We have now had quite a lengthy debate on several new Clauses, all of which propose special tax [column 1872]reliefs in favour of those who are in one way or another disabled. Naturally, this is a subject that rouses the sympathy of hon. Members in all parts of the Committee. As hon. Members have said, it is a topic to which we return almost annually in our Finance Bills, and we often hear some of the most moving of speech during the course of these debates.
These are also debates in which Treasury Ministers traditionally are seen in their hardest and most inhuman light and I confess that in turning to this subject I was reminded of the shock. I felt as a young barrister on first hearing one of my senior colleagues referring to the tag that hard cases make bad law. It seemed to me to be a very cynical remark, but in time I came to understand it. Anyone who is responsible for trying to preserve the coherence of legislation in any field such as this gets reminded of that saying from time to time. 9.45 p.m.
Before I turn to the particular Clauses. I remind hon. Members of some of the principles which I think we are agreed must guide us in our approach to these problems. If we are to have an acceptable taxation system and an acceptable system of allowances, however much our sympathies be aroused, we must agree that whatever decisions we take must be soundly rooted in principle and defensible in principle. The reason for that is that no tax system will be acceptable unless it is really felt to be fair. It has to be felt to be fair and it has to be fair between different classes of taxpayer. If we take a decision for a particular class of case we have to see whether there is a principle which distinguishes it from other classes and, if not, we must face the implications and consider whether we are prepared to extend it to the other case which are not distinguishable.
We have also to see that whatever we propose is administratively workable. This comes back to the question of the importance of seeing that people respect our tax system as being fair. If we introduce measures which administratively cannot be operated in a satisfactory way this will immediately lead to great feelings of injustice with a falling off in the respect which the administration of our tax law commands throughout the country. We also want to see that in whatever [column 1873]we propose the benefit will actually go to those we intend to benefit.
This leads to a point which has been referred to very fairly by some hon. Members, that when our sympathies are aroused in these matters of how to help the afflicted it does not always follow that tax reliefs are the best means of achieving those goals. Sometimes we shall achieve what we want more effectively through the instrument of the social services than through taxation reliefs. Some of the more ancient of our tax reliefs antedate the Welfare State as we know it. If we had had then the kind of structure of social services which we have now some of these tax reliefs might not have found their way on to the Statute Book as they would be matters dealt with by social security legislation.
Referring again to the correspondence, there is no kind of bad faith on anyone's part; it is simply an example of the confusion which arises when we use the word “allowance” to cover two entirely different things. We use the word “allowance” in the social security field with reference to a hardship allowance and meaning the payment of money and also, in this debate for example, as referring to a constant attendance allowance as a proposed tax relief. What my right hon. Friend the Minister of Pensions and National Insurance was referring to, she assures me—I have not seen the letter—was the use of the words “constant attendance allowance” in one of our pamphlets with reference to a proposed social insurance payment for the purpose of financing constant attendance.
As the hon. and learned Gentleman raised the matter during the course of my speech, may I attempt to get this absolutely clear? The letter written by the Minister of Pensions and National Insurance said:
“we propose to give a constant attendance allowance.”
I quite accept the argument which the hon. and learned Gentleman is putting forward, that it is possible to give social security benefits directly through social security legislation. Is it then the definite intention of the present Administration to introduce a constant attendance allowance benefit?
It is part of the policy which is contained in the pamphlet [column 1874]to which my right hon. Friend the Minister of Pensions and National Insurance was referring. The policies which we have advocated, and which we advocated before the General Election, are not matters which we have ever undertaken to carry out within 12 months. I remember my right hon. Friend the First Secretary of State and Secretary of State for Economic Affairs making several speeches during the General Election which made it perfectly clear that our programme was not merely a five-year programme but that much of it would require a second full term before we could carry it out. [Hon. Members: “Oh.” ] Hon. Members opposite, who only live from day to day, cannot conceive——
Dame Irene Ward
No, I will not give way. They cannot conceive of a political party being able to think ahead and see further than the end of its nose.
I turn, after those completely uncontroversial remarks, to the new Clause which I suggest is the one that I should deal with first—that is, new Clause 20. I take this first because it is the one which is widest in its scope.
Dame Irene Ward
No. 19 is first.
I will come to that later. I shall deal with them all, but it is logical to deal first with new Clause 20 because that is the one which is widest in its scope. It suggests an allowance for totally disabled persons similar to the relief introduced only a few years ago for registered blind persons. As hon. Members opposite have reminded us, this is not the first time that we have discussed these proposals. Indeed, the Clause is copied word for word from an Amendment which was moved last year by some of my right hon. and hon. Friends when we were in opposition. I am also reminded that I myself voted for that Amendment. I will not be so unkind as to remind right hon. and hon. Members opposite which of them voted against it, but I notice that they have been very careful to select someone to reply to the debate who did not take part in the Division. All I can say on my own behalf is that, since that time, I have become a sadder and a wiser man. On that occasion, the Amendment was resisted by the then Economic Secretary to the Treasury, [column 1875]on the grounds that this was a matter which was better dealt with by means of the social services and not by taxation.
Mrs. Margaret Thatcher (Finchley)
He lost his seat.
As the hon. Lady said, he lost his seat. He also argued that—I am sorry; I have lost my train of thought.
Dame Irene Ward
Can I help you?
I hope that the Committee will give attention while the hon. and learned Gentleman explains the inconsistency of both sides of the Committee.
The then Economic Secretary based his resistance of the Amendment primarily on the fact that this was not a matter which should be dealt with by tax reliefs; it should be dealt with through the social services. He also pointed out, which is a matter frequently referred to in these debates, that, when one is thinking of people who are suffering hardship and are in need among the poorer sections of the community, the fact is that taxation reliefs give little or no benefit to those who are in the greatest need, because it is only those who have sufficient income to qualify for tax reliefs who benefit from them. It was on this ground, principally, that the then Economic Secretary opposed it.
Nevertheless, my right hon. Friend, having himself supported these Amendments when moved by us in Opposition, naturally when he came to consider his Budget policy for this year, as indicated in the letter which has been referred to, looked very closely into this proposal for a total disability allowance. Without wearying the Committee with all the details, the fact is that there were then put to him by those who advise us on these matters quite formidable difficulties in dealing with this case on the simple matter of administration. The principal and first difficulty is that of how, from the practical point of view, one would determine who would be the people who would qualify for relief.
The new Clause proposes that a totally disabled person should be defined as meaning first of all, those who are already in receipt of industrial injury or war [column 1876]disablement pensions by reference to a test of 100 per cent. disablement and, secondly, persons who, though not in receipt of such a pension, are disabled in a manner and degree equivalent to 100 per cent. disablement. The first category are already accepted under the insurance provisions as being 100 per cent. disabled. They would not benefit from an allowance of this kind because they are already in receipt of a tax-free social security benefit which far exceeds the amount of allowance proposed and as they would have to give credit the tax relief cut reduced by seven-ninths of that tax free payment they would receive little benefit from this proposal. Therefore, the proposal would only operate for the second category—those disabled in manner and degree equivalent to 100 per cent. disablement.
Who is to determine whether a person is disabled in that sense? Obviously a tax inspector cannot do it. This means that one would have to set up an administration comparable to that set up under the National Insurance scheme to determine whether people are disabled to that degree. In addition, there will be many people suffering from different kinds of diseases and ailments not covered under the present pensions scheme and one would have to consider whether they qualified as 100 per cent. disabled.
Whatever definition was drawn up, it would give rise to complaints by those people who fell outside it, and if we extended this provision to the 100 per cent., pressures would immediately start from people who would say, “If it is 100 per cent., why not 90 per cent.?” Hon. Members who are familiar with these matters know the apparent illogicalities of what constitutes 100 per cent. disablement. If a man has an amputation of both legs just below the knee, that is 100 per cent., but if amputation is at the ankles and both feet are missing, that is only 90 per cent. disablement, and so on. Therefore, the pressures would be great and would be irresistible.
If illustration of that is required, one has only to look at New Clause 56 which proposes that relief should be extended to people with a 75 per cent. disablement. If one accepted that, how could one hold the line there? Pressure would start on behalf of people with 50 per cent. disablement. Therefore, if we had a [column 1877]scheme of this kind the result would be an enormous number of claims, in perfectly good faith, from people who felt that they were entitled to payment of this kind. There would have to be elaborate machinery to decide who was entitled, and there would have to be appeal machinery. In the end the result would be that for every person who fell on one side of the line and established his right to the allowance there would probably be two or three who fell on the other side and would not establish the right and we would thus create in total a greater sense of injustice. 10.0 p.m.
There is another fundamental difficulty in this approach. The intention underlying the proposal is, of course, to give assistance to people who, by reason of disablement, incur additional expenditure which ordinary people do not incur. Again, those who are familiar with the administration of our social insurance provisions will know that there are many people 100 per cent. disabled—fully within that term—who are able to be remuneratively employed without incurring any additional expenditure whatever—[Hon. Members: “No.” ] Indeed, there are—whereas there are others who do not qualify to anything like the 100 per cent. degree but who are very severely disabled—perhaps not able to work or able to do very little work—who incur considerable additional expenditure. So it is a very rough and ready test as a means of trying to attain the object.
It was because of these formidable arguments which were presented to him that my right hon. Friend felt unable to include this proposal in his Budget for this year. But I want to make clear that it is our earnest anxiety to examine these matters to see what reliefs, if any, we can carve out of the proposals which have been made which will be really practical and workable.
When we discussed several of these matters on Clause 10, I made two general comments. First, it is obvious that a year in which it is necessary to increase taxes substantially is not an occasion when a Chancellor can, in his Budget, set about a comprehensive review of personal allowances. If one is to put matters straight and try to get rid of [column 1878]some of the anomalies in our system, this can be done much more effectively in a year when a Chancellor is able to grant tax reliefs. Second, because of the inter-relation of tax reliefs and social security benefits to which I have been referring, if one is to make a comprehensive review of these matters, it must be done within the context of a review of the social services.
I was asked by the hon. Lady the Member for Tynemouth not to refer to this topic, but I cannot help doing so. It is relevant, as she knows, because she herself came with a deputation from the organisation to which she referred to see my right hon. Friend the Chancellor of the Duchy, and there was then discussed the social security aspect of the very matters she raised so eloquently in her speech today.
The constant attendance allowance proposal raised by new Clause No. 54 was considered with great care by the Royal Commission. After receiving representations on the subject from many sources, the Royal Commission rejected the proposal chiefly on the ground that its effect would be very haphazard and discriminatory in giving relief to people who incurred a particular form of expenditure when there were many others at least equally, if not worse, disabled incurring perhaps greater expenditure who would have no relief.
One has only to think of the example of the person without relatives or friends to care for him who goes into a paying nursing home. Such a person, under this proposal, would not qualify for relief at all. Again, as has been said, the result of granting this form of concession would lead to widespread pressures for its extension to cases in which the wife was incapacitated or the householder had a nurse or attendant for some other member of his family or household.
I was asked in this connection how one distinguished this case from that of the housekeeper allowance. The housekeeper allowance, as the Committee knows, is basically intended as an allowance to help the person who is confronted, single-handed, with the problem of looking after and bringing up small children. It is one extension that the Royal Commission found to be anomalous—namely, that in favour of the widow.[column 1879]
Will the hon. and learned Gentleman comment on Section 479 of the Income Tax Act, 1952, which gives an Income Tax allowance to clergy for domestic help? Why should that principle not be extended to other categories?
I was not aware of that provision, but I remind the hon. Gentleman of what the Royal Commission said in general about Income Tax allowances
“… income tax is an annual tax that has got to be administered. It is a tax that has to be collected each year from many millions of the population. It cannot therefore proceed on the basis of minute inquiries into the multiplicity of personal circumstances of individuals.”
It may have been possible there to carve out one small section of people for whom administratively that relief could be worked but this is precisely the difficulty I referred to. If one accepts an extension of that kind, immediately the argument follows, “If this is granted to one person why not to everyone else?” One then ends up with something that is administratively not workable.
New Clause No. 61 deals with dependant relative attendance relief. The hon. Lady the Member for Tynemouth explained that it is limited in particular to single women, almost as a token of respect for the work, which has been widely admired, of the Rev. Mary Webster and the Council for Single Women.
Dame Irene Ward
The Temporary Chairman (Mr. Thomas Steele)
Order. I hope that we will listen quietly to the Financial Secretary. It seems to me that there is too much noise.
Dame Irene Ward
On a point of order, Mr. Steele. The Financial Secretary has misquoted a Clause. Surely I am entitled to point that out to him? Surely we are not being gagged here?
The Temporary Chairman
Order. The hon. Lady misheard me. She was interrupting the Minister. I was asking right hon. and hon. Gentlemen to be quite so that they would hear what was happening.
Dame Irene Ward
Thank you, Mr. Steele.[column 1880]
I was giving way to the hon. Lady, but perhaps she does not now wish to interrupt. [Interruption.] I am sorry but I cannot deal with interruptions made from a sitting position. I did give way to her. I do not know whether or not she wishes to intervene.
Dame Irene Ward
I am grateful to the hon. and learned Gentleman for giving way. I would really have put the case quite nicely if I had not myself been interrupted and I did not quite know what was happening. I explained Clause 61 in great detail and said that the reference to single women covered everyone else as well. It is no good the hon. and learned Gentleman riding off on a note of single women, for that makes nonsense of one's attempts to deploy one's case.
The hon. Lady should have a little more patience. I was not attempting to ride off on anything. I was merely seeking to join her in paying tribute to the lady who has commanded such widespread admiration for the work she has done in the social security field in calling attention to a class of person whose conditions have been up to now rather ignored and overlooked.
The proposal here is that, in effect, there should be a £50 addition to the dependant relief allowance in certain cases. If the extra Income Tax reliefs were conceded to a tax payer who looked after a person of the kind referred to in the Clause, it would be claimed that there should at the same time be additional benefits and possibly cash benefits for people who needed care and attention of this kind but who had no relative to look after them or where the relative who looked after them had insufficient income to benefit from Income Tax relief. In other words, again there would be a similar spread of pressure and if relief which in effect benefits only those who have sufficient income to benefit from an Income Tax allowance is granted, it will be said with justification that the greater need is to benefit those of lesser means, and that can be done only through the social services.
I turn now to new Clause 19 which deals with the registered blind. There are some 100,000 registered blind persons [column 1881]in this country. About one in ten of them, about 10,000, benefit from the existing tax allowance in favour of registered blind persons. This is a revealing figure because it shows that nine-tenths, who presumably are the most needy nine-tenths of the blind, do not benefit at all from this allowance.
When this special allowance was introduced, I believe by the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd), it was made clear by the then Chief Secretary who moved the provision in question that they were being treated as a unique and quite exceptional class of persons. They were in a clearly identifiable category and there was no administrative problem in trying to determine who they were. They had already established their disability and were on a register which was clearly available to be checked and there was therefore virtually no possibility of abuse. The affliction from which these people suffer commands a unique and a quite extra-ordinary degree of sympathy. Given all these circumstances, there was a feeling on both sides of the Committee that there should be an exception from the general principles which I have been stating about allowances for dependent persons so as to give allowances to the blind.
The new Clause deals with the situation that under the present law a person has to be registered for the whole year in order to qualify for the relief. It follows that when blind persons are registered, during the year in which they are registered they do not get any relief at all, not even proportionate relief, and have to wait until the second year of their registration before they can qualify for the allowance.
It was suggested by the noble Lord the Member for Hertford (Lord Balniel) that this was anomalous. In the strict sense it is not anomalous. On the contrary, it follows the practice for various allowances of this class, which is that the person has to qualify for the whole of the tax year in order to qualify for the allowance. Those operate, for example, for the various child minder allowances. This is no doubt the reason why the allowance was drawn in this form.
Hon. Members have referred to the hardship which this occasions to blind people in particular cases, and I think [column 1882]that it was the hon. Lady the Member for Plymouth, Devonport (Dame Joan Vickers) who emphasised that it was in the early months when people were first afflicted that they were likely to incur the greatest additional expenditure and be in the greatest need of the allowance. We have received advice that there is a danger of repercussions. Already there are people who argue, and have been arguing for some considerable time, that there ought to be an equivalent arrangement for the other allowances, such as the child minder allowances, and that people who suffer from the disability in question, or the need in question, for only part of the year should be entitled to a proportionate part of the allowance. For reasons with which I need not weary the Committee, in these cases this would be quite unworkable and impracticable administratively.
I therefore beseech the Committee that if they agree, as my right hon. Friend suggests that they should, with this new Clause, that it should in doing so understand quite clearly that we are still treating this allowance as a quite unique one and that our decision today, if that be our decision, is not intended to serve as a precedent for any further extension of the principle or as a valid argument which can be used on a future occasion. Hoping and believing that the Committee will take this view, in spite of the administrative risks and difficulties involved, my right hon. Friend urges the Committee to accept this Clause.