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New Clause—(Amendment Of 10 & 11 Geo V, C 18, Section 23)

Volume 155: debated on Wednesday 21 June 1922

The text on this page has been created from Hansard archive content, it may contain typographical errors.

Section twenty-three of the Finance Act 1920 (which provides for a reduced rate of Income Tax on the first two hundred and twenty-five pounds of taxable income) shall have effect as if there were added the following:
The rate on which the next two hundred pounds of the taxable income of an individual shall be charged to Income Tax shall he two-thirds of the standard rate of tax, and the rate on which the next following two hundred pounds of the taxable income of an individual shall be charged to Income Tax shall be five-sixths of the standard rate of tax."—[Mr. Trevelyan Thomson.]

Brought up, and read the First time.

I beg to move, "That the Clause be read a Second time."

This Amendment does not, I claim, seek to upset the well-considered and well-designed scheme to which the Chancellor has referred. I have approached this on rather more general grounds than the more particular and special cases that we have been considering earlier in the evening. This new Clause seeks to extend the principle of graduation that is embodied in the present system of Income Tax which was recommended by the Royal Commission but which, I submit, has not been carried out to the extent to which it is desirable. No matter how correct a scheme may look on paper, practical experience of the working of it indicates directions in which it may he amended—in accordance with the general principles on which it was founded. This new Clause seeks to extend the principle graduation which will make the incidence of the Income Tax more equitable. People of moderate and fixed incomes have been most hardly hit in recent years, and this new Clause seeks to give these people some relief on the lines of increased graduation.

The hon. Gentleman who moved the new Clause said that this Amendment had the advantage of not being obnoxious or open to the criticisms applied to the preceding Amendments—that it upset the scheme of the Royal Commission. Unfortunately, the hon. Gentleman is wrong in that—

This would upset the very carefully thought-out scheme of effective graduation of the Income Tax, from the lowest point upwards, which was advised by the Royal Commission (page 28 of the Report), and which is embodied in the existing statutory scheme of graduation. That is the first objection. My second objection is that it would cost the Government nearly £12,000,000. Perhaps the Committee will agree that these two reasons are sufficient.

I hope that the Chancellor of the Exchequer and the Solicitor-General are going to alter their minds in regard to the position they have taken up on this question. We have already, by the scheme of the Finance Bill, introduced the principle of graduation. This new Clause seeks to lighten the graduation upwards until it reaches the amounts laid down by the Royal Commission on Income Tax. In these days, when we are being told by everybody that taxation is pressing most severely upon the lower middle classes, surely it would be well for the Government to consider those whom they look upon as their strongest and most consistent supporters. We believe in a graduated Income Tax, and I hope the right hon. Gentleman will carefully consider our Amendments. The Solicitor-General told us that this pro-

Division No. 173.]


[11.37 p.m.

Acland, Rt. Hon. Francis D.Davison, J. E. (Smethwick)Hayday, Arthur
Adamson, Rt. Hon. WilliamEdwards, C. (Monmouth, Bedwelity)Hayward, Evan
Ammon, Charles GeorgeEntwistle, Major C. F.Hirst, G. H.
Banton, GeorgeFinney, SamuelRogge, James Myles
Barker, G. (Monmouth, Abertillery)Gillis, WilliamJohn, William (Rhondda, West)
Bromfield, WilliamGraham, D. M. (Lanark, Hamilton)Jones, J. J. (West Ham, Silvertown)
Brown, James (Ayr and Bute)Griffiths, T. (Monmouth, Pontypool)Jones, Morgan (Caerphilly)
Carter, W. (Nottingham, Mansfield)Grundy, T. W.Kennedy, Thomas
Collins, Sir Godfrey (Greenock)Guest, J. (York, W.R., Hemeworth)Kenworthy, Lieut.-Commander J. M.
Davies, A. (Lancaster, Clitheroe)Hall, F. (York, W. R., Normanton)Lawson, John James
Davies, Rhys John (Westhoughton)Halls, WalterLunn, William

posal would cost £12,000,000. His other objection was that it was contrary to the recommendations of the Royal Commission on Income Tax. The whole history of the Government on this point is a denial and a repudiation of such art argument, and nobody knows that better than the two right hon. Gentlemen in charge of this Measure. For this reason I trust that argument will not be taken as one of any weight.

As for the argument that £12,000,000 would be lost to the revenue, I am not going to challenge those figures, because it is impossible for us to go into an actuarial calculation as to exactly how much it is going to cost. Nevertheless, we appeal for some abatement of taxation in regard to the lower classes and the lower middle classes. On this matter we have always had masses of figures thrown at as as to the number of millions which this particular abatement we are asking for would cost the country. Before we accept the figures given in the bald statements made by the Solicitor-General and the Chancellor of the Exchequer we should have some further details placed before us as to how they arrive at that cost. So far as I can calculate the number of millions which the Government say will be lost by the adoption of these various Amendments, they will amount to a larger sum that is likely to be realised by the whole of this tax. I hope therefore the Chancellor of the Exchequer and the Solicitor-General will take this Clause again into consideration and see if something cannot be done on the lines suggested in the Amendment. They have already undertaken to consider many Amendments which might involve bringing in a new Bill altogether, and I trust that in the course of that consideration this Bill will not be lost sight of.

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes, 59; Noes, 185.

Maclean, Nell (Glasgow, Govan,Sexton, JamesWalsh, Stephen (Lancaster, Ince)
Murray, Hon. A. C. (Aberdeen)Shaw, Thomas (Preston)Waterson, A. E.
Myers, ThomasShort, Alfred (Wednesbury)Watts-Morgan, Lieut.-Col. D.
O'Grady, Captain JamesSltch, Charles H.White, Charles F. (Derby, Western)
Parkinson, John Allen (Wigan)Smith, W. R. (Wellingborough)Whitingham, Margaret
Raffan, Peter WilsonSpencer, George A.Young, Robert (Lancaster, Newton)
Richardson, R. (Houghton-le-Spring)Sutton, John Edward
Robertson, JohnSwan, J. E.


Rose, Frank H.Thorne, G. R. (Wolverhampton, E.)Mr. Newbould and Mr. T. Thomson.
Royce, William StapletonThorne, W. (West Ham, Plaistow)


Agg-Gardner, Sir James TynteGoff, Sir R. ParkParry, Lieut.-Colonel Thomas Henry
Ainsworth, Captain CharlesGould, James C.Pease, Rt. Hon. Herbert Pike
Amery, Rt. Hon. Leopold C. M S.Grant, James AugustusPeel, Col. Hon. S. (Uxbridge, Mddx.)
Armstrong, Henry BruceGreen, Albert (Derby)Pennefather, De Fonblanque
Baird, Sir John LawrenceGreen, Joseph F. (Leicester, W.)Percy, Lord Eustace (Hastings)
Balfour, George (Hampstead)Greenwood, William (Stockport)Pickering, Colonel Emil W.
Banbury, Rt. Hon. Sir Frederick G.Green, Sir HarryPollock, Rt. Hon. Sir Ernest Murray
Barlow, Sir MontagueGreaton Edward CharlesPratt, John William
Barnett, Major Richard W.Grattan, Colonel JohnRandles, Sir John Scurrah
Barrand, A. R.Gritten, W. G. HowardRankin, Captain James Stuart
Bell, Lieut.-Col. W. C. H. (Devizes)Guest, Capt. Rt. Hon. Frederick E.Remer, J. R.
Bellairs, Commander Carlyon W.Hallwood, AugustineRichardson, Sir Alex. (Gravesend)
Benn, Sir A. S. Plymouth, DrakeHall, Rr-Admi Sir W.(Liv'p'l,W.D'by)Roberts, Rt. Hon. G. H. (Norwich)
Benn, Capt. Sir I. H., Bart.(Gr'nw'h)Hannon, Patrick Joseph HenryRoberts, Samuel (Hereford, Hereford)
Bennett, Sir Thomas JewellHarmsworth, C. B. (Bedford, Luton)Robinson, S. (Brecon and Radnor)
Bird, Sir R. B. (Wolverhampton, W.)Harmsworth, Hon. E. C. (Kent)Robinson, Sir T. (Lancs., Stretford)
Borwick, Major G. O.Harris, Sir Henry PercyRodger, A. K.
Bowyer, Captain G. W. E.Henderson, Lt.-Col. V. L. (Tradeston)Roundell, Colonel R. F.
Brassey, H. L. C.Herbert, Dennis (Hertford, Watford)Samuel, A. M. (Surrey, Farnham)
Breese, Major Charles E.Hilder, Lieut.-Colonel FrankSamuel, Samuel (W'dsworth, Putney)
Bridgeman, Rt. Hon. William CliveHinds, JohnSanders, Colonel Sir Robert Arthur
Brittain, Sir HarryHood, Sir JosephScott, A. M. (Glasgow, Bridgeton)
Broad, Thomas TuckerHope, Lt.-Col. Sir J. A. (Midlothian)Scott, Sir Leslie (Liverp'l, Exchange)
Brown, Brig.-Gen. Clifton (Newbury)Hopkins, John W. W.Seddon, J. A.
Bruton, Sir JamesHorne, Edgar (Surrey, Guildford)Shaw, Hon. Alex. (Kilmarnock)
Bull, Rt. Hon. Sir William JamesHorne, Sir R. S. (Glasgow, Hillhead)Shortt, Rt. Hon. E. (N'castle-on-T.)
Butcher, Sir John GeorgeHoward, Major S. G.Smith, Sir Allan M. (Croydon, South)
Casey. T. W.James, Lieut.-Colonel Hon. CuthbertSmith, Sir Harold (Warrington)
Chamberlain, Rt. He. J. A. (Birm. W.)Jodrell, Neville PaulStanley, Major Hon. G. (Preston)
Clay, Lieut.-Colanel H. H. SpenderJohnstone, JosephStanton, Charles Butt
Clough, Sir RobertJones, Henry Haydn (Merioneth)Stephenson, Lieut.-Colonel H. K.
Coats, Sir StuartKellaway, Rt. Hon. Fredk. GeorgeStewart, Gershom
Cobb, Sir CyrilKing, Captain Henry DouglasSturrock, J. Leng
Cockerill, Brigadier-General G. K.Larmor, Sir JosephSugden, W. H.
Colfax, Major Wm. PhillipsLewis, Rt. Hon. J. H. (Univ., Wales)Surtees, Brigadier-General H. C.
Colvin, Brig.-General Richard BealeLewis, T. A. (Glam., Pontypridd)Sutherland, Sir William
Conway, Sir W. MartinLindsay, William ArthurSykes, Sir Charles (Huddersfield)
Cope, Major WilliamLocker-Lampson, G. (Wood Green)Thomson, F. C. (Aberdeen, South)
Cory, Sir J. H. (Cardiff, South)Locker-Lampson, Com. O. (H'tlngd'n)Thomson, Sir W. Mitchell- (Maryhill)
Curzon, Captain ViscountLorden, John WilliamTryon, Major George Clement
Davidson, J. C. C. (Hemel Hempstead)Lort-Williams, J.Turton, Edmund Russborough
Davies, Thomas (Cirencester)Lyle, C. E. LeonardWaddington, R.
Davies, Sir William H. (Bristol, S.)Macdonald, Sir Murdoch (Inverness)Walters, Rt. Hon. Sir John Tudor
Dawson, Sir PhilipMcLaren, Robert (Lanark, Northern)Walton, J. (York, W. R., Don Valley)
Doyle, N. GrattanMacpherson, Rt. Hon. James I.Ward, Col. L. (Kingston-upon-Hull)
Du Pre, Colonel William BaringMalialleu, Frederick WilliamWatson, Captain John Bertrand
Edge, Captain Sir WilliamMarriott, John Arthur RansomeWheler, Col. Granville C. H.
Edwards, Major J. (Aberavon)Matthews, DavidWhite, Col. G. D. (Southport)
Eiveden, ViscountMond, Rt. Hon. Sir Alfred MoritzWilley, Lieut.-Colonel F. V.
Evans, ErnestMoore-Brabazon, Lieut.-Col. J. T. C.Williams, C. (Tavistock)
Eyres-Monsell, Com. Bolton M.Morden, Col. W. GrantWilloughby, Lieut.Col, Hon. Claud
Falle, Major Sir Bertram GodfreyMoreing, Captain Algernon H.Windsor, Viscount
Flides, HenryMurchison, C. K.Winiertan, Earl
Fisher, Rt. Hon. Herbert A. L.Murray, Rt. Hon, C. D. (Edinburgh)Wise, Frederick
Flannery, Sir James FortescueNall, Major JosephWood, Hon. Edward F. L. (Ripon)
Ford, Patrick JohnstonNeal, ArthurWood, Sir H. K. (Woolwich, West)
Forestler-Walker, L.Newman, Sir R. H. S. D. L. (Exeter)Worthington-Evans, Rt. Hon. Sir L.
Forrest, WaiterNicholson, Brig, Gen. J. (Westminster)Young, Sir Frederick W. (Swindon)
Fraser, Major Sir KeithNicholson, Reginald (Doncaster)
Frece, Sir Waiter deNorris, Colonel Sir Henry G.


Fremantle, Lieut.-Colonel Francis E.Norton-Griffiths, Lieut,-Col. Sir JohnColonel Leslie Wilson and Mr.
Ganzonf, Sir JohnOman, Sir Charles William C.McCurdy.
Gilmour, Lieut.-Colonel Sir JohnOrmsby-Gore, Hon. William
Glyn, Major RalphParker, James