HL Deb 20 January 1965 vol 262 cc917-20

3.9 p.m.

BARONESS WOOTTON OF ABINGER

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

[The Question was as follows:

To ask Her Majesty's Government whether they will now provide, in accordance with the practice commonly followed abroad, that the incomes of husbands and wives should be individually assessed and charged for income and surtax instead of being aggregated as at present.]

LORD SHEPHERD

My Lords, as my noble friend will be aware, the Royal Commission on the Taxation of Profits and Income carefully considered the tax treatment of married couples in their Second Report. They concluded that the taxation of the combined incomes of husband and wife as one unit was fairer to those concerned than separate taxation as separate units, and they recommended

VISCOUNT ST. DAVIDS

My Lords, I thank my noble friend for his detailed reply and look forward to seeing the information in the Official Report.

Following are the details referred to in Lord Stonham's Answer:

that the general rule of aggregation should be maintained. I am advised that, in the great majority of cases where the wife is earning, the present system is more favourable than separate taxation. It is only where the joint earned income is very substantial that the tax payable is more than it would be under separate taxation. I would inform my noble friend that if the wife wishes to handle her own affairs it is open to her or her husband to apply to be assessed separately on their separate incomes, although, of course, the total tax liability will remain the same. In all the circumstances my right honourable friend the Chancellor of the Exchequer sees no reason to dissent from the Royal Commission's recommendation.

BARONESS WOOTTON OF ABINGER

My Lords, I thank the noble Lord for his Answer. Is he able to say what the cost of this change would be?

LORD SHEPHERD

My Lords, I am afraid I cannot help the noble Lady in that matter, but I will inquire into it and let her have a figure.

BARONESS WOOTTON OF ABINGER

I do not know whether the Minister is aware that this proposal has long been resisted on grounds of cost, but does he not agree that, if it is expensive, it must follow that the gains to the taxpayer would exceed the losses? Is he not also aware that many women resent their own earnings being treated as part of their husbands' income; that this practice is widely regarded abroad as one of the signs that Britain has not been modernised; and that at certain income levels it is a direct inducement to men and women to live together without being married?

LORD SHEPHERD

My Lords. I would not rise to the noble Lady's first supplementary question, at least until I have seen what is the cost. In regard to her last supplementary question, I am not aware that persons do live in sin (shall we say?) in order to avoid taxation, but I would suggest to the noble Lady that in this matter one must consider not so much the position of persons living together but the need to obtain a fair balance in taxation between one married family and another.

LORD CONESFORD

My Lords, can the Minister say why Her Majesty's Government treat this recommendation of the Royal Commission with such respect and other recommendations of the same Royal Commission with so much contempt?

BARONESS SUMMERSKILL

My Lords, may I ask the noble Lord if he will let us have more figures on this subject? Although I agree with my noble friend's approach regarding sex equality, I nevertheless think it is a fact that in the industrial field, where the average wage for a woman is £9 or £10, it is not in the financial interests of the family if the wages are aggregated. Nevertheless, in the professional world, and in the higher income groups, as the noble Lord has agreed, there are of course cases where, it is suggested, men and women might be tempted to indulge in promiscuity because of the unfair tax position. Could the noble Lord let us know what modifications of the present system of assessment would have to be made so that there would be a fair approach, even in these higher income brackets?

LORD SHEPHERD

My Lords, I feel I should like notice of the last part of the noble Lady's supplementary question. In regard to her first supplementary as to figures, I shall, of course, be very pleased to provide her with figures; and if she feels that those figures would be of interest to the House, perhaps, again, she would put down a Question on the Order Paper.

BARONESS WOOTTON OF ABINGER

My Lords, it has been reported that the Government intend to scrape the moss and barnacles off our tax system. Will the Minister take into account that barnacles are the last thing that one would wish to find in the marriage bed?