HC PQ [Pensions and National Insurance]
|Document type:||public statement|
|Document kind:||House of Commons PQs|
|Venue:||House of Commons|
|Source:||Hansard HC [708/211-33]|
|Editorial comments:||Immediately after prayers. MT put a question at c224 and otherwise played no part.|
|Themes:||Local government finance|
Building Society Holdings (Information)
1. Mr. Shepherd
asked the Chancellor of the Exchequer if building societies who are required to supply details of individual holdings in their societies to the Inland Revenue are made aware that the information, supplied for averaging purposes, can be and is used for the purpose of checking individual holdings, and can lead to prosecutions against members.
The Financial Secretary to the Treasury (Mr. Niall MacDermot)
I believe that building societies are aware of the use made of this information.
Is it not a fact that very few members of building societies or depositors are aware of it? If this information is to be obtained, ought it not to be obtained, not in this underhanded way, but under Section 29 of the 1952 Act?
In fact, very much wider information could be obtained under Section 29. There is nothing underhand about the way this information is obtained. It is quite well known that 212returns have to be made in order to determine the composite rate. When the information is obtained, it has to be linked with the particular taxpayer's individual file for purposes of calculating the rate. If it is found that the taxpayer has not disclosed some of his income, it is the duty of the Revenue to investigate it.
Would it not be more equitable if this applied to all taxpayers who have money in building societies and not those who happen to be the victims of the particular sample?
The object of the exercise is not to obtain information about non-disclosure, but if such information comes to light then it is the duty of the Revenue to investigate it.
2. Mr. William Hamilton
asked the Chancellor of the Exchequer if he will now make a statement on the progress made in his consideration of the establishment of a State-run unit trust.
The Chancellor of the Exchequer (Mr. James Callaghan)
I am not yet ready to add to the reply I gave to the right hon. Member for Orkney and Shetland (Mr. Grimond) on 15th December, 1964.
Can my right hon. Friend give an assurance that he is speeding up his investigation of this important problem? Does he appreciate that the small saver is very anxious to participate in this kind of scheme, particularly if the shares are for sale at post offices in small units of 5s., 2s. 6d., or even 1s.?
Yes, I am much obliged. I am going into this with very great care and a great deal of information has been made available to us. I should prefer not to make a statement yet.
Mr. William Clark
If a national unit trust is brought into being, will the Chancellor confirm that no undue advantage will be given to it as opposed to private trusts?
I think it is far too early to start talking in that way. I should have thought that the hon. 213Gentleman would have welcomed the imaginative ideas coming from both sides of the House on this matter.
3. Mr. Gresham Cooke
asked the Chancellor of the Exchequer whether he is aware that German exports receive a rebate of the order of 5 per cent. to 6 per cent. of factor costs in relation to their turnover tax; and whether, in view of the fact that present taxation in the United Kingdom is estimated to amount to about 14dec;3 per cent. of the factor costs of British industry, he will increase the present export rebate for export goods.
A comparison cannot be made in this form, as the different rebates reflect entirely different systems of taxation.
Mr. Gresham Cooke
That may be so, but would not the Chancellor of the Exchequer agree that it shows that a very real advantage is obtained by German exporters and exporters in other countries which have a similar system over British exporters? There is a very big differential here. Would he look again at this problem and see if something can be done in the forthcoming Budget to lessen the differential?
As it is impossible to compare like with unlike, I cannot be as dogmatic as the hon. Gentleman is about this. If he and I have had access to the same sources of information—and I think that we have—then I think that much of the information he has read would be challenged if it were exposed to examination.
4. Mr. Higgins
asked the Chancellor of the Exchequer what steps he proposes to take to ensure that all forms of residential property are valued on a comparative basis for rating purposes.
All forms of residential property are required by law to be assessed on the same basis, namely the rent which the property may reasonably be expected to fetch.
Is the hon. and learned Gentleman aware that, as a result of recent decisions by the Lands Tribunal, the link between different forms of resi214dential property is becoming extremely tenuous? Does he agree that the only evidence allowed normally is in respect of the same sort of residential property and that it only extends to a general comparison if the first kind of evidence is not adequate? Is the hon. and learned Gentleman aware that the evidence for flats which is taken into account in my constituency does not take due regard of the fact that 600 or more flats are unoccupied?
I do not think that there is anything new in the decisions of the Lands Tribunal. They merely confirm what has long been recognised to be the basis of assessment. This basis is being considered in the Government's review of local government finance, including the rating system.
Can the hon. and learned Gentleman say when that review will be completed?
Is my hon. and learned Friend convinced that there are no discrepancies between different regions in the valuation of property?
The object of bringing rating assessments under the Inland Revenue Department was to obtain greater uniformity between regions. This is not easy to achieve, but generally the Department is satisfied that it is achieving it, and the results of appeals to the Lands Tribunal would seem to confirm that.
5. Mr. Higgins
asked the Chancellor of the Exchequer whether, in view of the fact that the capital value of a property reflects the discounted value of its future rents, he will take steps to allow selling prices to be used as a check on estimates of notional rents calculated for valuation purposes.
No, Sir; the law requires rating assessments to be based on the rental value of the property, and not on its capital value.
Would the hon. and learned Gentleman consider making this sort of comparison in the review into the rating system which is taking place in view of the discrepancies between the ratios of selling price and the notional rent?215
Yes, Sir. That will be considered in the review.
Is it not true that if the basis suggested by the hon. Member for Worthing (Mr. Higgins) were adopted it would result in the rating system being a great deal less regressive than it is at the moment?
Yes, but the argument the other way, which is sometimes ignored, is that capital values are very often an unreliable guide to rental values and would not necessarily themselves be a satisfactory basis either.
6. Mr. Peter Walker
asked the Chancellor of the Exchequer what action he has taken to improve invisible earnings.
70. Mr. Tinn
asked the Chancellor of the Exchequer what action he now proposes to encourage the growth of invisible exports.
So-called invisible earnings cover a wide range of activities, and form a valuable contribution to our balance of payments. Government policy is continually directed to securing the best possible return from them.
In view of the fact that 35 per cent. of these earnings come under this category, would the right hon. Gentleman consider other ways of giving tax incentives to the industries concerned, and will he see that they have representation on the various dollar-export councils?
Yes, Sir. I will look into this.
Export rebates are valuable in many fields, but there is a difficulty about extending them to service industries for reasons which I am sure are apparent to the hon. Gentleman. But invisibles provide an important part of our earnings and I will certainly do all I can. If the hon. Member has particular suggestions about particular services, I should be glad to consider them.
Has my right hon. Friend noticed the contrast between the deficit on invisible earnings of £20 million in the privately-owned shipping industry and the contribution made by the largely 216publicly-owned civil aviation industry of a surplus of £25 million?
Yes, Sir. It is noticeable that the earnings of shipping have gone down. To some extent this is due to the level of world trade. An improvement in world trade will bring an increase in the level of shipping earnings as soon as it starts to pick up.
Mr. Wingfield Digby
Will the right hon. Gentleman bear in mind the problems of the shipping industry, which are considerable, particularly with regard to capital? Will he do his best to restore the balance of £100 million a year which we used to have and which has row dwindled to nothing?
This is a problem which has afflicted many Governments for many years. The growth in nationalism in shipping is bound to militate against the earnings which we enjoyed from the shipping services before the First World War.
27. Dame Irene Ward
asked the Chancellor of the Exchequer whether he will introduce a scheme to extend export rebates to invisible exports, including ship-repair work.
I have carefully considered the hon. Lady's suggestion which, as I think she knows, would require legislation; but there are great practical difficulties in the way of accepting it.
Dame Irene Ward
Is not the hon. and learned Gentleman aware that shiprepairing for foreign owners has always been regarded as an export? When the ship repairers' representatives went to see the Treasury officials, they were given a friendly reception and were of the opinion that after an examination their invisible exports would be treated in the same way as the exports of people regarded as exporters. Can the hon. and learned Gentleman do better than appears from his Answer to be the case?
We always try to give people a friendly reception at the Treasury. Shiprepairing could not be considered in isolation from other forms of invisible exports. As I have said, there are difficulties about applying the scheme to invisible exports and I think that we must wait to see how the scheme works 217out in practice for a period before we consider how we can extend it.
Mr. Wingfield Digby
Is the hon. and learned Gentleman aware of the worldwide reputation of this country for shiprepairing, and will he keep in touch with the Shipbuilding Conference to see whether something can be done about this matter?
Certainly. I shall be glad to consider any specific suggestions which may be made.
Has my hon. and learned Friend noticed the improvement in shipbuilding which has already resulted from the steps taken by the President of the Board of Trade to improve credit facilities?
Yes. We try to help by many different ways, but we cannot find an answer to every problem by one means.
Capital Gains Tax
7. Mr. Wingfield Digby
asked the Chancellor of the Exchequer whether capital gains tax will fall on farm stock and working capital on every change of farm, whether owned or tenanted, by a farmer.
15. Mr. Ridley
asked the Chancellor of the Exchequer if he will exempt from his proposed capital gains tax gains which are made on works of art originally purchased from the artist.
42. Mr. Brewis
asked the Chancellor of the Exchequer whether he will take into account when preparing his new capital gains tax that the financial returns of small woodland owners come from infrequent sales of timber and that, averaged over a period of years, such returns do not exceed 3 per cent. per annum on the capital represented by their woodlands.
I have noted the points which the hon. Gentlemen make, but I must ask them to await my right hon. Friend's legislative proposals.
Will the hon. and learned Gentleman bear in mind that there are many young farmers whose ambition it is to move to a larger farm and that there are far too few farms becoming vacant? Even if another farm became available, 218is he aware that if this tax falls heavily on a young man before he moves he will be tempted to stay in the smaller farm?
I will take note of that point.
Is the hon. and learned Gentleman aware that his right hon. Friend has anticipated his Budget statement on a capital gains tax and will he not go a little way to meet the point in my Question No. 15? Is he aware that it this concession is not granted irreparable harm will be done to artists, painters and sculptors? Will he look at the problem seriously to see whether he cannot make a concession?
I cannot say more about my right hon. Friend's Budget statement, but I will bear that point in mind.
Is my hon. and learned Friend aware that at present Income Tax and Surtax are charged on increases in farm stock and working capital on charges being made and that to discriminate in this way by a capital gains tax could well lead to a situation in which there could be the evasion which we had before farms were assessed under Schedule D?
It is for those sorts of reasons that we are proposing to introduce the tax.
Is the hon. and learned Gentleman aware that this is a serious point? Is he having consultations with the National Farmers' Union and other organisations concerned with farming and the countryside about the imposition of this tax?
Yes, Sir. We are having representations from many organisations. We are glad to receive and consider any such representations.
8. Mr. Patrick Jenkin
asked the Chancellor of the Exchequer what is the policy of Her Majesty's Government with regard to the decimalisation of the currency; and whether he will introduce legislation to implement this reform.
9. Mr. Bessell
asked the Chancellor of the Exchequer whether he will now 219make a statement regarding Her Majesty's Government's policy on the introduction of a decimal coinage system.
I regret that the Government are not yet in a position to make a statement on the possible introduction of a decimal currency.
Would the right hon. Gentleman not agree that this is an inevitable reform and that the sooner it is made the better?
I think that it is a desirable reform, but we have to weigh against it the cost of introduction and the time of the introduction. In addition, there was not complete agreement on the Halsbury Committee about the method which should be employed. Therefore, I think that we would do better to take a little longer to consider all these issues properly before we take any steps.
Is the right hon. Gentleman aware of the difficulties caused to manufacturers of cash registers and business machines by the uncertainty of the position one way or the other?
I would be sorry if this were so, and it clearly means that the Government should make up their mind on the question. [Hon. Members: "Hear, hear."] It does no lie in the mouth of anybody opposite who is saying "Hear, hear" to ask us to make up our mind yet.
Is my right hon. Friend aware that any further delay in announcing our adoption of these changes is harmful to our export drive and that British industry generally is anxious to know where the Government stand? Is my right hon. Friend aware that I should be glad of an assurance that he will brook no delay on this matter?
I give that assurance.
10. Mr. Gresham Cooke
asked the Chancellor of the Exchequer if he will make a statement on the main activities of the Department of the Paymaster-General for the past three months; what is its present staff; and whether it is adequate for the purposes involved.220
While carrying on its normal banking and pension-paying services, the Department has been completing the first stage of its dispersal to Crawley New Town and planning the introduction of a computer system, to be installed at Crawley. Staff in post number 629, against a complement of 653; subject to the filling of vacancies, the staffing provision is adequate.
Mr. Gresham Cooke
Is the right hon. Gentleman aware that 629 people seem to help the Paymaster-General to do precisely nothing? Is he aware that the Paymaster-General has earned £1,830 since 16th October? Is he aware that he has answered only six Questions in the House, which come out at £305 per Question? Does the right hon. Gentleman think that this man is giving value for money? Do we not deserve better value for it?
My right hon. Friend the Paymaster-General's office acts as a banker for most Government Departments and pays more than 400,000 public service pensions to teachers, civil servants, National Health Service pensioners and the rest. As to the work of my right hon. Friend, I do not think that the hon. Gentleman need be so nervous. Unless he has something which he is anxious to hide, I can assure him that my right hon. Friend's eagle eye will not fall on him.
Is my right hon. Friend aware that the Paymaster-General is worth a score of hon. Members opposite?
With respect to my right hon. Friend, I think that he is probably worth many more than that.
On a point of order, Mr. Speaker. I should like to ask for your guidance. Is it permissible for an hon. Member to refer to the Paymaster-General as "this man" and not as "the right hon. Gentleman"?
No; it is a breach of the courtesies, but I did not hear it. Let us get on. I think that the right hon. Gentleman the Chancellor had answered.
11. Mr. Ridsdale
asked the Chancellor of the Exchequer whether he is satisfied that an adequate return is being achieved 221on the capital invested in the nationalised industries; and if he will make a statement.
Nationalised industries are expected to earn a reasonable rate of return on capital invested in them. I am satisfied that their financial objectives take this requirement into account.
Does the Chancellor think it right that there has been a price rise of 150 per cent. on certain season tickets in the past ten years in spite of the investment of £1,200 million in British Railways in the same period?
What has always to be remembered about the nationalised industries, especially the railways and coal, is that they are not capital intensive. Any general increase in wage rates must be reflected to a very much greater extent in the railways than in a great many other industries, and rises in fares are bound to follow rises in wages of this sort.
My right hon. Friend mentioned coal. Will he compare the increased productivity of the coal industry with that of private enterprise?
I am glad to say that the increase in productivity in the coal industry last year was over 6 per cent. and in 1962 it was over 8 per cent. These are very valuable assets.
Will the Chancellor confirm that he will be adopting the same targets as the previous Government did as regards the nationalised industries, and that this will extend to B.O.A.C. also for the writing off of the deficit and for the contingency allowance which he has agreed to make?
I answered a question in those terms about two months ago. That does not mean that I should not feel entirely free to review the basis of earnings in the industries, but the targets as targets are acceptable.
In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek to raise the matter on the Adjournment.
Tax Collection (Costs)
13. Mr. Ridsdale
asked the Chancellor of the Exchequer what is the present cost of collecting taxes by the Govern222ment; and what estimate he has made of the cost incurred by industry and others in assisting the Government in the collection of taxes.
In 1963–64, the costs of collecting the Inland Revenue duties, the Customs and Excise duties and the Motor Vehicles duties were £60.7 million, £24.8 million and £5.2 million, respectively. These figures include the relevant expenses incurred by other Departments. The answer to the second part of the Question is that no such estimate has been made.
Is not this figure far too high, and does it not show the urgent necessity of not overburdening the tax collecting machinery? Will the Chancellor do everything he can to act accordingly?
If the hon. Gentleman has any suggestions as to how we might collect our taxes more cheaply, I should be very glad to receive them.
Public Works Loan Board (Interest Rates)
14. Mr. Wingfield Digby
asked the Chancellor of the Exchequer what representations he has received as a result of his decision to raise the interest rates of the Public Works Loan Board as from 20th January; and what replies he has sent.
I have received three letters about this increase. In reply I have explained that only the rates for last-resort loans from the Public Works Loan Board were raised.
I recognise that the two-tier system gives some help, but will the Chancellor accept that people are not pleased, even if he has received only three letters, and will he give an undertaken that, when he is able to reduce the Bank Rate, there will be a reduction in this very high rate?
I was not pleased with having to raise the Bank Rate, but it was an essential part of the short-term defences which had to be raised. As to the level of Public Works Loan Board interest rates, I should be ready to review these at any time.
Is my right hon. Friend aware that many local authorities are 223extremely grateful for the improved availability of finance through the Public Works Loan Board?
I am much obliged. Perhaps I may add that, although in some quarters this has been dismissed as rather small help, over £90 million has been advanced in loans since November to about 290 authorities.
But is not the Chancellor aware that this added access to the Public Works Loan Board is available only to boroughs and towns which are not borrowing more than £500,000 and that the vast majority of authorities in the larger boroughs are suffering because they have had no improved access to the Board and their rates of interest are vastly increased in contradiction of the promises of the party opposite before the election?
The hon. Gentleman is anticipating Question No. 32, but, if he is impatient about a reduction in long-term interest rates, I can tell him that this Government still have four years and seven months of their life left to run.
Local Government Finance
16. Mr. Ian Gilmour
asked the Chancellor of the Exchequer if he will make a statement about his plans for transferring a larger part of the burden of public expenditure from the local authorities to the Exchequer.
31. Mr. Rhodes
asked the Chancellor of the Exchequer whether he is satisfied with the present system of financing local government services; and whether he will now make a statement about his plans for transferring more of the growing burden of local government costs to new sources of finance.
48. Mr. Biggs-Davison
asked the Chancellor of the Exchequer what are now Her Majesty's Government's plans for transferring part of the rate burden, particularly for education, to the taxpayer.
56. Mr. Dudley Smith
asked the Chancellor of the Exchequer if, in view of the considerable increase in rate demands this year, he will now reconsider his policy and transfer more of the cost of education to the National Exchequer.224
72. Mrs. Thatcher
asked the Chancellor of the Exchequer when he will have completed his review of the rating system; and whether he will make a statement about that part of the review which has been considering what steps to take to overcome the disparity between rating valuations for houses and flats of similar accommodation.
73. Mrs. Renee Short
asked the Chancellor of the Exchequer if he will announce his plans for transferring a greater part of local government expenditure from the ratepayers to the Exchequer.
74. Mr. Buchanan
asked the Chancellor of the Exchequer when he will make a statement on his plans for transferring the major portion of the burden of public expenditure from the local authorities to the Exchequer.
As my hon. Friend the Financial Secretary to the Treasury stated in answer to the hon. Member for Southampton, Test (Sir J. Fletcher-Cooke) on 5th February, we have taken steps to intensify work on the review of local government finance. This is a complex subject and I cannot yet give a completion date.
A study of local government finance is very different from what the right hon. Gentleman's party promised at the General Election. Is he aware that, so far from diminishing the rate burden, the measures which he has taken have already increased it, and will he undertake at least to undo the damage which he himself has done?
I do not think that local authorities generally share the hon. Gentleman's view. I find that they are being extremely co-operative, because they recognise the complexities of a review of this kind covering not only grants but the sharing of the burden between central and local government and the means of raising revenue. These are complex matters and the local authorities are helping us to investigate them very thoroughly.
Is my right hon. Friend aware that between 1955 and 1963 the rate burden in this country actually doubled and that this highly regressive and unfair form of taxation is now our most steeply rising form of taxation? 225Will he act with urgency in this matter, particularly as it has been reliably calculated that the rate burden in, for example, the city of Newcastle-upon-Tyne will double in the next nine years?
It has been evident to the House and the country for some time that the level of the rate burden will continue to rise as a result of the burdens which are imposed upon local authorities and the duties which they have to carry out. Although I cannot check in my head the figures which my hon. Friend gave, I must add that, in considering this question, we have to remember that ratepayers are also taxpayers. [Hon. Members: "Are they."] Sometimes they are the same people and sometimes they are not. Therefore, in reaching a conclusion on this problem, one has to consider where the burdens should rightly fall.
Mr. Hugh Jenkins
Will my right hon. Friend remind hon. Members opposite that, in urging the transfer of the burden from the ratepayer to the taxpayer, they must keep carefully in mind that it always happens that he who pays the piper calls the tune?
That is a consideration in the minds of many local authorities which are now deriving more than half their revenue from the central Government.
Is my right hon. Friend aware that a good deal of the concern among local authorities about the rate burden is directed against the general grant introduced by the previous Administration, which penalises progressive local authorities which want to expand their services and those which have experienced an increase in their population? Will he, therefore, see that this burden is removed from local authorities after he has completed his review?
My right hon. Friend the Minister of Housing and Local Government has already said in this connection that he will be reviewing the whole subject of the general grant.
The Allen Report shows injustice to elderly people on the question of the rate burden. Will the Chancellor give further consideration to overcoming this difficulty at the earliest possible moment?226
This is one of the aspects of the rating problem which must be considered very seriously and sympathetically, because there is a great deal of feeling about the more elderly people in our population. But we must be allowed to take time to examine the question properly and reach sound conclusions about it.
Does not my right hon. Friend agree that both local and national taxation ought to be related to income and that the present rating system needs very much to be changed and improved in this respect?
As a general principle, I accept that taxation is best when it is related to capacity to pay.
Is the right hon. Gentleman aware that the answers he is giving, careful and considered as they are, imply that he and the Government are examining this problem entirely afresh, whereas he and his party gave a clear undertaking at the election that they would make early transfer of expenditure from the local authorities to the central Government? Would it not have been more honest to the electorate if the party opposite had said that they would make an inquiry instead of giving a definite pledge?
I think that the right hon. Gentleman would have equally complained if, having got the evidence which is becoming available, we did not examine it before reaching conclusions.
National Insurance and Income Tax
17. Mr. Ridley
asked the Chancellor of the Exchequer how much will be paid in Income Tax and National Insurance contributions in a fully year by a married man with no children earning £18 per week in 1964–65 and 1965–66, respectively.
£163 13s. 10d. in 1964–65 and £170 18s. 10d. in 1965–66 if his employer had not contracted out of the graduated scheme of National Insurance and £150 0s. 10d. and £157 5s. 10d., respectively, if his employer had contracted out.
Is the hon. and learned Gentleman aware that this figure is the average wage? Is he further aware that our forecast that the Socialist Government 227would mean increased taxation to the average man has been amply borne out by these events? Will he apologise to the country for having misled it?
If hon. Members opposite had forecast the balance of payments situation they were to bequeath to us we might have been able to warn the taxpayers of the measures we would have to take in order to deal with the situation.
Is my hon. and learned Friend aware that, although £18 may be the average wage, a married man with two children has to earn £25 a week before he is affected to some extent?
That is quite right. A married man without children does not begin to pay additional Income Tax as a result of the last Budget until he is earning nearly £15 a week.
Scottish Bank Notes
19. Dr. Miller
asked the Chancellor of the Exchequer if he will take steps to make more widely known in commercial circles the fact that Scottish banknotes of every denomination are legal tender in all areas of the United Kingdom and should be accepted without demur.
No, Sir. Scottish bank notes are not in fact legal tender anywhere in the United Kingdom, although I believe that in practice they are fairly generally accepted in both England and Wales as well as Scotland.
Is my hon. and learned Friend aware that if this were more widely known in Scotland it might precipitate or provoke a rebellion the scale of which would be very much in excess of that which happened in 1745 because of the extent of the infiltration into England since that time? Will he take steps to see that these notes are made legal tender all over the country?
There would be difficulties about that as there are at least 20 different kinds of Scottish bank note. As for Scotland itself, if my hon. Friend knows of any case of a Scotsman refusing a bank note I would be glad to hear of it.
Is the hon. and learned Gentleman aware that, in recent weeks, owing to the attractive nature of the Scottish bank notes and the great reputa228tion for stability which Scottish banking has, I was offered and accepted a guinea for a Scottish bank note? Will he encourage this reaction?
Mr. William Hamilton
In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest opportunity.
Non-Residents (Income Tax)
20. Mr. Barnett
asked the Chancellor of the Exchequer what is the practice of the Inland Revenue, under Section 29(5) of the Income Tax Act, 1952, with regard to the raising of assessments on income derived by non-residents from money invested in banks and other financial institutions which do not deduct Income Tax at source.
In some cases this interest is exempted from United Kingdom tax under double taxation agreements between the United Kingdom and other countries. Where this is not the case there would usually be no way of enforcing collection of tax on interest assessed on non-residents and it is not, therefore, the general practice of the Inland Revenue to raise assessments on such interest.
Is my right hon. Friend aware that in a case brought to my notice the working of this Section of the Act actively discourages investment from abroad? As this is clearly not his intention, will he take steps to introduce amending legislation?
Perhaps my hon. Friend will be good enough to send me details of that illustration. Since he put down his Question, I have been into this with great care and I did not find this Section to have the effect he describes.
21. Mr. Maxwell
asked the Chancellor of the Exchequer why a single person cannot claim tax relief for a dependent female relative or non-relative residing with the taxpayer; and whether he will allow such taxpayers to claim relief.
I presume that my hon. Friend has in mind a claim to the housekeeper allowance. If so, the reason for which he asks is that the Income Tax 229Acts do not in general provide for relief for domestic assistance. On the second part of his Question, I have nothing to add to the Answer I gave to the Question from the hon. and gallant Member for Down, South (Captain Orr) on 10th November last.
Would not my right hon. Friend agree that the time has come to remove the distinction between widows and widowers and single persons? In the interests of sex equality, will he allow a claim where submitted on behalf of a female or male relative or housekeeper of either sex?
The position of the widow or widower has, as I indicated, in the answer to which I referred, for long been recognised as being something of an anomaly and it has never been thought right to extend it. No doubt my hon. Friend is aware that there are certain circumstances in which a single person can claim dependent relative allowances or housekeeper allowances for resident child minders.
28. Mr. Baker
asked the Chancellor of the Exchequer if he will introduce legislation to enable a widowed taxpayer's non-resident housekeeper to qualify for tax relief.
Is the hon. and learned Gentleman aware that the non-allowance for widows acts to the detriment of hardworking women who are trying to do their best for their children? Will he not ask his right hon. Friend to have another look at this matter to see whether he can help these unfortunate people?
I am sure that my right hon. Friend will have another look at it. As I said earlier, the position of widows and widowers without young children is already considered to be anomalous in our tax law. If the widowed taxpayer has a child resident with him or her, in certain circumstances he may claim an extra allowance of £40 under Section 17 of the Finance Act, 1960.
Will not the hon. and learned Gentleman get his right hon. Friend to take action about this very serious matter in the next Budget?230
I am sure that the hon. Gentleman will appreciate that I cannot anticipate the Budget statement.
22. Mr. McBride
asked the Chancellor of the Exchequer what would be the total cost, in a full year, of granting complete remission of Income Tax to all persons still employed in industry, who are aged 70 years and over, and 75 years and over, respectively; and if he will make a statement.
I regret this information is not available and I cannot anticipate my right hon. Friend's Budget statement.
Is my hon. and learned Friend aware that this is one of the aims of the old age pensioners' associations? Is he further aware that it would be highly desirable to give this concession to people who are still making a contribution to the economic life of the country?
Although no precise figures are available it would prove more expensive than most people realise, but we will be glad to consider any representations on the subject.
23. Mr. McBride
asked the Chancellor of the Exchequer what would be the total cost, in a full year, of granting complete remission of income tax to all retirement pensioners; and if he will make a statement.
About £230 million. My right hon. Friend could not accept this proposal which would give no benefit to those most in need.
24. Sir C. Osborne
asked the Chancellor of the Exchequer in view of the evidence against export subsidies, details of which have been sent to him by the hon. Member for Louth, what steps Her Majesty's Government propose to take to tighten the home market; and if he will make a statement.
The Government's policy is to secure a redeployment of our 231national resources that will encourage exports, save imports and maintain full employment.
Sir C. Osborne
Is the Chancellor aware that both the Governor of the Bank of England and leading industrialists who are most exercised with the export markets agree that export subsidies will not help our balance of trade? Does not he agree that curtailing the home market is the best way to put our balance of payments right?
There have been no export subsidies so far. What the Government have done is to rebate some of the indirect taxes paid by exporters. I am not quite sure, in considering the second part of the hon. Gentleman's supplementary question, whether he is calling for a substantial and severe deflation of the economy.
Is my right hon. Friend aware that the car manufacturers, who have long been among our most successful exporters, have always insisted upon the importance of high home demand in order to stimulate exports?
Yes, that is so. They have done well in exports. I regret that there was a falling off last year because of the tightening of overseas markets, but I hope that their exports will go up again this year.
Sir C. Osborne
Is the right hon. Gentleman aware that I was not asking for severe deflation at home but that the nation should be made to live within its means. The best way to do that is to curtail the home market so that exporters could have a high home demand.
Of course the nation must live within its means. That is the phrase that I have used on several occasions. But, in our view, the best way of doing that is not to create unemployment at home.
Sir C. Osborne
I am not advocating that.
The lessening of home demand must have such a consequential effect. We believe that the right way to redeploy our resources, and that is the task we are engaged upon.232
25. Sir C. Osborne
asked the Chancellor of the Exchequer in view of the statement by the Governor of the Bank of England that a marked cut in public expenditure was necessary to prevent another sterling crisis, and that civil estimates have risen from £4,304 million to £7,388 million in the last 10 years, if he will appoint an independent committee to investigate and recommend where cuts could be made; and if he will make a statement.
Sir C. Osborne
Is not the Chancellor of the Exchequer aware that some local authorities are having to pay as much as 9 per cent. on temporary loans, which will put up their housing costs enormously? Will he promise the country that at least he will reduce the 7 per cent. Bank Rate within the next six months?
I do not think that an independent committee to investigate and recommend where cuts could be made is likely to help local authorities who are asking for more access to the Public Works Loan Board.
Sir C. Osborne
If the right hon. Gentleman will not exercise this power, surely he should get someone from outside to help him to do the job.
The hon. Gentleman does not seem to appreciate that what he is asking for is that local authorities should have more access to public funds, which the Exchequer would have to carry below the line, so that it would have to borrow more from the money market.
29. Mr. William Hamilton
asked the Chancellor of the Exchequer if he will produce a new White Paper on Public Expenditure to replace that produced in December 1963, Command Paper No. 2235.
It is my intention to present a further White Paper on Public Expenditure later in the year.
Is my right hon. Friend aware that that Answer will give very great satisfaction in view of the gross deception incorporated in the previous Government's White Paper? In reference 233to the figures in paragraph 12 of that White Paper, in which there are 14 items ranging from defence to administrative and other services, can my right hon. Friend give me one of those figures which is accurate?
I regret to say that I have not checked those figures. I have been so occupied trying to reduce public expenditure to some form of order out of the chaos in which we found it. What I can do is give my hon. Friend a guarantee that when we produce our figures later in the year, they will at least be realistic and related to what the economy can stand.
26. Mr. J. E. B. Hill
asked the Chancellor of the Exchequer what proportion of personal income was saved in each of the last three years; and what steps he is taking to maintain or increase that proportion.
Personal savings are estimated to have been 9.1 per cent., 8 per cent. and 8.6 per cent. of personal disposable income in 1961, 1962 and 1963, respectively. Estimates for 1964 are not yet available. The Government are anxious to increase the level of savings, and I am at present considering a number of ideas in this field.
Will the right hon. Gentleman agree that it is vital to maintain the rising trend in savings, which has been such a feature of the last thirteen years? In considering suggestions for stimulating savings, will he be very chary of adopting any suggestions on the lines of the compulsory savings levy which, at the suggestion of one of his present advisers, was incorporated into the 1962 Budget for British Guiana, with such disastrous results?
I do not know of any proposals of this sort. Of course, certain proposals were left behind by the previous Administration, for example, for contractual savings schemes. These are being examined as well. I do not know whether the hon. Gentleman would equate them with the kind of plans he has in mind.