HC Deb 16 July 1957 vol 573 cc1080-103
Mr. H. Wilson

I beg to move, in page 7, line 31, to leave out from "income" to the end of line 35.

We are now, as we were during the Committee stage on 29th May, debating the concession being made to Surtax payers. On that occasion, considerable anxiety was expressed on this side of the House about the concession to Surtax payers, but the Chancellor, who, at that time, was rather more buoyant than he has appeared in recent speeches in the country, justified or tried to justify all that the Government were doing in the matter of Surtax by saying that it would enable us to have an increase in production.

The right hon. Gentleman referred to the capitalist system in the United States of America, and finally, as the crowning glory of his argument, said "After all, look at what they do in Russia," and concluded by saying: If in Europe, in the United States of America and in Russia they are prepared to offer rewards to those who are doing the big jobs, we should be foolish, and, indeed, failing in our duty, if we did not move a little in the same direction. I immediately followed the right hon. Gentleman, and I said: Now we understand why Mr. Khrushchev, when he was here last year, said that if he lived in this country he would be a Conservative."—[OFFICIAL REPORT, 29th May, 1957; Vol. 570, c. 450.] I see no reason to change the form of words which I used then because of anything that has taken place since.

I understand that the Chancellor is still in trouble with his Cabinet split about Post Office charges this evening, and we quite understand if it is not possible for him to be here for this discussion on Surtax, but if he had been here I am sure that he would realise that when he was saying that big rewards are given in the Soviet Union to some of the big executives he was wrong to say that they were allowed to keep a great deal more of their earnings than is the case in this country. He did not make sufficient allowance for the relative insecurity of employment in the top executive positions in the Soviet Union.

Nor do I think that the right hon. Gentleman has paid sufficient attention to another point to which we have drawn his attention, which is that in the Soviet Union they do not have the same tax provisions in respect of compensation for loss of office. [Interruption.] I think that we have got on very quickly with the Finance Bill today, possibly due to the fact that hon. Gentlemen who are now interrupting have not been with us for most of the time.

When we debated the question of the Surtax concession on the Finance Bill—properly speaking, they are actually changes in the earned income allowance to those who are in the Surtax range—we debated it rather more widely than is permitted by the Amendment. This Amendment is specifically related to that part of the concession which deals with the one-ninth earned income allowance in incomes of over £4,000 per annum.

We made it clear during the Committee stage that we were prepared, as part of a just and balanced Budget, to see some change made in the earned income position of Surtax payers, and that we thought it was reasonable, as was suggested in the Second Report of the Royal Commission, that perhaps there might be a concession made up to about £2,500 a year.

We were, in fact, more reasonable than that. We recognised that under this Government there has been this continuing inflation since the Royal Commission made its Second Report in 1954, and, therefore, our Amendment was based on the figure of £2,500, scaled up to allow for changes in the cost of living. That was voted down and I would be out of order tonight to deal at any length with the two-ninths earned income concession. In regard to the range beyond that, again we were prepared to see the acceptance of the Royal Commission's recommendations of one-ninth for the next £500, but what the Chancellor has done is to give one-ninth on the next £2,000.

I do not want to repeat the arguments used in Committee. I do not think that is necessary. Most of the reasons given by the Chancellor in the Budget debate in April, and as recently at 29th May, have now been shown to be completely hollow. He said, for example, that the purpose of this concession was to discourage emigration of our best brains. I do not think it necessarily follows that the executives, scientists, designers, craftsmen and others, upon whom above all our scientific future depends, are in the Surtax ranges. They are much less likely to be found in the ranges of £4,000 to £10,000 upwards.

We have had no evidence from hon. Members, nor even noble Lords, opposite suggesting that that is the case. We are only too well aware that the greater part of the emigration of the people we can least afford to lose occurs among those who are below the Surtax ranges altogether, those earning between £600 or £700 up to £2,000, who are outside the scope of these earned income concessions. For that vast and important group, which includes particularly the more virile, many of whom are emigrating, this Bill does nothing, except if the person in question has a child of more than 12 years of age. He then has a very small amount.

In Committee we had a very long and, many people thought, a rather inconclusive discussion on the relation of taxation to the amount of work done—incentives to production, and so on—and there was much bandying about of quotations from the Royal Commission's Report and, in particular, quotations from the Social Survey. In general, we took the view which prevailed with the Royal Commission. It could see no connection between the level of taxation and the amount of work done.

All of us agree that more work needs to be done. I for one have been deeply moved, and I am sure that hon. Members on this side have been moved, by the fact that the Chancellor, in the very grave speech that he made last Wednesday, when he opened a block of offices in the City, said that what we need is more work. I was interested to see that in his pronouncement to the National Production Advisory Council for Industry, on Friday, he said what troubled him was that we were being paid too much and that we wanted more work.

I was interested to find that the right hon. Gentleman said the same on television last night. This is interesting because, last year, we complained of industrial stagnation and said that it was the deliberate policy of the former Chancellor, who now, for some unaccountable reason, has become Prime Minister, which caused that stagnation. He said that expansion for production must be halted, that we were going too full out and efforts had to be retarded. Let us hear no more from the Government side of the House that people are not working hard enough, because, last year, it was the deliberate policy of the Government to ensure that they did not work hard enough.

I do not think there will be much room for a lot of debate tonight about the relation between incentive and the total volume of industrial production. It has now become quite clear that under this Government we get either stagnation in production or an inflationary boom that is completely outside the control of the Government, and there does not seem to be any middle position.

10.0 p.m.

That was not the only argument that we had about this Surtax position. I think we have been reasonably fair on this side of the House in suggesting that some improvement in the earned income position affecting the lower paid Surtax payers would not be unreasonable, provided it was part of a socially and economically just Budget. But this particular concession comes in a Budget where, as everyone knows, most of the concessions have been given either to the Surtax payers or to big industrial groups, particularly through the medium of the overseas trade corporations.

Time and time again in Committee and tonight the Government have said,"We cannot yield on this particular hardship case, on this fair proposal to relieve some taxpayers, because we have not got the money." Yet, they have given away in this field, covered largely by the Clause which we are now discussing, taxation amounting to £130 million in a full year. We warned the Government at the time of the Budget that they were going too far in this direction. We warned them that this would be regarded as highly provocative in the industrial sphere.

I do not think that anyone who really considered the repercussions of the Chancellor's action in the industrial sphere could have any doubt about what the reaction would be. The Chancellor nevertheless showed a total disregard of the economic and social consequences of his action as far as Surtax was concerned. That was in April. That was one of many reasons why in the Budget debate I described his Budget speech as an assignment with inflation.

I wonder how the Chancellor regards his Surtax concessions today. Does he not see any connection between his frivolous and irresponsible Budget and the very grave situation which he himself had to describe in those two speeches that he made last Wednesday and last Friday? I do not intend to follow him in those speeches tonight. I do not intend to deal in the slightest with the general inflationary situation, because we shall be having a full debate on the inflationary position, I hope, in the very near future.

By that time we hope that the Chancellor of the Exchequer will have got out of his hand-washing attitude. By that time we hope that he will have accepted the responsibility of the Government for the inflationary position and will be able to announce real policies for dealing with the subject of inflation. I hope that we shall have constructive proposals put forward, although I should be very much out of order if I were to attempt to outline any of them this evening.

As to this Clause which we seek to amend, even in the conditions of April, when there were still many who thought that the danger facing this country was deflation rather than inflation, we thought that these proposals were irresponsible and inflationary, and if we thought so then—and I am sure that the whole House must now realise how right we were about it—how much more do we feel that this argument can be sustained tonight, in the middle of the present inflationary crisis? I know the Chancellor said last night that there was not a crisis, that exports and production were going up. The only trouble was this little matter of inflation, and nobody was to blame, least of all the Government, who merely held the ring and stood on one side.

The real truth about the Budget was, as many of us said within 24 hours of the Chancellor sitting down in the Budget debate, that he was not concerned with the economic or the social position of the country. It was a direct appeal to the wavering Tory abstainers who had let him down in a long succession of by-elections. That was why we said, as early as 10th April, that this was directed not towards the economic position of the country but to the wilds of Warwick and Leamington, the backwoods of Beckenham, and all those other places. [An HON. MEMBER:"Hornsey."] Hornsey came a little later. The Government deferred the Hornsey by-election until after the Budget because they knew how popular the Budget would be, and they got their answer at Hornsey as they have had it in those other places.

Since then, the Chancellor has been driven to almost as many expedients in trying to justify his Budget as the Foreign Secretary was in trying to justify Suez a few months earlier, and with about the same degree of success. He said that it would stop emigration. We all know perfectly well that the Surtax payers with £4,000 a year or more are not the people who emigrate. Many of them are uncertain as to whether they would get as much at that in the United States or, indeed, in the Soviet Union, or any of the other places to which the Chancellor was directing their attention. Many of them are able to get, in addition to their salaries, various perquisites and privileges of a kind which do not fall within the scope or even the attention of the Board of Inland Revenue. So that particular argument also falls to the ground.

It was not possible for us again this evening to raise the whole wide subject of Surtax or of earned income relief. It was not possible for us to move—and I am sure that it would not have been selected if we had—precisely the same Amendment as we moved in Committee. We have, therefore, confined our argument to the £4,000 to £10,000 range where as the Chancellor told us in his Budget broadcast, it was essential to give belated justice to the Surtax payer. It is three and a half months later now and there still has not been given belated justice to the old-age pensioners who have a much higher claim on any of the Chancellor's priorities at present. Indeed, since that time, and partly because of the Budget, the inflationary position has got a great deal worse and the position of the old-age pensioners has correspondingly deteriorated as a result. But I should be out of order in pursuing that point any further.

I think that we are entitled, even at this late stage in the Finance Bill—and this is no laughing matter, I assure hon. Members opposite—to suggest to the Chancellor that if he wants to make the sort of appeal to the country, which it will be very difficult for a Chancellor like him to make, but which he must make if this country is to solve its inflationary difficulties, then, as a first step, and only as a first step, he should accept this Amendment, cut down on the largesse to the higher paid Surtax payer and give his concessions to those in greatest need because of the Government's proposals, and then produce a thorough-going and comprehensive series of proposals for dealing with the economic problems facing the country, both at home and abroad.

It is because we regard this as one of the most provocative acts of the Budget, the one which has done a great deal of harm both to our social system and to the economy, that we have put down this Amendment tonight, and in the likely event of the Government refusing to accept it we shall once again, with a much stronger case on our side as a result of the last three and a half months, go into the Division Lobby in favour of what we propose.

Mr. Birch

The right hon. Member for Huyton (Mr. H. Wilson) introduced some larger economic issues in his speech, which he rightly says will shortly be debated by the House, and I shall not, therefore, deal with them. The arguments on both sides about earned income reliefs have already been fully deployed in the Budget debate, in the debate on Second Reading, and in debate during the Committee stage, so it is rather "cold mutton" to have it at this time.

The right hon. Gentleman was, I thought, a little unfair in attempting to knock down my right hon. Friend the Chancellor by saying that his comparison with Russia was not correct, on the ground that the Russians had no security of office or no compensation for loss of office. That is not quite true, I think. After all, Mr. Malenkov has been made manager of a most important plant at Ust-Kamenogorsk, which, I suppose, is Russian equivalent of a peerage and a seat on a gas board. It is not fair to say that there is no compensation at all for loss of office in Russia. It is true, as my right hon. Friend said, that we are, on the whole, at the bottom of the league compared with most countries in the sense that our taxation is a great deal higher than most others, and still very high indeed by any standards.

Many different views have been expressed by hon. and right hon. Gentlement opposite in the course of debate about how high the level of earned income relief ought to go. During the debate on the Second Reading of the Finance Bill there was a sort of Dutch auction among them, during which they all suggested different sums. Now, on this Amendment, which takes up what was, I think, a Liberal Amendment which was not called, we are denounced once again for having done what we believe to be right from the point of view of stimulating production—I emphasise it again—and right from the point of view of keeping the ablest men in the country. If I may say so, it is a little tough to be denounced in quite these terms when we remember that the hon. and learned Member for Kettering (Mr. Mitchison) argued that earned income relief should run without limit for those under Schedule E or opting to be under Schedule E. When we refused to accept his Amendment, he denounced the whole proposition with almost maenad frenzy; so that the conflict of views among right hon. Gentlemen opposite seems to be a little odd.

On the question of whether or not this is an inflationary Budget, it is right to remind hon. Members that we have had Amendments which would have cost hundreds of millions of pounds. We have resisted them. This Budget provides a larger surplus than the one before, and it is not, in fact, an inflationary Budget. If we accepted the Amendment it would save only £4½ million, and that must be put against the hundreds of millions which hon. and right hon. Gentlemen opposite have suggested we should remit in taxation. These are not, I should have thought, very deflationary proposals.

Mr. H. Wilson

I wonder whether the right hon. Gentleman would elucidate that point. When he said that this Budget provided for a bigger surplus than last year's Budget, what does he mean by that? Is it not a fact that the Chancellor's Budget provides for a £560 million surplus, and did not his predecessor also budget for exactly a £560 million surplus? Is not the only difference between them that his predecessor was out in his calculations by about £300 million, and what guarantee have we that this Chancellor equally is not out by £300 million?

Mr. Birch

We must wait for the event for that. All I am saying is that we have discussed this matter up hill and down dale. There is nothing new to be said. We believe that the line we have adopted is right. We consider that the line proposed in this Amendment and in related Amendments to extend the concessions still further is wrong, and we stand pat where we are.

10.15 p.m.

Mr. Deputy-Speaker (Sir Gordon Touche)

The Question is,"That the words proposed to be left out stand part of the Bill."

Mr. Jay

I do not know whether the Economic Secretary has nothing more to say in defence of the Budget than we have just heard from him.

Mr. Gerald Nabarro (Kidderminster)

On a point of order. Is it in order for the debate, to continue after the Question has been put?

Mr. Deputy-Speaker

I had not collected the voices.

Mr. Jay

I was merely asking the Economic Secretary whether he really finds it impossible to give any better reply than that which we have heard so far. He defended the Russian social system and drew a bit closer together the link between the Tory party and Mr. Khrushchev, but he gave no answer to the arguments of my right hon. Friend the Member for Huyton (Mr. H. Wilson).

I ask the Treasury Ministers in all seriousness—and we would like to ask the Chancellor this if he were here—whether the Chancellor is really sure that he was so wise to give away this extra purchasing power in his Budget in April. The Economic Secretary says that there is nothing further to discuss, but does he not think that the experience of the intervening economic debates since April may throw at least some doubt on the wisdom of the Chancellor's decisions in his Budget? Does he think that we can draw no lesson from the inflationary consequences which that Budget has had?

After all, the Chancellor relieved taxation by £130 million in a full year. Although we were prepared to agree that some reliefs were wise, we did not believe that the Chancellor was right to go so far as to add this extra £130 million of tax relief on top of the other reliefs which he had given. The Chancellor himself said, in his Budget speech: I reject unequivocally the view that the sole duty of a Chancellor is to remove taxation at whatever risk to the economy …Actions of that character might conceivably buy from the undiscerning a momentary popularity. It would be short lived."—[OFFICIAL REPORT, 9th April, 1957; Vol. 568, c. 987.] I suggest to the Economic Secretary that the popularity of the Budget, if ever there was any, has been extremely short lived. The country today is coming to see that it was an obviously inflationary Budget. It has contributed to the existing situation—

Viscount Hinchingbrooke (Dorset, South)


Mr. Jay

—which the Chancellor himself has been lamenting. The noble Lord asks "How?" It has done so in precisely the way that we warned the Chancellor it would at the time of his Budget speech.

Viscount Hinchingbrooke

The right hon. Gentleman is arguing on a point of Surtax. The law is not yet made. No Surtax concessions have yet been given. Even if they had been, they would not operate for another year. How can they have an effect on inflation?

Mr. Jay

The noble Lord knows perfectly well that as soon as the concessions are granted in the law Surtax payers spend more freely. [HON. MEMBERS: "Oh."] Of course they do.

Mr. Nabarro

Surely, the right hon. Gentleman is forgetting that those same Surtax payers have to meet the bill for their incomes being assessed for Surtax in respect of the year before last. How can they spend the money that they have not got? Is it not a fact that these Surtax reliefs proposed in the Budget cannot affect the revenue at the earliest until 1st January, 1958, and, therefore, cannot have any influence at all on the inflationary position, of which the right hon. Gentleman is speaking?

Mr. Jay

Surely, the hon. Member knows that these are earned income reliefs and that the P.A.Y.E. adjustments have already been made.

Mr. Nabarro

The right hon. Gentleman is exactly wrong. These Surtax reliefs cannot come into effect and be felt by the Surtax payer—[HON. MEMBERS:"Earned income reliefs."]—well, earned income reliefs which affect the Surtax payer. They do not alter the coding of an Income Tax payer. They cannot benefit him until 1st January next at the earliest.

Mr. Jay

The hon. Member is wrong both technically and in substance. Even if he was not wrong technically, it is the case that Surtax payers anticipate these future concessions. If the hon. Member wants any confirmation of that, let him look at the banking figures for the last two months and he will see the increase in bank loans, which has contributed to this inflationary pressure. The noble Lord the Member for Dorset, South asked how this process has occurred. I gave the warning to the Chancellor in the Budget debate that, in the first place, the action he had taken in the Budget in this respect followed in no way from any economic analysis that he gave us in the Budget, and secondly, that in our view unless there was some factor that he had not revealed to the House, and that he has still not revealed, he was taking a grave risk with the gold reserve and the economic position of the country later in the year. I submit that that which we said in the Budget debate in April has been abundantly confirmed since then and that the consequences which we then predicted are now becoming evident to the country.

Mr. Nabarro

I rise only to correct the fallacy in the speech of the right hon. Member for Battersea, North (Mr. Jay). We are talking on the Amendment about earned income relief and its effect upon Surtax-payers in the bracket of income between £4,000 and £9,985 a year. In fact, these abatements in respect of earned income relief cannot affect the actual payment made by the Surtax-payer at the earliest date until 1st January, 1958. They did not in any way lead to a recoding on 21st June last.

I know this to be exactly true because, when these Budget proposals came in, I was in very grave doubt as to how the earned income relief affecting Surtax-payers would operate—whether by re-coding or by abatement of Surtax on the 1st January following, which would be, of course, the payment of Surtax in respect of assessment of the earned income of the individual for the year but one preceding. A ruling was given to me by the Inland Revenue that the earliest effects would be felt on the 1st January following. [HON. MEMBERS:"Schedule D."] On Schedule D—but these earned income reliefs that we are discussing are in respect of the Surtax-payer in either Schedule D or Schedule E.

Mr. Mitchisonrose—

Mr. Nabarro

Please allow me to finish. This is not an easy argument, by any means.

The right hon. Member for Battersea, North, therefore, might be in very small part right, but in the greater part he is wrong. It is the fact that the earliest date on which the monetary benefit can be felt by a Surtax-payer in respect of this earned income relief is 1st January next and in no part will be felt on and after 21st June, which is the date on which recoding for Income Tax takes place.

Mr. Houghton

All directors are assessable under Schedule E Pay-As-You-Earn. Managers and executives and others in employment are assessable under Schedule E, Pay-As-You-Earn. It is true that shopkeepers and self-employed traders are assessable under Schedule D, which is not Pay-As-You-Earn. All Schedule E payers have received recoding notices. Clause 11 (5) refers to the earliest date at which the benefits of the reliefs can be given, which was 21st June. Hon. Members who are assessed on Schedule E will know that they have already received the benefits of earned income relief beyond the point of £2,025 a year, if they are assessed under Schedule E, up to £10,000.

None of this earned income relief makes any difference to Surtax. The difference to Surtax is in the deduction of personal reliefs by £100 for marriage, children, etc. from Surtax liability but not earned income relief. My right hon. Friend was right when he said that, in respect of all deductions under Pay-As-You-Earn, the people assessed under Schedule E who will benefit from these reliefs are already receiving the benefit of them.

Mr. Nabarro

That was a very long intervention, and my own was not an intervention. My only observation on the somewhat technical intervention of the hon. Gentleman is that in the Amendment we are discussing there is nothing about Schedule D or Schedule E. The fact is that the earliest date on which monetary benefits can be derived by a Surtax-payer from this concession is on 1st January next. If the hon. Gentleman will see me after the debate, I will prove it.

Question put, That the words proposed to be left out stand part of the Bill:—

The House divided: Ayes 224, Noes 172.

Division No. 167.] AYES [9.38 p.m.
Agnew, Sir Peter Conant, Maj. Sir Roger George, J. C. (Pollok)
Amery, Julian (Preston, N.) Cooke, Robert Glover, D.
Arbuthnot, John Cooper, A. E. Glyn, Col. R.
Armstrong, C. W. Cooper-Key, E. M. Godber, J. B.
Ashton, H. Cordeaux, Lt.-Col. J. K. Goodhart, Philip
Atkins, H. E. Corfield, Capt. F. V. Gower, H. R.
Baldock, Lt.-Cmdr. J. M. Craddock, Beresford (Spelthorne) Graham, Sir Fergus
Baldwin, A. E. Crosthwaite-Eyre, Col. O. E. Grant, W. (Woodside)
Balniel, Lord Crowder, Petre (Ruislip—Northwood) Grant-Ferris, Wg.Cdr. R.(Nantwich)
Barber, Anthony Cunningham, Knox Green, A.
Barlow, Sir John Currie, G. B. H. Gresham Cooke, R.
Baxter, Sir Beverley Dance, J. C. G. Grimston, Hon. John (St. Albans)
Beamish, Maj. Tufton Davidson, Viscountess Grimston, Sir Robert (Westbury)
Bell, Philip (Bolton, E.) D'Avigdor-Goldsmid, Sir Henry Gurden, Harold
Bell, Ronald (Bucks, S.) Deedes, W. F. Hall, John (Wycombe)
Bennett, F. M. (Torquay) Digby, Simon Wingfield Harris, Reader (Heston)
Bennett, Dr. Reginald Donaldson, Cmdr. C. E. McA. Harvey, Sir Arthur (Macclesfield)
Bevins, I. R. (Toxteth) Doughty, C. J. A. Heald, Rt. Hon. Sir Lionel
Bidgood, J. C. du Cann, E. D. L. Heath, Rt. Hon. E. R. G.
Biggs-Davison, J. A. Dugdale, Rt. Hn. Sir T. (Richmond) Henderson, John (Cathcart)
Birch, Rt. Hon. Nigel Duncan, Sir James Henderson-Stewart, Sir James
Bishop, F. P. Duthie, W. S. Hesketh, R. F.
Body, R. F.
Boothby, Sir Robert Eden, J. B. (Bournemouth, West) Hill, Mrs E. (Wythenshawe)
Bossom, Sir Alfred Elliot, Rt. Hon. W. E. (Kelvingrove) Hill, John (S. Norfolk)
Braine, B. R. Elliott,R.W.(N'castle upon Tyne,N.) Hinchingbrooke, Viscount
Braithwaite, Sir Albert (Harrow, W.) Emmet, Hon. Mrs. Evelyn Hirst, Geoffrey
Brooman-White, R. C. Errington, Sir Eric Hobson,John (Warwick & Leam'gt'n)
Browne, J. Nixon (Craigton) Erroll, F. J. Holland-Martin, C. J.
Bryan, P. Fell, A. Hope, Lord John
Bullus, Wing Commander E. E. Finlay, Graeme Hornby, R. P.
Butcher, Sir Herbert Fisher, Nigel Hornsby-Smith, Miss M. P.
Butler,Rt.Hn.R.A.(Saffron Walden) Fort, R. Horobin, Sir Ian
Carr, Robert Fraser, Sir Ian (M'cmbe & Lonsdale) Horsbrugh, Rt. Hon. Dame Florence
Cary, Sir Robert Freeth, Denzil Howard, John (Test)
Chichester-Clark, R. Gammans, Lady Hudson, W. R. A. (Hull, N.)
Clarke, Brig. Terence (Portsmth, W.) Garner-Evans, E. H. Hughes Hallett, Vice-Admiral J.
Hughes-Young, M. H. C. Maitland, Hon. Patrick (Lanark) Ropner, Col. Sir Leonard
Hulbert, Sir Norman Markham, Major Sir Frank Russell, R. S.
Hurd, A. R. Marlowe, A. A. H. Schofield, Lt.-Col. W.
Hutchison, Michael Clark (E'b'gh.S.) Marshall, Douglas Scott-Miller, Cmdr. R.
Hutchison, Sir Ian Clark(E'b'gh, W.) Mathew, R. Sharples, R. C.
Hutchison, Sir James (Scotstoun) Maude, Angus Simon, J. E. S.(Middlesbrough, W.)
Hyde, Montgomery Mawby, R. L. Smithers, Peter (Winchester)
Hylton-Foster, Rt. Hon. Sir Harry Maydon, Lt.-Comdr. S. L. C. Soames, Christopher
Milllgan, Rt. Hon. W. R. Spearman, Sir Alexander
Iremonger, T. L. Morrison, John (Salisbury) Speir, R. M.
Irvine, Bryant Godman (Rye) Mott-Radclyffe, Sir Charles Spens, Rt. Hn. Sir P.(Kens'gt'n, S.)
Jenkins, Robert (Dulwich) Nabarro, G. D. N. Stanley, Capt. Hon. Richard
Jennings, Sir Roland (Hallam) Nairn, D. L. S. Stevens, Geoffrey
Johnson, Dr. Donald (Carlisle) Nicholls, Harmar Steward, Harold (Stockport, S.)
Johnson, Eric (Blackley) Nicholson, Godfrey (Farnham) Steward, Sir William(Woolwich, W.)
Jones, Rt. Hon. Aubrey (Hall Green) Nicolson, N.(B'n'm'th,E. & Chr'ch) Stoddart-Scott, Col. Sir Malcolm
Keegan, D. Noble, Comdr. Rt. Hon. Allan Storey, S.
Kerr, Sir Hamilton Nugent, G. R. H. Studholme, Sir Henry
Kershaw, J. A. Oakshott, H. D. Taylor, Sir Charles (Eastbourne)
Kimball, M. O'Neill, Hn. Phelim (Co. Antrim, N.) Taylor, William (Bradford, N.)
Kirk, P. M. Orr, Capt. L. P. S. Teeling, W.
Lagden, G. W. Orr-Ewing, Charles Ian (Hendon, N.) Temple, John M.
Lambert, Hon. G. Page, R. G. Thomas, Leslie (Canterbury)
Lancaster, Col. C. G. Pannell, N. A. (Kirkdale) Thomas, P. J. M. (Conway)
Langford-Holt, J. A. Partridge, E. Thompson, Kenneth (Walton)
Leather, E. H. C. Peyton, J. W. W. Thorneycroft, Rt. Hon. P.
Leavey, J. A. Pickthorn, K. W. M. Thornton-Kemsley, C. N.
Leburn, W. G. Pilkington, Capt. R. A. Tilney, John (Wavertree)
Legge-Bourke, Maj. E. A. H. Pitman, I. J. Turner, H. F. L.
Legh, Hon. Peter (Petersfield) Pitt, Miss E. M. Turton, Rt. Hon. R. H.
Lindsay, Hon. James (Devon, N.) Pott, H. P. Vickers, Miss Joan
Lindsay, Martin (Solihull) Powell, J. Enoch Wakefield, Edward (Derbyshire, W.)
Linstead, Sir H. N. Price, David (Eastleigh) Wakefield, Sir Wavell (St. M'lebone)
Lloyd, Maj. Sir Guy (Renfrew, E.) Price, Henry (Lewisham, W.) Walker-Smith, Rt. Hon. Derek
Longden, Gilbert Prior-Palmer, Brig. O. L. Wall, Major Patrick
Lucas, Sir Jocelyn(Portsmouth, S.) Profumo, J. D. Ward, Rt. Hon. G. R. (Worcester)
Lucas, P. B. (Brentford & Chlswick) Raikes, Sir Victor Ward, Dame Irene (Tynemouth)
Lucas-Tooth, Sir Hugh Ramsden, J. E. Whltelaw, W. S. I.
Macdonald, Sir Peter Rawlinson, Peter Williams, Paul (Sunderland, S.)
Mackie, J. H. (Galloway) Redmayne, M. Williams, R. Dudley (Exeter)
McLaughlin, Mrs. P. Remnant, Hon. P. Wills, G. (Bridgwater)
Maclay, Rt. Hon. John Renton, D. L. M. Woollam, John Victor
McLean, Neil (Inverness) Ridsdale, J. E. Yates, William (The Wrekin)
MacLeod, John (Ross & Cromarty) Robertson, Sir David
Macpherson, Niall (Dumfries) Robinson, Sir Roland (Blackpool, S.) TELLERS FOR THE AYES:
Maddan, Martin Rodgers, John (Sevenoaks) Mr. R. Thompson and
Maitland, Cdr. J. F. W. (Horncastle) Roper, Sir Harold Colonel J. H. Harrison.
Ainsley, J. W. Dalton, Rt. Hon. H. Hayman, F. H.
Albu, A. H. Davies, Ernest (Enfield, E.) Healey, Denis
Allen, Scholefield (Crewe) Davies, Stephen (Merthyr) Henderson, Rt. Hn. A. (Rwly Regis)
Awbery, S. S. Deer, G. Herbison, Miss M.
Bacon, Miss Alice de Freitas, Geoffrey Hobson, C. R. (Keighley)
Balfour, A. Delargy, H. J. Holman, P.
Benson, G. Donnelly, D. L. Holmes, Horace
Beswick, Frank Ede, Rt. Hon. J. C. Holt, A. F.
Bevan, Rt. Hon. A. (Ebbw Vale) Edelman, M. Houghton, Douglas
Blackburn, F. Edwards, Rt. Hon. John (Brighouse) Howell, Charles (Perry Barr)
Blyton, W. R. Edwards, Rt. Hon. Ness (Caerphilly) Hoy, J. H.
Boardman, H. Edwards, Robert (Bilston) Hubbard, T. F.
Bottomley, Rt. Hon. A. G. Edwards, W. J. (Stepney) Hughes, Cledwyn (Anglesey)
Bowden, H. W. (Leicester, S.W.) Fernyhough, E. Hughes, Emrys (S. Ayrshire)
Bowen, E. R. (Cardigan) Fienburgh, W. Hughes, Hector (Aberdeen, N.)
Boyd, T. C. Finch, H. J. Hunter, A. E.
Braddock, Mrs. Elizabeth Forman, J. B> Hynd, H. (Accrington)
Brockway, A. F. Fraser, Thomas (Hamilton) Irvine. A. J. (Edge Hill)
Brown, Rt. Hon. George (Belper) Gaitskell, Rt. Hon. H. T. N. Jay, Rt. Hon. D. P. T.
Brown, Thomas (Ince) George,Lady Megan Lloyd(Car'then) Jeger, George (Goole)
Burke, W. A. Gibson, C. W. Jeger,Mrs.Lena(Holbn & St.Pncs.S.)
Butler, Herbert (Hackney, C.) Greenwood, Anthony Jones, David (The Hartlepools)
Butler, Mrs. Joyce (Wood Green) Grenfell, Rt. Hon. D. R. Jones, Elwyn (W. Ham, S.)
Callaghan, L. J. Grey, C. F. Jones, Jack (Rotherham)
Carmichael, J. Griffiths, David (Rother Valley) Jones, J. Idwal (Wrexham)
Castle, Mrs. B. A. Griffiths, Rt. Hon. James (Llanelly) Jones, T. W. (Merioneth)
Champion, A. J. Griffiths, William (Exchange) Kenyon, C.
Chapman, W. D. Grimond, J. Key, Rt. Hon. C. W.
Chetwynd, G. R. Hale, Leslie King, Dr. H. M.
Coldrick, W. Hall, Rt. Hn. Glenvil (Colne Valley) Lawson, G. M.
Collick, P. H. (Birkenhead) Hamilton, W. W. Lee, Frederick (Newton)
Craddock, George (Bradford, S.) Hannan, W. Lee, Miss Jennie (Cannock)
Cullen, Mrs. A. Harrison, J. (Nottingham, N.) Lever, Harold (Cheetham)
Lewis, Arthur Pentland, N. Swingler, S. T.
Logan, D. G. Plummer, Sir Leslie Sylvester, G. O.
Mabon, Dr. J. Dickson Popplewell, E. Taylor, Bernard (Mansfield)
MacColl, J. E. Prentice, R. E. Taylor, John (West Lothian)
MacDermot, Niall Price, J. T. (Westhoughton) Thomas, Iorwerth (Rhondda, W.)
McInnes, J. Probert, A. R. Thomson, George (Dundee, E.)
McKay, John (Wallsend) Proctor, W. T. Thornton, E.
MacPherson, Malcolm (Stirling) Randall, H. E. Tomney, F.
Mallalieu, E. L. (Brigg) Rankin, John Ungoed-Thomas, Sir Lynn
Mann, Mrs. Jean Redhead, E. C. Usborne, H. C.
Mason, Roy Reeves, J. Watkins, T. E.
Mitchison, G. R. Rhodes, H. Wells, Percy (Faversham)
Monslow, W. Robens, Rt. Hon. A. Wells, William (Walsall, N.)
Moody, A. S. Roberts, Albert (Normanton) West, D. G.
Morris, Percy (Swansea, W.) Roberts, Goronwy (Caernarvon) Wheeldon, W. E.
Mort, D. L. Robinson, Kenneth (St. Pancras, N.) White, Mrs. Eirene (E. Flint)
Moyle, A. Ross, William White, Henry (Derbyshire, N.E.)
Mulley, F. W. Royle, C. Wilkins, W. A.
Noel-Baker, Rt. Hn. P. (Derby, S.) Short, E. W. Willey, Frederick
O'Brien, Sir Thomas Silverman, Julius (Aston) Williams, David (Neath)
Oliver, G. H. Skeffington, A. M. Williams, Rev. Llywelyn (Ab'tillery)
Oram, A. E. Slater, Mrs. H. (Stoke, N.) Williams, Rt. Hon. T. (Don Valley)
Orbach, M. Slater, J. (Sedgefield) Williams, W. R. (Openshaw)
Oswald, T. Smith, Ellis (Stoke, S.) Willis, Eustace (Edinburgh, E.)
Owen, W. J. Sorensen, R. W. Wilson, Rt. Hon. Harold (Huyton)
Padley, W. E. Soskice, Rt. Hon. Sir Frank Woodburn, Rt. Hon. A.
Paling, Rt. Hon. W. (Dearne Valley) Sparks, J. A. Woof, R. E.
Paling, Will T. (Dewsbury) Steele, T. Yates, V. (Ladywood)
Palmer, A. M. F. Stewart, Michael (Fulham) Zilliacus, K.
Pannell, Charles (Leeds, W.) Stonehouse, John
Pargiter, G. A. Strachey, Rt. Hon. J. TELLERS FOR THE NOES:
Parker, J. Summerskill, Rt. Hon. E. Mr. Pearson and Mr. Simmons.
Division No. 168. AYES [10.26 p.m.
Agnew, Sir Peter Gresham Cooke, R. Nabarro, G. D. N.
Aitken, W. T. Grimond, J. Nairn, D. L. S.
Amery, Julian (Preston, N.) Grimston, Hon. John (St. Albans) Nicholls, Harmar
Arbuthnot, John Grimston, Sir Robert (Westbury) Nicholson, Godfrey (Farnham)
Armstrong, C. W. Hall, John (Wycombe) Nicolson, N. (B'n'm'th, E. &Chr'ch)
Ashton, H. Harris, Reader (Heston) Noble, Comdr. Rt. Hon. Allan
Atkins, H. E. Harrison, Col. J. H. (Eye) Oakshott, H. D.
Baldock, Lt -Cmdr. J. M. Harvey, Sir Arthur (Macclesfield) O'Neill,Hn. Phelim (Co. Antrim, N.)
Baldwin, A. E. Heald, Rt. Hon. Sir Lionel Orr, Capt. L. P. S.
Balniel, Lord Heath, Rt. Hon. E. R. G. Orr-Ewing, Charles Ian (Hendon.N.)
Barber, Anthony Henderson, John (Cathcart) Page, R. G.
Barlow, Sir John Henderson-Stewart, Sir James Pannell, N. A. (Kirkdale)
Barter, John Hesketh, R. F. Partridge, E.
Baxter, Sir Beverley Hill, Mrs. E. (Wythenshawe) Peyton, J. W. W.
Bell, Philip (Bolton, E.) Hill, John (S. Norfolk) Piokthorn, K. W. M.
Bell, Ronald (Bucks, S.) Hinchingbrooke, Viscount Pilkington, Capt. R. A
Bennett, F. M. (Torquay) Hirst, Geoffrey Pitt, Miss E. M.
Bevins, J. B. (Toxteth) Hobson,John(Warwick & Leam'gt'n) Pott, H. P.
Bidgood, J. C. Holland-Martin, C. J. Powell, J. Enoch
Birch, Rt. Hon. Nigel Holt, A. F. Price, David (Eastleigh)
Bishop, F. P. Hope, Lord John Price, Henry (Lewisham, W.)
Body, R. F. Hornby, R. P. Prior-Palmer, Brig. O. L.
Bossom, Sir Alfred Hornsby-Smith, Miss M. P. Profumo, J. D.
Bowen, E. R, (Cardigan) Horsbrugh, Rt. Hon. Dame Florence Raikes, Sir Victor
Braine, B. R. Howard, John (Test) Ramsden, J. E.
Brooman-White, R. C. Hudson, W. R. A. (Hull, N.) Rawlinson, Peter
Browne, J. Nixon (Craigton) Hughes Hallelt, Vice-Admiral J. Redmayne, M.
Bullus, Wing Commander E. E. Hughes-Young, M. H. C. Remnant, Hon. P.
Butcher, Sir Herbert Hurd, A. R. Ridsdale, J. E
Butler,Rt.Hn.R.A.(Saffron Walden) Hutchison, Michael Clark (E'b'gh,S.) Robinson, Sir Roland (Blackpool,S.)>
Carr, Robert Hutchison, Sir IanClark(E'b'gh, W.) Rodgers, John (Sevenoaks)
Chichester-Clark, R. Hyde, Montgomery Roper, Sir Harold
Clarke, Brig. Terence (Portsmth, W.) Hylton-Foster, Rt. Hon. Sir Harry Ropner, Col. Sir Leonard
Conant, Maj. Sir Roger Iremonger, T. L. Schofield, Lt.-Col. W.
Cooke, Robert Irvine, Bryant Godman (Rye) Scott-Miller, Cmdr. R.
Cooper, A. E. Jenkins, Robert (Dulwich) Sharples, R. C.
Cordeaux, Lt.-Col. J. K. Jennings, Sir Roland (Hallam) Simon, J. E. S. (Middlesbrough, W.)
Corfield, Capt. F. V. Johnson, Dr. Donald (Carlisle) Smithers, Peter (Winchester)
Craddock, Beresford (Spelthorne) Johnson, Eric (Blackley) Spearman, Sir Alexander
Crosthwaite-Eyre, Col. O. E. Jones. Rt. Hon. Aubrey (Hall Green) Speir, R. M.
Crowder, Petre (Ruislip—Northwood) Joseph, Sir Keith Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)
Cunningham, Knox Keegan, D. Stanley, Capt, Hon. Richard
Currie, G. B. H. Kerr, Sir Hamilton Stevens, Geoffrey
Dance, J. C. G. Kershaw, J. A. Steward, Harold (Stockport, S.)
Davidson, Viscountess Kimball, M. Steward, Sir William (Woolwich, W.)
D'Avigdor-Goldsmid, Sir Henry Kirk, P. M. Stoddart-Scott, Col. Sir Malcolm
Deedes, W. F. Lambert, Hon. G. Storey, S.
Digby, Simon Wingfield Langford.Holt, J. A. Studholme, Sir Henry
Donaldson, Cmdr. C. E. McA. Leather, E. H. C. Taylor, Sir Charles (Eastbourne)
Doughty, C J. A. Leavey, J. A. Taylor, William (Bradford, N.)
du Cann, E. D. L. Leburn, W. G. Teeling, W.
Duncan, Sir James Legge-Bourke, Maj. E. A. H. Temple, John M.
Eden, J. B. (Bournemouth, West) Legh, Hon. Peter (Petersfield) Thomas, Leslie (Canterbury)
Elliot, Rt. Hon. W. E. (Kelvingrove) Lindsay, Hon. James (Devon, N.) Thomas, P, J. M. (Conway)
Elliott,R.W.(N'castle upon Tyne.N.) Lindsay, Martin (Solihull) Thompson, Kenneth (Walton)
Emmet, Hon. Mrs. Evelyn Linstead, Sir H. N. Thompson, Lt.-Cdr. R. (Croydon, S.)
Errington, Sir Eric Longden, Gilbert Thorneycroft, Rt.Hon. P.
Finlay, Graeme Lucas, Sir Jocelyn (Portsmouth, S.) Thornton-Kemsley, C. N.
Fisher, Nigel Lucas,P.B.(Brentford & Chiswick) Tllney, John (Wavertree)
Fletcher-Cooke, C. Lucas-Tooth, Sir Hugh Turton, Rt. Hon. R. H.
Fort, R. Macdonald, Sir Peter Vaughan-Morgan, J. K.
Fraser.Sir Ian (M'cmbe & Lonsdale) Mackie, J. H. (Galloway) Vickers, Miss Joan
Freeth, Denzil McLaughlin, Mrs. P. Wakefield, Edward (Derbyshire, W.)
Gammans, Dame Ann Muriel Maclay, Rt, Hon. John Wakefield,Sir Wavell (St. M'lebone)
Garner-Evans, E. H. McLean, Neil (Inverness) Walker-Smith, Rt. Hon. Derek
George, J. C. (Pollok) Macpherson, Niall (Dumfries) Wall, Major Patrick
Gibson-Watt, D. Maddan, Martin Ward, Rt. Hon. G. R. (Worcester)
Glover, D. Maitland,Cdr.J.F.W.(Horncastle) Whitelaw, W. S. I.
Glyn, Col. R. Markham, Major Sir Frank Williams, Paul (Sunderland, S.)
Godber, J. B. Marlowe, A. A. H. Williams, R. Dudley (Exeter)
Goodhart, Philip Mathew, R. Woollam, John Victor
Gower, H. R. Maude, Angus Yates, William (The Wrekin)
Graham, Sir Fergus Mawby, R. L.
Grant, W. (Woodside) Maydon, Lt.-Comdr. S. L. C. TELLERS FOR THE AYES:
Grant-Ferris Wg Cdr. R. (Nantwich) Morrison, John (Salisbury) Mr. Wills and Mr. Bryan.
Green, A. Mott-Radclyffe, Sir Charles
Ainsley, J. W. Healey, Denis Pearson, A.
Albu, A. H. Henderson, Rt. Hn. A. (Rwly Regis) Pentland, N.
Allen, Scholefield (Crewe) Herbison, Miss M. Plummer, Sir Leslie
Awbery, S. S. Hobson, C. R. (Keighley) Popplewell, E.
Balfour, A. Holmes, Horace Prentice, R. E.
Benson, G. Houghton, Douglas Probert, A. R.
Blackburn, F. Howell, Charles (Perry Barr) Randall, H. E.
Blenkinsop, A. Hoy, J. H. Rankin, John
Blyton, W. R. Hubbard, T. F. Redhead, E. C.
Boardman, H. Hughes, Cledwyn (Anglesey) Rhodes, H.
Bottomley, Rt. Hon. A. G. Hughes, Emrys (S. Ayrshire) Robens, Rt. Hon. A.
Bowden, H. W. (Leicester, S.W.) Hughes, Hector (Aberdeen, N.) Roberts, Albert (Normanton)
Boyd, T. C. Hunter, A. E. Roberts, Goronwy (Caernarvon)
Braddock, Mrs. Elizabeth Hynd, H. (Accrington) Robinson, Kenneth (St. Pancras, N.)
Brockway, A. F. Hynd, J. B. (Attercliffe) Ross, William
Brown, Rt. Hon. George (Belper) Jay, Rt. Hon. D. P. T. Royle C.
Callaghan, L. J. Jeger,Mrs.Lena (Holbn & St.Pnos,S.) Short, E. W.
Carmichael, J. Jones, David (The Hartiepools) Silverman, Julius (Aston)
Castle, Mrs. B. A. Jones, Elwyn (West Ham, S.) Simmons, C. J. (Brierley Hill)
Champion, A. J. Jones, Jack (Rotherham) Skeffington, A. M.
Chapman, W. D. Jones, J. Idwal (Wrexham) Slater, Mrs. H. (Stoke, N.)
Chetwynd, G. R. Jones, T. W. (Merioneth) Slater, J. (Sedgefield)
Coldrick, W. Kenyon, C. Smith, Ellis (Stoke, S.)
Collick, P. H. (Birkenhead) Key, Rt. Hon. C. W. Sorensen, R. W.
Craddock, George (Bradford, S.) King, Dr. H. M. Soskice, Rt. Hon. Sir Frank
Cullen, Mrs. A. Lawson, G. M. Sparks, J. A.
Dalton, Rt. Hon. H. Lee, Frederick (Newton) Steele, T.
Davies, Ernest (Enfield, E.) Lever, Harold (Cheetham) Stewart, Michael (Fulham)
Davies, Stephen (Merthyr) Lewis, Arthur Stonehouse, John
Deer, G. Logan, D. G. Strachey, Rt. Hon. J.
de Freitas, Geoffrey Mabon, Dr. J. Dickson Summerskill, Rt. Hon. E.
Delargy, H. J. MacColl, J. E. Sylvester, G. O.
Donnelly, D. L. MacDermot, Niall Taylor, Bernard (Mansfield)
Ede, Rt. Hon. J. C. Mclnnes, J. Taylor, John (West Lothian)
Edelman, M. McKay, John (Wallsend) Thomas, Iorwerth (Rhondda, W.)
Edwards, Rt. Hon. John (Brighouse) MacPherson, Malcolm (Stirling) Thomson, George (Dundee, E.)
Edwards, Rt. Hon. Ness (Caerphilly) Mallalleu, E. L. (Brigg) Thornton, E.
Edwards, Robert (Bilston) Mann, Mrs. Jean Tomney, F.
Edwards, W. J. (Stepney) Mason, Roy Ungoed-Thomas, Sir Lynn
Fernyhough, E. Mitchison, G. R. Usborne, H. C.
Fienburgh, W. Monslow, W. Watkins, T. E.
Finch, H. J. Moody, A. S. Wells, William (Walsall, N.)
Forman, J. C. Morris, Percy (Swansea, W.) Wheeldon, W. E.
Fraser, Thomas (Hamilton) Mort, D. L. White, Mrs. Eirene (E. Flint)
Gaitskell, Rt. Hon. H. T. N. Moyle, A. White, Henry (Derbyshire, N.E.)
George,Lady Megan Lloyd(Car'then) Mulley, F. W. Willey, Frederick
Gibson, C. W. Noel-Baker, Rt. Hon. P. (Derby, S.) Williams, David (Neath)
O'Brien, Sir Thomas Williams, Rev. Llywelyn (Ab'tillery)
Greenwood, Anthony Oliver, G. H. Williams, W. R. (Openshaw)
Grenfell, Rt. Hon. D. R. Oram, A. E. Willis, Eustace (Edinburgh, E.)
Grey, C. F. Orbach, M. Wilson, Rt. Hon. Harold (Huyton)
Griffiths, David (Rother Valley) Oswald, T. Woodburn, Rt. Hon. A.
Griffiths, Rt. Hon. James (Llanelly) Owen, W. J. Woof, R. E.
Hale, Leslie Padley, W. E. Yates, V. (Ladywood)
Hall, Rt. Hn. Glenvil (Colne Valley) Paling, Rt. Hon. W. (Dearne Valley) Zilliacus, K.
Hamilton, W. W. Palmer, A. M. F.
Hannan, W. Pannell, Charles (Leeds, W.) TELLERS FOR THE NOES:
Harrison, J. (Nottingham, N.) Pargiter, G. A. Mr. J. T. Price and Mr. Wilkins.
Hayman, F. H. Parker, J.

10.35 p.m.

Mr. Houghton

I beg to move, in page 7, line 41, after "by", to insert: inserting after the word 'establishment' in subsection (1) the words 'or for the year of assessment has been totally incapacitated' by". This Amendment deals with a comparatively small matter, and we hope that the right hon. Gentleman will be able to make this deserving concession to the incapacitated child. It was a matter dealt with in the report of the Royal Commission on Taxation, where, in paragraph 193, the Commission drew attention to the fact that whereas a child undergoing further education after the age of 16 entitled the parent to a continuation of the child allowance, a child over the age of 16 totally incapacitated could not qualify for the child allowance though the parent was entitled to the dependent relative relief.

The Commission drew attention to the fact that whereas the child allowance was taxed at £85, as it was then, the dependent relative relief was at £60, and the Commission said: In these circumstances the drop in the allowance from £85 to £60 seems a needless hardship; and we recommend that a person who is receiving a child allowance in respect of an incapacitated child when it attains the age of 16 should be entitled to the same figure of allowance for the intervening years until it attains 21, always assuming that the state of incapacity continues during any year of claim". Since those words were written, the child allowance has gone up, and in Clause 11 of this Bill for a child over 16 continuing education the relief now is £150. As the House will remember, for a child over 11 it is £125. I presume that an incapacitated child over 11 will qualify for the child allowance of £125 but at the age of 16 will not qualify for any child allowance at all. Beyond that, the parent will qualify only for the dependent relative allowance, which is lower, as the Royal Commission remarked. We propose, therefore, that the relief for an incapacitated child for the whole of the year of assessment over the age of 16 up to the age of 21 shall have the same tax relief as for a child of the same age continuing education and receiving therefore the higher child relief of £150.

A great strain on household resources, and many other problems, accompany the parents who have incapacitated children rising to adult years. The Royal Commission was right in suggesting that such parents should not be worse off than parents of children able to continue education after 16. We hope that the right hon. Gentleman will see his way to pick out this deserving additional relief from the Commission's Report. The cost would be very small and would not give any further twist to the inflationary spiral. This is a human as well as a taxation problem, and we hope that at this late stage of our Finance Bill discussions the right hon. Gentleman will be able to make the concession.

Mr. Jay

I beg to second the Amendment.

Mr. Powell

The hon. Member for Sowerby (Mr. Houghton) has drawn attention to the fact that at age 16 the allowance receivable by the parents of an incapacitated child will fall from £125, which is the amount of the child allowance from 11-plus to 16-plus, to £60, the amount of the dependent relative allowance. That was the fall to which—although there was then a smaller child allowance—the Royal Commission drew attention.

The child allowance and the dependent relative allowance are only part of the picture. It is true that at age 21—this was the reason why the Royal Commission brought age 21 into this matter at all—the parents can make a payment of an annuity to a child under a covenant; but I notice that the Opposition have not included that age-limit in the proposal which is before the House, but would propose to grant the full child allowance of £150 without limit of age.

There is, however, another and, I believe, much more relevant factor which comes into play at the age of 16. Irrespective of the means of the parents, the State then steps in and pays a grant to the incapacitated child—a National Assistance grant without regard to the means of the parents—which rises from 23s. 6d. at age 16 by gradations to 36s.—£3 a week or £150 a year —at age 21.

Therefore, in the case of greatest hardship, where the burden of an incapacitated child must necessarily weigh most heavily on the parents, from 16 onwards the State steps in and puts an amount of additional income into that house which exceeds the maximum that could possibly be gained by means of the child allowance at its upper figure of £150 a year. I suggest that that is the right way of dealing with the burden and problem of an incapacitated child, and not by a special dependent relative allowance which would help least those with the least resources. This is a direct payment which will, on the contrary, help most where the need is greatest.

10.45 p.m.

There is another reason why I suggest that we ought not to make this special exception from the general law as to dependent relatives by distinguishing the incapacitated child. As the years went on, it would become impossible to justify £150 dependent relative allowance for a child and only £60 for a person in any other relationship but equally dependent upon the taxpayer. In fact, this would in practice inevitably mean that the dependent relative allowance would have to be adjusted to the same figure as the full child allowance, which, of course, would have major financial and other repercussions. I would say to the House, therefore, that I do not believe that this problem of the drop in tax relief for the parents of an incapacitated child really exists as the Royal Commission represented it. In fact, in carrying this relief above the age of 16 for an incapacitated child, we should not only create a gross anomaly and sense of grievance in regard to other incapacitated and dependent relatives, but we should not be taking the most direct and most helpful way of assisting parents in this position, which is done at the moment by the State stepping in directly through the National Assistance Board.

Mr. Godfrey Nicholson (Farnham)

I listened with great interest to what my hon. Friend the Financial Secretary said. I think that this calls for some comment. Surely one can imagine that if the Amendment were accepted it would actually save money, because many people would prefer to keep their incapacitated child out of their own income, for which they could get relief for Income Tax purposes, and fall back on National Assistance. I can imagine many families which would rather not draw National Assistance, and so money would be saved for the Treasury.

I am a little tired of hearing that no exception can ever be admitted because of the concatenation of consequences it would carry in its train. Surely, that is, to some extent, a confession of failure. People should be encouraged to look after their incapacitated children out of their own income if that can be made possible for them by the State. I do hope that in future Finance Bills this matter will be looked at again.

Mr. Houghton

I can speak again only by leave of the House. Perhaps I may be permitted to do so for two minutes to comment on what the Financial Secretary said. It is true that in some cases the parents of the incapacitated child may apply for National Assistance, but in other cases they would not. Many parents who are taxpayers would feel inhibited from applying for National Assistance for their incapacitated child and would prefer to have their need met by tax relief.

There is nothing in this Amendment which restrains or restricts in any way applications to the National Assistance Board for the special help which is available in case of need. With regard to the comparison between the incapacitated child and another dependent relative, I think the House would agree that a child stands in a much closer relationship to the parent than any other dependent relative can to the taxpayer. There is something very special about that. It would be unwise for us to compare incapacitated children with other dependent relatives. We should rather compare an incapacitated child with a child of the same age who is fit and well and able to continue normal education.

I hope that, in the circumstances, the House will mark its approval of the recommendation of the Royal Commission by voting for the Amendment.

Question put, That those words be there inserted in the Bill:—

The House divided: Ayes 162, Noes 207.

Division No.169.] AYES [10.50 p.m.
Ainsley, J. W. Cullen, Mrs A. Hall, Rt. Hn. Glenvil (Colne Valley)
Albu, A. H. Dalton, Rt. Hon. H. Hannan, W.
Allen, Scholefield (Crewe) Deer, G. Harrison, J. (Nottingham, N.)
Awbery, S. S. de Freitas, Geoffrey Hayman, F. H.
Balfour, A. Delargy, H. J. Healey, Denis
Benson, G. Donnelly, D. L. Henderson, Rt. Hn. A. (Rwly Regis)
Blackburn, F. Ede, Rt. Hon. J. C. Herbison, Miss M.
Blenkinsop, A. Edelman, M. Hobson, C. R. (Keighley)
BIyton, W. R. Edwards, Rt. Hon. John (Brigthouse) Holmes, Horace
Boardman, H. Edwards, Rt. Hon. Ness (Caerphilly) Holt, A. F.
Bottomley, Rt. Hon. A. G. Edwards, W. J. (Stepney) Houghton, Douglas
Bowden, H. W. (Leicester, S. W.) Fernyhough, E. Howell, Charles (Perry Barr)
Bowen, E. R. (Cardigan) Fienburgh, W. Hoy, J. H.
Boyd, T. C. Finch, H. J. Hubbard, T. F.
Braddock, Mrs. Elizabeth Forman, J. C. Hughes, Cledwyn (Anglesey)
Brockway, A. F. Fraser, Thomas (Hamilton) Hughes, Emrys (S. Ayrshire)
Brown, Rt, Hon. George (Belper) George, Lady Megan Lloyd(Car'then) Hughes, Hector (Aberdeen, N.)
Callaghan, L. J. Gibson, C. W. Hunter, A. E.
Carmichael, J. Greenwood, Anthony Hynd, H. (Accrington)
Castle, Mrs. B. A. Grenfell, Rt. Hon. D. R. Hynd, J. B. (Attercliffe)
Champion, A. J. Grey, C. F. Jay, Rt. Hon. D. P. T.
Chetwynd, G. R. Griffiths, David (Rother Valley) Jeger, Mrs.Lena(Holbn & St.Pncs,S.>
Coldrick, W. Griffiths, Rt. Hon. James (Llanelly) Jones, David (The Hartlepools)
Collick, P. H. (Birkenhead) Grimond, J. Jones, Elwyn (W. Ham, S.)
Craddock, George (Bradford, S.) Hale, Leslie Jones, Jack (Rotherham)
Jones, J. Idwal (Wrexham) Padley, W. E. Steele, T.
Jones, T. W. (Merioneth) Paling, Rt. Hon. W. (Dearne Valley) Stewart, Michael (Fulham)
Kenyon, C. Palmer, A. M. F. Stonehouse, John
King, Dr. H. M. Pannell, Charles (Leeds, W.) Summerskill, Rt. Hon. E.
Lawson, G. M. Pargiter, G. A. Sylvester, G. O.
Lee, Frederick (Newton) Parker, J. Taylor, Bernard (Mansfield)
Lever, Harold (Cheetham) Pearson, A. Taylor, John (West Lothian)
Lewis, Arthur Pentland, N. Thomas, Iorwerth (Rhondda, W.)
Logan, D. G. Plummer, Sir Leslie Thomson, George (Dundee, E.)
Mabon, Dr. J. Dickson Popplewell, E. Thornton, E.
MacColl, J. E. Prentice, R. E. Ungoed-Thomas, Sir Lynn
MacDermott, Niall Probert, A. R. Usborne, H. C.
Mclnnes, J. Randall, H. E. Wade, D. W.
McKay, John (Wallsend) Rankin, John Watkins, T. E.
MacPherson, Malcolm (Stirling) Redhead, E. C. Wells, William (Walsall, N.)
Mallalieu, E. L. (Brigg) Rhodes, H. Wheeldon, W. E.
Mann, Mrs. Jean Robens, Rt. Hon. A. White, Mrs. Eirene (E. Flint)
Mason, Roy Roberts, Albert (Normanton) White, Henry (Derbyshire, N.E.)
Mitchison, G. R. Roberts, Goronwy (Caernarvon) Willey, Frederick
Monslow, W. Robinson,Kenneth (St. Pancras, N.) Williams, David (Neath)
Moody, A. S. Ross, William Williams, Rev. Llywelyn (Ab'tillery)
Morris, Percy (Swansea, W.) Royle, C. Williams, W. R. (Openshaw)
Moyle, A. Short, E. W. Willis, Eustace (Edinburgh, E.)
Mulley, F. W. Silverman, Julius (Aston) Wilson, Rt. Hon. Harold (Huyton)
O'Brien, Sir Thomas Simmons, C. J. (Brierley Hill) Woodburn, Rt. Hon. A.
Oliver, G. H. Slater, Mrs. H. (Stoke, N.) Woof, R. E.
Oram, A. E. Slater, J. (Sedgefield) Yates, V. (Ladywood)
Orbach, M. Sorensen, R. W.
Oswald, T. Soskice, Rt. Hon. Sir Frank TELLERS FOR THE AYES:
Owen, W. J. Sparks, J. A. Mr. J T. Price and Mr. Wilkins
Agnew, Sir Peter Errington, Sir Eric Iremonger, T. L.
Aitken, W. T. Finlay, Graeme Irvine, Bryant Godman (Rye)
Amery, Julian (Preston, N.) Fisher, Nigel Jenkins, Robert (Dulwich)
Arbuthnot, John Fletcher-Cooke, C. Jennings, Sir Roland (Hallam)
Armstrong, C. W. Fort, R. Johnson, Dr. Donald (Carlisle)
Ashton, H. Fraser, Sir Ian (M'cmbe & Lonsdale) Johnson, Eric (Blackley)
Atkins, H. E. Gammans, Dame Ann Muriel Jones, Rt. Hon. Aubrey (Hall Green)
Baldock, Lt.-Cmdr. J. M. Garner-Evans, E. H. Joseph, Sir Keith
Baldwin, A. E. George, J. C. (Pollok) Keegan, D.
Balniel, Lord Gibson-Watt, D. Kershaw, J. A.
Barber, Anthony Glover, D. Kimball, M.
Barlow, Sir John Glyn, Col. R. Kirk, P. M.
Barter, John Godber, J. B. Lambert, Hon. G.
Baxter, Sir Beverley Goodhart, Philip Langford-Holt, J. A.
Bell, Philip (Bolton, E.) Gower, H. R. Leather, E. H. C.
Bennett, F. M. (Torquay) Graham, Sir Fergus Leavey, J. A.
Bevins, J. R. (Toxteth) Grant, W. (Woodside)
Bidgood, J. C. Grant-Ferris, Wg Cdr. R. (Nantwich) Leburn, W. G.
Birch, Rt. Hon. Nigel Green, A. Legge-Bourke, Maj. E. A. H.
Bishop, F. P. Gresham Cooke, R. Legh, Hon. Peter (Petersfield)
Body, R. F. Grimston, Sir Robert (Westbury) Lindsay, Hon. James (Devon, N.)
Bossom, Sir Alfred Hall, John (Wycombe) Lindsay, Martin (Solihull)
Browne, J. Nixon (Craigton) Harrison, Col. J. H. (Eye) Linstead, Sir H. N.
Bullus. Wing Commander E. E. Harvey, Sir Arthur (Macclesfield) Longden, Gilbert
Butcher, Sir Herbert Head, Rt. Hon. A. H. Lucas, Sir Jocelyn (Portsmouth, S.)
Carr, Robert Heald, Rt. Hon. Sir Lionel Lucas, P. B. (Brentford & Chiswick)
Chichester-Clark, R. Heath, Rt. Hon. E. R. G. Lucas-Tooth, Sir Hugh
Clarke, Brig. Terence (Portsmth, W.) Henderson, John (Cathcart) Macdonald, Sir Peter
Conant, Maj. Sir Roger Henderson-Stewart, Sir James Mackie, J. H. (Galloway)
Cooke, Robert Hesketh, R. F. McLaughlin, Mrs. P.
Cooper, A. E. Hill, Mrs. E. (Wythenshawe) Maclean, Fitzroy (Lancaster)
Cordeaux, Lt.-Col. J. K. Hill, John (S. Norfolk) McLean, Neil (Inverness)
Corfield, Capt. F. V. Hinchingbrooke, Viscount Macpherson, Niall (Dumfries)
Craddock, Beresford (Spelthorne) Hirst, Geoffrey Maddan, Martin
Crosthwaite-Eyre, Col. O. E. Hobson,John(Warwick & Leam'gt'n) Maitland, Cdr. J. F. W. (Horncastle)
Cunningham, Knox Holland-Martin, C. J. Markham, Major Sir Frank
Currie, G. B. H. Hope, Lord John Marlowe, A. A. H.
Dance, J. C. G. Hornby, R. P. Mathew, R.
Davidson, Viscountess Hornsby-Smith, Miss M. P. Mawby, R. L.
D'Avigdor-Goldsmid, Sir Henry Horsbrugh, Rt. Hon. Dame Florence Maydon, Lt.-Comdr. S. L. C.
Deedes, W. F. Howard, John (Test) Morrison, John (Salisbury)
Digby, Simon Wingfield Hudson, W. R. A. (Hull, N.) Mott-Radclyffe, Sir Charles
Donaldson, Cmdr. C. E. McA. Hughes Hallett, Vice-Admiral J. Nabarro, G. D. N.
Doughty, C. J. A. Hughes-Young, M. H. C. Nairn, D. L. S.
du Cann, E. D. L. Hurd, A. R. Nicholls, Harmar
Eden, J. B. (Bournemouth, W.) Hutchison, Michael Clark (E'b'gh,S.) Nicholson, Godfrey (Farnham)
Elliot, Rt. Hon. W. E. (Kelvingrove) Hutchison, Sir Ian Clark (E'b'gh, W.) Nicolson, N. (B'n'm'th, E. & Chr'ch)
Elliott,R.W.(N'castle upon Tyne,N.) Hyde, Montgomery Oakshott, H. D.
Emmett, Hon. Mrs. Evelyn Hylton-Foster, Rt. Hon. Sir Harry O'Neill, Hn. Phelim (Co. Antrim,N.)
Orr-Ewing, Charles Ian (Hendon, N.) Roper, Sir Harold Thomas, P. J, M. (Conway)
Page, R. G. Ropner, Col. Sir Leonard Thompson, Kenneth (Walton)
Pannell, N. A. (Kirkdale) Schofield, Lt.-Col. W. Thompson, Lt.-Cdr. R, (Croydon,S.)
Partridge, E. Scott-Miller, Cmdr. R. Thorneycroft, Rt. Hon. P.
Paton, John Sharples, R. C. Thornton-Kemsley, C. N.
Pickthorn, K. W. M. Simon, J. E. S. (Middlesbrough, W.) Tilney, John (Wavertree)
Pilkington, Capt. R. A. Smithers, Peter (Winchester) Turton, Rt. Hon. R. H.
Pitt, Miss E. M. Speir, R. M. Vaughan-Morgan, J. K.
Pott, H. P. Spens, Rt. Hn. Sir P. (Kens'gt'n, S.) Vickers, Miss Joan
Powell, J. Enoch Stanley, Capt. Hon. Richard Wakefield, Edward (Derbyshire, W.)
Price, David (Eastleigh) Stevens, Geoffrey Wakefield, Sir Wavell (St. M'lebone)
Price, Henry (Lewisham, W.) Steward, Harold (Stockport, S.) Walker-Smith, Rt. Hon. Derek
Prior-Palmer, Brig. O. L. Steward, Sir William (Woolwich, W.) Wall, Major patrick)
Profumo, J. D. Stoddart-Scott, Col. M. Ward, Rt. Hon. G. R. (Worcester)
Ramsden, J. E. Storey, S. Whitelaw, W. S. I.
Rawlinson, Peter Studholme, Sir Henry Williams, Paul (Sunderland, S.)
Redmayne, M. Taylor, Sir Charles (Eastbourne) Wills, C. (Bridgwater)
Remnant, Hon. P. Taylor, William (Bradford, N.) Woollam, John Victor
Ridsdale, J. E. Teeling, W. Yates, William (The Wrekin)
Robinson, Sir Roland (Blackpool, S.) Temple, John M.
Rodgers, John (Sevenoaks) Thomas, Leslie (Canterbury) TELLERS FOR THE NOES:
Mr. Bryan and Mr. Brooman-White.

Further consideration of the Bill, as amended, adjourned.—[Mr. P. Thorneycroft.]

Bill, as amended (in Committee and on recommittal), to be further considered Tomorrow.