§ AGGREGATION WITH INCOME OF PARENTS OF INVESTMENT, ETC. INCOME OF UNMARRIED INFANTS NOT REGULARLY WORKING
§ Mr. Diamond
I beg to move Amendment No. 153, in page 10, line 35, leave out from beginning to ' so ' in line 36 and insert:'Subject to the following provisions of this section, an infant's income'.
§ Mr. Deputy Speaker (Mr. Sydney Irving)
It may be convenient with this Amendment to discuss Government Amendments No. 154, No. 155 and No. 156.
§ Mr. Diamond
I am grateful to you for that suggestion, Mr. Deputy Speaker, because the four Amendments go together. All told, they achieve two purposes. The first is to implement my undertaking to take out of aggregation a child's income arising from sums awarded for personal injury to the child. The second is to retain in a somewhat generalised form the de minimis exception for a child's income not exceeding £5 arising from parent-child settlements.
Of course I will explain as much detail as the House wishes, but I think that the Amendments broadly speak for themselves. The details of the personal injury exclusion are set out in paragraph (b) of the new subsection (2) and the definition reproduces that of personal injuries inserted in Section 31 of the Limitation Act, 1939, by the appropriate Section of the Law Reform Act, 1954, so that we are relying on words which have precedent and which should be capable of easy interpretation.
We covered this matter fairly fully in Committee. I have explained my understanding of the view of the Opposition, which is that the matter ought to go further, but I have made it clear that, 1618 however sympathetic I am to that point of view, I am totally unable to find a method of further distinguishing income which is to be exempt from aggregation from still further proposals which would immediately be put forward. I have therefore brought forward the proposal which I undertook to introduce and I have recognised that it is limited in the way which I suggested.
The issue of the £5 limit was raised in Committee by the hon. Member for Bournemouth, West (Sir J. Eden), and I made it clear that I thought that it would be very unfortunate if anybody thought that the removal of the £5 exemption meant that the Government no longer regarded savings as being of the same importance as previously, or the need to encourage savings as being as important as previously. We do, and to make it absolutely clear that we do we are re-introducing, in a somewhat generalised form, the £5 exemption. Income within this figure will continue to rank as that of the child for tax purposes, and will not therefore be aggregated. This deals with the first two Amendments. The other two are broadly consequential.
§ 9.30 p.m.
§ Mr. Iain Macleod (Enfield, West)
I have two comments to make, which I will relate to Amendment No. 154. I want to express gratitude to the Chief Secretary. In our discussions in Committee this became known as the thalidomide case. The effect of this Amendment, although it is not limited to thalidomide cases, but this was the one most in people's minds, is that the sums awarded in compensation because of injury to the infant shall not be aggregated with that of their parents.
In a sense it has always seemed extraordinary that we had ever to press such an obvious point before the Government conceded it. It would have been disgraceful if such an aggregation had been made. The point has been made, pressed 1619 and recognised, and we are grateful for that. I suppose that it is inevitable that the Treasury had, even in the case of these deprived children, such as a thalidomide babe, to draw this concession so as to make is at small and mean as possible.
For the child compensation directly related to the claim for damages in respect of personal injury to the infant or any disease or impairment to the physical or mental condition is allowed. However, unless I read this wrongly, the Treasury still aggregates with the income of the parents any investment income which might be left to the child by a grandparent or any other relative, or in any other way, whether the thought of compensation was in the grandparents' mind or not. I think that I am right in saying that what is put before us now is strictly limited to the satisfaction of the claim for damages.
I would have thought that, in considering a matter as sensitive as this, the Treasury could have relaxed a little further and said that children who suffered this appalling misfortune should not have any income which may be left to them aggregated as well. I am bound to record that note of disappointment at the narrowness of the Treasury interpretation of the undertaking given upstairs, but the undertaking has been honoured and as far as it goes it is extremely welcome.
§ Mr. Michael Shaw
I should like to support my right hon. Friend's arguments. The Treasury could have gone that bit further. One has only to look at some simple examples to illustrate the case that has been made. Let us look at a child who has been injured in a motor car accident. It so happens that the accident was the fault of someone who was not insured, and who had no private funds. Under those circumstances, there is clearly a case for personal damage. If it goes to court, and the claim is quantified, it will never be met, because the person concerned did not have an insurance policy covering him or any private funds. Had he been insured, there would have been a claim which would have been met and the money from it would have gone into a fund, the income from which would have gone each year to the child and would not have been aggregated with that of the parent.
1620 In the case in which there was no insurance and the person concerned was a man of straw, although the claim could be quantified, and although a grandparent might be willing to pay a similar sum of money into a fund, the proceeds each year would be regarded as the income, not of the child, but of the parent and would be aggregated for tax purposes.
The essence of this matter should have been to consider the character of the capital sum involved and the reason for the existence of the trust rather than the source from which it came. While we must be grateful for the Amendment, the logic of the situation, if logic there be— I believe that humanity guided the Chief Secretary rather than logic—should have allowed him to go that bit further and include all trust funds which arise, by whatever means, because of the illness or mental or physical condition of the child.
§ Mr. Fletcher-Cooke
I am troubled by the word "damages", which implies to me damages awarded in or out of court. It implies an adverse action—that is to say, a mishap due to the negligence or perhaps even the active wrong of another person, perhaps a driver, doctor, or drug firm in the case of a thalidomide baby.
Is it apt to cover cases in which no one is at fault, in which there is no adverse action, and in which the mishap is a pure accident and the compensation is paid purely from insurance?
Suppose that a child is insured against personal injury by its parents and, through nobody's fault, it falls out of a window or into the fire, or its nightdress catches fire. There is no negligence, but the compensation is paid on account of the child's insurance. I do not regard that as damages in law. My concept of damages is something which results from a claim against someone who has been negligent. I am concerned to ensure that the matter is not limited to damages in the sense in which I understand the word, but includes the sort of insurance compensation which I have mentioned.
§ Mr. R. J. Maxwell-Hyslop (Tiverton)
I propose to mention the points to which my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) has alluded. I am glad that he has done so, 1621 because he is legally trained and I am not.
There are a couple of other aspects of the same general problem on which I should like the Chief Secretary's advice. What about ex gratia payments in cases in which no claim has been formulated? It is not unknown for ex gratia payments to be made. They may be made without prejudice or by a wealthier person or body to a less well off person who has suffered an accident and has no cause in law to plead in court. So there is no question of damages there.
What happens, for instance, with children in this case, who are injured in an air crash? As the Chief Secretary may possibly be aware, under the Carriage by Air Act there are automatic damages— this is the ratification of the Warsaw Convention, is it not?—and the limit has been doubled. There is no question there of having to prove negligence. All one has to show is that one suffered damage in an aircraft which met with an accident. One doss not have to show that the airline or pilot vicariously or individually were responsible for it. Indeed, if one can show that the pilot was guilty of wilful negligence then, of course, the limiting provisions of the Act or the Warsaw Convention do not apply. So I think that my hon Friend has raised a point of very real substance here, because I doubt very much whether it was the intention of the Government to exclude cases of that kind.
There is another point on which I seek information. Were I a lawyer I should know the answer, but I have a very distinct impression that damages given in court are very often quite unpredictable. There is not a table laid down which says, so much for a leg, so much for an eye, so much for a lung. That is why, so often, people are advised to settle out of court. One has the distinct impression that factors which are not directly related to the legal rights and wrongs come into the assessment of damages. For instance, if a child has been left £5,000 by its grandmother, can we be sure that this will not influence the judge in the award which he makes of damages?
One suspects, very often, that what the judge says is, "What amount of money will this child need when it reaches 1622 mature years to ensure as reasonable a life as it is within the power of the court to endow him with?" If that child is the beneficiary of a trust fund, that process working in the judge's mind is likely, to put it mildly, to reduce the damages slightly, or, at any rate, reduce the sympathy, and even judges are human, with which the court regards the case when quantifying damages. If such a trust fund is to be grossed up rather than be subject to the relaxing provisions of Amendment No. 154, I think it will result in quite extraordinarily complex situations.
So I would certainly endorse what my hon. Friends have pressed, namely, that this Amendment certainly could be accepted but that it should be redrawn very much more widely, or that there should be another Amendment in addition to it so that the benefits, if we can use such a term in a situation which is inherently disastrous for the person concerned, are not so unnecessarily restricted as they will be by the drafting of the Amendment.
§ Mr. John Smith
I should like to say a brief word about Amendment No. 156, which has been selected with the other Amendments but which deals with Capital Gains Tax. The Chief Secretary did not, I think, mention this Amendment when he spoke. In Committee, I urged that if the income of children and parents were to be taxed together, as the income of husband and wife is already taxed together, then the transactions between children and parents should not be subject to Capital Gains Tax, in exactly the same way as transactions between husband and wife already are not subject to Capital Gains Tax.
I think that the Chief Secretary, if he thinks for a moment, will realise that this Clause is bound to give rise to an increased number of such transactions. This is a very material point. The analogy is exact with husband and wife. Does this Amendment effect what I urged the Chief Secretary to effect in Committee, or, if it does not, as I fear, will the right hon. Gentleman undertake to deal with this point later?
§ 9.45 p.m.
§ Mr. Diamond
Whenever anyone raises a new legal point, I think that it deserves careful consideration and not 1623 off-the-cuff answers given by a non-lawyer. Even if given by a lawyer, I still think that they should not be off-the-cuff answers. We are in the fortunate position that the legislation here, although we are on Report stage, is not required until next year. I could give off-hand indications, but it would be more sensible for me to take careful note of what has been said.
I am not advised that I can give a clear answer immediately to the point that has been raised. It is clear that we all want to see that the exemption from aggregation is not limited by the sheer coincidence or happening that there was no pressure, there was no court case, or there were no proceedings before the money arrived; that one form of pressure for the money resulted in exemption from aggregation, because it was damages in the ordinary accepted sense, and another form of pressure did not so result. I am sure that is not what we want. We want to achieve what I have indicated.
Equally, I am sure that we want to see that there is some relationship between the payment and the damage suffered by the child in the non-legal sense. Therefore, I think it would be far more sensible that I should undertake to give careful thought to everything that has been said, particularly on this new point and on the wording of the Amendment, as we have a full year in which to consider all that. I hope that what I have said indicates the way in which the Government are thinking about this matter.
On the other hand, I think that I can deal straight away with what was said by the hon. Member for the Cities of London and Westminster (Mr. John Smith) about Amendment No. 156. The effect of that Amendment is that, for the purpose of calculating Capital Gains Tax under the alternative rate, about which the hon. Gentleman was concerned, aggregation under this Clause will be disregarded and any sum which would otherwise be caught by Section 397 but is regarded as the child's income by virtue of the amended £5 exemption will also be treated as his income for the alternative rate Capital Gains Tax computation. I think that that meets the point put to me by the hon. Member 1624 for the Cities of London and Westminster.
I hope that the House will not believe that the Government have been unsympathetic or lacking in compassion in dealing with this matter. We are dealing with aggregation, nothing further than that. I illustrated in Committee that it has previously been the practice of all Governments, when dealing with aggregation of income for tax purposes—I have in mind particularly covenanted income of the children which, by law, belongs to the children, but which, for tax purposes, is treated as the income of the parent or covenanter and is, therefore, aggregated with that—wholly to disregard any compassionate circumstances affecting the parties concerned.
I recognise that it was our duty to respond to the points made to us, particularly about the thalidomide children, and I think that we have carried that out—I agree with the hon. Member for Scarborough and Whitby (Mr. Michael Shaw)—with a mixture of logic and compassion.
§ Amendment agreed to.
§ Mr. Iain Macleod
I beg to move Amendment No. 67, in page 10, line 36, after 'infant', insert:'who has not passed the upper limit of the compulsory school age as defined in section 35 of the Education Act, 1944 or any statutory re-enactment or modification thereof'.We welcome the concession which has just been made and we are also grateful for the undertaking that in the coming year the Chief Secretary will consider the points which have been made.
The Amendment provides us with the last opportunity that we shall have of discussing the Clause. I have made no secret from the beginning that I detest this Clause more than any other part of the Bill. It offends me more than the special charge, more even than the infringement of the Married Women's Property Act, and more even than the massive increases in taxation which have taken place.
I made it clear in Committee, and I do so again now, that, subject to the right of a Chancellor to move against tax evasion, we shall have nothing to do with the Clause, and that we shall repeal it at the earliest possible opportunity.
1625 We have this one last chance of putting a particular point to the Chief Secretary, and this is concerned with the aggregation of the income of infants from the compulsory school age until they reach their majority if they are being educated. The injustices done by the Clause are manifest. Only one of them, the small concession which we have just discussed, has been put right.
Thousands of people are affected by the Clause, and we tried in Committee to put forward an Amendment which, on reflection, I agree was too wide, that the Clause should not apply to children being educated. The Chief Secretary said, perfectly fairly, that that was, in effect, a wrecking Amendment, because it would mean that only children under 5 with investment incomes would be affected by the Clause, and clearly that would deprive the revenue of £25 million which the Treasury hoped to obtain.
I am not particularly moved by the fact that it was a wrecking Amendment. I intend in due course to wreck the Clause, but one must keep within the limits of debate, and it was a valid point. We have, therefore, limited the Amendment to add the wordswho has not passed the upper limit of the compulsory school ageas defined appropriately.
It is common ground between all political parties, and, in particular, between all Secretaries of State for Education and Science of those parties, that it is desirable that children should stay at school for as long as they can benefit from schooling. That is not only desirable educationally. It is a vital part of the present and future economic strength of our country. There is no argument about this. The parties agree with it, and many people found it very sad that one of the consequences of the January economy cuts was that the raising of the school-leaving age was further postponed.
I need not argue that the Amendment is educationally, economically and socially desirable; that is manifest. It is part of the policy of all three parties in the State. But the Clause says something quite different; it says that in circumstances in which an infant has investment income of its own, from whatever source—perhaps left by a grandparent, or derived in some other way—that income shall be aggregated with the income 1626 of the parent or parents unless the child is wholly employed in conditions defined in the Clause.
There is a direct inducement to the parents of children who may happen to have a little investment money of their own to take their children away from school and put them to work at the earliest opportunity. That proposition is more appropriate to the Victorian warehouse than to the modern educational system. I need not argue the point; it is self-evident. It is extraordinary that in due course the Chief Secretary will rise at the Dispatch Box and, with his usual courtesy and skill, attempt to refute something that is simply irrefutable.
There are two propositions on which I rest my case. First, it is common ground between all parties that all children who can benefit from schooling should stay at school certainly for the key years of their education. Secondly, it is common ground between us that it is undesirable that such children should be taken away from full-time schooling and pushed into full-time work. It is to put right this anomaly that the Amendment is moved.
In Committee, I referred to what I called the philosophy and policies of envy which are enshrined in the Clause. I have always detested this approach. Some grandparents may think it a suitable use of the money that they have earned as a result of their labour in life to help their grandchildren. For the life of me I cannot see what is wrong with that. Those who took part in the detailed debate upstairs know that the Clause is full of absurdities and cruelties; indeed, it was the result of the opposition from my hon. Friends to this Clause that brought down the guillotine in the end—an event unprecedented in more or less modern times.
I sum up by saying that the Amendment simply cannot be challenged on educational, economic or social grounds. We know the harm that the Clause will do. It will bring a great deal of distress to many women—especially divorced women. It will throw an unnecessary burden on to some children—especially children who are already deprived.
So, as one last try to make a little more sense of a thoroughly bad Clause, we put this proposal before the House. It simply says that the Treasury should 1627 recognise what is recognised by all the political parties, namely, that no obstacle should be put in the way of children remaining in full-time education and benefiting from that education.
§ 10.0 p.m.
§ Mr. Michael Shaw
I wholeheartedly support my right hon. Friend in this Amendment and in saying that we object to the whole Clause and are simply trying to improve a thoroughly bad Clause. On Second Reading, I spoke about this Clause, and said:Some things about the Clause are particularly obnoxious. One implication is that when a child leaves school and has to make a choice between going into industry and going on to further education, his need for further education for further vocational training may not be the paramount consideration in working out his future career."—[OFFICIAL REPORT, 24th April, 1968; Vol. 763, c. 368–9.]I went on to give an example which should, I hope, be near the heart of the Chief Secretary, namely, the alternatives facing a father whose son might choose the career of accountancy.
In making that choice, the son could first go to university and then take articles, or could go straight into a firm, taking articles immediately. If that child had an investment income and went to university, that income would continue to rank for tax purposes as his father's. If, on the other hand, we went straight into articles with a firm and earned a salary, that investment income would no longer be regarded as his father's—[HON. MEMBERS: "It is crazy."] This seems absurd, "crazy", as my hon. Friends say.
These alternative arrangements, when they are thought out in the family circle must include in their consideration the thought about the tax liability of the parent who is helping to decide what shall be done. The child's educational requirements are not the only considerations in circumstances like this. Surely it is essential that we should try as far as possible to see that, when a child's career is being planned in the home, the only factors which shall be considered are the future of the child and the best education or preparation which he can have for his future career. Such considerations as the tax burden on the parent should not have to come into the matter.
1628 Therefore, as I said on Second Reading, if we must have a Clause like this, it should be limited to the compulsory school leaving age limit, which is 15. In our rough and ready way, my hon. Friend the Member for Ormskirk (Sir. D. Glover) and I put down an Amendment to that effect in Committee. Alas, it was not called. I am grateful to my right hon. Friend not only for having put it forward in more sophisticated form, but also for having been successful in having it called.
This gets at the nub of the Clause. If we have to have it, so be it—let us have aggregation, as long as the child has no alternative than to stay at school. But once alternatives come in and a choice of careers is available to the child, once it is possible to go one way and relieve the tax burden of the parent, or to go another way to continue that burden for several more years, we are getting on to very dangerous ground and are influencing decisions which may be against the true interests and future of that child.
As long as we have this Clause—and I hope that it will not be for long—I believe that the Amendment ought to be incorporated.
§ Mr. Richard Wainwright (Colne Valley)
The concept which the Government thought out to try to rationalise their aggregation Clause is, to use the Government's own words, that of the "common spending unit". As I made clear in Standing Committee, Liberals have never accepted that, even if there is a common spending unit, it should necessarily involve those people in being an aggregated taxable unit.
But insofar as they stick to the idea that the common spending unit should, therefore, be a common tax unit, the Government ought to welcome the Amendment, because if there is any water at all to be held inside the idea of a common spending unit, it certainly drops out the moment the school leaving age is passed. That is a matter of common observation which must be apparent to hon Members on all sides of the House. The moment a young person passes the school leaving age, whether he or she continues in full-time education or takes a job, in the ordinary habit of contemporary life he or she drops out of the common spending unit of childhood.
1629 I particularly resent the way in which this part of the Clause tries to drive a wholly artificial wedge between young people who are continuing their education and those who are gainfully employed. I draw attention to the words "working regularly" and "full-time occupation". In the ordinary use of language, those words manifestly apply to the young person who stays on at school to try to get good A levels. Few young people are working more regularly or are more fully occupied than those who are trying to get good A level results.
But, as is so often the case in our tax Statutes, the English language has to be distorted to make "working regularly" and "full-time occupation" mean, for this purpose, something quite different from what is the common understanding of those terms. The Government are introducing an entirely artificial concept, one which I am sure will be rejected by the vast majority of young people of the ages affected, quite apart from their tax-paying parents. If only to rescue their own concept of a common spending unit, I hope that the Government will accept the Amendment.
§ Mr. John Smith
This is a very good Amendment because it mitigates the most decadent aspect of all of the Finance Bill—the suggestion that we should live off our children.
Indeed, far from extending to children the barbarous custom of treating a wife as the property of her husband for tax purposes, we should be freeing wives and giving them independence and equality with men. We on this side of the House certainly believe in the sanctity of the individual and believe that each should be treated separately. It is typical of Socialist Governments that they should seek to chain us together in gangs—to chain families into common spending units. It is an insult to deny children, these human beings, a separate identity.
The Government have used the analogy of something bad—the barbarous custom which I mentioned of taxing a husband and wife together—in order to enact something worse. We ought at least to accord the dignity of a separate identity to human beings who have grown up and left school. The Amendment gets us 1630 away from one of the great difficulties of interpretation in the Clause, the difficulty of defining when a child is working "full time" at a job andintends to be regularly engaged in it.How is an intention to be measured? Many hon. Gentlemen opposite intend to be "regularly engaged" here. What happens if a child loses his job, as some hon. Members opposite will? His intention and their intention was to remain in it. What happens if a child goes on strike, as most of mine do practically all the time?
§ Mr. Smith
I willingly admit that I am practically always out of order, but I am here describing the series of ill effects and difficulties of interpretation which arise if the Amendment is not accepted. If children lose their jobs, after they leave school, or go on strike, suddenly their parents are liable to pay their tax, and that places in their hands a dangerous weapon.
The intention mentioned in the Clause is also related to a minimum period of 15 months between two periods of education. That would vanish if the Amendment were accepted. When a child takes a job, how is it known whether the period will or will not exceed 15 months? Are the tax returns for everybody to be held up for 15 months until we see what happens? Furthermore, 15 months can cover three tax years. Is income to be apportioned for parts of years? Presumably the phrase "regularly engaged" means that one is allowed to break it off. If it were not so, there would be no point in mentioning a minimum period of 15 months.
§ Mr. Diamond
If the hon. Gentleman would be good enough to read the HANSARD record of the debates, he will find not only what he has said but what he is going to say and my full replies to all those arguments.
§ Mr. Smith
I was glad to see that this habit of quoting oneself has spread from Enfield to Whitby. Unless we accept the Amendment, we must also interpret what is a full-time occupation, and I warmly endorse the admirable point which was made by the hon. Member for Colne Valley (Mr. Richard Wainwright).
There are many difficulties here. Is a boy at a choir school paid for by way of scholarship in a full-time occupation? Is there a definition of "full time"? What about people who are paid to attend a course? What about members of the Services who are at university? Is that an occupation, or is it education? A distinction will have to be drawn because of the minimum period of 15 months. Who decides all these matters? Who decides all these important matters of interpretation—
§ Mr. Speaker
Order. With respect, I enjoy the hon. Gentleman's speeches. He is speaking at the moment about subsection (3) which we are not debating. He must come to the Amendment which he is seeking to support.
§ Mr. Smith
Mr. Speaker, there are these difficulties, which I think that I have sufficiently indicated, and there are the difficulties about stepchildren, which I went into in some detail in Committee. All of them will vanish if the amendment is accepted because they all occur after a child leaves school.
In the short period of office remaining to them, if the Government must enact this decadent measure and take a bite out of our children, then I hope that they will at least reduce the bite in the way suggested in the Amendment.
§ 10.15 p.m.
§ Mr. George Lawson (Motherwell)
My heart is wrung when I hear these statements about our children and what is likely to happen to them under this Clause. I am struck by the effort to so change the Clause that it shall not apply after the age of 15.
However, it seems to me that it would not matter. Probably two-thirds of our children normally leave school at the age of 15, and in my part of Scotland substantially more than two-thirds of them leave before they are 15. We hear all these heart-rending sobs about the youngster who will go on to become an 1632 accountant, or who will go to a university, but what about the youngster who leaves school at 15?
What has been uncovered and what is being dealt with in the Clause as it stands is the widespread practice of tax avoidance which has grown up. I understand from an earlier statement that the savings in tax avoidance will amount to about £25 million. That does not sound much like a grandparent here and there, as one would gather from what right hon. and hon. Gentleman opopsite have said.
The right hon. Member for Enfield, West (Mr. Iain Macleod) referred to the grandparent who puts aside a little money for his grandchild. It is apparent that a very large number of grandparents have been engaging in this practice, and if it is one which has become sufficiently widespread for the introduction of this method of beating tax avoidance to mean a saving of £25 million, it would appear that very many of the people whom I represent have been paying more tax than they should have been.
§ Mr. Michael Shaw
Does the hon. Gentleman realise that it was disclosed in Committee from his side that if children's incomes of under £115 a year were excluded from aggregation, which is a figure well within the possibilities of savings at Christmas, and so on, half the benefit in tax would disappear?
§ Mr. Lawson
I have looked into this point. If the people whose youngsters customarily leave school at 15 properly understood the tax system in this respect, there would be a revolution next week. A youngster leaving school at 15 and beginning to make a contribution at home is considered to be keeping himself and is no longer someone for whom his parent can obtain tax remission. But if he continues at school and goes on to university, his parent claims the tax remission. He may get a grant of as much as £370, and he can earn up to £115 without it coming into the purview of the taxation law.
The youngster who starts to work at the earliest age possible is treated quite differently, and what right hon. and hon. Gentlemen opposite seek to do by this Amendment is still further to extend this kind of protection. It is a device that has grown up to benefit people with youngsters who want to go on and on at school, 1633 and then to obtain degrees and so on enabling them to earn so much more subsequently. Hon. Members opposite want them to make the money as easily as possible and want as much as possible to be paid for by tax avoidance.
The hon. Member for Cities of London and Westminster (Mr. John Smith) does not know what some youngsters are like and the conditions in which they grow up. He talked about living on our children. What does he know about living on children? This is the kind of thing that has gone on too long. I could describe the circumstances in which many of our youngsters still grow up. Hers is a device whereby taxation payments will be remitted to the better off, or not paid by them, but it must in some way be added to the burden carried by the poorer people. If the House wants to do something to help the youngsters, it should help the poorer youngsters.
§ Mr. John Smith
If the hon. Gentleman wishes to continue to abuse me, I hope that my intervention rather early in his speech will not prevent him from doing so. I think that he imagines that most of the income which children may or may not have comes from gifts. But the great majority comes from money which has been left to them. Does he think that death is a form of tax avoidance?
§ Mr. Lawson
That intervention does not help. Do the youngsters begin to earn? Not so very long ago I knew youngsters who were beginning to make a contribution to the family income at the age of 9 or 10. It would be different if we were talking about youngsters who earned some money, but are our hearts to bleed because we hear that a youngster has a personal income from money left to him and that income is to be aggregated with his parents'? Why should not the income of such a child who has been left some money by grandparents, wealthy uncles or somebody else be aggregated with his parents' income? That is fair, is it not?
1634 Hon. Members opposite show very well where their interests lie. They are interested always in guarding privilege or developing another form of it. No sooner are little holes stopped up. or sometimes very big holes, than another is created by the brains of hon. Members opposite. The right hon. Member for Enfield, West looks at me as if he does not believe me, but he knows this very well.
I just came in to hear the debate, and I am very happy to have been able to put in a word for the youngsters that I represent, who matter so very much. They leave school at 15, and in many ways we shall find that it is they who get the raw deal, not the youngsters whose total income amounts to so much that by the provision we are discussing £25 million more in taxation will be obtained. That is a lot of money, which does not involve very much hardship. I am delighted at this, and I shall listen with great care and attention to my right hon. Friend's case. I am absolutely with him, as are my hon. Friends.
§ Mrs. Jill Knight (Birmingham, Edgbaston)
I did not have the benefit of serving on the Standing Committee, but I am fascinated by the Amendment and wish to put one small point. I understand that shortly the age of majority will be 18 and not 21. I believe that the Government have accepted this. What happens to the Clause then? We are already discussing the charming thought of infants who are unmarried and not working. I have a couple of infants who are unmarried, and it will not be very long before the eldest reaches the new age of majority.
It seems to me that it is extraordinary that we apparently are now discussing the possibility of an infant reaching the age of majority at 18 and yet still having his income lumped in with that of his parents. When the right hon. Gentleman answers this excellent Amendment, will he please cover this point?
§ Sir Douglas Glover (Ormskirk)
I do not propose to follow the hon. Member for Motherwell (Mr. Lawson) into the wild ideas which he has tried to stir up in what had up to then been a very sensible debate.
Our argument is very much on the lines of trying to achieve what the hon. Member was talking about—improved education for all children. It is the wish of every education authority to persuade as many parents as possible to leave their children at school after the minimum leaving age of 15, and we are proud and happy that over the country as a whole already at least 30 per cent. are staying on. We are seeking in the Amendment to take away any incentive for parents to take their children away from school at an age earlier than they otherwise would have done if the Amendment were rejected.
In these debates it is always generally assumed that every parent is a most desirable one. This does not necessarily follow. When we talk about children who have inherited some wealth, it may be that the grandparent left money to the grandchildren because he was by no means certain about the judgment or generosity or in some cases the love of the parents for the children. So the grandparent may have left out one generation and bequeathed his money to his grandchild deliberately and with a very definite purpose.
Out of a population of 50 million there must be a considerable number of parents whose marriage is under strain and where there is tension in the household. This may be why the grandparents have left money directly to their grandchildren. The hon. Member for Motherwell and the Chief Secretary must realise that, with aggregation, there is enormous pressure in such a household to take the children away from school at 15 and put them into earning employment so that their income will not be aggregated with that of their parents. Here is a direct incentive for such parents to take their children away from school and so reduce the standard of their education.
At a time when we are trying to get the school leaving age raised right across the board and to get children to stay at school until a later age, it is not in the national interest for anything to be 1636 done which provides an incentive, however small, to parents to take their children away from full-time education because it is in their selfish financial interest to do so. By aggregation the Government are making it in the direct selfish interest of such parents to take their children away from full-time education at an earlier date than they would otherwise do if the Government had not brought in this class-conscious, vicious Clause, based on jealousy. This is what is behind it, and it is unworthy of the right hon. Gentleman. I hope that in view of the argument that he has heard tonight he will, even now, accept my right hon. Friend's limited Amendment, which I believe goes the minimum distance to deal with a problem which should be dealt with in this year's Finance Bill.
§ 10.30 p.m.
§ Mr. Diamond
We had many debates on this topic upstairs and out of them it became clear that there is a fundamental and sincere difference of view between the two sides on the principle of aggregation of children's income. We therefore must recognise in this debate that there are sincerely held utterly opposing views. The debate has brought out once more that those views are totally opposed and we must recognise— and no one could have been more straightforward than the right hon. Member for Enfield, West (Mr. Iain Macleod)—that the purpose of the Opposition is to destroy the functioning of this principle and this central Clause or, so far as they cannot destroy it, to reduce its effectiveness.
It is not easy to deal with an Amendment without putting it into context. I hope that I may do so without going wider than the speeches which have been made and to which these remarks form the major reply. I want to take hon. Members with me through the different stages of what a grandfather might wish to do in order to help the growing family of his son or daughter. Many of us must be in this position. The son is newly married or starting to have a family, expenditure is great and the salary small. The grandfather may be able to help and is anxious to do so. He may wish to provide an income either in the form of a covenant or through settling capital in one form or another. He can do this in one of several ways.
1637 He can say to his son, for example, "You need help and I propose to settle some money on you". Secondly, he can settle the money on his daughter, if she is the child in question. Thirdly, if there is one grandchild, he can settle the money on that child. Fourthly, if there are two grandchildren, he can spread the money between the two.
If he picks the first course—and in all four cases the income available for the married couple with their children is identical—there is a certain amount of tax payable by the parent because it is the income of the father. If he takes the second course, there is the same amount of tax payable by the parent because it is the income of the mother, and aggregation between mother and father has been accepted and carried out in practice by all Governments for very many years. [An HON. MEMBER: "It should be stopped."] When the hon. Gentleman is leading a party with the full support of the country in order to carry out his ideas as opposed to those of the Conservative: Party, no doubt it will be stopped, but meantime, if we are to deal with the world of reality, aggregation of the mother's and father's income is the policy and has been since every hon. Member has been alive. So, if the money is given to the mother, who happens to be the daughter of the well disposed grandparent, the same tax is payable as if it were left to the father.
But it it is left to the child, more particularly if the same given amount, to be most advantageous for tax purposes can be divided between two children, a totally different amount of tax is payable by that family. The same income is available and it comes from the same source and it is available for the spending of a family of identical size. We will assume that that family needs it, and I have postulated that the family needs to spend it and is spending it. It is spending the same amount, but a totally different tax is available. Why? The reason is because we have previously not extended the principle of aggregating income as between wife and husband to the whole of the family. All the members live together as a family; they are a family unit; they are a single family unit; they are a single spending unit. It 1638 is sensible and right that the same tax principles should follow that.
What is happening, however, is that an artificial series of arrangements has been made as a result of which, instead of the grandfather in question helping either his son or his daughter, being the mother or the father, he has been giving money to his grandchildren. Grandfather has said after Sunday lunch, "Let me go up the nursery and see how the babies are doing". He has gone up to one of the babies and said, "You are doing fine; here is £500 for you to spend yourself". That is what the hon. Member for the Cities of London and Westminster (Mr. John Smith) is talking about.
§ Mr. Speaker
Before the right hon. Gentleman gives way, he has so far been discussing the Clause. I hope that he will now come to the Amendment.
§ Mr. Diamond
You are, of course, absolutely right, Mr. Speaker. I prefaced my remarks by saying that I would seek to put the Amendment in context, but I have clearly gone too far and I offer you my unreserved apologies, and I come at once to saying that the Clause, which seeks to withdraw the benefits obtained by these largely artificial transactions, will save the Revenue, the taxpayer generally, as my hon. Friend the Member for Motherwell (Mr. Law-son) correctly said, the general body of taxpayers, including the poorer, £25 million, is now sought to be amended in respect of children above the maximum school leaving age—an infant who has not passed the upper limit of the compulsory school age as defined in section 35 …The age which we can take for this purpose is 15, and it is suggested that beyond this age aggregation should cease.
The only argument advanced in support of the Amendment has been that aggregation would encourage parents to take their children from school at the age of 15. It is seriously suggested that parents with children in the fortunate position of having an income of their own of a size sufficient to be relevant 1639 for Income Tax purposes will take their children from school in order to save themselves a slight further embarrassment of further taxation when, without aggregation, they would otherwise press them to remain at school.
The right hon. Gentleman put this forward. I have never heard him say anything in which he did not believe, and I do not understand how he believes in it. It is inconceivable. Of course the principle behind this is one that I accept. Of course we should encourage children to stay at school. I am aware of this. I served for years as a member of the board of governors of an East End grammar school and I know of the pressures put upon scholarship children from poor families to get them away from school before the compulsory leaving age, in order to enable the family to keep on living. They were regarded as an earning unit, earning nothing at school.
There was no question of these children having an income of £115 a year. Think of what capital is involved when a child has such an income. I deny absolutely that there is a single parent alive who, in the circumstances postulated by the right hon. Gentleman, would dream of taking his child away from school. This has nothing to do with education, it has to do with the fact that the right hon. Gentleman and the Tory Party dislike this artificial method of tax avoidance being brought to an end, and this is the difference between us.
§ Hon. Members: He has sat down.
§ Mr. Wainwright
Will the Chief Secretary deal with the separate argument that where the child remains at school, accepting for the time being the point that he has made, there is a distinct unfairness in the treatment of the child still at school, within the family? There is this unfairness, quite apart from the deprivation of education. There is an obvious unfairness between the treatment of the child working hard for A levels and a child who is gainfully employed.
§ Mr. Diamond
I did not attempt to deal with all the points raised, because we are dealing here with a matter of fundamental principle, and most of the points raised were not related closely to the Amendment. I did not deal with the point raised by the hon. Member for Birmingham, Edgbaston (Mrs. Knight), who asked me about the Latey Report and its effect. This legislation will not come into effect for one year, so that inquiries can be made. It is possible that in the course of a year circumstances will alter and there will be new education provisions. This is fully recognised, and the hon. Lady will find that the matter was fully debated in Committee.
As to the point raised by the hon. Member for Colne Valley (Mr. Richard Wainwright) about the unfairness between the boy working hard for A levels and the apprentice, working hard, I must return to the principle to answer this. The principle here is that the family spending unit becomes two units when one of the children is, as it were, on his own, earning income. That is the only definition that fits the principle. [Interruption.] There is every good reason for taking the Bill in Standing Committee upstairs where we have sensible, sober discussion.
§ Mr. Diamond
As the hon. Gentleman who was most assiduous in his attention in Committee will, of course, know, that is the reason why we distinguish between earned income and unearned income for this purpose.
§ Mr. Fletcher-Cooke
In this Amendment we are dealing with children from 15 to 21, if men and women of 20 can be described as children. The advantage of this Amendment is that almost all the difficulties in the actual operation of the Clause, irrespective of its merits, would fall away like scales if it were accepted. All the problems about when somebody is working full time, all the problems of when they are living away and not in control—all of those disappear if the age is reduced from 21 to the minimum school leaving age.
Very briefly, because we have been through this matter many times, I want 1641 to give two examples of the enormous anomalies which will result, and the unfairness which will result, if the age of the children is to go up to 21. The first one is in the case of the poor child of rich parents, and the second is in the case of the rich child of poor parents. They are not, I think, extreme cases, but they are unusual.
Let us take, first, the poor child of rich parents—say, of a mill owner, who wants his son to go into the mill, as he did, when he is 16 or 17. That is not an uncommon situation. The father is rich, and the son does not want to. The son is, say, a musician, or something of that sort, and wants to pursue his studies, and has got a place, say, at the Royal College of Music, and wishes to see if he can make out there. The father dislikes this and says, "I cannot stop you, but you will not get a penny from me, if you will not go in the mill." [An HON. MEMBER:"Must be a Tory."] Maybe a Tory, maybe a Liberal, maybe Labour, but, at any rate, that is the position, and the son looks round and manages to get, say, an old aunt or a well-wisher to pay him £10 a week so that he can make out as a student and take up his place in further education—as I suggest, at the Royal College of Music.
That is unearned income and, therefore, will be aggregated with the rich father's income, and whereas today the son could pursue those studies, because he could probably live on £10 a week, it will be reduced to about £3 if his father is rich enough, and so the son will have to go sadly back to the mill, where the irony is so great, because the irony is that it will then be earned income, and although he is living at home in luxury, but genuinely in the common spending unit, as the Chief Secretary would say, his income will not be aggregated with that of the mill owner. What is the fairness in that? I hope that is not a situation of which the Chief Secretary is proud.
The second example is almost worse. It concerns parents earning, say, £1,500 or £2,000 a year when their son is left a lot of money directly by a remote relation in Australia—[Interruption.] I see nothing wrong with that example. It has happened more than once, but not to me—[Interruption.]
§ Mr. Speaker
Order. With respect, the temptation in this debate has been to debate the Clause. The hon. and learned Member will not be out of order if he comes to the Amendment.
§ Mr. Fletcher-Cooke
The Amendment deals with children from 15 to 21. My contention was that if the Amendment is accepted all these anomalies and difficulties will fall away like scales. That was the purpose of these examples.
The second example is where a boy of 18 or 19 is left directly an unexpected small fortune and he decides to leave the home and goes up to London to live it up with wine, women and song.— [HON. MEMBERS: "Shame."] I agree that is very bad. But what happens then—[Laughter.]
§ Mr. Speaker
Order. May I remind the hon. and learned Member that the Amendment we are discussing speaks about infants who have not passed the upper limit of the compulsory school-leaving age.
§ Mr. Fletcher-Cooke
The example that I have taken is of someone above the school-leaving age, though below the age prescribed in the Clause.
What happens immediately is that the father is irretrievably ruined, because the income of the son, over which he has no control, is aggregated with the father's and probably the tax that he has to pay is greater than his whole income for the year. It is no good the Chief Secretary saying, as I am sure he would, that he can get it back from the son in due course, because it will have gone—dissipated by his profligate behaviour.
I could give more examples of the anomalies, injustices and general bad management that will result from the Clause as it stands. If the Amendment is accepted, the Clause will at least be workable. It will be understandable, even if it is wrong, and at least it will not be an offence on the Statute Book. For this reason, with the House in its full mood, as it is, and with the debate having gone on not merely tonight, but over the last four weeks, when I think we may safely say that if he have not won in the Lobbies we have won in the arguments, I suggest that we come to a decision by recording, once again, our fundamental opposition to any idea of 1643 a common spending unit among people of 18, 19 and 20, most of whom probably left home years ago.
§ Lieut.-Colonel Sir Walter Bromley-Davenport (Knutsford)
Little did I think as I wended my way to the Chamber that I would be fortunate enough to catch your eye, Mr. Speaker. I had not intended to intervene in the debate. I have not, I regret to say, attended the debate for the last hour and a half. Therefore, I have missed all the tripe that has been talked about.
Let me put this whole matter into a nutshell. [Laughter.] This is a hate tax. The object is twofold, and hon. Gentlemen opposite have had letters from their constituents saying what I am going to say to them. The first object of the exercise is to destroy the fee-paying schools. The next is to prevent those who can afford to give their children a better education from doing so.
§ Sir W. Bromley-Davenport
I have prepared a long speech which now appears to be rather out of order. It is with regret that I shall resume my seat.
§ Mr. Iain Macleod
I hope that the House will forgive me if I say that I regard this as a matter of the utmost seriousness. It is appalling that as we have gone through the Clause and the Schedule hour after hour the only trifling concession that we have wrung from the Chief Secretary is in relation to thalidomide children. What right hon. and hon. Gentlemen opposite can find funny in this passes my comprehension. It is disgraceful. We have heard from the Chief Secretary and from the hon. Member for Motherwell (Mr. Lawson) the authentic voice of Stone Age Socialism. It comforts me at least that soon doctrines of this sort will be rejected by the people, just as we reject the Clause.
§ Question put, That the Amendment be made: —
§ The House divided: Ayes 138, Noes 192.1645
|Division No. 266.]||AYES||[10.58 p.m.|
|Alison, Michael (Barkston Ash)||Gibson-Watt, David||Miscampbell, Norman|
|Allason, James (Hemel Hempstead)||Gilmour, Ian (Norfolk. C.)||Monro, Hector|
|Astor, John||Glover, Sir Douglas||Montgomery, Fergus|
|Awdry, Daniel||Godber, Rt. Hn. J. B.||More, Jasper|
|Baker, Kenneth (Acton)||Goodhart, Philip||Mott-Radclyffe, Sir Charles|
|Baker, W. H. K. (Banff)||Goodhew, Victor||Murton, Oscar|
|Beamish, Col. Sir Tufton||Cower, Raymond||Nabarro, Sir Gerald|
|Bennett, Dr. Reginald (Gos. & Fhm)||Gurden, Harold||Nott, John|
|Biggs-Davison, John||Hall, John (Wycombe)||Onslow, Cranley|
|Black, Sir Cyril||Harrison, Col. Sir Harwood (Eye)||Osborn, John (Hallam)|
|Blaker, Peter||Harvie Anderson, Miss||Page, Graham (Crosby)|
|Boardman, Tom (Leicester, S.W.)||Hawkins, Paul||Page, John (Harrow, W.)|
|Bossom, Sir Clive||Heald, Rt. Hn. Sir Lionel||Pardoe, John|
|Braine, Bernard||Higgins, Terence L.||Peel, John|
|Brewis, John||Hill, J. E. B.||Percival, Ian|
|Bromley-Davenport, Lt.-Col. Sir Waiter||Holland, Philip||Pike, Miss Mervyn|
|Brown, Sir Edward (Bath)||Hooson, Emlyn||Pounder, Rafton|
|Bruce-Gardyne, J.||Hordern, Peter||Powell, Rt. Hn. J. Enoch|
|Bryan, Paul||Hornby, Richard||Pym, Francis|
|Buchanan-Smith, Alick (Angus, N&M)||Hunt, John||Ramsden, Rt. Hn. James|
|Buck, Antony (Colchester)||Iremonger, T. L.||Rees-Davies, W. R.|
|Campbell, B. (Oldham, W.)||Jenkin, Patrick (Woodford)||Rhys Williams, Sir Brandon|
|Carr, Rt. Hn. Robert||Kershaw, Anthony||Rossi, Hugh (Hornsey)|
|Chichester-Clark, R.||Kirk, Peter||Russell, Sir Ronald|
|Clegg, Walter||Kitson, Timothy||Scott, Nicholas|
|Cooke, Robert||Knight, Mrs. Jill||Scott-Hopkins, James|
|Crowder, F. P.||Lane, David||Sharpies, Richard|
|Cunningham, Sir Knox||Langford-Holt, Sir John||Shaw, Michael (Sc'b'gh & Whitby)|
|Dance, James||Lewis, Kenneth (Rutland)||Silvester, Frederick|
|Davidson, James (Aberdeenshire, W.)||Lubbock, Eric||Sinclair, Sir George|
|d'Avigdor-Goldsmid, Sir Henry||MacArthur, Ian||Smith, Dudley (W'wick & L'mington)|
|Dean, Paul (Somerset. N.)||Mackenzie, Alasdair (Ross&Crom'ty)||Smith, John (London & W'minster)|
|Dodds-Parker, Douglas||Maclean, Sir Fitzroy||Stainton, Keith|
|Eden, Sir John||Macleod, Rt. Hn. lain||Summers, Sir Spencer|
|Emery, Peter||Maddan, Martin||Taylor, Frank (Moss Side)|
|Errington, Sir Eric||Maginnis, John E.||Temple, John M.|
|Eyre, Reginald||Maude, Angus||Thatcher, Mrs. Margaret|
|Farr, John||Maxwell-Hyslop, R. J.||Thorpe, Rt. Hn. Jeremy|
|Fletcher-Cooke, Charles||Mills, Peter (Torrington)||Turton, Rt. Hn. R. H.|
|Fortescue, Tim||Mills, Stratton, (Belfast, N.)||van Straubenzee, W. R.|
|Vaughan-Morgan, Rt. Hn. Sir John||Wells, John (Maidstone)||Wood, Rt. Hn. Richard|
|Waddington, D.||Whitelaw, Rt. Hn. William||Woodnutt, Mark|
|Wainwright, Richard (Colne Valley)||Williams, Donald (Dudley)||Wylie, N. R.|
|Walker, Peter (Worcester)||Wills, Sir Gerald (Bridgwater)||Younger, Hn. George|
|Walker-Smith, Rt. Hn. Sir Derek||Wilson, Geoffrey (Truro)|
|Ward, Dame Irene||Winstanley, Dr. M. P.||TELLERS FOR THE AYES:|
|Weatherill, Bernard||Wolrige-Gordon, Patrick||Mr. R. W. Elliott and|
|Mr. Anthony Grant|
|Albu, Austen||Gardner, Tony||Morris, Charles R. (Openshaw)|
|Alldritt, Walter||Ginsburg, David||Moyle, Roland|
|Allen, Scholefield||Gourlay, Harry||Neal, Harold|
|Anderson, Donald||Gray, Dr. Hugh (Yarmouth)||Newens, Stan|
|Archer, Peter||Greenwood, Rt. Hn. Anthony||Noel-Baker, Rt. Hn. Philip (Derby, S.)|
|Armstrong, Ernest||Gregory, Arnold||Oakes, Gordon|
|Atkins, Ronald (Preston, N.)||Griffiths, Eddie (Brightside)||Ogden, Eric|
|Atkinson, Norman (Tottenham)||Griffiths, Will (Exchange)||O'Malley, Brian|
|Barnett, Joel||Hamilton, James (Bothwell)||Orme, Stanley|
|Baxter, William||Hamling, William||Oswald, Thomas|
|Beaney, Alan||Hannan, William||Owen, Dr. David (Plymouth, S'tn)|
|Bence. Cyril||Harper, Joseph||Page, Derek (King's Lynn)|
|Benn, Rt. Hn. Anthony Wedgwood||Harrison, Walter (Wakefield)||Palmer, Arthur|
|Bennett, James (G'gow, Bridgeton)||Haseldine, Norman||Pannell, Rt. Hn. Charles|
|Bishop, E. S.||Heffer, Eric S.||Parker, John (Dagenham)|
|Blackburn, F.||Henig, Stanley||Parkyn, Brian (Bedford)|
|Blenkinsop, Arthur||Herbison, Rt. Hn. Margaret||Pavitt, Laurence|
|Boardman, H. (Leigh)||Hooley, Frank||Pearson, Arthur (Pontypridd)|
|Booth, Albert||Horner, John||Peart, Rt. Hn. Fred|
|Bottomley. Rt. Hn. Arthur||Houghton, Rt. Hn. Douglas||Pentland, Norman|
|Braddock, Mrs. E. M.||Howie, W.||Perry, Ernest G. (Battersea, S.)|
|Bradley, Tom||Hoy, James||Perry, George H. (Nottingham, S.)|
|Bray, Dr. Jeremy||Huckfield, Leslie||Prentice, Rt. Hn. R. E.|
|Brooks, Edwin||Hughes, Roy (Newport)||Price, Thomas (Westhoughton)|
|Brown, Hugh D. (G'gow, Provan)||Hunter, Adam||Price, William (Rugby)|
|Buchan, Norman||Irvine, Sir Arthur (Edge Hill)||Probert, Arthur|
|Buchanan, Richard (G'gow, Sp'burn)||Jackson, Colin (B'h'se & Spenb'gh)||Rees, Merlyn|
|Callaghan, Rt. Hn. James||Jenkins, Rt. Hn. Roy (Stechford)||Richard, Ivor|
|Cant, R. B.||Johnson, James (K'ston-on-Hull, W.)||Robertson, John (Paisley)|
|Carmichael, Neil||Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)||Rodgers, William (Stockton)|
|Coe, Denis||Jones, J. Idwal (Wrexham)||Rose, Paul|
|Coleman, Donald||Kelley, Richard||Rowlands, E. (Cardiff, N.)|
|Crawshaw, Richard||Kerr, Mrs. Anne (R'ter & Chatham)||Sheldon, Robert|
|Cullen, Mrs. Alice||Kerr, Russell (Feltham)||Shore, Rt. Hn. Peter (Stepney)|
|Dalyell, Tarn||Lawson, George||Short, Mrs. Renée (Whampton, N. E.)|
|Davidson, Arthur (Accrington)||Lestor, Miss Joan||Silkin, Rt. Hn. John (Deptford)|
|Davies, Ednyfed Hudson (Conway)||Lever, Harold (Cheetham)||Silkin, Hn. S. C. (Dulwich)|
|Davies, Harold (Leek)||Lewis, Arthur (W. Ham, N.)||Silverman, Julius|
|Davies, Ifor (Cower)||Lewis, Ron (Carlisle)||Small, William|
|Dell, Edmund||Lomas, Kenneth||Snow, Julian|
|Dempsey, James||Loughlin, Charles||Spriggs, Leslie|
|Dewar, Donald||Lyons, Edward (Bradford, E.)||Steele, Thomas (Dunbartonshire, W.)|
|Diamond, Rt. Hn. John||Mabon, Dr. J. Dickson||Swingler, Stephen|
|Dickens, James||McCann, John||Taverne, Dick|
|Doig, Peter||MacColl, James||Thomson, Rt. Hn. George|
|Dunn, James A.||Macdonald, A. H.||Tinn, James|
|Dunnett, Jack||McGuire, Michael||Urwin, T. W.|
|Dunwoody, Mrs. Gwyneth (Exeter)||Mackenzie, Cregor (Rutherglen)||Varley, Eric G.|
|Dunwoody, Dr. John (F'th & C'b'e)||Mackintosh, John P.||Walker, Harold (Doncaster)|
|Edwards, William (Merioneth)||Maclennan, Robert||Wallace, George|
|Ellis, John||McNamara, J. Kevin||Watkins, David (Consett)|
|English, Michael||Mahon, Peter (Preston, S.)||Watkins, Tudor (Brecon & Radnor)|
|Ensor, David||Mahon, Simon (Bootle)||Wellbeloved, James|
|Evans, loan L. (Birm'h'm, Yadley)||Mallalieu, E. L. (Brigg)||Whitaker, Ben|
|Faulds, Andrew||Manuel, Archie||Whitlock, William|
|Fernyhough, E.||Marks, Kenneth||Wilkins, W. A.|
|Fletcher, Raymond (Ilkeston)||Marquand, David||Williams, Alan Lee (Hornchurch)|
|Fletcher, Ted (Darlington)||Mellish, Rt. Hn. Robert||Williams, Mrs. Shirley (Hitchin)|
|Foley, Maurice||Mendelson, J. J.||Williams, W. T. (Warrington)|
|Ford, Ben||Millan, Bruce||Winnick, David|
|Forrester, John||Miller, Dr. M. S.||Woof, Robert|
|Fowler, Gerry||Milne, Edward (Blyth)||Yates, Victor|
|Fraser, John (Norwood)||Molloy, William|
|Freeson, Reginald||Moonman, Eric||TELLERS FOR THE NOES:|
|Galpern, Sir Myer||Morgan, Elystan (Cardiganshire)||Mr. Alan Fitch and|
|Mr. Neil McBride.|
Amendments made: No. 154, in page 11, leave out lines 1 to 9 and insert:
(2) Subjection (1) above does not apply to—
(2A) Section 397(3) of the Income Tax Act 1952 (settlements on children: income not exceeding £5 not to be treated as income of settlor by virtue of section 397(1) of that Act) shall cease to have effect, but neither the said section 397(1) nor subsection (1) above shall have effect in relation to an infant for any year of assessment for which his aggregate income, so far as it would fall within one or other of those provisions but for this exception, does not exceed £5.
§ No. 155, in page 11, leave out lines 18 to 20.