Clause 36 (Hansard, 4 July 1968)

§ Mr. Michael Shaw
I beg to move Amendment 99, in page 31, line 36, after ' individual', insert: 'being a man under 65 or a woman under 60 at the beginning of the year 1967–68'. I had expected the sun to shine, the rain to pour and all extraordinary features of nature to be manifest at this moment because, at long last, and within five minutes only, we have to discuss in great detail the special charge. Our discussion, alas, will not be as great as we had wished, but, in the few minutes remaining, I hope to make sufficient points to convince the Government that our Amendment is acceptable.
The Chancellor described the reason for the special charge in these words on Second Reading: The burden on those who can supplement their incomes out of capital is relatively less severe, and it is equitable that they should be called upon to make some additional contribution."—[OFFICIAL REPORT, 24th April, 1968; Vol. 763, c. 265.] In other words, we are in so deep a crisis that we must needs gather from those whose incomes are large more than 100 per cent. of their income.

§ Mr. Joel Barnett (Heywood and Royton)
I am delighted to have the opportunity to intervene on this Clause. Where did my right hon. Friend say that that was the reason?

§ Mr. Shaw
I quoted his words from col. 265.

§ Mr. Barnett
But where did the Chancellor say that it was for that deep and dire reason?

§ Mr. Shaw
I beg the hon. Gentleman's pardon. I failed to say exactly when I ceased to quote, but, if he refers to the paragraph, he will see the point.
Clearly, the Chancellor's logic was tailored to fit the proposals which he made in the Budget. In my view, the special charge cannot be reconciled with 1783 the overwhelming need of the country to encourage initiative and enterprise and the need for greater and greater investment by the people. The reasons for the tax are two. In the short term, sweeteners had to be handed out. In other words, this is a "cookie for the Kremlin", a sop to the Left wing. Even in Committee, the reactions of certain hon. Members made all too clear that that was one of the reasons. In the long term, throughout the period of the present Government, it has become more and more apparent that they are completely lacking in control of their own expenditure, and this is the second reason why additional money is needed.
We are now seeing more and more differences between earned income and investment income. Whatever arguments there may be for such differences, they are not valid in relation to people reaching the age of retirement, and it is to this that our Amendment is directed. We consider that the method by which a person prepares for his retirement, either by savings or by way of pension rights, is and should be a matter for his own judgment and not a matter which our taxation laws should inhibit.
If a person, when he retires, has, for example, an investment income of £3,000, apparently that is all right and his income is not subject to a special charge. If he has a pension of £5,000 a year he will have no Surtax to pay on £3,000 of it and he will have no special charge. If, however, he has had to save to provide such an income for his retirement, the additional income comes to him as investment income on the savings which he has made and he has to pay £1,150 special charge and, in addition, about £1,000 additional Surtax. We regard that as wrong. Those who are retired should be exempt from the special charge.

§ Mr. Terence L. Higgins (Worthing)
I support my hon. Friend the Member for Scarborough and Whitby (Mr. Michael Shaw) in this Amendment. It is certainly the case that we had at long last reached this particular section and it is certainly on—