowance. As the Chief Secretary pointed out, practically no blind person who is receiving a war disability pension or an industrial injuries pension can benefit under this proposal, though we welcome the fact that many for whom there is no disability payment will benefit from this relief. I am assuming all the time that sickness benefits and National Insurance benefits will be excluded from the definition of "tax-free disability payments." I assume that a tax-free disability payment is one which is specifically related to the disablement.

We also regret that the Chancellor has not seen fit to broaden the scope of this relief. It seemed to me, when I first read the proposals, that here was an opportunity for the Chancellor to go much further along the path of the Royal Commission that he has seen fit to go. Had he been dealing with the much larger category of gravely disabled persons he would have had more excuse for introducing the provisos in the allowance than he has when confining it to the comparatively small number of blind persons who will qualify.

The Chief Secretary has repeated many of the arguments used previously against giving relief for total disablement. In past years, Treasury Ministers have reiterated the same arguments against giving any relief, even to the blind, but we have at least got rid of that. The basis of the Royal Commission's recommendation is contained in paragraph 201 of the second Report: … there are many kinds of disability (putting aside age, which is provided for by a special relief) so severe that they modify the whole conditions of a person's life and impose upon him a constant levy of extra expense that may fairly be said to affect the taxable capacity of his income. The Commission examined the many claims for refinements in the catalogue of personal allowances. It said that it was impossible for a taxation system to provide special reliefs, or variable reliefs, for every category of human or domestic condition, but after having said that personal allowances generally must take account of the common experiences of men and women, and taxpayers, it came to the conclusion that there should be an allowance for grave disablement. We find in paragraph 202: Our general conclusion is that grave disability ought to be the subject of allowance. The Commission made that recommendation in face of all that it had said against undue refinements in personal allowances generally. We must, therefore, give very great weight to the conclusion. The Commission, in paragraph 203, while it mentioned the blind incidentally, was talking all the time about persons who would be regarded as 100 per cent. disabled. The Minister says that if we talk of 100 per cent. disabled, we have to consider those who are 90 per cent., or 80 per cent., or 75 per cent. disabled, and so on.

The Commission dealt with the possibility in paragraph 203, in which, after referring to the obvious problems of administration, it stated: The difficulty reinforces the need to begin cautiously and to confine qualification to 100 per cent. disablement. But we feel at the same time that the difficulty is not insuperable and ought to be faced. Machinery of the kind we have in mind does in fact exist, though created for the purpose of war pension administration; and some of the qualifications, e.g., blindness, do, as it were, prove themselves. The Chancellor has not accepted that broader concept of the relief, and that is disappointing. We all know of persons who are gravely disabled. Some of them are not getting any disability payment of any kind. There are people suffering from some congenital condition, and there are those who have suffered accidents for which they have received no compensation. They, too, are living a very hard life. Many of them are bravely going out into the world to earn their living, grievously handicapped as many of them are.

I hope that the Chancellor will not think that this is a long moan about what he is proposing. We are really at the turning point in this matter. We have made so many fruitless efforts in the past and he is probably the first Chancellor to consider the matter favourably. This is a valuable innovation which, I hope, will pave the way to an extension of this sort of relief.

I do not for a moment deny that the Chief Secretary was right when he said that some problems of administration would arise if the allowance was extended to grave disability. We know that those who have their disablement assessed by medical tribunals for war and industrial disability pensions would be identifiable from the records of the Ministry of Pensions and National Insurance. They would identify themselves almost as readily as blind persons who we recognise by the certification that they have.

In other cases of disablement arising out of neither war nor industrial injury, other difficulties of assessment would be presented and, undoubtedly, some reliance would have to be placed on a satisfactory system of medical certification. Obviously, inspectors of taxes are not doctors and it would not be any good for a person to present himself at his local taxation office saying, "I am 100 per cent. disabled." It would be necessary to have proper medical evidence.

I do not deny these things, nor did the Royal Commission. Despite this, the Commission stated that the difficulties should be faced. Grave disability should be the subject of an allowance and we regret that the Chancellor has not seen fit to go further than blind persons, deserving, of course, though they are. We regret also that in dealing with blind persons he has seen fit to stick rigidly to the refinements which are included in the proposed new Clause.

It would have been more wholesome for the Chancellor to have presented the Committee with a proposal that was simple and direct and which represented an additional benefit to all who could qualify for it notwithstanding any payments they were receiving for their disablement.

Question put and agreed to.

Clause read a Second time and added to the Bill.