Clause 14. — (Charge of Income Tax for 1949–50.)

Part of Orders of the Day — Finance Bill – in the House of Commons at 12:00 am on 23rd June 1949.

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Photo of Viscount  Hinchingbrooke Viscount Hinchingbrooke , Dorset Southern 12:00 am, 23rd June 1949

I am glad that the Debate is now taking place in a quieter atmosphere which is perhaps natural after our labours early this morning. We have heard a great deal of violent polemics. The hon. Member for East Coventry (Mr. Crossman) was not here last night to take part in the wearing-down process in which most of us were involved, and he got away with a speech which, as my hon. Friend the Member for East Aberdeen (Mr. Boothby) implied was, even for him, unusually demagogic. I will take the opportunity of bringing the Debate back again to its central theme as set by my hon. Friend the Member for Chippenham (Mr. Eccles), with his usual wisdom and skill.

Our object here is to centralise our whole complaint against the burden of taxation and Government expenditure in what has rightly been called this token or symbolic Amendment. It is symbolic of the desire of the Conservative Party steadily to get away from the planned economy, the regulations and controls backed by the force of the police [HON. MEMBERS: "Oh."]—from the great Cripps freeze upon wages, profits, dividends, rents and currency and upon the passage of goods into and out of the country. This Amendment states in legislative terms our desire to restore what we understand by the progressive free society of Britain.

We have moved to reduce the Income Tax by 6d. this year. I hope that next year it will be 1s., and 1s. more after that. This is not a class or particular income group Amendment. [HON. MEMBERS: "Oh."] As we have repeatedly explained, it symbolises our main theme. Hon. Gentlemen will find on the Order Paper various Amendments designed, in association with this, to assist other sections of the community. I have one relating to dependants' allowances. The hon. Member for East Coventry chided us with doing nothing for the lower income groups. The Chancellor has removed that possibility by not allowing any reductions in Purchase Tax to be moved, which we should have liked to do. In my Budget speech I said I hoped that we would be able to put down an Amendment to reduce the duty on beer by 2d. instead of 1d. and on cigarettes by 6d. There is every kind of disposition on this side of the Committee to do things to reduce the pressure on all sections of society.

We must do everything we can at this very grave time for the future of the country to break the power of the collectivist State before it breaks us and ruins the spirit and individuality of everyone in the country. We should do it traditionally and constitutionally by refusing Supply and refusing Ways and Means. We ought now to reverse some of our thinking. The war taught us to do a lot of things first and to pay for them afterwards, and bureaucracy has done nothing but inherit the mood of the Armed Forces of the Crown in the war. I serve on the Estimates Committee with other hon. Members on both sides of this main Committee. We all know how impossible it is adequately to cover the whole field of Government expenditure. When we are able to bite upon any single item, we reveal most disturbing figures and trends. Hon. Members opposite know it and say it not only privately but now, fortunately, publicly in no uncertain terms, as the Reports come out.

What we are finding out is that, in spite of the period which has gone by since the end of the war, when there ought to have been a gradual decentralisation and demobilisation of the whole collectivist bureaucratic machine, the tendency in departments is still to proliferate in expenditure and still to branch out with new items and new designs of thought. No one under the Socialist Government is working within a strict budget. All down the line staff are being taken on—Departments at home, sub-departments, the British Council, the Arts Council, Embassies, and Colonial establishments are now filled with people who are doing jobs which were never done before in peacetime. [HON. MEMBERS: "Hear, hear."] Those jobs are not comparable with any jobs done by other States which are much more frugal and at the same time much livelier than we are.

The taxpayer exerts absolutely no control over the trend of events. On the contrary, control is exercised exactly in the reverse direction. The Treasury is much too weak to resist the spending Departments of the State, and the taxpayer is too weak to resist the Treasury. The taxpayer today is at the complete mercy of every bureaucrat with an idea, just as during the war, with much greater justification, the taxpayer was at the mercy of every engineer or every soldier with an invention. The secrecy and complexity of government are used today by the Socialist Government as a deliberate shield to prevent the taxpayer, who is, after all, the author of all fiscal power, from seeing whether what he is writing is making any kind of sense. As I said before, the only organisation that we have in this House which can touch upon these events in passing, the Estimates Committee, is quite incapable of lifting the veil of secrecy adequately, so that our constituents may see what is going on.

I therefore plead that this Committee should make a conscious decision to vote on this Amendment in order to resist the trend of events, to limit the growth of expenditure and to give deliberate instructions to the Treasury that they are to budget Departments strictly and restore to the taxpayer some of the power of which he has been deprived. If we do not do that, I suggest to the Committee that we face a very serious precipice, just as every country behind the Iron Curtain is facing it today and as even the United States faced it in the days of prohibition. That precipice is a very grave change in the moral character of our people.

I am very seriously concerned, as every hon. Member must be, at the widespread evasion of the law. There must be countless thousands of persons in this country, all the way down from high financiers to lowly traders, who are evading Income Tax illegally. Many more people again are suffering a moral deterioration of character through using their capital savings, whether earned or inherited, as income without any thought at all of future generations and their welfare. Excessive taxation leads them to do this. The great economist, Mr. Colin Clark, has referred to that trend and has also stated that excessive taxation actively promotes inflation. I will quote a short passage from his letter to the "Economist": Excessive taxation acts on real income through an economic process of disincentives with which we are familiar, and at the same time"— here is the point about the deterioration of moral character— expands money incomes through the less familiar socio-political process of weakening those forces … which can normally be relied on to resist inflationary pressure. 6.30 p.m.

So from that we see that economics and sociology combine in this period of Socialism to destroy personal standards. It is a grave charge against the Government that it should actively teach its citizens to explore the techniques of moral collapse, and that is what the Chancellor of the Exchequer is doing. He is, I believe, a good man and a Christian, but if he thinks that by austerity and high taxation he can compel people to be good and Christian he is terribly wrong. What he is compelling them to do is to turn their thoughts away from their work and their normal way of life towards devising by every means possible ways of overcoming him and his legislation; in other words, society in a period of excessive taxation turns introvertedly upon itself and becomes self-destroying. A generation ago, and again now, Europe experienced their terrible process.

The Population Report shows that classes of persons of great value to society today are being denied the means to express themselves and to give their lives and activities to the State out of the comfort and grace of home life. It is quite true that there are certain classes which the Socialists have actively aided. The coalminer, the engineer and other sections of society have risen in status, but other sections have fallen severely in the last few years—clergymen, teachers, retired Service officers, elderly spinsters, widows and university professors. These and many others are in poor circumstances today, and the mother of children is the most harshly hit of all. There never has been a Government which has acted with so little restraint against liberal-minded and educated people. [HON. MEMBERS: "Oh!"] Oh, yes, and the very people on whom we most rely to preserve and exemplify the moral force and stature of the country.