§ ALTERATIONS IN PERSONAL RELIEFS
Amendment proposed: No. 270, in page 9, line 24, at end insert:—
(2A) A man who becomes married during a year of assessment may by notice in writing to the inspector elect that his marriage be disregarded for the purposes of any claim for that year under section 214 or 215 of the Income Tax Act, 1952 or section 17 of the Finance Act, 1960 (housekeeper etc. relief), and, in that case, the marriage shall also be disregarded for the purposes of any claim for that year under section 10 of the said Act of 1952 (married and single relief).—[Mr. Harold Lever.]
§ Mr. Deputy Speaker
With this Amendment it will be convenient to discuss Amendment No. 268, standing in the name of the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) and the names of other hon. Members, in page 9, line 24, at end insert:(3) Where a man to whom subsection (2) hereof applies satisfies the conditions set out in section 214(1) of the Income Tax Act, 1952, as regards part of the year in which his marriage takes place, he shall be entitled to relief under the said section as if the sum specified in subsection (1) thereof were reduced by one-twelfth for each month of the year ending after the date of the marriage.(4) For the year 1968–69 and subsequent years section 214 of the Income Tax Act, 1952 shall be amended by substituting for the reference to £75 a reference to £120.
§ Mr. J. E. B. Hill
I am sorry that the Financial Secretary has not explained the purpose of Amendment No. 270, but I apprehend that it was put down to meet a point I had raised with the Chancellor of the Exchequer in correspondence. It seemed that Clause 14(2) in its present form was about to create an anomaly— indeed, an injustice—which arose from the fact that the Treasury had overlooked the case of a widower with a housekeeper allowance marrying and having his allowances apportioned by the operation of Clause 14(2)
It was decided in the courts some time ago that a taxpayer cannot claim a housekeeper allowance and a married allowance in the same tax year—the allowances are mutually exclusive. Before this year it was no great hardship for a widower remarrying in a tax year to forgo the housekeeper allowance of £75 in favour of the married allowance of £120, 1588 but the Clause as it stands would reduce the married allowance to a widower remarrying in the latter part of the year and at the same time deprive him of his housekeeper allowance. Therefore, if he married in the last six months of the year he would be worse off.
The Chancellor has sought to meet this point by Amendment No. 270, and in so far as he fills the gap I am grateful. But he has filled it in the meanest possible way. He is saying that the taxpayer would have the option in his year of remarriage of sticking to his housekeeper allowance of £75 and having no part of the married allowance. I think that I am right in saying that it would pay the taxpayer to opt for his housekeeper allowance if he married in the last seven months of the year but that in the first five months of the year he should abandon the housekeeper and stick to the apportioned wife's allowance. It may take a bereaved or remarrying accountant to appreciate the niceties of the allowances, but an anomaly has been created and Amendment No. 268 would meet the difficulty in a manner both more logical and more generous.
The first part of Amendment No. 268 says that if we are to apportion at all then we should apportion both allowances and—for that part of the year when the widower has a housekeeper he should have months allowed at the rate of £75 a year and in the subsequent months after marriage at the rate of the married allowance, £120 a year.
We go further. In the second part of our Amendment we suggest that the housekeeper allowance should be raised from £75 to £120. We say that because it is common experience that it is more expensive to find and pay for a housekeeper if one is a widower with young children than for a wife. It is a fact of economic life that housekeepers are dearer than wives. I therefore hope that the Chancellor will accept our point of view, because it has the merit not only of being generous, which may not particularly commend itself to the Treasury, but of restoring the position of 1920, when the allowance for the housekeeper was the same as that for a wife, although admittedly at a rather different level from that now obtaining.
1589 I should like to know how much it would cast to be generous. A balancing item would be that there would be some administrative saving, because the remarrying widower with a housekeeper allowance would not need to have an apportionment if the allowances were the same.
§ Miss Harvie Anderson
I should like to support my hon. Friend the Member for Norfolk, South (Mr. J. E. B. Hill) and say how glad I am that the Government have put right this anomaly to some extent. At the same time, I emphasise that I am sorry that they did not see fit to go as far as our Amendment suggests, because this seems to me a rather mean response to a very deserving case. While I am grateful for small mercies, I am not satisfied that they could lot have been a little more generous.
This is a sore subject for many people, because, while Amendment No. 270 makes a small concession, there is a far wider range of consideration which would be out of order on this Amendment. Many categories of people for whom there is no housekeeper allowance are as badly in need of such an allowance as the category with which we are dealing. I should like to take the opportunity to tell Treasury Ministers that they continue to convey the impression that homes run themselves.
These two Amendments are concerned with the ability of people to run their homes. A series of disasters might occur which would put any home absolutely out of action overnight. The fundamental consideration with which both Amendments deal, and the much wider range of interests beyond, is whether it is to be made possible for a home to continue as such. That is why I criticise the limitations of the concessions, because when it becomes impossible to maintain a home the burden which falls on the Treasury is often greatly in excess of any tax concession which has been seriously considered by any Government.
We women who run our homes wish that we could get across to Treasury Ministers, successive Treasury Ministers, the fact that we do quite a job and that those of us who are standing here when 1590 we should be cooking dinner have someone else to cook the dinner. This may be an opportune moment to remind hon. Members of that. If that single point can be got across to Treasury Ministers, a whole range of married women's tax concessions will be changed very quickly.
I am glad that some thought has been given to the position of a very small category of people who find themselves dependent on a housekeeper or on a wife, but, while I welcome the improvement which the Government Amendment brings about, I commend to the attention of the Government the vast range of tax improvement and reform needed in this whole respect.
§ Mr. Michael Shaw (Scarborough and Whitby)
I support Amendment No. 268. Obviously, we must be grateful to the Chancellor for his Amendment, but I fully concur that it does not go far enough. What is astonishing is that we have this flash of logic from the Treasury Bench about how illogical it is that a marriage allowance is given for a whole year, although the recipient may be married for only a month or two in that year, and about how, in this day and age, it is time to put that right.
But, that having been put right, a series of anomalies arises from having put it right. To correct those anomalies, the Government do not take the logical step, but proceed to work on what might be called the good old time-honoured system of taking what is administratively the most convenient way out, and that is exactly what has happened in this instance.
If it is argued, as it was argued in Committee and at other times, that subsection (2) makes the law of marriage allowance more logical, if it is found that the alteration affects other allowances, those allowances should be altered in exactly the same way and on exactly the same principle as marriage allowance is altered. That has not happened. The newly-married person has to choose whether to claim marriage allowance, or housekeeper allowance, or the allowance for looking after children if he is a widower. The Treasury has accepted that conflict of principle and we have not had any explanation of why the principle adopted in subsection (2) has not been 1591 adopted in the Amendment for the allowances under Sections 214 and 215.
It must be remembered that these allowances are given for a purpose. They are given because it is thought right that they should be given and because they are needed by the people receiving them. If a housekeeper allowance is needed for nine months a year before a person is married, the fact that he gets married at the end of that nine months does not mean that his need for the allowance during that nine months is any way alleviated.
That need remains the same. Having got married at the end of the nine months, he is allowed marriage allowance for three months, presumably because the Treasury thinks it right and because it thinks that he needs that allowance for three months. But he has to meet a need before he is married and a need afterwards. He now has to choose which allowance to have. The only logical answer is clearly that he should have the apppropriate proportion of both allowances for the year in which he gets married.
I suggest that we accept the Government Amendment and that they accept the second part of our Amendment, so that the whole House would be satisfied and, what is more important, justice would be done.
§ The Financial Secretary to the Treasury (Mr. Harold Lever)
I deferred commenting on this Amendment because I thought that the hon. Member for Norfolk, South (Mr. J. E. B. Hill) should have the opportunity not only of explaining it but of criticising it, being grateful where gratitude was appropriate and disappointed where some disappointment was not altogether without possibility of anticipation. We owe the Amendment to the hon. Gentleman's raising this point, originally by letter. He drew attention to an anomaly which had escaped the attention of everyone, and we are grateful to him for enabling us to put it right, although not to his most ebullient satisfaction, this year.
At any rate, we will not get the singularly unattractive situation of a man losing the benefit of his housekeeper allowance later in the year because he gets married. I see the force in some of the arguments that have been made, if one were able 1592 satisfactorily to achieve the meticulous justice which hon. Members seek in this matter. I share their attitude, but unhappily our system of allowances is almost always upon an annual basis. It is true that hon. Members may point out that we changed the bowling, so to speak, by making marriage allowances apportioned. This was a year in which we had to exact a very formidable sum of new taxation from the community.
Given that decision, we looked for the areas where we could most reasonably seek to exact some taxation. One of the most obvious ones was that a man should not get a year's marriage allowance if he had been married for only a day in that year. From this, we got the concept of apportioning the marriage allowance. [Interruption.] I see that the right hon. and learned Member for Hexham (Mr. Rippon) thinks it is—
§ Mr. Lever
—outrageous. He thinks that we should pay a year's marriage allowance, even in a difficult year like the present one, to a man who has been married for a day. It seemed to us, and I think most hon. Members will feel the same way, that if one has to exact so much extra taxation, here was a source of many millions which could be tapped, when people were receiving marriage allowances for a full year, although they had been married for only a fraction of part of that year. This seemed reasonable on the face of it, but it gave rise to this anomaly. We tried to put it right as fully as we could without imposing a new set of administrative splittings in annual allowances, and that is why the concession made is not as generous as many hon. Members would like. I am afraid that it has to be accepted for the present, and I would recommend the House to accept this Amendment, which goes a good deal towards meeting what the hon. Gentleman had in mind.
I am not at all without sympathy for the difficulties of people in this situation. I have been put into the position of having to lose—I am not at all disappointed at the consequences—my housekeeper allowance in order to achieve a marriage allowance. I must say that at that time I was at once an immediate gainer because I got the marriage allowance for the whole year.
§ Mr. Lever
One horse has bolted. I feel a good deal of sympathy for people in this position. None the less, I must ask the House to accept that, this year at any rate, it would not have been possible to introduce yet another split for the sake of what would be marginal sums of money. I will not go into competitive computations with the hon. Gentleman about at which point of time how much monye would have been involved. I hope that he will accept our gratitude for drawing this anomaly to our attention and that, although disappointed, he will support the Amendment, which represents a real attempt to meet the complaint as reasonably as we can.
As to any other concessions on the housekeeper allowance, I take the points made, as I say, with personal understanding and sympathy of the position. Alas, this is not a year in which the Chancellor is likely to give rein to my normally sympathetic inclinations. I must ask hon. Members to make their appeals in a subsequent year, when we are under no such strict exigencies as we are this year. For these reasons I ask the House to accept the Amendment, which is intended to meet in a broad way, the difficulties raised by the hon. Member. We cannot accept any other concession at the present moment.
§ Mr. Charles Fletcher-Cooke (Darwen)
I am not sure that the appeals for gratitude which the Financial Secretary has addressed to us have fallen on very receptive ears. These two Amendments went on the Order Paper simultaneously. This in itself is perhaps a coincidence, perhaps not. The Government's Amendment is the barest justice, much meaner than the Amendment in the names of myself and my hon. Friends. The amount of difference in money to the Exchequer, even in what the Financial Secretary calls "this difficult year" must be trivial. I do not know why he cannot accept what my hon. Friend the Member for Norfolk, South (Mr. J. E. B. Hill) put forward in a most reasonable manner.
I cannot believe that there is much money in the difference. It strikes me that this is cheeseparing. On the other 1594 hand, better half a loaf than no bread at all. We ought not to take any more time over this. There was an obvious injustice in the Government's first proposal, and we are grateful at least that they have seen the light, even at this late stage.
§ Amendment agreed to.