House Of Commons
Thursday, 14th October, 1943
[Mr. SPEAKER in the Chair]
Oral Answers To Questions
National War Effort
Prospective Employees (Medical Examination)
Mr. Rhys Davies
asked the Minister of Labour whether he is aware of the growing practice of employers to engage medical officers to examine prospective employees; that this practice tends to transfer the determination of employment into the hands of the doctors, increases unemployment and must create a pool of permanently unemployed persons especially if the medical fitness required is of a progressively high standard; and whether he will consider this problem?
The Minister of Labour (Mr. Ernest Bevin)
It is my policy to encourage the greater use of doctors' services in industrial establishments in the interest of the medical welfare of the employees. I have no evidence that this is leading to the imposition of unnecessarily high standards of physical fitness in prospective employees.
Will my right hon. Friend inquire whether pressure is brought to bear upon employers by the premium insurance companies dealing with workmen's compensation so as to avoid compensation risks by throwing out certain persons who would otherwise be eligible for employment?
I could not undertake an inquiry into that at this stage, but, if my hon. Friend has any knowledge of any such cases, I should be glad to consider it.
What steps does my right hon. Friend take, if a man does not pass a doctor, to provide suitable employment?
I have an arrangement with my right hon. Friend that, if a man passes out through injury or is unsuitable to go back into the employment, I take him over immediately for training for some other employment.
Statutory Rules And Orders
asked the Minister of Labour why no explanatory memorandum was attached to the Emergency Powers (Defence) Employment of Women (Control of Engagement) Order (S.R. & O. No. 1278 of 1943)?
This Order made certain changes in the classes of employments which are to be subject to the Employment of Women (Control of Engagement) Order, 1943 (S.R. and O. 1943 No. 142). It would have been better, I agree, if an explanatory memorandum had been issued, and I am now circulating an explanation in the OFFICIAL REPORT.
Would the right hon. Gentleman arrange, if possible, for some explanation in the Press, because it is important, as this Order affects so many hundreds of thousands of women, that they should be conversant with it so that they may exactly know their position?
I will certainly do that.
Following is the explanation:
The purpose of the Order referred to is to control the engagement of certain nurses, midwives and whole-time members of voluntary aid detachments by requiring all engagements of such persons to be made in future through a local office of the Ministry of Labour and National Service or an approved employment agency. The engagement of such persons had hitherto been excluded from the operation of the principal Order. The amending Order does not apply to the employment of any person as a member of a Civil Nursing Reserve, and the principal Order contains certain general exceptions which will also be applicable to the amending Order, e.g., the Order will not apply to the engagement of persons under 18 or over 40 or of any person who has living with her a child under the age of 14.
asked the Minister of Labour the estimated number of man-hours required for the completion by employers in seven-fold of Form L.17 (October, 1943) under the Undertakings (Records and Information and Inspection of Premises) Order, 1943?
I regret that I am unable to make an estimate, but I can assure my hon. Friend that only the minimum of information is asked for consistent with the proper planning of man-power policy.
Women's Albert Hall Meeting
Sir Herbert Williams
asked the Minister of Labour why the Meeting at the Albert Hall on 28th September was paid for out of public funds; the total cost of the meeting; how the audience was selected; why 75 per cent. were women of the age group 45–50; and why the Press was excluded?
This meeting was organised by the Government, and the invitations to attend were issued by me on behalf of the Government. It was therefore in accordance with precedent and proper practice that the expenses, including reasonable sums for travelling and subsistence allowances, should be paid out of public funds. About 6,000 persons attended, and the estimated total cost is about £17,000. The invitations were issued through national voluntary organisations representing women in the home, in industry, in the professions and in the many forms of voluntary service, and the persons attending were those selected by those organisations. As regards the ages of those who attended, my hon. Friend evidently has access to sources of information which are not open to me; I have no information whatever on this subject. The meeting was confidential and therefore not open to the Press.
Sir H. Williams
Having regard to the fact that the only news of the meeting is that which was officially circulated, can the right hon. Gentleman explain why one Press report stated that 75 per cent. of the audience was between 45 and 50, and is there any precedent for a meeting of this kind in which confidential information is disclosed by a Minister other than to Members of Parliament?
With regard to precedent, this meeting follows precisely the precedents in the case of docks, shipbuilding, aircraft production, coalmining and other trades in the promotion of the war effort. As to what the Press said or imagined, I am not responsible.
Sir H. Williams
As the only official reports made were those issued by the right hon. Gentleman's Department to the Press, is he not responsible for the Press reports?
I have not seen the statement anywhere that the Press said the ages were between 45 and 50. That was not issued by my Department.
In view of the inspired statements in the Press, can Members now be furnished with a copy of the proceedings?
It was done in precisely the same way as the statement about the miners' meeting was published. This Conference was called to promote the war effort in the fifth winter of the war, and I am satisfied that it is one of the best steps that have been taken.
Sir Joseph Lamb
Did the other meetings referred to cost the same amount as this?
Proportionately, I should say about the same.
When the right hon. Gentleman says that the meeting was confidential, is he seriously suggesting that secrets of a security nature were disclosed to a meeting of 6,000 people? Further, is it correct, as reported, that he said on this occasion that he did not trust the Press?
That is another piece of imagination by the Press, of which my hon. Friend is very well aware and at which he is an expert. It is a piece of sheer imagination. I am not going to satisfy the Press as to what I said at the meeting except to deny that I ever made that statement. As to the question of secrecy, we followed exactly the precedent followed in the other cases. There were no secrets in the sense of official secrets revealed at all. These Conferences have served a better purpose handled in this way than merely turning them into ordinary public assemblies.
Could my right hon. Friend's views about the Press be communicated to his new colleague Lord Beaverbrook?
I do not think there is any need to communicate them. He knew my views about it long before I was a Minister.
On a point of Order. Is the right hon. Gentleman entitled to blacken my character in the way he did by suggesting that I was an expert at imagining things?
Dr. Edith Summerskill
Is my right hon. Friend aware that this is the first occasion during the war that a mass meeting of women workers has been called in order that a Minister may pay a tribute to their work, and is he aware that the only criticism that can be levelled at the meeting is that it was long overdue?
Then why have it in secret?
Mr. De la Bére
Why have it in camera?
Sir John Mellor
asked the Minister of Labour what degree of privacy was attached to the meeting at the Albert Hall on 28th September and for what reasons?
The Government wished to meet representatives of the women of the country in private conference. A full report of the speeches of Ministers at the meeting was issued to the Press, and a report of the Conference is being circulated to those who attended.
Sir J. Mellor
As the 6,000 women were intended to report to their organisations, was the Press excluded merely in order to give a sensation of intimacy?
I am not guilty of that.
Sir H. Williams
Will this report also be made available to Members of Parliament?
I have no objection.
Sir H. Williams
Will it be made available?
I will go into that.
Will the Minister say whether His Majesty's Government put up a good show in this brains trust?
Mr. De la Bére
We must separate the true from the false and the real from the unreal.
Mr. Norman Bower
asked the Minister of Labour whether he has any further information regarding the origin of the recent outbreak of unofficial strikes; what policy he proposes to adopt in order to deal with them; and whether he will seek powers to punish those responsible, whether employers, workers, or outsiders, by death or imprisonment for life?
I have nothing to add to the statement which I made on 24th September in the course of the Debate on Man-Power, or to the reply which I gave on 23rd September to the Question put by the hon. and gallant Member for Bewdley (Major Conant).
asked the Minister of Labour whether arising out of the shipwrights strike on the Clyde and the Vickers-Armstrong strike at Barrow-in-Furness, he is considering modifications of the Essential Work Order for the purpose of speeding up negotiations and the rapid settlement of grievances?
No, Sir. Any dispute can be reported under the Conditions of Employment and National Arbitration Order, and the Order provides that where a dispute is so reported and steps taken to settle the matter do not result in a prompt settlement, the dispute must be referred to the National Arbitration Tribunal within 21 days from the date on which the dispute was reported.
Is the Minister not aware that employers can carry on negotiations for month after month—in the case of the shipwrights it was over nine months—until the workers are provoked into taking action which may be exceedingly undesirable, and then they come under the ban of the Minister? Would it not be better for the Minister to intervene long before things come to that point?
That is not a statement of fact. The employers cannot carry on negotiations longer than the union is willing to carry them on. Immediately a union see that there is no possibility of a settlement they can report it, and as soon as they report it I have a legal obligation to refer it.
Is the Minister not aware that in the case to which the hon. Member for West Fife (Mr. Gallacher) referred the shipwrights were negotiating for nine months before it came to a settlement?
That may be, but the onus is upon the union if they cannot settle to refer the matter to me, and I do not propose to depart from the policy that we have followed during this war and proceed to take the responsibility off the hands of the respective parties.
Commander Sir Archibald Southby
asked the Minister of Labour whether he will give the names of all employers who have deliberately provoked strikes for ulterior reasons?
Sir A. Southby
Will my right hon. Friend say why not?
I cannot add anything to what I have said.
Sir A. Southby
May I ask why in that case he made the allegation in the speech which he made in this House recently?
There were very good grounds for it.
May I ask why it is that men's names are given if it is not alleged against them that they are responsible?
If the hon. Member will look up Hansard, he will see that I referred to no names of either parties.
Sir A. Southby
In view of the unsatisfactory nature of the right hon. Gentleman's reply, I beg to give notice that I will raise this matter on the Adjournment.
Italian Prisoners Of War
Major-General Sir Alfred Knox
asked the Minister of Labour whether he has considered the possibility of relieving the man-power shortage by making further use of Italian prisoners of war, especially of skilled men in their pre-war occupations?
This matter is under consideration.
Sir A. Knox
Will the right hon. Gentleman do his best to get these Italian prisoners of war a new status under his organisation so that further use may be made of them, not confining the use to quarrying and agricultural work?
I am responsible for the allocation of prisoners of war in this country to the various Departments which call for them under the present régime, but as I have said in my answer it is obvious now that matters will have to be reconsidered.
Will the Minister consider whether we cannot use German prisoners of war as we did in the last war?
Discharged Waaf, Bargoed (Unemployment Assistance)
Mr. Ness Edwards
asked the Minister of Labour whether he is aware that a discharged member of the W.A.A.F., for whom his Department could not find suitable employment, was paid 18s. per week unemployment assistance by the Bargoed assistance office, whilst the girl's board and lodging was 25s. per week; and whether he will see that the Assistance Board pays such allowances in this type of case as will enable these ex-service women to live free of undue hardship?
I am having inquiry made and will communicate with my hon. Friend.
Is the Minister aware that this girl, discharged from the W.A.A.F., was offered either the streets or the workhouse, had it not been for the good offices of the manager of the exchange at Caerphilly, and will he take steps to see that these girls are protected when they are discharged?
I cannot accept what the hon. Member has said before making inquiries. I do not know the facts.
Mobile Women Workers, Scotland
Mr. Neil Maclean
asked the Minister of Labour the number of young women directed to employment from Scotland to English workshops who left Glasgow by train on Monday night, 3oth August; and how many left on Wednesday night, 1st September?
The total numbers of women travelling to employment in England from Glasgow were 107 on 3oth August and 94 on 1st September. Not all of them were in receipt of writtten directions.
Did the officials of the Ministry inform those girls before they were sent down there that they had a right of appeal?
The officials have instructions to inform everybody about that, and if my hon. Friend has any evidence that these girls were not informed, I will look into it.
Is it not the case that in a number of instances that information has not been given to the girls?
If the hon. Member will give me instances, I will look into them.
asked the Minister of Labour the number of occasions on which girls from Scotland were sent to factories in England and found no work to start on, or no arrangements made for billeting, and had to return to Scotland?
I am not aware of any such cases, but if my hon. Friend has any particular cases in mind and will let me have details, I shall be glad to have them investigated.
Is the Minister aware that in the Debate on man-power I gave him a particular instance where one girl was prosecuted for going back to Scotland, and may I ask whether in that case she has now to go back to England again?
asked the Minister of Labour whether he is aware that when a factory in Renfrewshire stopped working a shift a large number of girls received their notice of dismissal, officials from the Labour Ministry interviewed the girls in the factory, and travelling warrants and the necessary papers to go to English factories were already made out for and handed to them; how many girls were sent; and whether they were told they had the right to appeal against the direction?
If my hon. Friend will give me the name of the factory, I will have inquiries made and communicate with him.
Will my right hon. Friend do his best to impress upon the Supply Departments to place contracts in Scotland, because that would avoid incidents of this nature?
Young Girls (Employment)
asked the Minister of Labour whether he is aware that, under present conditions the demand for the labour of girls between the ages of 16 and 18 years is so great that they are continually being enticed from one employment to another at increasing wages and that many of them are being offered £3 10s. per week or more; and whether, in view of the unfairness to older girls, whose employment is controlled and the difficulties caused to employers, he will consider instituting some form of control which will put an end to this abuse?
I am not aware that the difficulty to which my hon. Friend refers is widespread. Girls of 16 and 17 years employed in undertakings scheduled under the Essential Work Orders may not leave their employment without the permission of the National Service officer, and a large proportion of the girls of the age mentioned come under these Orders.
Mr. Rhys Davies
asked the Minister of Labour whether he will consider granting indefinite deferment to butchers of low medical category over 30 years of age employed on travelling shops in rural areas especially where the customers are employed full-time in industry and find it difficult to travel to the towns for their shopping?
Deferment is not normally granted to men born in 1905 or later who are engaged in the occupation referred to by my hon. Friend. If such men are placed in medical Grades III or IV, they are not, at present, called up for the Armed Forces, but are transferred to industry to some work of greater national importance. Applications for the deferment of those born before 1905 are dealt with by district man-power boards on their merits, irespective of the man's medical category.
Will my right hon. Friend ask his officers to have it in mind, because it is a very great convenience to the public, particularly in the rural areas, to have these travelling butchers' shops, otherwise they would have to travel miles by bus to do their shopping?
The man-power board have instructions to take all factors into consideration, and I consult with the Minister of Food on all these matters.
Conscientious Objectors (Boys' Clubs)
asked the Minister of Labour whether he is aware that conscientious objectors have been ordered to run boys' clubs as a condition of their exemptions; and whether he will cause this practice to cease immediately?
The conditions under which conscientious objectors are exempted from military service are specified by tribunals. These are independent statutory bodies, whose decisions cannot be varied by me. I am not aware of any cases in which tribunals have ordered a man to take up work with boys' clubs, but certain men have been allowed to continue such service.
Will the right hon. Gentleman look further into this matter? Is it not absolutely scandalous, when this country has placed the obligation of military service upon all fit men, that any conscientious objector should be excused military service on condition that he takes up a post in which he has an opportunity of influencing young people against military service?
I cannot interfere with the tribunals. With all the difficulties over conscientious objections, I am sure the House will agree that in this war the problem has been handled with the minimum trouble.
Sir A. Southby
asked the Secretary of State for the Home Department, how many individuals are still detained under Regulation 18B; and how many have been released since 15th July, 1943?
The Secretary of State for the Home Department (Mr. Herbert Morrison)
A report is presented to Parliament each month as to the action taken under Defence Regulation 18B. During the period 15th July to 30th September last 64 persons have been released from detention under the Regulation and on 30th September 364 persons were still detained, of whom 258 are persons of hostile origin or association.
Mr. William Brown
asked the Home Secretary why his instructions that women officers at Holloway prison were to be granted two hours weekly for shopping purposes have not been obeyed, whereas his instructions to increase the hours of these officers by 12 each fortnight has been carried out?
Mr. H. Morrison
In connection with the arrangement made in April last that prison officers should work six hours overtime per week so as to enable prisoners to be out of their cells for an extra hour, it was agreed that women officers should be allowed two hours off duty each week for shopping purposes. There was a short delay in introducing this concession at Holloway while consideration was being given to representations from the staff about the way in which it should be applied, but it became effective in the middle of May and has continued since then except for one week when owing to exceptionally heavy calls on the staff it was impracticable to allow time off for shopping.
asked the Home Secretary whether he is aware of the shortage of women officers in the prison service which is causing essential services in respect of prisoners to be overlooked; that four assaults have taken place upon officers at Holloway prison recently and that discipline is deteriorating by reason of this shortage of staff; and whether he will approach the Departments concerned with a view to releasing volunteers from the women's Forces for employment in the prisons, consider releasing the existing staff from the abnormal number of hours they are now working, and give instructions that the essential services to prisoners are to have a prior claim to the output of women's prisons?
Yes, Sir. For some time great difficulty has been experienced in filling vacancies on the staffs of women's prisons, and the shortage at Holloway Prison in particular is now acute. I am in consultation with my right hon. Friend the Minister of Labour and National Service as to the best method of overcoming this difficulty. But I cannot accept the suggestion that in general essential services to prisoners are overlooked. At Holloway Prison officers have been assaulted on three occasions this year, but any suggestion that the prisoners are out of hand would be misleading. Nor can I accept the suggestion in the last part of the Question that the productive employment of prisoners is not an essential service. Shortage of staff has made it necessary to shorten the hours of associated work at Holloway, but this is an undesirable expedient which I should be unwilling to extend and hope to discontinue as soon as possible.
When does the right hon. Gentleman consider that his discussions with his right hon. Friend will produce a result which will ease the situation in Holloway?
It is difficult, I admit, but my hon. Friend may be assured that I will do all I can, and I am sure that my right hon. Friend the Minister of Labour will be as helpful as he is able to be.
Mr. Rhys Davies
But is not part of the problem due to overcrowding of the prisons, because magistrates are now sending persons to gaol for offences that were never punishable before?
That Question had better be put down. My impression is that that is not so.
Could not convicts of military age be sent overseas and thus release some of the persons who are now looking after them?
Officers' Quarters, Dartmoor
Mr. W. Brown
asked the Home Secretary whether he is aware that officers at Dartmoor prison are being compelled to occupy official quarters that were condemned years ago and that, in some cases, officers and their families have to descend two flights of stair-4 in order to avail themselves of lavatory facilities; and what steps he proposes to take in this matter?
Mr. H. Morrison
Though the quarters in question are inconvenient by modern standards, it is misleading to describe them as condemned. Under present conditions it is not possible to reconstruct them or to replace them by modern houses, but such work as is practicable to improve them has been done.
If it be the case that, unsatisfactory as these premises may be, we are compelled, by the exigencies of the case, to use them, will the Home Secretary consider reducing the normal period of time during which these officers have to remain there?
I will certainly consider that point, in so far as it is possible to do so, but the present staffing problem is one of very great difficulties. I am not unsympathetic about it. I am not particularly proud of these habitations, but we are bang up against a difficulty of labour.
Polish Government (Newspaper Attacks)
28 and 29.
Captain Alan Graham
asked the Home Secretary (1) whether his attention has been drawn to an article, under a false name, in the "Tribune" newspaper of l0th September, attacking the head of an allied foreign State resident in this country, and complementary to a more abusive article in the "Daily Worker" of i4th September; and whether he will warn both concerned that persistence in this campaign of British newspapers against Britain's Ally, Poland, will furnish grounds for their suspension from publication;(2) whether, in the interests of the United Nations and the better prosecution of the war, he will consider the reimposition of the ban on the "Daily Worker" for their systematic campaign of abuse and denigration against the Government of Poland, as specially evinced in their article of 14th September?
Mr. H. Morrison
I have seen the article attacking the Polish Government in the "Daily Worker" for 14th September, and also the article in "Tribune" for l0th September. I agree with my hon. and gallant Friend in deploring abusive attacks on an Allied Government in the British Press. While our Allies will not look for an immunity from criticism which is neither accorded to nor sought by His Majesty's Government, responsible and reputable organs of the British Press recognise that restraint and courtesy should be used in discussing those Governments and particularly the heads of States who are our guests in this country. My powers of interference with the free expression of opinion in the Press are strictly limited, at the wish of the House, to the minimum necessary to prevent the conduct of propaganda which endangers the prosecution of the war, and, while I shall keep a watch for mischievous attacks on our Allies, I do not at present think that I should be justified in taking the action suggested by my hon. and gallant Friend.
Sir Alfred Beit
Are not such attacks equally undesirable when they appear in "Soviet War News"?
Mr. G. Strauss
Is it not the case that the article in "Tribune" was a statement of objective fact, the truth of which has not been denied by anybody, that it was not abusive, and that it was plainly written in the best interests of the democratic cause for which the Allies are fighting; and have not the British Press just as much right to comment on the personnel and actions of Allied Governments as they have to comment on the actions or personnel of the British Government?
I do not think I could accept my hon. Friend's description of the article. I have made no reflection on the British Press as a whole. The British Press as a whole sees the obvious point that if there is controversy in the public Press as to the heads of other Governments and those Governments, it cannot be helpful to the unity of the Allies' cause.
Is the Minister not aware that if he were to ban newspapers in this country for attacks and slanders on the Allies, there would be a wholesale closing down of papers in this country? Is he not further aware that, in view of the character—the vicious character—of the Polish Press, he should commend to the questioner the remark of the War Minister, that what is sauce for the goose is sauce for the gander?
On a point of Order. May I ask the hon. Member to withdraw his slander on the Press of an allied nation? It is absolutely and positively untrue to assert that the official Polish Press is in any way vicious.
Channel Islands (Red Cross Facilities)
asked the Home Secretary whether he will secure for the Channel Islands the same Red Cross facilities as are accorded to occupied mainland European countries?
Mr. H. Morrison
The Occupying Power has not so far permitted a representative of the International Red Cross to visit the Channel Islands, but otherwise the same Red Cross facilities are available to the islanders as to other occupied territories in Europe, Channel Islanders who are detained in camps in Germany as civilian internees receive Red Cross parcels from the British Red Cross in the same way as other British civilian internees. But such parcels are not sent to civilians at liberty in the Channel Islands or elsewhere in occupied Europe.
Thank you, Sir.
Crimes Of Violence (London Black-Out)
Sir J. Mellor
asked the Home Secretary how many complaints have been received by the police of crimes of violence in London during the black-out during the past 12 months; how many convictions have been obtained; arid in how many cases have the offenders been flogged?
Mr. H. Morrison
196 cases of robbery or assault with intent to rob during the hours of darkness were reported in the Metropolitan Police District in the 12 months ended 31st August, 1943. 52 of these reported offences occurred in some house or building and not in the street. 86 cases were cleared up, 155 persons having been charged in connection with the crimes. 108 of the persons concerned were found guilty and in two cases the offenders were ordered to be birched.
Sir J. Mellor
Has special attention been given to the number of brutal assaults upon elderly persons?
Very careful attention is given to all aspects of this matter, and, of course, that would be a particularly objectionable kind of assault. I can assure my hon. Friend that we are doing everything that we can, but obviously the situation is difficult.
Mr. Rhys Davies
Is this crime on the increase?
I should need notice of that question.
Factory Fire-Watching (Pay)
Sir J. Mellor
asked the Home Secretary whether the National Advisory Council for Fire Prevention has made further recommendations with regard to the current rate of 1s. an hour paid for fire-watching in some factories operated on behalf of the Government; and whether this will now be reduced to the standard rate of 3s. a night?
Mr. H. Morrison
I hope to be in a position to make a statement on this subject at an early date.
Sir J. Mellor
As these experiments have now been going on for two years, will not my right hon. Friend expedite the decision?
I am always expediting everything, I can assure my hon. Friend.
asked the Home Secretary whether he is satisfied that the Civil Defence schemes of local authorities, after a period of years, are now working well; what proportion of the activities of the Civil Defence Regional Commissioners are thereby rendered unnecessary; and whether he can now see his way to make reductions to a skeleton basis of the staffs of the latter so as to render fresh manpower available for the national needs?
Mr. H. Morrison
Generally speaking, the answer to the first part of the Question is in the affirmative. The local Civil Defence organisation must, however, be constantly adapted to the changing circumstances of the war, and the Regional Commissioners' function of helping, advising and co-ordinating the local authorities is continuous. Moreover, in order to achieve considerable economies in man-power and material in the local authority services, certain additional functions have been laid upon the Regional Commissioners, such as the organisation of the Civil Defence Reserve. I am satisfied that the Regional Offices are a necessary and valuable link in the chain of Civil Defence, both administrative and operational, and that it would be impossible to reduce their staffs to a skeleton basis. In recent months these staffs have been continually reviewed and pruned where possible, and a further such review is about to be undertaken.
Is my right hon. Friend aware that a certain amount of overlapping of activities takes place in this matter, of which I could give him particulars, if he wished?
If my hon. Friend will let me have those particulars, I shall be very happy to look into them.
asked the Minister of Health how far the Civil Defence schemes of local authorities now working satisfactorily for a period of years make it possible to reduce the overlapping work of the Civil Defence section of his Department, so as to effect reductions of staff to a skeleton basis and to set free a reserve of man-power for the national needs?
The Minister of Health (Mr. Ernest Brown)
The staffing of the Ministry, both centrally and regionally, is kept under continuous review in the light of all the circumstances, including that referred to by my hon. Friend.
Mr. Edmund Harvey
asked the Home Secretary how many first offenders under 21 years of age have been sent to prison without the option of a fine for refusal to take up employment as directed and for absenteeism or lateness, respectively, during the 12 months ended the 31st August, 1943; and in how many cases of this nature the offender was placed on probation?
Mr. H. Morrison
I regret that all the information asked for is not available. New methods of classifying returns have recently been adopted, and at present I can only give figures for the first four months of this year. The statistics do not enable me to distinguish between first and other offenders or to give separate figures for the different offences under the same Defence Regulation. In the four months January to April this year 331 persons between the ages of 17 and 21 years were found guilty of offences under Defence Regulation 58A. Of these, 33 were sentenced to imprisonment without the option of a fine and 12 were placed on probation.
Is my right hon. Friend aware that the Lord Chancellor has recently said that it is very undesirable to send young persons to prison for a short period, and could he not use his influence to see whether these young offenders, many of whom offend through ignorance, could be dealt with differently?
I think it must depend on the nature and extent of the offences, and I do not like interfering with the courts in the exercising of their discretion if I can avoid it.
Mr. George Griffiths
Are any of those sent to prison directors convicted for being late or absent?
asked the Minister of Health whether, in settling the policy for evacuees, he will consider withdrawing all those to London who are billeted in places where accommodation is urgently needed for war workers?
Mr. E. Brown
No, Sir. The allocation of evacuees to the various reception areas is adjusted with due regard to the demands for accommodation for war workers. If my hon. and gallant Friend will send me information of any particular area where he believes difficulties to be occurring, I will at once make inquiries.
asked the Home Secretary why no explanatory memorandum is attached to the Alien Restriction Order, No. 1317, of 1943; and what is meant by the words in paragraph 1 (i), "An alien coming to the United Kingdom from a place within the United Kingdom"?
Mr. H. Morrison
The Aliens Order, which operates, as my hon. Friend knows, in time of peace as well as in time of war, provides for the giving of Directions as regards particular aliens or classes of aliens, and it has not been the practice to attach explanatory memoranda to these Directions. A Direction of 6th August, 1942, which applied the landing and embarkation provisions of the Aliens Order to aliens who arrive in the United Kingdom as recruits for one of the Allied Forces contained an exception for those coming from Canada and the United States. I recently decided that this exception was too wide and ought to be limited to members of the military or naval forces of the United States. The new Direction of September, 1943, gives effect to this decision. It is not, however, necessary that these landing and embarkation provisions shall apply to aliens crossing from Northern Ireland to Great Britain or vice versa; and it is for this reason that the Direction contains the words to which my hon. Friend refers in the last part of his Question.
Will the right hon. Gentleman continue to be very vigilant? He has promised the House to avoid jargon of this nature appearing in similar Orders. Will he also watch in future to avoid incomprehensibility of Orders, because many Orders are not easy for the House to understand?
I did take the point which the hon. and gallant Member mentions in the last part of his Question. I received an explanation which convinced me it was right, though I am not sure that I could stand a cross-examination on it. I will do what I can in the matter.
Sir Harold Webbe
Will the Home Secretary now issue a short memorandum explaining his answer?
asked the Home Secretary whether he is prepared to receive, at the present time. applications for British naturalisation from refugees now resident in this country even though no decisions upon such applications are intended to be taken until the end of the war; and, if so, will priority of consideration be given according to the order of the applications being received?
Mr. H. Morrison
I cannot prevent people from sending me applications, but to invite them to send applications which cannot at present be considered would not be a justifiable course. To undertake that after the war applications will be dealt with in the order in which they have been received would be unfair to those who have considerately refrained from troubling the Home Office during the war with applications which cannot at present be taken up and would be an invitation to all potential applicants to add to the work of my Department by sending in their applications as early as possible.
Could not some assurance he given to aliens who are serving in the Armed Forces and yet are quite uncertain as to whether, after the war is over, they will not be bundled out of this country? If they are good enough to serve in the British or Allied Forces, are they not good enough for naturalisation?
I would not accept that. I think it would be most unwise that such a sweeping commitment should be entered into. The question of naturalisation must be kept open to be settled on its merits in due course.
Eire Workers' Earnings, Great Britain
asked the Home Secretary whether, before the 33,465 Irish workers who returned to Eire, during the To weeks ending 4th September, were allowed to leave England and take their earnings with them, they had to submit evidence that they had paid Income Tax in this country?
Mr. H. Morrison
No, Sir. Persons applying for exit permits to leave this country are not required to produce evidence that they have discharged their public or private financial obligations. Questions of collection of tax and prevention of evasion are, of course, matters for my right hon. Friend the Chancellor of the Exchequer.
Will not the Wage-earners' Income Tax Bill provide a remedy for this abuse?
It will make its contribution.
Mr. Francis Watt
asked the Home Secretary whether he is aware that workmen's compensation in the British coal-mining industry is almost wholly administered by trade mutual insurance companies; why none of these companies were consulted by his Department regarding the Workmen's Compensation (Temporary Increases) Bill; and how far the consultations which occurred between his Department and insurance interests were confined to the Accident Officers' Association, a body representative only of tariff companies?
Mr. H. Morrison
The mutual indemnity companies to whom my hon. Friend refers are associations of employers whose views are, I understand, represented through the British Employers' Confederation, with which there was consultation. In addition to the British Employers' Confederation and the Accident Officers' Association, representatives of non-tariff insurance companies and Lloyds underwriters undertaking employers' liability insurance were also consulted.
Does the right hon. Gentleman not realise that this Bill affects accidents going back over a period of nearly 20 years and imposes an additional liability on employers of all workmen drawing weekly payments since January, 1924? In those circumstances, and having regard to the fact that a great many of these cases could not possibly be covered by existing—
That is becoming a speech, not a question.
Does the right hon. Gentleman not think that something more than the perfunctory investigations he has carried out are necessary?
No, Sir, we gave the matter very careful consideration. There were discussions as regards these particular companies, and they are associated with the employers' organisation which was consulted. I do not think that any injustice has been done.
Association Of Education Committees (Resolutions)
asked the President of the Board of Education whether he has considered the Resolutions relating to Part III. Authorities and the proposals of the White Paper passed at a recent meeting of the Association of Education Committees; and what action he proposes to take thereon?
The President of the Board of Education (Mr. Butler)
The Board have received copies of the resolutions passed at the general meeting of the Association of Education Committees and have expressed their readiness to discuss them with the Executive Committee of the Association.
Teachers (Service In Forces And War Work)
asked the President of the Board of Education how many certified teachers have now left their employment to serve in His Majesty's Forces and in other war work?
Exact figures are not available, but it is estimated that the number of men teachers who have left employment in public elementary and secondary schools to serve in His Majesty's Forces or on other war work is between 20,000 and 22,000.
asked the President of the Board of Education how many teachers' certificates were issued in 1938 and in 1943 in England; and how many in Wales?
The numbers of students who qualified for recognition as certificated teachers in 1938 were: England 5,530, Wales 638. Figures for 1943 are not yet available, but the numbers for 1942 were: England 4,366, Wales 479.
Schoolchildren (Use Of Countryside)
asked the President of the Board of Education whether he proposes to give effect to the recommendations in the Scott Report for organising visits of schoolchildren to rural districts and for educating the public in the proper use of the countryside?
The Board have for many years encouraged organised visits of schoolchildren to the countryside, and I hope to see a wide extension of such visits in the future. As regards the second part of the Question, I would refer my hon. Friend to the answer which I gave him on 23rd September, a copy of which I am sending him.
Council For The Encouragement Of Music And The Arts
Mr. R. Morgan
asked the President of the Board of Education whether it is within the powers of C.E.M.A. to finance the building of theatres?
The moneys at the disposal of C.E.M.A. would not permit them to embark on enterprises such as my hon. Friend suggests.
Education Bill (Roman Catholics, Lancashire)
asked the President of the Board of Education whether he is aware that estimates prepared by the Catholic hierarchy in Lancashire show that the new Education Bill will impose a burden of £2,500,000 on Lancashire Catholics; and whether he will consider ways and means whereby this other burden can be considerably reduced?
I have seen some estimates of the anticipated burden on the Roman Catholic community. I have also received representations from the Roman Catholic Hierarchy, and these, together with representations from other interests, are being considered.
Will my right hon. Friend see that every feeling of injustice is removed from this section?
Does the right hon. gentleman not agree that it is very unfortunate that private pockets should be called upon to defray such a large share of the expenditure on national education?
Mass Unemployment (Prevention)
asked the Prime Minister whether the Government are prepared to consider granting facilities to Sir William Beveridge to have access to information available in Government Departments in connection with the independent inquiry he is carrying on into the problem of unemployment and its cure, in view of the great importance of the question and the necessity for obtaining the fullest advice on the subject?
The Prime Minister (Mr. Churchill)
On this particular subject I have nothing to add to the answer which I gave to my hon. Friend the Member for East Islington (Mrs. Cazalet Keir) on 13th April last.
In the event of any application for facilities being received, would it receive sympathetic consideration?
Does the Prime Minister appreciate that if Sir William Beveridge is to be accorded such privileges every hon. Member is entitled to them?
Sir A. Beit
asked the Prime Minister whether he is now in a position to complete the story of the fall of Tobruk, in view of the escape from captivity of General Klopper?
The Prime Minister
General Klopper has returned to South Africa. Everyone will congratulate this gallant officer on his escape from being a prisoner of war. In due course I have no doubt the story of what happened at Tobruk in June, 1942, will be reconstructed, but I have no new information about it at the present time.
asked the Prime Minister whether it is now proposed to give the House an opportunity of discussing questions of electoral reform?
The Prime Minister
Yes, Sir. The Government propose to give time for a Debate on electoral reform.As the House is aware, a Bill has been presented to give effect to the scheme recommended by the Departmental Committee on Electoral Machinery. The Government are fully conscious of the importance of giving attention to all measures designed to secure that whenever there is an appeal to the country—whether at by-elections or at a General Election—the result shall be fully and truly representative of the views of the people. It will no doubt be the wish of the House, as it is of the Government, that this Measure should be passed before the end of the present Session. My right hon. Friend the Home Secretary has also announced the Government's intention to submit to Parliament legislation on the subject of redistribution. In addition, however, to measures of this kind designed to improve the machinery by which the existing Parliamentary franchise is exercised, the Government recognise that full consideration ought to be given to various proposals for changes in the existing franchise law, for controlling the expenditure allowable to candidates, and for other amendments designed to secure the maximum of fairness in the conduct of elections. In the opinion of the Government the best method of securing a full examination of these problems will be by a Conference, presided over by Mr. Speaker, and if the House concurs in the proposal the Government would propose that Mr. Speaker should be invited to undertake this important task in addition to his already onerous duties. In the first instance, however, as I have already stated, the Government desire that there should be a wide Debate on electoral reform in order to give the House a full opportunity of expressing its opinion. We propose, therefore, to set apart two days for this Debate early in the new Session.
asked the Minister without Portfolio what economic reforms he proposes to introduce before the end of the war so as to ensure that in time of peace there may still be more jobs to be done than there are people to do them as has proved to be the case in time of war?
The Minister without Portfolio (Sir William Jowitt)
If my hon. Friend will refer to the speeches of the late Chancellor of the Exchequer on the subject of economic policy of 2nd February last and of my right hon. Friend the President of the Board of Trade on the same topic of the following day, he will find a complete survey of the problem of employment after this war and of the lines we should follow to secure maximum employment. I cannot add to the statements then made except to say that the maintenance of full employment in time of peace is under the constant and continuous study of His Majesty's Government.
Would my right hon. and learned Friend give his mind to the terms of the Question? He has not dealt with the Question at all. If he does not understand the Question, will he consider taking a course at the School of Economic Science?
Cannot this familiar reply, that the matter is under the constant study of the Government, be varied in some way? Can it be amplified? Can my right hon. and learned Friend add something new to what he has already said?
Sir W. Jowitt
It was amplified by my answer in which the lines of study were indicated.
Women's Land Army (Accidents, Legal Aid)
asked the Minister of Agriculture whether similar facilities for obtaining legal aid in the event of an accident are guaranteed to members of the Land Army as to members of the Fighting Forces or whether, in such circumstances, members of the Land Army are expected to rely on the support of their trade unions?
The Minister of Agriculture (Mr. R. S. Hudson)
Although the special arrangements for the provision of free legal advice to members of the Forces do not apply to members of the Women's Land Army, the latter can seek the assistance of voluntary associations, such as the poor man's lawyer or the citizen's advice bureau. In addition, of course, my Department, including headquarters and county offices of the Women's Land Army, are always prepared to give all the general advice and assistance they can in cases of accident.
Is my right hon. Friend aware that in a recent case no help was forthcoming from any officer of his Department?
I wrote to my hon. Friend giving a very complete list of the people to whom this girl's parents could apply for advice.
Workers' Transport (Petrol)
Mr. John Dugdale
asked the Minister of Agriculture the maximum amount of petrol which he instructs the county war agricultural executive committees should be used to transport a single land-worker to and from a day's work?
Arrangements for local transport of land workers to and from work are made at the discretion of county war agricultural executive committees who have been instructed to exercise a strict economy in the use of all kinds of fuel.
Does the right hon. Gentleman really think it right that a three-ton lorry, using 31 gallons of petrol, should be used to take four girls to work? Is that not waste of petrol?
I would not like to express an opinion on that without knowing the full facts. It might well have been an individual case.
asked the Minister of Agriculture whether, in order to allay growing discontent and give confidence to farmers as to the future in their farming operations, he will, at the earliest possible moment, make a full statement of the Government's plans for post-war agriculture in the United Kingdom?
I would refer my hon. Friend to the reply given on 23rd September by my right hon. Friend the Deputy Prime Minister to the hon. Member for the Isle of Ely (Mr. de Rothschild) to which I am unable to add.
Arising out of that inconclusive answer, might I ask whether, in face of the strong feeling among farmers in the United Kingdom—and in no place more so than in Ulster—in favour of a definite post-war plan for agriculture, the right hon. Gentleman will take immediate steps to prepare such a plan, in order to prevent agriculture drifting well-nigh to disaster, as it did after the last war?
Will my right hon. Friend consider that what the agricultural community wants is a discussion in this House before the Government put forward any policy, so that the Government can hear the agricultural community's views?
Does the right hon. Gentleman not recollect how badly the Ulster farmers were let down after the last war? Will he not take any steps that he can to see that these loyal citizens are not discouraged in their efforts to grow more corn and more flax?
Sir J. Lamb
asked the Minister of Agriculture whether he is aware of the great hardship to many owners of livestock whose land adjoins that of the Forestry Commission by the fact that the Commission is under no statutory obligation to erect and maintain fences round land acquired by them for afforestation; and, having regard to the need for maintaining adequate supplies of home-produced meat, what action he proposes to take to enable this land to be grazed by stock to its full capacity in the national interests?
I have received no specific complaints of the nature referred to. If my hon. Friend will send me particulars of any cases in which difficulties have arisen, I shall be happy to look into the matter.
Rating And Valuation
asked the Minister of Health how many rating authorities have continued to revise the current valuation list in accordance with Section 37, Rating and Valuation Act, 1925, during the years 1939 to 1943; and how many rating authorities have postponed such revision, taking into consideration the provisions of the Rating and Valuation Act (Postponement of Valuations) Act, 1940?
Mr. E. Brown
As my hon. Friend is aware, the postponement of the compulsory quinquennial valuations does riot preclude either ratepayers or rating authorities or county valuation committees from making proposals interim for the alteration of the assessments of rateable pro- perties. I regret that I have no information to show how far either ratepayers or rating authorities have refrained from taking advantage of their rights in this respect.
State Medical Service
Dr. Russell Thomas
asked the Minister of Health what steps he has taken to ascertain the views of doctors serving in the Armed Forces, both in this country and abroad, in regard to the future of medical practice?
Mr. E. Brown
I am quite alive to the need for this, but the appropriate time will be when the White Paper has been issued as the basis for public discussion.
Is it not a fact that no steps have been taken to ascertain the views of about 30,000 doctors connected with the Armed Forces? Would my right hon. Friend give a political assurance and guarantee similar to that of the Prime Minister yesterday in the case of coal, that the medical profession will be protected?
The proper time to deal with that matter will be when the White Paper is issued. The country and the House will then be able to express an opinion.
Are we to understand from the answer that the right hon. Gentleman has taken advice only from the older doctors, and not from the younger ones, who are in the Services and who will be called upon to administer the medical service?
I have pointed out that the time to deal with these questions will be when the White Paper is before Parliament.
Sir Ernest Graham-Little
asked the Minister of Health whether he is aware that the representative body of the British Medical Association has, in 1942 and 1943, recorded almost unanimous opposition to the establishment of any whole-time salaried State medical service to the extinction of private practice, as proposed in Assumption B of the Beveridge Report; that similar oposition has come from numerous plebiscites of the profession; and whether he still adheres to his declaration at Westminster Hospital, on 4th October, that the Government has accepted Assumption B and is engaged in putting its provisions into operation?
The answer to the last part of the Question is, Yes, Sir. But, if my hon. Friend will look again at Assumption B of the Report, he will find that it does not contain the particular proposal which he describes—nor does it purport to deal at all with the method of organising the new service.
Sir E. Graham-Little
Will my right hon. Friend contradict the statement which he is said to have made, that this matter has been determined already and that it is actually being put into operation?
I have never said that.
Dr. Russell Thomas
Is the right hon. Gentleman aware that more than 90 per cent. of the profession have recently turned down the matter, and that they are particularly disturbed at the Socialistic scheme he brought forward at the outset?
The hon. Member is now repeating what he said on the Adjournment, with not very great satisfaction to himself.
Is the Minister aware that the national health service is more important than the opinion of a few private practitioners?
Bovine Tuberculosis (Children)
asked the Minister of Health whether the absence of any reference in his Annual Report, Cmd. 6468, among the details of the causes of deaths, to deaths of children due to bovine tuberculosis, indicates that his Department regard this cause as non-proven?
Mr. E. Brown
No, Sir. Deaths from bovine tuberculosis are included under deaths from tuberculosis.
Will the matter be dealt with in future under this heading?
My hon. Friend will know that at the moment we are able to issue only a short summary. It is very difficult to put all the detail in. When considering the next summary I will bear that point in mind and see whether we can do it.
Is the Minister aware that the summary is very full?
If my hon. Friend will compare it with the normal pre-war Report he will find that it is a summary indeed.
National Health Insurance
Mr. John Dugdale
asked the Minister of Health whether health insurance authorities are entitled to reduce their payments to insured persons while they are in receipt of treatment allowances?
Mr. E. Brown
A person discharged from His Majesty's Forces who is in receipt of treatment allowances for injury or disease attributable to his service is disentitled to benefit under the National Health Insurance Acts in respect of incapacity arising from that injury or disease for a period of 26 weeks reckoned from the date of the injury or the first removal from duty. If the incapacity continues beyond those 26 weeks and treatment allowances remain in payment, the person becomes entitled to sickness benefit at half rate, but he continues to be disentitled to disablement benefit. This reduction or suspension of benefit ceases, however, when he has been employed for a prescribed period since the date of his discharge, namely, 26 weeks in the case of sickness benefit and 104 weeks in the case of disablement benefit.
asked the Minister of Health the names of those towns which have now been supplied with mass miniature radiography machines in connection with his campaign against tuberculosis?
Mr. E. Brown
Miniature radiography units have now been supplied in England to the County Councils of London, Lancahire, Middlesex and Surrey, and to the Staffordshire, Wolverhampton and Dudley Joint Tuberculosis Board. Another unit has gone to Scotland, and one is on the point of delivery to the Welsh National Memorial Association.
Mr. Graham White
asked the Minister of Health whether he is in a position to make a statement with regard to the progress made under Regulation 33B?
Mr. E. Brown
The Regulation is substantially helping local authorities to get into touch with persons suffering from venereal disease and to induce them to undertake treatment. Up to 30th June last 1,893 cases were brought to the notice of medical officers of health in this way. The number of cases reported more than once as alleged sources of infection was 110. In three cases it was necessary to take proceedings for failure to carry out treatment.
In view of the fact that only six men have been reported under Regulation 33B, is the Minister satisfied that this Regulation is making a satisfactory contribution to the reduction of the incidence of venereal disease?
I would say that it is making a very useful contribution.
Sir A. Beit
Can the Minister say whether the majority of the 1,800 cases to which he refers were voluntary sufferers or persons who had been compulsorily examined?
They were cases that were brought to the notice of medical officers.
Can the Minister say what has been the result of the recent Regulation?
Mr. Ness Edwards
asked the Minister of Health what response he has received from local authorities in the Welsh region to Circular No. 2778 issued by his Department in March, 1943; and what number of houses are covered by the plans submitted?
Mr. E. Brown
Proposals have so far been submitted by 91 local authorities in Wales, covering 13,934 houses.
Mr. Ness Edwards
asked the Minister of Health which local authorities in the county of Glamorgan have submitted plans for a first year programme for postwar housing; and what number of houses are covered by these plans?
As the answer involves a number of figures, I will, with permission, circulate it in the OFFICIAL REPORT. The total number of houses covered by the programme is 2,924.
Following is the answer:
The undermentioned local authorities in Glamorgan have submitted plans for a first year's housing programme, as follow:
|Swansea County Borough Council||457|
|Barry Borough Council||158|
|Neath Borough Council||200|
|Aberdare Urban District Council||100|
|Bridgend Urban District Council||360|
|Glyncorrwg Urban District Council||52|
|Maesteg Urban District Council||500|
|Ogmore and Garw District Council||76|
|Pontypridd Urban District Council||369|
|Cardiff Rural District Council||256|
|Cowbridge Rural District Council||100|
|Neath Rural District Council||138|
|Penybont Rural District Council||158|
Rent Restrictions Committee
asked the Minister of Health whether he can now give the names of the members of the promised Committee on Rent Restriction and its terms of reference?
Mr. E. Brown
As already announced, the Chairman of this Committee will be my Noble Friend Viscount Ridley, and I hope to be able to announce the names of the other members shortly. The terms of reference will be:
"to review the question of rent control, including the working of the Rent Restrictions Acts, and to advise whether any, and if so what, changes are necessary."
Is the right hon. Gentleman asking the Chairman to expedite the report of the Committee?
I hope that the Committee will get to work at once.
Do the terms of reference mean that the examination will only cover the ground previously covered by rent committees?
Not at all; the answer says "if so, what changes are necessary."
Lieut.-Commander Gurney Braithwaite
Can the right hon. Gentleman give an assurance that the terms of reference will not exclude the consideration not only of rents of houses but of rents charged for parts thereof, furnished rooms and so on?
I think my hon. and gallant Friend can be satisfied that we have drawn up the terms of reference as widely as possible.
Mr. S. O. Davies
Can the Minister give the House an assurance that there will be a representative of working-class organisations or trade unions on this Committee?
Perhaps the hon. Member had better wait until he sees the composition of the Committee.
Mr. W. Brown
Will the terms of reference cover not only the matter of rent restrictions but the inflated selling prices of houses which are now being obtained?
I would like notice of that question.
asked the Minister of Health the all-in cost of each of the cottages built hitherto under his 3,000 construction scheme?
Mr. E. Brown
The all-in costs in the two schemes where figures are available are £963 and £955 respectively.
Is the Minister making much progress with these cottages? How many has he available now?
That is not covered by this Question.
Can the Minister say how many?
If the hon. Member will put that question down I will gladly answer it.
Sir R. Glyn
asked the Minister of Health whether he will consider the need for a survey of the condition of rural workers' houses so that as soon as means can be arranged urgent repairs may be carried out?
Mr. E. Brown
A Sub-committee of my Central Housing Advisory Committee is reviewing the whole field of rural housing under the chairmanship of Sir Arthur Hob-house, and I understand that the question of a comprehensive survey of rural houses is one of the matters which they have under consideration. I am expecting the report of this Sub-committee about Christmas time. The carrying out of urgent repairs, however, need not and should not await this report. Local authorities, including rural district councils, are being urged to undertake urgent repairs at once, and to take advantage of the facilities afforded under the new scheme for concentrating immobile labour on essential housing work.
Has the Minister considered the report now published on rural housing by the Communist Party?
I have the advantage of having a copy.
Mr. George Griffiths
Has the right hon. Gentleman read it?
Local Authorities' Boundaries
Sir Ralph Glyn
asked the Minister of Health whether he will consider altering the boundaries of various local authorities in view of changes that have taken place affecting industrial and social conditions in the neighbourhood and many areas; and what steps should hon. Members take to bring the views of local authorities to an appropriate body?
Mr. E. Brown
No alteration of boundaries can be made while the Local Elections and Register of Electors (Temporary Provisions) Act, 1939, remains unaltered but the changes to which my hon. Friend refers will clearly have to be taken into account when the time comes for any re-arrangement. Meantime, I shall be glad to receive from hon Members any information about their own constituencies, which they think ought to be on record.
Sir R. Glyn
Does not my right hon. Friend realise that it is very hard to make plans until the local authorities know the areas in which they are going to plan?
That is quite clear.
Business Of The House
Mr. Arthur Greenwood
May I ask the Prime Minister to state the Business for the next series of Sittings?
The Prime Minister
The Business for the next series of Sittings will be as follows:
First Sitting Day—Second Reading of the Regency Bill [ Lords] and of the Rent of Furnished Houses Control (Scotland) Bill, and Committee and remaining stages of the Town and Country Planning (Interim Development) (Scotland) Bill.
Second Sitting Day—Committee stage of the Wage-earners' Income Tax Bill.
Third Sitting Day—Second Reading of the Workmen's Compensation (Temporary Increases) Bill.
May I ask the Prime Minister whether, on the third Sitting Day, there might be an extension of time for the Second Reading of the Workmen's Compensation Bill, and whether it would be possible at an early stage to arrange a Debate on the food situation in India?
The Prime Minister
It was rather hoped that this particular Bill was one which would be very largely agreed upon, and it is not expected that it will lead to a discussion requiring an alteration of the hour.
May I raise this question again on the next Sitting Day? And what about India?
The Prime Minister
We have a good deal of Business to get through before we rise. I should be more inclined to think it would be convenient to have that Debate, which certainly should take place, in the new Session. The measures that can be taken in India are being taken, but they all take some time to put into operation. I am inclined to think that it would be more convenient to wait, although the Government endeavour as much as possible to fall in with the wishes of the House.
It is a matter of urgent and definite public importance, and to postpone it until the next Session, which is some little time away now, is, I think, an undue delay.
The Prime Minister
We will do our best to try and find a way before we separate.
Sir H. Williams
Is it possible for His Majesty's Government to provide that the scope of the pay-as-you-go Bill shall be extended to cover those people who are at present excluded?
The Prime minister
The Chancellor of the Exchequer is here, laden with information, and he will be making a speech in the near future in which further light may be thrown upon this matter.
Sir H. Williams
May I ask whether the right hon. Gentleman can unburden himself at an earlier stage so that he can have a quieter time at the week-end?
May we have a Debate before any commitments are entered into in connection with the currency conversations now taking place in Washington?
The Prime Minister
I do not want to peg out all our time. I will consult with the Chancellor of the Exchequer on the subject, but I must not be understood to be making any promises.
Mr. Holds worth
Can the Prime Minister give a guarantee to the House that extended time will be given for the Committee stage of the Wage-earners' Income Tax Bill, as some of the Amendments are likely to take a good deal of time?
May I ask the Prime Minister whether, in view of the unsatisfactory nature of the two days' Debate on coal, he will let us have a further Debate?
The Prime Minister
It would be better to await some of the discussions which are to proceed between the authorities concerned.
Questions To Ministers
Sir Irving Albery
I desire to ask your guidance, Mr. Speaker, on a matter arising out of Question time. I put a Question yesterday to the Minister of Information which was not reached in time for an oral answer to be given. I subsequently received a reply which did not give any reply to the main Question and was of a completely frivolous nature. I wish to ask you, Sir, whether in such a circumstance on the present occasion, and possibly subsequently, you would permit such a Question, which received such a reply, to be re-tabled for another answer?
I think the Rule is fairly clear about that. I do not accept the suggestion of the hon. Member that the answer was frivolous or not satisfactory. That matter is decided by the Clerks of the Table after consultation with me. But if a Question has not been fully answered, it can be put down again. That is the hon. Member's course.
Orders Of The Day
Wage-Earners' Income Tax Bill
Order for Second Reading read.
The Chancellor of the Exchequer (Sir John Anderson)
I beg to move, "That the Bill be now read a Second time."I feel myself to be to-day in a very special sense the successor of the late Sir Kingsley Wood. The plan which I have to present to the House was his; the White Paper explaining it had been completed for presentation at the time of his death. I know how much thought he had given to this question, and I ought to make it quite clear to the House that the Bill as it has been introduced embodies in every detail the plan which he drew up. In whatever form it may emerge, the plan, beneficent in purpose and in effect, will remain essentially the last achievement of Kingsley Wood, and his name will always be honourably associated with it. Before turning to the plan itself, I think it will be convenient if I make a few remarks on the nature of our Income Tax system—a matter of some little complexity—for it is important that modifications in the system such as we are concerned with to-day should be examined in the light of the general structure and principles upon which the structure is founded. The aim of our Income Tax system, which I have heard described, like our Civil Service, as "the best in the world," is to collect from every taxpayer throughout his life, year by year, by a process of annual assessment, a sum payable according to his financial circumstances in the particular year and to the rates and conditions of Income Tax for the time being in force. The practice and procedure of the Revenue Department have had to be adjusted from time to time to meet the varying circumstances of the different classes of taxpayers. But such practice and procedure must always, in the course of critical examination, be subject to this test: How far do they achieve the aim which I have just stated? I referred a moment ago to variations of procedure. There are two such variations as between the different classes of taxpayers which are of special importance Lin the present connection. One relates to the period on which calculations are based in determining tax liability for any particular year. The other variation concerns the time in which the taxpayer is required to discharge his tax liability for any particular year. These variations are both of importance, because they affect the question of the carry-forward of tax liability beyond the end of the year of charge. Now as to the period on which calculations are based. Normally the practice is to take a past period, and that has the obvious advantage that calculations can be made on the basis of ascertained fact. Such a system involves this, that under it adjustments have to be made at the beginning and end of the taxpayer's Income Tax life. That also is of importance. As regards time of payment also, there are variations between classes. Taking the two together the variation in the basis of calculation and in time of payment, the result we have at the present moment is that in the case of the manual wage earner the basis of calculation, the basis of assessment, is the earnings of the current year and the payment of tax begins from the 11th month of the year of charge. That is to say, that the tax for the Income Tax year beginning in April, calculated on the income of that year, begins to be collected in the following February and it runs on month by month for one year. In the case of salaried employees in general and of non-manual wage earners the basis of assessment is the preceding year. Payment in this case runs from the 8th month. That is to say, from November for a period of 12 months. In the case of Crown employees and certain salaried railway employees the basis is the preceding year but payment begins from the first month and is, therefore, completed within the course of the year of charge. Those are the three variations with which we are concerned to-day. It is important to remember that, in considering the changes we are now proposing to introduce. Pay-as-you-earn will be a new practice. It means paying out of current earnings, on the basis of current earnings. I do not think it will be necessary for me to describe in detail what is already in the White Paper. The central feature of the scheme, as hon. Members will have observed, is that deduction of tax keeps in step, not only with weekly earnings but with the accruing liability up to date. Thus, the nature of Income Tax as an annual tax, is preserved, since at the end of the year the deductions would be equal, with insignificant variations one way or the other, to the true liability and at any intermediate time during the year the amount deducted is related to the amount so far earned. This removes the great objection to which all other schemes have been found to be subject, that they have regard only to the income of the particular week. Such systems mean that in millions of cases too much must, inevitably, be deducted over the year, and repayments then have to be made at the end of the year. We avoid all that by this plan. The new system keeps in step, as I have said, with the growth of earnings, and where earnings fall, it gives relief even to the extent of prompt repayment, where circumstances alter so that too much has been paid. Adjustments are automatic, whether they are caused by variations in income or by changes in the taxpayer's domestic circumstances during the tax year. Repayments, when due, will be made automatically by the employer in normal cases. Where the wage-earner, however, becomes unemployed for any appreciable time, the Revenue Department will make the repayments; and where unpaid sickness lasts for any length of time, arrangements will be made for repayment of tax, if due, during sickness, without waiting for a return to work. The House will no doubt agree that such a system provides an admirable solution for the problem of the wage-earner and removes all the difficulties with which we have been familiar and which arise under the present system, where the earnings fluctuate, and the tax on high earnings has to be recovered from low earnings. There is also the difficult problem of seasonal industries, and there will be the much greater problem of adjustment after the war to peace-time conditions, with changes in working hours and individual employment which must inevitably result in some instability in earnings. By the introduction of this new system the wage-earner will be placed on a footing which ensures that the weekly tax liability automatically adjusts itself to any of these changes. I come now to the scope of the plan. The remarks which I made at the beginning about the general features of our Income Tax system were intended to lead to what I now have to say about scope, and I recognise that this may well be the main point to which the House may wish to direct criticism. It is important to realise that the main justification for this plan is to be found in the element of fluctuation and instability of earnings. Until the combination of the present high rates of tax with the wide incidence of tax arose in this war, as a result of the inclusion of many millions of wage-earners, the existing system gave rise, I think one may fairly claim, to no serious difficulty. But the weekly wage-earner often lives of necessity on a weekly budget, and it is especially desirable in his case, not only that the tax should be assessed on current earnings, but that it should be collected from current earnings. I would not seek to contend that the salary-earner never suffers from fluctuations or instability, but these are nothing like so common as in the case of weekly wages. For the most part, the man on an annual salary has a regular income, to the continuance of which he can look forward, and, indeed, taken over the years, the salaried worker, normally, is on an ascending scale of income in the course of his career. Where there was pressing need for action, therefore, was in regard to weekly wages, and it is, in fact, in relation to that case that the great demand in the House and outside has been over the last few years, for some reform of the system. The new plan might, therefore, have been limited to the manual wage-earner. Incidentally, may I say that ever since the last war the manual worker has been recognised as in a different category from other employees and his taxation system has, in fact, differed accordingly? Since 1915 he has been assessed on the earnings of the year, either by quarterly or by half-yearly assessments, while others as I have explained, have been in the main on the basis of the earnings of a past period. There would, thus, have been good precedent for applying the new scheme to manual wage-earners only. The late Chancellor of the Exchequer, however, thought well to include others whose earnings are similarly computed and whose circumstances are generally similar, by bringing in all weekly wage-earners and not merely manual wage-earners as previously. I indicated earlier in my speech that large changes in the Income Tax system must have regard not only to the basic principles of the system but to the actual structure of the system as we find it. The case for change in regard to the weekly wage-earner was, in my opinion, overwhelming. The case for other classes is, I think, by no means so clear. So far as salary-earners receive increasing incomes over the course of their career, the present system of assessment on the preceding year's income actually operates somewhat to their advantage. A change to a current basis would obviously bring any increases of income into assessment one year earlier in every case. Moreover—and this is an important point which is often overlooked—the salary-earner is safeguarded against hardship caused by a serious drop in income, by the provision of the present law which allows a reduction of assessment from the preceding year basis to the current year basis, where the fall in income exceeds 20 per cent. That was a change introduced by legislation in 1940, I think in the second Finance Act of that year.
Mr. Benson (Chesterfield)
That applies only to war-time conditions.
Sir J. Anderson
It is perfectly true that that change was introduced in 1940 to meet war-time conditions. Anyhow, it is a provision of the law at present in force, and I think I am right in saying that it is frequently overlooked. Letters which I have received show that.Now I come to the question of remission of tax. The desire which may be felt in this House, in some quarters—and it may be general—for an extension of the scope of the scheme of pay-as-you-earn is, I expect, influenced to some extent at any rate by the provision which we have made in this Bill for discharge of tax and by a perfectly natural wish to see that any concession of that kind should be extended. But it is my duty to point out quite plainly that the discharge of tax is not given in this scheme for its own sake, or as a concession justifiable in itself. It should rather be regarded as the essential price which has to be paid for the benefits of the new system because of the extreme difficulty of imposing a double charge in a single year. Viewed in that way, it is fair to ask whether the price should be paid for those classes of taxpayers where the need for the change is not so imperative as it is for the weekly wage earner. If Income Tax were being started afresh as a new tax, I have no doubt that the new system would be applied universally to employment. It has many undoubted advantages. But we have to consider the existing position and the strength of the case for large changes as well as their cost. As Chancellor of the Exchequer I must examine most carefully the debts which I am asked to wipe out in order to meet the plea that the time-lag in collection should be removed for everyone. I must point out that the time-lag is, in essence, time granted by the Exchequer to the taxpayer and is not an imposition but an easement and as such is not, in itself, a very obvious ground for further concessions. The tax to be discharged in the case of the weekly wage-earner means, in essence, giving up claims which would have been made on the taxpayer later on, when, as we hope, the burden of war taxation may in some measure be relieved. The experience of the last war shows however that arrears of war taxes are specially difficult to collect in the case of weekly wage-earners when conditions of employment change after the war. The remission therefore of the outstanding tax balance affects in their case something which would to a certain extent—to an incalculable extent—be a doubtful debt in the future. Any wholesale extension of the plan, however, would raise different considerations. In the case of large incomes the arrear of tax outstanding represents money a very high proportion of which undoubtedly will ultimately reach the Exchequer. I could not, in the crisis of a great war, when so much uncertainty enshrouds our financial future, lightly forgo a claim to many millions of pounds—a claim which is in every respect legitimate and reasonable. The discharge proposed in the plan before the House amounts, after the deduction of post-war credit, to £125,000,000. No one can say how much of this amount would in practice have had to be written off in any case, but it certainly would be a considerable proportion. If all employments were included in this scheme a further discharge of £60,000,000 would be involved, and that unquestionably is money which would be in the main recoverable. It is true that in other countries some forgiveness has been given for tax arrears, on the adoption of a pay-as-you-earn system, for all levels of salaries, but I believe those countries had no system of payment by deduction such as exists in this country, a system which has enabled existing arrangements to work comparatively smoothly for classes other than wage-earners. My mind is not closed, however, to the possibility of reconsidering the scope of the scheme. While I could not agree to wholesale extension accompanied inevitably by a very large remission—though I regard the principle of pay-as-you-earn as valid and suitable for general application at the proper time and in the proper way, and should like to work up to that—I have been giving very serious consideration to the case of salaried workers in the lower salary ranges. I recognise that a strong case may be made for early action in this matter, for these lower salaries, and if the opinion of the House as expressed in debate should be in favour of such a concession, limited to that class, I shall be quite ready to come forward with suitable proposals on the Committee stage. In view of the reasons that I have indicated an Amendment for this purpose would have to be by way of the inclusion of all salaries, however paid, below a certain annual limit. Such a system of income limitation is not free from difficulty, and I believe the late Chancellor was deterred from making any such proposal as I am now hinting at by the prospect of serious anomalies arising owing to fluctations of earnings on either side of the dividing line. If such an extension as I have suggested is made, what I may call the "in and out" difficulty will have to be met by the adoption of this simple principle for every individual taxpayer—"Once on pay-as-you-earn, always on pay-as-you-earn." I do not think the House will expect me to say more on that point at this moment. [Interruption.] It would apply to personal emoluments; it would not apply to anyone who is not in Schedule E. I turn now to the operation of the scheme embodied in the Bill. The employer's part in its working is going to be of the greatest importance. The scheme will involve an increase of work for employers as a vital contribution which is needed in order to realise the benefits of the plan. This is unquestionably an unfortunate addition to have to make in wartime, when staffs have been cut down, but I feel no doubt that in the interests of the workpeople the employers will be ready to shoulder this burden.
Sir Granville Gibson (Pudsey and Otley)
Will the Minister of Labour be encouraged to return some of the employees to assist in that work?
Sir J. Anderson
My predecessor was at great pains to make certain of the feasibility of the plan, and he consulted with representatives on both sides of industry, from whom the scheme had a most favourable reception. I recognise that the new system involves additional pressure of work on pay day, since under the old system the tax to be deducted could be entered in pay sheets in advance. If as a result it should be found in some cases that a slight adjustment of the existing arrangements for payment of wages is desirable, I feel sure that employers will have the fullest co-operation of their employees, who stand to gain so much from this scheme.It is the initial stage that will be the most difficult. It is important that all should understand the working of the scheme well in advance. The Inland Revenue—and here I should like to pay a tribute to the work that has been done by the Inland Revenue in preparing details of the scheme—will do everything possible in this direction by explanatory literature and broadcasts; and a specially trained staff will be available to help employers and representatives of labour locally, to expound the scheme to them and as far as possible officials will be available to visit individual employers who require assistance. The first step in publicity has been the issue of a cheap edition of the White Paper, of which half a million copies have already been sold. I will not weary the House with a long exposition of the Bill itself, particularly in view of the full explanation contained in the White Paper and the Explanatory Memorandum attached to the Bill, but there are a few points to which I ought perhaps to call attention. Clause 1 of the Bill deals with the persons affected. The scheme includes, as that Clause shows, first of all everyone employed by way of manual labour. It adds to these all weekly wage-earners, with certain exceptions, to which I will refer in a moment. The definition of weekly wage-earner follows that embodied in the existing law, since the Income Tax Act, 1918, defines weekly wage-earners as persons who receive wages calculated by reference to the hour, day, week or any period less than a month. The exceptions which I mentioned are Crown servants and certain railway officials who are already taxed under special arrangements and have deduction schemes which run throughout the tax year. These classes do not have in fact any time-lag in the collection of their tax, and there is not therefore the same need of a change in the basis as in the case of the classes affected by the Bill. Clause 1 (3) provides that the incidence of the plan shall depend on the conditions obtaining before it was announced. This is necessary in order to fix the population to be given code numbers under the scheme and to prevent deliberate changes in methods of payment in order to alter the incidence of taxation.
Mr. Bowles (Nuneaton)
In Clause (2, b) is it not possible for a man to be in and out of the scheme every week? He may have a basic salary of £150 a year, with commission. He may be a commercial traveller, and his earnings may be greater in one week and less in the next.
Sir J. Anderson
I do not think that would be quite the result, but I have indicated that so far as the suggested salary limit is concerned I favoured the principle of "Once on pay-as-you-earn always on pay-as-you-earn."Clause 3 provides for transition from the existing to the new system and for the discharge of tax. It would be impracticable while the change is taking place to make the half-yearly assessments for manual wage-earners under which tax would be deducted next February and March. As explained in the White Paper, provisional deduction will be made in those months subject to adjustment later if those deductions prove incorrect. Subsection (7) gives power to make these provisional deductions, and as this provision relates to the charge of tax for the current year a Resolution will be necessary. A Resolution is on the Order Paper and will be moved at the end of the Second Reading. The provisions for discharge are, as I have explained, intended to avoid anyone having to pay two lots of tax out of one income. Discharge is therefore given only while the taxpayer is subject to deduction under the new system, except that this limitation does not operate if the taxpayer dies, becomes unemployed or ceases his occupation. Sub-section (5) deals with post-war credit. This credit—it is a somewhat elusive point—is the amount of extra tax paid in any year by reason of the cut that was made in the allowances in 1941. The taxpayer does not therefore become entitled to the post-war credit for the year—this being a matter which, like assessment, goes by complete years and not shorter periods—until he has paid the amount of tax for that year which would have been chargeable on the basis of the higher allowances. The cancellation of tax for the current year will therefore reduce the amount by which the tax payable exceeds the tax bill for the year on the pre-1941 basis and will therefore operate to reduce or even to wipe out the post-war credit for that year. This means that the taxpayer's post-war credit for 1943–4 will he limited to any amount by which the two-twelfths in the case of the manual wage-earner or five-twelfths in the case of others which he actually pays exceeds his liability far the year on the old basis. In the case of those who would not have been liable for tax but for the cut in allowances the whole of these two-twelfths or five-twelfths which they pay will still rank as post-war credit. No-one's post-war credit for any other year of charge will be affected, and in the case of those coming under the new system it should be remembered that the tax payable by them from April next will immediately begin to rank for post-war credit for 1944–45.
Sir Adam Maitland (Faversham)
Would it be convenient to say how much is the total sum which will not be credited by the Treasury in respect of the charge he has just outlined in respect of post-war credits?
Sir J. Anderson
The proportion varies according to the income and the allowances to which the taxpayer is entitled, but I could give the thing roughly at once in this way. Taking the whole body of weekly wage-earners, the gross amount of outstanding tax, that is the ten-twelfths or seven-twelfths to be discharged, is £250,000,000, and against that there is £125,000,000 post-war credit to be set. That leaves a balance of £125,000,000.
Mr. Woodburn (Stirling and Clackmannan, Eastern)
Would the right hon. Gentleman arrange that whoever is winding up the Debate might give a concrete example of how this really works, because it is impossible to disentangle it?
Sir J. Anderson
I said it was a somewhat elusive point, but I am sure my hon. Friend will be glad to accede to the hon. Member's request.It will be obvious that provision must be made to meet the cases of persons whose circumstances change in the future so that they move from the pay-as-you-earn system to the old system, or vice versa. That is not affected by what I said about the principle of "Once on pay-as-you-earn always on pay-as-you-earn," because I was dealing then with the question of a salary limit; there will still be some transfers as for instance when a man moves from Schedule E to Schedule D and the other way about. This question of transfer from one system to another is not entirely new. Within the field of employment there are already three systems in operation: the manual wage-earner assessed half yearly, the employee assessed under Schedule E and Crown employees who have a system of current deductions. The present Bill covers all the provisions that are urgently necessary in order to bring the new system into operation next April, but other questions, such as this matter of transfer from one system to another, will have to be carefully considered over the course of the next few months, and proposals made to cover them in next year's Finance Bill. This war has laid many burdens, not all of them financial, upon our people, and I think we all agree that the spirit in which those burdens have been accepted, and particularly the manner in which the terrific burden of direct taxation has been borne by all sections of the community, and certainly not least by that section which was brought for the first time during the war within the range of Income Tax, is a tribute to the quality of the nation and a fine example to the world. I recall that in 1915 a predecessor of mine found it necessary, in view of the unprecedented height to which the Income Tax had been raised, to introduce a special measure of easement. The tax was then a graduated one, rising to 3s. 6d. in the £ as a maximum on earned income. Times have indeed changed. I am glad that it should have fallen to me, as my first public act as Chancellor of the Exchequer, to present in this House a Measure which, without impeding the volume and even flow of revenue into the Exchequer, will, I believe, substantially ease the burden upon that section of the community least able to bear it. I hope the House will accord its approval to these proposals by unanimously agreeing to the Second Reading of the Bill.
Mr. Lewis (Colchester)
Before the Chancellor of the Exchequer finishes will he answer one question? He told us that if this pay-as-you-earn system were extended to all classes of salaried workers, it would involve the Exchequer in a loss of approximately £60,000,000. He then told us that he was considering the possibility of extending pay-as-you-earn to the lower-paid grades of salaried workers only. Could he give us some idea of what that would cost the Exchequer?
Sir J. Anderson
I had not intended to be very specific on this point, but perhaps I should say a little more than I did. If the House will not hold me to every detail, I may say that what I have in mind is this, that the line should be drawn at a salary, or equivalent emoluments on a whole-time basis, excluding such incidental items as overtime, of £600. On that basis the loss of revenue, after taking into account post-war credit but not taking any account of possible bad debts, would be of the order of £7,000,000
Mr. Pethick-Lawrence (Edinburgh, East)
I should like at the outset to associate myself with the remarks which fell from the Chancellor of the Exchequer in appreciation of his predecessor. We all recognise that the late Sir Kingsley Wood devoted a great deal of his time and thought to the proposal which is embodied in this Bill, and that in spite of the very great difficulties in putting forward any such scheme he persisted until the scheme embodied in the Bill was actually evolved. It was a sign of the flexibility of his mind that he was not bound by any preconceived notions and was willing to examine, and ultimately to embody in a specific scheme, proposals which are of very great advantage to the manual workers of this country. I should also like to associate with that appreciation one word regarding the Financial Secretary to the Treasury. He has devoted a very great deal of thought to this matter, and I think we owe him a great debt of gratitude for his part in producing this particular scheme. Having said that about the late Chancellor of the Exchequer and the Financial Secretary, I think that we must extend very grateful thanks to the present Chancellor of the Exchequer, because in this very early stage of his new office he has shown that he too is prepared to keep an open mind and to meet the wishes which have reached him, no doubt, from all parts of the country and from Members of this House; and in preparing the scheme I am sure his experience in what I may call the chrysalis stage of his political career cannot fail to have been of great service to him. I shall have a word to say with regard to the actual suggestions he has put before us for amending the Bill, but in this preliminary observation I would point out that he showed a Chancellor of the Exchequer's art in keeping the pea under the thimble up to the very last moment. From the earlier part of his speech few people would have imagined that he was going to indicate the concession which in the last few sentences he actually foreshadowed.There are certain things which I think need to be said about this Bill. The principle of the Bill, as the Chancellor has pointed out, is not concerned with the transitional question at all. The principle of the Bill is whether we want to make such a change in our Income Tax administration that we tax on current income instead of income a little further back. I feel certain that with Income Tax so high as it is to-day it is of great importance that as much of the Income Tax field as is possible should be on the current rather than on the post-dated basis. I think it has not been fully appreciated by large numbers of people that, apart from the transitional period, this change is not necessarily by any means to the pecuniary advantage of the taxpayer. The Chancellor has given one illustration. Let me put it into concrete terms. Where a man is on a salary, and it is a gradually increasing salary, under the old system, by paying always in arrears, he was paying Income Tax on a smaller salary than he was currently receiving. Under the new scheme a man with a rising scale of salary will in each year be paying on the higher rate rather than the lower; therefore, under the permanent provisions of the Bill, it does not work out to the advantage of anyone to be on the current-payment basis where his salary is increasing. On the other hand, there are great advantages to everybody from paying on current income. I remember when I was a Minister of the Crown that in the first few months of holding office I received a greatly increased income and paid no Income Tax on it, with the result that I had a considerable surplus to invest. When my period of office terminated I had to pay Income Tax on nearly a year's salary without the advantage of additional salary, and the investments I had made had to he resold to pay the tax. There is really something rather foolish about that system, and I am sure the Chancellor and the House generally will agree that there is a great advantage in paying tax currently on any sums of money which come to us as salary. Having said that, I wish to point out that the transitional effects are merely incidental to the main principle. This discharge, or remission, or forgiveness of Income Tax is only an incident which arises owing to the practical impossibility of expecting any taxpayer to pay two years' tax in a single year. Certain rather curious results arise. In the first place, a taxpayer, under the change-over from the old system to the new, incidentally gets a remission which does not affect him until his wages ultimately disappear or, in the case of his death, affects the estate of the person who is the inheritor of what is left of his fortune. Another curious incidental effect is that wage earners pay no Income Tax on the particular wages they are earning at the present moment. It might have been mentioned in the coal debate yesterday, as an additional reason why the coal miner should exert himself during the next few months, that, in fact, any increase of wages which he earns at present does not involve him in any additional payment of tax. I think I am night in that; if I am wrong the point will be brought out. It is a curious little side-pocket result of the change. So much for the principle and the incidental consequences of this change in the law. I now come to the method. Most of us, I imagine, have received proposals for several different methods of carrying out the principle, and even if I were able fully to explain the difference between those proposals and the one of the Chancellor of the Exchequer, obviously it would not be possible to do so in this Debate. The one essential difference between many of them, not all of them, and the Chancellor's plan is the cumulative system by which the tax, instead of being computed on the weekly wage, is, under the Bill, computed on the aggregate amount of wages paid up to date in any particular year, a proposal which seems admirable for the person concerned. I cannot conceive any plan which would more adequately meet this case. Undoubtedly this cumulative system does add to the troubles of the bookkeeper for the employer who is making out the wage payments and arriving at the deductions, but I do not think there is anything complicated about the sums which he will have to do. They are elaborate, because for each payment to the wage-earner he has to do about six little sums, but all are exceedingly simple sums of addition and subtraction, except for looking out certain things in the tables. I do not think that -the House can possibly decide between one scheme and another, so far as method is concerned. No doubt the Chancellor of the Exchequer himself has gone carefully into the facts, with, as I have said, his previous great knowledge of Inland Revenue matters. He and the Board as a whole have underwritten this scheme, and we as a House will accept it with thankfulness. We must however recognise that it will throw on the employer a good deal of additional labour and that there will be for some time difficulty in the matter, to which the Chancellor of the Exchequer has already referred. Now I come to the concession which the Chancellor of the Exchequer has announced his willingness to bring into effect, if it is the wish of the House. I feel certain that the wish of the House will be that this amendment should be made, but I should like to re-emphasise what I said at the beginning, that, apart from the remission, the persons who will come into the scheme will not necessarily gain from the alteration of the principle of collection. Many of them will suffer. The immediate effect upon most of them will be a loss. I hope that Members of the House recognise that fact and that those who have written to them recognise it also. At the same time, I think that what the Chancellor of the Exchequer has promised will be accepted with very great satisfaction by Members of this House and people outside. I have been written to myself. Letters have been reaching me from a number of different sources asking that persons who would have been outside the Bill should be brought into it. I should like to mention three of them. I was not quite clear upon what the Chancellor of the Exchequer said about the Civil Service. I understood him to say that all civil servants pay on their current wages at present, but I do not think that is quite a true statement of the position.
Sir J. Anderson
I said out of their current wages. They pay on the basis of an assessment related to the previous year, but they pay as they go, month by month, and there is no outstanding charge of tax for the particular year.
Of course, these matters are rather complicated, and I do not quite understand what the Chancellor of the Exchequer is now saying. He does say that they pay on the previous year's basis, and that is the point. I was approached by a number of postal workers who said they were speaking on behalf of the manipulative grades. They pointed out that their wages vary very considerably week by week and that under the Bill as it stood they were excluded from the change. They point out to me that, just as the ordinary manual wage-earner had a great disadvantage when his wages varied so, on that principle, they would gain by being included in the scheme. I am not quite clear how far the new proposals of the Chancellor to-day will bring them in. I think they will, and in that case the difficulties that they raised will be met. I have had a communication from the Association of Local Government Officers. There I think the answer is quite clear, that they will come into this scheme, provided their wages are below the level to which the Chancellor of the Exchequer said he was prepared to go. Finally, I have had an application from the National Union of Journalists along those lines. There I think the same remarks will apply.I want now to look at this thing from a little larger point of view. The Chancellor has explained to us that we are dealing here with Schedule E. Personally, I do not believe, whatever may be the point at which he may stop to-day, that he can stop short in the end of including the whole of Schedule E in the new scheme. I am not quite sure that the argument which he puts up against it is sound. What he says in effect is this: We are dealing with Schedule E. Of the taxes that are in arrears in Schedule E, certain classes would probably never be recovered, or at any rate only a very small proportion of them would be. So far as those are concerned, the late Chancellor of the Exchequer took one compartment, and the right hon. Gentleman is now taking a second compartment, and the Inland Revenue are prepared to accord the principle; but with regard to the remainder, which he says could be recovered, he is not prepared to take that step. Of course, that is very intelligible from the Revenue point of view, but in the first place the new line which the Chancellor of the Exchequer has described himself as willing to make, raises a good many complications, one of which he mentioned himself. He mentioned the question of where people are in and out. The rule will have to be adopted that once a man is in the scheme he will have to stay in, however large his salary becomes. That would obviously mean that 10 years hence you might have two men, one in the scheme, earning a large salary because he came in when he was earning a small salary, and the other earning a smaller salary all through which put him over the limit to qualify him for the scheme. The latter would still be paying on the old plan. I think the right hon. Gentleman will agree that even though he may stand on that line to-day, the line will obviously have to go in the years to come. I should have thought, now that he is making the change, that it would have been simpler if he had made it altogether at the same time. Whenever this change is made, the same question of transition periods will arise. The moment a man is turned over from one scheme to the other there will be the question of what is to be done with the year that is left out. I confess that I see a little more difficulty in the making of this line than the right hon. Gentleman apparently does. If he says, with regard to the high salary people, "Why should I forgo a large part of the tax that these people are quite competent to pay, would pay and are entitled to pay? he could be answered in this way. If that be so, and if he feels—and I quite understand his position—that he cannot remit all that taxation, there is a precedent, not in this country but in the United States, of how to handle this question. What they have done there is to say, "We will remit"—this is how I understand it, but it is very complicated, and I would not like to be too sure, hut I am assuming that I am correct in my reading of the matter—" upon incomes below a certain figure. We will remit the whole of the period in that case, covered by this transition. Between one figure and the next, we will remit a percentage and then, above a certain figure we shall not remit at all." I should have thought it possible for the Chancellor of the Exchequer, even if he fixed some figure—I think he mentioned £600 to-day—that above that figure he would still adopt the new system but would not remit the whole of the year or whatever it is, but only, say, 50 per cent. of it.
Sir Alfred Beit (St. Pancras, South-East)
Does the right hon. Gentleman recognise that the proposal would mean that in one year such persons would have to pay more than a full year's Income Tax?
I do recognise that fact quite clearly,,but, after all, you are giving them a remission of their burden, and in the circumstances they might not be unwilling to pay a certain amount. I am merely quoting what has happened in America and suggesting that some scheme might possibly be found of a similar character for this country. Most of the people who are on the larger basis do not look at the thing from the weekly or the monthly point of view. If they feel that they are getting a considerable concession, as they would be, in the course of a year or two, although they might have to pay more in one year, it would not necessarily be to their disadvantage, and they might be quite willing to do so. It would be a form of life assurance, like paying a premium for a life assurance. I throw this out merely as a suggestion. It would have been easier and more complete for the Chancellor of the Exchequer to have opened this matter over the whole of Schedule E instead of shutting it down at this figure. If necessary he could make some provision for getting part of the year's hypothetical taxation brought in, in addition. I believe that in the end, whether it be this year or in some future year, the Chancellor of the Exchequer will be forced by the logic of events to come to something of that kind.However, I do not want to press my right hon. Friend too hard on this matter. After all, we have got a very great change—we may call it a concession or a move—in the Bill as it stands, and on the top of that my right hon. Friend has made a very handsome proposal. If he feels that he cannot go above it this year, we ought not to be too hard on him. I think he would be wiser to go what I might call the whole hog on this thing and give us the whole of Schedule E on the same basis. There is only one small point remaining on which I would like to say a word or two, and that is post-war credits. I confess that I read Clause 3 (5, a and b) a a great many times before I discovered exactly what it meant, and I collated it with the information contained in the Explanatory Memorandum to the Bill and in the White Paper. One of my hon. Friends tried to work it out for me in two or three practical examples, and I think I understand now what it proposes. Having understood it, I am not quite sure whether it is fair. I should have thought the simplest thing to say, taking the case of the two-twelfths of the year's taxation, was that everything ought to be taken on the two-twelfths basis. If a taxpayer would have got a certain post-war credit he has to pay for the two-twelfths of the tax and on the same basis he should get two-twelfths of the post-war credit. As I understand it, that is not the proposal of the Government in the Bill. Apparently, they do not provide him with as much, and even though he may pay for this two-twelfths tax at the increased rate, in certain cases they do not give him any post-war credit at all. If the sum works out negatively, they do not take away from him anything beyond the post-war credit, but if it works out positively, they only pay him as the result of this formula under Sub-section (5), and he is a little worse off. The proposal I have made, would, I suggest, appear to the ordinary man the reasonable thing to do. I would ask the Chancellor to look at that again. It cannot be a matter of more than a very few pounds. That is all I wish to say about this Bill. I would like to repeat the debt of gratitude which this House and the country as a whole owe first of all to Sir Kingsley Wood and to his Financial Secretary and also to the present Chancellor, who has brought his great knowledge to bear and added to it the human understanding, the appreciation of what is being felt by the country as a whole.
Sir Adam Maitland (Faversham)
I would like to join with what I am sure will be the general chorus of congratulations to my right hon. Friend on his appointment as Chancellor of the Exchequer and in wishing him every success. It seemed to me that as the late Sir Kingsley Wood—whose death we deplore—increased the number of taxes and the volume of taxation, so his parliamentary stature was enhanced. I hope that the converse will operate in the case of my right hon. Friend and that his reputation may thrive on fewer taxes. May I tell him of an enthusiastic—and as I hope—a friendly constituent of mine who said that he was interested to notice that I am supporting the pay-as-you-go Income Tax plan, but that he thinks many workers would be much happier and proceed much more eagerly to their work if Income Tax was abolished entirely. I pass on that suggestion to my right hon. Friend but I would add that I have not found myself able to support the suggestion.The great interest which has been caused by this scheme is not by any means confined to the particular class of taxpayer directly affected. [Interruption.] Some hon. Friends have occasionally brought before the late Chancellor of the Exchequer the necesity and the desirability of this particular scheme, and I am glad to have my own attitude about it confirmed and approved by the hon. Member for Dumbarton Burghs (Mr. Kirkwood). My view is that when this direct taxation was imposed on the manual worker it was a mistake to try and maintain the existing system of an annual basis. I am not quite certain that that mistake is not being perpetrated again. I am not convinced in my own mind of the necessity of which the Chancellor spoke for fixing up a weekly system of taxation based on the annual amount earned. I think we have to look for some considerable time to fairly high rates of taxation, and I think that we should frame our future system of taxation on the basis that the rate of tax will be very high. The existing system of allowances and rebates has been built up in our usual illogical way. It is a system that was fixed very largely when Income Tax varied from 6d. and 9d. to 1s. in the and we have since accepted the same general principle. Conditions and rates of taxation have considerably changed. However sound particular methods were when the tax was comparatively low, I think that the operation of the allowances and rebates is to-day operating most harshly in their incidence on the taxpayer in whatever category he may be. I am particularly glad to observe that the Chancellor recognises the urgent need for this alteration and that the new basis of our taxation will not be confined to those specifically included in this Bill. My own view—and I hope the Chancellor of the Exchequer will be courageous enough to share it—is that taking as an assumption that there will be very many more years of the existing rate of taxation, a complete review should be undertaken of the existing basis of taxation, having in mind also the system of allowances and rebates. It is my conviction that while heavy rates of tax can be imposed for a limited number of years, it will from an administrative point of view be quite impossible to secure the Revenue on those high rates beyond a certain definite period. I am not impressed at all by the idea that this scheme has been put forward as a gesture or a concession to the taxpayer. I do not believe it. I do not believe that that motive actuated the late Chancellor in putting forward this scheme. I believe that the arguments which did convince him arose from the fact that we had many troubles arising from the position under the scheme for manual workers; secondly, that these troubles were continuing; and, thirdly, I am quite sure that the right hon. Gentleman had in mind that the cessation of the war would inevitably raise new difficulties which would accentuate the trouble which had been caused. I would say to my right hon. Friend that these circumstances had become hardships upon individual workers. I wanted to make this appeal. The same argument with regard to the personal difficulties of the manual worker in regard to Income Tax apply with equal force to the salaried man. It is not how a man is paid but what he has to do with his pay that matters; it is not whether he is paid weekly or monthly but the amount he received that counts. I see no justice whatever for a system of taxation differentiating between taxpayer and taxpayer, beyond the differences which experience proves fair and right. We must pay the penalty—as a House of Commons—of our mistakes, and I am glad to hear that the Chancellor is ready to extend the range of his proposal. I had a letter from a large employer of labour, and I think that a breath of air from somebody who has no responsibility to constituents would be helpful to the House. It certainly corroborates the idea which the Chancellor has announced today. The letter says:
The writer makes the same kind of suggestion which the Chancellor announced to-day. He says:"Referring to the pay-as-you-go legislation which is at present being introduced, I feel that the suggestion that only weekly wage earners should receive a remission is most unjust and unfair. I would here wish to place on record that as far as I am personally concerned, as I am a payer of Surtax I am not worrying in regard to the matter of any remission, but I am very strongly of the opinion that if legislation goes through upon the lines that one reads in the Press, the greatest error will have been committed. The men and women in factories working overtime are undoubtedly earning very high wages and have for a number of years earned more than the average clerical worker, and it would seem that the clerical staff are definitely going to be penalised."
The last sentence is an expression with which I do not quite agree. I think if concessions are to be made the claims of every taxpayer should be considered, The whole position of Income Tax payers should be reviewed, and there should be some kind of equity between taxpayer and taxpayer. Taxes should not only be fair between the State and the individual but should be fair between individual and individual. I have taken the liberty of referring to that proposal because it is somewhat in line with what the Chancellor outlined. I put it in as further evidence if he needs further evidence. If he says he intends to alter the basis and now proposes to extend it to a larger number of taxpayers it will be generally welcomed. There are one or two points of detail I wish to make. The first is with regard to the form in which the new tax is to be put into operation, and this is a practical point. Having in mind some of the troubles which arose when the tax was first imposed on the manual workers, I attach great importance to the necessity that as soon as possible there should be deducted the true rate of tax. There was a letter in "The Times," I think on 9th October, in which some friends of mine drew attention to the weekly operation of the tax which this scheme involved and pointed out as an illustration this kind of example: Week No. 1, amount earned £9 10s., actual tax deducted £1 16s.; week No. 2, £9 9s., actual tax deducted £1 2s.; week No. 3, £9 8s., actual tax deducted £2 3s. The correspondents in "The Times" went on to say that these were by no means extravagant cases and that in some instances there was a weekly variation of 18s. I emphasise that point to my right hon. Friend because it will be very difficult to convey to the ordinary working man why he should have these variations of tax taken from his weekly wages. Further, it will put an imposition on the employers which if it is possible to avoid should be avoided, because there are still people in this country who do not completely trust their employers and they do not believe that some of the amount deducted is not in fact being retained by the employers. I believe that to be utterly false, but it is held in certain quarters. I suggest it would be better to make concrete suggestions which have some bearing on the administration of the new proposals. I am firmly of the opinion that it is of importance that the working man should understand exactly the basis on which he is asked to contribute to taxation. That is not going to be easy, because the salaried worker with longer experience of Income Tax payment does not always understand the anomalies of taxation. Even when a taxpayer does understand there are times when he feels that he has a grievance. Because of that I venture to re-assert my previous statement and to hope that the Chancellor between now and the Committee stage will have full regard to the basis of existing taxation and the stringent financial claims upon the taxpayer. I would say to him that it would be better to come to this House and say that because of the fact that we have such high taxation for a long period and because of the fact that this high rate of taxation must be continued we need to make vital alterations in the basis of our assessment. If he does that and submits proposals accordingly the House will support him. Although the Chancellor has spoken about the cost of the scheme being about £125,000,000, that is not strictly correct in terms of present cash payment. The £125,000,000 will be spread over a number of years. I hope that my hon. Friend the Financial Secretary, if he is going to reply, will tell us how that sum is spread over. As to the scheme generally, I am quite sure it will be cordially accepted, and that, Oliver-Twist-like, we shall look for more."The matter will no doubt be debated thoroughly, and I would suggest that if distinction is to be made, monthly wage earners should receive a remission in tax upon the first,£500 earned, and beyond that they should be made to pay the tax according to the existing Income Tax Regulations. I would not like the remission of tax to any Surtax payers at all."
Mr. Graham White (Birkenhead, East)
The words in which the Chancellor of the Exchequer referred to his predecessor in office raised a very sympathetic echo in the hearts of all of us; and not least in mine. I had the greatest affection for the late Chancellor ever since I had the privilege of working with hire some years ago. It was not only the qualities of the man himself that gained our affection, but also those qualities which he possessed of getting the best possible work out of those associated with him. It is of interest that the present Chancellor seems to be following on the same lines as his predecessor, realising that progress is often made more rapid and satisfactory by seeking to develop agreement, rather than by accentuating differences. I had intended to say that I supported this Bill, on behalf of my hon. Friends, with reservations; but, having heard the speech of the Chancellor, I shall say little or nothing about the reservations.I have always regarded the Income Tax and everything connected with it with feelings bordering upon hatred, not because I believe it to be in any sense an unjust tax or badly administered—very much the reverse—but because it is a tax which no ordinary man can understand. I think few people who have read the White Paper, and even fewer who have read only the Bill, will be able to grasp the scheme, as it will work out in administrative detail. I do not blame the Treasury or the Income Tax authorities for the difficulty. They are bound by an Act which is venerable and antique, fortified by a great mass of case law and rules, which, narrowing down from precedent to precedent, has produced an administrative complex that no one can understand unless he has made it a life study or has been specially trained as an accountant. Therefore I think it good that the Chancellor's first Measure should be one designed to make Income Tax easier to understand. If he wishes to endear himself to the people of this country he will make arrangements, as soon as opportunities serve, to review the whole scope of the Income Tax. There is no section of our fiscal machinery which it is more necessary to make simple and more easily understood. The taxation system started in conditions very different from those obtaining to-day and however perfect the system may be for obtaining revenue, it is very largely obsolete. The House may recollect a discussion we had earlier this year on an Amendment to the Finance Bill, as a result of which a Committee was set up to go into the effects of the present rates of tax and the present methods of collection on the industries of this country. The Income Tax is much more than a machine: it may be an instrument of social and industrial policy. For that reason, the whole of our Income Tax machinery should be reconsidered. Particularly we should be on the lookout to see whether it cannot be used as an instrument, when we are engaged in remobilising for peace after the war to even out fluctuations of trade and to ensure better employment. As a result of inquiries in different parts of the country among all sorts of taxpayers, dockyard workers, shopkeepers, professional people and business people, I have found that there is a general welcome for the Bill. That welcome will be much more cordial to-morrow morning, as a result of the suggestions that the Chancellor has put forward, because, although there was a very general welcome from different classes of taxpayers, there was in every case, whether they were concerned or not, a feeling of resentment at what they considered discrimination. As complaints came in, by deputation or through the post, it was borne in upon me that the proposed discrimination was indefensible. For example, in one of our large cities, when the Boards of Guardians were abolished some of the staffs were transferred to the public assistance service, and, for reasons best known to themselves, they staked a claim, and succeeded in it, for payment on a weekly basis. Those people, although some of them are paid considerably more than others who are paid on a monthly basis, will have a quite indefensible differentiation made in their favour. That kind of thing, which is fairly widespread, made it clear that there was something indefensible about the differentiation. It is very important that there should be no question of unfairness about this tax. The Chancellor of the Exchequer referred to the necessity for an explanation of the tax. He also referred, with, I thought, insufficient emphasis, to the difficulties of bringing this scheme into operation at all. The difficulties are very, very great. The task of overcoming these difficulties by all concerned, by the Inland Revenue authorities and by the employers, should be regarded as a war task of the very first importance, because the Income Tax is now pressing hard into the affairs of every house in the land, and is not a matter to be looked at in any superficial way. Take the case of the employers. How hard it will be for them is quite evident from the fact that if we go back only to Cmd. 6348 of April, 1942, we find it stated there that it was impossible to work the very scheme which is here proposed. The Paper said:
We are 18 months further on. There is no more staff to do the work than there was then. We are now in the fifth year of the war, which makes it terribly important that every possible effort should be made to bring this scheme in smoothly. From somewhere some people will have to be found to do additional work, and a great deal of overtime will have to be worked by certain people. Where the wage week ends on Wednesday and wages are not paid until Friday, it may be possible to do the work without extra staff, but where the week ends on the Friday it will not."Under a current earnings basis (of assessment) a computation would have to be done by the employer 52 times in the year and the burden thus placed on employers' clerical staff would be heavy, even if the employer could find the staff. … There would be the problem of getting all the work done in the interval between the end of the pay week and the time at which payment is made. It would create an almost insuperable difficulty in cases where wages are paid at the end of the week in which they are earned."
Mr. George Griffiths (Hemsworth)
The majority of the mining companies keep a week in hand, from Saturday to the following Saturday.
I am not suggesting that in order to make the scheme work it will be necessary for everybody to have a week in hand.
I am not saying that, either.
Mr. Kirkwood (Dumbarton Burghs)
We will not stand that.
I had no intention of raising this point at all. In one case which has been brought to my attention the actual cost to the employer of administering this scheme will be many thousands of pounds—in fact, it will be of the order of £20,000. This employer has a very large number of branches, each employing 100 to 150 people. That is a special case, but I am going to mention it as an example of the kind of thing which has to be taken into account. The additional cost to the employers of doing work which used to be done by the tax collector should not be expected, at any rate, to rank for tax. I am inclined to think that this kind of operation could be carried out more on the lines of that between the Ministry of Health and approved societies in connection with a National Health Insurance by which a per capita grant is made for the work done. I am not putting that forward as an alternative, because I have not thought it out, but I think it is not an unreasonable suggestion. There is a heavy burden put upon people who do this work, and at a time of extreme difficulty it would be a reasonable proposition.I have been trying to argue that this is important work, and it is very important that it should be brought in soon. Misunderstandings with regard to Income Tax have had an effect upon savings groups and at times upon production, though it may be having less effect on production than it had. I remember a gentleman I met in a Midland town. He was a very highly skilled man, and it was well within his capacity to earn £20 a week, and at the establishment where he was employed £20 or even more might have been paid to him with the greatest satisfaction. But he refused to do a hand's turn of work more. He said, "I have no family. There are only my wife and myself. Ten pounds is enough for me, and why should I work for Kingsley Wood?" That may be a rare case.
A very rare case.
But it is an example of the kind of thing which should be removed by explanation. I entirely support what the Chancellor of the Exchequer said with regard to a continuous campaign of explanation concerning the Income Tax, which is far from being understood. The White Paper adds to the confusion. For instance, in paragraph 30, it will be observed:
That is a statement which, if you carried the transaction through to the end of the year, is no doubt correct, but if you turn to Example A in page 14, the figure set out indicates to the ordinary observer precisely the opposite of what has been said earlier. The wage for the first week given in the example is £5 6s. 6d. and the tax deducted is £1; for the fourth week the wages paid is £5 4s. and the tax deducted is 24s., and for the fifth week the wages paid is £5 15s. and the tax deducted is £1. Anybody would be entirely excused if he gave up trying to guess what this really does mean. I hope that this matter will be followed up and that we shall have these things dealt with in the simplest possible way, and as soon as possible, avoiding all these obscurities and apparent inconsistencies which are set out in the White Paper. The Prime Minister, I understand, is taking an interest in the subject of basic English and I certainly hope that we may have some attention given to that in the compilation of these White Papers. I am hoping the day may not be far distant when we shall see a Bill issuing from the Treasury in basic English."The deductions are lower in the weeks in which the wages are lower and higher in the weeks in which the wages are higher."
Sir Percy Harris (Bethnal Green, South-West)
No, for goodness' sake.
The right hon. Baronet hopes for goodness' sake we may not have such a Bill. I think that reference to that Committee might by no means be unhelpful. In the Explanatory Memorandum to this Bill the word "emoluments" appears once, but if you turn to the Bill the word "emoluments" appears twice in most lines and at least once in almost every other line. This is a Bill dealing with Income Tax. I know that there is a technical meaning of "emoluments," but no working man ever went on strike in order that his emoluments should be increased. Emoluments appertain to the Prime Minister and the Archbishop of Canterbury, but no working man talks about emoluments. I looked up the word yesterday in Johnson's Dictionary. I did not know what an emolument was myself, although I had an idea of the technical meaning of it. An emolument, according to Johnson's Dictionary, is "profit arising from grist," whatever that may mean. It was described in 1625 as being an uncouth word. The standards of 1625 are not those of 1943, but here is this word, and no one ever went on strike about emoluments and no sinner was ever deterred from wrongdoing by hearing that "the emoluments of sin is death." The Bill would be easier to understand if some other word were substituted for "emoluments," which is not the only word in the English language. It is a curious thing that when we are dealing with matters of gain and loss the words that describe them are nearly always monosyllabic—tips, bets, gain, loss and the like. If "income" were substituted for "emoluments," in most cases it would probably meet the bill. I am not sure that a little ingenuity might bring the Bill into a more intelligible form. An intelligent and simple form of propa- ganda and education in regard to the aim and purpose of the Income Tax and the part it plays in the national life should be undertaken.With regard to the concession which the Chancellor has promised in respect to certain classes of wage-earners, it may be said with some certainty that it will facilitate and help the administration of the scheme. There will be a tremendous job of work in finding out who is to be included in the scheme and who is not. There will be tens of thousands of cases which will have to be considered. There are other things which are looming in the future which may well lead to a great simplification of the scheme. The Government were understood during the time that the proposals of the Committee presided over by Sir William Beveridge were before the House to be in favour of family allowances, and I presume that they are still in favour of family allowances, and that at some not too distant date a system of family allowances will he introduced. It will be evident to anybody who thinks for a moment that it would abolish at once a very considerable number of these codes. I shall be glad to hear from the Financial Secretary, when he replies, to what extent they have considered the implications of family allowances in connection with this scheme and whether he does not think it might lead to a very great simplification in the method of working. I confess complete ignorance of Income Tax, and have all my life avoided having anything to do with it. All I expect is to be told at the end of the year how little I have to spend. That in itself is a wrong thing. It is wrong from the point of view of the taxpayer and also from the point of view of the Inland Revenue authorities. They have to spend a great deal of time on this, and accountants have to be employed on one side or the other to ascertain the taxable liability. I hope that there will be some liaison between the Treasury and the Committee which is examining into Company Law, so that forms of accounts may be so organised and arranged that these studies, researches and investigations which absorb so much time on the part of the authorities and employers will be got rid of. There is almost an unlimited number of points in connection with this Bill and its proposals which will lead to discussion, and which, I hope, will receive consideration. I would like to congratulate whoever was responsible for this principle. It seems to indicate that after all it will be possible to work the pay-as-you-earn scheme in spite of the conclusive document written by the same people in April. 1942, to say that it could not possibly he worked. If this can be made to work smoothly—and it is very important indeed that it should—I hope that everyone concerned will do everything possible to make it work. I think that the inventor of this new scheme will rank with the genius who invented the points system of rationing. It is something of the same order and very little less important. It is a matter in which whoever had it in mind can well take pride. We on these benches support this Bill with reservations. The reservations for the time being we withdraw, and if any remain, we will discuss them later on the Committee stage.
Mr. R. Morgan (Stourbridge)
I only intervene for a short time in this Debate. I want to congratulate the Chancellor of the Exchequer on his excellent statement to-day and also for his announcement at the end of his speech, because whatever we may say about the merits of this Bill, we must admit that the scheme itself has caught the public imagination. Indeed, the feeling was so strong that I doubt whether the Bill would have passed through the. House without the extension which was foreshadowed in my right hon. Friend's speech. I do not intend to quarrel with the hon. Member for East Birkenhead (Mr. Graham White) in his rather pernickety references to the wording of the Bill or about the difficulties that will confront employers. I think it is true that they will find difficulties, like all changes bring at the beginning, but they will right themselves. I would like to congratulate the authors of the Bill on their excellent work and their "ready-reckoner" scheme which they have formulated for employers. Like other hon. Members, I have been inundated with requests from different associations and employers who pressed for an extension of this scheme. I am not speaking particularly for any one class, but local government officials have been very strenuous in pressing their case, and I must say that I could see no argument against extension. When we come to the Committee stage later there will be Amendments to Schedule E, and I think they will find general favour. I would like to put on record the feeling of gratification that there will be among members of the National Association of Local Government Officers and teachers at what has been done. It was difficult to see how a teacher earning £15o per annum should be excluded while another class of worker, being paid monthly and receiving a lot more money, was included.Recently we had a Question in the House referring to people who come to this country, receive large sums in their pay packets, and send them off to Ireland without paying their whack of Income Tax. This scheme will bring in all these people. For that reason and the reasons I have mentioned I would like to express my gratitude to the Chancellor of the Exchequer, because I came here, like the hon. Member for East Birkenhead, to espouse the cause of those who have been left out. Now that these people have been brought in I am sure that they will all be very grateful.
Mr. Kirkwood (Dumbarton Burghs)
I would like to begin by thanking the late Chancellor of the Exchequer. It is over two years since I took a deputation to him, and I am quite sure that nothing would have given him greater pleasure than to have brought in this Bill. Eighteen months ago, in answer to Questions I put to the late Chancellor about this scheme, I was told that it was impracticable, that it could not be done. Eight months ago, when there appeared in the Press of this country stories about a pay-as-you-earn scheme in Canada, I again questioned the late Chancellor. May I say that I have the greatest regard for his work? I had known him intimately for a quarter of a century during which I obtained many concessions from him for the workers. In his replies to me about the Canadian scheme the late Chancellor said that he did not think the workers of this country would stand the strict inquiry into personal matters such as had been necessary to carry out that scheme in Canada. The reason why some of us were interested in this scheme, as hon. Members know, is because the scheme under which we are now operating at present adversely affected workers, particularly those in shipyards. At this time of the year, because of inclement weather, the hours of these workers are cut down, there is no overtime, and Sunday work is reduced to a minimum. Thus these shipyard workers and engineers whom I represent here have had to pay heavy Income Tax demands on big summer-time earnings out of small wages. When foremen went to these workers and asked them to do extra work when it was necessary—as it was time and time again when there was a heavy call for repairs—the men refused. They said that if they worked overtime the money they earned would be taken off in Income Tax.Seven months ago I introduced to the Financial Secretary to the Treasury a deputation of shipbuilders. The deputation came from Aberdeen, Dundee and the Firth of Forth. Four came from the Firth of Forth, eight from the Clyde, some from the Ayrshire shipyard, three from Newcastle-on-Tyne, four from Birkenhead and some from Barrow-in-Furness. This deputation was organised by the much maligned shop steward movement in this country; the Financial Secretary received it like the gentleman he is and both he and the representative of the Treasury who was with him have been highly praised by the convener of shop stewards on the Clyde, who led the deputation, for their attitude that day. We were given a great concession, as I was able to show some 7,000 workers about a fortnight ago. Months ago, when I asked people here to assist me, there was nothing doing, but the shipbuilders and engineers who have fought for us are very anxious that there should be no division among the working class. They feel that the Bill ought to include the black-coated workers as well as the hardy sons of toil. I want it to be understood, and I want it to go out from here, that this is a proof of what I have always held—that we are able to get concessions here in the House of Commons for the workers and are able to modify conditions, as we have been able to do right through the ages, without blood and tears. We got this concession without any strike, and because of that I am delighted that this Bill has been introduced to-day. It is almost a year ago since the Chancellor of the Exchequer challenged me and my friends to produce a scheme after we had said that it could be done. Their Chief Tax Assessor of the West of Scotland, two chartered accountants, who were employed by the Government during the last war, and one of the ablest lawyers in the West of Scotland, all of them my friends, produced a scheme, and I handed it to the late Chancellor of the Exchequer. Now the principle of this scheme has been accepted. I am a member of the working class; I know nothing about finance, because I have never had any finance, like many others in Great Britain. That is the explanation. But I have friends who know about finance, and I am backed up by some of the biggest employers in shipbuilding and engineering, as well as my own union, the Amalgamated Society of Engineers, which has a membership of 800,000. I presented them with a copy of the scheme that I submitted to the Chancellor of the Exchequer, and they all informed me that it is vastly superior to the scheme that has come from the right hon. Gentleman. The largest employer of labour, who employs over 20,000, says the Bill is far too complicated. There are 51 codes to deal with reliefs up to £310, and they say they could be reduced by 75 per cent. In fact, they say they will have to be reduced in order that the scheme may work. The employers were not in favour of tax being deducted by them at the beginning, but I was able to get them to see that the office work of their staff was a bagatelle compared with the discontent throughout the shipbuilding and engineering industry, and they are now in favour of it. The next item that I am asked to draw attention to is this: We have among us people who do not pay Income Tax because they do not earn enough, but some of them make a tremendous effort, at great sacrifice, to take out an insurance. I am informed that, because they do not pay Income Tax, they get no rebate. Surely it is worth while making them some concession. [HON. MEMBERS: "The rebate is off the Income Tax."] It is difficult to get hon. Members opposite to understand our point of view, because their conditions are as different from ours as night is from day. I have been up against that all my life, and I have been up against it for 20 years in the House of Commons. But I know perfectly well that, if we can get those in power to see that what we are advocating is going to be for the good of the community at large, we get a concession. We were told yesterday by the highest authority in the land that nationalisation of the mines was im- possible. That is what they said to me 18 months ago about paying Income Tax as you go, but we got them to change their minds. My advice to my colleagues is to keep hammering away at the Government, and I am quite satisfied that success will attend their efforts.
Colonel Greenwell (The Hartlepools)
This House is justly renowned for the indulgence which it invariably extends to one addressing it for the first time. I trust, therefore, that I may look for this indulgence to-day, particularly as I wish to address a few remarks on the subject of Income Tax, which is probably one of the most complicated that the tortuous mind of man has ever evolved. I, therefore, hope the House will overlook those errors into which I must, by reason of lack of experience and nervousness, inevitably fall. I think this Bill must remind us all of those film plays which from time to time appear in which the principal actor has passed from among us. It is indeed, I think, a Caesarean Bill in that it is born after the death of the one who conceived it, and we shall all hope that it will prove to be a memorial to the many meritorious acts of a man who deserved well of the State.There are two points which seem to me to stand out very prominently in these proposals. The first is that some measure of this nature has obviously become inevitable. The Government are faced, in regard to the deduction of the appropriate tax from the weekly wage-earner, with a very serious problem. Doubtless there are companies which carry the matter of post-war credits in their balance-sheets, but if there are such companies I, personally, do not know of them. Having regard to the nebulous terms in which the Exchequer has delineated these proposals for after the war, it would be a pretty bold firm or body of business men who would care to carry in their balance-sheets these guarantees for the future in the way of a tangible asset. Therefore it is not surprising to me that the British working man or woman, with his or her usual fund of common sense, refuses to regard post-war credit as other than something very ephemeral indeed. The problem with which the Government is faced is that, when the period of re-adjustment ultimately arrives, it must inevitably carry with it some period, however transitory, of unemploy- ment for a great number of people, and there would at the same moment, under the existing system of taxation, be large numbers who are at one and the same moment debtors to the State by arrears of Income Tax and creditors of the State under the post-war credit scheme. I think a very large number of weekly wage-earners merely regard the post-war credit scheme as an insurance against their ability to pay arrears of Income Tax dependent on their condition of employment at the time. This obviously lays the Government open to a straight charge of bad faith, in that under these conditions the post-war credit scheme is not worth the paper it is written on. From this point of view I hope the House will agree that the present proposals were absolutely inevitable in some form or another sooner or later, and I think the Government will be commended from all sides on the proposals they have now put forward. The second obvious point which seems to arise is the complete unfairness of giving a magnanimous present of £250,000,000 to one section of the community only. This could not be made more obvious than by citing the case of two brothers both, let us say, employed in the same job in the same industry when war broke out. One may have been married and had children and so was temporarily reserved while the other brother joined the Forces and, let us say, is now a commissioned officer. As a commissioned officer he is a monthly wage earner while his brother, who has remained in industry, is a weekly wage earner. The officer is earning probably half what his brother in industry earns, but because he is a monthly and not a weekly wage-earner he does not get this Io months' remission of tax, though risking his life in the service of his King and Country. That seems to be grossly unfair. I would also ask the Chancellor whether he thinks it fair to give no remission, of the nature proposed in the Bill, to such worthy public servants as school masters and school mistresses, who are faced, when their period of pension begins, with the payment of taxes incurred during the last year of service. I think it was gratifying to the House to know that the Chancellor has intimated that he will be prepared to consider such cases as those. Also, there are to be considered the cases of local government officers and many others who, although they do not have the advantage of being paid on a weekly or even a monthly scale, are yet subject to wide fluctuations in actual income. I would suggest that the Bill ought to be amended so as to treat everyone alike, even though it should cost a far greater sum than the £250,000,000 at present envisaged. It has to be remembered that whatever the amount involved it would be spread over a very long period of years. The only obvious and reasonable way in which this can be done is to provide by legislation that, in the case of death, the last year's Income Tax should be assessed on the actual income up to the time of death where that would be lower than the estimate of the previous year's income. There is one third and final point to which I would draw the Chancellor's particular attention. I do not think those who drafted these proposals are sufficiently aware of the conditions at present obtaining throughout all those branches of British industry engaged in the war effort. I venture to think there is no industry so employed which does not suffer in almost every one of its constituent firms from a grave shortage of clerical staff. The right hon. Gentleman the Minister of Labour has so diluted and attenuated office staffs of most firms engaged in the war effort that the compilation of weekly pay rolls presents an ever-increasing problem. How those attenuated staffs will compete with the enormous extra burden placed upon them by the present Income Tax proposals and the calculations that will be involved I, for one, cannot see. Although these arrangements will in time become largely automatic this is the process that will have to be gone through week by week. The obligation to deduct tax and to pay it over to the country is, under the scheme, imposed on the employer, and the steps he has to take in calculating the amount of Income Tax payable week by week are as follow: First, he must ascertain the gross earnings of the individual workman for the week. Secondly, he must add up, on the card provided by the Income Tax authorities for the individual man, that man's gross earnings for the taxation period up to that particular week. In other words, when we come to the i3th week of the taxation period, he must add the gross earnings of the r3th week to the accumulated earnings in the first 12 weeks. Thirdly, he must base his calculations on the code number of the workman given on the card supplied by the taxation authorities, since it is in accordance with the code number that the workman gets the benefit of all the allowances to which he is entitled. Fourthly, he must refer to the book of tables supplied by the taxation authorities, and from them ascertain in respect of (i) the particular week, (ii) the particular code number, and (iii) the gross earnings of the workman up to that week, the gross amount of tax due by the workman from the beginning of the taxation period to the particular week. Fifthly, and I think the House will be gratified to know, lastly, he must then deduct the amount of tax already paid in previous weeks as shown on the workman's taxation card. I hope the House will agree that that process, although it may become mechanical, does involve a very large amount of extra work for pay bill staffs as we know them in industry. I would also ask the Chancellor whether he has ever heard of the squad system of piecework? Under this system, which covers many thousands of men in the shipbuilding industry, one man in the squad draws the money earned by all the members of the squad, and that money is subsequently divided among them under their own mutual arrangements. The amounts individually received are supposed to be reported to the wages staff of the firm concerned by the leader of the squad, and it is within my experience that these reports may be received in anything from two to ten days after the actual payment. The Income Tax computations that will be necessary in connection with payment to piecework members under the squad system will involve an enormous number of people in an enormous amount of extra work. But that is not the most difficult situation that may arise under the squad system. Some firms in the shipbuilding industry pay their squads individually, that is, the firm works out the amount of money due to each individual, and it quite frequently happens in these days, when sickness is more rife than we should like to see it, that one man may work in as many as five different squads. A hand-rivetting squad normally consists of three men and a heater, and there may be a catcher boy. If one man falls sick, the squad is made up by a man from a number of odd men who are at hand. When the sick man returns the odd man goes back to the men kept in reserve and will make up another squad. Under that system, and the calculations which I have outlined, it is not to-day possible under the present Income Tax system to calculate the amount due to each man in the squad till perhaps lunch time or dinner time on the day of pay. How it is to be done under the new system of taxation I do not see. I rather fear the draftsmen of this Bill have failed to take that into account. Considering the number of platers and riveters in the British shipbuilding industry at present, this is a very serious point indeed. Unless there are safeguards, I think conditions in the shipbuilding industry will become impossible and before very long lead to complete breakdown and chaos. The first of those safeguards is that it will be eminently desirable for many firms in such industries as shipbuilding—and probably coalmining, although here I speak without authority—to alter what is known as the "Total-time" day, that is the day up to which wages are computed. In the industry with which I am associated that day varies between Monday night, Tuesday night and, in one or two isolated instances, Wednesday night. Calculations are made up to one of those nights for the payment of the wages on the following Friday night. It will be essential that that date be put back, and it cannot be done, I would like the Chancellor to notice, on the responsibility of the industry involved, of its own authority. Last year, in one district, it was deemed essential to alter the "Total-time" day. The leaders of the trade unions were approached, the matter was discussed, and they quite saw that, with the existing wages staffs, the proposals were not only reasonable but absolutely necessary. Without difficulty, an agreement was reached between the trade unions and the employers and notices were posted to give effect to the alteration in the "Total-time" day, but the workmen simply refused to have anything to do with it, and a strike lasting some weeks and involving large numbers of men took place and was stopped ultimately only after prolonged and difficult negotiations. In view of that no body of employers will take on themselves the responsibility of trying another experiment on those lines. I suggest that the Chancellor should ask his colleague the Minister of Labour to see that this alteration, which will undoubtedly be essential, is made by order—that industry should be ordered to alter its "Total-time" day to a suitable day for the calculations to be easily made. The second safeguard which I think is essential is that the Minister of Labour should release from the Forces, if necessary, or from other places a sufficient number of competent—I emphasise the word "competent"—people to augment existing wages staffs. If that is done, I think the Chancellor's proposals can be implemented without difficulty, but if it is not done certain branches of British industry will be in for a very difficult time, and we may conceivably be faced with widespread stoppages. The whole object of this Bill is to make war-time industry run more smoothly by removing sources of difficulty and irritation. I therefore earnestly hope that before the Bill becomes law the Chancellor will give serious consideration to some of these points which have apparently been overlooked and which, unless they are rectified, will probably make the last state of war-time industry worse than the first.
Mr. William Brown (Rugby)
I think the first thing I have to do is to compliment the hon. and gallant Member for The Hartlepools (Colonel Greenwell) on his exceedingly clear and competent maiden speech. We are always nervous when we make speeches in this House. [Laughter.] Hon. Members may laugh, but, believe me, my knees are positively knocking together. And we are most nervous when we address this House for the first time. The hon. and gallant Member should be felicitated on his very powerful and cogent contribution in his first speech to us. I am in a good temper to-day, so I will now go on to felicitate the Chancellor of the Exchequer. Normally, the function of the Chancellor of the Exchequer in Britain is to find out what the House of Commons want, and then to tell them that they cannot have it, but here is a Chancellor of the Exchequer, in his first address to the House in that capacity, giving us what we want before we ask him. Before the demand for the extension of the provisions of the Bill from the manual worker to the salaried workers has been articulated in this House, it has been given to us, at any rate in principle, and we shall see the working out of it later.
Mr. Gallacher (Fife, West)
But it is something that has been asked for for many months.
It is certainly true that there has been a popular and a Press demand for the extension of the provisions of the Bill from manual workers to salaried workers for months, but the most remarkable thing is that it has been taken some notice of before the Debate has started. In the Chancellor's opening speech we were assured that the provisions of the Bill would be extended to salaried workers up to the level of £600. I hope that this singularly auspicious beginning to the Chancellor's career will be maintained. That he should do straight away what we want done is a most abrupt, remarkable, and welcome change from the past; and I hope that the Chancellor of the Exchequer will continue along the path on which he has started.Now I wish to represent the claim of a section of the community which, even after the Chancellor's speech, is still left out of the Bill. The Bill, even with the proposed additions, still excludes from its scope all servants of the Crown. There is a very large number of them. They are in the Army, the Navy, the Air Force, the Civil Service, the Prison Service and the Judiciary—a vast number of people who come under the heading of Crown servants—and who are completely excluded from the scope of the Bill. My job to-day is the single one of attempting to urge the Chancellor to bring them inside the scope of the Bill, and not to leave them outside as the last solitary orphans of the storm. I would like to explain to the House how this thing works out in practice. The manual workers in Government employment, in dockyards, factories and elsewhere, are covered by the Bill, and therefore I need not spend any time upon them. The second category of civil servants is the hundreds of thousands who have come into the service during the war. Their number is approximately 300,000. They are employed as temporary civil servants, either on a weekly paid basis, or on a salaried basis. So far as they are on a weekly paid basis, I fail to see the slightest reason for distinguishing between them and the ordinary weekly paid worker outside. A temporary clerk in a Government office, no less than a clerk in industry, has to balance his budget weekly, and every single argument that the Chancellor of the Exchequer used to-day to justify the introduction of this scheme, must apply with equal force to the weekly paid temporary civil servant recruited during the war. The case of the salaried temporary civil servant is even worse. Before he came into the Government service as a temporary employee he was due to pay Income Tax in the usual way on his earnings for the previous year. When he came in, he came also under the Government scheme which already compelled the civil servants to pay as they went. So, for the first year of his Civil Service life, the salaried temporary officer paid double Income Tax, on two years' earnings. From all the categories to whom the Chancellor of the Exchequer has distributed his benevolence these are excluded, but if there is a case for giving anybody a rebate of Income Tax of five, eight or Io months, as the case may be, surely the people with the first claim are those who paid two years' Income Tax during one year. So I ask for a formal assurance that back pay will be given forthwith to that category. We ought to compensate those people. They ought not to be excluded from the benefits which the Bill proposes to confer. Now I turn to the permanent, established civil servant. Here again the category is also made up of weekly paid wage-earners and salaried workers. We heard from the Chancellor of the Exchequer that, in his view, nothing need be done about them because, said he, they already have a pay-as-you-go system. That is perfectly true. Instead of having two demands a year, discharged at the latest possible moment, as is the case with the normal taxpayer, these people suffer regular deductions from pay at the source. As the Chancellor himself said, they start to pay in the first month of the tax year. But the point is that, although we have a pay-as-you-go system, what we pay is assessed, not on the current year's earnings, but on the last year's earnings, so that although we may have a pay-as-you go system, it is not the pay-as-you-go system which this Bill proposes to apply to the wage and salary earners of Britain. The Chancellor of the Exchequer did not disguise this, but he implied that since the ups and downs of income were less in the salaried area, it was less necessary to apply to it the principle of the Bill. There are two answers to that implication. The first is that it is not true, and the second is that the Chancellor of the Exchequer has already vitiated his own argument by deciding to bring salaried workers in. In normal times it is true that the salaries of permanent civil servants will go up increment by increment, year by year, but we are not living in normal times. During the war, all promotions in the Civil Service have been made on what is called an acting basis. Instead of definitely promoting a man from, say, the clerical to the executive grade, what happens is that you give a man an "acting promotion." There are many men now in the Forces whose claims to promotion will have to be considered at the end of the war, and those claims can be considered only if present promotions are on an acting bans. Therefore, at the end of the war we shall have thousands of reversions, from the grade to which the holders have been promoted, to lower grades, and unless something is done those people will have to pay, during their year of reduced earnings, Income Tax based upon the highest point reached of the salary paid to them in their acting capacity. The second point is that a very great deal of overtime is being worked in the Departments. It would be true to say that overtime is general throughout the public service. At the end of the war, that overtime will presumably drop off. Not only will there be a very heavy loss in income, due to reversion, but a further loss due to the cessation of large-scale overtime, such as prevails to-day. The Civil Service recognises that, under ordinary conditions, the balance of advantage lies, with steady incremental progression, in keeping to the old system, but the Civil Service unions, in consultation, have come to the conclusion that, in present circumstances, they want this scheme applied to them. They have had discussions with the Inland Revenue. The Inland Revenue are invariably helpful, understanding and courteous, in everything except in dealing with my personal Income Tax affairs. The Inland Revenue have explained their difficulties, and we have taken full account of them; but at the end of it all, the unions of the Services, which represent about 450,000 workers in the public service, asked me to express in this House their desire that this scheme shall be applied to them. The last thing I have to do is to refer to our Army, Navy and Air Force officers. They too, are Crown servants. At the end of the war, thousands upon thousands of them will be demobilised and come back to civil life. I hope that they find jobs not less remunerative than the Army, Navy, or Air Force jobs in which they now are. Are they to be left in the position of having to pay Income Tax in civil life on their last year's earnings in the Army, Navy, or Air Force? If so, that strikes me as a monstrous injustice. It is monstrous that they should be excluded from the proposals of the Bill, and I ask the Financial Secretary to the Treasury to tell us that their position will be taken into account. I ask him to say also that he will take account of the views of the Civil Service unions in this matter, and that he will introduce, at the Committee stage, such Amendments of the Bill as may be necessary to bring Crown servants within the scope of the Bill, to the same extent as is proposed for the community generally.
Mr. Summers (Northampton)
I should like to add a word of tribute to those that have already been said for the part that the late Chancellor of the Exchequer played in this scheme, and also to the ingenious minds which have found a way round those innumerable obstacles which they themselves told us existed, when they published the White Paper some I8 months ago. There can be no doubt that, broadly speaking, and as far as the Bill goes, the proposals have met with a very cordial reception throughout the country, which has been echoed in the speeches to which we have listened today. Before coming to the essential point, namely, the scope of the Bill, I would like to refer to a less important matter with which the Chancellor dealt to-day, but which I found it somewhat difficult to follow. I refer to the point which arises when a person under the scheme falls out of employment through sickness or some other cause.We were told, in language which appeared perfectly clear, that provision would be made for the prompt repayment of any excess tax which had been deducted as a consequence of his falling out of employment. The Chancellor of the Exchequer no doubt knows the Bill infinitely better than I do, but I have failed to see in my first study of the Bill any provision for prompt repayment, unless the man in question was reemployed. If the Chancellor's remarks meant anything, they must include other circumstances than re-employment. I hope that the Financial Secretary to the Treasury will take the opportunity of explaining how, under the Bill as it now stands, repayment of excess tax deduction is to be effected if the man in question is out of work for any appreciable period of time. There will undoubtedly be many hard cases if that is not done, and there will be the absurd position that people out of work may need to have recourse to public assistance for loss of their normal income when, all the time, tax which has been wrongly deducted in the light of subsequent events is still in the possession of the State. That anomaly is one which should be dealt with, I suggest, on the Committee stage of the Bill. In regard to the scope of the Bill, anyone who came here prepared with a set speech will, I am happy to feel, find it necessary to revise very many points which he would otherwise have made in view of the attitude and the final remarks of the Chancellor to-day. It was clear that he recognised that there were certain anomalies under the Bill as it was drafted, and he indicated that on the grounds of anomaly and on the grounds of equity he was prepared to extend it to people earning up to £600. Presumably, though was not quite clear whether in fact their emoluments—the hon. Member for East Birkenhead (Mr. Graham White) will forgive the word—are calculated in terms of a week or some longer period. I assume that that distinction will be eliminated, but there would still remain very substantial anomalies. Without wishing to detract from the welcome we accord to the attitude which the Chancellor has adopted, I do not believe that satisfactory arrangements will prevail until there is no dividing line at all. In my own business we had before the war and still have substantial numbers of people earning £1,000 a year on piecework. Their wages are calculated in terms of a week. But there will be others earning £650 a year whose wages are calculated in terms of a month who if this dividing line is made will be excluded, while the worker earning £1,000 a year will receive the benefits of this scheme. Any dividing line must entail most invidious distinctions. We are told, and it is self-evident, that people cannot just go in and out of the scheme owing to changes in their circumstances. It will have to be settled that once a man starts on the pay-as-you-earn system he will have to continue doing so hereafter. But as the right hon. Gentleman the Member for East Edinburgh (Mr. Pethick-Lawrence) pointed out, the effect of that would inevitably be that a person who starts below the datum line when the scheme is introduced and rises perhaps to £3,000 or £4,000 or £5,000 a year, continues to have the benefit of the scheme, while a person who was drawing £750 in earnings at the beginning of the scheme is still assessed on past periods. That will inevitably lead to the most glaring and absurd anomalies, which in fact would be quite indefensible. There is also a question which no doubt will apply whether or not a datum line is introduced. There will surely be anomalies between what I might for simplicity call the weekly husband or the monthly wife or alternatively the monthly husband and the weekly wife. How on earth their joint incomes for the purpose of Income Tax are to be calculated I find it very difficult to understand. This is one of the numerous anomalies which are in fact bound to arise with this datum line. The Chancellor indicated that he would very much have liked to go the whole hog and to have had no distinction, but that he felt that under to-day's conditions it was a question of cost, which deterred him from treating everyone alike. He indicated that it would cost some £7,000,000 to go as far as he thought he was justified in going at the present time. I fail to see how, in fact, the cost of forgiveness or discharge of taxation can be accurately assessed at all. Not only is it a question of the numbers involved, but the actual amount of tax which the Treasurer goes without is that amount which a person affected by the scheme is relieved from paying either on retirement or death. Surely the measure of the cost to the Treasury in the long run would depend not only on the amount the individual is in fact forgiven at that time but on the rate of taxation at that time. When we say that £250,000,000 less post-war credits is the measure of the existing plan and that an additional £7,000,000 is incurred by including people up to £600. I venture to think that that is a very general statement which ought to be taken with the utmost reserve, in view of the inevitable errors which the future may bring to that calculation. It may be felt that in considering the merits of extending the scheme to still higher and, I hope, indefinite limits, the benefits conferred on people of such incomes are really not justified, but it might easily be overlooked that a person earning, say, £2,000 a year does not in fact have twice as much spending power as a person with £1,000 a year. There are after all four categories into which people fall from the Income Tax point of view: those who escape entirely owing to the allowances, those who come on the reduced rate—6s. 6d. at the present time—those who come within the next slice of taxable income at the 10s. rate, and finally those who incur Surtax, so that as you go higher in the income ranges so the spending power is less, and when fluctuations in a person's circumstances arise he is that much less able to deal with the changes forced upon him. Therefore the differences between gross and net income do to my mind affect this question. There is this point. It is not as it were the rich man who is going to be forgiven by an addition to this scheme for the remission of tax. The actual remission arises when he either retires or dies. If in fact he retires, it is almost certain that he will at that time be in the worst possible position to pay the tax for he will be called upon to pay on the basis of his previous income. If he dies, it is not that person at all but his heirs you are relieving, if you extend the scheme. To my mind, it is entirely false—and it has not been suggested to-day—to argue that to extend the scheme to higher ranges is really giving privileges and concessions where in fact they are not required at all. I would like to add one word on the work which will fall on employers. That work is virtually inescapable. There is widespread recognition of the satisfaction to employees generally which a scheme of this kind will bring. I have no doubt whatever that additional work will be required. It will readily be provided, and the scheme will not be looked upon askance as a consequence of it, but it will be a mistake to imagine that it is purely additional work at the outset of the scheme and that once the thing has become familiar to those operating it many of the teething troubles will in fact be eliminated. Clearly it will become easier to operate, but the essential difference between a new scheme and the old is that under the old scheme it was possible to insert the amount of tax which each employee was to have deducted before his actual wages for that week were known, but under the new system the amount cannot be inserted until the employee's wages for that week are calculated. This means that the tax calculation will follow the wage calculation instead of preceding it, and that is a distinction which no familiarity with the system can alter. It is an additional difficulty with which employers will be permanently faced. I hope that the Ministry of Labour, particularly under present conditions, will recognise that the smooth working of this scheme is essential if it is to have the initial start which we hope it will have. If the difficulties are made more difficult than is inevitable, the start of the scheme will be made very much worse. I hope the Ministry of Labour will look sympathetically on employers who are at present in danger of losing clerical staff under the call-up for this, that or the other. It will help very much if the Ministry will look sympathetically on the matter, and I hope that when we come to the Committee stage the Chancellor will increase the scope of this scheme as widely as he can possibly justify, and I hope the House will support no dividing line as regards earned income of any kind.
Mr. Hewlett (Manchester, Exchange)
May I express my congratulations to the hon. and gallant Member for the Hartlepools (Colonel Greenwell) on his maiden speech and the hope that we may hear him on many occasions? I have listened to what the Chancellor had to say in presenting the Bill. I agree with him that in so far as Schedule E tax is concerned there is some little complexity regarding the assessment and collection of the tax. The country generally is grateful to the Government for bringing this Bill before the House. I say quite definitely that the consensus of opinion throughout the country is that the Bill should have gone much further than is indicated in the White Paper. Why should this legislation apply to wage-earners who are paid weekly and not to wage-earners who are paid monthly, quarterly or annually? The consensus of opinion in the Manchester area is quite definite that this legislation should apply to all workers. I have had a vast amount of correspondence from various constituents. I shall read portions of two letters. One is from the Manchester Chamber of Commerce, who at their board meeting on Monday night unanimously passed the following resolution:
The other communication is from the Manchester Municipal Officers' Guild, which has a membership of approximately 4,000. They submit that there is no justification for discrimination between taxpayers receiving wages and those receiving monthly salaries, that many salaried workers are not better off, but worse off, financially than a great number of wage earners, and that the burden of tax arrears bears just as heavily on them. They maintain that the test of eligibility to share in the benefits of the scheme is not the size of the income, but whether the taxpayer's earnings are paid weekly or monthly. Broadly speaking, the discrimination is between manual and black-coated workers. A manual worker earning £5 a week will get the benefit of the scheme, but a clerk or other black-coated worker with £260 a year will not. A manual worker earning £15 a week will come within the scheme, but a salaried worker earning £20 or £25 a month will be excluded. Why should there be two classes of Schedule E Income Tax payers? We are fighting for democracy; why should we not be democratic in our domestic legislation? Is there any logical reason why a person employed at an annual salary of £416 should be taxed on a different basis from one employed at a salary of £8 a week? The present proposals for separate treatment will appreciably increase the amount of work involved both in the offices of employers of labour and in the offices of His Majesty's inspectors of taxes, by reason of the classification of the two types of Schedule E taxpayers, and I wonder whether the Members of the Government, the majority of Members of this House, and the public generally fully appreciate the tremendous amount of additional work which has been already placed on employers of labour through recent legislation, whereby such employers are made unpaid collectors of Income Tax. This has involved an immense amount of official work for which, as far as I can gather, there has been hardly a "thank you." I would like to mention a case that has come to my personal knowledge. At the beginning of the war a certain firm, with a view to saving labour, appealed to their salaried people to agree to their emoluments being paid monthy, it being indicated that if any member of the staff preferred to continue on the weekly basis he or she could do so. Speaking generally, that monthly system was brought into operation. Therefore, the anomaly arises that a man drawing £376 per annum and paid on a monthly basis will not come within the scheme, while a man paid £425 per annum and paid weekly will. Do not make the difficulties of the employers and the inspectors of taxes still greater. Let us have one clear-cut scheme, so that the new enactment shall apply to all Schedule E taxpayers; and cease differentiation as between weekly and monthly drawers of wages or salaries. We were all delighted to hear the Chancellor indicate that he might extend the Bill to include people drawing salaries up to £600 a year, whether such salaries are paid monthly, quarterly or annually. I plead with the Chancellor to go further, and to allow all Schedule E taxpayers to benefit from the Bill."In the opinion of the board of directors of the Manchester Chamber of Commerce, the pay-as-you-earn method of taxation should be applied to all earned income, whether the earnings are calculated by reference to a period of less than a month or a longer period."
Mr. Benson (Chesterfield)
I think everybody feels very grateful to the Chancellor for indicating that he proposes to take away a very large part of our grievances by extending the proposal to salaried workers. But he will find that there is a very strong feeling indeed against the imposition of a bar at £600. I am well aware that if he granted this extension without any limitation there might be a number of people who would feel aggrieved and that if you grant a forgiveness to a man drawing £500 a year the small shopkeepers and business men might feel that they are getting a bad deal. But that is a political rather than a fiscal argument against the abolition of the bar and as the small shopkeepers and business men invariably grumble all the time about everything I do not think that it matters very much. I think that the advantage of tidying up as we go outweighs any disadvantage. Our Income Tax law is complicated enough. There are enough anomalies in it already. I think there will have to be very powerful reasons indeed to make this House willingly accept a bar at £500, £600, £1,000 or any other figure. A bar in itself is objectionable.My right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) suggested that it might be possible to get rid of the inequity by charging a certain amount in the present year against the forgiveness at the end of the taxpayer's life. That is quite reasonable and I commend it to the Chancellor as a method of getting revenue now when we need it at the sacrifice of revenue when we shall need it less. The amount that would have to be charged to the taxpayer would be on an average very small because although you may be forgiving £1,000 at the end of the taxpayer's life the present value of £1,000 say, 20 years hence is very small. So if we wish to do this business on an actuarial basis, it can be done without throwing any great burden on the taxpayer. But the effect of forgiveness on Exchequer receipts is really nil. The Chancellor has talked about it costing £60,000,000, but he will never feel the loss of that sum. It is purely a theoretical calculation. In fact, this scheme seems to work a miracle, because it gives very considerable concessions to the taxpayer without any cost to the Chancellor. If he can only find other methods of doing this trick, he will become the most popular Chancellor in history. This £60,000,000 loss will never fall upon the Chancellor except in the unlikely event of our Income Tax system being wound up. It is true that if the rate drops the Chancellor will lose some small amount—not very much. But, as we apprehend, the rate is not going to drop very much, and it is not going to drop at any rate until after the war; so the advantages of getting rid of the bar and making a clean sweep are very great. The real cost to the Chancellor will only be a very small fraction of £60,000,000 if and when the rate of Income Tax drops. We shall, therefore, require very much stronger arguments to make us accept the very untidy method of putting on a bar, at any figure. Having a tidy mind, I am very much in favour of extending this scheme to every level of Schedule E income.
Mr. Hely-Hutchinson (Hastings)
I think my right hon. Friend the Chancellor is to be congratulated upon facing his baptism of fire as Chancellor and at the same time receiving so handsome a christening mug as this Bill. He will be known as the Chancellor who turned us over from go-as-you-please to pay-as-you-earn. I am very sorry that he has limited the scheme to the weekly wage-earner. I think that the case has been admirably put, and put in an uncontroversial way, by the right hon. Gentleman the Member for East Edinburgh (Mr. Pethick-Lawrence) and the hon. Member for Chesterfield (Mr. Benson). It seems to me that in the years ahead this situation, with some people having their tax deducted as they earn it and others having it deducted on the present basis, is going to be anomalous. As I listened to the Chancellor giving as his main and indeed as his only reason for not going the whole hog the fact that the Revenue would lose £60,000,000, I felt inclined to question, most respectfully, the accuracy of the calculation, for reasons which were hinted at by the hon. Member for Chesterfield. In the second place, I think that in a series of Budgets so unbalanced as the present ones when one is trying to effect a great reform it is really straining at a gnat after having swallowed a whole regiment of camels to accept an item of £125,000,000 and to object to one of £60,000,000. It takes some considerable time to build a case, whether it be the case for the Empire or for the public schools, which may take several hundred years to develop, or, to descend from the sublime to the ridiculous, the case for an amendment to Income Tax procedure. Hon. Friends of mine on both sides of the House have been trying to get this done for 2½ years. We have at times had some impression that somewhere along the chain there was that particular type, fortunately not universal, of official who had made up his mind that he did not want to do something. That was certainly borne out by the form of the arguments used in the White Paper issued in 1942. I have my original copy, and I find I scribbled on it:
I believe that my right hon. Friend the late Sir Kingsley Wood always wanted to get this done. He had great difficulties to overcome. They were not all difficulties in negotiating with outside bodies; some of them, I believe, were internal difficulties. Some of us who were supporting him are pleased to feel that by the use of dynamite and several hundred Parliamentary Questions we helped to shift whatever obstructions there were in his way. I would like, as part of the tribute to my right hon. Friend, to mention some of the arguments which hon. Friends of mine and I put forward to him and which we embodied in a letter which I wrote to him on 4th March, 1942. I will not weary the House by quoting all the letter, but I will just give the beginning and end of it. It read:" This is a piece of special pleading by somebody who does not want to do something."
Towards the end it said:" May I add my voice to those which are recommending that in respect of Schedule E, the taxable year, the year of assessment, and the period of deduction should be made to coincide."
The final thing I put into the letter which I would like to emphasise, because nobody appreciated more fully than I do what a tremendous change there was in our Income Tax procedure, when Sir Kingsley Wood started in 1941 to deduct Schedule E at the source, was as follows:"Without going into detail, I suggest that once the plunge in respect of Schedule E has been taken, a whole vista of simplifications and modifications, both of taxes and of tax machinery, would be opened up, tending not only to make the income-tax itself a more flexible instrument, but also to make taxation and financial problems generally less of an inhibiting factor in changes of occupation and rates of pay, throughout the whole range of tax-payers."
That letter, which I have read, while I happened to be the writer of it, represents naturally enough the views of many hon. Members with whom I had collaborated in trying to bring about something which we all thought ought to be done. I would like briefly to comment upon one or two observations of hon. Members who have spoken, particularly upon the maiden speech of the hon. and gallant Member for The Hartlepools (Colonel Greenwell), who has now left the House. He spoke of the complications of this Bill. It is a complicated Bill; and its application is complicated. I do not see how it could be anything else. It is a great deal less complicated than anything I expected to see on this subject. He spoke of the cost to employers. I do not myself think that the cost of carrying out the provisions of this Bill is going to be very much greater to employers than that of carrying out the deduction at source which was started in 1941, but I do not think that the cost of either should necessarily be imposed upon employers without compensation. I would like to draw my right hon. Friend's attention to the old system of poundage, allowed to those who operate on behalf of the Government in the collection of taxation. My hon. and gallant Friend in his maiden speech, which delighted all of us, also referred to shortage of labour as being one of the difficulties with which employers are confronted. We have to be fair about this. That shortage of labour is a difficulty which affects all of us, and the Inland Revenue are a bit short of labour themselves. The hon. Member for Rugby (Mr. W. Brown), who I am sorry to say has left the House, started his speech by attempting to appear before us as a modest violet. I propose to do something more unusual still, and to say something in support of what he said. I wish to read a short letter which I received from a constituent which I think would please the hon. Member for Rugby if he were here. It says:"From the political viewpoint, I think the Schedule E change would be acceptable to both sides of the House. It would be a question of building on the corner stone you laid last year—deduction of Schedule E at the source."
"I feel I must write to you to express the hope that you will support the demand being made to the Chancellor of the Exchequer that his pay-as-you-go proposals shall be applied for the benefit of all concerned.
The present proposals are grossly unfair to monthly wage earners and are quite contrary to the accepted taxation principle of equal sacrifice for all.
The writer of that letter probably does not realise that he is already on a pay-as-you-earn system, being a civil servant, and the only effect of going from that system to the new pay-as-you-earn system, is that he may have to pay more tax this year than otherwise. My hon. Friend the Member for Northampton (Mr. Summers) joined in with a very able argument on the question of the expense to the Treasury and also on the cost to employers. I hope that these suggestions coming to my right hon. Friend from every quarter of the House will bear fruit in due season. It is obvious that all quarters of the House are determined that sooner or later this principle of pay-as-you-earn shall be extended to all Income 'fax payers. One can readily appreciate that the strain on the machinery of the Inland Revenue may make it difficult to disturb existing arrangements about salaries and larger taxpayers at present. It may be something for which we can afford to wait while gratefully accepting for the moment the very good provisions which are in this Bill. But if by any chance there is in the way of this extension the same kind of obstruction which I strongly suspect was in the way of the present Bill, then I would like to say that quite a lot of us have several more tons of dynamite and several hundreds more Parliamentary Questions up our sleeves which we are prepared to ask. We all know that Socrates was given hemlock for asking inconvenient questions in the market place. Nowadays we do things somewhat differently—we kick inconvenient persons upstairs. I would like to say a word more about the Bill itself. It strikes me as a good Bill, absolutely first-rate as far as it goes, and in particular those who worked it out deserve congratulations on the coding system. That was a stroke of brilliance which goes as far as possible in the direction of securing privacy. With these remarks I commend the Bill and hope that it will be passed as soon as possible.In my own case I became a temporary civil servant at the request of the Government. As such I am paid a salary monthly. This salary is considerably less than is earned by many munition workers and yet they are to receive a present of so months' tax while I am to pay as usual."