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Post-War Credits

Volume 436: debated on Tuesday 15 April 1947

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I next turn to the Income Tax Post-War Credits. Last year, we repaid the first three years, out of a total of five years, of these Credits to old people, men over the age of 65, and women over the age of 60. I thought that this would cost about £26 million. We have, in fact, paid out more than twice as much, just £58 million, to no less than 1,750,000 old people. We had, of course, no reliable information last year to show the distribution of the Post-War Credits between the different age groups. There is no age evidence upon the Post-War Credit. It is evident that the old people, and we were very glad that it was so, had accumulated more than twice as much in Post-War Credits as we had supposed. This year, I propose to go a step further, and to complete the payments to the old people. I propose to arrange to pay the last two years of their Credits, and, in the light of last year's experience, that should cost another £70 million. There is more credit in the fourth and fifth years than in the first three.

Actually, repayment cannot start until the autumn, but it will, I hope, be finished before Christmas. Any man reaching the age of 65, and any woman reaching the age of 6o, will thenceforward be able to claim, in one single payment, all his, or her, Post-War Credits for the five years. I cannot go further this year, and I hope the Committee will not press me to do so, in the repayment of Post-War Credits These are a great reserve of' purchasing power, which we must only release slowly, while inflationary pressure continues. If deflation were to threaten, this reserve might be one of the first to be called up to counter it. Last year, the old people, when they drew their Post-War Credits, reinvested a considerable proportion in the Post Office Savings Bank—and in other forms of savings. I appeal to them, as I appeal to other citizens, to do the same this year and put the money by, so far as their personal circumstances permit.