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Child Allowance

Volume 436: debated on Tuesday 15 April 1947

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In the second place, I propose to increase the child allowance from £50 to £6o a year, and thus restore this allowance to the pre-war figure, not merely the 1940 figure. This will cost £15 million in a full year, and £13 million this year. These last two increases together, will relieve 750,000 people who now pay Income Tax, from all payment in the future; and will, of course, noticeably reduce the tax paid by millions of others.

Following these reliefs, I would like to give the Committee some figures, because I am not sure that it is always understood what is the tax free income of various sections of the community, and what is the income above which standard rate at 9s. in the £first becomes chargeable. There is a bit of loose, defeatist, talk about incentives sometimes. People talk about there being no incentive to work if they have to pay anything in Income Tax. And it is especially for this reason that I want to give the facts and figures to the Committee.

Following the reliefs I have indicated, a single man will pay no Income Tax until he is earning £2 12s. a week, and he will not begin to pay tax at full standard rate, which is now only 9s. in the £, until his earnings exceed £5 10s. a week. Even then, of course, he only pays at the standard rate on the excess over this amount. The corresponding figures of other types of taxpayers are as follows: a married man with no children will pay no tax if he earns below £4 5s. a week, and no tax at standard rate below £7 2S. a week; for a married man with one child, the figures are, £5 12s. and £8 los.; a married man with two children £7 and £9 18s.; with three children £8 8s. and £11 5s.; and with four children £9 15s. and £12 13s. a week. Finally, that paragon of good citizenship, the married man with five children, pays no Income Tax unless he earns more than £11 3s. a week, and he only pays the full standard rate on the excess of earnings over £14 IS.