asked the Chancellor of the Exchequer (1) whether he will make arrangements for tax deducted from the weekly wages of workers to be varied week by week according to the amount of the wages, in order to avoid the hardships now caused to Clydebank workers and their families, by deducting from their present small earnings large arrears of tax on their higher earnings last year; is he aware that this system is leading to reluctance in th3 men to work overtime, and in their wives to go out to work at all;
(2) whether he is aware of the hardships now caused to Clyde bank shipyard workers and their families by the demands for income tax on the good wages and overtime earned last year; and what concessions does he propose to make to these people to encourage them to continue to work overtime without the knowledge that extra money so earned will be taken from them for arrears of tax, especially as it was by his arrangement that the arrears accumulated until 1st January?
I would remind my hon. Friend that the scheme for deduction of tax from wages for the period January to June of this year is already in operation, and it would not be practicable to vary it by making week to week deductions according to the amount of the wages, as he suggests. The reason for the time lag involved is the necessity of ensuring that each taxpayer receives the allowances and reliefs to which he is entitled.
Would it not be better to scrap the whole scheme as it is now understood and institute a system under which deductions are made weekly from the wages of the men, afterwards setting up for them a credit account in respect of any over-deductions?
No, Sir. The present scheme was carefully considered. I will keep the matter under careful review, but I think the scheme has certainly been devised in the interests of the wage earners.
Does not the right hon. Gentleman consider that it is in the national interest that this system should be reconsidered? The incentive to the workers is being taken away from them, and it is affecting production and doing no good at all, and is it not time that it was altered?
The arrangements for collection of Income Tax by deduction from wages provides substantial relief from the hardship which might otherwise result from demands for lump sum payments. My hon. Friend will, I am sure, appreciate that, if the scheme is to work equitably, the period over which tax is to be deducted cannot be varied as between one taxpayer and another according to individual circumstances. I would, however, remind him of the provision that the deductions on account of Income Tax shall in no case reduce the net cash payment of wages below certain minimum figures which are higher for married than for single men.
Is the Chancellor aware of the fact that unless he alters this system in its entirety he is not going to get the Income Tax? He will have to do the same as was done in the last war, and cancel it all out, because it cannot be got. You will have the railway-men on about it just inside a month, never mind the engineers.
No, Sir. I have a belief myself, and I think it is shared by people in all political parties, that this scheme has met with a fair and proper response on the part of the workers.
No, Sir. I think there is no misunderstanding about that. The deputation to which the hon. Member refers was one of which I received very short notice and I found that it was a deputation of shop stewards, and I suggested to the deputation that if they desired to see me they should be accompanied by trade union officials.