Orders of the Day — House of Commons Members Fund Bill.

Part of the debate – in the House of Commons at on 19 July 1939.

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Photo of Sir Edward Keeling Sir Edward Keeling , Twickenham

My right hon. Friend the Chancellor of the Exchequer admitted that under the existing law a Member of Parliament is not liable to pay tax on a statutory deduction from his salary. There is in fact a provision in the Income Tax law to that effect. I regret that at this hour of the night I am not able to recall the provision, but it does exist. But under this Clause of the Bill a Member of Parliament is to pay a tax which nobody else in the country pays; that is to say, he is to pay Income Tax and Surtax on a statutory deduction from his income. My right hon. Friend the Prime Minister said during the Debate on the Second Reading of the Bill: I sympathise with his feeling that it is repugnant to pay taxation on income which we have never received, yet a good many of us have to endure that injustice, if it be an injustice, at the present time. The incidence of Surtax comes, not upon the reduced income after it has paid Income Tax, but upon the gross income before the deduction of Income Tax. Therefore, people have to pay Surtax on a certain amount of income which they have never received." — [Official REPORT, 13th July, 1939; Cols. 2571–2572.) Surely that does not meet the argument. The law applies to every taxpayer whose income is above £ 2,000, but the case under this Sub-section (4) is entirely different. This Sub-section singles out a particular kind of Surtax or Income Taxpayer for extra taxation —' namely, a Member of Parliament as such. It proposes to alter the Income Tax law to the detriment of Members of Parliament. That is the most extraordinary proposition in this extraordinary Bill. What is the reason for it? I suggest that the only possible one is that the Government are trying to please both the supporters of the Bill and its opponents. They are altering the law in order that the supporters of the scheme may be able to say to objectors that there is no charge on the taxpayers. I submit it is not right to twist the law for any such purpose, and that was the view of the Departmental Committee. You will find this Amendment is in strict accordance with the recommendation in paragraph 20 of the Departmental Committee's report, and I cannot understand how hon. Members can possibly wish to retain Sub-section (4).