Weekly Wages (Income Tax).

Oral Answers to Questions — National Finance. – in the House of Commons on 3rd February 1942.

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Photo of Mr David Kirkwood Mr David Kirkwood , Dumbarton District of Burghs

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?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

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.

Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

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?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

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.

Photo of Mr William Gallacher Mr William Gallacher , Fife Western

Will the right hon. Gentleman say why he refused to meet a deputation on the subject which was accompanied by Members of this House?

Photo of Mr Thomas Levy Mr Thomas Levy , Elland

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?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

No, Sir. I should like to say at once that I completely dissent from such a view, and I think that hardly anybody shares such an opinion.

Photo of Mr William Thorne Mr William Thorne , West Ham Plaistow

Is the Chancellor of the Exchequer aware that there is a number of cases where men who are receiving £3 15s. a week find that £1 4s. 2d. is deducted from their pay in respect of Income Tax?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

The exact particulars of deductions will be found in the White Paper which was issued at the time of the opening of the Budget, and I do not think they would bear out those figures.

Photo of Mr David Kirkwood Mr David Kirkwood , Dumbarton District of Burghs

asked the Chancellor of the Exchequer whether he will look into a number of hard cases where Clydebank workers are being pressed for arrears of Income Tax and mitigate their suffering by arranging for payment to be spread over as long a period as may be necessary?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

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.

Photo of Mr David Kirkwood Mr David Kirkwood , Dumbarton District of Burghs

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.

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

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.

Photo of Mr Herbert Williams Mr Herbert Williams , Croydon South

Why is there this diminution of enthusiasm for Income Tax?

Photo of Mr Hector McNeill Mr Hector McNeill , Greenock

Is the Chancellor of the Exchequer not aware that by refusing to meet a deputation from Clydeside on this subject he created the impression that he was afraid to discuss and to justify it?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

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.

Miss Ward:

May I ask my right hon. Friend why his machinery for the collection of this tax was not absolutely perfect? May I have an answer?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

I do not quite follow the question.