HC Deb 21 February 1980 vol 979 cc632-4
3. Mr. McQuarrie

asked the Chancellor of the Exchequer what progress his Department has made to alleviate the position regarding widows' pensions and taxable income, when the widow takes up employment and is taxed on the gross income of pension and wages.

The Minister of State, Treasury (Mr. Peter Rees)

I have the tax position of widows under review, and I met representatives of the National Association of Widows on 13 February. I have noted the point made by my hon. Friend.

Mr. McQuarrie

I am grateful to the Minister for that reply. I should like my hon. Friend to remember that the Budget is close, and that we are hopeful that when my right hon. and learned Friend the Chancellor makes his Budget Statement he will take into consideration that fact that those widows are heavily penalised. Action must be taken as part of the grossing operation to give them relief. The husbands paid for the pensions before they died, and their widows are entitled to receive them.

Mr. Rees

I have no doubt that my right hon. and learned Friend will take full account of the points made by my hon. Friend, but I cannot anticipate his Budget.

Mr. R. C. Mitchell

Does the Minister prefer the woman concerned to go out to work or to apply for supplementary benefit?

Mr. Rees

I do not believe that it is for me to express a preference between those two options. However, I do feel that the tax system is loaded in a way that would indicate a particular course of action to a lady in that unfortunate position.

Mr. Horam

Will the Minister consider taking the widow's allowance out of the tax system for the first six months after her husband dies? Will the hon. and learned Gentleman accept that it is the only short-term benefit that is at present subject to tax? Does he agree that the cost of making it non-taxable would be small and would be much appreciated by widows?

Mr. Rees

There is an anomaly. As the hon. Gentleman will realise, it can be cured in one of two ways.

Mr. Cormack

Is my hon. and learned Friend aware that his predecessor at the Treasury received deputations from the National Association of Widows with great courtesy, year after year, and did nothing? Will he endeavour to improve on that?

Mr. Rees

I hope that I have matched the courtesy of my predecessors. We shall certainly take note of the point made by my hon. Friend.