§ 3.6 p.m.
§ [The Question was as follows:
§ To ask Her Majesty's Government, since an anticipated loss of £1,500,000 or more will be suffered by the Revenue in the ensuing year in the collection and refund of the selective employment tax in respect of certain old age pensioners—
§ 1. Whether it would not be appropriate to abolish forthwith this tax imposition upon those who through its payment may generally find difficulty in purchasing the weekly necessities of life; and
§ 2. Whether the sixty-one officials at present involved could not be released for employment in productive industry and thus become of some real assistance in the national economic struggle.]
§ LORD SHEPHERDMy Lords, private householders may claim refund of the selective employment tax in respect of domestic or nursing assistance if they are, or have living with them, persons over 70 years of age. It would not be feasible to relieve these householders from payment of the tax since it is impracticable for the Ministry of Social Security to distinguish between employers on National Insurance cards. The tax is normally refunded, subject to the necessary conditions being met, at quarterly intervals. In cases where they are satisfied that there is hardship, the Ministry of Social Security may arrange for monthly repayments. The question of releasing the 61 officials from their present employment does not therefore arise.
§ LORD WISEMy Lords, unfortunately I did not hear entirely what the noble Lord said, because he was speaking so quickly. But may I ask him a further question? Is it correct to say that the Government are not concerned about the reduction of Government expenditure and the use of clerical staff, both male and female? Is there to be no end to the creation of new jobs?
§ LORD SHEPHERDMy Lords, I apologise to my noble friend if I spoke too quickly. It was not with any intention other than getting on with the business of the House. I made inquiries, anticipating the supplementary question, and I am satisfied that the position is that if we were to make any changes in this field it might well mean that we should have to provide an increased staff so to do.
LORD HAWKEMy Lords, do Her Majesty's Government realise that if they wish to lessen poverty in this country it would greatly assist that aim if they remitted all selective employment tax on the employment of old-age pensioners of any sort?
§ LORD SHEPHERDMy Lords, we have made a number of exclusions under the Act. If there is any particular hardship in the case of an old-age pensioner there are means within the social security administration for that hardship to be alleviated.
LORD HAWKEMy Lords, I do not think the noble Lord realises how wide I am going. I am suggesting that no selective employment tax should be charged on any person who is drawing an old-age pension of any sort, since obviously it is greatly to the advantage of the economy that old-age pensioners should be encouraged to work as much as possible.
§ LORD SHEPHERDMy Lords, I have a great deal of sympathy with the point of view expressed by the noble Lord. Owing to the manner in which this tax is being raised—that is, by the use of employment stamps—as I said in my original Answer it is not possible to identify the employer in every case.
§ LORD POPPLEWELLMy Lords, is it not a fact that old-age pensioners who are in employment are able to work only 309 part-time and to earn a limited sum before their pension is affected? Does not the new proposal mean that part-time employees who are working less than 21 hours a week will be eligible for a reduction in the selective employment tax?
§ LORD SHEPHERDMy Lords, I think the noble Lord is quite correct, but I understood that the noble Lord, Lord Hawke, was referring to old-age pensioners who were in fact employers.
§ LORD SILKINMy Lords, are the Government doing nothing to make this concession known to the general public? I have the impression that it is not generally known.
§ LORD SHEPHERDMy Lords, as I understand the position notices are displayed in the post offices where these stamps have to be purchased before they are put on the National Insurance card, but I will certainly look into the question to see whether wider publicity could be given.
LORD HAWKEMy Lords, is the Minister aware that he was only partially correct in agreeing with his noble friend Lord Popplewell, because old-age pensioners over the age of 70 can work for any number of hours and earn any sum of money they like; and many of them do.
§ LORD WISEMy Lords, may I come back to my original Question? Is it not correct that in the case of old-age pensioners the selective employment tax is collected from them, thus reducing their already low standard of living; and that the Government are getting interest on the money which has been collected by its use, or misuse, and then paying it back to the old-age pensioner? Is it not also the fact that the Government lose £1½ million in carrying out this exercise? Does the noble Lord consider that this is competent administration?
§ LORD SHEPHERDMy Lords, my noble friend is under a misconception in regard to the figures that were given the other day. The figure of £1,500,000 is not a loss, in the sense of representing the 310 cost of the operation of S.E.T. in relation to those who have been excluded from the Act. In fact, this is a sum of money which has been collected by the purchase of stamps, and has been refunded. I am afraid that I cannot remember the other question which my noble friend asked.
§ LORD WISEI mentioned the way in which the tax was collected from the old-age pensioner, or in respect of the old-age pensioner invested by the Government and repaid to the old-age pensioner, and there is a loss of £1½ million on the exercise. If the noble Lord will read what his noble friend said to me in reply to my supplementary question on April 4 he will find that the figures I have given are correct.
§ LORD SHEPHERDMy Lords, first of all, the old-age pensioner we are considering is an old-age pensioner who pays for the stamp. As the noble Lord will be aware, an old-age pensioner, or for that matter any employer, may have changes of staff, and as I see it there is no way at the present moment in which we can clearly identify the stamped card of an employee who is employed by an old-age pensioner. This is the difficulty of excluding old-age pensioners from this scheme. I certainly will consider all the points that have been made, but I believe the administrative difficulties are far too great for any real change.
§ LORD WISEMy Lords, may I inform my noble friend that the old-age pensioner who employs domestic help for any particular purpose, whether because of infirmity or any other reason pays the tax. He or she then reclaims it on a special form from the office. What my noble friend said just now is not correct.
§ LORD SHEPHERDMy Lords, I think the noble Lord will agree that the employer pays this tax by the purchase of a National Insurance stamp which is affixed to the National Insurance card. There is no way at the present moment of being able to identify the card in the name of the employee, as to whether that employee is employed by an old-age pensioner or by any other form of employer.