§ In section 214 of the Income Tax Act 1952 (which refers to a person taking charge of a widower's or widow's children or acting as his or her housekeeper) as amended, and in section 218 of the said Act (which refers to a person employed or maintained to take charge of children) as amended if the claimant is liable to pay employer's part of the National Insurance contribution in respect of the person for whose services he is claiming relief, for the references to £75 in each of the said sections, there shall be substituted references to £130.—[Miss Pike.]
§ Brought up, and read the First time.
§ The Temporary Chairman (Mr. John Brewis)
I think that it would be for the convenience of the Committee if we took with this Clause, new Clause 25 and new Clause 55.
§ Miss Pike
The Committee will be glad at this stage of the proceedings that I can be fairly brief, because I am assured, having listened to the Chief Secretary in the previous debate, that he will allow us to have this Clause at this time. He will recollect that not more than half an hour ago he stated categorically, that one of the main principles of taxation, and one which he was standing by very firmly at this time, was that those with the heaviest burdens should pay the least tax.
Therefore, I am assured that we need not go into any great depth of argument, because he himself will readily recognise the justice of the case that we are putting forward. Equally, I do not need at this stage to argue the principle, because the principle of this allowance has been readily conceded for a long time. All we are asking for in this new Clause is a very modest increase of £55 in the allowance, which has not been changed since 1960.
I am one of those people who believe that the allowance, anyway, has always been too meagre, and I speak with some experience. I am not a widow, and I do not have children of my own, but I am the daughter of a widow. My mother was widowed at the age at which 2340 I am now. She was widowed at the age of 47, when my brother and I were at the most expensive period of our lives, and our education and the whole of our future was in doubt. I know from personal experience the difficulties of a person who has not been in employment before, who has to go out and find employment to try to increase the prosperity of the family, to try to increase the income of the family, so as to give the family a decent start in life.
In those days, the Income Tax allowance was £50 a year, which was a very meagre allowance, but by present standards I expect that it was generous. Of course, there are several factors which add to the increased burden which the Chief Secretary has so readily conceded is one of his guiding principles. In the first place, where the father or the mother is alone in trying up bring up the family, there is often a certain amount of compensation, which I believe must be supplied if the children are to have the same opportunities and the same start in life. They are deprived of their mother or their father, and by the very nature of things it is, to some extent, only half a family.
I am most concerned with the mother in these instances, and another factor is that the mother has to go out to work, very often not having been out before, or not for some time. That is another strain on the family, and the mother feels the urge to give greater compensation and make certain that her children are not at a disadvantage compared with their friends when it comes to holidays and all the things which mean a lot in the lives of young children.
Then there is the great difficulty which arises from the fact that women cannot equal the previous living standards of their families by their own earnings. We still have not got equal pay and a situation where most women have the training, opportunities and qualifications to go out and earn equally in the labour market. Apart from anything else, they are at a disadvantage in terms of earnings and their families' incomes and living standards are reduced considerably.
Again, many of us depend on the services of a housekeeper, and, good though she may be, it is always more 2341 expensive to have someone else looking after one's household affairs. She is probably less frugal and careful. She requires better conditions than would a wife. I am thinking of the case of a widower left to bring up a family. Most housekeepers want their own rooms, television sets and, very often, much easier standards than a wife would require. It is always more expensive to run a house with a housekeeper or child minder, however good that person may be.
The case was argued convincingly in 1963 by right hon. and hon. Members opposite when they were in opposition. At that time, they argued for something broader than I am asking for tonight. They deployed their arguments very cogently. During the course of the debate, the right hon. Member for Sowerby (Mr. Houghton) said:… we are asking the Government … 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.The present Government are at the beginning of their term, and I would ask them to try to establish this reputation as well.
§ Mr. Diamond
It so happens that I have not that volume of the OFFICIAL REPORT before me. Could the right hon. Lady refresh my memory by telling me what happened at the end of the debate?
§ Miss Pike
I am sure that is within the recollection of the right hon. Gentleman. But things move forward, and there is no reason why the right hon. Gentleman should not remember the arguments that he advanced and tonight allow us to carry the new Clause.
If the right hon. Member for Sowerby does not carry all that much weight with his right hon. and hon. Friends, I feel sure that the right hon. Member for Blackburn (Mrs. Castle) has considerable influence inside the Cabinet. So perhaps I might make a short quotation from what she had to say at that time: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?I will refer later to the still more fantastic increase in the cost of living which we are experiencing at present.
2342 The right hon. Lady went on: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?"—[OFFICIAL REPORT, 15th May, 1963; Vol. 677, c. 1458–66.]For once, I am in complete agreement with the right hon. Lady, because we all know the justice of the case. It is not only that normal living costs have increased. The value of money has dropped dramatically in the last three years, since these arguments were first put forward. Under this Government the value of the £ has gone down by another 1s. 6d., thus adding another burden to those who are managing on a very meagre income, with a very narrow margin between what is an acceptable standard, and what is a tremendous hardship and difficulty.
The cost of living has also risen. Since 1964, the Retail Price Index has risen by 8. 9 points, and the cost of living by 8. 2 per cent. Not only has the general index risen, but one of the important components of this, the cost of food, has risen by 10 points or 9. 2 per cent.
Those who were awake this mornnig to hear the nine o'clock news, or were sufficiently alive to take in what was said, will remember that, according to the recent Ministry of Labour survey, not only is food costing more, but the average expenditure on food is 6s. a week more for the average family. Our standards as a whole are going up, and the survey goes on to say how expenditure on clothing, transport, and all the things that loom so large in the household budget are going up at the present time.
The cost of the stamp has increased for those who employ housekeepers or child minders. Since 1964 the cost of the stamp has gone up by 2s. 10d. a week for the employer's share of the cost of the stamp. It is no good the right, hon. Gentleman saying that the personal earnings allowance has gone up to compensate for these things. These people are being compared with people who would not necessarily, in similar circumstances, have to employ an expensive housekeeper.
They are having to employ people who are scarce to get in the labour market.
2343 Their wages are high because of the scarcity of supply, and all the time expenses are rising rapidly. Taxation, too, has increased, bringing an added burden to these people. These are the real reasons why we must at this time press the Government to concede this essential act of justice.
I am sure that I do not need to go on giving examples to the Committee. We all know from experience in our constituencies that we should be giving more help to this class of people. In a society where people have greater opportunities than ever before, these are the families who, on the whole, are tending to lag behind.
New Clause 55 goes further and asks that the housekeeper should not necessarily be resident. I do not wish to take anything from any of my hon. Friends' speeches, although I have been frustrated by not having the freedom of the back benches during these long debates. Having got to my feet now, I am inclined to deploy all the arguments that I have at my disposal, because this may be my last chance of taking part in these debates.
If the Government are not prepared to make this concession about the residential qualification, it makes my case even stronger. It is more difficult now than ever before to get residential help. It is more expensive than ever before to get the type of person who is willing to live in. It is more expensive than ever before to try to give them the sort of living conditions which they demand.
This same new Clause also requests that another category of deserving people should have this special attention, namely, elderly parents who are being looked after in the family. This is something that we have to look at very carefully. We are trying to keep families together. We are trying to make certain that these old people do not become a burden on the State, with all that this means in terms of weakening our economy, and, more important, all that it means in terms of the emotional life of the family itself.
If the Chief Secretary was sincere in what he said during previous debates about his priorities in taxation, and if he looks carefully at the increased burden 2344 which has fallen on these people, he will have no hesitation in accepting this very modest increase in their tax allowance.
§ 10.45 p.m.
§ Mr. Diamond
The hon. Lady the Member for Melton (Miss Pike), who speaks with knowledge and with such obvious sincerity in these matters, has made a powerful case for increasing the housekeeper allowance. The hon. Lady has pointed out, correctly, that it was fixed at its present figure in 1960 and she went on to demonstrate—I accept what she has said—that costs have risen since then and that it is now more expensive to employ a housekeeper in the circumstances in which the various Income Tax allowances are granted than it then was.
The hon. Lady has been good enough to quote what I said a little earlier about sharing the burden on the basis that the broader shoulders carry the larger burden, as is an essential element of justice. I pointed out, however, two things of which I may, perhaps, remind her. I am dealing with the matter shortly because I feel that those of us who have taken part in the debates in the last day or two, or whatever period it is—some of us are a little less clear about whether it is days, nights or whatever it is—would not wish to detain the servants of the House too late tonight having regard to the great ardours to which they have had to submit in recent times.
The first of the two points which I made on an earlier new Clause was one which I dealt with in all the pristine purity of my approach to tax principles, but it would be appropriate to remind the Committee of it. The essential point about the structure of taxation reliefs is not that the allowances represent the cost of maintaining the various employees, housekeepers or whatever may be the case, but that it is a system which provides a just sharing of the burden as between different persons according to the responsibilities which they have to carry. It is not, therefore, the case that the housekeeper allowance pretends to represent the cost of maintaining a housekeeper or the increased cost of maintaining a housekeeper.
If one were to grant an increase in the housekeeper allowance, it would immediately put out of the just distribution of the burden to which the hon. Lady has 2345 referred all those who have other responsibilities for which allowances are granted under the Income Tax Acts, but in which no one is appealing for an increase. For there to be justice, there would have to be an increase not only in the housekeeper allowance, but in a whole variety of allowances. I am sure that we would all accept that. We would all welcome it if it were possible. I regret to say, however, that it just is not possible. The cost involved is not merely the cost involved in this specific housekeeper allowance, but the cost of all the other allowances which one would have to increase to maintain a just sharing of the burden.
My right hon. Friend the Chancellor of the Exchequer has made it clear that this is a year when, as our recent debates on Selective Employment Tax have shown, additional revenue has to be collected. It is, unfortunately, not a year in which it is possible to give substantial increases in a variety of allowances, which would have to be the case if one were to accept this very substantial rateable increase in the housekeeper allowance and marry it with the other allowances that have to go with it.
Because of that, because of the essential need to keep the burden of taxation justly spread between all those who have dif-
§ ferent responsibilities, some of them in connection with housekeepers, which we recognise and with which we sympathise, and others with other kinds of responsibilities which are not covered by the Amendment, I am bound to tell the Committee that we could not, unfortunately, recommend that the Clause should be adopted.
§ Miss Pike
I will not burden the Committee with another speech about the justice of this case, but I would point out to the Chief Secretary that justice is not confined to uniformity. To give justice to one section of the population one does not have to raise the level all over the board. If one is concerned with justice one is more concerned with priorities than with uniformity. In this case, in this year of financial difficulty, rising costs and taxation, inflation, and difficulty throughout the economy, I would say that this is just the sort of family which will be at the greatest risk. If we cannot now give it extra help we are not meting out justice.
§ For those reasons, I hope that my hon. Friends will take the matter to a Division.
§ Question put, That the Clause be read a Second time:—
§ The Committee divided: Ayes 83, Noes 130.2347
|Division No. 86.]||AYES||[10.51 p.m.|
|Alison, Michael (Barkston Ash)||Gurden, Harold||Pardoe, John|
|Allason, James (Hemel Hempstead)||Hall, John (Wycombe)||Percival, Ian|
|Atkins, Humphrey (M't'n & M'd'n)||Hamilton, Michael (Salisbury)||Pike, Miss Mervyn|
|Batsford, Brian||Harris, Frederic (Croydon, N.W.)||Pink, R. Bonner|
|Bell, Ronald||Hawkins, Paul||Prior, J. M. L.|
|Black, Sir Cyril||Hogg, Rt. Hn. Quintin||Pym, Francis|
|Body, Richard||Hordern, Peter||Ridsdale, Julian|
|Boyd-Carpenter, Rt. Hn. John||Hornby, Richard||Rossi, Hugh (Hornsey)|
|Braine, Bernard||Hunt, John||Sharples, Richard|
|Brinton, Sir Tatton||Hutchison, Michael Clark||Shaw, Michael (Sc'b'gh & Whitby)|
|Brown, Sir Edward (Bath)||Irvine, Bryant Godman (Rye)||Smith, John|
|Buck, Antony (Colchester)||Johnson Smith, G. (E. Grinstead)||Stainton, Keith|
|Burden, F. A.||Johnston, Russell (Inverness)||Taylor, Sir Charles (Eastbourne)|
|Chichester-Clark, R.||Jones, Arthur (Northants, S.)||Taylor, Edward M. (G'gow,Cathcart)|
|Cooke, Robert||King, Evelyn (Dorset, S.)||Taylor, Frank (Moss Side)|
|Costain, A. P.||Kirk, Peter||Thatcher, Mrs. Margaret|
|Crawley, Aidan||Knight, Mrs. Jill||Thorpe, Jeremy|
|Crouch, David||Lewis, Kenneth (Rutland)||Vaughan-Morgan, Rt. Hn. Sir John|
|Dance, James||Lubbock, Erie||Vickers, Dame Joan|
|Dean, Paul (Somerset, N.)||Mackenzie, Alasdair (Ross&Crom'ty)||Walker-Smith, Rt. Hn. Sir Derek|
|Deedes, Rt. Hn. W. F. (Ashford)||Macleod, Rt. Hn. Iain||Webster, David|
|Elliott, R.W. (N'c'tle-upon-Tyne, N.)||Maxwell-Hyslop, R. J.||Wells, John (Maidstone)|
|Eyre, Reginald||Maydon, Lt.-Cmdr. S. L. C.||Whitelaw, William|
|Fisher, Nigel||Monro, Hector||Wills, Sir Gerald (Bridgwater)|
|Fletcher-Cooke, Charles||More, Jasper||Wilson, Geoffrey (Truro)|
|Glover, Sir Douglas||Morgan, W. G. (Denbigh)|
|Goodhew, Victor||Mott-Radclyffe, Sir Charles||TELLERS FOR THE AYES:|
|Gresham Cooke, R.||Neave, Airey||Mr. Anthony Grant and|
|Griffiths, Eldon (Bury St. Edmunds)||Nott, John||Mr. Peter Blaker.|
|Anderson, Donald||Bacon, Rt. Hn. Alice||Bishop, E. S.|
|Archer, Peter||Barnes, Michael||Booth, Albert|
|Atkins, Ronald (Preston, N.)||Binns, John||Boston, Terence|
|Bray, Or. Jeremy||Howie, W.||Ogden, Eric|
|Brown, R. W. (Shoreditch & F'bury)||Hughes, Rt. Hn. Cledwyn (Anglesey)||Oram, Albert E.|
|Callaghan, Rt. Hn. James||Hughes, Hector (Aberdeen, N.)||Orbach, Maurice|
|Cant, R. B.||Hughes, Roy (Newport)||Orme, Stanley|
|Chapman, Donald||Hunter, Adam||Oswald, Thomas|
|Concannon, J. D.||Hynd, John||Palmer, Arthur|
|Cronin, John||Irvine, A. J. (Edge Hill)||Park, Trevor|
|Crosland, Rt. Hn. Anthony||Jeger, George (Goole)||Parker, John (Dagenham)|
|Crossman, Rt. Hn. Richard||Jeger, Mrs. Lena (H'b'n&St.P'cras,S.)||Parkyn, Brian (Bedford)|
|Davidson, Arthur (Accrington)||Jenkins, Hugh (Putney)||Pearson, Arthur (Pontypridd)|
|Davies, Dr. Ernest (Stretford)||Johnson, Carol (Lewlsham, S.)||Perry, Ernest G. (Battersea, S.)|
|Davies, Harold (Leek)||Judd, Frank||Price, William (Rugby)|
|Davies, Robert (Cambridge)||Kerr, Mrs. Anne (R'ter & Chatham)||Redhead, Edward|
|Dewar, Donald||Kerr, Dr. David (W'worth, Central)||Roberts, Gwilym (Bedfordshire, S.)|
|Diamond, Rt. Hn. John||Kerr, Russell (Feltham)||Robinson, W. O. J. (Walth'stow, E.)|
|Driberg, Tom||Lestor, Miss Joan||Rodgers, William (Stockton)|
|Dunnett, Jack||Lewis, Arthur (W. Ham. N.)||Roebuck, Roy|
|Dunwoody, Mrs. Gwyneth (Exeter)||McBride, Neil||Rogers, George|
|Edwards, Robert (Bilston)||McCann, John||Ross, Rt. Hn. William|
|Ellis, John||MacColl, James||Ryan, John|
|Ennals, David||MacDermot, Niall||Sheldon, Robert|
|Ensor, David||Macdonald, A. H.||Short, Rt.Hn.Edward (N'c'tle-u-Tyne)|
|Fitch, Alan (Wigan)||McGuire, Michael||Short, Mrs. Renée (W'hampton.N.E.)|
|Fletcher, Raymond (Ilkeston)||McKay, Mrs. Margaret||Silkin, S. C. (Dulwich)|
|Fletcher, Ted (Darlington)||Mackenzie, Gregor (Rutherglen)||Silverman, Julius (Aston)|
|Floud, Bernard||Maclennan, Robert||Tinn, James|
|Foley, Maurice||MacPherson, Malcolm||Tomney, Frank|
|Fraser, John (Norwood)||Mahon, Peter (Preston, S.)||Walden, Brian (All Saints)|
|Gardner, A. J.||Mahon, Simon (Bootle)||Wallace, George|
|Gray, Dr. Hugh (Yarmouth)||Marquand, David||Wellbeloved, James|
|Grey, Charles (Durham)||Mellish, Robert||Whltaker, Ben|
|Griffiths, Rt. Hn. James (Llanelly)||Mikardo, Ian||willey, Rt. Hn. Frederick|
|Hamling, William||Millan, Bruce||Williams, Alan Lee (Hornchurch)|
|Hannan, William||Miller, Dr. M. S.||Williams, Mrs. Shirley (Hitchin)|
|Hazell, Bert||Mitchell, R. C. (S'th'pton, Test)||Willis, George (Edinburgh, E.)|
|Heffer, Eric S.||Molloy, William||Winnick, David|
|Henig, Stanley||Morris, Charles R. (Openshaw)||Zilliacus, K.|
|Herbison, Rt. Hn. Margaret||Morris, John (Aberavon)|
|Hilton, W. S.||Murray, Albert||TELLERS FOR THE NOES:|
|Hooley, Frank||Neal, Harold||Mr. Neil McBride and|
|Horner, John||Noel-Baker, Francis (Swindon)||Mr. R. W. Brown.|
|Howarth, Robert (Bolton, E.)||Norwood, Christopher|
§ The Chancellor of the Exchequer (Mr. James Callaghan)
I beg to move,
That the Chairman do report Progress and ask leave to sit again.
I am sure that it will be agreed on all sides of the Committee that we have made reasonable progress today and that we should now adjourn.
§ Question put and agreed to.
§ Committee report Progress; to sit again Tomorrow.