Sir Kingsley Wood: Churchill’s PAYE Chancellor

Sir Howard Kingsley Wood

Sir Howard Kingsley Wood was an English Conservative politician. The son of a Wesleyan Methodist minister, he ran a law firm before becoming a member of the London County Council and then a Member of Parliament. He died in office as Winston Churchill’s wartime Chancellor of the Exchequer, on the day he was to announce the PAYE scheme.

The PAYE scheme remains in place today across the UK. Employers deduct tax and national insurance from their workers’ salaries and pay the sums directly across to HMRC. Therefore, most British employees don’t have to file annual tax returns or worry about saving up for a future tax bill.

Sir Kingsley Wood Key Facts

Born: 19 August 1881, Kingston upon Hull

Died: 21 September 1943, London

Education: Central Foundation Boys’ School

Spouce: Agnes Lillian Fawcett (married 1905)

Children: 1 daughter

Career: Solicitor, London County Council, House of Commons, Cabinet

Party: Municipal Reform Party, then Conservative Party

Early years

Howard Kingsley Wood was born on 19 August 1881, in Kingston upon Hull.

He was the first child of the Reverend Arthur Wood, a Wesleyan Methodist minister, and his wife Harriet.  The couple went on to have another two children.

When the Reverend Arthur Wood was appointed to be minister of Wesley’s Chapel in London, the family moved with him. Consequently, Howard Kingsley Wood attended central the Foundation Boys’ School in the London Borough of Islington.

After leaving school, young Howard was articled to a solicitor. In 1903, he qualified with honours in his law examinations

Marriage To Agnes

Howard Kingsley Wood married Agnes Lillian Fawcett in 1905.

Whilst there were no biological children of the marriage, the couple adopted a daughter.

Kingsley Wood’s Law Firm

Kingsley Wood established his own law firm, located in the City of London, which later became Kingsley Wood, Williams, Murphy, and Ross.

Specialising in industrial insurance law, he represented the industrial insurance companies in their negotiations with the Liberal government to gain valuable concessions for his clients.

Then in 1911 David Lloyd George’s National Health Insurance Act of 1911 provided for the compulsory insurance of lower paid workers and set a fixed capitation fee for doctors. The government paid two ninths of the fees, with the remainder made up by insurance.

Member of London County Council

On the 22nd of November 1911, Kingsley Wood won a by-election, and became a member of the London County Council. He represented the Borough of Woolwich for the Municipal Reform Party.

Key positions held by Kingsley Wood at London County Council:

1911-1919 Member of National Insurance Advisory Committee

1915 Chaired the London Old Age Pension Authority

1916-1919 Chairman of the Faculty of Insurance

1917 – 1918 Chaired the London Insurance Committee

1920, 1922, 1923 President of the Faculty of Insurance

In addition, he was a member of the council committees on insurance, pensions and housing.

Knighthood And Parliament

In 1918, at the age of 36, Kingsley Wood received a knighthood. That same year, he stood as a Conservative candidate in the general election for the marginal constituency of Woolwich West.

He not only won the marginal seat, but represented it for the rest of his life. 

Parliamentary Private Secretary 1918-1922

The 1918 general election was called immediately after the Armistice with Germany which ended the First World War, and is therefore referred to as the Khaki election, given the influence of wartime sentiment.

Prior to election, Kingsley Wood advocated the establishment of a Ministry of Health. As a result, the first Minister of Health Christopher Addison appointed him Parliamentary Private Secretary. Whilst this was an unpaid ministerial assistant post, it was a traditional first rung on the political ladder.

Backbenches 1922 – 1924

In 1922, the coalition government collapsed. A Conservative government formed by Bonar Law on 23 October 1922 saw no offer of a parliamentary post for Kingsley Wood. 

On 20 May 1923 Stanley Baldwin became the Conservative Prime Minister following Bonar Law’s diagnosis of terminal throat cancer.

Then came an  unstable minority Labour government under Prime Minister Ramsay MacDonald on 22 January 1924, followed by reinstatement of Stanley Baldwin on 4 November 1924.

During this turbulent period, Kingsley Wood continued to concentrate on backbench work.

The Summer Time Bill 1924

The notable event of this period for Kingsley Wood was his success in passing the Summer Time Bill 1924. 

Setting a permanent annual summer time period – of six months from the first Sunday in April to the first Sunday in October – was fiercely opposed by the agricultural lobby.

Working With Chamberlain 1924-1929

With Baldwin’s return in November 1924, Kingsley Wood was appointed Parliamentary Secretary to the Ministry of Health as junior minister to Neville Chamberlain.

Kingsley Wood and Chamberlain worked together at the Ministry of Health from 11 November 1924 to 4 June 1929. They became both friends and firm political allies, working on local government reform.

Together, they introduced a radical updating of local taxation, with “rates” based on property values.

Kingsley Wood was appointed as a civil commissioner during the General Strike of 1926. Then in 1928, he became a privy councillor, which was an unusual appointment since he was a junior minister.

Watch: Kingsley Wood In The Lunt Estate, Bilston (1927)

Promotions for Kingsley Wood 1930-1933

In 1930 Kingsley Wood was elected as the first chairman of the executive committee of the National Union of Conservative and Unionist Associations.

Ramsay MacDonald formed the National Government in 1931, and made Kingsley Wood Parliamentary Secretary to the Board of Education. 

Later that year and following another general election, he was promoted to Postmaster General. Two years later, in 1933, Kingsley Wood was appointed to the cabinet.

Postmaster General 1933-1935

As Postmaster General, Kingsley Wood oversaw significant reforms and investment in the General Post Office. 

These changes included building new automated exchanges for the telephone service; a large fleet of motor vehicles to speed up postal service delivery; creating the GPO Film Unit; and allowing the GPO to keep all surplus revenues (minus an annual Treasury contribution), to be used for reinvestment in the service.

Minister of Health 1935

Stanley Baldwin returned for his third and final stint as Prime Minister on 7 June 1935. He appointed Kingsley Wood as Minister of Health.

The Ministry had responsibility for both health and housing. 

The 1930s saw a massive slum clearance programme, which boosted economic activity in a period of great hardship. Meanwhile a full-time, salaried midwifery service was created under the Midwives Act of 1936, which saved many lives.

WatchKingsley Wood: Welfare Centre In Chelsea (1930s)


Watch
Kingsley Wood Visits Kent Hop Pickers (1935)


WatchKingsley Wood & Hampshire Hop Pickers (1937)

Tribute For Kingsley Wood’s Health Work

“On behalf of my Liberal National colleagues, I should like to join in paying my humble tribute to the memory of Sir Kingsley Wood. I have another reason for doing so, because I was greatly privileged eight years ago in serving under him at the Ministry of Health, where he established a great record for his brilliant administrative gifts.

He was one of the shrewdest men in council I ever met. He had a great agility of mind, a perfect genius for disentangling the essential points in any problem, and an infinite capacity for hard work. “

Sir Geoffrey Shakespeare (MP for Norwich) to the House of Commons, 22 September 1943

Secretary of State for Air 1938 – 1940

When Anthony Eden resigned from Chamberlain’s government in March 1938, a cabinet reshuffle saw Kingsley Wood become Secretary of State for Air.

Within two years, the department’s production of warplanes went from 80 each month to 546. By now the Second World War was in progress.


Watch – Kingsley Wood: Air Force Building Opens (1938)

Watch – Kingsley Wood: Examining A Crashed Nazi Plane

Tribute For Kingsley Wood’s Air Force Work

“The great contribution for which Sir Kingsley Wood’s administration of the Air Ministry will always be remembered was the founding and development of the Empire Air Training Scheme in Canada, to which pilots from New Zealand and Australia came in great numbers, to which would-be pilots from the United Kingdom have also been sent in large numbers, and which has produced us a ceaseless flow, numbered by tens of thousands, of those extraordinarily competent and daring men to whom we owe so much of the satisfactory position we have now attained…

I imagine that the friendships and comradeships formed by these young men in the vast training camps of Canada will carry on their beneficent influence long after the older Members of this House have passed away. “

The Prime Minister (Mr. Churchill) to the House of Commons, 22 September 1943

Lord Privy Seal 1940

Unfortunately the demands of this office took its toll. Chamberlain therefore swapped the positions of Kingsley Wood and Sir Samuel Hoare, so Kingsley Wood now became Lord Privy Seal. It was a post without department, chairing both the Home Policy Committee of the cabinet and the Food Policy Committee.

But a few weeks later, the British defeat in Norway put the premiership of his good friend Chamberlain into an impossible position.

Kingsley Wood advised Chamberlain to resign. Furthermore, he encouraged Churchill to step forward as successor and ignore pressure from those who preferred Lord Halifax as a successor.

Two days after becoming Prime Minister on 10 May 1940, Churchill appointed Kingsley Wood as Chancellor of the Exchequer.

Chancellor of the Exchequer 1940

Kingsley Wood presented four budgets to Parliament during the forty wartime months he was Chancellor of the Exchequer.

In July 1940, he created a council of economic advisors. One of these was John Maynard Keynes, who was quickly recruited as a full-time adviser at the Treasury.

In his second budget in April 1941, Keynes’s conception of using national income accounting to control the economy was adopted.

Gone was the orthodox Treasury doctrine that Chancellors’ budgets were purely to regulate governmental revenue and expenditure. Instead he brought in a top rate of income tax and added  two million to the number of income tax payers.

For the first time in Britain’s history, the majority of the population was liable to income tax.

Between 1938 and 1943, inflation increased sixfold thanks to the public expenditure incurred fighting a world war. Kingsley Wood therefore subsidised essential rationed goods, while imposing heavy taxes on goods classed as non-essential.

The PAYE System

Howard Kingsley Wood, as Chancellor of the Exchequer during World War II, championed introduction of the system called Pay As You Earn (PAYE).

Because this system was introduced and remains in place today, most employees in Britain don’t ever have to complete a tax return.

Instead, their employer calculates and pays income tax and national insurance from the worker’s salary. Then those taxes are paid directly across to HMRC (Her Majesty’s Revenue and Customs) without the employee taking any action.

Death Of Sir Kingsley Wood

Sir Kingsley Wood died suddenly at his London home on the morning of 21 September 1943, at the age of 62. 

Later that day, he was to have announced the PAYE system to the House of Commons.

Agnes, the widow of Sir Kingsley Wood, died in 1955.

Churchill’s Tribute to Kingsley Wood

“The extension of the Income Tax to the wage-earners was a very remarkable step. That it should have gained the assent of this House, elected on universal suffrage, is also a remarkable fact, showing how extremely closely the wage-earning masses of the country and those who represent them feel associated with the vital issues now being fought out in the field.

Undoubtedly, payment in arrear, when the Treasury accounts are made up, being demanded from the wage-earners, produced many cases of very great hardship and tended to cause dissatisfaction with a great principle of taxation which was being so very willingly accepted. The Chancellor had given the closing weeks of his life to a most careful study of the “pay-as-you-go” principle, and he was looking forward, on the very day that he died, to making a statement to the House on the subject. “

The Prime Minister (Mr. Churchill) to the House of Commons, 22 September 1943

Tribute by Sir Perey Harris

“Quite frankly, I feel that when he took on the most difficult and important post of Chancellor of the Exchequer some rather doubted whether, from his training and experience, he would “fill the bill.”

This year I was able to pay a tribute, a tribute which the whole House was prepared to pay, to his great success in an almost super-human job. He had not great arts of oratory, but he had extraordinary thoroughness in exposition, he always listened to criticism, he had good temper, was never ruffled, was always prepared to learn and, what was very wise, always ready to take sound advice and select wise counsellors in his difficult job. As my right hon. Friend who spoke for the Labour Party said, we all loved Kingsley Wood. He was a universal favourite. The news of his death came to us as a great shock. We liked his genial smile and his lack of pomposity. He never learned the Treasury manner. He was always prepared to regard us all as his friends and colleagues, and I cannot help expressing the sympathy of the whole House with his widow in what must, to her, be a great tragedy.”

Sir Perey Harris (MP for Bethnal Green, South-West), to the House of Commons, 22 September 1943