HC Deb 17 February 1970 vol 796 cc187-9
12. Dr. Summerskill

asked the Chancellor of the Exchequer what representations he has received concerning an alternative to the aggregation of the earnings of married women with those of their husbands for taxation purposes; and whether he will make a statement.

25. Mr. Cronin

asked the Chancellor of the Exchequer what consideration he has given to further reductions of income tax payable by married women who do paid work.

Mr. Diamond

My right hon. Friend has received various representations on how much a single man, and a married man with one, two or three children under 11 years of age, respectively, need earn in January, 1970, to offset the increase in the cost of living compared with men in similar circumstances earning, respectively, £500, £1,500, £3,000 and £4,000 a year in 1964, taking into account changes in the internal purchasing power of the £ sterling, income tax, surtax and family allowances.

Mr. William Rodgers

With permission, I will circulate the figures in the OFFICIAL REPORT.

Mr. Costain

Does the Minister realise how convenient that Answer is? Does he appreciate that the last time I asked a similar Question I was told that it meant £700 a year more on a salary of £3,000 to maintain the same spending power? Does he not appreciate that it is the high rate of taxation brought about by this Government which is causing pressure on the prices and incomes policy?

Mr. Rodgers

I do not accept the hon. Gentleman's conclusion, and I think that before drawing further conclusions he should study the figures.

Following are the figures:

this matter, but I cannot anticipate his Budget statement.

Dr. Summerskill

Would my right hon. Friend bear in mind that when a professional man and woman both go out to work they are penalised financially for having entered into the married state? Instead of there being a tax on virtue, people should be taxed as individuals in their own right. Furthermore, is he aware that the Medical Women's Federation claims that because of this tax burden 1,500 married women doctors are not practising?

Mr. Diamond

On the first part of the question, I am sure my hon. Friend is aware that up to a salary in excess of £5,000 a married couple both working are better off than they would be if single. As to the question of aggregation, the House is aware that this matter was studied in detail by the Royal Commission, which concluded that aggregation should be maintained.

Mr. Cronin

Would not my right hon. Friend agree that this tax law is based on the archaic assumption that a woman is some sort of chattel of her husband, and that it is therefore quite inconsistent with the ideals of a modern society which wants to make the maximum use of the scientific knowledge of all its members, irrespective of sex?

Mr. Diamond

I do not want to be drawn into the question of who is whose chattel. I would only reply to my hon. Friend that the law is based on the commonsense assumption that married people live together, share together and work together.

Mr. Iain Macleod

But does not the right hon. Gentleman agree that the situation is that up to a joint income of £5,085 it pays to be married and that, beyond that sum, it pays to get divorced? On what conceivable principle can he justify that situation?

Mr. Diamond

I have already answered the right hon. Gentleman by saying that the system is based on aggregation. That matter of aggregation was considered in depth by the Royal Commission and approved. It made a suggestion about the ceiling for an addition to the earned income relief, and when the right hon. Gentleman's own Government considered the position in 1957 they made an alteration to the ceiling, but left unaltered for that year, and the seven following years, the principle of aggregation.