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Volume 980: debated on Tuesday 4 March 1980

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Motion made, and Question proposed, That this House do now adjourn.—[ Mr. Cope.]

1.9 am

I am grateful for the opportunity to speak on a subject that will be of concern to more than 3 million widows in the United Kingdom. The House may remember that in my maiden speech I devoted a certain amount of time to the problems faced by widows in general and working widows in particular. I became more aware of the problems of widows as a result of the general election campaign. My experience was not unusual. I am certain that the vast majority of candidates representing the three major political parties would have found during that campaign that widows within the various constituencies approached them asking for their support for the case put forward by the National Association of Widows.

My concern, both during the general election campaign and subsequently, has been strengthened largely because of the large number of widows who work in industrial constituencies such as mine. Before I develop my theme and highlight some of these problems, it is important to emphasise that similar problems are faced by one-parent families, a matter of which I am becoming increasingly aware.

I am naturally pleased that the Minister who is to reply to the debate is my hon. and learned Friend the Minister of State; because of his close interest in matters of this kind I am confident that he will already be aware of much that I wish to say. Because of his knowledge of the work of the National Association of Widows, I am equally certain that the association will have earned his respect as it has earned mine, and I hope that this will prompt him to give me a favourable reply.

A woman immediately becomes a single woman for tax purposes as soon as she becomes a widow. The single person's tax allowance is £1,165. That compares very unfavourably with the married man's allowance which is currently standing at £1,815. If the man's wife works, both partners can enjoy the single person's allowance of £1,165 plus two salaries.

A widow has one salary plus her widow's pension, a maximum of £23·30 a week, with a tax allowance of only £22·40 a week. This effectively means that should a widow continue to work after her husband's death, or find she has to go to work, she will be taxed on every penny that she earns. Yet she still has the same overheads as when her husband was alive. She will still have to pay the rent or the mortgage. She will still have to pay the domestic rate to the council. She will still have to feed and clothe herself and pay for heating, lighting, and so on. Very often these expenses do not diminish on the death of a husband.

Like many hon. Members, I was delighted that in the last Budget my right hon. and learned Friend the Chancellor of the Exchequer exempted the whole of the war widow's pension from tax. Although there is a great deal of sympathy both here and elsewhere for those who suffered such a tragic loss as a result of their husbands being killed in the service of their country, I argue that outside the war there are many deaths that are no lfess tragic, be they at work, in the home, in a car, or wherever. The sense of loss is exactly the same for the widow, and she has the unenviable task of trying to start a new life for herself and possibly her family. If it is right to exempt war widows' pensions from tax—and it is—why is it wrong to exempt other widows? Cannot the Chancellor consider exempting part of the pension from tax in precisely the same way as previous Chancellors began to exempt the war widow's pension?

I spoke earlier of the circumstances in which a widow may find that she has to go out to work to enable her to make ends meet. There are, of course, other circumstances in which a widow may wish to go out to work through choice. there are numerous examples of widows going to work for purely therapeutic reasons. Irrespective of the motivating reason behind the decision to work, the widow should not be penalised by being taxed on every penny that she earns.

This brings me to my second suggestion, which is an alternative to exempting some of the pension from tax. Could not the Chancellor consider the introduction of a special widow's tax allowance to fall approximately halfway between a single person's and a married man's allowance?

Cognisance is already taken of the fact that a widow may have to bring up children within the family home. If those children are under 19 years of age, an additional tax allowance of £650 is allowed, and rightly so. However, no recognition is made of the fact that the financial commitments of the family home still have to be met or, more to the point, that the husband might well have died when he was at the peak of his earning capacity. If the widow has then to go out to work, or chooses to do so, there is no chance that she will start employment at the peak of her earning capacity. Quite the reverse; she may be lucky to find employment at all. If everything else that I say is forgotten, I beg the House to remember that widows do not want charity. They want to ensure that they are able to maintain their spirit of pride and independence and to take their rightful place in society.

So far I have dealt with the way in which widows are discriminated against for tax reasons. I now wish to turn to other anomalies that adversely affect widows. The most glaring example concerns the widow's allowance, a benefit which is paid for the first 26 weeks of widowhood, provided that national insurance contribution requirements are met and which is the only short-term benefit which is taxable.

Will my hon. Friend agree, in his strong and logical condemnation of the present system, that widows, particularly new widows, are the most discriminated-against members of society? Will he not also agree that as we continue moving towards a more civilised society we should recognise that a widow has all the problems of the married family without the advantage of the male partner to look after her interests?

I am most grateful to my hon. Friend for his support for the case that I am making. I think that there is an answer to the overlap of benefits. I simply believe that they should be free from tax.

The second anomaly concerns those widows who pay full national insurance contributions and yet do not receive the benefits for which they have contributed. A widow in receipt of a full pension of £23·30 will not receive sickness or unemployment benefit, or industrial injury benefit. If the widow in receipt of an age-related pension is paying full contributions she will receive only the difference between the two. The National Association of Widows has evidence of a widow who was pregnant when her husband was killed and who had paid full national insurance contributions for all her working married life but was refused a maternity grant because she was then in receipt of a widow's allowance. That is abhorrent.

Further evidence could be supplied of a widow who was taken ill and awarded invalidity benefit on her own record of full national insurance contributions. This benefit was withdrawn immediately she became a widow, because she was awarded a widow's allowance. Those widows not entitled to receive sickness or unemployment benefit because they are in receipt of full widow's pension should not be forced to pay full national insurance contributions. That is virtually taking money under false pretences.

The House should be reminded that a childless widow under 40 years of age receives no pension and if widowed between the ages of 40 and 50 receives only a reduced pension. Do the Government assume that widows under the age of 40 will remarry? What right have they so to decide? If a woman has had a very happy marriage, often she would not wish to remarry, for obvious reasons.

The Government also assume that because child benefits are withdrawn when the child reaches 19 years of age, a child could be deprived of the opportunity of achieving higher qualifications. These are some of the main financial problems facing widows. To return to the point that I made earlier, I make no apology for the fact that the main plank of my platform is to fight for fairer tax treatment.

Successive Governments have chosen to tackle the problems of widows by increasing their pension. Obviously, while this is welcome, I hope that I have demonstrated that by increasing the pension, which is, more or less, in line with the single person's tax allowance, there is not, and never will be, any incentive or reward in a widow working.

The House will be grateful for the opportunity to discuss this issue. I hope that the Minister of State will bear in mind the support given by so many of my hon Friends this evening, in spite of the financial restrictions.

I am grateful for that observation.

Another vagary is that a pension increase in April which is not paid until November is virtually valueless by the time it is received. The time is long overdue for the ending of discrimination against widows by the Treasury and the Department of Health and Social Security. I hope that my speech will ensure official recognition of widowhood as a tragic but honourable status.

1.21 am

I congratulate my hon. Friend the Member for Rossendale (Mr. Trippier) on raising an important subject. I recognise, as does my hon. Friend the Member for Watford (Mr. Garel-Jones), that this subject moves the whole House. The evidence of that is that about a dozen of my hon. Friends have chosen to stay at this late hour to listen to the important contribution by my hon. Friend the Member for Rossendale. He has a long and honourable record. We all recall his maiden speech, in which he discussed the problem. He is a member of the all-party committee on widows and one-parent families. He has previously drawn the Government's attention to the problem. It is a matter of great concern to this and all Administrations. I have received a delegation from the National Association of Widows, led ably by my hon. Friend the Member for Reading, North Mr. Durant), and we have studied the widows' charter with care.

I am precluded from anticipating the Budget. That is a melancholy restriction because I should like to cover the range of problems that were so lucidly and eloquently dealt with by my hon. Friend the Member for Rossendale. He will understand my constraints. I shall touch upon the dimensions of the problem so that the House may judge the confines within which any Administration must consider what, if anything, they can do for widows. I recognise that the year of death poses particular problems for widows. Both the emotional and economic problems of readjustment must be faced. The expenses of a household are not necessarily halved on the death of a husband.

An excellent speech has been made by my hon. Friend the Member for Rossendale (Mr. Trippier) and I hope that the Minister will convey the feeling of the House to the Chancellor of the Exchequer, because it is worthy of his attention.

I assure the House that the Chancellor will be informed of the debate. I shall convey to him the points raised.

We recognise that the year of death is a year of stress and difficulty for widows. The expenses of a household are not automatically halved by such a sad event.

To put the dimension of the problem in its true perspective, I must stress that a family would not, in fiscal terms, be worse off in the year of death. The husband would have received his full married allowances for that year, and there is no clawback on his death. The widow will receive a full single person's allowance, and if she has a child she will receive an additional allowance. In crude fiscal terms—I emphasise "fiscal", as it is only one small aspect of the problems faced by a widow—the family would be slightly better off.

My hon. Friend touched on the widows' allowance paid for the first 26 weeks of widowhood, which, as with all short-term benefits, is subject to tax. That matter was raised at Question Time not so long ago. As I said at that time to the hon. Member for Gateshead, West (Mr. Horam), the anomaly could be cured in two ways. It is not for me to anticipate in which way, if any, my right hon. and learned Friend may choose to approach the problem.

I touch briefly on the position of a working widow. It is not strictly accurate to say that a working widow is taxed more heavily than a married woman. A working widow has two sources of income—her widow's pension and her earnings. A married woman has only a single source of income, namely, her salary. Naturally, the quantum of tax would be a little different. The new PAYE arrangements that are to be applied to pensions do not affect in any way the quantum of tax payable.

My hon. Friend made an interesting suggestion—one that has been made before by the national association—that there should be a special tax allowance for widows. If a widow were to receive more than a single person's allowance, plus any additional allowance for children, she would, in effect, be receiving more than a married man with a wife who does not work, and with a child. It is a matter for debate whether a widow should be put in such an advantageous position. I am stating that merely as a question of simple arithmetic. It would be for my right hon. and learned Friend, and eventually the House, to decide how the problem should be attaacked.

My hon. Friend touched also on benefits. As the House will appreciate, I am not well qualified to deal with that problem. It is a matter for my right hon. and hon. Friends in the Department of Health and Social Security. However, I shall touch on one point raised, namely, the overlapping benefits.

It is true that a widow is entitled to receive only the higher of two benefits to which she might otherwise be entitled— either her widow's benefit or, for example, sickness benefit. She is in no different a position from any other claimant, although her position might be regarded as more pressing. I emphasise that widows are the only group of beneficiaries under our social security system who are entitled to full maintenance benefit while of working age, without any earnings disqualification.

I am not saying that that mitigates the tragedy of a widow's position, but it demonstrates that the social security system takes some account of that problem.

I am sure that all Members in the House will appreciate that in the present economic climate my right hon. and learned Friend the Chancellor of the Exchequer's scope is limited. It is sad that there are no Opposition Members listening to the debate, as I am sure that many of them would share that view. I hope that my hon. and learned Friend will take on board the fact that it is essential to try to accommodate the transition from a married status to a widowed status in that initial traumatic stage. If emphasis could be laid upon that I am sure that that would remove many of the problems that these people presently feel.

I am sure the whole House is grateful for that point, which amplifies what my hon. Friend the Member for Rossendale said in his opening remarks. Of course, one recognises the problems of adjusting, not only emotionally but, particularly, economically. Alas, there is little that we can do in this House to ease the process of emotional adjustment. But, of course, I appreciate the problems of economic adjustment, when possibly the principal breadwinner of the family has been lost, with all the traumas that follow from that. I must stress that for that year that point has been recognised by the fact that the family as a whole is slightly better off in fiscal terms. I shall not debate with my hon. Friends whether sufficient has been done. I think that they recognise the constraints under which this and any Government have to operate at the present time. However, I have taken careful note of that point and I shall ensure that my right hon. and learned Friend takes note of it when he finally frames his Budget measures.

I congratulate my hon. Friend. I think that he has done a service to the whole House by raising this issue. It is a pity that there is not a wider representation in the House to hear the points that he has made with such eloquence and lucidity. I know that he appreciates the particular difficulties under which anyone speaking in my position operates. Alas, in the run-up to a Budget, I cannot be as forthcoming as I should like. However, I assure my hon. Friend that his points will be fully borne in mind by my right hon. and learned Friend in his deliberations in the weeks to come. I am sure that those outside who read our debates will feel that a most important subject has been sympathetically and adequately ventilated.

Question put and agreed to.

Adjourned accordingly at twenty-eight minutes to Two o'clock.