§ THE EARL OF DENBIGH rose to ask His Majesty's Government the amount of revenue obtained in each of the last three years from licences for the employment of indoor men servants, chauffeurs, grooms, gardeners, keepers, &c., and all who are officially characterised as "menservants" and to move, That in these times of acute unemployment it is contrary to the public interest to maintain the principle of penalising those able to give employment to menservants.
§ The noble Earl said: My Lords, the Motion which I have the honour to bring before the House is one which, I think, has considerable interest in these days, as it concerns a subject which, for some reason or other, seems to have been almost entirely overlooked. We are faced with a terrible amount of unemployment in the country, and we are constantly being appealed to to give employment to ex-Service men and others. There is a strong tendency to use ex-Service men as handy men for household duties in place of women. I know many 120 people who do so, and they say that they get very much better work out of them. People are also using married couples for household work. It seems to me entirely wrong that, in order to employ a man for any work of that description, it is necessary to take out a licence for him, even though it be at the low figure of 15s.
§ This tax, I believe, dates from about the year 1869, when it was introduced as a luxury tax by a Chancellor of the Exchequer who thought that he saw a useful means of obtaining a little income from the rich people who employed men under the various definitions that are given. But times are very much altered. If you look at the definitions in the paper which we all receive in the month of January, when we are called upon to give our return of employees who are liable to tax, you will find that all those who can be characterised as "maitre d'hotel, house steward, master of the horse, groom of the chambers, valet de chambre, butler, under-butler, clerk of the kitchen, confectioner" and so on, even down to postilions—in these days of motor cars!—have to be registered and are taxed at 15s. a head. While I am afraid that, so far as my own modest establishment goes, the maitre d'hotel, house steward, master of the horse, clerk of the kitchen and confectioner have "gone west" many years ago and we are far more concerned with that interesting race of damsels known as "tweenies," we want to encourage people to give employment as much as possible, and I strongly suggest that this is a tax which is entirely out of date and unnecessary.
§ I do not know how much money is obtained from this duty. The income goes to the local authorities, I believe, and I suppose that if, in the next Budget, the Chancellor of the Exchequer were to bring in a measure to drop this duty, the local authorities would require some compensation. I should not think that would be very difficult to get; but I do strongly suggest that an expression of opinion on the subject is not out of place. If you take on as an extra gardener an unemployed man in the village, to do extra work in the garden, unless you take him on as a labourer and pay him by the hour you have to take out a licence. If you take him on by the week ipso facto he becomes an under 121 gardener and you are liable to pay the tax, and if you fail to take out a licence you are liable to a, penalty. In the same way, if in the winter you take on an unemployed man to work in the stables the same thing happens.
§ Amongst the various shades of opinion which support noble Lords of the Party opposite there is a vast amount of nonsense talked about this question of employing domestic servants. I went not long ago to hear a debate between Mr. Maxton and Mr. Oliver Stanley on the subject "Do the Rich rob the Poor? and I listened with interest to Mr. Maxton, who can talk a vast amount of nonsense when he likes. I was impressed by the cheap cheers which he drew from the gallery when he enumerated all the requirements of the rich—that they wanted somebody to put them to bed and to get them up in the morning, to feed them at table, to black their boots and put their clothes out, etc., all with a view of showing how useless and helpless they were—quite ignoring the fact that if those who had money to spend on domestic servants were lo be got rid of, or their income reduced to such a figure that they could not afford to employ men servants, a very large number of extra men would be thrown upon the streets and reduced to drawing the "dole." I know perfectly well that noble Lords opposite do not agree with nonsense of that description, but it is the sort of view put forward in some quarters, and it is just as well that some people should realise that you cannot pay wages and taxes with the same money.
§ We want to give employment and to employ all those we can afford to employ, and I think it is a very irritating grievance that we should be called upon to pay a tax, no matter how small it may be. I suggest that it might be the other way, and that there might be a remission of Income Tax to employers for every man they employed, but I suppose that that would be too much to suggest. Therefore I beg to call the serious attention of this House to the question. I think it would be a good thing to have an expression of opinion from this House and I therefore move: "That in these times of acute unemployment it is contrary to the public interest to maintain the principle of penalising those able to 122 give employment to men-servants." I also wish to ask the Government if they can give any information as to the amount of revenue which is obtained from this particular tax.
§ Moved to resolve, That in these times of acute unemployment it is contrary to the public interest to maintain the principle of penalising those able to give employment to men-servants.—(The Earl of Denbigh.)
§ THE PAYMASTER-GENERAL (LORD ARNOLD)My Lords, the noble Earl has introduced this Motion in an interesting speech, and what he has said will no doubt receive a considerable measure of approval and support from your Lordships. Nevertheless I do not think that a close examination of the problem will show his arguments to be so well-founded as to justify the Government in yielding to his request and abolishing, in one way or another, this duty. I propose, with your Lordships' permission, to analyse the position, so that we may get what I think is the real perspective of the matter. First, I would reply to the question as to the yield of the duty in the last three years. In the twelve months ending March 31, 1928, the yield was £140,588. For the next year, ending March, 1929, it was £141,429, and for the third year, ending March, 1930, it was £142,318. Your Lordships will mark that the yield of the duty is rising, slowly no doubt but still rising, and if I may give another figure that point will be even more clearly established. If I go back one more year, to the twelve months ending March, 1927, the yield of the duty was then £133,366. Therefore, you will observe that in the four years the proceeds of the licence duty have increased by about £9,000. I think it follows from that that it is a little difficult to establish the position that the duty is an onerous burden or a deterrent to employment, because the yield is actually increasing.
I observe that in The Times this morning there was a leader, and the writer of that leader, in inveighing against this duty, after describing in technical terms the male servant, says this:—
To-day the families that can afford luxuries of this high-sounding order are a vanishing quantity.123 It is a little difficult to reconcile that with the fact that the proceeds of the duty are actually increasing, and I think I shall be able in some subsequent figures also to do something to combat the observations of The Times leader writer. In spite of the surmises indulged in by various persons, and of the letters to The Times, the broad fact emerges that despite high taxation the number of male servants is increasing. Let me continue the analysis a little further. The tax or duty is 15s. per male servant, and I submit that that is hardly sufficient, save in a few cases, to be a deterrent to employment. It may be an irritant, but not a deterrent. I dare say it is a slight irritant, but all taxation is irritating, and if the Chancellor of the Exchequer is to abolish taxes or duties merely because they irritate he would very soon find himself left with no revenue at all.What is the operating idea in the suggestion that this duty really deters those who would otherwise do so from engaging male servants of one kind or another? I think it will be agreed that in the main—not entirely—the very vast majority of these male servants are employed by those in the Super-Tax class. The latest figures show that there are 95,592 Super-Tax payers in the country, that is, those with £2,000 a year and upwards—mostly upwards. They have between them an income of £531,000,000. It is true that they have to pay taxes—Super-Tax, Income Tax, and of course the ordinary indirect taxation, and also there are the Death Duties. I will throw them all in in the calculation that I am going to make, and make an estimate of what they cost over the average; and the average net income of the Super-Tax payers, after they have paid all their taxes, including an allowance for Death Duties is about £60 a week each. I repeat that these 95,592 persons, when all their taxes have been paid, have an income left of somewhere about £60 a week each.
Let us look at it a little further. I am dealing always with averages. I have told the noble Lord that the yield of the tax was £142,318. That means in round figures that the number of these male servants is about 190,000. Assume that they are all employed by those who are in the Super-Tax class. Speaking broadly, that would mean that the average per Super-Tax payer would be 124 about two male servants, and the charge for that would be 30s. a year. So the position is that on the average these Super-Tax payers, who have a net income after all their taxes have been paid of about £60 a week each, are called upon to pay for their average of two male servants about 30s. a year. Now, £60 a week is between £8 and £9 a day. So, if you take the amount of this duty at 30s. a year, it is the equivalent of about 4½ hours' income per year in their case. It is very difficult to establish the proposition with any degree of assurance that a tax of that kind really deters these people from employing male servants. If a Super-Tax payer came to me and said that because of this tax he could not employ a man whom he wanted I should say he was a very exceptional person, or else that that was not really the reason.
There is one point that I would make in regard to the noble Earl's remark about gardeners. It is not the case, of course, that if you employ a gardener for a day or so any tax is payable, and, as I understand it, if a duty is payable for a gardener he must really be a gardener. I think the noble Earl almost indicated that. There was a case of Dillon versus the Marquess of Bath. There it was held that an ordinary labourer employed in digging and doing other work, including sowing potatoes and planting cabbages under the direction of a gardener, and paid only the same wages as an agricultural labourer in the same neighbourhood, is not a gardener or under-gardener under the Act. The tax is of greater antiquity than the noble Earl suggested. It really began, not in 1869, but in 1777, so it has been in existence for about 153 years. That in itself, I should have thought, might have entitled it to a little respect from the Conservative Party. I make the noble Earl a present of this: it is not an ideal tax, and if we were founding a tax system afresh to-day I think it quite likely that this tax or duty would not be in it but that is a very different thing from taking it out now, after it has been in for 153 years.
As a matter of fact, this is not really a national tax, it is a local tax. It is collected by the county councils and the county borough councils. So far as England and Wales are concerned it does 125 not come into the national accounts at all. Scotland is a little different: there it goes in and out. But there is no part of the proceeds of this tax which goes to the Chancellor of the Exchequer. Therefore, if it were abolished you would either have to have the unanimous consent of the local authorities, or the Chancellor of the Exchequer would be expected to make up the amount, or, in the last resort, if that were not done, it would presumably mean some increase in rates. It is a matter more of rates than of taxes. I think that the Chancellor of the Exchequer is quite right in saying, as I do on his behalf, that he cannot in these circumstances do away with the tax. The amount may not be large, but it has its modest usefulness to the local authorities, and in these days I think it certainly should be retained.
As I say, if it were done away with the local authorities would have to get the money from some other source, and I really do not think the money could be got from a class better able to afford to pay than the persons who are at present liable. So, speaking on behalf of my right hon. friend, I cannot accede to this Motion, whatever there may be in its favour so far as unemployment is concerned—and I do not think in practice that amounts to much. The decision which I have to announce would, I am convinced, be the decision of any other Government. This is not a new request of the noble Earl. The matter has been raised several times in recent years, and successive Chancellors of the Exchequer have always refused to yield to the request that this duty should be abolished. My right hon. friend takes up the same position.
§ THE EARL OF DENBIGHMy Lords, I should like to point out that the speech of the noble Lord dealt simply and solely with the Super-Tax payer. I do not dispute for one moment that the amount of tax is a very small item, when taken alongside of the average income of the Super-Tax payer. But there are other people in this country besides Super-Tax payers, thank Heaven, and I am sure there is a very large number of people with small incomes who would probably employ a much larger number of men at the present moment if it were not for this annoying tax. I am not thinking of the Super-Tax payers; they can look after 126 themselves. All we want to do is to remove every possible hindrance to the employment of men, and I maintain that it is not too much to ask for an opinion from this House to the effect that this tax is practically out of date in the circumstances in which we live now, quite irrespective of what it was over 150 years ago when the tax was first imposed. It is contrary to the public interest to keep it on.
§ On Question, Motion negatived.