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(1) For subsection (1) of section two hundred and fourteen of the Income Tax Act, 1952 (wh.ch relates to a person taking charge of a widower's or widow's children, or acting as his or her housekeeper), there shall be substituted the following subsection:—
214.—(l) If the claimant proves that he is a widower and that he has living at any time during the year of assessment a child or children or that a person is resident with him in the capacity of a housekeeper, he shall subject to the provisions of this section be entitled to a deduction from the amount of income tax with which he is chargeable equal to tax at the standard rate on sixty pounds".
I beg to move, That the Clause be read a Second time.
The proposal here is to broaden the effect of Section 214 of the 1952 Income Tax Act, which permits widow's or widower's allowance only where the person carrying on the work of the deceased is resident in the house. The proposed new Clause would give the allowance to the widow or widower with children and also if the outside person is merely a housekeeper. We are not concerned with the housekeeper aspect of the matter. We originally made a slight error which was pointed out by the hon. Member for Sowerby (Mr. Houghton), and we altered the drafting in respect of housekeeper allowance. That is not the purpose of our proposal tonight.
The effect of our proposal would be to make an allowance to a widow or widower who has someone resident in the house to look after a child or has a daily help or child-minder; or even where there is no second person involved at all and the widow or widower incurs expense possibly by sending the child to a crèche or day nursery, which would not have been necessary had the other partner to the marriage been alive. Only to that extent does this proposal broaden the effect of Section 214.
Our proposal is one of the numerous recommendations in the Millard Tucker Second Report, and is found in paragraph 200 (c). That Committee made the following comments:
The allowance to a widow or widower for the expense of a child looked after by another person seems to us to cover only partially the real reduction of the capacity to pay that takes place when one of two married persons is left by the other's death with responsibility for dependent children. The extra expense may take the form of employing a resident housekeeper. That is the event that the present allowance provides for. Or it may take the form of employing a non- resident child-minder. It is a moot point whether that is covered today. But again, it may take the form of putting the child out in a crèche or day nursery. That is certainly not covered…
The paragraph goes on to recommend that these expenses should be covered, that is to say, expenses incurred in looking after the child should he covered whether a person is employed either daily or in residence to assist in looking after the child. That is the purpose of this Clause.
This is a matter which I am sure hon. Members are constantly coming up against in their constituencies. I have known a number of such cases, particularly of widowers rather than widows, but no doubt it works the other way as well. A number of widowers have come to me and complained about this, particularly from homes where the income is only moderate. They are not able to pay for a resident help, but are incurring extra expenses. If this Clause were accepted as an amendment to the 1952 Act those cases would be covered. I hope the Government will accept it.
The plain effect of the Clause is to provide additional child allowance of £60 for the first child of a widow or widower irrespective altogether of circumstances. That is the proposition that the Committee is asked to consider. I would simply put to the Committee that such a provision would create a quite indefensible distinction between the circumstances of any widow or widower with dependent children on the one hand and any married couple on the other with such dependent children.
In the case of a married couple with a dependent child or children the mother might be partly or wholly incapacitated. There might be a case, there commonly is, where both parents go to work. In those cases, and numerous more instances which could be mentioned, similar commitments have to be incurred by the parents having dependent children and there is a similar limitation on taxable capacity. It would, therefore, be quite indefensible simply because there is the status of widow or widower, without further qualification, to increase in this way the child allowance.
The only national dividing line which has so far been found in this matter is of necessity that there shall be in the place of the spouse who is dead, normally the mother, an actual member of the household for the sake of looking after the children. Once that qualification is departed from—the qualification of a resident housekeeper—the extra burden which is assumed becomes one which it is quite impossible to assess. It might be a child-minder, it might be a daily help, it might simply be occasional help, or it might be—aS is envisaged in the Clause—circumstances where there are no additional commitments whatsoever. I must, therefore, recommend the Committee not to depart from the basis in the existing Income Tax law which renders the allowance in the case of a widow or widower with a dependent child or children dependent on employment of a resident housekeeper.
For Income Tax purposes the housekeeper allowance is not free from either difficulties or anomalies. In its Second Report, the Radcliffe Commission was not as specific or emphatic about its remedies for these difficulties as it might have seen. The hon. Member for Bolton, West (Mr. Holt) made a slip of the tongue when he referred to the Report of the Millard Tucker Committee. I am sure that he was referring to the Second Report of the Royal Commission on Taxation of Profits and Income. In fact, he quoted from that Report.
We on this side of the Committee would prefer to deal with a reform of the housekeeper allowance more comprehensively than in this way. There is undoubtedly the question of relationship with the housekeeper to be cleared up. Section 214 of the Income Tax Act, 1952. requires a taxpayer to prove that unless the housekeeper is a relative of his own or that of his deceased wife there is no such relative of his own or of his deceased wife available or willing to undertake the task. That, I think, is a quite unnecessary requirement. I would almost describe it is as an impudent requirement.
I do not think that a taxpayer should be required to satisfy the Inland Revenue that he has scraped round for some relative of his own or of his deceased wife to become his housekeeper, but, unhappily, has failed and has had to find someone else. In point of fact, I really doubt whether any taxpayer is subject to any such inquisition. I have never heard of one. However, it is in the Act, and I think that it should be removed.
There is also the question of residence. This is a difficult one. The Royal Commission in the paragraph quoted by the hon. Member for Bolton, West referred to the question of the child-minder not resident. Not all widowers, for all sorts of reasons on which I need not dwell at this hour of the night, find it convenient or desirable to have a resident housekeeper. Yet they incur expense in getting a child-minder to look after their children. The Commission pointed out that if the expense of putting the children into some sort of crèche during the day was incurred there was no allowance for that. The allowance was solely in relation to the housekeeper, though, of course, the widower would be getting the normal child allowance. The Radcliffe Commission made the suggestion which the hon. Gentleman has incorporated in this proposed new Clause.
I do not think that we should wish to press this matter on the Government just now. We would hope that it could be added to those matters which the Chancellor has promised to consider during the coming year. It certainly needs attention, and although we are sorry not to he able to follow the Liberal Party in its newly-found fighting form and carry the matter to a glorious conclusion, it has our sympathy. We would rather support the Liberal Party on more comprehensive reform than that of the personal allowance.