HL Deb 03 December 1952 vol 179 cc701-4

2.43 p.m.

LORD SALTOUN

My Lords, I beg to ask the Question which stands in my name on the Order Paper.

[The Question was as follows:

To draw the attention of Her Majesty's Government to the circumstances of Miss Browne, daughter of Mr. A. E. Browne of the Consular Service, who, left badly off owing to her father's long and painful illness, has managed to educate herself and is in her final year at Bedford College—but in doing so has exhausted her means save for her post-war credits; and unless she can encash these she may fail in her effort; and to ask whether the Government is prepared to grant encashment in special cases, and if not, what is the moral justification for refusal. And, in general, Parliament having abolished all tontines as a matter of public policy, how can Her Majesty's Government justify themselves for running a universal tontine of their own?]

THE EARL OF SELKIRK

My Lords, the noble Lord, Lord Saltoun, has again drawn our attention to the state of the law regarding the income tax post-war credits, by bringing before us an example of a young person who is in need of money and not able under the law to obtain payment of her credits. Miss Browne's father was a pensioner of the Consular Service who died in 1948, aged sixty-two. He held some post-war credits which were not payable to him, since he was under sixty-five. They had been transferred to Miss Browne, who was entitled to his estate. She is in need of money to help her in her final year of study but finds that, at the age of twenty-eight, she is herself too young to claim payment.

The intention behind the creation of post-war credits was, first, to sweeten the pill of increased taxation introduced in 1941–42 as part of the war effort, and, secondly, to provide a reserve of purchasing power which could be released if a depression ensued after the end of the war. The credits amounted to approximately £800 million and it has not been possible since the war to undertake large-scale payments out of that total because of the inflationary danger of such an undertaking. Approximately £193 million has, however, been paid out since 1946 in payments to the older people—men over sixty-five and women over sixty—and these payments are continuing at the rate of about £16 million a year. Successive Governments have been constantly aware of the dissatisfaction of those suffering hardships who have these credits but are not old enough to claim payment. The present method of repayment was selected from among the many possibilities for starting the release of credits because it may fairly he taken that in general the greatest reed will be found among the older people and because it was felt appropriate to ensure payment to those who, in the ordinary course, may be expected to have the shortest time to enjoy the benefit of it. This system inevitably fails to take account of the circumstances of particular cases, or of the degrees or types of hardship from which many people suffer; it does so, not out of any failure of human understanding of the hardships which have been brought to the notice of successive Governments but by way of escape from the really serious difficulties of taking hardship as a criterion for payment.

In answer to the noble Lord's specific question, I must refer him to the reply given by the Chancellor of the Exchequer to a similar Question on November 7. My right honourable friend then said (OFFICIAL REPORT, Commons, Vol. 507, Col. 4: Written Answers): This is one of the matters which I shall consider when framing my Budget proposals. Moreover, a further Question was put to him on November 27 dealing with the type of cases which Lord Saltoun has particularly in mind to-day—namely, those where the original holder has died under the age of sixty-five. The Financial Secretary to the Treasury answered similarly (OFFICIAL REPORT, Commons, Vol. 508, Col. 70) that: The question of paying post-war credits to either general or particular classes of taxpayers is one of the matters which my right honourable friend will consider when framing his Budget proposals. In those circumstances, I fear that I can to-day do no more than undertake to bring to the attention of my right honourable friend the representations made by the noble Lord, Lord Saltoun.

LORD SALTOUN

My Lords, I am grateful to the noble Earl for the reply he has given me. I know from experience that when Her Majesty's Government undertake to consider a matter we may hope that something will come of it. But his answer does lead to one or two supplementary questions which I beg leave to put to him. If, in the first place, the true reason for the failure of the Government to repay these credits is that they cannot really afford to do so, instead of their choosing an arbitrary and uncertain criterion like longevity would it not be more fair to set aside a certain sum, say the £16 million in question, for repayment annually, and to repay those creditors to whom the Government's default have brought the greatest difficulty? I think I could suggest a method of selection which would not be too onerous and unfair and which might serve the purpose. The next question is: is it not probable that in those families who extend themselves in the service of the community these credits may remain for ever as an heirloom in the family? I know at least I one family which over 150 years has been short-lived. Thirdly, I should like to ask: is it really the case, as suggested by a revenue official, according, to the Sunday Chronicle, that money in the pockets of the people it belongs to is reprehensible inflation, whilst money in the pocket of the Government is not; and is that why, as fast as credits were diminished by the banks, in loyalty to the Government's request, the Government overdraft more than made up for the reduction?

THE EARL OF SELKIRK

My Lords, I am sure the constructive proposal which the noble Lord made in regard to the way in which these credits shall be paid out will be carefully considered. He has suggested that there is a better way of spending £16 million than the way the Government have selected. I would rather not comment on that. He has made a contradictory suggestion because, first of all, he suggested that the Government cannot afford to pay these credits, whereas in point of fact I have said that these payments would be inflationary. That is, I think, beyond peradventure. The wisdom of the Government in spending money is a matter which it is our particular business to follow and to criticise. That is a matter which we cannot do in individual cases, but it is our duty to do so in regard to the Government. It is for that reason that we hope the Government's expenditure is sometimes wiser than individual expenditure.

LORD SALTOUN

I hope the noble Earl appreciated that I was discussing only the £16 million which he told me the Government were already paying every year on this account. Therefore, my suggestion would be no more inflationary than the present system.