Clause 16. — (Increase of Relief for Dependent Relative of Female Claimant and for Widows and Others in Respect of Children.)

Orders of the Day — FINANCE (No. 2) BILL – in the House of Commons at 12:00 am on 7th June 1967.

Alert me about debates like this

Photo of Mrs Margaret Thatcher Mrs Margaret Thatcher , Finchley 12:00 am, 7th June 1967

I beg to move Amendment No. 86, in page 18, line 33, to leave out 'ten' and to insert 'twenty'.

Photo of Mr John Jennings Mr John Jennings , Burton

It will be for the convenience of the Committee if we consider at the same time Amendment No. 87, in page 18, line 37, leave out 'twenty' and insert 'seventy', and Amendment No. 88 in page 18, line 37, after 'pounds', insert: and for the reference in that subsection to two hundred and ten pounds there shall be substituted a reference to two hundred and fifty pounds'.

Photo of Mrs Margaret Thatcher Mrs Margaret Thatcher , Finchley

We now come to the Clause which gives special tax relief to single women who are maintaining dependent relatives, and we have a number of Amendments on the Notice Paper, the first of which is to increase the relief given to £120. This relief at the moment is £75, and the Bill increases it to £110. It is a rather curious figure to have selected, and we have chosen the figure of £120 for a very good reason.

An example may make it clear to the Financial Secretary. There might often be cases of an elderly couple where the husband dies leaving the mother a widow. Her support is then carried on by her daughter. Daughters frequently take over the task of supporting their mother or other relatives. The irony of the Financial Secretary's suggestion would be that the mother, during her lifetime as the wife of her husband, would be ranked for an allowance of £120, but when her support is taken over by her daughter that tax allowance would be reduced to £110 on this suggestion.

So, while husband is maintaining wife he gets in respect of her a tax allowance of £120; when daughter maintains that same woman, her mother, the tax allowance is reduced. This seems to make neither rhyme nor reason. It seems to be very much better, if the Financial Secretary is to give this extra help, and we welcome what he is doing, that he gives it in some reasonable amount, and we would suggest that the sum of £120 would be very much better than £110, not merely because it is £10 more, but because it is related to the other personal relief.

5.45 p.m.

One has to note in this Clause that relief is given only if the relative is incapacitated by old age or infirmity from maintaining himself or herself, or is an elderly person. In either case, one would expect that the elderly or infirm person can often do less than an ordinary hale and hearty man or woman. So that is another reason why the relief should at any rate be equal to that for a wife and it would be a reason why it should probably be put up even further. That is not an argument which I am advancing at the moment, but there are good arguments for making it at least £120.

The other Amendments, to which I will refer briefly, concern the limits up to which a person is regarded as a dependent relative. These are changed quite frequently, but it is noticeable, if one goes back in history, that they have hitherto always been moved in years when there has been an increase in retirement pension, so that as there has been an increase in retirement pension the income limits which enable a person to claim relief have been put up. That is obviously in order that the increase in pension should not be clawed back in tax.

There has never been an increase given without an increase in pension. The point is that if the Financial Secretary and the Government are really setting out to give preferential relief to the single woman, who often bears many burdens, and supports her ageing parents, frequently with precious little help, it would be as well to raise these particular limits. At the moment, as the Financial Secretary knows, on his proposals full relief of £110 would be given in respect of a relative who had an income of £210 a year—which is just over £4 a week—or less. Over that income of £4 a week, the relief would taper off until it was extinguished at £320 a year. It would dwindle and dwindle, until it was totally extinguished after the dependent relative had an income of just over about £6 10s. a week.

What we are proposing is that the full relief should be given up to an income of £250, and thereafter it should taper off. If our £120 suggestion was accepted, the relief would not be extinguished until a dependent relative had an income of £370 a year. This would be the first real advance on that relief which we have had for a long time.

There are some very good reasons for giving that increased relief. At the moment, the single scale rate is £4 10s. for an old person—that is, £234 a year. That is the minimum, without any allowance for rent. Therefore, we should put on only a very modest amount—a few shillings—for rent. An income of £250 is by no means large.

We put forward these Amendments in the hope that the Financial Secretary will be able to accept one, or preferably both, of them. I had hoped that now that we are no longer on the Surtax Clauses the benches behind the Financial Secretary would have filled. For the Labour Party, justice usually ceases where Surtax begins. But justice usually begins from nought up to Surtax. Perhaps I have been mistaken in that view. I hope that the two hon. Members on the benches opposite will be in favour of our proposal.

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

I support the very strong case which my hon. Friend the Member for Finchley (Mrs. Thatcher) put forward for this modest Amendment.

There is only one solitary Member on the Government back benches. Here we have one of the few opportunities which will arise during our discussion of the Bill to discuss what one might call the social service Clauses. It is an extraordinary commentary on the interest of the Labour Party in these matters that it is able to muster no more than one honourable and hearty soul for the debate. I hope that he will not only listen to the debate, but will take part in it. [Laughter.]

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

It is not a laughing matter.

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

It is not a laughing matter, but I will give the hon. Member for Heywood and Royton (Mr. Barnett) the benefit of the doubt and say that he is laughing in embarrassment caused by the absence of his colleagues.

Photo of Mr Joel Barnett Mr Joel Barnett , Heywood and Royton

I should not mind betting that I have spent a little more time in the Committee during the Bill's proceedings than the hon. Gentleman.

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

I concede that willingly to the hon. Gentleman. The point which I am making is that when Surtax was being discussed there was a quite respectable gathering on the benches opposite, but now that we are discussing the social service Clauses and people who are bearing burdens through looking after elderly relatives—

Photo of Mr John Jennings Mr John Jennings , Burton

Order. We have dealt at length with this point about the attendance, or lack of it, in the Chamber. Let us now get on with the Amendment.

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

I am sorry that I was provoked into a diversion. I will return to the Amendment.

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

Perhaps hon. Members opposite are looking after dependent relatives.

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

That is an interesting thought, but I had better not develop it, otherwise I should incur the displeasure of the Chair.

We are dealing with people, many of them single women, who are bearing a very considerable burden. In many cases, they have sacrificed jobs and prospects to look after elderly and infirm relatives. We hear constantly from Ministers who administer the social services the plea that this cash allowance and other cash allowances cannot be increased at present because the resources are not available. Here we have a chance in these Amendments to give a little more assistance and encouragement to those who, because they are bearing family responsibilities, are saving what would otherwise be a very much bigger burden on the cash and care services of the State.

I hope that that economic argument will appeal to the Financial Secretary. On 20th March he said that the tax forgone on the dependent relative allowance now amounts to about £34 million a year. That is a comparatively modest sum of taxation to forgo when one considers the work and family responsibilities which these women are bearing. The cost to the State would be very much greater if they were not able and encouraged to bear it.

It is interesting to note that most of the dependent relative tax relief is going to those on comparatively modest incomes. We are sometimes told that the more we extend the tax relief system, the more we pile on additional benefits for the rich. But the figures which the Financial Secretary gave show quite clearly that the bulk of the tax forgone goes to those who have incomes under £2,000 a year. The figure for those whose income is over £2,000 is given by the Financial Secretary as negligible

Bearing in mind the very strong arguments put forward by my hon. Friend the Member for Finchley and the relationship between this tax relief and the cash benefits within the social services, I hope that the Financial Secretary will accept the Amendment.

Photo of Mr Joel Barnett Mr Joel Barnett , Heywood and Royton

I am tempted to speak as hon. Members opposite have chided us because there are fewer Members on this side of the Committee than there have been heretofore. Having sat here for some time, I would remark that there are fewer Members opposite than there have been heretofore, and I am tempted to wonder whether that is because a certain race is being run at Epsom—[HON. MEMBERS: "It has been run."] That shows how ignorant I am in these matters. Hon. Members opposite are much better informed on them. Last night, one of them made a great plea for the rich but non-industrious Surtax payers, as they were described. He thought it a terrible shame that there are so few British racehorse owners left. For hon. Members opposite to chide us and to say that we do not care about the poorer sections of the community who are affected by the relief which we are discussing is a little rich.

I am always tempted to support what the hon. Lady the Member for Finchley (Mrs. Thatcher) says. She presents her case in a very charming manner, although today the charming dress which she is wearing clashes a bit with the colour of the bench on which she sits. However, that would not prevent me from supporting her case if I thought that it was a strong case.

I would very much encourage the idea of helping people to look after their old relatives, having seen something of it in my family, and having seen something of the situation of old people, no matter how well they are looked after in the best of old people's homes. There are old people's homes which are very well run by wonderful wardens. For instance, there are really dedicated people in the Salvation Army. Nevertheless, the ideal situation is for old people to live in the happiness of their own family. If there is anything that we can do to encourage that, then certainly I should support it.

However, any figure which is fixed for dependent relative relief is arbitrary. The Government have chosen this year to increase it to £110. I wonder, as the hon. Lady did, how on earth we get the £110. She has a very ingenious method of arriving at the figure of £120. That is precisely the difference between what the person would have for a widowed mother and what he would have for a wife.

We can find all sorts of anomalies of this kind in family allowances, whatever formula we adopt. It is arguable whether it is more expensive to keep a wife than a widowed mother. It would be an interesting argument to pursue. I doubt whether many husbands in this House would not agree that it is much more expensive to keep a wife than a widowed mother. It is an arguable point. Some hon. Members may disagree, but I would have thought that, generally speaking— depending upon the wife—it is more expensive to keep a wife.

Photo of Mrs Margaret Thatcher Mrs Margaret Thatcher , Finchley

I cannot allow this to pass. On the whole, bearing in mind the number of duties that they perform, wives are very badly paid by their husbands.

6.0 p.m.

Photo of Mr Joel Barnett Mr Joel Barnett , Heywood and Royton

I am sure that the hon. Lady deserves every penny she is paid. I have no doubt that many wives deserve more, but I am making the simple point that it is likely that most husbands would agree that it is more expensive to keep a wife than a widowed mother.

Photo of Bernard Braine Bernard Braine , Essex South East

One can argue along those lines, but surely the hon. Member is aware that in many instances in his own constituency —it is certainly so in mine—a woman has a dependent relative who does not enjoy the best of health, when the strain of care and the need for extra nourishment can impose a frightful burden. The hon. Member must not make light of the situation.

Photo of Mr Joel Barnett Mr Joel Barnett , Heywood and Royton

I was not for a moment making light of it. The hon. Member will be able to make his own speech in his own time. He should not impute to me that I was making light of the burden of maintaining old people. I agree that it is a great burden, and not only in financial terms. It is a burden in terms which cannot be measured—in terms of love and affection. But it is a minor point that we are debating, namely, the question of which arbitrary figure we should use as a dependent relative allowance. That is the point at issue.

The only argument put forward by the hon. Lady was that it would be better to have £120 than £110. She equated this with the relationship between maintaining a widowed mother and a wife. That was her only real argument. We could choose £150. I should be delighted to give £200 in respect of a dependent relative allowance. We want to increase these allowances. But if—as we must—we have to choose an arbitrary figure, it is stretching the debate to make a great deal of the question whether it should be £120 or £110.

The hon. Member for Somerset, North (Mr. Dean) said that this increase was going to those on the most modest of incomes. Very often the most modest incomes of all are those of people who are not paying tax—certainly those who are not paying tax at the standard rate. If those people are maintaining a dependent relative they get no allowance. So, although we want to give some dependent allowance in respect of the person who is paying tax at the standard rate or at a reduced rate, we also have to bear in mind, when playing about with the total national income, the fact that anything we give away here, or any reduction we make in tax revenue, means that less is available in benefits for those whom we need to help but who are not paying tax at all

Photo of Bernard Braine Bernard Braine , Essex South East

I support the Amendments, the case for which was argued so cogently by my hon. Friend the Member for Finchley (Mrs. Thatcher) that there is no need for anyone to speak at length in their support. The Bill provides increased relief to a single woman with a dependent relative, and in that sense the provision can be welcomed. But I find it exceedingly odd that while the Bill alters the top income limit it leaves the bottom limit unchanged. As I understand, the Amendments raise the top limit further, but also increase the bottom limit. I am sure that that is only right and fair, and I hope that the Financial Secretary will be able to say that the Government are prepared to accept these modest suggestions.

Our proposals are right, because our aim should be to encourage people to shoulder family responsibilities. I have always argued that the system of family allowances should not have been limited to dependent children. It should have been extended to those who have dependent relatives.

This is not the time and place to argue what the structure, philosophy or purpose of the Welfare State should be, but it is clear than an increasing number of our old people will have to be cared for. They are living longer. It is better that, as far as possible, we preserve their independence in their own homes. It is better that they should remain in the bosoms of their families, rather than drift into institutions. There is no argument about that. It is clear that old people need their independence, and that they also need a degree of privacy in the home. What they and their relatives were prepared to put up with years ago has undergone a considerable change.

I enjoyed the speech of the hon. Member for Heywood and Royton (Mr. Barnett). When I intervened I merely wanted to say that it is impossible to equate the position of a dependent relative with that of a wife. In some cases a wife is a very costly member of the family; in others, thank heavens, she is the means by which the family is held together and its income is properly spent. We cannot generalise about this. Similarly, many a girl who may have forfeited her chance of marriage in order to look after a widowed mother finds it a very great strain. She may find it a far greater burden than her father did when he was alive.

The hon. Member said that we cannot put an arithmetical figure on this; it is a purely arbitrary decision. The Government have decided upon a certain figure and the Opposition suggests a higher figure. Perhaps all these figures are arbitrary, but it seems to me that it would be arbitrary indeed to say that we should not extend in respect of a dependent relative the same treatment as we extend in respect of a dependent wife. For those reasons I strongly support the Amendments.

A tax allowance should be the minimum amount necessary to maintain a dependent relative, and it is impossible for us to decide that the mother of a working woman, maintained by that working woman and provided with a home by her, is less costly to maintain than the wife of a man, working in the same employment. What we are asking for here is that justice should be done. We should not, therefore, discriminate as between the cost of maintaining a dependent mother or other dependent relative, on the one hand, and the cost of maintaining a wife, on the other.

After all, a daughter who goes out to work and maintains her widowed mother has precisely the same expenses. The House has to be maintained. I have constituents who say to me, "Why should I be treated differently? T have had mortgage repayments to make since my father died. I have rates to pay. My mother costs as much to feed now as she did as my father's wife." It is illogical for the hon. Gentleman to argue as he did. It seems to me that the Amendments make good, sound, social sense. They also make economic sense, because they encourage a feeling of responsibility among a large number of people who do not merely consider it a duty to maintain their relatives but enjoy going on doing their work. It gives them a raison d'être. It seems to me that there is a case for behaving generously here.

The Chancellor admitted at the end of an extremely dull and unedifying Budget statement that here was a class of person who needed our help and sympathy. He has moved a little in that direction. All that we ask the hon. and learned Gentleman to do is move a little further and recognise the principle of equity which lies behind these Amendments.

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

If the case was as clear as hon. Members opposite appear to suggest for equating the amount of this allowance with the difference between the single person's and the married person's personal allowance, ft is astonishing to me that it did not dawn on them when they were in office.

What has happened is that, in this Clause, the Chancellor has proposed a very substantial increase in the dependent relative's allowance. The present allowance is £75 to a taxpayer maintaining a dependent relative who is incapacitated by old age or infirmity. The Chancellor proposes to increase that to £110 where the taxpayer supporting the relative single-handed is a single woman, including in that term a widow, a divorced person, or a separated wife.

Out of the generosity of our hearts, we should all like to be able to increase all tax allowances. However, knowing that he had very little room for manoeuvre this year, my right hon. Friend was moved by the representations which were made, particularly following the campaign by the National Council for the Single Woman and her Dependents, on behalf of this specially deserving class, as it appeared to him, of single women who have to maintain elderly relatives.

There is a special reason for helping this class. Not unnaturally, there have been objections and protests from some single men who maintain elderly relatives and who may, in the particular circumstances of the complainant, not have a greater income than some single women who will benefit from the Clause. Naturally, there have been protests of that kind. I think that the right answer to give is that, taking the generality of the class, single women earn lower incomes than men in comparable positions, and the fact that the Chancellor is not able to help everyone in this position is not a reason for not trying to help a clearly definable class who appear to be more deserving.

6.15 p.m.

The first Amendment is the proposal that the increase should be to £120 instead of to £110. This calls for an explanation of why my right hon. Friend chose the £110 figure. The argument for the Amendment is based on the extra amount of the personal allowance of a married man, compared with a single man. It is said that this is comparable to the position of a man who maintains his wife and, therefore, that the personal allowance should be comparable.

The point is that the two situations are not alike. It is for that reason that it has been thought right to choose the £110 figure. In trying to pitch the allowance at the right figure, one has to try to do justice between taxpayers with differing personal circumstances. If we did what is being asked and equated it to the extra allowance which a married man receives in respect of his wife, we should be ignoring the fact and the distinction that the married man's allowance is not an allowance for one person but for two persons. Indeed, it is often an allowance for two incomes. The dependent relative's allowance is an allowance for one person, for the dependent relative. The relative who is being supported also has a personal allowance, and his or her income is not aggregated with that of the supporting relative.

The hon. Member for Finchley (Mrs. Thatcher) quoted as an example the case of a married woman who is widowed, and, instead of being supported by her husband, is supported by her daughter. However, when the father dies and the daughter takes over responsibility for the care of her mother, it is not true that the allowance in respect of her mother drops from £120 as a wife to £110 as a dependant, because the mother now gets a £220 personal allowance for herself in addition to the £110 allowance to which the daughter is to be entitled.

It is for that reason and to keep some proportion between the two cases which we were asked to compare—the daughter supporting her mother and the husband supporting his wife—that my right hon. Friend thought that a generous figure was £110, still leaving some distinction between that and the £120 for the married person.

With this Amendment we are discussing Amendments Nos. 86 and 87, and they deal with the taper to avoid a sudden cut-off. If the income limit of the dependant is about £210, there is a provision for tapering the allowance. The Amendments propose to raise the income limit of the dependant, up to which the full dependent relative's allowance would be given, from £210 to £250. The tapered allowance for a dependent relative with an income in excess of the limit for the full allowance would begin at £250. With an allowance of £120 as proposed in the other Amendment, no allowance would be due where the dependant's income was £370 or more. These more favourable income limits would apply only to dependent relatives maintained by single women.

Of itself, the increase in the allowance to £110 which my right hon. Friend is proposing carries with it an increase in the limit of the tapered allowance from £284 to £319. It is our view that a further special increase in the dependant's

income limit in these cases would not be justified.

I accept what the hon. Lady implied, that there is no reason to be tied blindly in this respect to the National Insurance pension level, but I think that the short answer to the proposal in these further Amendments to raise the dependant's income limit for full dependent relative allowance is that there is no reason to have a bigger income limit for the test of dependency on a single woman than for a test of dependency on other people. The basis for the increase in the basic allowance falls when we come to consider what should be the income limits of the dependent relative in this connection.

As I have said, the reasons for taking account of the additional difficulties of the single woman are that she often cannot work full-time because of the need to look after the dependant, and that in any case her rate of earning is lower than that of a man. Neither of these points argues in favour of raising the relative's own income limit up to which the full allowance is given. For these reasons, we propose increasing the dependent relative allowance in the way that is suggested, but not making any addition to the limits of the dependant's own income for these purposes.

Photo of Mrs Margaret Thatcher Mrs Margaret Thatcher , Finchley

I am a little disappointed with the Financial Secretary's reply, but I shall not detain the Committee. Perhaps it would be better if we showed what we felt about this in the Division Lobbies.

Question put, That 'ten' stand part of the Clause: —

The Committee divided: Ayes 216, Noes 147.

Division No. 349.]AYES[6.21 p.m.
Abse, LeoBooth, AlbertColeman, Donald
Allaun, Frank (Salford, E.)Bowden, Rt. Hn. HerbertConcannon, J. D.
Alldritt, WalterBraddock, Mrs. E. M.Corbet, Mrs. Freda
Allen, ScholefieldBradley, TomCraddock, George (Bradford, S.)
Anderson, DonaldBray, Dr. JeremyCrawshaw, Richard
Archer, PeterBrooks, EdwinCronin, John
Armstrong, ErnestBroughton, Dr. A. D. D.Cullen, Mrs. Alice
Atkins, Ronald (Preston, N.)Brown, Rt. Hn. George (Belper)Davidson, Arthur (Accrington)
Atkinson, Norman (Tottenham)Brown, Hugh D. (G'gow, Provan)Davies, G. Elfed (Rhondda, E.)
Bacon, Pt. Hn. AliceBuchan, NormanDavies, Ednyfed Hudson (Conway)
Barnett, JoelBuchanan, Richard (G'gow, Sp'burn)Davies, Harold (Leek)
Beaney, AlanButler, Herbert (Hackney, C.)Davies, Ifor (Gower)
Bellenger, Rt. Hn. F. J.Callaghan, Rt. Hn. JamesDavies, S. 0. (Merthyr)
Bence, CyrilCant, R. B.Delargy, Hugh
Benn, Rt. Hn. Anthony WedgwoodCarmichael, NeilDell, Edmund
Binns, JohnCastle, Rt. Hn. BarbaraDewar, Donald
Blackburn, F.Chapman, DonaldDiamond, Rt. Hn. John
Blenkinsop, ArthurCoe, DenisDickens, James
Dobson, RayJackson, Peter M. (High Peak)Pearson, Arthur (Pontypridd)
Doig, PeterJenkins, Hugh (Putney)Peart, Rt. Hn. Fred
Donnelly, DesmondJones, Dan (Burnley)PentIand, Norman
Driberg, TomJones, J. Idwal (Wrexham)Perry, George H. (Nottingham, S.)
Dunn, James A.Jones, T. Alee (Rhondda, West)Prentice, Rt. Hn. R. E.
Dunwoody, Mrs. Gwyneth (Exeter)Kelley, RichardPrice, Christopher (Perry Barr)
Dunwoody, Dr. John (F'th & C'b'e)Kerr, Dr. David (W'worth, Central)Price, Thomas (Westhoughton)
Eadie, AlexKerr, Russell (Feltham)Price, William (Rugby)
Edwards, Rt. Hn. Ness (Caerphilly)Lawson, GeorgeProbert, Arthur
Edwards, William (Merioneth)Leadbitter, TedRankin, John
Ellis, JohnLestor, Miss JoanRees, Merlyn
Ennals, DavidLewis, Arthur (W. Ham, N.)Rhodes, Geoffrey
Ensor, DavidLewis, Ron (Carlisle)Robinson,Rt.Hn.Kenneth(St.P'c'as)
Evans, Albert (Islington, s.w.)Loughlin, CharlesRobinson, W. O. J. (Walth'stow, E.)
Evans, Ioan L. (Birm'h'm, Yardley)Lyon, Alexander W, (York)Rose, Paul
Faulds, AndrewLyons, Edward (Bradford, E.)Ross, Rt. Hn. William
Fernyhough, E.McBride, NeilRowlands, E. (Cardiff, N.)
Finch, HaroldMcCann, JohnSheldon, Robert
Fitch, Alan (Wigan)MacColl, JamesShinwell, Rt. Hn. E.
Fletcher, Raymond (Iikeston)MacDermot, NiallShore, Peter (Stepney)
Fletcher, Ted (Darlington)Macdonald, A. H.Short, Rt.Hn.Edward(N'c'tle-u-Tyne)
Foley, MauriceMcGuire, MichaelSilkin, Rt. Hn. John (Deptford)
Foot, Sir Dingle (Ipswich)Mackenzie, Gregor (Rutherglen)Silkin, Hn. S. C. (Dulwich)
Ford, BenMackie, JohnSlater, Joseph
Forrester, JohnMaclennan, RobertSnow, Julian
Fowler, GerryMacMillan, Malcolm (Western Isles)Spriggs, Leslie
Freeson, ReginaldMcMillan, Tom (Glasgow, C.)Steele, Thomas (Dunbartonshire, W.)
Galpern, Sir MyerMcNamara, J. KevinStrauss, Rt. Hn. G. R.
Gardner, TonyMacPherson, MalcolmSwingler, Stephen
Ginsburg, DavidMallalieu,J.P.W.(Huddersfie4d,E.)Symonds, J. B.
Gordon Walker, Rt. Hn. P. C.Manuel, ArchieTaverne, Dick
Gourlay, HarryMapp, CharlesTinn, James
Gray, Dr. Hugh (Yarmouth)Mason, RoyTuck, Raphael
Greenwood, Rt. Hn. AnthonyMayhew, ChristopherVarley, Eric C.
Griffiths, David (Rother Vailey)Mendelson, J. J.Wainwright, Edwin (Dearne Valley)
Griffiths, Rt. Hn. James (Laneily)Millan, Brucewalden, Brian (All Saints)
Hamilton, James (Bothwell)Miller, Dr. M. S.Walker, Harold (Doncaster)
Hamilton, William (Fife, W.)Milne, Edward (Blyth)Watkins, David (Consett)
Hannan, WilliamMitchell, R. C. (S'th'pton, Test)Wellbeloved, James
Harper, JosephMolloy, WilliamWhitlock, William
Harrison, Walter (Wakefield)Morgan, Elystan (Cardiganshire)Williams, Alan (Swansea, W.)
Hart, Mrs. JudithMorris, Alfred (Wythenshawe)Williams, Clifford (Abertillery)
Haseldine, NormanMorris, Charles R. (Openshaw)Williams, Mrs. Shirley (Hitchin)
Hazell, BertMoyle, RolandWillis, George (Edinburgh, E.)
Heifer, Eric S.Newens, StanWilson, Rt. Hn. Harold (Huyton)
Henig, StanleyNoel-Baker, Francis (Swindon)Wilson, William (Coventry, 8.)
Herbison, Rt. Hn. MargaretNoel-Baker,Rt.Hn.Philip(Derby,S.)Winnick, David
Hooley, FrankOgden, EricWinterbottom, R. E.
Homer, JohnOram, Albert E.Woof, Robert
Houghton Rt. Hn. DouglasOrme, StanleyYates, Victor
Hoy, JamesPadley, Walter
Huckfield, L.Page, Derek (King's Lynn)
Hughes, Emrys (Ayrshire, S.)Paget, R. T.TELLERS FOR THE AYES
Hughes, Roy (Newport)Panned, Rt. Hn. Charles Mr. W. Howie and
Hunter, AdamPark, Trevor Mr. Brian O'Malley.
Jackson, Colin (B'h'se & Spenb'gh)Pavitt, Laurence
NOES
Alison, Michael (Barkston Ash)Cooke, RobertHamilton, Michael (Salisbury)
Allason, James (Hemel Hempstead)Costain, A. P.Harris, Reader (Heston)
Awdry, DanielCrosthwaite-Eyre, Sir OliverHarrison, Col. Sir Harwood (Eye)
Baker, W. H. K.Dance, JamesHarvey, Sir Arthur Vere
Bell, RonaldDavidson,James(Aberdeenshire,W.)Harvie Anderson, Miss
Bennett, Sir Frederic (Torquay)d'Avigdor-Goldsmid, Sir HenryHawkins, Paul
Berry, Hn. AnthonyDean, Paul (Somerset, N.)Heseltine, Michael
Bessell, PeterDodds-Parker, DouglasHiggins, Terence L.
Biffen, JohnDoughty, CharlesHiley, Joseph
Birch, Rt. Hn. NigelEden, Sir JohnHill, J. E. B.
Blaker, PeterErrington, Sir EricHirst, Geoffrey
Bossom, Sir CliveEyre, ReginaldHolland, Philip
Boyd-Carpenter, Rt. Hn. JohnFortescue, TimHordern, Peter
Boyle, Rt. Hn. Sir EdwardGalbraith, Hon. T. C.Hornby, Richard
Braine, BernardGibson-Watt, DavidHunt, John
Brewis, JohnGilmour, Sir John (Fife, E.)Irvine, Bryant Godman (Rye)
Brinton, Sir TattonGlover, Sir DouglasJenkin, Patrick (Woodford)
Brown, Sir Edward (Bath)Gower, RaymondJopling, Michael
Bruce-Gardyne, J.Grant-Ferris, R.Kerby, Capt. Henry
Buchanan-Smith,Alick(Angus,N&M)Gresham Cooke, R.Kimball, Marcus
Buck, Antony (Colchester)Grimond, Rt. Hn.King, Evelyn (Dorset, S.)
Bullus, Sir EricGurden, HaroldKirk, Peter
Campbell, GordonHall, John (Wycombe)Kitson, Timothy
Carr, Rt. Hn. RobertHall-Davis, A. G. F.Lambton, Viscount
Chichester-Clark, R.Hamilton. Marquess of (Fermanagh)Lewis, Kenneth (Rutland)
Lloyd, Ian (P'tsm'th, Langstone)Onslow, CranleyTemple, John M.
McAdden, Sir StephenOsborne, Sir Cyril (Louth)Thatcher, Mrs. Margaret
Mackenzie, Alasdair(Ross&Crom'ty)Page, Graham (Crosby)Thorpe, Rt. Hn. Jeremy
Macleod, Rt. Hn. IainPage, John (Harrow, W.)Tilney, John
McMaster, StanleyPardoe, Johnvan Straubenzee, W. R.
Macmillan, Maurice (Farnham)percival, IanVaughan-Morgan, Rt. Hn. Sir John
Maddan, Martinpounder, RaftonWainwright, Richard (Colne Valley)
Maginnis, John E,Powell, Rt. Hn. J. EnochWalker, Peter (Worcester)
Marples, Rt. Hn. ErnestPrior, J. M. L.Ward, Dame Irene
Maude, AngusPym, FrancisWeatherill, Bernard
Mawby, RayRamsden, Rt. Hn. JamesWebster, David
Maxwell-Hyslop, R. J.Renton, Rt. Hn. Sir DavidWhitelaw, Rt. Hn. William
Maydon, Lt.-Cmdr. S. L. C.Ridley, Hn. NicholasWills, Sir Gerald (Bridgwater)
Mills, Peter (Torrington)Rossi, Hugh (Hornsey)Wilson, Geoffrey (Truro)
Mills, Stratton (Belfast, N.)Royle, AnthonyWinstanley, Dr. M. P.
Monro, HectorRussell, Sir RonaldWolrige-Gordon, Patrick
More, JasperScott, NicholasWood, Rt. Hn. Richard
Morgan, Geraint (Denbigh)Smith, JohnWoodnutt, Mark
Morrison, Charles (Devizes)Stainton, KeithWorsley, Marcus
Mott-Radclyffe, Sir CharlesSteel, David (Roxburgh)Wright, Esmond
Munro-Lucas-Tooth, Sir HughStodart, AnthonyWylie, N. R.
Murton, OscarSummers, Sir SpencerYounger, Hn. George
Nabarro, Sir GeraldTaylor, Sir Charles (Eastbourne)
Nicholls, Sir HarmarTaylor,Edward M.(G'gow,Cathcart)TELLERS FOR THE NOES:
Nott, JohnTaylor, Frank (Moss Side)Mr. R. W. Elliott and
Mr. Anthony Grant.

6.30 p.m.

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

I beg to move Amendment No. 138, in page 19, line 3, to leave out 'seventy-five' and to insert 'one hundred and twenty'.

Photo of Mr John Jennings Mr John Jennings , Burton

I suggest that it would be convient to discuss, at the same time, Amendment No. 137, in line 4, after 'and', insert: 'in section 218 of the Income Tax Act 1952 for the reference to seventy-five pounds there shall be substituted a reference to one hundred and twenty pounds and'.

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

Subsection (3) proposes to raise, from £40 to £75, the allowance available for widows, widowers and single people in charge of children and who cannot qualify for the housekeeper allowance proper. In other words, it proposes to put the child-minder allowance on all fours with the housekeeper allowance, and this makes a good deal of sense. However, the Government propose to leave the housekeeper allowance exactly as it is. The subsection does not increase it. The object of the Amendment is to raise both the housekeeper allowance and the child-minder allowance to £120.

The first of two powerful arguments which I wish to adduce was made by the Chancellor in his Budget speech. He said: For Income Tax purposes there is at present a well defined category of taxpayers made up of widows, widowers and certain other taxpayers who have single-handed responsibility for children. Here again, especially in the case of widows with children who go out to work there is a lot of near hardship."— [OFFICIAL REPORT, 11th April, 1967; Vol. 744, c. 1009.]

The right hon. Gentleman admitted that a lot of near-hardship exists, particularly for widows who go out to work. If he admits this, why has he increased one allowance, but left the other exactly as it is? If he admits that there is hardship for these widows, he should have increased not just one allowance, but both. After all, they both fulfil similar purposes; they assist the widow who goes out to work in the extra expenditure in which she is involved in paying for someone to look after her children while she is working.

My second powerful argument was adduced by the right hon. Lady who is now the Minister of Transport, when a somewhat similar Amendment was proposed by her hon. Friends. On that occasion—though she was then in opposition—she said: This housekeeping allowance was £50 before the war. It is only £75 today. Can we in all conscience say that it has been increased pro rata to the absolutely fantastic increase in the cost of living? Are we not in fact progressively worsening the position of widows and widowers with children who need to employ this kind of help? Are we, therefore, not increasing the violent sense of injustice they feel through being classed as single persons when they have inherited these domestic responsibilities? "—[OFFICIAL REPORT, 15th May, 1963; Vol. 677, c. 1466.] This strong argument was used in favour of a similar proposal in 1963. If it was a strong argument then, how much stronger it must be today, in view of the substantial increase in the cost of living and the higher burden of taxation falling on these widows, not to mention the freeze on incomes.

The problems which these women face are well known and I need not detail them. Many of them are widows and must be both mother for, and breadwinner to, their children. They go out to work because they want to do the best they can for their children. This inevitably means the additional cost of employing people to look after their children. They are, therefore, bearing a big burden and if our taxation system is to be based on ability to pay, we should at least ensure that these tax allowances respond to increases in costs, increases which these widows must bear like anyone else. Yet the housekeeper allowance has not been raised since 1960.

One argument the Financial Secretary cannot use against this modest proposal is its cost—the loss in revenue that would be involved. According to figures given by the Financial Secretary, and reported in Hansard on 20th March of this year, the housekeeper allowance involves a loss in revenue of about £6 million a year. Acceptance of this proposal would mean a minute additional loss in revenue, but it would be of substantial assistance to these widows.

It should be remembered that if these widows are not able and encouraged to go out to work, they might want to be supported by the Supplementary Benefits Commission—and then the cost to the State of the cash benefits to which many of them would be entitled would be far greater than the comparatively small loss in tax revenue which the housekeeper allowance provides. I hope, for these reasons, that the Amendment will be accepted.

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Farnham

With these Amendments we turn from the old to the young. Another difference is that the Bill here seeks to remove an anomaly, in a way rejected by the Government in connection with a previous Amendment, by bringing the allowance available to widows, widowers, single women and some other taxpayers who have charge of children to the housekeeper allowance level.

The first Amendment is, so to speak, consequential on the second, in that it continues the principle of equating this allowance, to which the subsection refers, with the housekeeper allowance, and the second Amendment seeks to raise these allowances to a higher level.

We were asked by hon. Members opposite why, in the last Amendment, we had the figure of £120. In this Amendment there are two reasons for this sum being proposed. The first is, and it has since been overtaken by events, the logical reason of keeping it in line with our previous suggestion. Secondly, it seems now, as previously, both sensible and equitable to make the two allowances correspond.

I believe that there will be no argument from the Treasury Bench against equating the child-minder allowance with the housekeeper allowance even at the higher level. I do not believe that the Financial Secretary could or would wish to produce the argument that action that was correct, right, just and equitable at the £75 level becomes wrong at a level of £120. The argument is not really about the sum of £120. In this case, the actual figure is not as important as it was in the last Amendment. The argument is really about raising the level of the housekeeper allowance from the £75 which the right hon. Lady the present Minister of Transport found so inadequate in 1963.

I do not know what would be the equivalent of the pre-war allowance of £50, if expressed in modern terms and allowing for the increase in prices, the decline in the value of money and the rise in the rate of taxation, but my hon. Friend the Member for Somerset, North (Mr. Dean) has put forward a very powerful and cogent case on grounds of equitable treatment of taxpayers, the one with another, and of the need of those who have the sole responsibility for children. That case is established beyond all doubt.

My hon. Friend also said that acceptance of this Amendment would make it easier for people not to require supplementary benefit or direct help through the social security system. Without going so far as to exceed the rules of order, I can say that what we suggest here is in line with a number of new Clauses and Amendments that we shall put forward seeking to extend the principle of self-help, as it were—pressing the Financial Secretary and the Treasury Bench generally for allowances making it easier for people to help themselves and less likely to require help from the State.

6.45 p.m.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

What I call the humane side of the argument has been admirably advanced by my hon. Friends, and I want just to add a further point. Most people who go out to work and pay taxation of one kind or another are to be found among those who have skills to offer to the community, and their skills are of tremendous importance to our economy. In addition, many people of this kind take a highly responsible view of their families.

If, therefore, it is in the national interest that continual pressure should be brought to bear, as it is, on those with skills to offer, it is equally right that the Government should ensure that those people should be given all possible assistance and put their skills into the common pool. This argument cannot be faulted. Therefore, though I am a little doubtful that we are likely to get the right response from the Treasury Bench, if the Government have any real appreciation of the need of the economy for these skills, in logic and in sense the Amendment ought to be accepted.

It would be quite interesting to know how many speeches have been made by members of the Government to encourage women with skills to put them to the service of the economy. Whenever one goes from the North to the South, one always hears requests to those who are trained to give their service to the State in either a national or a local government sense. If the Government do not respond favourably to these Amendments, it makes them out, if I may say so, to be perfect fools, and nowadays it is reckoned that women are not fools. They know that valid requests are being made to which many people want to respond, but they at least expect that those who are at present in charge of our economy should have enough sense to ease the path in the way suggested.

I often wonder how much information the Treasury Bench gets from the women's organisations—many of which are composed of highly qualified women —and whether Ministers bother to seek that information and advice. Even today there are one or two very powerful organisations which, if not presided over by Ministers, have some ministerial connection. Even I sit on one or two committees now. All these bodies, which do a great deal of work in presenting facts about actual cases to the Government, would speak with a unanimous voice in support of these Amendments.

I get a little tired of arguing sound logical cases and then having arguments presented against them from the Treasury Bench. Parliament in this respect does not behave in a real way. That is why I sometimes feel the general community does not pay so much attention to Parliament as it should. I get very tired of hearing responsible people in the country making claims for the kind of support embodied in these Amendments and no echo of support being given from the Treasury Bench.

I hope that today we shall get a really constructive and helpful answer and that our Amendments will be accepted.

Photo of Mr Philip Holland Mr Philip Holland , Carlton

I should like to reinforce the very powerful case put forward by my hon. Friends with a simple illustration, a "Little Willy's Guide" to the sort of thinking of the Treasury Bench. I think it quite inexcusable that there should be such a wide variation, or any variation at all, between the tax allowance applicable to a wife or to a housekeeper whom a widower has to employ to look after himself and his children.

I put the case of a married couple with a three-year-old son. In those circumstances, the husband is granted a tax allowance of £120. Then tragedy hits the family and the mother dies in childbirth, leaving the man a widower with a young child and a newborn baby. The man must immediately employ someone to look after his home and children while he goes to work. I cannot believe that in the normal case this arrangement would be less expensive or onerous than it was before tragedy struck the family. Indeed, I should think quite the contrary, because a wife who was a partner in the life she led with her husband would work to make the income stretch to the maximum benefit, particularly when he is trying to establish himself and build his career. She shops in the cheapest markets and accepts voluntary self-denial when money is a little tight.

But a housekeeper is on a quite different footing. She has a fixed wage to provide her with a reasonable income in addition to her board and lodging and she will tend to shop in the most convenient rather than necessarily the cheapest market. Housekeeping then becomes rather more expensive. The outgoings are far less flexible from week to week in that sort of case. That is a particular burden should the widower go through a particularly difficult financial patch.

Yet a housekeeper is necessarily employed to look after him and the children and this merits an allowance of only £75 against the allowance of £120. The widower, as a result of his great personal tragedy and the unavoidable increase in his financial commitments, must then pay increased tax to the Government. This seems to be wholly inequitable. I can see the inherent danger in granting a larger tax allowance for a housekeeper than for a wife, but it seems simple justice to make the two allowances the same.

That is all we are asking for in these two modest Amendments. The case I have quoted is not so hypothetical as it might seem but is typical of many tragedies which unhappily occur. Surely the Financial Secretary can give sympathetic consideration to the correction of what is clearly a tax anomaly. I do not propose to delay the Committee. I urge him to accept these two Amendments to make this modest improvement on the grounds of justice, humanity and common sense.

Photo of Bernard Braine Bernard Braine , Essex South East

I join my hon. Friends in supporting these Amendments. Here, we are seeking to help a particularly deserving and particularly vulnerable group of women. The Chancellor said in his Budget statement that widows with children who go to work experience real hardship. In a Budget in which economic circumstances did not permit him to make concessions he said that he was acutely aware of the difficulties of many groups of our citizens. Many of them send me their budgets and at the bottom end of the incomes scale"— these people are at the bottom end of the income scale— there is a great deal of pinching and scraping. He went on to say: No praise is too high for those social workers who continue to uncover the poverty that still exists, for example, among certain families with children. We intend to find the best measures to relieve this hardship. We waited expectantly to see what he found, but he was able only to increase the personal allowance to £75 similar to where a housekeeper is employed. That is completely inadequate. I hope that we shall not hear the argument again as we did on the last two Amendments about this or any other figure being arbitrary.

Let us consider the realities of the situation which face the kind of women we are here seeking to help. The vast majority of them are near the bottom end of the taxable income scale. Any hon. Member in touch with his constituents knows that most of them in this category in the last few years have had a considerable struggle. Any rise, however small in the cost of living, in the cost of food, of clothing or of transportation to work hits them harder than most.

The Chancellor admitted in his Budget statement that there was near hardship in this category. He said: There is a lot of near hardship."— [OFFICIAL REPORT, 11th April, 1967; Vol. 774, c. 1009.] The reasons for this are quite clear. This is a category of women who, despite the contribution which many with special skills could undoubtedly make if they were given special inducements, includes others who have no special skills, but who have been forced by family circumstances to go to work. When they come to my weekly "surgery" they tell me frankly that they never expected to have to go to work. Perhaps the husband was carried off by illness or accident in his early thirties, in the prime of life, and so they are forced to go to work to maintain their children, to keep the mortgage going and to keep the home together.

In short, this is a category of women who are less able than most to increase their income. As a consequence—I am measuring my words very carefully— this is a category who have borne the brunt of the rise in the cost of living which we have experienced in this country in the last two or three years. I shall not go into detail, but it is generally true—hon. Members opposite know this—that for the first time now for many years there has begun a decline in the material standard of living of our people. Where has this been most in evidence? It is in this category of widows that one finds more evidence of hardship than in any other. Hon Members need not take that from me. The Chancellor himself concedes it. But the concession which he proposes in the Clause hardly offsets, if at all, the rise in the cost of living which these women have had to endure in the last couple of years.

7.0 p.m.

I have always believed that, when we are considering any tax relief, we should observe two principles. First, we should be prepared to give incentive to extra effort which benefits not only the taxpayer himself but the community as a whole. I give that high priority. Second, we should encourage social responsibility, the keeping together of the family. By now, surely, we can measure the cost of broken homes, of unwanted children, of unhappy and lonely old people who are cut off from their relatives.

Who is more deservting of help and encouragement in our society today, with all the forces that tend to pull the family unit apart, than the woman with children who has lost her husband by death or by desertion and who is forced to go out to work? Plainly, she is more handicapped than most. She deserves all the help we can give her to preserve her independence and to help her in the vital social task of holding her family together. The case for acting generously in this context is unanswerable, and I hope that the Financial Secretary will in a few moments concede it.

Photo of Sir Albert Costain Sir Albert Costain , Folkestone and Hythe

Each of my hon. Friends has dealt with the Amendment from one particular aspect, and I shall add but one further point. We have heard about the difference between the marriage allowance and the dependant's allowance. I put my appeal to the Financial Secretary in this way. What we are asking for in this Amendment would cost no more than would be met by every worker in the country contributing ld. a week—much less than to a flag day. That is all we are asking for, but it would help those who need it most.

I am concerned particularly for the children. My hon. Friends have put a powerful argument on behalf of the widow and widower. If this help cannot be given, if these people cannot afford to have a housekeeper or help in the home, it is the children who will ultimately suffer. It cannot be too much to accept a small Amendment of this kind for their sake.

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

We have had a short and interesting debate, and, as often happens when our discussions touch on the social aspects of our tax legislation, it has been a moving one, too. There have been several references to the problem of child poverty in large families. The hon. Member for Essex, South-East (Mr. Braine) gave this special attention and he quoted a passage from my right hon. Friend's Budget speech. We are not suggesting that this Clause will deal with that problem as such. I need only remind the Committee of the recent debate in which my right hon. Friend the Minister of Social Security spoke of the different possible means for dealing with that problem which are under active consideration by the Government now.

The Amendments deal with the second proposal which my right hon. Friend puts forward in the Clause, the proposal to raise—to give the technical name— what is known as the additional personal allowance to the same level as the housekeeper allowance, namely, from £40 to £75. The additional personal allowance is available to several categories of people, both men and women—in the debate attention has been directed particularly to women—who have single-handed responsibility for supporting a young child. It covers, first, widows and widowers; second, single men; third, single women, including divorced or separated wives, who are working full-time or are totally incapacitated; and, fourth, the married man whose wife is totally incapacitated throughout the tax year, and where the claimant is entitled to a child allowance but is not entitled to the £75 resident housekeeper allowance.

I remind the hon. Lady the Member for Tynemouth (Dame Irene Ward) that this proposal of the Chancellor's is itself an example of the echoes which occasionally come back from the Treasury Bencii. It has been urged upon the Treasury for several years now. The history of the matter is this. For the classes of people who did not have a resident child minder but only a non-resident child minder, or otherwise had the task of looking after their children single-handed, there was, up to 1960, no extra allowance at all. Their cause was argued, and it was considered by the Royal Commission on Taxation, which recommended that this distinction should be abolished and that these people should have the same allowance as was available in respect of a resident housekeeper.

In 1960, the then Chancellor of the Exchequer, Mr. Heathcoat Amory, as he then was, went some of the way and gave the £40 allowance. He did not accept in full the recommendation of the Royal Commission. What my right hon. Friend has done this year is to go the whole way in following the recommendation of the Royal Commission, equating this allowance with what has been known for short as the housekeeper allowance available to similar people with the same responsibility but having a resident housekeeper to look after the child.

In moving the Amendment, the hon. Member for Somerset, North (Mr. Dean) asked why, if the Chancellor increased the one—what he called the child-minder allowance—he did not increase the housekeeper allowance. That would follow the logic of the Clause if his proposal were to restore the differential, but it is not. The hon. Gentleman accepts the equation of the two allowances, but he then wishes to raise them both. The relevant question then is: should one, at the same time as equating these allowances, raise both of them? This is a quite separate question.

I would answer, in turn, by asking another question: why these two allowances in distinction from all other personal allowances? One must relate them to the context and pattern of personal allowances as a whole. It is here that the answer to the proposal in the Amendments lies.

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

The Chancellor admitted in his Budget speech that there is near hardship particularly among widows who go out to work. If that admission is correct, what logic is there in increasing the child-minder allowance but leaving the housekeeper allowance where it is?

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

May I substitute the word "asserted" for "admitted"? The hon. Gentleman seems to lay responsibility for this at the door of the Chancellor. He asserted that the problem existed, but, as I said at the outset, it is a problem which goes much wider. My right hon. Friend is unable, within the overall Budget judgment which he has formed this year, to assist all the people whom he would like to assist, and he has picked out what he considers to be the most deserving, being impressed by the argument, first, on the dependent relative allowance for the single woman, with which we have just been dealing, and, second, by this class in carrying out the recommendation of the Royal Commission. But the proposal in the Amendments, if accepted, would seriously distort the pattern of personal allowances. For example, the total personal allowances for a widow with a child under 11 would be £455, as against £340 for a childless married couple.

The hon. Member for Carlton (Mr. Holland), in particular, urged us to base the housekeeper allowance and the child-minder allowance on the analogy of the allowance which is given to the married man as compared with that given to the single man. Again, I suggest that this is a false comparison. The effect of the Clause as it stands is not ungenerous. A widow with a child under 11 will get an allowance of £220 for herself, the ordinary £115 for the child, and an extra £75, whether or not there is a child-minder to look after the child. The effect of this is to give, in effect, a child allowance of £190, instead of £115, for the first child in these cases.

It is difficult to see any justification for giving an extra £120 instead of £75. It is true that this £120 is the difference between the married man's allowance and the single person's allowance, but the married man's allowance is an allowance for two people. The hon. Gentleman asked us to compare it with the case of a widow employing a resident housekeeper to look after her child. In that case the housekeeper herself is a separate taxpayer and receives her own personal allowance. That is the distinction between that case and the case of the husband who supports a wife who is not earning an income herself.

Photo of Mr Philip Holland Mr Philip Holland , Carlton

I do not think that that is a direct parallel. Does not the housekeeper receive much of her reward in kind? Therefore, she is in a very low income bracket and probably does not earn enough money to make the difference between paying tax and not paying tax; whereas a wife may be out at work earning a substantial amount, if she is a professional woman, and thus be in a much higher tax bracket. Such a wife would benefit more from the personal allowance than would a housekeeper in receipt of a small wage and, in addition, board and lodging.

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

Resident housekeepers tend to earn rather more substantial incomes these days; and, if they are kept out of the Income Tax bracket, it is simply because they have personal allowances of their own. If a widow were given an extra allowance equal to the extra allowance which the married man gets for his wife, it would be going too far and would distort the pattern of these allowances.

I was asked what the cost of accepting these Amendments would be. The estimate I am given for the extra cost for this year is £2<£ million and in a full year £2f million. That is a very substantial increase on the cost of the amendments proposed in the Clause, but it is not on that ground primarily that I advise the Committee to reject them. It is because the proposals in the Clause rightly meet the two most difficult and most deserving cases without distorting the general pattern of personal allowances.

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Farnham

I made the point that the £120 was perhaps not critical to this argument. To what level must prices rise before the Government will regard it as a deserving case to increase an allowance which was considered to be inadequate in 1963?

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

I omitted to deal with the point about the price level. No Chancellor of the Exchequer, to my knowledge, has ever accepted the proposition that all personal allowances must keep pace with changes in the value of money. That certainly is not what has happened. If this matter is to be considered and reviewed, it must be looked at in the context of many other changes which have taken place.

The hon. Member for Somerset, North (Mr. Dean) quoted a passage from a speech made by my right hon. Friend the Minister of Transport when she was in opposition. In arguing this point she said that this allowance was £50 before the war. Since then there have been enormous changes in many other ways, apart from the general question of the standard of living. There have been differences in social security benefit, in child allowances, in family allowances, and so on. We must look at this question in the context of the whole social security system and the general level of personal allowances in deciding what is the fair level at which to pitch a particular allowance at a particular time.

7.15 p.m.

Photo of Sir Harmar Nicholls Sir Harmar Nicholls , Peterborough

I found one aspect of the Financial Secretary's reply a little disturbing from the point of view of back benchers. He advanced as his first argument—it follows that he considered it to be a strong one— the proposition that the Amendment cannot be considered because it upsets the neatness of dealing with personal allowances. He said that, if we deal with this allowance, we must automatically deal with all the others. That does not follow. Whatever Government are in power, back benchers must let the Treasury Bench know that Parliament has a say in these matters.

The Chancellor has decided that this problem is one which ought to be dealt with. That is why he has included this change in the Clause. The hon. and learned Gentleman claimed, with some justice, that although Mr. Heathcoat Amory, a few years ago, only partly accepted the advice of the Royal Commission, the present Chancellor has gone further and has given the extra money to come up to the Royal Commission's recommendation.

If the Chancellor has selected this part of the personal allowances because he believes that there is special merit in it, must Parliament accept at once his decision as to what the figure should be? Is not the point of bringing the proposal before the Committee that the Government shall share the minds of members of the Committee? If the Chancellor has decided that this personal allowance deserves the time of Parliament, it is right, whether it is neat or not neat, that back benchers should bring their experience to bear on the matter.

I believe that my hon. Friends have made their case. We are not criticising the Chancellor. We are not saying that there is something wicked about the Chancellor because he has not included the figure of £120 instead of £75. Indeed, to some extent we commend him for going along the right road. The Royal Commission said so. Now my hon. Friends have said so. I am certain that the whole Committee would say so.

The argument of my hon. Friends that this allowance should fit in with the wife allowance of £120 is unanswerable. The figures given by the Financial Secretary to show that if the Amendment were carried the allowances would then be higher than those enjoyed by a married couple did not carry much weight. The Chancellor, by selecting this personal allowance for upgrading, has admitted that it is a special case.

The Committee is now considering it on behalf of Parliament. It is saying that the figure put into the Bill by the Chancellor is not the correct one. My hon. Friends have produced strong evidence to show that the figure in the Amendment is better

than the figure in the Clause. I hope that the Financial Secretary will forget neatness and recognise the importance of this personal allowance, as admitted by the Chancellor himself; and, having done that, pay heed to the point of view which has been advanced by hon. Members on behalf of their constituencies.

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

The Financial Secretary has very largely relied on what he calls the distortion of the allowances as a whole which the Amendment would bring about. As is well known, that is invariably the last refuge of a Treasury Minister who cannot think up a respectable argument against an Amendment. If that argument is to be taken seriously, one cannot increase any allowances without increasing allowances all across the board. Yet we have already had the Government making modest increases to two allowances in the Bill, and that is welcome. The hon. and learned Gentleman used a totally negative argument, and I hope that my hon. Friends will support me in the Division Lobby.

Question put, That "seventy-five" stand part of the Clause: —

The Committee divided: Ayes 203, Noes 138.

Division No. 350.]AYES[7.23 p.m.
Abse, LeoConcannon, J. D.Foot, Sir Dingle (Ipswich)
Allaun, Frank (Salford, E.)Craddock, George (Bradford, S.)Ford, Ben
Alldritt, WalterCrawshaw, RichardForrester, John
Allen, ScholefieldCronin, JohnFowler, Gerry
Anderson, DonaldCrossman, Rt. Hn. RichardGalpern, Sir Myer
Archer, PeterCullen, Mrs. AliceGardner, Tony
Armstrong, ErnestDavidson, Arthur (Accrington)Ginsburg, David
Atkins, Ronald (Preston, N.)Davies, G. Elfed (Rhondda, E.)Gordon Walker, Rt. Hn. P. C.
Atkinson, Norman (Tottenham)Davies, Ednyfed Hudson (Conway)G our lay, Harry
Barnett, JoelDavies, Harold (Leek)Gray, Dr. Hugh (Yarmouth)
Baxter, WilliamDavies, Ifor (Gower)Greenwood, Rt. Hn. Anthony
Beaney, AlanDavies, S. O. (Merthyr)Griffiths, David (Rother Valley)
Bellenger, Rt. Hn. F. J.Delargy, HughGriffiths, Rt. Hn. James (Llanelly)
Benoe, CyrilDell, EdmundHamilton, James (Bothwell)
Benn, Rt. Hn. Anthony WedgwoodDewar, DonaldHamilton, William (Fife, W.)
Binns, JohnDiamond, Rt. Hn. JohnHannan, William
Blackburn, F.Dickens, JamesHarper, Joseph
Blenkinsop, ArthurDobson, RayHarrison, Walter (Wakefield)
Booth, AlbertDoig, PeterHart, Mrs. Judith
Bowden, Rt. Hn. HerbertDonnelly, DesmondHaseldine, Norman
Braddock, Mrs. E. M.Driberg, TomHazell, Bert
Bradley, TomDunn, James A.Heffer, Eric S.
Brooks, EdwinDunwoody, Mrs. Gwyneth (Exeter)Henig, Stanley
Broughton, Dr. A. D. D.Dunwoody, Dr. John (F'th &amp; C'b'e)Herbison, Rt. Hn. Margaret
Brown, Hugh D. (G'gow, Provan)Eadie, AlexHobden, Dennis (Brighton, K'town)
Buchan, NormanEdwards, Rt. Hn. Ness (Caerphilly)Hooley, Frank
Buchanan-Richard (G'gow, Sp'burn)Edwards, William (Merioneth)Horner, John
Butler, Herbert (Hackney, COEnnals, DavidHoughton, Rt. Hn. Douglas
Callaghan, Rt. Hn. JamsEnsor, DavidHowie, W.
Cant, R. B.Evans, Albert (Islington, S.w.)Huckfield, L.
Carmichael, NeilFaulds, AndrewHughes, Emrys (Ayrshire, S.)
Castle, Rt. Hn. BarbaraFinch, HaroldHughes, Roy (Newport)
Chapman, DonaldFitch, Alan (Wigan)Hunter, Adam
Coe, DenisFletcher, Raymond (Ilkeston)Irvine, A. J. (Edge Hill)
Coleman, DonaldFletcher, Ted (Darlington)Jackson, Colin (B'h'se &amp; Spenb'gh)
Foley, MauriceJackson, Peter M. (High Peak)
Jones, Dan (Burnley)Mitchell, R. C. (S'th'pton, Test)Rowlands, E. (Cardiff, N.)
Jones, J. Idwal (Wrexham)Molloy, WilliamSheldon, Robert
Jones, T. Alec (Rhondda, West)Morgan, Elystan (Cardiganshire)Shore, Peter (Stepney)
Kelley, RichardMorris, Alfred (Wythenshawe)Silkin, Rt. Hn. John (Deptford)
Kerr, Russell (Feltham)Morris, Charles, R. (Openshaw)Silkin, Hn. S. C. (Dulwich)
Lawson, GeorgeMoyle, RolandSilverman, Julius (Aston)
Leadbitter, TedNewens, StanSlater, Joseph
Lestor, Miss JoanNoel-Baker, Francis (Swindon)Snow, Julian
Lewis, Arthur (W. Ham, N.)Noel-Baker, Rt.Hn.Philip(Derby,S.)Spriggs, Leslie
Lewis, Ron (Carlisle)Ogden, EricSteele, Thomas (Dunbartonshire,W.)
Loughlin CharlesO'Malley, BrianSymonds, J. B.
Lyon, Alexander W. (York)Oram, Albert E.Taverne, Dick
Lyons, Edward (Bradford, E.)Orbach, MauriceTinn, James
McBride, NeilOrme, StanleyTuck, Raphael
McCann, JohnPadley, WalterVarley, Eric G.
MacColl, JamesPage, Derek (King's Lynn)Wainwright, Edwin (Dearne Valley)
MacDermot, NiallPaget, R. T.Walden, Brian (All Saints)
Macdonald, A. H.Pannell, Rt. Hn. CharlesWatkins, David (Consett)
McGuire, MichaelPark, TrevorWellbeloved, James
Mackenzie, Gregor (Rutherglen)Pearson, Arthur (Pontypridd)Whitlock, William
Mackie, JohnPeart, Rt. Hn. FredWilliams, Alan (Swansea, W.)
Maclennan, RobertPentland, NormanWilliams, Clifford (Abertillery)
MacMillan, Malcolm (Western Isles;Perry, George H. (Nottingham, S.)Wiliams, Mrs. Shirley (Hitchin)
McMillan, Tom (Glasgow, C.)Price, Christopher (Perry Bar)Willis, George (Edinburgh, E.)
MacPherson, MalcolmPrice, Thomas (Westhoughton)Wilson, William (Coventry, S.)
Mallalieu,J.P.W.(Huddersfield,E.)Price, William (Rugby)Winnick, David
Manuel, ArchieProbert, ArthurWinterbottom, R. E.
Mapp, CharlesRankin, JohnWoof, Robert
Mason, RoyRees, MerlynYates, Victor
Mayhew, ChristopherRhodes, Geoffrey
Millan, BruceRobinson,Rt.Hn.Kenneth(St.P'c'as)TELLERS FOR THE AYES:
Miller, Dr. M. S.Robinson, W. O. J. (Walth'stow, E.)Mr. Harold Walker and
Milne, Edward (Biyth)Rose, PaulMr. Ioan L. Evans.
Ross, Rt. Hn. William
NOES
Alison, Michael (Barkston Ash)Hall-Davis, A. G. F.Nicholls, Sir Harmar
Allason, James (Hemel Hempstead)Hamilton, Marquee of (Fermanagh)Nott, John
Awdry, DanielHarris, Reader (Heston)Onslow, Cranley
Baker, W. H. K.Harrison, Col. Sir Harwood (Eye)Osborn, John (Hallam)
Bell, RonaldHarvey, Sir Arthur VereOsborne, Sir Cyril (Louth)
Bennett, Sir Frederic (Torquay)Harvie Anderson, MissPage, Graham (Crosby)
Berry, Hn. AnthonyHawkins, PaulPage, John (Harrow, W.)
Bessell, PeterHeseltine, MichaelPercival, Ian
Biffen, JohnHiggins, Terence L.Pounder, Rafton
Birch, Rt. Hn. NigelHiley, JosephPrior, J. M. L.
Boseom, Sir CliveHill, J. E. B.Pym, Francis
Braine, BernardHirst, GeoffreyRamsden, Rt. Hn. James
Brewis, JohnHolland, PhilipRonton, Rt. Hn. Sir David
Brinton, Sir TattonHordern, PeterRidley, Hn. Nicholas
Brown, Sir Edward (Bath)Hornby, RichardRossi, Hugh (Hornsey)
Bruce-Gardyne, J.Hunt, JohnRussell, Sir Ronald
Buchanan-Smith, Alick(Angus,N&amp;M)Irvine, Bryant Godman (Rye)Scott, Nicholas
Buck, Antony (Colchester)Jenkin, Patrick (Woodford)Sinclair, Sir George
Bullus, Sir ErieJopling, MichaelSmith, John
Campbell, GordonKerby, Capt. HenryStainton, Keith
Carr, Rt. Hn. RobertKing, Evelyn (Dorset, S.)Steel, David (Roxburgh)
Chichester-clark, R.Kirk, PeterStodart, Anthony
Cooke, RobertKnight, Mrs. JillTaylor, Sir Charles (Eastbourne)
Costain, A. P.Lambton, ViscountTaylor, Frank (Moss Side)
Crosthwaite-Eyre, Sir OliverLewis, Kenneth (Rutland)Thatcher, Mrs. Margaret
Dance, JamesLloyd, Ian (P'tsm'th, Langstone)Thorpe, Rt. Hn. Jeremy
Davidson, James(Aberdeenshire, W.)McAdden, Sir StephenTilney, John
Dean, Paul (Somerset. N.)Macleod, Rt. Hn. lainVan Straubenzee, W. R.
Deedes, Rt. Hn. W. F. (Ashford)McMaster, StanleyVaughan-Morgan, Rt. Hn. Sir John
Dodds-Parker, DouglasMacmillan, Maurice (Farnham)Wainwright, Richard (Colne Valley)
Doughty, CharlesMaddan, MartinWalker, Peter (Worcester)
Eden, Sir JohnMaginnis, John E.Ward, Dame Irene
Elliott,R.W.(N'ctle-upon-Tyne,N.)Maude, AngusWeatherill, Bernard
Errington, Sir EricMawby, RayWebster, David
Eyre, ReginaldMaxwell-Hyslop, R. J.Whitelaw, Rt. Hn. William
Fortescue, TimMaydon, Lt.-Cmdr. S. L. C.Wills, Sir Gerald (Bridgwater)
Galbraith, Hon. T. C.Mills, Peter (Torrington)Wilson, Geoffrey (Truro)
Gibson-Watt, DavidMills, Stratton (Belfast, N.)Winstanley, Dr. M. P.
Gilmour, Sir John (Fife, E.)Miscampbell, NormanWolrige-Gordon, Patrick
Glover, Sir DouglasMonro, HectorWood, Rt. Hn. Richard
Gower, RaymondMore, JasperWorsley, Marcus
Grant, AnthonyMorgan, Geraint (Denbigh)Wright, Esmond
Grant-Ferris, R.Morrison, Charles (Devizes)Wylie, N. R.
Gresham Cooke, R.Mott-Radclyffe, Sir CharlesYounger, Hn. George
Grimond, Rt. Hn. J.Munro-Lucas-Tooth, Sir HughTELLERS FOR THE NOES:
Gurden, HaroldMurton, OscarMr. A. Royle and Mr. Kitson.
Hall, John (Wycombe)Nabarro, Sir Gerald
Question proposed, That the Clause stand part of the Bill.

7.30 p.m.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

I want to add one or two comments because I could not get into the debate after the Financial Secretary had replied to the Amendment. He made an extraordinary observation. He said that the Chancellor could not do anything in this case because no Chancellors before him had ever taken the action we were proposing. That is a most extraordinary argument. I am sure that it was not one he made during the General Election, because, if I remember rightly, at that time the finances of the country were to be entirely altered.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. The hon. Lady cannot reopen the debate on the Amendment.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

I do not want to reopen it, Sir Eric. I only want to say that, if the Chancellor of the Exchequer can never make an alteration in anything because none of his predecessors has ever done it, he has frozen himself entirely for the rest of his life at the Treasury.

It is a very important point of democracy not to allow a Chancellor to say that he cannot do something because no other Chancellor has ever done it before. It is an extraordinary suggestion. I do not want to follow it up in detail, but I must put on record that I do not want to be in a Parliament where a Minister says that he cannot ever do anything because no one has ever done it before. I am sure that the hon. and learned Gentleman could not have meant it, but it was the most silly observation I have ever heard from the Treasury bench, and I have heard many.

Question put and agreed to.

Clause ordered to stand part of the Bill.