§ Subsection two of section twenty-seven of the Finance Act, 1946, shall have effect as if there were added the words "or is payable to a wife by way of old age pension by virtue of her own contributions under the National Insurance Act or earlier Acts.—[Mr. Houghton.]
§ Brought up, and read the First time.
§ 6.30 p.m.
§ Mr. Houghton
I beg to move, "That the Clause be read a Second time."
This is a very simple Clause and has a very simple purpose. Before the operation of the Finance Act, 1946, the contributory pensions of wives, who earned their pensions under the Widows' and Orphans' Contributory Pensions Act by reason of their own contributions, were 2216 allowed to be reckoned as their own earned income, and that gave them the benefit of the reliefs given under the Income Tax Act for wives' earned income. But under Section 27 (2) of the Finance Act, 1946, the privilege of counting a contributory pension as a wife's earned income was taken away. Since then, a wife's contributory pension has been reckoned as the husband's earned income, and not that of the wife.
This Clause is intended to restore the position under which a wife, who has contributed under the insurance schemes to her own pension and gets her pension by virtue of her own contributions, should be allowed to reckon that pension as her own income for Income Tax purposes without having the disadvantage of reckoning it as part of the husband's earned income. In that respect I seek to put the contributory pension of a wife on the same footing as a teacher's pension or a Civil Service pension to a married woman, and to any other married woman who may earn a pension by reason of her vocation or occupation. It would also restore the status quo ante of the position before 1946.
§ Mr. Eccles
I beg to second the Motion.
I think this case is one to which the House will listen with sympathy. It is high time we did away with anomalies between men and women as fast as we can, and in the matter of taxation there are many anomalies. The proposal in this Clause is very sensible. The Government have been very mean on all questions of equal pay. Here is an opportunity for the Government to do a little to show that they will carry out their usual protestations in favour of the female sex.
§ The Economic Secretary to the Treasury (Mr. Douglas Jay)
This Clause refers to a rather narrow and limited point. The Clause seeks, as I understand, to make eligible for the special wife's earned income allowance an old age pension payable to a married woman as a result of a contributory payment. The recipient of an old age pension under the National Insurance Act—that is to say, a retirement pension—already gets as my hon. Friend knows, the ordinary earned income allowance of one-fifth. She gets 2217 that by virtue of the Finance Act, 1946. Therefore, we are not discussing whether the normal earned income allowance should be enjoyed by a married woman receiving a contributory old age pension. That main point is already conceded, and is in force.
The issue raised by the Clause is a rather special one: whether a married woman of that kind should, in virtue of her pension, qualify also for an additional special wife's earned income allowance which, as the House will remember, was raised from £80 to £110 in the Finance Act, 1946. The Chancellor of that time decided that this further allowance should not apply, for the very straightforward reason that the allowance was raised specifically to induce married women to take up work in industry or other productive work, or to remain in work if they were already there. If that is the purpose of this special married woman's earned income allowance, it would not accord with that purpose to apply it in the case of a married woman who has, ex hypothesi, retired and is receiving a retirement pension.
For that reason, my right hon. and learned Friend accepts the argument put forward by the Chancellor in 1946 that the additional allowance should not apply, although, of course, the ordinary one-fifth earned income allowance is enjoyed by a married woman receiving a retirement pension. That is the main reason why we do not feel able to accept this Clause. But there is one subsidiary reason which I think is relevant. This additional married women's earned income allowance was originally introduced many years ago; I believe it was in 1897. The reason then given for it, which has always been used as its justification, was that if a woman as well as her husband goes out to work it is probable that she will have to incur special expenses in order to maintain her home while both she and her husband are at work. That is the classical justification which has always been given for this allowance. That, again, does not apply to a married woman who has retired from work and is living at home in receipt of a retirement pension. For both those reasons we do not think the case is made out for this further concession.
§ Lieut.-Commander Braithwaite
I am sorry that the Economic Secretary has 2218 not been more forthcoming in this matter. I think the most significant portion of his remarks was that which he omitted. It is customary on these occasions for the Chancellor or one of his lieutenants to wind up his resistance to these proposals by saying that the cost would be prohibitive. There has been no mention in this instance of any cost at all. I have a suspicion that the cost of such a concession would be extremely trifling, and it would aid the House in coming to a decision on this Clause if we could be told from the Treasury Bench what would be the cost of this concession if the Government were to make it.
§ Viscount Hinchingbrooke
I think the Economic Secretary's reply was conclusive so far as I am concerned, on both the grounds that he adduced, but I have a sort of oblique reason for wishing that this new Clause would go through. The reason is that the Clause would ensure that the married allowance was justified by the payment of the pension and would remove the requirement that women should earn their right to the allowance by entering industry. In these days productivity is not everything; sociology is equally important. It is a great pity that we are continuing to pay this allowance to married women, inducing them to go into industry and leave their homes without sufficient care or sustenance. The more we see today of what is going on in these homes and what is happening to the children, the more strongly one feels that that allowance is a mistake. Therefore I regret that this Clause has not been accepted, because so far as old age pensioners are concerned, old people who might look after homes and children, the allowance now operates in the direction of their earning money outside.
§ Mr. Haworth (Liverpool, Walton)
I cannot help expressing my disappointment at the Economic Secretary's reply. It seems to me that the Government are treating this matter in two different ways with respect to the same person. The Treasury say to a woman, "If you go out to work we will make an assessment of your income as a woman, quite independently of your husband's income." In fairness to the woman that policy ought to be pursued in relation to the rest of 2219 the income which she gets, either from her earnings, or from her pension resulting from her earnings and the stoppages for insurance which were made from her earnings while she was working. If we do not accept the principle of this, I think it is unfair to a woman to say to her, "We will not link your income with your husband's if you go to work in industry during this period of labour shortage; we will treat you as a separate entity altogether." If we say that to her it seems to me that we should be logical and fair and allow the woman to be treated as a separate entity right the way through.
She receives this pension only because of the fact that she has been working and contributing through insurance as a worker. She does not receive this money as the wife of her husband, but as a worker in her own right. I think the Treasury should be logical and fair about this, although I do not accept the wholesale strictures of the hon. Member for Chippenham (Mr. Eccles) about our unfairness to women generally. I think we have been comparatively generous to women in many walks of life, but I believe there is a case here for thinking this over again and I hope further consideration will be given to it.
§ Question put, and negatived.