I beg to move, "That the Clause be read a Second time."
The object of this Clause is to exempt from Income Tax the fees paid to part-time retained voluntary firemen known as attendance and turn-out fees. It is in no sense a party issue, and I hope that I shall receive support from all sides of the Committee. It affects directly only a limited number of people, the firemen themselves, but indirectly it affects the whole population of the country.
I should like briefly to explain to The Committee the position of the part-time retained firemen. These voluntary firemen have an authorised establishment of 21,375 and form the entire staff of most of the smaller fire stations of the country and part of the staff of the stations in many of our larger towns. They are all volunteers, who carry on their duties in addition to their normal work. They receive three forms of remuneration. There is a retaining fee rising from £15 a year in the case of the ordinary fireman to £45 a year in the case of the station officer. Secondly, there is a turn-out fee of 10s. for the first two hours of a fire and 3s. for each subsequent hour. Finally, there is a fire-call attendance fee of 5 s. an hour for each attendance at the fire station.
Until recently, these fireman have always assumed that these fees were free of Income Tax. I understand that before the war there was no question of levying tax. Even in the National Fire Service in the war many of the fees paid to the part-time firemen were not subject to tax but were treated as subsistence allowances. It was not until the National Fire Service was transferred to the local authorities under the Fire Service Act, 1947, that any general attempt was made to secure payment of Income Tax, either on retaining fees or on the fire-call and turn-out fees. Since the transfer, however, receding of Income Tax assessments on the wages of part-time firemen for their normal occupations has been extensively carried out and has caused great hardship and indignation amongst the part-time firemen.
As hon. Members will realise, fire fighting is an extremely arduous and dangerous job which calls for a high standard of physical endurance and courage, and the firemen have to be ready to get into their uniforms at any time of the day or night in a matter of seconds. The average attendance is 30 fires a year, and it is quite common for the retained part-time firemen to be engaged all night on a fire and even have to follow their normal occupations the following day. Hon. Members in this Committee will appreciate better today than they did a few days ago exactly what this means. Fire fighting also involves a tremendous amount of extra work on the womenfolk of the family, in washing and drying uniforms after fires, in making cups of tea when they come in during the night and so forth.
There is no doubt that the firemen have a real grievance on purely financial grounds over their treatment, but there is a good deal more to it than that. These men joined the voluntary fire service not just in order to add to their emoluments. They joined because they regarded it as a duty towards humanity and, like the lifeboat men who are in a similar position, they have a real feeling that they are carrying out an humanitarian mission, something which often involves the risk of injury or loss of life to themselves. Unlike other part-time jobs, both the retained firemen and lifeboat men have no option but to go out when they are called. There are, therefore, strong arguments on what might be called moral grounds for exempting them from payment of Income Tax on these fees.
Finally, there are also strong practical grounds for doing so. The part-time firemen in England and Wales at the present time number only approximately 14,000; that is to say they are 5,000 down on their establishment. In Scotland they number 1,958 out of an establishment of 2,375. The discontent amongst all ranks of the part-time fire service is such that, while there has never been any suggestion of a strike, many men feel that there is no proper appreciation of their services to the community. Although they would like to continue in this work, there are liable to be widespread resignations if this feeling of dissatisfaction persists. If this takes place, it will be a most serious matter for the country both on practical and on financial grounds.
As I said before, the part-time retained firemen form the entire staff of the smaller fire stations. The approximate cost of maintaining a retained part-time fireman is £85 a year. The equivalent figure for a full-time man is £510. These amounts cover more than the actual remuneration paid to the firemen. They include an allowance for overhead charges in connection with the provisions and maintenance of buildings, equipment, uniform, and so forth.
Here it should be noted that far more exacting standards of accommodation are needed for the whole-time personnel than for the part-time retained firemen. Moreover, because of the necessity for shifts, three full-time men are required to replace one part-time man, so that the difference in cost is £1,530 for a full-time man as against £85 for the part-time man. If that is worked out, it means that the resignation and replacement of only 1,000 voluntary firemen by full-time men would cost the country an additional sum of £1½ million a year.
On 4th June I presented to the House a petition signed by 11,237 men of the part-time fire service of England and Wales. In this petition the men did not ask for remission of Income Tax on their retaining fee, which, they admit, it is reasonable to regard as a payment falling under the accepted expression of a wage. On the other hand, they consider that the small payments made for attendance at fires, or standing by at fire stations during fires, do not come into the same category, and they demand urgently that these fees should be exempted from tax.
I am well aware of the general objections to making exceptions from the principle that Income Tax is a tax of income and should be measured solely by the ability of the taxpayer to pay. But the fact is that exceptions have been made by the Treasury to this principle. For example, there is the exemption from tax on training and expenses allowances and bounties for Territorials granted by the Chancellor of the Exchequer in 1947. The training allowance, which is in fact a subsistence allowance, and the bounty were exempted from Income Tax. That is the very reason for which I am now asking for exemption of tax for the voluntary firemen.
It is true that the Chancellor at that time made it clear that this should not be regarded as a precedent to other classes of cases, but I claim that the objects of the concession in the case of the Territorial Army were exactly the same as those in the case of the part-time voluntary firemen; that is to say, the need to encourage recruiting, and also the saving to public funds if the jobs in question had to be filled by regular full-time personnel instead of part-time volunteers.
Moreover, in Clause 20 of this Bill there is a further exception made by the Chancellor when he grants exemption from tax on the bounties of the Class Z reservists and on ex-soldiers who volunteer for re-enlistment. This case appears to me almost exactly analogous to that of the part-time retained fireman. Finally, and this seems to me conclusive, there is the fact that the part-time retained voluntary lifeboat men are already exempted from tax on the first £50 of their retaining fees. I claim that the retained firemen are in exactly the same position as the retained lifeboat men.
As I say, they are not asking for exemption from tax on the retaining fees. All they are asking for is exemption from tax on these small attendance and turn out fees. The total cost to the Treasury would only be £100,000 a year. When that is measured against the figure I have given of a possible increase of £1½ million a year if 1,000 men were to resign from this part-time service, the Committee will agree that it is in the national interest that these men should be exempted from tax.
Having regard, firstly, to the serious lack of recruits; secondly, to the danger of the depletion of the part-time service; thirdly, to the risk of heavy increases in cost if full-time men have to be brought in as replacements; and finally, and last but not least, to the feeling of very great bitterness and injustice amongst the men at what they regard as an act of ingratitude on the part of the community towards them for the self-sacrificing work which they carry on, I most strongly urge upon the Chancellor that he should accept this Clause and bring the part-time retained firemen into line with the lifeboat men and the other classes of persons who enjoy similar exemptions.
The hon. Member for Taunton (Mr. Hopkinson) urges us to exempt from Income Tax the fire-call attendants and turn-out fees of part-time retained voluntary firemen. We must all sympathise with a great deal of what the hon. Member has said. I entirely agree that these men perform the most valuable public-spirited services, and I am sure he was right in saying that they show physical endurance and courage and that many of them take up this work out of a sense of duty rather than simply from a desire to earn a higher income.
The fact is, however, as the hon. Member himself said, that these fees, in our opinion at any rate, are unquestionably of the nature of income. They are a payment for services, and under our Income Tax law, as I think the Committee will agree, it is an absolute cardinal principle that payments for services should be subject to Income Tax.
There are, of course, many other member of the community doing, as I think the hon. Member will agree, equally valuable and public-spirited service. There are miners' rescue squads, for instance, and indeed we have to remember that throughout both World Wars men in the Army, Navy and Air Force who were actually engaged in fighting paid Income Tax on their Service pay.
The only additional argument advanced by the hon. Member was that a certain concession had been made in regard to bounties and some special payments to Territorials and to Class Z Reservists this year. In those once-for-all payments there is really a considerable element of compensation for disturbance in the case of people who are suddenly switched from civil to military life, very often unexpectedly.
In addition, may I remind the hon. Member that when my right hon. Friend the present Minister of Local Government and Planning made that concession in 1947, not merely did he say that
it must be unique in the Income Tax structure and that the Income Tax structure was to be maintained, but that Mr. Oliver Stanley, replying in that debate for the Opposition, said:
The time may come when we will press more concessions upon the Chancellor, but we shall not base those claims on the way in which he has met our request tonight."—[OFFICIAL REPORT, 9th July, 1947; Vol. 439, c. 2368–9.]
It was rather on that understanding that that concession was given. Therefore, I am afraid that while we recognise the strength of all that the hon. Member said about the services of these men, we are bound to take the view that these payments to them are of the nature of income and therefore must continue to be liable to tax.
I am extremely sorry, as will be my hon. Friend the Member for Taunton (Mr. Hopkinson), to have heard the Financial Secretary's reply. He agreed with the humanitarian grounds of our argument but disagreed with the financial grounds. I believe, however, that not only our humanitarian, but also our financial, grounds are a little bit better than he gave us credit for, because in the illustrations which he used the hon. Gentleman referred to other people who did additional work. He referred to miners' rescue squads and to men in the Armed Forces. I should be the last person to detract in any way from the services that those people render, but there is a very clear distinction between their services and those of the people to whom the Clause relates.
In the instances given by the Financial Secretary, the services which those people render are in direct line with their normal job; they are associated with and arise from their normal job of work, and therefore it can be said that their services are part of their normal function. In the case of the voluntary fireman, that is not so. His voluntary fire service is entirely a social gift to the community and bears no relation whatsoever to his normal work. During the rest of the time the income which he draws, and on which he pays his normal tax, may be from one of a thousand different jobs—the butcher, the baker, the candlestick maker, or anything else.
The job which is done by the voluntary fireman is something quite exceptional. It is a duty and a service to the community over and above his normal contribution as a hard-working citizen. Therefore, to that extent it is entirely exceptional.
I think the hon. Member will agree that quite a number of large establishments have their own works fire brigades, in which the men are protecting the works from which they are getting their living.
Even if they are voluntary fire brigades, the hon. Member for Sparkbrook (Mr. Shurmer) once again is confirming my point. Those people are doing jobs of work connected with their regular employment, but the men of whom I am talking are not.
The men to whom I have referred are actually working for big firms and are engaged in a voluntary fire brigade. Very often they are protecting the factory in which they work.
The hon. Member is perfectly right, but I think that what he says is irrelevant to this issue.
One further issue which I should like to raise to the Chancellor and which bears upon this point is that these men are already, by any standards, hopelessly underpaid. The Financial Secretary quite fairly told us that we must not refer to the lifeboatmen as a precedent. I will therefore use them, not as a precedent, but as a comparison. The Financial Secretary admitted that the concession given by the Chancellor in 1947 exempted the lifeboatmen up to the first £50. That £50 which he exempted is probably more than the average voluntary fireman earns in a whole year by the fees which we are asking should be exempted. Their average yearly total is only about £85, and for some men is less than that, and this figure includes the proportion of attendance fees on which we are not asking for exemption.
Furthermore, these men have not had any pay increase whatsoever for their services since, I think, 1941. Therefore, to keep their fees down to that very low pre-war level and then, after seven or eight years, suddenly to slap on Income Tax as well, makes it appear to them that the authorities are going for them in a way that is quite unjustified in view of, I repeat, their additional contribution over and above what most people give to the social good.
This matter is of great concern to us in the countryside. To hon. Members in the cities it means nothing, because they have big full-time staffs in elaborate stations. In the countryside, however, the danger of fire and the danger to life and property is bad enough at the best of times. It can be coped with only by the voluntary firemen, unless the Treasury are prepared to face the greatly increased costs to which my hon. Friend has already referred.
Recruitment in the service is going down because the men really feel that they have a grievance. I assure the Chancellor—and hon. Members opposite who have had experience of these men will agree—that I have received deputations, have been to the stations, and have seen these men, who really have a grievance. It is not some trumped-up idea just to try to get a little more money from somewhere. The money they get is pitiful enough at the best of times, but by discouraging recruiting and giving them a grievance the Government are making greater the risks in the villages and small towns where these men serve.
The injustice which is being done to them is false economy, because we are getting to the stage where the Government will have to face a continued and increasing breakdown in the voluntary fire services. We are very near to that point, and if it happens the Chancellor will have to find, not £100,000, but several million pounds to make up the damage which is being done very largely by the Treasury's rigid insistence. I urge the Chancellor seriously to think again.
I should like to reinforce what has been said about the shortage of part-time firemen. I do not know whether the Financial Secretary has had correspondence with the local authorities on this subject, which is a matter of very deep concern to them, and I wish to explain the latest position.
I do not know whether the Financial Secretary is aware that the conditions of service of all local authority fire brigade personnel are negotiated by a body called the National Joint Council for Local Authority Fire Brigades. Part-time service has not had quite the representation it deserves on that body for the simple reason that this National Joint Council has been exceedingly busy since 1948 negotiating conditions of service for full-time personnel. Part-time personnel are for the most part organised by the British Fire Services Association, which has not any representation on the National Joint Council.
The officer ranks among the part-timers are looked after by the National Association of Fire Officers, but the junior ranks among the part-time firemen, for the most part, belong to the British Fire Services Association and have not had very much consideration given to their conditions of service in recent years. Their last increase was about 1944, but they have not had any increase since then.
I am coming to that almost immediately. Things have now reached a stage when those in part-time service are so dissatisfied with so many leaving and so few recruits coming in, that local authorities are concerned about the position. On 30th November, 1950, the employers' side wrote to the employee's side and said that there was a considerable deficiency in the establishment of part-time personnel which was causing concern to the fire authorities, such concern that the employers came forward and proposed an increase in the fees for these part-time officers. It is almost unprecedented for employers to offer an increase because things are so bad.
One method of removing the cause of discontent would be for the Financial Secretary to see his way to exempting these turn-out fees and attendance fees from Income Tax. There are four forms of payment. There is a retainer fee, a turn-out fee, an attendance fee, and an hourly rate. The turn-out fee for firemen is at the rate of 10s. for the first two hours, the attendance fee is 5s. for standing by in the event of a fire, or turning out for drills, and the hourly rate is for periods in excess of the first two hours. It is the turn-out fee and the hourly rate, which is 3s. for the fireman for the first two hours, and only those two forms of payment out of the four I have mentioned that we are asking the Financial Secretary to consider.
With the increasing cost of living, men in this voluntary service are finding that although the payment does net them a small remuneration it is becoming less. If a man does his job properly at a fire he is soaked through within half an hour. Except possibly for a heath fire, a fireman is soaked through in the first half hour, and whatever precautions one takes, dirt gets down one's collar and up one's sleeves. Everything a man is wearing, shirts, underclothing and socks, has to be washed. A man may have to attend two or three fires in a day. That can often happen. Then there is the additional wear on clothing—the wear from use, as well as the wear from washing. One of the infuriating things, not only for the part-time but also for the full-time fireman, is that it is not possible to ask for a rebate on the extra expense incurred.
That is one way, but a better way would be to exempt these fees from tax. It is not very much. I believe my hon. Friend the Member for Taunton (Mr. Hopkinson) put down a Question asking what the concession would cost and was told it would be £100,000. I am surprised that the figure was so high, and I am wondering whether some of the other payments have not also been taken into account. The sum of £100,000 merely for tax on turn-out and hourly rates is very high indeed, and I wonder if the Financial Secretary could check that figure.
As well as the extra cost of laundry, there is the extra cost of lighting and heating which other people do not have to meet. In the case of some full-time firemen the local authority gives free fuel and light, but for the part-time fireman who lives at home there is no compensation for these very necessary expenses which go with this voluntary job. I ask the Financial Secretary to reconsider the matter and try to make some offer to assist part-time firemen and also local authorities.
All those of us representing rural areas will associate ourselves with the tribute paid by the hon. Member for Somerset, North (Mr. Leather), to the work of voluntary part-time firemen. I have a number in my constituency, and for their fire-call they use the wailing note of the all clear of the air raid warning which was used during the war and always sends a shiver down my back. When that goes I know that these voluntary firemen are mounting their bicycles and rushing to the fire station to report for duty.
Surely my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith), put his finger on the point by his question. Hon. Members opposite are asking to be done through taxation relief what most of us have to ask our employers to do—to increase our pay. It is quite wrong in principle to seek increases in pay through remissions in taxation for one particular section of the workers, however laudable their task and worthy their case.
I frequently say that the Chancellor of the Exchequer is able to give more wage increases than employers because he is the only person who can give a wage increase free of tax by remission of tax. If the Chancellor is in the position to do that for workers as a whole it will be perfectly right and proper and we shall all share in the benefit we can get. But here is a case where workers—voluntary part-time firemen are workers—are seeking improvements in pay by means of remission of Income Tax. That is what it amounts to.
I ask hon. Members opposite why, if voluntary part-time firemen have asked for an increase in pay, they have not got it if the numbers required for the strength of the fire service are seriously falling? We ought to be told why the Chancellor is being asked to give a wage increase to the voluntary part-time firemen which the employer has not been asked to give or has refused to give.
I am sorry if in trying to bring in a subsequent argument to support my case I misled the hon. Member. We are not asking for an increase in pay. We shall ask for that at the proper time and place. We feel strongly that there is a point of principle in regard to these fees which the Government are overriding. I introduced the question of pay to show how the position is aggravated, but it has nothing to do with the specific case we are putting to the Chancellor.
I want to reinforce the plea which has been made to the Government. Like many other hon. Members, I know a lot about this case because most of my constituency is protected by firemen such as these we are discussing. I appreciate that there is a Treasury difficulty here and that the logical answer is the one given by the hon. Member for Sowerby (Mr. Houghton), which was suggested by his hon. Friend, and that is to increase the emoluments these people are receiving from their employers.
That is the obvious answer, but it is not so simple as that. If the fees were doubled, as they would have to be to provide for the tax to which they would be subject, that would be a minimum rate. Once we started a wage rise of that sort the whole matter would be on an entirely different basis, and we should have the representatives of the firemen initiating negotiations for an emolument for firemen based on a non-voluntary principle and we should get a subsidiary paid fire service with something of the relationship of the War Reserve to the regular Police Force. That is not what these people want. They want to be able to maintain their spirit of having a mission and a function in a voluntary capacity for the good of the community and to be able to do so without being put to expense.
I suggest that this is not so much a legislative as an administrative matter. In days gone by these receipts for firemen were not calculated as included under Schedule E for assessment. That cannot have been owing to ignorance on the part of the Inland Revenue, because many members of the Inland Revenue must also have been part-time firemen and must have been aware of the facts of the case. That having been done, there is surely a perfectly justifiable administrative assumption that these emoluments are nothing but clearances of expenses. If it were admissible, I am sure that any fireman would be able to justify expenditure to the extent of the receipts under the two headings. That is an easy way of dealing with the matter and the most economical method. It is also the most simple way administratively, and it is in accordance with normal taxation principles.
I should not like it to go out that we are not sympathetically inclined towards the moral grounds which have been raised. I was the chairman of a fire brigade for many years, and I turned out with the men for fires and for practice. I also know something about having to deal with fires in my daily duties before I came to the House of Commons. The difference between myself and Tory Members is that I have dealt with fires before I die whereas they will have to deal with them afterwards.
It is not the case that voluntary firemen really want a tax remission. What they want is a fair reward, after tax has been deducted, for the wear and tear caused by the duties thrust upon them in fighting fires. These men have been to see me in my area. I do not agree with the hon. Member for Taunton (Mr. Hopkinson). I think he libels this fine set of men in suggesting that if they do not get this tax remission they will resign. That is a libel on a very fine force of men. I know that for certain reasons there may be a lack of enthusiasm to join the service. I agree with the hon. Member as far as that. But I would never go so far as to suggest that if this remission is not granted the men in the service will resign. That is not true.
I did not suggest that they would resign as a direct result of not getting this remission. All I say is that it is the basis of the present seepage from the service. Great encouragement would be given if this remission were granted.
That is much better than what I understood the hon. Gentleman originally to say. I agree that it is difficult to get men to volunteer to perform this most onerous duty. At the end of an arduous period of fire fighting, with all the dirt, grime, smoke, dust, filth, wet shoes and everything else, they want some tangible reward for having done this most difficult task in the interests of their neighbours and friends.
This is a wage problem, not a tax problem. If this remission were given, what would happen? We should open the door for every other category in the country in which there is an abnormal situation. The engineer who, because of a breakdown in the works, is called upon to work overtime will want tax remission on the money he is paid for that overtime. The Government should, so far as is practicable, encourage the authorities responsible to give these men slightly more, so that they are rewarded for doing an onerous duty in the interests of the country.
The speech of the hon. Member for Rotherham (Mr. Jack Jones), apart from one provocative remark to which I shall not attempt to reply, has emphasised that there is emerging from this debate a general desire in the Committee for something to be done for these firemen. There is, however, a difference of method. The hon. Member for Sowerby (Mr. Houghton) and the hon. Member for Rotherham have said—and it is an obvious point of view—that this is a question of wages; but on a Finance Bill we can only attempt the method suggested by my hon. Friend, which is that there should be some tax concession.
I say at once, that I realise the difficulty of the Financial Secretary. It is a difficulty with which he will be confronted for a good many hours, because we have now commenced what I have already described as the "annual parade" of deserving things for tax remission. I have sat behind Chancellors of the Exchequer as well as opposite them, and I know that at this stage of the Finance Bill they have to harden their hearts for fear of a breach, however small, in the Revenue front which they have set up under the Budget. I therefore feel that those who seek concessions must point to some precedent, and to a precedent which will enable the Financial Secretary, out of the kindness of his heart, to do what he really wishes to do without a breach, at any rate in principle, of his Revenue front.
I suggest that there is a method by which the hon. Gentleman can meet this request, although not perhaps in precisely the way laid down in this proposed new Clause. The Finance Act, 1947, did, it is true, exempt the Territorial bounty from Income Tax, and the Financial Secretary is quite right in saying that the present Minister of Local Government and Planning described it at that time as a unique concession. But it has not proved to be a unique concession, because we are doing very much the same thing this year for the Z Reservists. I always think that any Chancellor makes a mistake when he uses the word "unique," because we never know what is round the corner, or what is coming next. It is no longer unique. The Z Reservists made their way through that particular gap in the Revenue front.
My hon. Friend the Member for Somerset, North (Mr. Leather) was, I think, not quite accurate—the Financial Secretary will be able to confirm or deny it—when he said that the exemption on the first £50 paid to lifeboat men was the result of a Finance Act. I think it was the result of an administrative regulation.
If what the Financial Secretary says is true, then I am sorry to say that my argument is destroyed, because I was going to suggest that if the first £50 of remuneration to lifeboat crews is exempt, the same might apply to firemen, although I think it might be more expensive to the Treasury than the new Clause proposes. However, if the Financial Secretary assures us that we are wrong about that, I am afraid, Mr. Diamond, that I caught your eye almost in vain.
However, I think this matter might be looked at again. The hon. Member for Rotherham, who said that local authorities might be more generous in the wages they pay, has a strong argument, but it cannot be discussed now. It will have to be transferred to the arena of party politics and discussed in connection with the Election.
I am sorry if nothing at all can be done. I know that my hon. Friend the Member for Taunton (Mr. Hopkinson) does not intend to take up the time of the Committee by pressing this matter to a Division, and perhaps that is all the more reason for favourable consideration. Could these part-time firemen not at least come within the same ambit of thought and cogitation as the speedways? Could we not be told between now and next year—that would be a very safe reply for the Government to give—that the whole matter will be reviewed and the whole basis reconsidered? If the Financial Secretary would say that, it would be a word of cheer for these admirable men.
I intend to detain the Committee a very few minutes more. It may be that the lifeboat men do not receive this £50 on their retaining fee, but it is given to them, I understand, by administrative regulation as expenses in some form or another. I suggest that the Financial Secretary should look at that again and see whether that is not so.
One or two hon. Members opposite have said that this is really a question of wages. I maintain that that is not so. It is not at all the mood in which the firemen have come to me. This is a psychological question. The men are not concerned about these very small payments but feel that they are not getting the gratitude of the community in the way that they deserve, and they feel that very strongly.
I know of no better case than when the nurses were in the same position. Everybody admitted the great service they were rendering but nobody was prepared to pay them. It is as a result of organising themselves that their status has increased.
They are employed whole-time. These men do not ask for increased wages. They ask for exemption from Income Tax. About 12,000 of them have signed a petition to Parliament asking for just that. That is what they want. I hope that between now and the Report stage the Financial Secretary will be able to reconsider this matter and devise some means of meeting our wishes. If it cannot be in the way I am suggesting, will he look at this administrative regulation which I understand exists in the case of lifeboat men and see whether he can apply the same sort of thing to retained part-time firemen? If that is not possible, will he consider making representations to the local authorities to make increases in the retaining fees, fire attendance fees and turn-out fees which is what hon. Members opposite have suggested? It is not what the firemen want but it would be better than nothing. In the circumstances, I beg to ask leave to withdraw the Motion.