HC Deb 15 May 1963 vol 677 cc1455-91

10.10 p.m.

Mr. Houghton

I beg to move, in page 10, line 14, at the end to insert: (4) In section 214 of the Act of 1952 (person taking charge of widower's or widow's children or acting as his or her housekeeper), as amended by section 18 of the Finance Act 1960, for the reference to £75 there shall be substituted a reference to £100.

The Deputy-Chairman

It may be for the convenience of the Committee if with this Amendment we discuss the Amendments in page 10, line 18, at end insert: and in the said section 216 for references to £75 (inserted by section 18 of the Finance Act 1960) there shall be substituted references to £100".

In line 18, at end insert: (5) In section 217 of the Act of 1952 (claimant depending on services of a daughter) for the reference to £40 (inserted by section 14(4) of the Finance Act 1953) there shall be substituted a reference to £60.

In page 11, line 6, at end insert: (8) In section 17 of the Finance Act 1960 (additional relief for widows and others in respect of children) for the reference to £40 there shall be substituted a reference to £60.

Mr. Houghton

Yes, it will he convenient to group these Amendments together, though with your permission, Sir Robert, we should probably wish to divide on several of the Amendments separately.

This group of Amendments deals with the personal reliefs which are not included in the Clause but which we think should have been brought into the Chancellor's improvements of personal allowances. The Amendment in page 10, line 14, concerns the housekeeper allowance. The first Amendment in page 10, line 18, is concerned with the dependent relative allowance. The second Amendment in page 10, line 18, concerns the allowance for an infirm taxpayer relying on the services of a daughter. The Amendment in page 11, line 6, concerns the relief given in the Finance Act, 1960, to widows and others in respect of children.

The allowances for a housekeeper and dependent relative, dealt with in the Amendment in page 10, line 14, and the first Amendment in page 10, line 18, were increased from £60 to £75 in 1960. The Chancellor of the Exchequer has not seen fit to improve on the 1960 figure in the Clause. The same applies to dependent relatives. Although the Chancellor has successively improved the conditions under which the dependent relative allowance may be granted, he has not increased the amount. That again was increased last in 1960.

In the case of the second Amendment in page 10, line 18, this is a small relief granted to only a few taxpayers where an infirm taxpayer relies on the services of a daughter. This relief was increased from £25 to £40 in 1953–54 and has not been improved since.

The matter dealt with in the Amendment in page 11, line 6, is a new relief introduced into the Finance Act, 1960, to provide for the case of widowers and widows with young children who did not have a resident housekeeper and who did not therefore qualify for the conventional housekeeper relief. In that case, relief of tax on £40 was provided for in the Finance Act, 1960. That covers the four reliefs which are referred to in the four Amendments.

I am sure that the Minister will wish to explain to the Committee why the Chancellor has not felt able to improve these reliefs in the Bill. It is true that there has been no uniformity, either as to the amount or as to the dates on which the personal allowances have been changed. The main personal allowances were improved last in 1955, and I am sure that the whole Committee would agree that they were due for some improvement this year. I mention that because some of these reliefs—in fact, all of them except one—have been increased since 1955. I think the only one that has not been increased since 1955 is the case of the infirm taxpayer relying on the services of a daughter. But I am bound to refer to the fact that when the new relief of £40 was introduced into the Finance Act, 1960, it seemed to correspond to the allowance of £40 given for an infirm taxpayer relying on the services of a daughter.

One can, therefore, look at the new relief for widows and widowers with children but with no resident housekeeper as having been forecast in 1960 in line with the existing relief of £40 for an infirm taxpayer relying on the services of a daughter. We think that since the Chancellor has revised almost all the personal reliefs—married, single, wife's maximum earned income relief, improvement in child allowance, forecasting a relaxation of the earnings conditions and income conditions in relation to children for 1964–65—the Chancellor might well have included these in his general sweep-up of personal allowances this time.

10.15 p.m.

I know that there is a certain amount of revenue involved. It is very likely, far example, that the Treasury Minister who is going to reply will say that the main cost of the improvement of these allowances would be in respect of dependent relatives and that that, coupled with the housekeeper relief, might very well cost £7 million or £8 million. I cannot be sure of the amount, of course. I think that when we proposed to increase it to £90 last year we were given an estimate of something like £6¾ million as the cost of the improvement of relief for housekeeper and for dependent relative.

There is no need to detain the Committee on this matter any longer. I am sure that hon. Members can see the point. It is solely a question of whether reliefs which were lying at a low level but which were increased in 1960 should come within the Chancellor's review of reliefs in 1963. I hope it will be possible for the Treasury to offer some hope of an improvement in these allowances. At least, I think that if the Economic Secretary is going to reply we shall look for some convincing explanation of why they are left out and why they should continue to be left out.

This, I suggest, is perhaps a point on which the whole Committee might like to express its view. If these points are not dealt with this year, it is unlikely that they will be dealt with for some years to come—at least, if the present Government remain in office. That is a big question mark which hangs over the whole of our debates, and the optimistic anticipations of many hon. Members opposite may, of course, be falsified by events. All I can say is that for the moment we are asking the Government in office to do something, and if they wish to vindicate the reputation which they hope to establish for generous administration of Income Tax they will accept these Amendments.

Mr. du Cann

I am sure that, as the hon. Member for Sowerby (Mr. Houghton) said, it is appropriate to discuss these four Amendments together for they, indeed, cover the same point. The Committee is much obliged to him. If, after what I have said, he sees fit—I hope to talk him out of any precipitate action—at the conclusion of this short debate to lead his hon. Friends into the Lobby, that is completely understood.

Dame Irene Ward

If I may interrupt my hon. Friend, may I have an answer to my speech later? I wanted to make a speech before my hon. Friend the Economic Secretary committed himself.

The Deputy-Chairman

I called the hon. Gentleman.

Mr. du Cann

In view of what my hon. Friend the Member for Tynemouth (Dame Irene Ward) has said, I am ready to give way to her. She is sitting directly behind me. I did not see her rise to her feet, although I looked round.

I have expressed my gratitude to the hon. Member for Sowerby for the fact that we are dealing with these four Amendments together. I should prefer to reply to my hon. Friend the Member for Tynemouth when she has concluded her speech, to which, if she is fortunate enough to catch your eye, Sir Robert, we shall all look forward.

Dame Irene Ward

I am very grateful to my hon. Friend the Economic Secretary for giving way. I wanted particularly to raise a point on an Amendment dealing with allowances for widows' children. I think that it is very important that this Amendment should commend itself to my hon. Friend. I cannot understand why there seems to be some objection on the part of the Government to doing anything specific for widowed mothers outside the National Insurance Act in which they have made some additional allowances. Here is an opportunity in the Finance Bill to do something for widowed mothers.

It is tremendously important that attention should be paid to this Amendment. I listened with very great care to what the hon. Member for Sowerby (Mr. Houghton) said and that is why I rose to speak on this Amendment and to suggest a way to the Economic Secretary whereby he can do justice to widows' children without interfering with the financial balance of the Bill.

If I remember rightly, I made this observation last year. One has to make observations on the Finance Bill for 10 years in succession before one ever arrives at a victory. I would point out to the Economic Secretary, as he has only just got into the Government and so was probably not present when I raised this matter last year, that it would be perfectly possible, and it would conform with the recommendation of the Royal Commission on Taxation to adopt a special course in regard to the housekeeper allowance paid to widows and widowers. A resident housekeeper costs quite a considerable amount of money. In other words, if one has a resident housekeeper it indicates that one is a person of reasonable substance. I think that it would be far better to follow the recommendation of the Royal Commission, remove the allowance from people of substantial means for their housekeepers and hand it over to widowed mothers for their children.

If my hon. Friend will consider it, I am quite sure that he will be aware that a large number of widowed mothers go out to work to earn money to try to make up to their children for the lowering of the standard of living through the loss of their fathers. It seems a most extraordinary thing, with all the pressure that has been exerted on what I would call a quite normal Government, that quite normal men—although I notice that there is no woman in the Treasury at Government level—with normal approaches to life should consider that it is right to give substantial allowances for housekeepers to widows and widowers who could well afford them themselves while at the same time denying any increase to a widow who has to play the part of both father and mother to her children. Not only has she to try to earn money to maintain the standard of living for her children but she is also subject to the earnings rule. It is an absolute scandal and I cannot understand it. My hon. Friend is always most polite and he makes the most excellent speeches. He could make a very much better one if he would just give attention to what I am saying and do what I ask.

Mr. du Cann

I come now, one might say, to the meat of the matter. The hon. Member for Sowerby (Mr. Houghton) has suggested by the Amendment in line 14 that the housekeeper allowance of £75 for widows and widowers should be increased to £100. By the first Amendment in line 18, he suggests that the dependent relative allowance of £75 should be increased similarly to £100. By the second Amendment in line 18, he suggests that the allowance of £40 given to a taxpayer compelled by old age or infirmity to depend on the services of a daughter resident with and maintained by him should be increased to £60, and, similarly, by the Amendment in page 11, line 6, he suggests that the special alternative allowance of £40 introduced in 1960 should be increased to £60. Those are all straightforward arguments which are perfectly well understood.

My hon. Friend the Member for Tyne-mouth (Dame Irene Ward) who said some very pleasant things about me which I greatly appreciate—whether she will say the same after I have finished is another matter—wants to recast the whole structure in relation to certain of these allowances. If I may, I will treat the argument on these four points as a whole, with just two exceptions.

First, I take a small point on the Amendment in line 14. I do not make much of it. The Amendment refers to Section 214 of the 1952 Act. The hon. Gentleman will appreciate that, if one were to accept the Amendment, one would have to take into account also the provisions of Sections 215 and 218 of the Act.

Mr. Houghton indicated assent.

Mr. du Cann

I see that the hon. Gentleman nods acknowledgement. I make that point only to establish for the record that these three Sections are complementary and interlocking.

Mr. Houghton

Yes.

Mr. du Cann

My second point relates to the allowance for the services of a daughter. This allowance was strongly criticised by the Royal Commission as anomalous, the reason being that it is an allowance for the taxpayers' disability but depending upon the accident of his having a daughter as opposed to any other specially named relative available to look after him.

I return now to the main theme. My right hon. Friend considered this matter most carefully before framing his Budget, but he decided that there is no case for increasing these particular allowances this year. As the hon. Gentleman reminded us, the housekeeper and dependent relative allowances were increased as recently as 1960, only three years ago. The special £40 alternative allowance was a new allowance in that year. The married and single allowances which we have dealt with in this Budget have stood at their present level since 1955, eight years ago. The present child allowances were fixed in 1957, six years ago.

In other words, the allowances which we are discussing on these Amendments, with the single exception of the allowance in respect of a daughter's services, which, I suggest, has to be considered quite differently, were improved quite recently, only three years ago. The other allowances with which we have dealt were fixed several years ago, a substantial time ago, I suggest. It, therefore, seemed to us right to give priority to the older allowances.

There is a further point here. The hon. Gentleman was arguing to some extent that, if it were appropriate to raise certain allowances, it was probably appropriate to raise the majority of the allowances in step, so to speak, having these allowances in mind particularly. I understand that point, but the general answer to that argument is this. It seems to us that it does not take sufficient account of the Chancellor's budgetary purpose this year. His proposals on personal taxation do not involve a straight increase in allowances but are intended to let all taxpayers off the tax on what is, at present, the first £60 of taxable income, with further benefit for married and family men.

10.30 p.m.

One of my right hon. Friend's main aims has been to raise the starting point for tax liabilties all round but without allowing the full benefit from the in- creased allowances to run all the way up the scale. Therefore, it would be wrong to suggest that the changes which he has proposed ought necessarily to involve an all-round improvement in the secondary personal allowances. If this were done, it would be to some extent out of step, not in step, with what he has done in his Budget. As I have explained, he has not thought fit to increase again this year allowances which were increased as recently as 1960, and in the case of the daughter's allowance he remains convinced that there is an anomaly here and that it would be quite wrong to act in this case.

All taxpayers entitled to the allowances to which these Amendments relate will benefit from the changes in the basic personal allowances and some of them from the increases in the child allowances. It would favour them unduly, perhaps, to give them increases also in the secondary personal allowances. I hope that that passage of my speech at least will convince my hon. Friend the Member for Tynemouth that we are not entirely without heart in the Treasury even if some of us for the time being as yet are childless. I hope that my hon. Friend will not hold it against us that we do not have a woman in the Treasury—she was good enough to say at least that we are normal—and I hope she may think that the arguments which I have put forward indicate, I hope clearly, that we have endeavoured to think all this out with a great deal of care and to proceed logically.

I come now to a point which I particularly want to make. I would not wish my hon. Friend, or any Member of the Committee, to think that we take the view that changes in these allowances are ruled out for all time; nothing of the sort. There is, however, logic in what we have done. We are proceeding in steps and it is appropriate for us to have acted as we have done this year. Perhaps one can look forward to other things in the future.

The precise cost in a full year of dealing with these allowances in the way that the hon. Member for Sowerby suggests would be £11¼ million, which is not an enormous sum in matters of this sort and is very different from the figure involved in the Amendments by the Liberal Party—whose Members again, are absent from our deliberations—in suggesting that we should gaily spend £300 million. The truth is that looking at the logic of my right hon. Friend's proposals, which I warmly support, this group of proposals would not have had a proper place this year.

Mr. Mitchison

The appeal for logic strikes me as rather curious. Logic in these cases means going back over a series of years and finding to what extent the various allowances have kept step with one another during that time. That may be history of a remarkable character, but it has nothing whatever to do with logic. It is about time that the Treasury ceased looking at things this way and considered the ordinary, commonsense question of whether these allowances are sufficient for the purpose for which they are given. It never seems to occur to the Treasury to do that.

When I look at the allowances, my conclusion is that they are not sufficient. The funniest bit of logic is that when there is an allowance which one believes to be anomalous, it is put at the lowest possible figure. It is neither more nor less anomalous if too little is given by way of the allowance. It is time that the Government of the day considered the only question that matters, which is whether these allowances are sufficient for the purpose—that is to say, whether they are fair allowances, because one cannot differentiate unduly between one case and another, to meet the type of expense which is involved in each case.

They are all hard cases in one form or another. I quite agree with what has been said: when talking about a dependent daughter, one might say, "Why a daughter? Why not a sister?" Indeed, we have a new Clause down about it, and we shall be hoping for the Government's support when we come to it. They might like to extend their anomaly; it might look better if they did so.

Seriously, and in all conscience, nowadays the only question that matters is: are these allowances enough for the purpose for which they are intended? That means, to meet additional expense arising out of real hardship in some form or another. I am sure that the Committee has it well in mind that when we are talking about £40 or £75 or £100, all that really comes to anybody out of it is tax at the standard rate on those figures. It is totally absurd, I should have thought, to suppose that they were adequate now for the purpose for which they were originally intended and still ought to be intended.

On those grounds the Opposition are going to divide against the Government on these Amendments. We shall spare the Committee the excessive pedestrian locomotion of walking through the Division Lobby four times, but it must not be taken that the selection is any more than one of convenience. We propose to divide on the first Amendments dealing with £75 and £40, and only on those for no other reason than to save the Committee too much walking while we establish our principle in the matter.

Mrs. Barbara Castle (Blackburn)

The Economic Secretary made a very plausible little speech, and he has a very fetching way with him, but I think he has overlooked one factor with regard to the housekeeper allowance. That is that all wives and husbands have a shock when they become widows or widowers to discover that suddenly they are classed as single persons.

This seems to them, particularly if they have a family to bring up, an absolute affront. That is the moment when men in particular suddenly realise the size of the loss they have sustained and how much they undervalued the services of the wife while she was living. To find that they are classed as single when they suddenly have all the domestic responsibilities falling upon their shoulders comes to them as a very great injustice and indignity. When this is raised with the Treasury the answer always is, "But we help the widower in certain ways, in particular through the housekeeper allowance."

I have been raising this point for some years. I remember taking up the matter in 1961 when one of my constituents wrote to me: I have just suffered the grievous loss of my wife aged 30 … I am now given to understand that despite the fact that I have two daughters aged five and eight to care for, a home and all the worry and responsibilities which go with it, by some strange twist of a legal brain I now become for tax purposes classed as a single man. Surely by present-day standards when the majority of wives of working men have to go out to work to keep their family respectable, a man should not, besides losing her earning capacity, her love and companionship, suffer a body blow from the Welfare State by losing his claim to £100 personal allowance. I took this up with the Economic Secretary at that time, and he confirmed that the married man's tax allowance would no longer be available to my constituent. He went on: The suggestion has frequently been made that a basic Income Tax allowance higher than the single person's allowance of £140 should be given to widows and widowers and particularly to those of them who have homes of their own to maintain but successive Governments have been unable to agree to this. He went on to say that although my constituent … will be entitled only to the £140 basic personal allowance, he will of course be able to continue to claim the allowances for his children. Furthermore, he can claim in addition either an allowance of £75 if he employs a resident housekeeper or, if he cannot claim this £75 allowance, an extra allowance of £40 towards his extra expenses in looking after his children. That was the Government's answer to the problems of the widows and widowers. Despite this, the problem has gone on rankling with these people. I had a letter only the other day from another constituent widower asking me to raise once again the fact that in his view widowers do not get a fair deal because they are classed as single persons even though they have families and homes to keep.

It is with this in mind that I think we have a right to impress upon the Treasury that the housekeeping allowance is something which is not just a kind of ex gratia payment made out of the kindness of the Government's heart but a serious contribution to the serious domestic problems faced by these people. They should, as my hon. and learned Friend the Member for Kettering (Mr. Mitchison) has said, re-examine this matter to see whether the provision is adequate to close this gap which the people we are concerned with feel so acutely.

This housekeeping allowance was £50 before the war. It is only £75 today. Can we in all conscience say that it has been increased pro rata to the absolutely fantastic increase in the cost of living? Are we not in fact progressively worsening the position of widows and widowers with children who need to employ this kind of help? Are we, therefore, not increasing the violent sense of injustice they feel through being classed as single persons when they have inherited these domestic responsibilities? I sincerely suggest to the Government that our Amendment is very modest and entirely realistic, bearing in mind that the allowance was £50 before the war.

Mr. Harold Davies (Leek)

I believe that the Economic Secretary said that the Government were looking at these anomalies, and my hon. and learned Friend the Member for Kettering (Mr. Mitchison) said he hoped that they would make a concession. I hope that the Government will think about this. Some of us have had problems like this and even the Income Tax inspectors sympathise with the case of a single man whose sister acts as his housekeeper. I dare not follow that matter any more because I shall be ruled out of order.

The case made by my hon. Friend the Member for Blackburn (Mrs. Castle) is unanswerable, particularly in view of the fact that this allowance was £50 before the war. I am sure that hon. Members on both sides of the Committee sympathise with these cases. If the Economic Secretary can find a way to do what we ask he will please not only hon. Members but will do justice to these people.

Question put, That those words be there inserted:—

The Committee divided: Ayes, 128, Noes, 198.

Division No. 112.] AYES [10.45 p.m.
Abse, Leo Blyton, William Castle, Mrs. Barbara
Ainsley, William Bowden, Rt. Hn. H. W. (Leics, S.W.) Cliffs, Michael
Allaun, Frank (Salford, E.) Bowen, Roderic (Cardigan) Collick, Percy
Awbery, Stan (Bristol, Central) Braddock, Mrs. E. M. Corbet, Mrs. Freda
Bacon, Miss Alice Bradley, Tom Craddock, George (Bradford, S.)
Baxter, William (Stirlingshlre, W.) Brown, Rt. Hon. George (Belper) Cronin, John
Beaney, Alan Butler, Herbert (Hackney, C.) Cullen, Mrs. Alice
Bennett, J. (Glasgow, Bridgeton) Butler, Mrs. Joyce (Wood Green) Dalyell, Tam
Carmichael, Neil Blackburn, F. Davies, G. Elfed (Rhondda, E.)
Davies, Harold (Leek) Hynd, John (Attercllffe) Robertson, Bohn (Paisley)
Davies, Ifor (Gower) Irving, Sydney (Dartford) Robinson, Kenneth (St. Pancras, N.)
Davies, S. O. (Merthyr) Jeger, George Rodgers, W. T. (Stockton)
Dempsey, dames Jenkins, Roy (Stechford) Rogers, G. H. R. (Kensington, N.)
Diamond, John Jones, Dan (Burnley) Ross, William
Dodds, Norman Jones, Elwyn (West Ham, S.) Short, Edward
Donnelly, Desmond Jones, T. W. (Merioneth) Silverman, Jullus (Aston)
Edwards, Rt. Hon. Ness(Caerphilly) Kelley, Richard Slater, Mrs. Harriet (Stoke, N.)
Edwards, Walter (Stepney) King, Dr. Horace Slater, Joseph (Sedgefield)
Fernyhough, E. Lawson, George Small, William
Fitch, Alan Lewis, Arthur (West Ham, N.) Spriggs, Leslie
Fletcher, Eric Loughlin, Charles Swingler, Stephen
Foot, Dingle (Ipswich) McBride, N. Taylor, Bernard (Mansfield)
Fraser, Thomas (Hamilton) McCann, John Thomas, Iorwerth (Rhondda, W.)
Galpern, Sir Myer McInnes, James Thornton, Ernest
George, Lady Megan Lloyd(Crmrthn) Mallalieu, E. L. (Brigg) Thorpe, Jeremy
Ginsburg, David Manuel, Archie Tomney, Frank
Gourlay, Harry Mapp, Charles Wainwright, Edwin
Grey, Charles Mason, Roy Warbey, William
Hannan, William Millan, Bruce Watkins, Tudor
Harper, Joseph Milne, Edward Weitzman, David
Hayman, F. H. Mitchison, G. R. Whitlock, William
Healey, Dents Morris, John Wilkins, W. A.
Henderson, Rt. Hn. Arthur(RwlyRegis) Oliver, G. H. Williams, D. J. (heath)
Herbison, Miss Margaret O'Malley, B. K. Williams, LI. (Abertillery)
Hill, J. (Midlothian) Oram, A. E. Willis, E. G. (Edinburgh, E.)
Hilton, A. V. Oswald, Thomas Wilson, Rt. Hon. Harold (Huyton)
Holman, Percy Paget, R. T. Winterbottom, R. E.
Hooson, H. E. Pargiter, G. A. Woof, Robert
Houghton, Douglas Pavitt, Laurence Wyatt, Woodrow
Howell, Charles A. (Perry Barr) Pentland, Norman Yates, Victor (Ladywood)
Hoy, James H. Price, J. T. (Westhoughton)
Hughes, Cledwyn (Anglesey) Probert, Arthur TELLERS FOR THE AYES:
Hughes, Emrys (S. Ayrshire) Reynolds, G. W. Mr. Redhead and Dr. Broughton.
Hunter, A. E. Roberts, Goronwy (Caernarvon)
NOES
Allan, Robert (Paddington, S.) Drayson, G. B. Jones, Arthur (Northants, S.)
Allason, James du Cann, Edward Jones, Rt. Hn. Aubrey (Hall Green)
Ashton, Sir Hubert Duncan, Sir James Kaberry, Sir Donald
Atkins, Humphrey Elliot, Capt. Walter (Carshalton) Kerana, Cdr. J. S.
Awdry, Daniel (Chippenham) Emery, Peter Kerr, Sir Hamilton
Balniel, Lord Errington, Sir Eric Kershaw, Anthony
Barber, Anthony Farr, John Kimball, Marcus
Barter, John Finlay, Graeme Kirk, Peter
Batstord, Brian Fletcher-Cooke, Charles Kitson, Timothy
Bennett, Dr. Reginald (Cos & Fhm) Fraser, Ian (Plymouth, Sutton) Leather, Sir Edwin
Biffen, John Freeth, Denzil Leavey, J. A.
Bingham, R. M. Gammans, Lady Legge-Bourke, Sir Harry
Birch, Rt. Hon. Nigel Gibson-Watt, David Lewis, Kenneth (Rutland)
Bishop, F. P. Gilmour, Ian (Norfolk, Central) Litchfield, Capt. John
Black, Sir Cyril Gllmour, Sir John (East Fife) Longbottom, Charles
Bourne-Arton, A. Glyn, Sir Richard (Dorset, N.) Longden, Gilbert
Boyd-Carpenter, Rt. Hon. John Goodhart, Philip Lovers, Walter H.
Boyle, Re. Hon. Sir Edward Gower, Raymond Lucas, Sir Jocelyn
Brewis, John Green, Alan Lucas-Tooth, Sir Hugh
Brown, Alan (Tottenham) Gresham Cooke, R. MacArthur, Ian
Bullard, Denys Grosvenor, Lt.-Col. R. G. McLaughlin, Mrs. Patricia
Carr, Compton (Barons Court) Gurden, Harold Maclay, Rt. Hon. John
Hall, John (Wycombe) Maclean, SirFitzroy (Bute&N.Ayrs)
Channon, H. P. G. Harris, Frederic (Croydon, N.W.) Macleod, Rt. Hn. Iain (Enfield, W.)
Chichester-Clark, R. Harrison, Col. Sir Harwood (Eye) McMaster, Stanley R.
Clark, William (Nottingham, S.) Harvey, Sir Arthur Vere (Macclesf'd) Macmillian, Rt. Hn. Harold(Bromley)
Clarke, Brig. Terence(Portsmth, W.) Harvey, John (Walthamstow, E.) Macpherson, Rt. Hn. Niall(Dumfries)
Cleaver, Leonard Harvie Anderson, Miss
Cole, Norman Hay, John Maddan, Martin
Cooke, Robert Heald, Rt. Hon. Sir Llonel Markham, Major Sir Frank
Cooper, A. E. Henderson, John (Cathcart) Marten, Nett
Cooper-Key, Sir Neill Hendry, Forbes Maudling, Rt. Hon. Reginald
Cordeaux, Lt.-Col. J. K. Hill, Mrs. Eveline (Wythenshawe) Mawby, Ray
Costain, A. P. Hill, J. E. B. (S. Norfolk) Maxwell-Hyslop, R. J.
Coulson, Michael Hirst, Geoffrey Maydon, Lt.-Cmdr, S. L. C.
Courtney, Cdr. Anthony Hocking, Philip N. Miscampbell, Norman
Craddock, Sir Beresford (Spelthorne) Holland, Philip More, Jasper (Ludlow)
Critchley, Julian Hollingworth, John Morgan, William
Cunningham, Knox Hopkins, Alan Morrison, John
Curran, Charles Hornby, It. P. Heave, Airey
Currie, G. B. H. Hornsby-Smith, Rt. Hon. Dame P. Nicholls, Sir Harmar
Dalkeith, Earl of Howard, John (Southampton, Test) Noble, Rt. Hon. Michael
Dance, James Hughes-Young, Michael Osborn, John (Hallam)
Deedes, Rt. Hon. W. F. Hutchison, Michael Clark Page, Graham (Crosby)
Digby, Simon Wingfield Irvine, Bryant Godman (Rye) Pannell, Norman (Kirkdale)
Donaldson, Cmdr. C. E. M. James, David Pearson, Frank (Clitheroe)
Doughty, Charles Johnson Smith, Geoffrey Peel, John
Perclval, Ian Seymour, Leslie Thornton-Kemeley, Sir Colin
Pickthorn, Sir Kenneth Sharpies, Richard Tiley, Arthur (Bradford, W.)
Pitman, Sir James Shaw, M. Touche, Rt. Hon. Sir Gordon
Pitt, Dame Edith Shepherd, William Turner, Colin
Prior, J. M. L. Skeet, T. H. H. Vaughan-Morgan, Rt. Hon. Sir John
Proudfoot, Wilfred Smith, Dudley (Br'ntf'd & Chiswick) Vickers, Miss Joan
Pym, Francis Smyth, Rt. Hon. Brig. Sir John Wakefield, Sir Wavell
Ramsden, James Spelt, Rupert Warder, David
Rawlinson, Sir Peter Steward, Harold (Stockport, S.) Walker, Peter
Redmayne, Rt. Hon. Martin Stodart, J. A. Walker-Smith, Rt. Hon. Sir Derek
Rees, Hugh Stoddart-Scott, Col. Sir Malcolm Wells, John (Maidstone)
Rees-Davlee, W. R. Storey, Sir Samuel Williams, Dudley (Exeter)
Renton, Rt. Hon. David Studholme, Sir Henry Williams, Paul (Sunderland, S.)
Ridsdale, Julian Summers, Sir Spencer Wise, A. R.
Roberts, Sir Peter (Healey) Talbot, John E. Wolrlge-Gordon, Patrick
Robinson, Rt. Hn. Sir R. (B'pool,S.) Taylor, Edwin (Bolton, E.) Woollam, John
Rodgers, John (Sevenoaks) Taylor, Frank (M'ch'st'r, Moss Side) Worsley, Marcus
Roots, William Teeling, Sir William
Ropner, Col. Sir Leonard Temple, John M. TELLERS FOR THE NOES:
Royle, Anthony (Richmond, Surrey) Thomas, Peter (Conway) Mr. Gordon Campbell and
Russell, Ronald Thompson, Sir Richard (Croydon,S.) Mr. McLaren.

Amendment proposed: In page 10, line 18, at end insert: (5) In section 217 of the Act of 1952 (claimant depending on services of a daughter) for the reference to £40 (inserted by section 14(4) of the Finance Act 1953) there shall be

substituted a reference to £60.—[Mr. Mitchison.

Question put, That those words be there inserted:—

The Committee divided: Ayes 128, Noes 201.

Division No. 113.] AYES [10.53 p m
Abse, Leo Grey, Charles Oswald, Thomas
Ainsley, William Hannan, William Paget, R. T.
Allaun, Frank (Salford, E.) Harper, Joseph Pargiter, G. A.
Awbery, Stan (Bristol, Central) Hayman, F. H. Pavitt, Laurence
Bacon, Miss Alice Healey, Denis Pentland, Norman
Baxter, William (Stlrlingahtre, W.) Henderson, Rt. Hn. Arthur(RwlyRegis) price, J. T. (Weathoughton)
Beaney, Alan Herbison, Miss Margaret Probers, Arthur
Bennett, J. (Glasgow, Bridgeton) Hill, J. (Midlothian) Reynolds, G. W.
Blackburn, F. Hilton, A. V. Roberts, Goronwy (Caernarvon)
Blyton, William Holman, Percy Robertson, John (Paisley)
Bowden, Rt. Hn. H. W.(Lelcs, S.W.) Hooson, H. E. Robinson, Kenneth (St, Pancras, N.)
Bowen, Roderic (Cardigan) Houghton, Douglas Rodgers, W. T. (Stockton)
Braddock, Mrs. E. M. HoweH, Charles A. (Perry Barr) Rogers, G. H. R. (Kensington, N.)
Bradley, Tom Hoy, James H. Ross, William
Brown, Rt. Hon. George (Belper) Hughes, Cledwyn (Anglesey) Short, Edward
Butler, Herbert (Hackney, C.) Hughes, Emrys (S. Ayrshire) Silverman, Julius (Aston)
Butler, Mrs. Joyce (Wood Green) Hunter, A. E. Slater, Mrs. Harriet (Stoke, N.)
Carmichael, Neil Hynd, John (Attercliffe) Slater, Joseph (Sedgefield)
Castle, Mrs. Barbara Irving, Sydney (Dartford) Small, William
Cline, Michael Jeger, George Spriggs, Leslie
Corbet, Mrs. Freda Jenkins, Roy (Stechford) Swingler, Stephen
Craddock, George (Bradford, S.) Jones, Dan (Burnley) Taylor, Bernard (Mansfield)
Cronin, John Jones, Elwyn (West Ham, S.) Thomas, Iorwerth (Rhondda, W.)
Cullen, Mrs. Alice Jones, T. W. (Merioneth) Thornton, Ernest
Dalyell, Tam Kelley, Richard Thorpe, Jeremy
Davies, G. Elfed (Rhondda, E.) King, Dr. Horace Tomney, Frank
Davies, Harold (Leek) Lawson, George Wainwright, Edwin
Davies, Ifor (Gower) Lewis, Arthur (West Ham, N.) Warbey, William
Davies, S. O. (Merthyr) Loughlin, Charles Watkins, Tudor
Dempsey, James McBride, Neil Weitzman, David
Diamond, John McCann, John Whitlock, William
Dodds, Norman McInnes, James Wilkins, W. A.
Donnelly, Desmond McKay, John (Wallsend) Williams, D. J. (Neath)
Edwards, Rt. Hon. Ness (Caerphilly) Mallalieu, E. L. (Brigg) Williams, LI. (Abertillery)
Edwards, Walter (Stepney) Manuel, Archie Willis, E. G. (Edinburgh, E.)
Fernyhough, E. Mapp, Charles Wilson, Rt. Hon. Harold (Huyton)
Fitch, Alan Mason, Roy Winterbottom, R. E.
Fletcher, Eric Millan, Bruce Woof, Robert
Foot, Dingle (Ipswich) Milne, Edward Wyatt, Woodrow
Fraser, Thomas (Hamilton) Mitchison, G. R. Yates, Victor (Ladywood)
Galpern, Sir Myer Morris, John
George, Lady Megan Lloyd(Crmrthn) Oliver, G. H. TELLERS FOR THE AYES:
Ginsburg, David O'Malley, B. K. Mr. Redhead and Dr. Broughton.
Gourlay, Harry Oram, A. E.
NOES
Agnew, Sir Peter Ashton, Sir Hubert Balniel, Lord
Allan, Robert (Paddington, S.) Atkins, Humphrey Barber, Anthony
Allason, James Awdry, Daniel (Chippenham) Barter, John
Batsford, Brian Harvey, John (Walthamstow, E.) Peel, John
Bennett, Dr. Reginald (Gos & Fhm) Harvle Anderson, Miss Percival, Ian
Biffen, John Hay, John Pickthorn, Sir Kenneth
Bingham, R. M. Heald, Rt. Hon. Sir Lionel Pitman, Sir James
Birch, At. Hon. Nigel Henderson, John (Cathcart) Pitt, Dame Edith
Bishop, F. P. Hendry, Forbes Prior, J. M. L.
Black, Sir Cyril Hill, Mrs. Eveline (Wythenshawe) Proudfoot, Wilfred
Bourne-Arton, A. Hill, J. E. B. (S. Norfolk) Pym, Francis
Boyd-Carpenter, Rt. Hon. John Hirst, Geoffrey Ramsden, James
Boyle, Rt. Hon. Sir Edward Hocking, Philip N. Rawlinson, Sir Peter
Brewis, John Holland, Philip Redmayne, At. Hon. Martin
Brown, Alan (Tottenham) Hollingworth, John Rees, Hugh
Bullard, Denys Hopkins, Alan Rees-Davies, W. R.
Campbell, Gordon (Moray & Nairn) Hornby, R. P. Renton, Rt. Hon. David
Carr, Compton (Barons Court) Hornsby-Smith At. Hon. Dame P. Ridsdale, Julian
Channon, H. P. G. Howard, John (Southampton, Test) Roberts, Sir Peter (Heeiey)
Chichester-Clark, R. Hughes-Young, Michael Robinson, At. Hn. Sir R. (B'pool,S.)
Clark, William (Nottingham, S.) Hutchison, Michael Clark Rodgers, John (Sevenoaks)
Clarke, Brig. Terence(Portamth, W.) Irving, Bryant Godman (Rye) Roots, William
Cleaver, Leonard James, David Ropner, Col. Sir Leonard
Cole, Norman Johnson Smith, Geoffrey Royle, Anthony (Richmond, Surrey)
Cooke, Robert Jones, Arthur (Northants, S.) Russell, Ronald
Cooper, A. E. Jones, At. Hn. Aubrey (Hall Green) Seymour, Leslie
Cooper-Key, Sir Neill Kaberry, Sir Donald Sharpies, Richard
Cordeaux, Lt.-Col. J. K. Kerans, Cdr. J. S. Shaw, M.
Costain, A. P. Kerr, Sir Hamilton Shepherd, William
Coulson, Michael Kershaw, Anthony Skeet, T. H. H.
Courtney, Cdr. Anthony Kimball, Marcus Smith, Dudley (Br'ntf'd & Chiswick)
Craddock, Sir Beresford (Spelthorne) Kirk, Peter Smyth, Rt. Hon. Brig. Sir John
Critchley, Julian Kitson, Timothy Speir, Rupert
Cunningham, Knox Leather, Sir Edwin Steward, Harold (Stockport, S.)
Curran, Charles Leaver, J. A. Stodart, J. A.
Currie, G. B. H. Legge-Bourke, Sir Harry Stoddart-Scott, Cot. Sir Malcolm
Dalkeith, Earl of Lewis, Kenneth (Rutland) Storey, Sir Samuel
Dance, James Litchfield, Capt. John Studholme, Sir Henry
Deedes, Rt. Hon. W. F. Longbottom, Charles Summers, Sir Spencer
Digby, Simon Wingfield Longden, Gilbert Talbot, John E.
Donaldson, Cmdr. C. E. M. Loveys, Walter H. Tepsell, Peter
Doughty, Charles Lucas, Sir Jocelyn Taylor, Edwin (Bolton, E.)
Drayson, G. B. Lucas-Tooth, Sir Hugh Taylor, Frank (M'ch'st'r,Moss Side)
du Cann, Edward McLaughlin, Mrs. Patricia Teellng, Sir William
Duncan, Sir James Maclay, Rt. Hon. John Temple, John M.
Elliot, Capt. Walter (Carshalton) Maclean, sirFitzroy(Bute&N.Ayrs.) Thomas, Peter (Conway)
Emery, Peter Macleod, At. Hn. Iain (Enfield, W.) Thompson, Sir Richard (Croydon, S)
Errington, Sir Eric McMaster, Stanley R. Thornton-Kemsley, Sir Colin
Farr, John Macmillan, Rt. Hn. Haroid (Bromiey) Tiley, Arthur (Bradford, W.)
Finlay, Graeme Macpherson, Rt. Hn. Niall(Dumtries) Touche, Rt. Hon. Sir Gordon
Fletcher-Cooke, Charles Maddan, Martin Turner, Colin
Fraser, Ian (Plymouth, Sutton) Markham, Major Sir Frank Vaughan-Morgan, At. Hon. Sir John
Freeth, Denzil Marten, Neil Vickers, Miss Joan
Gammans, Lady Maudling, Rt. Hon. Reginald Wakefield, Sir Wavell
Gibson-Watt, David Mawby, Ray Weldor, David
Gilmour, Ian (Norfolk, Central) Maxwell-Hyslop, R. J. Walker, Peter
Gilmour, Sir John (East Fife) Maydon, Lt.-Cmdr. S. L. C. Walker-Smith, At. Hon. Sir Derek
Glyn, Sir Richard (Dorset, N.) Miscampbell, Norman Ward, Dame Irene
Goodhart, Philip More, Jasper (Ludlow) Wells, John (Maidstone)
Gower, Raymond Morgan, William Williams, Dudley (Exeter)
Green, Alan Morrison, John Williams, Paul (Sunderland, S.)
Gresham Cooke, R. Heave, Alrey Wise, A. R.
Grosvenor, Lt.-Col. R. G. Nicholls, Sir Harmer Wolrige-Gordon, Patrick
Gurden, Harold Noble, At. Hon. Michael Woollam, John
Hall, John (Wycombe) Osborn, John (Hallam) Worsley, Marcus
Harris, Frederic (Croydon, N.W.) Page, Graham (Crosby)
Harrison, Col. Sir Harwood (Eye) Pannell, Norman (Klrkdale) TELLERS FOR THE NOES:
Harvey, Sir Arthur Vera (Macclsef'd) Pearson, Frank (Clitheroe) Mr. McLaren and
Mr. McArthur.
Mr. Houghton

I beg to move, in page 10, to leave out lines 24 to 26 and to insert—

does not exceed £50 a deduction equal to 5s. 9d. for each pound of the relevant amount.
does exceed £50 but does not exceed £100 the same deduction as if the relevant amount were £50, plus 3s. 9d. for each pound of the relevant amount in excess of £50.
This is a matter I referred to in the speech I made on Second Reading, namely, that the change in the belts of the reduced rates means that the lowest rate of tax is now 4s. in the £. Under the Chancellor's proposals, the first £100 of taxable income will be charged at 4s., the next £200 at 6s., and thereafter at the standard rate of 7s. 9d.

Incidentally, it is extremely difficult to calculate from the table set out in subsection (5) of Clause 12 exactly what the reduced rates are. I ask any hon. Members who can apply their minds to this complicated subject at this late hour of night to try to make something of the table on page 10 of the Bill. The new table is to be substituted for the old one in the 1952 Act. It is to say this:

"Where the relevant amount—

does not exceed £ a deduction equal to 3s. 9d. for each pound of the relevant amount."

That is fairly straightforward. Three shillings and nine pence taken from 7s. 9d. equals 4s. It goes on to say:

"does exceed £100 but does not exceed £300 the same deduction as if the relevant amount were £100, plus 1s. 9d. for each pound of the relevant amount in excess of £100.
exceeds £300 the same deduction as if the relevant amount were £300."

I have never read such gibberish in all my life. If any layman can tell from that what the reduced rates are, he is a better man than I am. Yet this is what we have to work on at five minutes past eleven at night. To jump from exemption to 4s. in the £, which after earned income relief is an effective rate of 3s. 2d., is a pretty big jump.

I ask the Committee to consider that in 1955 the reduced rate bands were 2s. 6d. on the first £100, 5s. on the next £150, 7s, on the next £150, and then 9s.—the standard rate. From 1955 to 1963, when the standard rate at the beginning was 8s. 6d., the reduced band rates were 1s. 9d. on the first £60 of taxable income, 4s. 3d. on the next £150, 6s. 3d. on the next £150, and on the balance 8s. 6d. until 1959 and then it was reduced to 7s. 9d. The top rate was not levied until after the first £400 of taxable income in 1955. Since 1955 the standard rate has operated after the first £360 of taxable income. It now operates after the first £300 of taxable income. Since 1955 the standard rate has operated first after £400 of taxable income, secondly after £360 of taxable income, and now under the Bill after £300 of taxable income, which suggests that as the Chancellor is lifting the allowances he is narrowing the gap between exemption and tax at the standard rate. We think this is a bit steep.

I know that the right hon. Gentleman has drafted these changes so skilfully that he takes more people out of effective tax without carrying the benefits in the same proportion right up the scale. Nevertheless, we feel that some easement of entry into the band of actual tax should be introduced into the new table. As I said on Second Reading, it is all very well to say that everybody who is paying tax at the moment will pay a little less tax under the proposals in the Bill. This is true, but as people who are now exempt from tax become liable for tax in the future they will feel that to jump from no tax to an effective rate of 3s. 2d. in the £ is a rather steep level of marginal tax.

Therefore, in case hon. Members opposite have not been able to make out what our Amendment means, any more than they can make out what the Bill means, we propose that the first £50 of taxable income shall be charged at 2s., the next £50 of taxable income at 4s. and then the next £200 at 6s. What, in effect, we are proposing is to cut the first £100 zone in two, which the Chancellor proposes should all be at the 4s. rate, and substitute for it half—that is, £50—at 2s. and the other half at 4s., and then the 6s. rate for the next band of £200. We are not proposing to move to expand the scale but to alter the incidence of it by reducing the rate for the first E50 of taxable income.

At this hour of the night one has to abbreviate one's grievances and, therefore, I hope I have made the point. It would be possible to go back through the history of this matter and substantiate our case by more arguments of detail. The Economic Secretary, or the Financial Secretary, or the Chief Secretary, or all three of them, may form a formidable trio in reply to this formidable case, but I hope that the case will appeal to them as being reasonable.

One cannot bump people up from no tax to the 4s. range without somebody grumbling about it. Hon. Members can be quite sure that in the future this point will obviously be the subject of many representations and Amendments to Finance Bills, and the hon. Member who is to reply might as well meet trouble more than half way by dealing with it now.

Mr. du Cann

The hon. Member for Sowerby (Mr. Houghton) certainly has a reasonable case, on the face of it. I hope to be able to give him a reasoned reply and to convince him that the arguments on the other side are even stronger than the case which he so skilfully deployed.

First, on his criticism that these words appearing in the table are unclear, I think that is perfectly true of the layman, and it is perfectly true of those people who, perhaps, might come across this table for the first time. On the other hand, I think that study makes it very much clearer. I have myself asked the same question, and I understand that the Financial Secretary has asked it even more strongly than I have. We are both convinced by the advice that we have received, namely that the table never has caused any trouble and, as the hon. Gentleman will see, it follows on previous legislation and it is important that it should be in context.

Be that as it may, whether or not improvements might or might not be effected in the future, at least I hope to some extent to be able to explain the matter to him clearly. In any case, I think it is probably unnecessary, because I know very well that he understands these matters infinitely better than I do.

The Amendment proposes to substitute a more favourable scale of reduced rate reliefs to that proposed by the Chancellor. The details of my right hon. Friend's proposals are these: coupled with his proposal to increase basic personal allowances, he proposes to have reduced rate bands of £100 at 4s.—that is to say, 7s. 9d. minus 3s. 9d.—for the first section of the table; £200 at 6s.—that is to say, 7s. 9d. minus 1s. 9d.—instead of, as the hon. Gentleman pointed out, the present £60 at 1s. 9d., £150 at 4s. 3d. and £150 at 6s. 3d.

The Amendment proposes to keep the lowest reduced rate band very near the present £60 at 1s. 9d., and suggests that instead of paying 4s. on the first £100 of taxable income, the taxpayer should pay at 2s. on the first £50 of taxable income and at 4s. on the next £50. In other words, and in simple English, my right hon. Friend has proposed two steps up to the standard rate. The hon. Gentleman says, first, that this is too steep, that the point of entry is too high, and proposes a smoother graduation with more steps, rather like the present scale—that is to say, unless we alter it by passing this Clause of the Bill.

11.15 p.m.

On the point that the point of entry— 4s.—is too high, I know that the hon. Gentleman feels this matter keenly, because he was good enough to refer to it in his Budget speech, and gave us notice of it. He said that many exempted by the Chancellor's proposals would soon be taxable again with a rise in income—good old Tory prosperity one might say in parenthesis—and these would take the rap at 4s. in the £ instead of at 1s. 9d. on the first part of their taxable income and that this was too high as a marginal rate to begin with.

The effect of the hon. Gentleman's Amendment would be to widen the first band of income taxable very near to the present 1s. 9d. reduced rate so that, in effect, there would be something near a straight increase of £50 in basic personal allowance. That is what it would amount to. I will discuss the implications of this in a moment, because it is important to understand it.

The real choice before my right hon. Friend was to exempt a large number from tax altogether and have a lower reduced band at 4s., or to exempt far fewer and take driblets of tax from large numbers under such a scheme as the hon. Gentleman suggests. I think everyone knows that with weekly deductions by way of P.A.Y.E., particularly when dealing with small sums of tax, driblets are a nuisance to the Revenue, to the employer and to the man one is taxing.

The measures which my right hon. Friend has adopted will exempt over 3 million taxpayers, a very large number, and will give some help to married men over and above the relief to single persons, at a cost which he feels in his judgment he can face. They will exempt a large number of taxpayers who pay relatively small amounts of tax, and I cannot help feeling, and I hope that the Committee will agree with us, that it was a sensible thing to aim at, and, indeed, a sensible thing to achieve.

Now I come to the point about smoother graduation. I think that this is frankly a matter of taste, on the whole. The hon. Gentleman referred to precedents. I have a number in front of me, but I will not go into them in detail except to say that I do not think that there is any reason why the three-tier system, so to speak, of reduced rates, which has applied in recent years, should be retained for ever.

From 1920–21 to 1945–46, which is a long time—over 25 years—there was only one reduced rate band. The Committee will recall that we now have two. There were two from 1946–47 to 1951–52—in other words, when we were pleased to have a Labour Government looking after our affairs. Also for 15 years from 1920–21 the reduced rate was half the standard rate, so I do not think there is anything very much in the argument of precedent from the point of view of advancing the case which the hon. Gentleman deployed.

A final point which I should like to make before coming to the question of cost is this. The effective rate of tax on total income is, of course, very much lower than the marginal rate, but I will not take the Committee right through the Financial Statement. I think we are all aware of it.

Mr. Houghton

Will the hon. Gentleman permit me to say that 4s. in the lowest band is the highest rate since 1941–42?

Mr. du Cann

Yes, I am sure that that is right; but it does not mean necessarily that it is wrong—

Mr. Mitchison

Is it logical?

Mr. du Cann

—because, if it is accepted that it is appropriate to take out of tax about 3 million people, and I think it right and proper to do that, it must follow that the method adopted to do it is the correct one. In any case, if we can look forward to the improvement in prosperity to which the hon. Gentleman was good enough to refer in his speech in the Budget debate, the point does not seem to he one of very great importance.

The hon. and learned Member for Kettering (Mr. Mitchison) asks whether it is logical. Whether it is logical I do not really know. All I can say is that my right hon. Friend has produced a first-class Budget which I warmly support, not least this part of it.

Now, the question of cost. The proposal advanced by the hon. Member for Sowerby to have a 2s. rate of tax on the first £50 of taxable income instead of the Chancellor's 4s. rate, while leaving the Budget proposals otherwise unchanged—this is the point—would cost no less than £74 million this year, 1963–64, and £98 million in a full year. I am sure that the Committee will agree that to add this to the cost of my right hon. Friend's other proposals would be out of the question.

I quite understand the points which the hon. Gentleman has made. We have given them thought, as he will appreciate from my reply. On the other hand, I think that the anxieties which he has are not, so to speak, as serious as they might be. I am certain that the results of my right hon. Friend's proposals will be thoroughly in everyone's interest. While I welcome the debate, and not least the courtesy of the hon. Member in curtailing his remarks at this time of night, I must tell him that we cannot accept his Amendment.

Mr. Mitchison

We may be content to differ and to show our difference in the Lobby on this question, which is, in some ways, an important though not a very difficult or large one, but it would be ungracious to divide the Committee without thanking the Chancellor warmly for having accepted in this Budget the main proposal of the Opposition last year, which was supported, on the whole, by the same kind of argument as that advanced by the Economic Secretary tonight. It is late, but not too late for an acknowledgment of the gracious conversion of the Government to the main proposal put to them last year.

The band proposal was a good one, and it was made without the confusion between rises in money income and rises in real income which, to me, seem to cloud a little the clarity of the hon. Gentleman's speech. If a rise in Tory prosperity means a rise in money incomes, the question whether that is or is not inflation may depend on an increase of productivity which, so far, they have not achieved.

Mr. John McKay (Wallsend)

I am sorry to intervene at this point, because of the time, but I wish to make a few observations on the whole general question. [HON. MEMBERS: "Oh."] I know that some people do not like to listen at all unless they are speaking themselves, but this is an important subject and there are some aspects of it which should be emphasised.

At a time like this, 25 years after 1938, one expects that when wages are negotiated for any class of people, the cost of living should be taken into consideration. In 1938 and 1939, the tax arrangement meant that a married man earning £220 paid no tax. Surely, we should agree to give to all taxpayers a basic purchasing power equal to that of the 1938 income of £220. That is the chief reason why I want to speak against the changes, because they are not good enough.

I want to speak against the general idea that on this occasion the Tory Government have done a tremendous job. One must emphasise what a great boon

it would be if they would implement some of our Amendments. Whenever a Tory Government want to implement a worthwhile proposal for the section of the community that supports them, they do not worry about giving £83 million to the richest people, to the Surtax payers. The time has, however, arrived when we should provide for all taxpayers a basic purchasing power equal to the basis which was laid down in 1938 and 1939.

Question put, That the words proposed to be left out stand part of the Clause:—

The Committee divided: Ayes 186, Noes 110.

Division No. 114.] AYES [11.28 p.m.
Agnew, Sir Peter Green, Alan More, Jasper (Ludlow)
Allason, James Gresham Cooke, R. Morgan, William
Ashton, Sir Hubert Grosvenor, Lt.-Col. F. G. Morrison, John
Atkins, Humphrey Curden, Harold Heave, Airey
Awdry, Daniel (Chlppenham) Hall, John (Wycombe) Noble, At. Hon. Michael
Balniel, Lord Harris, Frederic (Croydon, N.W.) Page, Graham (Crosby)
Barber, Anthony Harris, Reader (Heston) Pannel, Norman (Kirkdale)
Barter, John Harrison, Col. Sir Harwood (Eye) Pearson, Frank (Clltheroe)
Bennett, Dr. Reginald (Goa & Fhm) Harvey, Sir Arthur Vere (Macclesf'd) Peel, John
Biffen, John Harvey, John (Walthamstow, E,) Pickthorn, Sir Kenneth
Bingham, R. M. Harvey Anderson, Miss Pitman, Sir James
Bishop, F. P. Hay, John Pitt, Dame Edith
Black, Sir Cyril Heald, Rt. Hon. Sir Lionel Prior, J. M. L.
Bourne-Arlon, A. Henderson, John (Cathcart) Proudfoot, Wilfred
Boyd-Carpenter, At. Hon. John Hendry, Forbes Pym, Francis
Boyle, At. Hon. Sir Edward Hill, Mrs. Eveline (Wythenshawe) Ramsden, James
Brewis, John Hill, J. E. B. (S. Norfolk) Rawlinson, Sir Peter
Brown, Alan (Tottenham) Hirst, Geoffrey Redmayne, At. Hon. Martin
Bullard, Denys Hocking, Philip N. Rees, Hugh
Campbell, Gordon (Moray & Nairn) Holland, Philip Rees-Davies, W. R.
Channon, H. P. G. Hollingworth, John Renton, At. Hon. David
Chataway, Christopher Hopkins, Alan Ridsdale, Julian
Chichester-Clark, R. Hornhy, R. P. Roberts, Sir Peter (Heeley)
Clark, William (Nottingham, S.) Howard, John (Southampton, Test) Robinson, Rt. Hn. Sir R. (B'pool,S.)
Clarke, Brig. Terence(Porternth, W.) Hughes-Young, Michael Rodgers, John (Sevenoaks)
Cleaver, Leonard Irvine, Bryant Godman (Rye) Roots, William
Cole, Norman James, David Ropner, Col. Sir Leonard
Cooke, Robert Johnson Smith, Geoffrey Royle, Anthony (Richmond, Surrey)
Cooper-Key, Sir Neill Jones, Arthur (Northants, S.) Russell, Ronald
Cordeaux, Lt.-Col. J. K. Jones, Rt. Hn. Aubrey (Hall Green) Seymour, Leslie
Costain, A. P. Kaberry, Sir Donald Sharpies, Richard Shaw, M.
Courtney, Cdr. Anthony Kerans, Cdr. J. S. Shepherd, William
Craddock, Sir Beresford (Speithorne) Kerr, Sir Hamilton
Crawley, Aidan Kershaw, Anthony Skeet, T. H. H.
Critchley, Julian Kimball, Marcus Smith, Dudley (Br'ntf'd & Chiswick)
Cunningham, Knox Kirk, Peter Smithers, Peter
Curran, Charles Kitson, Timothy Speir, Rupert
Currie, G. B. H. Leather, Sir Edwin Steward, Harold (Stockport, S.)
Dalkeith, Earl of Legge-Bourke, Sir Harry Stodart, J. A.
Dance, James Lewis, Kenneth (Rutland) Stoddart-Scott, Col. Sir Malcolm
Deedes, At. Hon. W. F. Litchfield, Capt. John Storey, Sir Samuel
Donaldson, Cmdr. C. E. M. Longbottom, Charles Studholme, Sir Henry
Doughty, Charles Longden, Gilbert Summers, Sir Spencer
Drayson, G. B. Loveys, Walter H. Tapaell, Peter
du Cann, Edward Lucas, Sir Jocelyn Taylor, Edwin (Bolton, E.)
Duncan, Sir James Lucas-Tooth, Sir Hugh Teeling, Sir William
Elliot, Capt. Walter (Carshalton) MacArthur, Ian Temple, John M.
Emery, Peter McLaren, Martin Thompson, Sir Richard (Croydon, S.)
Errington, Sir Eric Maclay, At. Hon. John Thornton-Kemsley, Sir Colin
Farr, John Msclean, SirFitzroy(Bute & N. Ayre) Tiley, Arthur (Bradford, W.)
Fletcher-Cooke, Charles Macleod, At. Hn. Iain (Enfield, W.) Touche, At. Hon. Sir Gordon
Fraser, tan (Plymouth, Sutton) Macmillan, Rt. Hn. Harold(Bromley) Turner, Colin
Freeth, Denzil MacPherson Rt. Hn. Niall(Dumfries) Vaughan-Morgan, Rt. Hon. Sir John
Gammans, Lady Maddan, Martin Vickers, Miss Joan
Gibson-Watt, David Markham, Major Sir Frank Wakefield, Sir Wavell
Gilmour, Ian (Norfolk, central) Maudling, At. Hon. Reginald Walder, David
Gilmour, Sir John (East Fife) Mawby, Ray Walker, Peter
Glyn, Sir Richard (Dorset, N.) Maxwell-Hyslop, R. J. Walker-Smith, At. Hon. Sir Derek
Goodhart, Philip Maydon, Lt.-Cmdr. S. L. C. Ward, Dame Irene
Gower, Raymond Miscampbell, Norman Wells, John (Maidstone)
Williams, Dudley (Exeter) Wolrige-Gordon, Patrick TELLERS FOR THE AYES:
Williams, Paul (Sunderland, S.) Woollam, John Mr. Graeme Finlay and
Wise, A. R. Woreley, Marcus Mr. Brian Batsford.
NOES
Abse, Leo Hannan, William Paget, R. T.
Ainsley, William Harper, Joseph Pargiter, G. A.
Allaun, Frank (Salford, E.) Hayman, F. H. Pentland, Norman
Awbery, Stan (Bristol, Central) Healey, Denis Price, J. T. (Westhoughton)
Baxter, William (Stirlingehire, W.) Herblson, Miss Margaret Probert, Arthur
Bennett, J. (Glasgow, Bridgeton) Hill, J. (Midlothian) Reynolds, G. W.
Blackburn, F. Hilton, A. Y. Roberts, Goronwy (Caernarvon)
Blyton, William Holman, Percy Robertson, John (Paisley)
Bowen, Roderic (Cardigan) Hooson, H. E. Robinson, Kenneth (St. Pancras, N.)
Braddock, Mrs. E. M. Houghton, Douglas Rodgers, W. T. (Stockton)
Bradley, Tom Howell, Charles A. (Perry Barr) Rogers, G. H. R. (Kensington, N.)
Brown, Rt. Hon. George (Belper) Hoy, James H. Ross, William
Carmichael, Nell Hughes, Cledwyn (Anglesey) Short, Edward
Castle, Mrs. Barabara Hunter, A. E. Slater, Mrs. Harriet (Stoke, N.)
Cliffe, Michael Hynd, John (Attercliffe) Slater, Joseph (Sedgefield)
Corbet, Mrs. Freda Irving, Sydney (Dartford) Small, William
Craddock, George (Bradford, S.) Jeger, George Spriggs, Leslie
Cronin, John Jenkins, Roy (Stechford) Swingler, Stephen
Cullen, Mrs. Alice Jones, Dan (Burnley) Taylor, Bernard (Mansfield)
Dalyell, Tam Jones, Elwyn (West Ham, S.) Thomas, Iorwerth (Rhondda, W.)
Davies, G. Elfed (Rhondda, E.) Jones, T. W. (Merioneth) Tomney, Frank
Davies, Harold (Leek) King, Dr. Horace Wainwright, Edwin
Davies, liar (Gower) Lawson, George Warbey, William
Davies, S. O. (Merthyr) Lewis, Arthur (West Ham, N.) Watkins, Tudor
Dempsey, James Loughlin, Charles Weitzman, David
Diamond, John McBride, N. Whitlock, William
Dodds, Norman McInnes, James Wilkins, W. A.
Donnelly, Desmond McKay, John (Wantland) Williams, D. J. (Heath)
Fernyhough, E. Mallaliou, E. L. (Bragg) Williams, LI. (Abertiliery)
Fitch, Alan Manuel, Archie Willis, E. G. (Edinburgh, E.)
Fletcher, Eric Mapp, Charles Winterbottom, R. E.
Foot, Dingle (Ipswich) Mason, Roy Woof, Robert
Fraser, Thomas (Hamilton) Millan, Bruce Wyatt, Woodrow
Galpern, Sir Myer Milne, Edward Yates, Victor (Ladywood)
George, Lady Megan Lloyd(Crmrthn) Mitchison, G. R.
Ginsburg, David Oliver, G. H. TELLERS FOR THE NOES:
Gourlay, Harry O'Malley, B. K. Mr. Redhead and Dr. Broughton.
Grey, Charles Oram, A. E.
Mr. Houghton

I beg to move, in page 11, line 1, to leave out "£325" and to insert "£350".

The Chairman (Sir W. AnstrutherGray)

I think that we may also discuss the three following Amendments, the first in the name of the hon. Member for Dorset, West (Mr. Wingfield Digby), in line 1, leave out "£325" and insert "£400"; the second in the name of the hon. Member for Sowerby (Mr. Houghton) in line 4, leave out "£520" and insert "£550"; and the third in the name of the hon. Member for Dorset, West, in line 4, leave out "£520" and insert "£650".

Mr. Houghton

That would be convenient, Sir William.

This group of Amendments deals with age exemptions. At present the limit of income for a single person over 65 and upon which total exemption can be claimed is £300 a year. The Chancellor proposes to raise that to £325. In the case of a married couple, one of whom is over 65, exemption can be claimed if their joint total income is at present not more than £480. The Chancellor proposes to raise that limit to £520. My first Amendment proposes to raise the Chancellor's figure of £325 to £350 and my second to raise the married man's limit from £520 to £550.

What the Chancellor proposes to do is welcome and fully justified as being in harmony with the other changes which he has made, but he has not gone quite far enough. I drew attention earlier to the fact that the tax relief which the Chancellor's new limits will give as compared with the normal tax payer will actually be less than at present, notwithstanding the lifting of the limit of income.

For example, I would say that a single person over 65 with an income of £300 a year is being relieved for the year 1962–63 of approximately £8 10s. tax. By that I mean that the under-65 taxpayer on £300 a year would be paying about £8 10s., but a person over 65 on the same income and granted total exemption would thereby be relieved of £8 10s. tax which he would have to pay but for the provision of age exemption. Under the Chancellor's proposals to raise the limit for a single person from £300 to £325, the amount of tax by which the old person will be relieved is less at £325 than it was at £300—I estimate by about £2 10s. a year.

Similar figures can be given for a married couple one of whom is over 65. At present, the person under 65 on £480 a year would be paying about £17 tax, but a person over 65 would be paying nothing and thereby be relieved of about £17 tax. For the forthcoming year on a limit of £520 the tax relief for a person of 65 and over would be about £12 10s., so that in both cases the actual tax relief given on the higher exemption limits is lower than the tax relief now given on the lower limits.

It can be argued that since the general level of taxation is being lowered, the person receiving the benefit of age exemption cannot expect to maintain the same relative tax relief as before, and that since everybody's tax is going down, the relative position of the person getting age exemption as compared with a person who is not will be modified as well. That argument might be sustainable if it were not for what the Chancellor has done with small income relief, for by increasing the small incomes relief limit from £400 to £450, a jump of £50 and not £25, the tax relief for 1963–64 will be greater than it was before, as one would expect it to be. This proposal is a matter of relativities and it is in that context that I put it to the Committee.

11.45 p.m.

It is difficult to decide which is the right point at which to stop age exemption. We know the problems which arise in cases of this kind, where a person is exempt up to a point, and then gets marginal relief up to a further point, and then comes into full taxation. We heard a lot about it several years ago, and two years ago the Chancellor quite obstinately refused to increase the age relief but did so the following year. As my hon. and learned Friend the Member for Kettering (Mr. Mitchison) has pointed out, the work of the Opposition in recent years has been one of tireless endeavour to convert the Government to clearer thinking on these matters, and I am happy to say that, though belatedly, our efforts have been rewarded.

No Finance Bill has ever contained so many things that so many people on this side of the Committee have been urging for so long. We are grateful for that. It is thought that keeps up our energies and enthusiasm throughout the night. We shall not relax our efforts to convert the Government. Not this year—and it will be too late next year—but perhaps in about 1975, they may come back again and take up the threads of age relief where we leave off.

I hope that the point that I have made appeals to the Chancellor. I am grateful to him for remaining to hear our debates. I am sure that the discussions in Committee on the Finance Bill must be wearisome in the extreme to the Chancellor, because he has been through all this before. He has chewed it over and discussed it with the Chief Secretary, the Financial Secretary and the Economic Secretary; he has had the permanent officials round him, who have been saying, "Do this, do that; do not do this; do not do that; if you do this something else will automatically happen". At the end he must be bewildered and tired of it all. But he has come here to listen to it all over again.

Who would be Chancellor—except my hon. Friend the Member for Cardiff. South-East (Mr. Callaghan)? [HON. MEMBERS: "Where is he?] He is on a visit to one of our friends and allies, establishing friendly relations with the Kennedy Administration, with which he will have close contacts in a few months from now. I am sure that hon. Members opposite will regard that as a very worthy expedition for my hon. Friend to make. After all, there have been enough discords between this Government and the Government of the United States, and it is up to somebody to go out and cement the bonds of friendship.

I have no desire to distract the Committee from the real point of the Amendments. I hope that we shall get a favourable reply from the Financial Secretary.

Mr. Wingfield Digby

On an earlier Amendment I dealt with some problems of the over-65s—the retired people—and I do not wish to weary the Committee with a repetition of those arguments. I want to express my gratitude to the Chancellor for the concession that he has made in respect of age exemption, which covers a rather wider range of people than the earlier Amendment, since it deals with income from all sources. But I hope that my right hon. Friend will continue to look at this matter in the future. He has given only £25 to a single person and £40 to a married person on this occasion. The cost is not inordinate—only £1 million this year and £2 million in a full year. That shows that this is not a very expensive way of helping a very deserving class of people. The hon. Member for Sowerby (Mr. Houghton) has dealt with this problem of exemptions. Of course it is not only those over 65 who are in this position, and it might not be just to have too big a differential. If my right hon. Friend cannot give more than £2 million on this occasion, I hope that he will boar this in mind on another occasion as a good way to help retired people of whom there are so many in my constituency.

Captain W. Elliot

I wish to support my hon. Friend the Member for Dorset, West (Mr. Wingfield Digby) who, for the second time tonight, has skilfully picked out these marginal cases for which help could be provided by the expenditure of a comparatively small sum of money. After the Budget speech of my right hon. Friend the Chancellor I received a number of letters drawing attention to a remark he made about £700 a year being a modest income. No doubt my right hon. Friend had in mind a married man still in work who had a family. But, like my hon. Friend the Member for Dorset, West, I have a constituency in which there are a large number of pensioners, and they have to live on £350 or £400 a year. They are over 65 and they are men and women who saved when saving was difficult. A concession such as is asked for would help them very much. It would also encourage others to save. I hope that we shall not get so engrossed with State pension schemes that we forget to encourage people to save for themselves.

Dame Irene Ward

I should like to support what has been said by my hon. Friend the Member for Dorset, West (Mr. Wingfield Digby). One is told by the powers that be of the difficulty in helping these people and that is only too true. But on occasions when something could be done for them there is always some reason advanced why the help given should be on a modest scale.

I think it worth while to put on record that it was my right hon. Friend the present Minister of Defence who, when he was Chancellor of the Exchequer, had the idea of trying to help these people. The idea was well received and everyone was delighted. But since then the problems of these people have been accentuated. There has been legislation relating to rents, rates have increased and there have been increases in the cost of fuel, so that their situation has become well-nigh intolerable.

It is no use saying that these people can obtain National Assistance. They have saved their money and it is better that people should be thrifty and be encouraged to save than that money should be given from the Treasury. The little that we can do to help them should be done more generously. Ministers take a great deal of pride in making reductions in the Purchase Tax on various commodities. But these people have not sufficient money to take advantage of such reductions.

Mr. Mitchison

I am glad to hear that the hon. Lady wants to do something for these people. Why not repeal the Rent Act?

Dame Irene Ward

We are at present discussing the Finance Bill. I have always pursued the line, and I think the hon. and learned Member for Kettering (Mr. Mitchison) will agree, of taking every opportunity I can to get on with the job to which I have set my mind. I point out, however, that whatever the disadvantages of the Rent Act, if the policies advocated by the parties opposite—both the Socialists and the Liberals—were put into operation, these people would not have any money at all. [HON. MEMBERS: "Where are the Liberals?"] Of course, they are never here. I always insist on making a speech on this subject and never miss an opportunity of speaking for these people. I hope that something a little more generous will be done for them.

Mr. Barber

I think that it would be helpful if I were first to say something about my right hon. Friend's proposal for age exemption and then to consider this Amendment.

As the hon. Member for Sowerby (Mr. Houghton) has reminded the Committee, under the existing law age exemption is granted to a single person of 65 or over if his income does not exceed £300 and to a married couple where either the husband or the wife is 65 or over and the joint income does not exceed £480. The proposal is to raise the exemption to £325 and £520 respectively, and the proposal of the hon. Member is to raise the amounts to £350 and £550 respectively, while the proposal of my hon. Friend the Member for Dorset, West (Mr. Wingfield Digby) is to raise them to £400 and £650 respectively.

The intention behind the age exemption is to give special relief from tax to elderly people living on quite small incomes which they are not able to augment in any way. For this reason, at the bottom end of the income scale it gives more favourable treatment than would be given by changing the rate of tax on the basis of the ordinary reliefs and allowances. It is, therefore, equivalent in effect to a special increase in personal allowances for elderly people with incomes in the range affected which exceed the amounts which would be covered by the ordinary amount of income relief or age relief and ordinary personal allowances; but, precisely because the intention is to help people with quite small incomes, the relief does not amount to giving, more favourable allowances all the way up the income scale.

The benefit from the proposed increases in the age exemption limits under the Clause as it stands will depend on the circumstances of the individual taxpayers concerned. The greatest benefits will go to those with incomes equal to the new income limits, so a single man with an income of £325 who found it advantageous to claim marginal relief for 1962–63 had a tax bill of £11 5s. With the same income he will now become exempt for this year. Similarly, a married man with an income of £520 will be exempt from tax, when previously he paid £18.

12 m.

These are quite significant reliefs to those older people who are living on small fixed incomes. Whether or not the extent of the relief is right must at the end of the day be a matter of judgment by hon. Members.

The hon. Member for Sowerby mentioned the age exemption in the speech which he made in the course of the Budget debate. He made much the same point on the Amendment this evening. I find it somewhat hard to accept the logic of his argument. I will quote one or two sentences from what he said during the debate on the Budget. This extract puts succinctly the point which he reiterated this evening: The Chancellor has raised the limits for age exemption, but has reduced the actual tax saving by one-quarter. A single person, under the new exemption limit of £325, will get actually £2 13s. a year less in tax relief than he got previously, when the limit was £300. A married man, rising now to £520 exemption, will get £4 7s. a year less in actual tax relief than he got on the previous limit of £480."—OFFICIAL REPORT, 9th April, 1960; Vol. 675, c. 1118.] A single person at the new exemption of £325, the figure mentioned by the hon. Gentleman, would become exempt from tax. Similarly, a married man at the figure of £520, the figure mentioned by the hon. Gentleman, would become exempt from tax. It is a little hard to see that the single person with the new exemption limit of £325 or the married man with the new exemption limit of £520 is doing too badly. After all, they are being exempted altogether from tax. One could hardly do more for them than that.

The hon. Gentleman's point as far as I can understand it, is that the income limits for age exemption should he raised so as to give the same tax benefit at the new limits, compared with tax on the normal basis, as was given at the 1962–63 income limits, compared with the "normal" tax for that year. I think I have understood the hon. Gentleman correctly. As the hon. Gentleman pointed out, although I do not think he accepted it when he pointed it out, when individuals' tax liabilities are being reduced all round, as they are on this occasion, it is not unreasonable to find that the relative advantage given by a special exemption is not fully maintained.

I know that the hon. Gentleman went on this evening to try to compare the age exemption and the small income relief. There really is not any valid comparison between the two, certainly not on the lines suggested by the hon. Gentleman. After all, the comparison must involve starting from a hypothetical situation in which there is neither age exemption nor small income relief and then seeing what difference the proposed arrangements for age exemption and small income relief make as compared with the difference flowing from the existing arrangements. This is, if not a far-fetched exercise, at any rate one of somewhat dubious validity. What we should do in these cases, and what people are really concerned with, is to look at an individual's tax position as a whole. My right hon. Friend's proposals for increasing age exemption are pretty reasonable and will, as I have shown, be of great help to elderly people living on small incomes.

I can well understand the purpose of my hon. Friends the Members for Dorset, West, Carshalton (Captain W. Elliot) and Tynemouth (Dame Irene Ward) in seeking to persuade my right hon. Friend to insert still higher figures in the Finance Bill. Perhaps my hon. Friends will not mind if I make this point. Under the proposals as they now stand, a young married couple will begin to pay tax when their income exceeds £440 a year. I wonder whether an exemption for an elderly married couple up to £650 as proposed by my hon. Friend—£210 more than for a young married couple—would not be somewhat out of line. The age exemption which my hon. Friend proposes is a good bit above the starting point for a younger married couple, even with a child. Their starting point is £588 a year. Whatever the merits of my hon. Friend's proposal in isolation, I am sure that he would be the first to agree that one must get a certain relationship between the various allowances.

Of course, I recognise that the proposals which my hon. Friend has put forward, and to a lesser extent those put forward by the hon. Member for Sowerby, would be a great boon to the elderly people, but perhaps I should remind the Committee that the whole idea of age exemption, as was mentioned by my hon. Friend the Member for Tyne-mouth, was introduced by a Conservative Government in 1957. The hon. Member for Sowerby was so concerned to improve Anglo-American relations that I am sure he inadvertently omitted to give the Con- servative Government the credit for introducing the allowance which he now seeks to improve. Not only was it introduced by a Conservative Government in 1957, but it was increased in 1958, and again it was increased only last year. Now there is this further increase this year proposed by my hon. Friend. I mention this history very shortly because it shows conclusively that we do not regard this relief as something which is static.

For the reasons which I have given, I hope the Committee, and my hon. Friend in particular, will not press these Amendments this year—a year in which, in any event, my right hon. Friend is proposing some increases.

Mr. Mitchison

May I ask the hon. Gentleman two questions? First, for what reason, other than midnight forgetfulness or political prejudice, does he think that the proposals of the Opposition in this case would be of less benefit to old folk than those of the Chancellor? Second, I see from the White Paper that the Chancellor's concessions will cost £1 million this year and £2 million in a full year. Could he tell us the corresponding figures for our proposals and for those of his hon. Friend?

Mr. Barber

I think the hon. and learned Gentleman misunderstood what I was saying. I certainly intended to say that the proposals of my hon. Friend the Member for Dorset, West would be of greater benefit than those of the Opposition, because he wished to a go a little further than the Amendment moved by the hon. Member for Sowerby.

The cost of the Amendments moved on behalf of the Opposition would be £1¼ million in 1963–64 and £2½ million in a full year. So far as my hon. Friend's Amendments are concerned, they would cost £7 million this year and £11 million in a full year. I did not refer to the cost, for the obvious reason that this was not one of the main arguments which I thought it right to put before the Committee for asking hon. Members not to press these Amendments this year.

Amendment negatived.

Clause ordered to stand part of the Bill.

Schedule 3 agreed to.