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New Clause—(Amendment Of 10 And 11 Geo V, C 18, S 16)

Volume 155: debated on Tuesday 27 June 1922

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Section sixteen of the Finance Act, 1920 (which provides allowance in respect of earned income), shall have effect as if for the word "one-tenth" there were substituted the word "one-fifth."—[ Mr. Lunn.]

Brought up, and read the First time.

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

Parliament has wisely decided to differentiate between earned income and unearned income. I have not read the Debates that took place when this scheme was carried out, but I often wonder what justification was offered for any able-bodied man or woman, who neither toiled nor spun, receiving unearned income at all. I could not offer any justification for people who are able to work receiving an income for which they do not work. At the same time Parliament has made some differentiation in the matter. For instance, a married man in receipt of an income of £325 would be liable to taxation on £100, having been excused £225 for himself and his wife. If his income was earned he would be liable to taxation on only £90. This new Clause would give further relaxation to the people who work for their livelihood. I need not say that people in receipt of small incomes have some difficulty in getting along at the present moment. I urge upon the learned Solicitor-General that he should give consideration to this new Clause in the interests of people who are earning their livelihood, seeing that consideration has already been given to those who do not work for their livelihood.

I regret that it is quite impossible for the Government to accede to the request implied in this Amendment. It would cost £10,500,000 sterling in a full year, and, having regard to the position of the Exchequer, that is a conclusive objection to it. The Committee will remember, no doubt, that the scale of differentiation was most carefully considered by the Royal Commission, who recommended that there should be a uniform allowance of one-tenth, and that was carried out in the Finance Act, 1920. The Royal Commission found that the previous system of differentiation worked most unevenly in different cases, and it was in consequence of their recommendations that the present system of taking, so to speak, a lump off the first part of the income was adopted in place of the old system. It is impossible for the Government to consider at all any partial revision of the carefully considered scheme recommended by the Royal Commission and adopted by this House in 1920. It may be that in years to come, when the expenditure of the country has been successfully reduced to a very much lower scale and revenue is coming in well, it will be thought desirable to have a general reconsideration; but a partial reconsideration of the general system of differentiation adopted is impracticable.

I am disappointed with the reply of the Government. If we are asking for a partial review of the recommendations of the Royal Commission, we are asking it on behalf of a section of the community which really requires it. We have spent something like four or five hours considering the interests of a section of the community which is not nearly so hard pressed as that for which we appeal. The learned Solicitor-General has told us that there is a differentiation. That we frankly admit. But we point out just as strongly that that differentiation between earned Income and the income of those who draw their money from investments is not fair. More encouragement should be given to those Members of the community who have to live by what they can earn by their efforts, those who are really giving value to the State for the money they earn as against those who render no service to the State. The Amendment would do only bare justice.

We understood that the cost to the Treasury would not be anything like the figure that has been mentioned. Whether it reaches that cost or the one that we would like to believe it reaches, that does not touch the point of justice. I hope that even yet the Solicitor-General, on behalf of the Chancellor of the Exchequer, may offer us some of the words

Division No. 178.]


[9.19 p.m.

Adamson, Rt. Hon. WilliamGrundy, T. W.Polson, Sir Thomas A.
Addison, Rt. Hon. Dr. ChristopherGuest, J. (York, W.R., Hemsworth)Raffan, Peter Wilson
Banton, GeorgeHartshorn, VernonRichardson, R. (Houghton-le-Spring)
Barker, G. (Monmouth, Abertillery)Hayday, ArthurRose, Frank H.
Barnes, Major H. (Newcastle, E.)Hayward, EvanSexton, James
Benn, Captain Wedgwood (Leith)Hirst, G. H.Short, Alfred (Wednesbury)
Bowerman, Rt. Hon. Charles W.Hogge, James MylesSitch, Charles H.
Bramsdon, Sir ThomasHolmes, J. StanleySwan, J. E.
Briant, FrankIrving, DanThomas, Brig.-Gen. Sir O. (Anglesey)
Bromfield, WilliamJohn, William (Rhondda, West)Thomson, T. (Middlesbrough, West)
Cairns, JohnJones, Morgan (Caerphilly)Walsh, Stephen (Lancaster, Ince)
Carter, W. (Nottingham, Mansfield)Kenyon, BarnetWatts-Morgan, Lieut.-Col. D.
Cecil, Rt. Hon. Lord R. (Hitchin)Lawson, John JamesWhite, Charles F. (Derby, Western)
Collins, Sir Godfrey (Greenock)Lyle-Samuel, AlexanderWignall, James
Davies, A. (Lancaster, Clitheroe)Maclean, Rt. Hn. Sir D. (Midlothian)Williams, Aneurin (Durham, Consett)
Davies, Alfred Thomas (Lincoln)Murray, Dr. D. (Inverness & Ross)Williams, Col. P. (Middlesbrough, E.)
Edwards, C. (Monmouth, Bedwellty)Myers, ThomasWintringham Margaret
Finney, SamuelNaylor, Thomas EllisWood, Major M. M. (Aberdeen, C.)
Foot, IsaacNewbould, Alfred Ernest
Fraser, Major Sir KeithO'Grady, Captain James


Galbraith, SamuelParkinson, John Allen (Wigan)Mr. Lunn and Mr. Frederick Hall.
Gillis, William

of hope that he has given to other sections of the House during the evening—offered in such a generous way that only a. few moments ago we had one hon. Member getting up and giving the Chancellor of the Exchequer and the Solicitor-General special thanks. Here is a section of the community which is more deserving of your generosity than the section with which we have been dealing for the last four or five hours. We are not pleading for your generosity. What we are pleading for is a measure of justice, and it is curious that any time we get up to move an Amendment or propose a new Clause, pleading for a measure of justice for any section of the community, we are suet by the argument either that the Treasury cannot afford it or that the Royal Commission on Income Tax has recommended something else. We are growing a little tired of the excuses put forward by the Chancellor and the Solicitor-General. We believe these excuses would not be so frequent if we had behind us the Federation of British Industries. Unfortunately, we have not an influence of that kind behind us. We represent those who toil and spin. The Federation of British Industries represent those who neither toil nor spin. Consequently, they get these messages of hope and these promises of future reconsideration which we do not get. I hope before the Debate closes we shall have the Solicitor-General giving us one of those messages of hope and promising that he will reconsider this before the Report stage is reached.

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

The Committee divided: Ayes, 61: Noes, 254.


Adkins, Sir William Ryland DentGreene, Lt.-Col. Sir W. (Hack'y, N.)Norman, Major Rt. Hon. Sir Henry
Ainsworth, Captain CharlesGreenwood, Rt. Hon. Sir HamarNorris, Colonel Sir Henry G.
Armitage, RobertGreer, Sir HarryNorton-Griffiths, Lieut.-Col. Sir John
Armstrong, Henry BruceGregory, HolmanParry, Lieut.-Colonel Thomas Henry
Ashley, Colonel Wilfrid W.Greig, Colonel Sir James WilliamPearce, Sir William
Astbury, Lieut.-Com. Frederick W.Gritten, W. G. HowardPease, Rt. Hon. Herbert Pike
Astor, ViscountessGuest, Capt. Rt. Hon. Frederick E.Perkins, Walter Frank
Atkey, A. R.Hall, Lieut.-Col. Sir F. (Dulwich)Perring, William George
Baird, Sir John LawrenceHamilton, Sir George C.Philipps, Sir Owen C. (Chester, City)
Baldwin, Rt. Hon. StanleyHannon, Patrick Joseph HenryPickering, Colonel Emil W.
Banbury, Rt. Hon. Sir Frederick G.Harmsworth, C. B. (Bedford, Luton)Pilditch, Sir Philip
Barker, Major Robert H.Harmsworth, Hon. E. C. (Kent)Pinkham, Lieut.-Colonel Charles
Barlow, Sir MontagueHaslam, LewisPollock, Rt. Hon. Sir Ernest Murray
Barnett, Major Richard W.Henderson, Lt.-Col. V. L. (Tradeston)Pownall, Lieut.-Colonel Assheton
Barnston, Major HarryHennessy, Major J. R. G.Pratt, John William
Barrand, A. R.Herbert Dennis (Hertford, Watford)Preston, Sir W. R.
Barrie, Sir Charles Coupar (Banff)Hills, Major John WallerPurchase, H. G.
Bartley-Denniss, Sir Edmund RobertHinds, JohnRae, Sir Henry N.
Bell, Lieut.-Col. W. C. H. (Devizes)Holbrook, Sir Arthur RichardRemer, J. R.
Bellairs, Commander Carlyon W.Hood, Sir JosephRemnant, Sir James
Benn, Sir A. S. (Plymouth, Drake)Hope, Sir H.(Stirling & Cl'ckm'nn,w.)Renwick, Sir George
Betterton, Henry B.Hope, Lt.-Col. Sir J. A. (Midlothlan)Richardson, Sir Alex. (Gravesend)
Bigland, AlfredHopkins, John W. W.Richardson, Lt.-Col. Sir P. (Chertsey)
Bird, Sir R. B. (Wolverhampton, W.)Hopkinson, A. (Lancaster, Moseley)Roberts, Rt. Hon. G. H. (Norwich)
Blair, Sir ReginaldHorne, Edgar (Surrey, Guildford)Roberts, Samuel (Hereford, Hereford)
Blake, Sir Francis DouglasHorne, Sir R. S. (Glasgow, Hillhead)Roberts, Sir S. (Sheffield, Ecclesall)
Blane, T. A.Hume-Williams, Sir W. EllisRobinson, S. (Brecon and Radnor)
Boscawen, Rt. Hon. Sir A. Griffith-Hunter-Weston, Lt.-Gen. Sir AylmerRobinson, Sir T. (Lancs, Stretford)
Bowyer, Captain G. W. E.Hurd, Percy A.Samuel, A. M. (Surrey, Farnham)
Brassey, H. L. C.Hurst, Lieut.-Colonel Gerald B.Samuel, Samuel (W'dsworth, Putney)
Breese, Major Charles E.Inskip, Thomas Walker H.Sanders, Colonel Sir Robert Arthur
Bridgeman, Rt. Hon. William CliveJackson, Lieut.-Colonel Hon, F. S.Sassoon, Sir Philip Albert Gustave D.
Briggs, HaroldJameson, John GordonScott, A. M. (Glasgow, Bridgeton)
Broad, Thomas TuckerJephcott, A. R.Scott, Sir Leslie (Liverp'l, Exchange)
Brotherton, Colonel Sir Edward A.Jodrell, Neville PaulSeddon, J. A.
Brown, Brig.-Gen. Clifton (Newbury)Johnson, Sir StanleyShaw, Hon. Alex. (Klimarnock)
Bruton, Sir JamesJohnstone, JosephShaw, William T. (Forfar)
Buckley, Lieut.-Colonel A.Jones, Sir Edgar R. (Merthyr Tydvll)Shortt, Rt. Hon. E. (N'castle-on-T.)
Butcher, Sir John GeorgeJones, G. W. H. (Stoke Newington)Simm, M. T.
Campion, Lieut.-Colonel W. R.Jones, Henry Haydn (Merioneth)Sprot, Colonel Sir Alexander
Carter, R. A. D. (Man., Withington)Jones, J. T. (Carmarthen, Llanelly)Stanley, Major Hon. G. (Preston)
Casey, T. W.Joynson-Hicks, Sir WilliamStanton, Charles Butt
Cautley, Henry StrotherKellaway, Rt. Hon. Fredk, GeorgeSteel, Major S. Strang
Chamberlain, N. (Birm., Ladywood)Kelley, Major Fred (Rotherham)Stephenson, Lieut.-Colonel H. K.
Child, Brigadier-General Sir HillKidd, JamesStevens, Marshall
Churchman, Sir ArthurKing, Captain Henry DouglasStewart, Gershom
Clough, Sir RobertLambert, Rt. Hon. GeorgeStrauss, Edward Anthony
Cockerill, Brigadier-General G. K.Larmor, Sir JosephSturrock, J. Leng
Colfox, Major Wm. PhillipsLaw, Alfred J. (Rochdale)Sugden, W. H.
Colvin, Brig.-General Richard BealeLewis, Rt. Hon. J. H. (Univ., Wales)Sutherland, Sir William
Cope, Major WilliamLewis, T. A. (Glam., Pontypridd)Sykes, Sir Charles (Huddersfield)
Cory, Sir C. J. (Cornwall, St. Ives)Lloyd, George ButlerTaylor, J.
Cowan, D. M. (Scottish Universities)Locker-Lampoon, G. (Wood Green)Thomas, Sir Robert J. (Wrexham)
Dalzfel, Sir D. (Lambeth, Brixton)Locker-Lampson, Com. O. (H'tingd'n)Thomson, F. C. (Aberdeen, South)
Davidson, Major-General Sir J. H.Lorden, John WilliamThomson, Sir W. Mitchell- (Maryhill)
Davies, David (Montgomery)Lort-Williams, J.Townley, Maximillan G.
Davies, Sir David Sanders (Denbigh)McCurdy, Rt. Hon. Charles A.Tryon, Major George Clement
Davies, Thomas (Cirencester)Mackinder, Sir H. J. (Camlachie)Vickers, Douglas
Davies, Sir William H. (Bristol, S.)McLaren, Robert (Lanark, Northern)Wallace, J.
Davison, Sir W. H. (Kensington, S.)M'Lean, Lieut.-Col. Charles W. W.Walters, Rt. Hon. Sir John Tudor
Dawson, Sir PhilipMacleod, J. MackIntoshWalton, J. (York, W. R., Don Valley)
Dewhurst, Lieut.-Commander HarryMcMicking, Major GilbertWard, Col. J. (Stoke-upon-Trent)
Dockrell, Sir MauriceMcNeill, Ronald (Kent, Canterbury)Ward, Col. L. (Kingston-upon-Hull)
Doyle, N. GrattanMacpherson, Rt. Hon. James I.Ward, William Dudley (Southampton)
Du Pre, Colonel William BaringMacquisten, F. A.Waring, Major Walter
Edgar, Clifford B.Mallalieu, Frederick WilliamWarner, Sir T. Courtenay T.
Edge, Captain Sir WilliamMalone, Major P. B. (Tottenham, S.)Watson, Captain John Bertrand
Edwards, Major J. (Aberavon)Manville, EdwardWeston, Colonel John Wakefield
Erskine, James Malcolm MonteithMarks, Sir George CroydonWhaler, Col. Granville C. H.
Evans, ErnestMartin, A. E.White, Col. G. D. (Southport)
Falcon, Captain MichaelMiddlebrook, Sir WilliamWilley, Lieut.-Colonel F. V.
Falle, Major Sir Bertram GodfrayMitchell, Sir William LaneWilliams, C. (Tavistock)
Fell, Sir ArthurMolson, Major John ElsdaleWilloughby, Lieut.-Col. Hon. Claud
Fisher, Rt. Hon. Herbert A. L.Mond, Rt. Hon. Sir Alfred MoritzWinterton, Earl
Flannery, Sir James FortescueMorden, Col. W. GrantWise, Frederick
Forestier-Walker, L.Moreing, Captain Algernon H.Wood, Hon. Edward F. L. (Ripon)
Forrest, WalterMorrison-Bell, Major A. C.Wood, Sir H. K. (Woolwich, West)
Fremantle, Lieut.-Colonel Francis E.Munro, Rt. Hon. RobertWood, Major Sir S. Hill- (High Peak)
Ganzoni, Sir JohnMurchison, C. K.Worsfold, T. Cato
Gee, Captain RobertMurray, John (Leeds, West)Worthington-Evans, Rt. Hon. Sir L.
George, Rt. Hon. David LloydNeal, ArthurYeo, Sir Alfred William
Gibbs, Colonel George AbrahamNewman, Sir R. H. S. D. L. (Exeter)Younger, Sir George
Gilmour, Lieut.-Colonel Sir JohnNewson, Sir Percy Wilson
Goff, Sir R. ParkNewton, Sir D. G. C. (Cambridge)


Gould, James C.Nicholson, Brig.-Gen. J. (Westminster)Colonel Leslie Wilson and Mr.
Green, Joseph F. (Leicester, W.)Nield, Sir HerbertParker.