Amendment of Law

Part of Orders of the Day — Ways and Means – in the House of Commons at 12:00 am on 17th April 1947.

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Photo of Lieut-Commander Joseph Braithwaite Lieut-Commander Joseph Braithwaite , Holderness 12:00 am, 17th April 1947

I said he was a national figure. We all remember the gentleman, and he is still alive. I think it would be invidious to mention any name. This is a matter of some seriousness. At that time, the House took the gravest possible view of that incident. A National Government was in office. Hon. Members may recall that an inquiry took place, and as a result of that inquiry, it was made crystal clear that a Minister of the Crown and another Member of the House, who could not have had access to the secrets, had taken advantage of certain Budget information prior to the Chancellor's announcement. I do not want to go any further into this matter now, but I ask the Solicitor-General whether he will take note of what I have said. I believe this to be another case for a very careful inquiry by the Chancellor of the Exchequer, or, indeed, on a higher level than that, because it is quite obvious that someone who had access to the Budget secrets made use of that information for the purpose of financial gain in the stock market.

The Chancellor told us in his Budget speech that the revenue consequences of the February fuel crisis would not manifest themselves, he thought, during the present financial year. I am not so sure of that. I believe that the effects of the fuel crisis of February will begin to have marked results as we enter next winter, but in any case, I think we have to take serious note of the fact that the effect on the revenue is now hanging over us like a dark cloud. It does not require anything much in the way of financial genius or mathematical knowledge to be able to say now that in April, 1948, we shall be faced with a heavy prospective deficit on the next Budget if it is based upon present levels of taxation. That will be bound to have a detrimental effect in more than one way.

Hon. Members may recall that in the Budget Debates a year ago, I pointed out that the whole structure of our National Insurance Scheme depended absolutely upon industrial production in this country. I well remember the Debates upon the Beveridge Plan, as it was called at the time. It was stressed from both sides of the House that the National Insurance. Scheme relied for its ultimate success upon the increased productivity of this country, the recapture of our export markets and, above all, holding prices reasonably steady where they were in 1944. One of the most agreeable features of the National Insurance Scheme, which commanded the greatest support on all sides at the time, was the proposal to raise old age pensions to the present figure. The advantage of that increase is rapidly dribbling away, and the purchasing power of that 26s. is already considerably less than it was when the Beveridge Plan was first adumbrated.

I ask hon. Members opposite to recall what they have often said in the past about hon. Members on this side. I remember that when there was a modest increase in the Tobacco Duty when we started rearmament—I believe 2d. was imposed in 1937, in 1938 and in 1939—hon. Members opposite said: "We think that a tobacco tax as such is quite a fair way of helping to rearm the country, but it is something which the rich man can take in his stride easily but which will fall with the most merciless cruelty upon the old age pensioners." No more merciless blow has been struck at the old age pensioner than that which the Chancellor dealt him last Tuesday. I am not yet in a position to know what old age is like, but I have always tried to picture myself, if ever I should reach old age, enjoying two things—sitting in the sun and smoking a pipe. In this country it is a very rare experience to sit in the sun. We get only fleeting glimpses of it and the sun appears fitfully as an act of God. The tobacco of the old age pensioner is now to be whisked away by an act of folly of the Socialist Government. If the old age pensioner is to keep up his smoking at the present level, it will cost him something like 7s. a week out of his pension of 26s. The Debate so far has shown that I am not alone in my feelings on this matter, and there are hon. Members opposite who feel the same as I do. I hope the Chancellor will reconsider the whole matter.

I turn now to the method of operation of P.A.Y.E. I am not one of those who think that this method should be swept away, I think it has many advantages, and that it has worked reasonably well since its introduction; but perhaps the Financial Secretary will be good enough to examine some of the methods that are being used to assess P.A.Y.E. Some very curious things are being done in regard to some of the little trades which support men back from the war, and so on. I will give an example of a hairdresser operating a saloon in a West End hotel. When he goes along with his takings, his cheques for business done, to the Income Tax official, the official says to him; "You have taken 30s. in tips this week." The man shows the cheques and says, "No." The official then says, "We assess you as if you were a waiter, and we assess the waiter's tips by the number of bedrooms in any particular hotel." What on earth has the number of bedrooms in a West End hotel got to do with the number of people who go to a barber's shop? How many people in London for a day or two go for a haircut or a shampoo? In the Oxford Street area there seems to be a gauleiter who ought to be examined, if not removed. A man's word should be accepted in this matter; he should not be told that the Inland Revenue are not interested in the cheques he has taken and the business he has done. It seems to me to be a monstrous example of bureaucracy to tell a hairdresser that in the sight of the Treasury he has become a waiter, and that the tips are based on the number of bedrooms there may be in any particular hotel. Why not take the man's word for it, just as the word of an hon. Member of this House is taken as to his expenses to he set off against Income Tax? I hope the Financial Secretary will have a look at that.

There is another matter to which I referred at the time of the interim Budget, and here I am hopeful of carrying the whole Committee with me. I think all of us, on whatever Benches we may sit or whatever political faith we may follow, are not at all happy at the moment about the extent of black market operations in this country. This Budget gives us a very heavy burden to bear—the British are a cheerful, patient people-9s. in the £ Income Tax, a swingeing Tobacco Duty, and the rest of it. I appeal to the Government not to go on flogging the willing horse until they have rounded up the unwilling horses, Millions of pounds in loose money are changing hands in this country without the Treasury getting a penny of it in Income Tax.