§ 2.45 p.m.
§ Baroness BURTON of COVENTRYMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, as State retirement pensions are not taxed in New Zealand, Finland and the United States of America, they would be prepared to consider a similar taxation concession in this country.
§ Lord JACQUESMy Lords, tax exemption for State retirement pensions is not common practice. The three countries named in the Question are exceptions. My right honourable friend does not consider it the best way of helping the elderly. Straightforward increases in pension and a tax allowance for those over 65 years of age with incomes of £3,000 per annum or less are more effective ways of helping those in need.
§ Baroness BURTON of COVENTRYMy Lords, is my noble friend the Minister aware that we might define a little more widely than he does the description of those in need? Is he aware that it seems unfortunate that we are unable to think of some way of helping those who have put by a little for their old age, and who are now having those savings taken away from them when they exceed that ceiling? Could not the noble Lord look again at that aspect of the matter?
§ Lord JACQUESMy Lords, I must point out to my noble friend Lady Burton of Coventry the effect of what she is advocating in her original Question. What she is advocating really means the greater the income the greater the relief, and the smaller the income the smaller the relief. That is inconsistent with the policy of this Government.
§ Lord DAVIES of LEEKMy Lords, is my noble friend aware that, as usual, his reply is precise, it is pungent, but it is also pregnant with alternative possibilities?
§ A Noble Baroness: How can it be pregnant?
§ Lord DAVIES of LEEKMy Lords, a question can be pregnant because something alive may come out of it. Therefore, I ask my noble friend whether he considers that giving supplementary benefits to pensioners who have paid income tax may sometimes be more expensive to the Government than giving more allowances in income tax to these people? Would the noble Lord be kind enough, with his kindly heart, to look at the matter in a little more depth, and give a reply in more depth to the Question of my noble friend Lady Burton of Coventry?
§ Lord JACQUESMy Lords, when a Budget is due in April it would be quite wrong to begin speculating on alternatives in March.
§ Lord HAILSHAM of SAINT MARYLEBONEMy Lords, would not all this trouble be avoided if the Government would look again at the tax credit scheme, without prejudice, and without partisanship?
§ Lord DAVIES of LEEKMy Lords, we are not joining in that!
§ Lord JACQUESMy Lords, that is a matter of opinion.
§ Lord SHINWELLMy Lords, why does my noble friend assert that he knows what is best for the elderly? Is he a better judge of what is best for the elderly; or should he not leave it to the independent judgment of the elderly themselves?
§ Lord JACQUESMy Lords, if this were left to the elderly themselves, they would pay no tax at all.
Baroness WARD of NORTH TYNESIDEMy Lords, in view of the fact, as I understand it, that the Government want ideas for the Budget, and that something could be done if the Government were so minded, would the noble Lord consider this as one of those ideas? Could my noble friend say that this matter will be looked at, and an answer as to why it is not being done given in the Budget Statement?
§ Lord JACQUESMy Lords, I cannot possibly give an undertaking of that kind.
§ Baroness BURTON of COVENTRYMy lords, may I ask the noble Lord the Minister whether he realises that a good many of us on all sides of the House are rather disturbed at this aspect? Is he aware that no one questions the consideration of the Government for pensioners? Alternatively, I think no one questions the consideration of the Government for high wage-earners. Does the noble Lord realise that in between these two categories there is a category of people who have saved, who are now over retirement age, and who really do pay excessive taxation once the ceiling of £3,000, which is not enormous today, is exceeded?
§ Lord JACQUESMy Lords, while £ 3,000 is not enormous, when one is considering helping the needy it is obviously quite substantial.
§ Lord AVEBURYMy Lords, is the noble Lord the Minister aware that this is an extremely odd proposal to come from the Benches behind him, and one with which we personally cannot sympathise? If any money is available for pensioners, it should be used by the right honourable gentleman the Chancellor of the Exchequer to increase the basic rate to help those in greatest need, and not those who already have money.
§ Lord JACQUESMy Lords, I thank the noble Lord for his question.
§ Lord DAVIES of LEEKMy Lords, that was the purpose of mine, too.