§ Exemption shall be granted from income tax chargeable by virtue of section 156 of the Income Tax Act, 1952, in respect of any allowances awarded, or other payments made, by the Royal National Life-boat Institution to duly appointed coxwains and crew members of the lifeboats of the Institution solely in recognition of time spent at sea in the lifeboats with the express intention of saving human life at sea. —[Mr. Nott.]
§ Brought up, and read the First time.
§ Mr. Deputy Speaker (Mr. Sydney Irving)
I suggest that it would be convenient for the House to consider at the same time new Clause No. 9—"Exemption from income tax of allowance paid to members of lifeboat crews for time spent saving life at sea".
§ Mr. Nott
This proposal seeks to exempt from Income Tax the allowances paid to voluntary lifeboat crews for time spent at sea in rescue operations around the coasts of this country. We now have about 150 lifeboat stations and these are 290 manned almost exclusively by men who voluntarily and frequently put out to sea to rescue lives, and risk their own in the process. Last year more than 800 lives were saved by the lifeboats and inshore rescue boats of the Royal National Life-Boat Institution. These boats were called out about 2,000 times to undertake their task.
The valour of the lifeboat crews and the hazards under which they work are well known to hon. Members and I need not elaborate on them. Since, however, it is the object of these proposals to gain exemption from tax for the allowances paid to voluntary crews, I must show good reason why this group of people should be excluded out of the countless others who devote their time and energies to public service as well. I hope to do this by pointing out not merely the acknowledged valour of the lifeboat crews but by calling attention to taxation precedent and equity.
The present financial position of the Royal National Life-Boat Institution, a wholly self-supporting charity, is that last year, in 1966, its income was £1.33 million while its expenditure was £1.45 million. The deficit of about £124,000 in its accounts was met wholly out of its 291 reserves. From these resources, the Institution provides a small retainer to coxswain, second coxswain and bowman, but these retainers do not exceed £100. The voluntary crews which put out to sea to man these lifeboats when rescue operations take place receive no retainers whatever.
The Institution also pays to full-time mechanics and a few full-time crews—I believe that there are only two or three in the whole country—a standard wage, but I emphasise that the new Clause does not seek exemption for the allowances and retainers which are paid to full-time lifeboat crews. Nor does it seek exemption from Income Tax for those retainers paid to coxswain, second coxswain and bowman.
In addition, the Institution pays allowances to voluntary crew members for rescue work at sea. These allowances amount to 30s. for the first two hours at sea and 7s. 6d. for every hour thereafter. This makes an average of about £2 to £3 for the voluntary crew member for each trip. Quite apart from the constant risk of life which these voluntary crew members accept, one has to bear in mind the sacrifice of earnings from their normal occupation. An inshore fisherman, a shell fisherman—bearing in mind that most of the calls on a lifeboat occur in the summer months—might well lose in one day's call up to £20 or £30 of earnings. The lifeboat is normally called out to a greater extent in the summer months, and it is in those months that the fishermen who largely man the lifeboats have to earn their income to tide them over the barren winter months.
In 1966 the total of these allowances paid to voluntary members of the Royal National Life-boat Institution were about £50,000. Taking the effective rate of tax of each of the crew as about 4s. in the £, the Treasury would lose about £10,000 by granting this concession, and this £10,000 can be compared with more than £1 million which the Government probably save by virtue of the fact that our rescue services around the coast are wholly carried out by the R.N.L.I. But for the fact the R.N.L.I. is entirely self-supporting from voluntary subscriptions, the Government would have to provide the type of rescue services 292 around the coast which they provide on the road, in the air and on the railways. We are talking about only an amount of probably £10,000, based on an effective rate of tax of 4s., on a total payment of £50,000.
Even if the Government concede that in equity this £2 or £3 which the men receive for risking their lives at sea in order to save others is a very small amount, they may say that it is not reasonable to make these allowances free of tax. I will explain later why I feel that they should be free of tax from the tax point of view. The Government may say that they cannot do this because it would create a precedent and there would be a flood of applications from others involved in the public service who would also ask that their allowances be free of tax when received. If the argument is that this concession cannot be granted because it would create a precedent, I suggest that there already are plenty of precedents. Under Schedule E, where no office or employment can be shown, the Revenue makes no attempt to tax this type of allowance on the principle that these are financial loss allowances.
If we look at the allowances which jurors receive for attending a jury, or local authority councillors receive for attending council meetings, or members of hospital boards receive, surprisingly, we find that all these come under Schedule E, but they are not taxable in the hands of the recipient because the Revenue deems them to be financial loss allowances. I suggest that a voluntary lifeboat crew member who has another occupation but who is spending his time rescuing lives at sea could be deemed to be in a very similar position to a member of a hospital board who, under Schedule E, is not required to pay tax on the amount which he obtains. It is not possible to show that any office or employment exists in the case of a voluntary lifeboat crew member.
I feel that the allowances might come under Case VI of Schedule D, if they are not assessed under Schedule E. The R.N.L.I. does not engage any crew members and there is no contractual relationship between the R.N.L.I. and individual crew. The coxswain is chosen by the local honorary secretary, who asks him whether he will abide by certain regulation. He is certainly not an employee 293 under any normal criteria. Even less are the crew members obliged to turn up for rescue work, because they are entirely free to come and go as they please. The R.N.L.I. has no power to give them orders, and they may turn up for a particular rescue operation or not, entirely as they wish. I suggest that there is no employer-employee relationship at all between the R.N.L.I. and voluntary crew members of the lifeboat. Surely, therefore, for the purposes of Schedule E one must say that there is no office or employment and that the allowances should be treated on a comparable basis with those of people engaged in public service who receive a financial loss allowance. If they do not receive a financial loss allowance under Schedule E, then I suggest that they should be taxed under Case VI of Schedule D.
In my view these allowances have been taxed under Schedule E for many years in the mistaken belief that voluntary lifeboat crew are employees. Until 1949 no attempt was made to assess these allowances for tax, and it was only under stricter arrangements entered into in that year to tax part-timers that the R.N.L.I. were required to make a return of these payments. The Treasury allow the R.N.L.I. to disregard in their return to the Revenue any payments to individuals not exceeding £50. The Revenue are already granting a concession to the R.N.L.I. in that they need not declare on their return any sum less than £50 paid to individuals. I suggest that the Revenue are not entitled to give this concession to the R.N.L.I. if it is under Schedule D, because then the R.N.L.I. cannot be required to make a return of the payment to lifeboat crew at all.
As I have said, these are derisory amounts. The average voluntary member of a crew might get £2 or £3 for a rescue operation in which he risks his life, whereas his normal earnings in a good day's fishing might be £20 to £30. Since it is only £2 or £3, I think that these sums might even be regarded as the expenses which the men incur going to and from the lifeboat station and warming themselves with rum on their return from the trip. That is not asking too much if the man is assessed under Schedule D. If he is assessed under Schedule E, then he is in a comparable position with the 294 juryman, local councillor or member of a hospital board who does not pay tax on his allowance, because, I am told, it is regarded as a financial loss allowance.
We know in the House that the Treasury can set its mind against any concession which the whole world considers to be fair and just. It is, however, up to Treasury Ministers—and I know that the Financial Secretary always bears this in mind—to act sometimes against the negative attitude of their Department and to mete out justice in a case of this nature.
I do not pretend that these voluntary lifeboat crew perform any greater service to the community than others who administer to its needs but it can be shown that the environment in which they work and the occasions on which they put to sea frequently involve dangers which are unsurpassed in other fields. Ultimately the Government bear responsibility for the safety of our shores. They can meet this responsibility by removing a genuine grievance felt by many voluntary lifeboat men around the coasts of this country. This can be done by bringing these payments as financial loss allowances under Schedule E, or allowing them as expenses under Case VI of Schedule D. I hope that the Government will not reject the Clause, because it is a matter about which the voluntary lifeboat crew feel most deeply. I trust that the Financial Secretary will give me a positive reply.
§ Mr. James Johnson
I will be brief in supporting this new Clause, but I would feel ashamed if no one supported it from this side of the House. The hon. Gentleman the Member for St. Ives (Mr. Nott), has made a most competent speech. He has obviously done his homework, and if ever there was a deserving cause this is one. This is not a political matter. In February, 1950, in another place, when we were lodgers over the way, Sir Stafford Cripps changed the system when he confirmed that regular fees and awards paid to voluntary lifeboatmen would be taxable save for… a special award for a particular act of gallantry.What could be more gallant than the hazardous work of lifeboatmen?
295 I was born on the Northumberland coast and saw lifeboats going out, particularly in winter. I accept the point made earlier that if they go out in the summer this can mean a considerable loss to the crew who are earning perhaps £20 or £30 a day as fishermen. The sum that they are paid as lifeboatmen is no compensation. I speak with the support of the R.N.L.I., which sponsors this new Clause, and I hope that the Financial Secretary will not be a stony-hearted as a former right hon. Friend was and will look at this upon its merits.
I also represent the seaport of Hull. We have a deep-sea fishing fleet, and I know that many of our men feel strongly about this situation. It is a big grievance among inshore fishermen who are the lifeboatmen of the Yorkshire coast. They receive very small awards, which are no compensation for their loss of earnings. The R.N.L.I. cannot afford to increase its payments and the fact that these meagre amounts do not rank for Income Tax relief causes much hard feeling.
The hon. Gentleman made one of two technical points about Schedule E and Schedule D, which I did not always follow. As a layman the point that I particularly want to make is that these men are not employees. One can argue one case on Schedule E and another on Schedule D, but the point that struck me was that under Schedule E all manner of people, members of hospital boards for example, can claim Income Tax relief. It seems that a well-financed gentleman may leave Hull for a hospital board meeting in Leeds and claim these special allowances and facilities, whereas the fisherman who is out beyond Spurn Point, in the teeth of a North Sea gale, in filthy weather, does not get the same treatment. There is no equity here. This is one of the most deserving cases that I have ever come across.
Surely 30s. is a legitimate expense to cover, amongst other things, some hard liquor to keep warm when these men return from a rescue. These men volunteer for the task and look upon it as much more than a job. It is scandalous that jurors and local councillors, as I understand it, qualify for tax allowances under Schedule E whereas these fishermen, saving lives at sea, do not. Bearing 296 in mind the hazardous work that these men perform and the action of a former Chancellor nearly 20 years ago, with which I did not agree, and which probably made all of us feel unhappy, perhaps tonight we shall see a slight change in the law passed in 1950.
§ 5.15 p.m.
§ Mr. W. H. K. Baker (Banff)
I wish to support very briefly what has been said, both from this side of the House by my hon. Friend the Member for St. Ives (Mr. Nott) in moving the new Clause, and by the hon. Member for Kingston upon Hull, West (Mr. James Johnson). I would stress three points. The first is the hazardous nature of the work of these men. It is true to say that in my part of the world we have two lifeboats constantly at the ready, and when they go out in bad weather the hazardous nature of their ask, in the North Sea and the Moray Firth, has to be seen to be believed. I have seen it. I have been to sea in a half-gale in the Moray Firth, and I know what the conditions are.
It is obviously a disincentive to tax these rates. They cannot in any way be called payments for work carried out, and I sincerely hope that the Government will take note of this point. It is important to realise the voluntary nature of this work. These men have no direct contractual relationship with the R.N.L.I. There is no question but that if the lifeboat is called out they turn up. Very few lifeboats put out to sea with an incomplete crew, and we do not want, by way of disincentives such as we have at present, to prevent this happening.
A great proportion of the population in my constituency is directly or indirectly occupied in the inshore fishing fleet. This is a hazardous occupation and many of the wives of these fishermen have told me that they gain a certain amount of comfort from two things. The first is that they can listen by radio to what is happening at sea, between the various vessels, when they talk to each other, and the other very important point is that they have at the back of their minds that if any disaster overtakes their boats the lifeboat is available.
This stability and feeling of security is amply proved by the tremendous efforts made locally in raising funds for the R.N.L.I. They run whist drives, organise 297 flag days, and even have a stand in the local agricultural show. It is in the prime interest of the local communities such as those I have mentioned that we remove this restriction. I trust that the Government will accept this new Clause.
§ Mr. John M. Temple (City of Chester)
I congratulate my hon. Friend the Member for St. Ives (Mr. Nott) on the way in which he moved the new Clause and on its underlying motives. For many years I was co-governor of the Fisheries Organisation Society with my hon. Friend's predecessor in the House. I know that his predecessor would have been proud of the task which he has performed in trying to get a certain amount of recognition in tax terms for those inshore fishermen who, in fair weather and foul, make rescues round our coasts.
Only a few weeks ago I had the privilege of attending the Annual General Meeting of the Royal National Life-boat Institution. On that occasion the award of a gold medal was made to Commander Harvey, my constituent. That medal was awarded for rescue work at sea—in fact, on the North Wales coast—when he had had charge of a lifeboat which was responsible for rescuing a considerable number of seamen from a Greek ship which had foundered.
My hon. Friend the Member for St. Ives has put forward a magnificent case on technical and other grounds. I wish to make only two practical points. The first concerns the Royal National Lifeboat Institution. It is almost unique as a voluntary institution. I do not think that there is an institution comparable with it anywhere else in the world. We should be grateful to those volunteers who help round the coasts with the work of that institution, which is supported entirely by voluntary subscriptions.
I have had the good fortune of visiting many parts of our coastline, both as governor of the Fisheries Organisation Society and as president of the National Council of Salmon Netsmen of England and Wales. Ninety per cent. of the crews of our lifeboats are manned by inshore fishermen. When they are at sea, inshore fishermen are normally capable of looking after themselves. The rescue work which they perform is usually 298 done for people other than their own kith and kin.
I mentioned that Commander Harvey was in charge of a lifeboat which rescued Greek seamen. A few moments ago the hon. Member for Kingston upon Hull, West (Mr. James Johnson) said that he was interested in distant and middle water fishermen. But distant and middle water fishermen, whom we respect enormously, do not crew the lifeboats because necessarily their tasks lie far from our coasts. Therefore, the lifeboat crews are drawn mainly from the inshore fishermen.
These men perform a dangerous job. If I had gone out of the Chamber an hour ago, I might have picked up the evening newspaper which might have referred to a "storm in the Commons." A storm in the Commons is news, a storm at sea is not. But a storm at sea is a very serious matter, and it is on those occasions that these men are called out. They are paid very small sums for their rescue work at sea. All that we ask for in the new Clause is that they should have tax remission on those sums.
Since a new Clause of this nature was moved some years ago, there has been a significant change of circumstances. It will be common knowledge to anyone who read the newspapers over the weekend that an enormous number of yachts go out along our coast which are in the hands of very inexperienced yachtsmen. When they get into difficulties, the first people probably who are called out are the lifeboat men and those who man the rescue boats. Helicopters may take part as well.
We are concerned in the new Clause with the work of the lifeboat and rescue boat crews. They may go out to sea at any moment. Whatever the state of the tide, these men have to man the lifeboats. I mention the state of the tide, because the men I represent—the inshore fishermen—often have to spend many hours at sea in a lifeboat. They will probably be the most important members of their respective crews just because they are experienced. They may well miss the tide and, therefore, lose the opportunity of fishing for a day or two or three because they should catch a tide in order to be in a certain position off the coasts to do their fishing.
This is a matter which ought to be recognised by the Treasury Bench. It is 299 not a case of earning overtime just when it may suit the employer or employee. It is a question of performing a vital service for a very small reward, indeed. Frankly, I was surprised when my hon. Friend the Member for St. Ives told us about the scale of the rewards. This is a voluntary service which these men are proud to perform. We are proud of them. The Treasury Bench should take a very sympathetic view of the new Clause. We owe these men a tremendous debt. When I go round our coasts and see them, knowing what they have to face when a storm blows up, it seems to me that we ought to do everything in our power to assist them. I am glad that this is a cross-bench appeal to the Financial Secretary and hope it succeeds.
§ Mr. Raymond Gower (Barry)
I, too, congratulate my hon. Friend the Member for St. Ives (Mr. Nott) on the new Clause. I hope that it will not be necessary for him to divide the House. The hon. Member for Kingston upon Hull, West (Mr. James Johnson), who supported the Clause, made a most helpful and pertinent speech. Last year, the lifeboats were called out on about 1,000 occasions, as a result of which 489 lives were saved. How can we value this service when it is stated in terms like that? The inshore rescue boats were called out about 700 times last year, as a result of which at least 328 lives were saved.
It is true that in these days of advanced technology and scientific devices many things have improved, but even today, for those of us who live along the coastline of this country, there is a reality about the wordsfor those in peril on the sea".It can be really frightening to hear the power of nature. We are getting this hazardous service far too cheaply. We are not recognising its enormous value. These men are volunteers. If we go on treating them in this quite unworthy way, will we have them much longer? Perhaps we shall, because they are such splendid men. But I do not think that Parliament should cause them to be treated in such an unworthy manner.
It is significant that prior to 1949, I understand, most of these allowances were not taxed. It was as a result of a most regrettable change in that year, which 300 was before I had the honour to sit in the House, that they were taxed. I hope that the Financial Secretary will have the honour of reversing that unfortunate decision. It will be a well-deserved honour for which we will praise him. I hope that he will rise to this great occasion and do justice to the men who servethose in peril on the sea".
§ Mr. MacDermot
The hon. Member for Barry (Mr. Gower) referred to something which happened in 1949. I am not instructed and cannot assist the House about that. However, I believe that during the course of the Finance Bill in 1950 some Amendments or new Clauses were tabled proposing something similar to what is proposed in this new Clause. Both in Committee and on Report, a proposal was put down that the retaining fees paid to lifeboat men and retained voluntary firemen should be exempt from tax. I not know whether it was discussed, but that was the last time that an Amendment of this kind was put down.
Let us get clear what we are discussing. As the hon. Member for St. Ives (Mr. Nott) made clear, there are, I understand, certain full-time and fully-paid employees of the Royal National Life-boat Institution. The new Clause is not directed at them. The mechanic, for example, of a lifeboat is normally a full-time employee and paid a full wage. The coxswain is rarely full-time and the remainder are part-time volunteers. They receive, first, a retaining fee, which ranges from something like £100 a year for the coxswain to £15 a year for the bowman, and the ordinary crew receive no retainer. I do not think that the new Clause is intended to apply to them, although as it is worded it might do so.
Secondly, a fee of 25s. is paid for each exercise trip. That, clearly, is intended to be covered by the new Clause. Thirdly, there is an award for a summons when the men are called out—
§ Mr. Nott
The wording of new Clauses 2 and 9 is similar. In practice, although I think that there is a strong case for 301 the fees paid for exercise to be covered, I did fix include them because I used the term:saving human life at sea".I was referring solely to the allowance of 30s. for the first two hours and 7s. 6d. for each hour thereafter. I was not including payment for exercises, but I agree that there is a good case for doing so.
§ Mr. MacDermot
I thought that it was intended to cover that item, and I still think that it is covered by the wordsin recognition of time spent at sea in the lifeboats with the express intention of saving human life at sea.That is the intention of the exercises.
The third form of payment is an award for a summons which amounts to 30s. for the first two hours and 7s. 6d. for each succeeding hour. I understand from the hon. Member for St. Ives that that is intended to be covered.
Fourthly, there are special awards, to which scme hon. Members have referred, not exceeding £5 which may be granted for special acts of gallantry. They are normally paid, not by the institution, but by the Ministry of Transport or the owners of the ship concerned. What we are concerned with, therefore, are the awards for a summons.
I have listened with sympathy to the speeches which we have heard from hon. Members, on both sides—there is no party aspect to the matter—who have spoken with the emotion which we all feel when we think of the work of the lifeboat crews. This is not, of course, the only work for which we get pleas for tax concessions for particular forms of income, nor is it the only income which is related to dangerous work.
The answer to all these arguments, however, always has been, and remains, that Income Tax is a tax on income and that in taxing it we do not distinguish between the nature of the occupations which people are carrying on when they earn the income or the dangerous or disagreeable nature of the work which is involved.
Let me give examples. There are many other occupations, like those of Service men, coal miners, people engaged in deep sea fishing and test pilots, in which people are paid a bonus for particular work which they do—it may be work for 302 which they volunteer—for which danger money or dirty money is paid. Those additional payments are, of course, all taxable.
If we were to grant an exemption in this case on the ground of the hazardous nature of the work, we would surely have to extend it to danger money and payments which are made by way of danger money unless one singles out this occupation and says that there is something particular about the nature of the work which requires to be given different treatment.
All the arguments which we have heard this afternoon would apply to part-time firemen, who, indeed, were included in the Amendments that were put down in 1950. It would be very difficult to say that people who do part-time work on a voluntary basis to save life at sea should be entitled to remuneration for it which is tax free but that firemen, who equally imperil their lives to save people in burning houses, should not. It seems to me that the same considerations apply.
§ Mr. James Johnson
Is my right hon. and learned Friend comparing miners who in a pit accident get men out from the coal face? Is he saying that the money which they get for that job is comparable with that which is paid for those who go out to sea to rescue others? If that is what my hon. and learned Friend is saying, I would like him to consider also my analogy or comparison with men or women who in local government tasks would get allowances as opposed to fishermen who go out to sea to save lives.
§ Mr. MacDermot
I am not aware whether any such payments are made to miners in the circumstances of accident to which my hon. Friend has referred.
§ Mr. Johnson
In that case, it is not correct for my hon. and learned Friend to start speaking about dirt money or danger money, in this way. It is not a proper analogy.
§ Mr. MacDermot
There are plenty of occupations in which people are paid danger money, and they are taxed on money which they receive as danger money. If the argument is that owing to the hazardous nature of the work exemption should be given, we had better not embark on it lightly without considering whether we would propose 303 to extend the extension to all moneys which are paid as danger money. One can imagine the development which would result from that if substantial parts of remuneration in certain occupations were classed as danger money to get the benefit of the exemption. These are the sort of difficulties which, from the viewpoint of tax principle, one encounters in starting to make an exemption on that basis.
§ Mr. Frederic Harris (Croydon, North-West)
Surely, danger money and dirt money are paid mainly to people in the course of their employment. It is an extension of their remuneration for the work and they are, therefore, taxed upon it. In the new Clause, we are concerned with voluntary workers who do an entirely separate task. The Financial Secretary has confused the two issues.
§ Mr. MacDermot
I must take the arguments one by one, and I am merely answering the first argument, the emotional one, which is put forward on the basis that the work is dangerous. The hon. Member for Croydon, North-West (Mr. Frederic Harris) seeks to answer me by shifting on to another point: that the occupation is part-time and voluntary. There are other occupations which are part-time and voluntary but in which people are taxed on their remuneration from them.
I come next to the second point raised by my hon. Friend the Member for Kingston upon Hull, West (Mr. James Johnson), which was contended also at the outset by the hon. Member for St. Ives. It is the analogy of the financial loss allowance which is paid to people like jurors, to certain people in local government and on hospital management committees, and so on. The difference here is that, in those cases, we are concerned with an allowance which is paid to people undertaking voluntary work against proof of financial loss. The payments here, however, are not in respect of financial loss, and there is no need for there to be any financial loss. We were given the example of a fisherman who might lose £20 on the day and that he is called out, but he is still entitled to the award if it happens to be a day when he would not have gone out fishing. In other words, it is given on the basis of a remuneration 304 and, for tax purposes, comes under the heading of income.
A number of hon. Members have stressed this point and have based their arguments on the very heavy financial loss which many of these people suffer. The hon. Member for City of Chester (Mr. Temple) spoke from a great deal of experience about the financial sacrifice which this can cause to inshore fishermen. If the Life-boat Institution would like to consider whether it wants to alter the basis of the award and make it payable not as a fee which is payable in all circumstances but as a financial loss allowance against proof of financial loss—and I am sure that it is a matter on which it would want to reflect—certainly I shall be prepared to meet representatives of the institution and discuss it with them, after I have had suitable advice.
I have not had an opportunity to have advice on this point because it is a new one to me which has arisen during the course of the debate. There may be difficulties inherent in the proposal; I do not know. However, if hon. Gentlemen would like it treated on that basis for tax purposes, certainly I will look into it. In view of the stage which we have reached this year, it is a matter which would have to be dealt with and brought forward in another year. However, I could not accept the Clause as it stands at the moment for the reason that, although we are dealing with a small class of persons, small payments and ones which excite great sympathy, we should be getting ourselves in difficulties if, for reasons of sympathy, we were to adopt an approach which offends against the most basic principle of Income Tax, which is that it is a tax generally upon incomes of all classes, without distinction as to the nature of the work or the source of the remuneration.
§ Mr. Gower
I thank the hon. and learned Gentleman for what he has said. He quoted the example of part-time firemen and said that they appeared to be very similar. Surely the people voluntarily doing dangerous work of this kind for very small amounts must be relatively few in number, and I should have thought that his argument was not fatal to the acceptance of the Clause.
§ Mr. MacDermot
I will look into what the hon. Gentleman has said, but 305 I should much prefer to approach it on the basis which I have indicated and see if any kind of solution can be found on that basis. If one starts trying to carve out a category of earnings and say that, if the work is voluntary, part-time and dangerous, the income should be tax free, for the time being one might get a self-contained and closely defined class. However, it would not have a great deal of logic or principle behind it. The other approach might be more rewarding.
To answer the technical point about whether these people are taxed under Schedule D or Schedule E, I agree that they fall within Schedule E and are taxed under that Schedule. It has been argued that, if they were treated as being persons in employment and taxed under Schedule D, they might be entitled to exemption on the basis of the payment being expenses for getting to and from the lifeboat station. But none of us gets expenses for getting to and from work, nor for keeping ourselves warm while carrying out the work, so that would not provide a solution. Fortunately, they are taxed under Schedule E, and therefore one can approach the matter by comparing them with jurors or people on a hospital management committee. However, this would require payments to be made on a different basis from that on which they are made at present.
§ Mr. Iain Macleod (Enfield, West)
I say straight away that I know that it is the view of my hon. Friend the Member for St. Ives (Mr. Nott) that we should not divide the House on this matter, and that enables us to discuss it in as calm and as helpful a way as we can.
First of all, we should be as clear as possible what we are discussing. It is common ground that, by these Clauses, we are not considering the question of the annual retainer. There is some dispute between the Financial Secretary's interpretation and my hon. Friend's as to whether exercises are or are not included. As a matter of legal drafting, I think that the Financial Secretary is right and that exercises probably are included. However, I think that it is also right to say that they are not meant to be included.
The Clause has received support on the Order Paper from all three parties. What 306 we really care about on both sides of the House is the allowances which are paid for rescue work. One is almost ashamed to mention them, it seems. They are 30s. for the first two hours and, thereafter, 7s. 6d. per hour at sea.
I do not feel that either side of the House can feel very happy about what has happened over the years. Curiously enough, in the very first month in which I was a member of the House, I remember this principle being discussed in March, 1950, and I think that it is true that the case of part-time firemen was then argued. Since then, successive Chancellors have not altered the position as laid down by Sir Stafford Cripps, and successive Shadow Chancellors have not pressed the case. So I do not think that we can look back over the years with any great happiness.
However, I think that the Financial Secretary was very conscious of the feeling of the House that we want something to be done. I do not underestimate the difficulties. I accept the position in relation to Income Tax and the simple argument that one taxes income, and there it is, although I think that there is great validity in the point made by my hon. Friend the Member for Croydon, North-West (Mr. Frederic Harris) that it is not a valid comparison to say that it is possible to draw a parallel between these people, who are voluntary workers, in respect of the rescue work which we seek to free from tax, and those whose work is, as it were, an extension of their ordinary occupations.
What everyone in the House wants to say to the Financial Secretary is, "Please find a way round this." We know the difficulties, and we shall not push him on it. It may be that in some way this could be considered as expenses. Heaven knows, the sums are trivial enough to come under that heading. I am sure that the R.N.L.I. will be glad to have talks with the Financial Secretary, and it may be that a way can be found to attribute this in some relationship to financial loss. That may prove to be a way round the problem.
In short, though it may have taken a long time, the House has come together to feel that we must do something about 307 this. I am content to leave it with the Financial Secretary. I am sure that his statement was made in absolute good faith. I hope very much that the conversations which he will have with the R.N.L.I. will be fruitful, and that in next year's Finance Bill we will remove an injustice which has lasted for far too long.
§ Mr. F. J. Bellenger (Bassetlaw)
Having listened to the debate, it seems that my hon. and learned Friend the Financial Secretary is making some sort of a concession—qualified, of course. He is not giving the point entirely to the hon. Member for St. Ives (Mr. Nott), but he has said that he thinks—he has not taken advice—that this can be dealt with by treating it in a different way, which is quite legal. Will he give the House an assurance that before we finally finish with the Bill he will take advice on this so that hon. Members can know whether it will be possible for the method he suggested to be used? If he does not do that, and the Clause is withdrawn, hon. Members may find themselves in the position that the advice given to my hon. and learned Friend is purely negative, and then where will they be?
§ Sir Douglas Glover (Ormskirk)
It is not very often that I rise in this House to sympathise with a Minister, but I do so in this case. It is right that income is income, and Income Tax is tax on income. Wherever the money comes from it is income.
I sympathise with what has been said by my hon. Friend the Member for St. Ives (Mr. Nott), and the hon. Member for Kingston upon Hull, West (Mr. James Johnson) about the problems of lifeboat men. As the Financial Secretary proposes to discuss this problem with the R.N.L.I., I think that it will be as well if he discusses it also with the mountain rescue organisations who do a similar job on dry land to that which is done by the lifeboat men at sea. These men go to the top of Snowdon to bring down misguided mountaineers, often on stretchers, and the number of fatalities among them is higher than amongst lifeboat men. One must consider, too, those who go down pot-holes to rescue people. We had an example of this over the weekend. They go to considerable difficulties to rescue their colleagues, and they, too, must lose 308 a considerable amount of money and time in carrying out this work.
If the Financial Secretary wants to create justice for all these people, he has a very difficult job ahead of him, but I hope he will remember that it is not only lifeboat men who come into this category. As I have said, there are the mountain rescue teams, and those who go down 1,000 feet below ground and crawl along these confined spaces to get to injured colleagues. I do not think that this is anything to laugh about, particularly as I would not want to go down a pot-hole, but I would volunteer to go out in a lifeboat to rescue someone who was in difficulties. I certainly would not be prepared to go down a pot-hole, because that would give me claustrophobia. To me, going down a pot-hole represents far greater danger than going out in a lifeboat in a rough sea.
§ Mr. Temple
As I shall be speaking on behalf of the inshore fishermen, can my hon. Friend help me by saying whether any allowance is paid to these mountain rescue workers, or to these pot-holers?
§ Sir D. Glover
I cannot tell my hon. Friend that, but I would have thought that as they were always on call to go out at short notice there was some voluntary system of cash allowances for them. All I am asking the Financial Secretary to do is to consider the other people when he has his discussions about the lifeboat men.
If the Financial Secretary can get over this problem, I am sure that, irrespective of occupation, the public will be glad to see these men drawing this money without any deduction for tax. The sum involved is very small indeed, and it seems almost indecent that when people have risked their lives to save others the small allowance which they receive is deducted for tax. If the Financial Secretary can get round the problem by regarding this money as an expense allowance, or a claim for loss of earnings, he will have the support of the whole House, and in fact the whole country.
§ Sir D. Glover
On a point of order, Mr. Deputy Speaker. Does my hon. Friend need the leave of the House? This is his new Clause.
§ Mr. Deputy Speaker
Under Standing Order No. 51 the only right given to a mover of a new Clause or an Amendment is in respect of a Bill which has been to a Standing Committee. The Finance Bill has not.
§ Motion, and Clause, by leave, withdrawn.