HC Deb 25 May 1978 vol 950 cc1721-2
1. Mr. Spriggs

asked the Chancellor of the Exchequer if he will investigate the widowed mother's allowance tax anomaly referred to by Mrs. J. Nicholls of 32 Closk Face Road, St. Helens; and if he will make a statement.

The Minister of State, Treasury (Mr. Denzil Davies)

I am looking into the points that Mrs. Nicholls has raised, and I will be writing separately to my hon. Friend as soon as possible.

Mrs. Nicholls' treatment is not, however, anomalous. The reason why widowed mothers, like other pensioners, are at present paying more tax than they did at the end of the tax year 1977–78 is that the increases in their pensions, made last November, which were specially exempted until April for administrative reasons, have been taxable since 6th April. Pensioners, like other taxpayers, will, however, find their tax deductions go down this month when the increases in personal allowances take effect. The lower rate band will come into effect from July, when there will be a further tax reduction. The tax reductions made under the Budget proposals will normally more than offset the extra tax due on the pension increase.

Mr. Spriggs

Is my right hon. Friend aware that last year the widowed mothers' allowance in this case was £31.80, with a child allowance benefit of £2.50, the latter subsequently being increased to £4.60, the whole of which was taken from the widowed mothers' benefit? This lady had an extra £4.90 income tax to pay, on top of which her salary was less this year than last. This case and similar cases should receive the urgent attention of the Treasury and the Government as a whole.

Mr. Davies

I can reassure my hon. Friend that the tax position of widowed mothers is no different now under the new regime of child benefits from what it was under child tax allowances. Indeed, we made certain of that by ensuring that the dependency allowance—the first £52 of it last year and the first £80 of it this year—is tax free, so the switch from child tax allowances to child benefits in no way affects the taxable position of widowed mothers.