§ 20. Mr. McNamaraasked the Chancellor of the Exchequer what representations he has received for the abolition of child allowances permitted for Income and Surtax purposes and their replacement by more adequate family allowance benefits; and what reply he has sent.
§ 64. Mr. Croninasked the Chancellor of the Exchequer what is his policy with regard to abolishing child allowances for tax purposes and increasing family allowances.
§ Mr. CallaghanI have not received direct representations on this matter, and I cannot add to what has been said on this subject by my right hon. Friend the Minister of Social Security.
§ Mr. McNamaraCan my right hon. Friend then say what consideration he is giving to this problem in his Department?
§ Mr. CallaghanAs I think has been stated, an examination of this problem is going on in the Government at the moment.
§ Mr. William HamiltonCan my right hon. Friend give an assurance that the Inland Revenue itself is not creating obstacles and objections to being used 198 for social purposes, as suggested in the Question?
§ Mr. CallaghanI am responsible for the Inland Revenue and would therefore take full responsibility for any of its actions. It would, of course, be appropriate for it to advise me on the effects of changes of this sort on the taxable capacity of individual taxpayers.
§ Mrs. ThatcherIn the consideration of this matter which is going on, will the right hon. Gentleman take into account the fact that child allowances exist to ensure that the Revenue takes less from the man with family commitments than from the man with identical income and that any change in that situation would be bound to redound very badly on the family man?
§ Mr. CallaghanThe first part of the proposition is clearly true. As to the second, I suppose that it would depend on what compensation was given in the shape of family allowances
§ 21. Mr. McNamaraasked the Chancellor of the Exchequer if he will make an estimate of the cost to the Exchequer of the abolition of Income and Surtax allowances for children, together with other welfare benefits such as school meals, and their replacement by a standard family allowance of 25s. for the first child and £1 each for other children in the family.
§ Mr. CallaghanAssuming that parents bore the full cost of school meals and milk, this proposal would yield a substantial net saving to the Exchequer.
§ Mr. McNamaraIn view of that fact, would my right hon. Friend consider introducing such a scheme in his next Budget?
§ Mr. CallaghanI think that my hon. Friend will expect only the traditional reply to that over-optimistic questiton.
§ Mr. Iain MacleodBut could the right hon. Gentleman tell us—this is such an important matter, as regards both this Question and the last—whether his Answers mean that what is being studied is part of the Government's long-term plans, or is it linked in any way to what was said about lower-paid workers in the recent White Paper?
§ Mr. CallaghanNo, Sir. It is related to long-term plans. It will obviously have an impact on any statements in the White Paper, but it does not spring directly from that.