I think that it would be for the convenience of the Committee to take the new Clause relating to child allowance in the name of the right hon. Member for Leeds, South (Mr. Gaitskell) with the new Clause to provide a "tapering" for child allowance and the new Clause relating to apprentices in the name of the same right hon. Gentleman, together with the new Clause in the name of the hon. Member for Orkney and Shetland (Mr. Grimond) relating to allowance for children.

We are quite agreeable to having in one debate the discussion of all these Clauses as long as it is understood that if we wish we may divide on the Clause itself.

The right hon. Gentleman will not be able to divide on every one.

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

In view of your Ruling, Sir Charles, I propose to address my remarks mainly to the new Clause that I am moving and to refer to the other proposed new Clause which provides for the tapering of the child allowance. No doubt my hon. Friends will have arguments to advance in favour of the other Amendments. I am glad to notice from the result of the Division that such a large number of hon. Members opposite have attended today to listen to the debate on the Finance Bill.

I make no apology for moving a new Clause which is similar to one that we have moved in previous years from these benches, and one in which I have often previously declared a considerable personal interest. I make no apology because we are merely proposing relief for the large family. We attach very considerable importance to it. Indeed, we would give priority to this suggestion over a great many of the suggestions made in the course of our debates on the Finance Bill. For that reason, I am gratified to find that Members of the Liberal Party have given support to the main Amendment on this issue.

I believe that it is true that much of the poverty and much of the remaining inequality today is due not to the size of the income so much as to the size of the family that is affected. To put it more precisely, the number of dependants in a family in relation to the number of earners determines the real standard of living of the family. Indeed, it might be argued that the main defect of our Income Tax system today is its failure to take adequate account of that fact. I believe that we all tend, sincerely and very understandably, to forget this, because we are naturally inclined to think in terms of the family income rather than in terms of income per head of the household.

I noticed that earlier in our debates the right hon. Member for Blackburn, West (Mr. Assheton) argued that a great deal of the transfer, as he called it, within our taxation and social service systems was what he called horizontal, between one working-class family and another, rather than what he called vertical, between rich and poor. He failed to take account of the fact that a great deal of the transfer is no doubt between the single earner at a given level of income and the earner with a number of dependants. The most graphic way to illustrate the remarkable inequality that exists between families is by a careful study of the position of different families, not in terms of gross income or even of net income of the family as a whole, but in terms of the net income per head in the household, that is to say the income, after tax and after counting family allowances, divided by the number of people in the household or family.

I am not saying that there may not be some savings in overheads on a family of two. Indeed, it can be argued that a household of two is the most economical unit. The Royal Commission on the taxation of Profits and Income gave great support to my general case. It said that it is probably true that the most favourably treated unit at the moment at almost all income levels is the husband and wife, both earning, without children. They have the advantage of having no non-earning dependants, an economical household and considerable benefits from our present Income Tax system. Indeed, the Royal Commission goes so far as to refer to the unduly favourable position of the couple, both earning. Hardship begins to arise when the couple, both earning, begin to have children and the wife, because of the children, is quite rightly unable to go on doing full-time work.

If we make a simple calculation on this basis of the income per head of the household after tax, we get quite interesting results. I am taking several income levels and allowing for our existing tax concessions and also Family Allowance. If we compare two sorts of household, on the one hand the single man or woman and, on the other, the husband and wife with three children, we get these results, if my arithmetic is correct. The single man on an income of £350 a year, or £7 a week has an income after tax of £326. If a man has a wife and three children and his wife is not earning, the income per head of the family is £78. A single man is rather more than four times better off. If we take the level of £600 a year, the figures are £519 and £128, and the single man is a little more than four times better off. At the level of £2,000 a year, it actually works out that the single man is about four and a half times better off. I think those are rather graphic figures.

Of course, it may be said that all those figures really mean is that the family without children can afford various luxuries such as television, tobacco and drink—which we find are consumed in such large amounts, taking the population as a whole—whereas the family with a large number of children has to go without those things. It may be thought that, although they have to go without those things, when we consider the necessities of food, and so on, the large family may be well off. If anyone thinks, that, I would advise him to look at some figures which surprised me in the latest Ministry of Food survey. The survey relates to the year 1951, but I do not imagine that these figures would alter much from one year to another. It gives the actual food consumption and expenditure on food for different sections of the population and different types of family.

The survey, at page 51 of the latest edition, compares a household of one male and one female adult—roughly speaking, presumably the type of family I spoke of, where the husband and wife are both earning and without children—with a family of one or two adults and four or more children. We there find the remarkable result that the expenditure on food per head, quite apart from luxuries, of the family with two adults is actually double that of the family with four or more children. That proves emphatically that the inequality due to large families which still prevails in our system despite the child allowance, married allowance for Income Tax purposes and the family allowance paid by the Ministry of National Insurance, is still very large. If it is the case that the family with no children spends twice as much on food per head, there is clearly a very large inequality.

It may be said that all I have really proved is that if we divide our income by five or six there is very much less left after tax than if we divide it by one. That is a great truth which no one denies but which no one really acts upon—at any rate the Chancellor of the Exchequer does not. An interesting point picked out by the Royal Commission was that in some countries the whole Income Tax structure does attempt to act upon this truth much more effectively than ours. Based on what the Commission called the equation system, it regards the household not as one unit of taxation but as two, three, four, or five units and divides the gross income by that number before charging tax. If we were to do that with our Income Tax system at present, particularly in the lower-middle and middle-class incomes, we would produce most revolutionary effects in the amount of income paid in Income Tax by large families. It is interesting to note that France enforces that system.

We are not suggesting that anything so radically or revolutionarily favourable to the larger family should be introduced into our tax system. Nevertheless, I do think it is worth the Committee recognising, in passing, that that system does prevail. The fact that we do not include it in our arrangements is an ade- quate reason for being rather more favourable to the large family through the traditional child allowance, as we are suggesting in this new Clause.

I speak for myself, although this may include some others, in saying that in this matter we may have been the victims of a certain confusion of mind. We have tended to think we were meeting the problem by increasing the married allowance for Income Tax purposes. The Labour Government, in 1951, increased both the child allowance and the married allowance and we conceived ourselves to be alleviating this problem; but, in so far as one increases the married allowance one actually relieves further the couple who are both earning and without children who, as the Royal Commission showed, are probably the most favoured people under our existing system. I suspected the Chancellor also of falling into that conclusion the other day when he spoke of his sympathy for the married man. He may have had in mind the family with a large number of dependants. Of course it is that family, and not the married man as such, that is suffering under the existing system.

The Royal Commission proposed as a fairly major reform of our system an alteration of the child allowance. The majority Report wants to do that in such a way that the relief per child is greater as we go up the income scale. As I understand the majority proposals, there would be no benefit to anyone where the family income was less than £850 a year. The minority proposals would give benefit up to that level, but above that level would give an increasing benefit as the gross income rose. I am not convinced that it is right to make the child allowance discriminate according to the size of the income. I cannot quite understand why it should cost more to feed or clothe a child because one has a higher income. Therefore, all we are proposing to do is to give a straight increase in the child allowance from £85 to £100 for every child.

I would not be greatly surprised if the Chancellor told us that he could not do that because of the high cost. Nevertheless, I think there is one interesting conclusion from the statistics of this argument that changes in tax which would give very considerable relief to the large family cost surprisingly little in terms of revenue lost. The majority proposals of the Royal Commission would, I think, cost only £16 million a year in revenue. At first sight that may be rather surprising because obviously it would be a very considerable relief to large families. I presume the reason is that there are remarkably few large families in the community; or, at any rate, that the proportion of families with more than two children is surprisingly small.

Of course, the implication of that is that it is possible for this Committee, or for the Government, to give quite considerable relief to the worst cases without involving the total Budget in a very heavy expense. Indeed, the fact is that the families of three, four, five and upwards, are to some extent a small, and—if I may put it vividly—an oppressed minority under our present system of taxation and family allowances.

Hear, hear.

I am glad to have the support of the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) on this rare occasion. Having convinced him, perhaps I have said quite enough on that point, and I would therefore merely add, on the subject of the new Clause referring to the tapering of the child allowance, that it seems to us, at any rate, that the Royal Commission, which deals with this at page 58 of its Report, has made an exceedingly strong technical case for altering the present defects in the existing system. The Report states:

"An income of £85 in the child results in £170 in all being relieved, £85 in the child and £85 in the parent: an income of £86 in the child gives the parent no relief."

That would seem to be a technical fault in the tax as it now stands, and I am sure that the attention of the Chancellor has already been drawn to it. But we have done our best to draw his attention to it by putting down the new Clause, and though, as I gather, we cannot vote on this point, even should we wish to do so, I hope that the Chancellor will give it serious consideration.

Finally, may I emphasise that we feel that on the major issue there is a serious case, quite apart from all partisan argu- ment? If the Chancellor finds, or imagines, that he has not the revenue to sacrifice in order to make this concession this year, I hope that, in the unlikely event of his still being responsible for these matters next year, he will give in his consideration a very high priority in tax relief to these claims.

I do not think that anyone who has had the experience—as the right hon. Member for Battersea, North (Mr. Jay) and I have—of bringing up a family can doubt that it is an extremely expensive business. Nor can they doubt that the concessions at present given by the Treasury come nowhere near compensating for the additional expense.

I believe that two of the new Clauses, those of the right hon. Member about "tapering" and my own, fulfil almost exactly the recommendations of the Royal Commission. The new Clause to which the right hon. Gentleman has chiefly addressed his remarks seeks a straight increase in the child allowance. I am sure that at the moment we could all agree that the family is unduly penalised by our tax system, but I believe that the Chancellor may more willingly take the straight recommendations of the Royal Commission than anything else; nevertheless, I would support both a straight increase and the recommendations of the Royal Commission.

When, earlier in our debates on the Finance Bill, I mentioned this matter, the Chancellor was a little pained, as Chancellor's often are, that he had not been given credit for his good deeds. He wore that expression which one sometimes sees on the face of St. Sebastian in the pictures of the late Italian period, where one sees the saint full of arrows, wearing an expression of resignation and boredom. It is true that he did give some slight concession to the family, but it is also true that the Royal Commission expressly states that in its view the family is still at a very grave disadvantage.

I would also draw the attention of the Financial Secretary to the correspondence which has lately appeared in the "Manchester Guardian," from which it is quite clear that what the medium-grade Income Tax payers finds so expensive is bringing up their children. Even today, if the Financial Secretary looks at the "Manchester Guardian," he will see a letter from someone in which it is pointed out that, even with State scholarships, it costs £300 or £400 to educate two children.

At present the only child allowance is £85, which ceases at the age of 16, unless the child is educated after that age; and it is not available if the child has any other income. In addition, as the right hon. Member for Battersea, North has said, there is no tapering provision, and if the income is £86 the parent loses the whole allowance. As I have said, it cannot be pretended that this allowance anything like covers even the cost of feeding a child, far less clothing or educating one, or providing additional accommodation.

In my view, there are two points to be considered. There is the need for an increase in the child allowance and there is also the strong case which is made by the Royal Commission for making the scale to some extent a sliding scale. The right hon. Member for Battersea, North considers that the majority Report of the Royal Commission is not convincing on this point, but I would ask him to consider—whatever may be the ethical grounds of the whole matter—that in fact the better-off people do have to spend much more on their children. In the present state of society, I think that we must take that for granted.

At present a married man with an income of £500 and two children pays the same tax as a single man with an income of £166. A married man with an income of £2,000 a year pays the same tax as a single man with an income of £1,666. In fact, as we go up the scale, the position of the married man with children gets progressively very much worse compared with that of a single man, or of a family without children. I do not argue that the differential should be carried on right up the scale in the same degree, but I maintain that at the moment the two are too close together in the higher ranges of Income Tax, and therefore there is something to be said for a sliding scale as recommended by the Royal Commission.

It is greatly to the advantage of this country as a whole to encourage the middle classes, the professional classes, the skilled men, the better paid work people in industry, to have children. I would say that those of them who can do so should be responsible for bearing the cost of some part of the education of their children as well as their upbringing.

It seems to me that there may be at least three major objections to these proposals. First, there is the cost, which has been dealt with to some extent by the right hon. Member for Battersea, North. I do not believe that the cost would be so great compared with the injustice which is done at present. If the cost is unbearable, there is at least a strong case, in my opinion, for putting more tax on the single man, or a family without children, and less tax on the family with children. I should be happy to see that done.

The second objection is that the Chancellor may argue that he does not wish to deal with the matter piecemeal. He may say that the recommendations of the Royal Commission have not been published for very long and that he has not had proper time to consider them as a whole. There may be a certain amount of force in that argument. If the Chancellor can assure us that he is favourably disposed towards the general case made from this side of the Committee, I can see that he may have some case for saying that he cannot be expected to do anything at once.

But I would draw his attention to the fact that the conclusions on this matter, as set out in the Report of the Royal Commission, are very complete and self-contained, and that he might at least, after the debates we had on the subject last year, be able to show us which way his mind is working. I must confess, however, that last year I was not convinced that the case was so strong that it required him to act then. Now the Royal Commission has reported and the Chancellor has had a further year to consider the matter, and I feel that he ought to be able to give some idea of his general views.

Lastly, there is the point that it seems that some change of this sort in our tax system would be in accord with the recommendations of the Royal Commission on Population. There may be a dispute as to what the size of the population ought to be but there can be very little dispute that, whatever it is, it ought to be reasonably balanced. Surely it will not be said that it is desirable that the country should encourage a low birth-rate, especially among the skilled and professional classes, at a time when the number of old people is growing very rapidly.

The general case for some change in the tax system which will give both the same general increase in allowances and also do something to cure the discrepancy between the differences in the higher ranges of income and the lower, as between married men with families and single men, is necessary. In view of the Report of the Royal Commission, I very much hope that the Chancellor will be able to give us some encouragement showing that he, too, is of the same mind.

Like the right hon. Gentleman the Member for Battersea, North (Mr. Jay), I declare an interest in this matter, but it is not one which leads me into supporting the new Clause. The right hon. Gentleman failed to make his entire case good, and he did not disclose to the Committee that the proposal covers only a fraction of the field. He made some slighting remarks about those who have a high income and said that he did not think that their children ought to cost them more. I should have thought that if he consulted his professional colleagues in the £2,000 a year class, or just over, he would find that they feel very strongly that any tax lightening for children should apply throughout the scale. I imagine that, like the right hon. Gentleman, they send their children to schools where fees have to be paid and perhaps afterwards to the university, where I believe the right hon. Gentleman went himself.

Although perhaps as a party hon. and right hon. Gentlemen opposite do not think it quite correct and appropriate at the moment to suggest that allowances for children should range through the Surtax scale, the right hon. Gentleman must have had close contact with many people in that scale who would welcome such allowances when they can be given.

I assure the noble Lord that my proposal would help everybody at any level of income within the Income Tax scale. The only people it would not help would be those who are not at present paying any Income Tax. I wish to help them through family allowances, but I did not refer to that because it would have been out of order.

I am sure that the professional friends of the right hon. Gentleman whom I have been trying to imagine—and perhaps they exist in fact—would—agree that his proposals would operate through the scale, but where they would disagree is with his remark that it should not cost anybody in that class anything more to feed and to clothe a child. He left out, perhaps deliberately, education and the general circumstances of living of many people in the professional classes.

To that extent he overtly ignored one end of the scale. He also completely ignored the other end of the scale and did not make that clear to the Committee at all. He did not disclose that no person with three children with an income of between £600 and £700 a year pays any tax provided that the income is all earned. Therefore, the proposal would not affect anybody with three children with an income between £600 and £700. It is designed for a very narrow class of persons earning between £700 and £2,000 a year, over which sum the right hon. Gentleman's political strictures begin to apply. I want the Committee to be quite clear about that. I make the point absolutely firmly because it is the basis upon which I hope to ask the Chancellor to reject the new Clause.

Of course, this is an alteration of Income Tax and it can apply only to Income Tax payers. It might well be that those who support the proposal would also think it desirable to increase the family allowance or widows' pensions or many other of those benefits which would affect the class of lower income earner to which the noble Lord referred.

I should be only too delighted to have a discussion on family allowances, but it would be out of order now. I am trying to confine my remarks to the proposal, and I maintain that what I have attempted to tell the Committee is true.

On those grounds I hope that the Chancellor will not accept the new Clause. We have received the Report of the Royal Commission. The proposals in it must be with the Treasury. If justice is to be done in this field, it must be done throughout the whole scale. It must he done to those with very small earnings indeed who are finding it extremely difficult to maintain their families and, in justice, it should be carried to the top, or near to the top, of the Surtax scale, provided the proposals are reasonable.

I hope that the Chancellor will not deal piecemeal with the matter this year, but will direct his officials to investigate very carefully the many proposals of the Royal Commission, albeit I thought some of them were not entirely satisfactory, and really get down to a reform in this field of taxation which is crying out for reform when one considers the immense advances that are being made in other countries which are directed towards the growth and maintenance of the population and the general enjoyment of the masses.

I am not at all surprised at the point of view expressed by the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke). It is evident that he realises that in this country there are still two nations. Not only does he realise that, but he is determined that the two nations shall continue.

I am more than surprised to find the hon. Member for Orkney and Shetland (Mr. Grimond) taking almost the same point of view. He said that we took it for granted that the better-off spend more on their families. Of course, we take it for granted that they spend more on their families. The simple reason is that they have much more money to spend than have the poorer people in the community. We do not accept the deduction of the hon. Member for Orkney and Shetland that, because the better-off spend more on their families, we should use public funds to make it possible for them to be in a much better position than they are at present, and use this sliding scale so that the better-off may get an even bigger whack of public money than they do now.

There is no question of giving a whack of public money. This is a question of slightly reducing the amount of tax they pay.

I do not accept that. All of us who are within a definite range of income have to pay Income Tax. Many of us pay it gladly because of the benefit not to ourselves but to others less well off. It is something which we have accepted for a long time. If the hon. Member's suggestion were accepted, it would mean that the better-off would have less responsibility, and they would have it at the expense of the less well-off.

I said that the single man could be more highly taxed and the better-off men with families could be slightly less taxed. In that case there might be no deduction in the amount of tax collected from any class but merely a redistribution between taxpayers in the same class.

The hon. Member is going away from the proposal which he made. He said quite clearly in his speech that he was in support of the majority Report recommendations. Those recommendations were that there should be a sliding scale. In other words, the already better-off would be given a bigger child allowance than the less well-off. I, as a single person, would be willing to be taxed even more heavily if children would benefit, but I should object strenuously to being taxed more heavily so that people much better off than I am would have a bigger whack of the share that I was ready to give up.

If we want to get the support of all those whose taxation would have to be heavier, we would have to show them that we in Parliament were trying to be just. The only way that one could possibly be just would be to accept what my right hon. Friend suggested in introducing the new Clause—to make the allowance the same for every child but higher than the present family allowance. That is of the greatest importance.

The facts given by my right hon. Friend show clearly the great hardships that are being suffered by families with more than two, and particularly with more than three, children. It is also true that wise, sensible and good parents are not only content to think about their children's immediate future. They consider also the future of the child when it becomes an adult. They want the very best for their children. I say to the noble Lord that it is not only people with middle-class incomes or those who pay Surtax who have a great desire to see their children going not only to good schools, but to the university. There are many examples of this in the area from which I come. My own family is a very good example. My father had a very low income as a miner, but he was a parent who desired for his children the best that he could possibly get. He was able to send three of his children to the university on the miserable wage that he was getting.

The hon. Lady misunderstands the purpose of my speech and has allowed a little prejudiced reflection to creep into her criticism of it. I went out of my way to say that I thought something ought to be done for people below £700 a year right down to the lowest wage earner with family responsibilities. I hoped that that would be done next year. I merely pointed out that the proposal of the hon. Lady's right hon. Friend did not attempt to do this.

If my right hon. Friend or I tried to make a case we would be ruled out of order, because the Clause deals only with those who pay Income Tax. The people to whom the noble Lord refers are outside the range of Income Tax. If we were to accept the noble Lord's sliding scale, there would be much less chance for his right hon. Friend the Chancellor of the Exchequer, even next year, to ensure that in another part of the Finance Bill he would be able to give help to those at present below the level of Income Tax. Whichever way one examines the noble Lord's speech, therefore, it is a plea for the people who are already very well-off.

I have spoken about the desire of good parents to get the very best in education for their children. That is good for the individual child, but it is of the greatest importance also for the nation that parents ought to be able to get the best. Every child should be able to develop to the full the talents and skills that God has given it at birth. That is important. not only for the individual child and the happy life to which it will lead, but for the nation, which depends for its whole livelihood on what we can do as a great industrial nation.

For that reason also it would be a very good thing if the Chancellor of the Exchequer this year, not waiting until next year, could accept the very modest request contained in the new Clause. It would relieve harassed parents and would give to every child a chance of developing to the full all its abilities. We on this side do not take for granted that there should be special benefits for children who are born into better-off homes. We take for granted that every child is born equal and ought to have these chances. I beg of the Chancellor of the Exchequer and of his hon. Friends at the Treasury to give these points their serious and sympathetic consideration.

I understand that the new Clause relating to apprentices and their allowances is being discussed in this general debate. I should therefore like to press the case, which we argued not only last year but on two or three previous occasions, for similar treatment for the parents of apprentices as for parents of children undergoing full-time education, who are given a concession equal to £85 at the standard rate of Income Tax.

The Economic Secretary is as well aware of the arguments as I am. We discussed the matter fully last year and the hon. Gentleman was sympathetic to the problem which we posed. The 1938 Act recognised the existence of this problem, and the concession on £13 was given at that time. We then moved from the £13 limit to £26, and last year we asked for the full £85 concession to be made to the parents of apprentices.

The Chancellor of the Exchequer did not feel that he could go the full way with us, but he agreed to accept the principle of what we were saying and he increased the allowance to £52. I do not know whether it was the extremely brilliant speech of the hon. Member who moved the new Clause on that occasion or the obvious justice of the case which influenced the right hon. Gentleman. At any rate, he conceded the principle and suggested that the difficulty which made it impossible to go the full way was that the Royal Commission at that time had still not reported and it would be premature to equate the true allowances until such time as he had had an opportunity to look at the whole complicated problem in the light of the advice which would be submitted to him by the Royal Commission. The position, therefore, is that the gap was narrowed appreciably, and for that we are grateful. We now ask the Economic Secretary to go the whole way.

4.30 p.m.

I put it to the hon. Gentleman that, if he agreed to concede in full the £85, he would in fact equate the two claims, because where children win bursaries or things of that kind their parents are not taxed upon them, although they mean a concession to them of something like £300. I cannot say too strongly that we do not in the slightest degree suggest that there should be a levelling down. We believe that it is right and proper that, where a child is undertaking educational studies of that type, the parents should be given encouragement and should receive all the concessions which it is possible to give them.

The only point we are making is that it is now quite obviously unfair not to give these advantages to the child of a person who sacrifices quite a lot in the way of income from the child in order to ensure that he becomes a good craftsman and undertakes an apprenticeship which, at its termination, will not only serve that boy well but will serve the nation equally well.

We now have the advantage of the advice of the Royal Commission on the Taxation of Profits and Income in their Second Report (Cmd. 9105), in which we see the conclusions to which these distinguished gentlemen came. In paragraphs 187 to 192, they deal very adequately with this problem. They say:

"In the case of the child at an educational establishment, income accruing in the form of scholarship emoluments is not counted in reckoning his income for the purpose of the £85 limit, and the test that decides whether his parent is to receive child allowance in respect of him or not is the simple one of determining whether the child's total income, excluding these emoluments, exceeds £85."

That is the sort of thing which we were saying last year, and which we say now. We think it is right and proper that it should be the case. The Royal Commission also point out:

"But the apprentice comes under a different rule in that an income of less than £85 accruing to him would disqualify his parents from the allowance."

I know that the Economic Secretary to the Treasury realises the educational point here. In paragraph 189, the Report goes on to say:

"We cannot feel surprised that those interested in the position of the apprentice complain that there is no good reason for these distinctions. The cause of them, as we understand the matter, lies in the fact that the 1938 scheme for apprentices was intended to meet the specific case of the unpaid apprentice and was not intended to equate apprenticeship with general education. The figure of £13 allowed was meant to prevent an apprentice who was not altogether unpaid, in that he received something by way of pocket money, from being excluded from the category of those whose parents were entitled to relief. By the same reasoning, on the other hand, the value of free board, lodging or clothing had to be included in the computation of the value of the emoluments. The recent increases of the figure of £26 and now £52 appear to be no more than a recognition that the requirements of pocket money are now somewhat inflated."

That is a masterly under-statement, I should have thought, speaking on behalf of all the fathers present. In paragraph 190, the Report says:

"The distinction between the two oases wears somewhat thin when it is appreciated that an 'educational establishment' includes one that gives purely vocational instruction. But, given the common element in the two cases, we think that it is wrong, because it creates, needlessly, a sense of injustice, to disqualify the parent of an apprentice in any case in which the parent of a child receiving general education would not similarly be disqualified. We recommend accordingly that an apprentice receiving full-time instruction for the specified period (two years or more) should be treated in the same way of this purpose as a child receiving full-time instruction at an educational establishment."

Last year we reached the position in which the Economic Secretary to the Treasury, in replying to the debate, said:

However, I must also put to the Committee certain objections on the other side. We heard the usual thing about Royal Commissions, and that one should not shelter behind them. The Committee must recognise that there are great advantages in obtaining the advice of a body of this experience and knowledge and which is considering this particular problem."—[OFFICIAL REPORT. 11th June, 1953; Vol. 516, c. 584.]

We saw the point of the hon. Gentleman's argument, and we waited, with what patience we could muster, for the Report of the Royal Commission and for this year's debate on this very important subject. We now hope that the Government will recognise the very changed conditions in the sphere of apprenticeship, since the whole background of premiums and pocket money has gone, and will realise that in this age there is indeed very great competition between various types of industry for the services of our young men and women.

It is inevitable, if we are to maintain our ability to earn our living, that we must invest more and more in getting boys into apprenticeships and in encouraging parents not to hang back, as it were, from careers of that kind for their sons in favour of the higher wages to be obtained in unskilled industry, but to realise that, by putting their youngsters to apprenticeships in craft industries, they will ultimately reap the benefit, while the nation as a whole will also benefit.

I should have thought that in these days, when we have this competition, it was essential that we should keep abreast of events, and should make it obvious that we will not penalise parents who put their boys to apprenticeships in craft industries, as I am afraid we have been doing in the past. There is no politics in this; it is purely a matter for consideration by the Government as to the justice of the case we are making for the implementation of the £85 limit.

I should like to repeat that no argument was put from the Treasury Bench last year against the fundamental point which we made in this respect. It was purely a case of awaiting the Report of the Royal Commission, and indeed the Government accepted the principle of the claim when they agreed to advance the allowance from £26 to £52. Therefore, I cannot see a single reason for any further delay. I know that hon. Members opposite feel just as strongly on this matter as some of us do; in fact, some of them said so in the debate.

We therefore ask the Economic Secretary to say that the time has arrived when the Government fully agree that it is in the interests of the nation as a whole that we should invest more in producing good craftsmen, and that the change which has taken place in the conditions of apprenticeship now makes the ideas of 1938 quite out of keeping with modern events.

We hope the Economic Secretary will say that it is the determination of the Government to equate the two allowances in the cases of boys having full-time education and those serving apprenticeships. I hope we shall not be disappointed this time, and I also hope that we shall not have any splitting of the difference in order to arrive at something in the neighbourhood of £70. I speak for the whole of my party on this issue, and I hope the Economic Secretary will tell us that this time the Government agree to equate the two claims.

I wish to add a very few words to the debate in support of what has been said by the hon. Member for Newton (Mr. Lee). I would repeat what I believe was said last year—although I have no OFFICIAL REPORT before me—that there are no party politics in this issue. I feel that it would be wrong as a matter of principle to endeavour to implement piecemeal any of the proposals of the Royal Commission to which the hon. Gentleman made reference. I prefer that they should be dealt with at a later date, upon a more comprehensive basis.

My sole reason for intervening is to make two points, which follow directly from what the hon. Member for Newton said. It is often popularly supposed that the rate of industrial development and expansion, and of scientific progress, depend for the most part upon the money which may be invested in industrial concerns in the form of new capital. In my opinion, that is a lesser consideration, the more important consideration being to attract into general industry over a very wide range of industries, which I shall not attempt to delineate—a continuous flow of suitable young men, and in some instances of young women, as apprentices who will thus ensure that the rate of industrial and scientific progress is maintained in terms of skilled manpower and craftsmanship, both in the nationalised and the private sectors of industry.

Secondly—and this is a psychological factor of the utmost importance—the spread of popular education has meant that many parents who themselves worked for many years in industry regard apprenticeship as something less reputable for their children than secondary or grammar school education followed by university education. A French saying which was often used 30 or 40 years ago in very many applications was Il n'y a pas de sal metier. That is abundantly true today. It is often believed that there is something a little distasteful about a child leaving a secondary or grammar school and becoming an industrial apprentice. I believe that to be a wholly misconceived notion. We ought to do everything possible to encourage young men and young women to go into indentured apprenticeship approved alike by trade unions and employers' associations. The discrimination which still exists today in the allowance for apprenticeship—although my right hon. Friend the Chancellor increased the allowance last year—and the allowance for a child undergoing full-time education at a higher educational establishment is a contributory cause to the insufficient rate of flow of apprentices into industry.

4.45 p.m.

While I am opposed to dealing on a piecemeal basis with the recommendations of the Royal Commission, I remind the Committee that we are just as concerned on this side of the Committee as are hon. and right hon. Gentlemen opposite about the position of apprenticeship in industry generally. We hope that next year my right hon. Friend the Chancellor of the Exchequer will remedy the anomaly that exists in allowing relief of only £52 in the case of apprentices, and £85 in the case of young men and women undergoing full-time education.

The hon. Members for Newton (Mr. Lee) and Kidderminster (Mr. Nabarro) have made very important speeches. I wish I had the opportunity of developing at length the serious point that the hon. Member for Kidderminster has just made about the recognition of industrial apprenticeship as comparable to apprenticeship to the learned professions via the universities.

I wish to raise a narrow point which the Chancellor will find embodied in a proposed new Clause standing in the name of some of my hon. Friends, and which asks him to make a small contribution by way of tax concession to removing one of the anomalies which exist as extra burdens on the parents of children suffering from disabilities. Section 212 (1) of the Income Tax Act, 1952, which is the main Section from which all our discussion flows today, helps parents who have bright children who go on for further education. That is right and proper.

When a child of 16 becomes a wage-earner, tax relief in respect of that child ought to be removed, but if the child stays on at a grammar school, and goes on to a university or some other kind of post-secondary training, he does not earn money, even if he has a scholarship or a bursary or some kind of grant. He still is a financial liability to his parents in college or term time, and certainly during vacation. The father gets relief to the extent of £85 at the standard rate. Moreover, if the bright child is in receipt of an income up to £85, that money is disallowed in conceding to the parent his tax relief. All that is excellent. Indeed, we want to raise the £85 to £100.

Unlike the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke), we believe that while special and unjust burdens are being carried by parents of children in income ranges below which we can help in our Finance Bill proposals this time, that fact should not stop us from trying to tidy up and make more just the relief that we give inside the upper income group.

Having called the attention of the Committee to what happens to the father of the bright child, I now want to refer to children who are at the other end of the intellectual scale. For instance, there are the spastics, about whom hon. Members can read in last night's Adjournment debate. There are children suffering from cerebral palsy, epileptics and mentally backward children, who are in every way a complete liability to their parents. Under the present Income Tax law, these children after the age of 16 are classed as dependants. The parent gets dependant relief, which is only £60. If we give tax relief of £85 in respect of the able children proceeding to further education at a university, the same relief at any rate ought to be given to the parents whose children are a complete liability because they do not go out to work or go on to further education.

Few people other than the unfortunate parents who carry such burdens realise what a tremendous disadvantage is suffered by a handicapped child. I have in mind a friend of mine, the father of an epileptic son, who literally can never be left alone. When he goes out into the street, his father or mother must be with him. The worst of the spastic children need constant care and attention by their parents for 24 hours a day. The mentally defective child is the worst, because although it grows up it remains a child, no matter at what age, needing all the care from its parents that a child of three years or four years of age usually gets.

These handicapped children bring nothing into the home. Dependants, for whom Income Tax relief is given, are allowed to earn a maximum yearly income of £85 without interfering with the qualification of the person concerned to get the relief of £60. But the handicapped child cannot earn any money, makes no contribution to the household and is a complete liability. All that it has to give to the parents is the gratitude, affection and love which is one of the most remarkable features of the handicapped children I am speaking about who, handicapped as they may be, do appreciate what the parents are doing for them.

Even more curious is the fact that if the handicapped child goes to a special school for spastics, for the blind, for the deaf, for the epileptic or the cripple, the original Section stands and the parent is entitled to the full tax relief. The handicapped child is continuing its further education and is entitled to the £85 relief which the bright child going to a university is getting, even though, so far as the parent is concerned, the handicapped child in a special school is a less financial as well as less physical and mental liability than if he were at home. The cost to a parent of keeping the child is less when the child goes to a special institution, yet the parent gets a tax relief for a child who goes to a special school.

Not all handicapped children are in a special school. Some are too seriously handicapped to go to any special school in the country. If they are classed as ineducable there is obviously no special school to which they can go. Moreover, in respect of most of the disabilities which exist among children, we are still very short of special school provision. If it is the State's fault that there is not a special school to which a child can be sent, it is certainly unjust to penalise the parent who cannot send his child for special education because provision is not made.

If Members of the Committee will look at the Ministry of Education's latest Report, they will find that we are short of special school accommodation for 20,500 children. Of these, 12,500 are educationally subnormal, so that to penalise financially the parents of an educationally subnormal child because they have not sent the child to a school which does not exist is obviously fantastically wrong. I hasten to say that the concession—the narrow proposal I am speaking about—would not cost 20,000 times £20 a year but a much smaller sum, because many parents of handicapped children are below the income range at which this benefit would operate. It would be concerned with only a very narrow group, between certain ages.

Sometimes the parent will not let the child go to a special school or a mental institution. It is very easy to be glib and to say that a parent ought to do so if some kind of efficient preparation or treatment for the handicapped child exists, or else get only the concession which is given at present. It is very easy to be wise about someone else's parental problems.

The mother who devotes herself to a helpless child is sometimes afraid, having looked after, protected and sheltered the child for five or 10 years, to let it go into whatever may seem to be theoretically the best special institution. Some of us try to persuade mothers, when the opportunity arises, to conquer that fear, and to send children to the special provision which is made, but it is not so easy as it might seem, especially as the provision for various kinds of handicap is not uniformly good.

It is often the most devoted parents and the worst cases of handicapped children who suffer the particular injustice which we are trying to get rid of this afternoon. I admit that the new Clause I have spoken of represents a microscopic amendment. It does very little, and its help will go only to parents whose incomes are large enough to make the concession worth while. But it will help. and it will be some recognition on the part of the Chancellor and this Committee of the valuable work being done by parents who are unfortunate enough to have a handicapped child, and who are proud enough, or affectionate enough, or skilled enough, to handle the whole question of the care and education of the child themselves.

I admit that it is part of a much bigger problem that such parents, if their income is low, lose all kinds of benefits. They lose the family allowance when the child reaches the age of 15 years and, if they are poor, they have to wait until the child is 16 before National Assistance benefit can be claimed. We cannot solve that problem inside this new Clause and in this Bill, but I feel sincerely that if I have stated the case clearly not a single Member of the Committee can fail to be convinced of the necessity to remove what is in the first place an injustice, and an injustice which is being done to some of the finest and most unfortunate parents in the community at the present time. I hope that whatever the Chancellor does on the broad request which is being made, he will at least concede this very narrow point.

I wish to support my hon. Friend the Member for Newton (Mr. Lee) and also the remarks made by the hon. Member for Kidderminster (Mr. Nabarro). I was very interested to hear the hon. Gentleman refer to the fact that the apprenticeship in engineering, or indeed in any trade, was at one time, in a certain respect, rather despised in comparison with entry into a profession. There is still current today an idea that apprenticeship into the engineering industry today is similar to what it was when my hon. Friends the Members for Newton and Leeds, West (Mr. Pannell) and I were apprenticed.

The engineering industry today is a very complicated one, and a successful apprenticeship in modern engineering practice and technique calls for something more than a boy who is in a sense stupid. When my hon. Friends and I were apprenticed, we did not need such great technical or mathematical knowledge as a boy being apprenticed today requires. Employers in modern engineering plants, especially in the Midlands and in Scotland, are spending a lot of money in providing training in the factory and indeed in teaching mathematics in the factory in order to provide for the industry the engineers and technicians who will be needed in the future.

I still remember how a few years ago it always struck me as being rather stupid that when a young lady I knew who succeeded in winning university awards valued at £285 or £305 per year the scholarships were not taken into account when the parents claimed Income Tax relief, and she was in residence at a university for about 28 weeks in the year, whereas in the case of a boy apprentice getting £2 a week and living at home, and who had to go to a technical school, to have instruments bought for him and who had to acquire technical books, his parents were allowed no Income Tax relief at all for him.

5.0 p.m.

That always struck me as being very stupid indeed. Here were parents getting Income Tax relief in respect of a daughter whose income from scholarships for 26 weeks in the year when in residence at the university was higher than theirs. The same parents whose son was an engineering apprentice and who was receiving £2 a week, would receive no Income Tax relief at all. That strikes me as a most stupid anomaly, particularly when the demands made on an apprentice in the matter of education and the acquisition of instruments, which are very expensive, are so high.

It is about time that engineering apprentices were put on the same footing for purposes of Income Tax relief as a student undergoing full-time education. Not long ago, I went round a factory in Glasgow which is running its own school on the premises for the purpose of teaching the boys the rudiments of engineering practice; but I was told that even that was not a sufficient incentive to boys to become apprentices.

I am afraid that today there are many boys, both in engineering and in other fields, who are being pushed and squeezed into wrong careers because not sufficient security is being given to them in the engineering industry. When the hon. Member for Kidderminster talks about boys not becoming apprentices because apprenticeship appears to some to be less dignified than other professions, I would assure him, as one who was an apprentice, who is the father of two children, and who lived in South Wales between 1924 and 1936, that I and many of my colleagues in the engineering industry and many of my friends in the mining industry used to say, as a result of our own experience between the two wars, that if we could help it none of our children would enter those industries. It was not because we felt that members of our trades had a lower status than articled clerks or civil servants, but simply because of our own personal experience between the wars. That is the real reason we are short of engineering technicians today.

Let us be careful when we encourage boys to become apprentices that we give them the assurance that they will not undergo the same experience as their fathers, because, unless we do we may push the industry back to where it was 20 years ago. I ask the Economic Secretary to give serious consideration to the matter of the placing of apprentices in modern engineering plant on an equal footing with those undergoing full-time education, Such boys have to be students and have to acquire as much knowledge and develop as much capacity in observing very intricate engineering problems as university students. We have to place those apprentices, for the purpose of Income Tax relief, on the same level as full-time students.

I rise to support the case which has been made by my hon. Friend the Member for Newton (Mr. Lee) and others for placing apprentices in regard to Income Tax relief on precisely the same footing as all other students. This is a matter which has the support of both sides of the Committee, and the only argument that has been adduced against it was that of the hon. Member for Kidderminster (Mr. Nabarro), who said he did not think that the Chancellor of the Exchequer ought to deal with this matter in a piecemeal fashion. I hope that the Chancellor will not accept that argument.

We have been urging this matter year after year, and for the last two years have been asked to wait because it was under consideration by a Royal Commission. That Royal Commission has now considered the matter, and has completely vindicated everything that we have been urging. It is not good enough for the hon. Member for Kidderminster to say that the Chancellor ought to wait another year in order to make a comprehensive review of this aspect of legislation. It is a matter which can quite easily be segregated from all the other recommendations of the Royal Commission.

The findings of the Royal Commission come out firmly, fully and explicitly in support of putting Income Tax relief for apprentices on precisely the same footing for all other students. As my hon. Friends have urged, the case for that is overwhelming. I am convinced that it is not only a social injustice to maintain this discrimination, but is also a national disservice to do so. The burden on the parents is precisely the same whether the boy is an apprentice or a university student.

To maintain in these days that there should be some discrimination based on social status between the two is quite false, quite unsound and very unwise. Indeed, as my hon. Friend has pointed out, the need for the recruitment of technicians into the engineering industry and into industry generally is one of the foremost national needs at the present time. We require every possible skill and every possible perfection of technique that we can get. This may be only one modest method by 'which we can contribute to that end, but it can be said in its favour that it will not cost the Exchequer a great deal. For these reasons, I raise my voice in support of what has been said in the debate and hope that the Chancellor will accept the proposal.

This is a most important and an extremely interesting subject, and the speeches made from both sides of the Committee have been of great help to the Government in trying to formulate a view on what is, of course, an extremely complex section of our Income Tax law. It is bound to be so. because it probably expresses better than any part of the law the eternal conflict between having a tax system which is simple and one which does justice in the multiplicity of individual cases. It is terribly difficult to try to come to a correct and fair balance between those considerations.

My right hon. Friend the Chancellor of the Exchequer is very grateful indeed to the Royal Commission for the extremely valuable work it has done on this subject, and for the most interesting, helpful and thoughtful recommendations which it has put forward. My right hon. Friend considers—indeed I am sure we all consider—that its recommendations should have the most careful study by all Members of this Committee and by the public as a whole. My right hon. Friend also considers that now that we have the Report of the Royal Commission, and therefore an opportunity really to tackle this complicated branch of the Income Tax law in its entirety, it would be unwise to tackle it except on a comprehensive and logical basis. I will try to explain one or two of the reasons why my right hon. Friend takes that view.

In his Second Reading speech my right hon. Friend said clearly to the Committee that he did not feel that he could this year implement any of the recommendations of the Royal Commission's Report, for a number of reasons. In the first place, there inevitably arises the question of cost, and, as the Committee is aware, my right hon. Friend this year is working to an extremely narrow margin. He does not feel that he has any money to spare for large tax concessions. That is the first point.

Will the hon. Gentleman deal with the cost of each of these proposals?

That is my intention. The next point, of course, is that the Royal Commission did not indicate any particular order of priority in its recommendations which would guide us in the selection of certain recommendations rather than others if we should decide contrary to the views of my right hon. Friend, to pick out some in advance of others.

Then it is true, of course, that the Report was received only very recently and after my right hon. Friend had made up his mind on the main aspect of his Budget proposals. I do not think that either in this Committee or in the public mind generally has there been time for study of the complicated matters which arise in the Commission's Report. These various matters are both complex and interlocking. Many of the suggestions put forward are designed to put right what are considered to be anomalies, but most of those anomalies are so regarded because of comparison with other individual cases.

We often say, "Why should Mr. A in certain circumstances get relief when Mr. B. does not?" of course, if one has an anomaly—what appears to be an unfairness between one citizen and another—one should try to put it right, but in doing so one may find that, unless one deals with the whole situation at the same time, another anomaly is created. I will try to explain why as I go on.

Another point is that the Royal Commission's Report does envisage, together with a number of reliefs of taxation, certain increases of taxation and withdrawal of concessions or allowances that are at present made. I quite understand that it is not within the rules of order for hon. Members opposite to put down Amendments increasing taxation or withdrawing concessions, but the fact is that we are having to consider this afternoon some of the recommendations of the Royal Commission without others which, in the Report, go together as a single comprehensive whole.

Then, of course, it is true that within the Report of the Royal Commission there is a majority and a minority view on some points, and particularly on the major point of child allowance. I think it is only right that opinion generally should have a chance to weigh up and consider the relative merits of the two points of view.

Would not the hon. Gentleman agree that there is an area of common ground between the minority and the majority views? They are not completely in contradiction.

But the area of common ground is far from coincident with the ground of the suggestions put forward by the right hon. Gentleman. In fact, I think that so far as the main proposals are concerned the flat rate increase to £100 for child allowance is quite different from either the majority or the minority proposals of the Royal Commission. That does not necessarily mean that it is wrong, but it is not the same thing.

Perhaps I may take the four main points of the Clauses which we are discussing. The first is the question of raising child allowance generally from £85 to £100. I am quite certain that on both sides of the Committee we always feel that when there is money available for relief of taxation those people with children should be among the very first claimants. They are not necessarily a first priority—after all there are the old people and others—but people with large families are among the first claimants. I would not for a moment dispute the arguments of the right hon. Gentleman who, in these matters, has a personal interest numerically greater than mine, and there is a strong case obviously for arguing, as I think the Royal Commission pointed out, that the man with a large family has a considerable claim for greater taxation relief than at present exists relative to the bachelor.

We should however remember that the child allowance has recently been increased. It was £60, it went down to £50 during the war, but has since increased in three steps to £60, £70, £85 and is now at the highest point it has ever been. There has therefore been quite a substantial increase.

Perhaps the Economic Secretary would agree that in relation to the changed value of money it is really probably lower today than before the war?

I quite agree, but if we bring in the question of changed value of money we shall get into rather wide fields.

Quite frankly, the main problem in this case is the cost. In a full year it would cost £16 million; £13 million this year and £16 million in a full year. I am referring now to the first Clause, which seeks to raise the allowance from £85 to £100. £16 million in a full year is really a rather large sum, and certainly larger than my right hon. Friend could contemplate at present.

Then there is the question of tapering which is raised in another proposed Clause. That, again, is an interesting proposal and, I think—in theory at any rate—clearly has a very strong argument in its support. It does seem anomalous that if a child's income is £85 there should be a full allowance, but if it reaches £86 the allowance should stop altogether. Nevertheless, I think that the argument put forward is open to the objection that, if fully carried out, it might be found that under this proposal a parent might be getting a tax relief in respect of a child receiving an income large enough to be taxed itself.

But the chief difficulty, frankly, is the administrative difficulty. The whole P.A.Y.E. coding system is based on our being able to assess with a fair degree of certainty before the Income Tax year begins what are the proper Income Tax allowances of the individual. Where one has a definite limit of £85 one can, at the beginning of the year, tell with some certainty whether the child's income will be above or below the limit. Under the tapering proposal it would be difficult to know what would be the right allowance to give to the parent. It would therefore mean that before the Income Tax year began inquiries would have to be made of the parents concerned by the inspector of taxes as to likely level of a child's income during the year, and at the end of the year there would have to be check-up adjustments.

I quite agree that these administrative difficulties would arise, though we have a lot already in connection with the operation of the child allowance. No inspector can predict whether a child will earn sufficient in the first year of employment to disqualify the parent from receiving the allowance. All that retrospective adjustment has to be made now. I am not suggesting that it is not inconvenient both to the Inland Revenue and to the taxpayer, but the proposal would not introduce such an entirely novel set of difficulties as the hon. Gentleman would appear to suggest.

No, I suggest not that the difficulties would be novel but that they would be more extensive. This would undoubtedly multiply the inquiries to be made. It might involve the employment, I am informed, of another 450 clerks. As our P.A.Y.E. system now works, it would introduce very great complexities and more administrative work. I do not say that that is a final reason why it should not be adopted. I am putting forward some of the practical difficulties which weigh against the immediate acceptance of these proposals. That deals with the tapering proposal.

I come now to the case of the disabled child, which was mentioned by the hon. Member for Southampton, Test (Dr. King) in a most interesting speech to which I listened with great appreciation. I recognise that here we are dealing with extraordinarily difficult cases, and the hon. Member is right to say that it is unwise to tell parents what they should do—although we often think that we know—with their children. When we come to consider, as my right hon. Friend will consider, the recommendations of the Royal Commission here, quite clearly, is one with a strong claim on our sympathies. However, I would suggest that to accept the recommendation as it stands by itself would give rise to other difficulties, and is an example of what I mean by the interlocking character of some of these matters.

The proposal is that where a child is incapacitated the allowance age should be raised from 16 to 21. The question at once arises—if up to 21, why not beyond? The reason given by the Royal Commission is that beyond that point a parent can, by a settlement, divest himself of part of his income and hand it to his child. That may be true in a number of cases but not in all. There might be many cases where it was not practicable and might not be desirable.

There is also the case of other relatives who are supporting incapacitated children. Suppose an uncle takes over where the parents cannot do it. What about other dependent relatives? By increasing this dependant allowance in the way that hon. Members suggest, would we not create another anomaly as between a dependent relative who is getting £60 and an incapacitated child who is getting £85 up to the age of 21?

I am not putting forward these arguments as reasons for rejecting the hon. Member's main principle. I am pointing out that it is not easy to accept this sort of recommendation immediately without careful consideration of all the other anomalies which may be created or the interlocking factors which may arise.

Would the hon. Gentleman give the cost of this proposal?

The cost of the disabled child concession would be very small. I could not give an accurate figure, but it would be negligible. It would be hard to give an estimate of the cost of tapering; I am told that the figure might be £1 million or £1½ million a year, but it is difficult to estimate. In the case of apprentices, the figure would be pretty small.

The question of apprentices has been raised already in previous years by the hon. Member for Newton (Mr. Lee), and I listened with great interest to what was said by my hon. Friend the Member for Kidderminster (Mr. Nabarro) and the hon. Members for Dunbartonshire, East (Mr. Bence) and for Islington, East (Mr. E. Fletcher). Obviously, this is a matter on which there is a great deal of feeling on both sides of the Committee. Here again, as in the case of the disabled child, there is a strong claim for our consideration. The proposed new Clause does not go the whole way with the Royal Commission in this matter, because apart from agreeing with the thesis that the limit should be £85 and not £52, they also wanted to deal with the anomalous situation relating to board and lodgings and the repayment of premiums, which are two matters which I should have thought we should deal with at the same time if we are going to try to deal with the earnings limit.

In the case of apprentices there is also a practical point to which I referred last year and which is related to this question of taper. I am told that nowadays there are few apprentices getting less than £85 a year, so that in practice to increase it from £52 to £85 would not affect many people. But a lot of people do come in the range between £85 and, say, £150. Therefore, clearly there would be strong and reasonable pressure to apply a tapering provision in the case of apprentices.

If we could do this, I think there would be a strong case for doing so. But, as I have explained—and this once again is the interlocking factor coming into play—we cannot see how we could introduce a tapering provision of this kind without great administrative difficulties. The question of helping apprentices—I do not think there is disagreement in principle on this matter—and introducing what hon. Members have in mind is related to all these other different factors that arise in the Report of the Royal Commission. I have tried to explain the attitude of my right hon. Friend to all these matters—

Before my hon. Friend leaves the question of apprentices, may I ask him to bear in mind that all these matters that we are considering are concerned with spending money in the form of giving tax relief, except the matter relating to apprentices, which is a question of earning money by stimulating greater production, and as production is paramount, can my hon. Friend give first consideration to this apprentice matter?

That is just what my right hon. Friend does not want to do. He does not want to give first consideration to any one of these cases because, strong as is the case for this proposal, a strong case exists for the view expressed by the hon. Member for Southampton, Test. My right hon. Friend said in his Second Reading speech that it was not right to pick out any particular recommendation in the Royal Commission Report, because he wants to study the whole Report between now and next year, and he will in the course of that study be assisted by the expressions of opinion from hon. Members on both sides of the Committee on these important matters.

The hon. Gentleman has said that there is not a lot involved financially, but would he not agree that between now and next year the parents of many thousands of boys leaving school will have to come to a decision about their future? I should have thought that if it was possible for the Government to accept this proposal they would be making a most important contribution to the labour force which is now undertaking apprenticeship? I should have thought that to wait until next year would canalise many thousands of youngsters out of apprenticeship into, perhaps, unskilled jobs, or jobs which will not give much of a return to this nation.

The hon. Gentleman has a strong argument there, and he has, indeed, advanced very strong arguments on this point before now. My right hon. Friend has weighed them all before coming to his decision, but his general attitude on this question and on these related questions is that he wants to study the Report, and he will study the views of hon. Members on both sides of the Committee before coming to a conclusion as to what should be done about these matters.

In view of the cost of some of the proposals and the essentially interlocking nature of all of them, he does not think that he would be doing right by accepting the recommendations of the Royal Commission this year or by picking out some recommendations in advance of others. He wants to have time for himself and for the country as a whole to study all these matters with the great care that they undoubtedly deserve.

I think this is an exceptionally disappointing answer. This Government may be great in some respects, but it is very weak on the matter of making concessions—even small concessions which it would be within their power to make. Three new Clauses have been discussed together, and each of them has great merit. They have all been very well presented, and no opposition was put forward to any of them before the Economic Secretary's speech. The case about apprentices was extremely well presented by my hon. Friends the Members for Newton (Mr. Lee) and Dunbartonshire, East (Mr. Bence), both of whom spoke with practical knowledge of the matter, and the Economic Secretary admits that the cost would be negligible.

Not for apprentices.

What is the figure for the apprentices proposal then?

I could not give the exact figure, but it would almost inevitably lead to tapering, and with tapering it would cost £1 million or £1½ million.

The hon. Gentleman mentioned a figure, which I will come back to in a minute, for the proposal to increase the child allowance. On the question of the disabled child, he said that the cost would be negligible, and then I interjected and asked what would be the cost of the apprentices proposal and I understood him to say that that would be negligible also. He did go on to make an argument to the effect that it would not—

I thought my hon. Friend said that it might amount to £1½ million in his original reply on apprentices.

We only want to get the facts. The Treasury Bench have access to these estimates. I thought the figure of £1 million arose on the question of tapering, but this proposal does not involve tapering. The proposal made by my hon. Friends the Members for Newton and Dunbartonshire, East are to raise the figure from £52 to £85.

My point was that, in our view, to accept the apprentices new Clause would inevitably involve tapering, and the cost would be £1½ million. We could not do one without the other.

I will not pursue that last argument. I should have thought that it was possible to accept the proposals on the Paper as an instalment of reasonable justice. Particularly should it be easy to accept, because the Economic Secretary argued that a number of apprentices would not be much helped by it, and that would further reduce the cost below what it might have been expected to be had it been thought that there was a wider range of applicability. However, when all these estimates have been passed to and fro, it remains true that these are relatively small from the point of view of loss of revenue.

I should have thought that, making all allowance and looking at everything before doing anything—which is obviously a philosophy which can be carried dangerously far—it would have been worthwhile for the Government to have made these two tiny concessions this year. The cost would have been very little. Their acceptance would have created more good will and would have done a little good to a fair number of people. I hope my hon. Friends will express in the Division Lobby their view that these minor concessions might well have been made.

5.30 p.m.

I now pass to the third proposal, which is rather more substantial in terms of finance. This is the proposal to increase the child allowance from £85 to £100. There is a very strong case for this proposal. The noble Lord the hon. Member for Dorset, South (Viscount Hinchingbrooke) contributed to our debate on this subject, and I am glad that he has now returned to the Chamber because I want to comment upon one or two things which were said by him. I think it is generally accepted—as the Royal Commission says; and all those Members who have mentioned the subject this afternoon have said it—that there is still far too wide a gap between the tax liabilities of the person without children and those of the person with children, and, increasingly, those of the person with a large family below the earning age.

No one has controverted that statement. The question we have to decide is, what is the most satisfactory way of narrowing that gap? The Royal Commission made certain proposals, including a differential element. It proposed that in certain conditions greater tax relief should be given in respect of the child of the richer man than of the child Of the poorer man. We reject that proposition. We consider it to be both more just and more simple that every child within the field of applicability of this concession should count for one, and that the relief should in all cases be the same.

We are now discussing only Income Tax. Much might be said in relation to the general thesis put forward by the noble Lord the Member for Dorset, South—with much of which I would agree—hut Income Tax relief alone cannot be the instrument of narrowing the gap to the extent that many of us would desire, and we are precluded by the rules of order from discussing other methods. The noble Lord did not bring out in his speech the fact that the proposal of my right hon. Friend the Member for Battersea, North (Mr. Jay) suggests an exactly equal financial benefit for all children, provided their parents are paying some Income Tax—subject to a taper in the marginal zone. It would apply equally to a person earning £1,000 a year as to a Surtax-payer who was receiving many thousands of pounds a year. They would all receive the same advantage.

No injustice would be done to prolific Surtax-payers; they would be entitled to the same advantage as persons at any other level of income, providing that the latter had to pay some Income Tax. That seems just and right. I know there is an argument about the greater cost of education that may be incurred, but that cannot properly be dealt with by way of Income Tax. There may be some other way of dealing with it, but the only way by which we could do it in the field of Income Tax would be to adopt the objectionable principle of giving a larger Income Tax relief in respect of the child of the richer of two taxpayers. We say that this would widen still further the field of inequality which it is our object to narrow.

My right hon. Friend said that he would say something about the proposal in regard to incapacitated children.

I thought that I had covered that. I said that it was a most desirable proposal. I intended to add that it stands on the same page—page 70—of the Royal Commission's Report, and is recommended by the Commission in the same terms as those used by my hon. Friend the Member for Southampton, Test (Dr. King) in his admirable speech. It stands next door to the proposal with regard to apprentices. In my judgment, both proposals, having the authority of the Royal Commission behind them and costing such small sums of money, are worthy of being adopted forthwith.