HL Deb 13 May 1975 vol 360 cc603-6

2.59 p.m.

Earl CATHCART

My 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 what steps they propose to take to relieve the hardship on widows, living solely on the standard war widows pension, who as a result of the recent Budget are now required to pay income tax.

Lord JACQUES

My Lords, the best step any Government can take to relieve hardship on war widows is to increase their pensions. This Government have increased the standard war widows pension by almost 50 per cent. in the past year. This compares with an increase in the retail price index of just under 20 per cent. in the same period. This increase in pensions has to be borne by taxpayers and, in so far as war widows are taxpayers, they must bear their share.

Earl CATHCART

My Lords, in thanking the Minister for his reply, I should indicate that I sit on the Scottish Council of the Royal British Legion. Is the Minister aware that, as a result of the last Budget, the war preference—the small additional pension which a war widow receives as compensation; or, rather, as I prefer to call it, a memorial to her husband's sacrifice—is no longer covered by the personal allowance and is thus reduced by taxation from £3.40 to £2.69 a week which, I submit, is quite unworthy, and will the Government take action to make this war preference tax free?

Lord JACQUES

No, my Lords. Tax exemption gives more to the better-off. Increases in pensions give more to the less well-off. The latter is the policy of Her Majesty's Government.

Lord CLIFFORD of CHUDLEIGH

My Lords, may I, as President of the Devon branch of the Royal British Legion, ask the Minister whether he would not agree that the United Kingdom, having failed to give a lead in the matter of exempting war widows pensions from income tax, should now gladly follow the enlightened example of such countries as—and I give them in alphabetical order—Australia, Austria, Belgium, Canada, France, Germany, Greece, Israel, Italy, Japan, Luxembourg, Malaysia, Malta, New Zealand, Pakistan, Singapore, South Africa and the United States of America?

Lord JACQUES

My Lords, I could also give a list of those countries which do not exempt these pensions from tax, and all it would prove is that different States have different methods of taxation.

Lord BLYTON

My Lords, is the Minister aware that while there is appreciation of all that has been done for the pensioners, there are terrible anomalies in the tax area? Is he also aware that I have a cousin—

Several Noble Lords: Why not!

Lord BLYTON

—who serves in the school meals service with a wage of £7.10 a week, and a widow's pension of £11.10, and that out of that £7.10 a week there is tax deducted of £2.45? Does the Minister not think that something ought to be done in relation to tax for such people, especially as my cousin has to pay £5 a week for a council house and does not have any rent rebate?

Lord JACQUES

My Lords, my noble friend has brought us to the real issue, which is not whether the war widows pensions should be exempt, but whether the personal allowances for income tax are adequate. My right honourable friend was able in the Budget to increase the personal allowance for single persons by £50. He regretted that in the present economic circumstances he could not do more. The probability of some increase in the personal allowances is obviously in his mind, and that would be the real cure for this problem.

Lord CARRINGTON

My Lords, would the noble Lord confirm, as is stated in the Question, that the recent Budget now means that standard war widow pensioners have to pay income tax for the first time? If that is so, how does he justify it?

Lord JACQUES

My Lords, I would not quite accept that. I suggest that it is the unprecedented increase in the pension that has caused these war widows to be liable to tax.

Lord MAYBRAY-KING

My Lords, is the noble Lord aware that all the ex-Servicemen's associations in the country appreciate what this and previous Governments have done for the ex-Servicemen, but they have all placed in the forefront of their campaigns the widows of their fallen comrades? At the present moment they are hurt at the new tax anomaly which has occurred in the case of the war widow.

Lord JACQUES

My Lords, if someone's income increases by 50 per cent. and she is then caught by taxation, I cannot accept that that is an anomaly. It shows that the Government have been very generous in their consideration of the war widows.

Baroness WARD of NORTH TYNESIDE

My Lords, would the noble Lord agree, after having heard so many noble Lords speak in favour of the Question asked by my noble friend Lord Cathcart, that it seems that this noble Upper House wants further action on this matter? Also, would the noble Lord bear in mind that when I was in another place I never thought that war widows had as much attention paid to their claims as they ought to have had, irrespective of whichever Government were in power? I should like something further done now in relation to the point of view which has been so adequately expressed by this Upper House today. May I have an assurance on that account?

Lord JACQUES

My Lords, some months ago the present Government took the same view as the noble Baroness and increased the pensions by 50 per cent. She is speaking rather late.

Baroness WARD of NORTH TYNESIDE

No, I am not.

Lord BALNIEL

My Lords, in view of the very strong expressions of opinion in this interchange, and the fact that it appears that the standard war widows pension is now being taxed for the first time, will the noble Lord undertake to bring the exchange expressed in this House to the personal attention of the Chancellor of the Exchequer?

Lord JACQUES

My Lords, I am quite sure that the Chancellor of the Exchequer knows of the noises being made. But I shall certainly direct his attention to what has been said. However, what I have said remains the policy of Her Majesty's Government.

The LORD PRIVY SEAL (Lord Shepherd)

My Lords, I am conscious of the fact that we have now been dealing with Questions for 26 minutes. If I may say so upon coming back after a week's absence, your Lordships have not reformed very much; you still make statements rather than put questions. I hope that the House will now agree that we should move to the next business.