Talking Politics THE THALIDOMIDE TAX
IT is the melancholy fate of Government departments -most of all, perhaps, the Treasury, but the Department of Health and Social Security is conspicuously in the same boat-to be castigated by their critics both for mindless profligacy and for extreme miserliness. Thus the Treasury, condemned by so many for its failure to exercise adequate restraint over the mounting toll of public expenditure, suddenly found itself cast at the end of last month in the role of a collective Scrooge, intent on extorting every penny it could, even from the thalidomide children. In fact, of course, the Treasury has several defences against this charge, which was, in any case, swept away within the week when it came up with its own solution in the form of a E5 million gift to the thalidomide children’s trust. First, it says that the letter from Dr John Gilbert, the Financial Secretary to the
Treasury, to Mr Jack Ashley, announcing that income paid by the trust to the children must be taxed, simply restated that which had all along been the law, and which the Government’s Conservative predecessors had clearly accepted as the law also. Secondly, the Press reports which followed the publication of the letter, with their reference to the Revenue taking 48p in the pound, exaggerated the extent of the taxman’s incursions
on two counts.
The taxable income would
perhaps only to a quarter of what the trust disbursed to families, because so much of what the trust provides comes in non-taxable forms, such as lump-sum payments for home conversions and extensions. And liability would have reached 48% only in exceptional cases where there was substantial additional On their best, though fallible, income accruing. calculations, they expected the average liability, I gather, to be 20-25%. Even so, making all allowances for the constraints under which Mr Healey and his colleagues have to work, the publication in the Sunday Times of Dr Gilbert’s letter to Mr Ashley reflected a degree of insensitivity in the Government handling of the case which some
the Labour side find very hard to understand. Was there no-one in the Treasury, it is now being asked, who could have raised a warning hand and recommended that this bald rejection should not be allowed to go out ? Couldn’t there have been some consideration at that stage, rather than after a week of critical headlines, of ways in which the Government could hold out some hope of alleviating the families’
disappointment ? Instead, there was an immediate public protest, which was successful within the week. This is both a tribute to Mr Ashley and those working with him, and a mark of the sharpness of the blast from Downing Street which followed the Sunday Times report. Mr Wilson has long taken a personal interest in disablement policy and often recalls that he was the first Prime Minister to pledge himself to appoint a
Minister specifically for the disabled. He and Mrs Wilson both have their own favourite disablement charities. One immediate suggestion was that there should be a straight exemption from tax for this specific situation. The Treasury looked at this and recoiled in horror. you permitted this one exemption in the next Bill: Finance wouldn’t a whole string of other groups come forward with equally irresistible cases ? Wouldn’t the committee stage become a long sequence in which amendments were moved to widen the exemption, leaving the Government day after day to turn a stony face to them ? And what about those disabled peopie who, getting no income, could qualify for no exemption either: shouldn’t they, given a favourable report from the Pearson Commission, come nearer the head of the queue ? In any case, tax concessions help those with greater incomes more than those with less, so it might not in any case be the best way of channelling Government aid.
Instead, the Government is topping up the fund with E5 million-a much greater sum, it estimates, than the taxman is likely to take-and is giving an additional E3 million to the Family Fund, administered by the Rowntree Memorial Trust, which helps the much wider community of severely congenitally handicapped children. On top of this, the E25 million aid for the disabled promised in Septemberhas been included in the programme for the first term of the new Government.
At which point, we might pause to note something which failed to happen last week. The Government reshuffle did not bring in a new Secretary of State for Social Services. When Labour came back to office in February, a lot of Labour M.p.s thought Mrs Castle might take charge just for the term of minority Government, and then make way for a younger successor.
But Mrs Castle has regained much of her old came back to Cabinet office, and by the end of the last session her chances of a longer stay at the Elephant and Castle looked considerably improved. There remain those in the party who are critical of Mrs Castle’s style-though she seems mellower now than in her spell on the back benches in the 1970 Parliament-but on the whole most Labour M.p.s seem satisfied with the present tripod-style team in which Dr David Owen (Health) and Mr Brian O’Malley (Pensions) are given a generous rein under Mrs Castle’s general direction.
passion since she
change in the team is the departure of a parliamentary under-secretary, Mr Bob Brown, to look after the Army, and the arrival of Mr Alec Jones as his replacement. In a reshuffle unusually dedicated to keeping sweet the people of Scotland and Wales, Mr Jones runs the risk of being identified as the department’s statutory Welshman. But in fact he has a longstanding interest in pensions policy and has The
taken part in the committee stage of every social security Bill since he was elected in 1967. DAVID MCKIE. 1. See
Lancet, Sept. 21, 1974,