FINANCE (No. 2) BILL.

HC Deb 13 August 1940 vol 364 cc613-752

Considered in Committee [Progress, 8th August].

[Sir DENNIS HERBERT in the Chair.]

SEVENTH SCHEDULE—(Purchase Tax (Chargeable goods).

3.52 p.m.

Mr. Barnes (East Ham, South)

I beg to move, in page 41, line 11, column 3, to leave out "young."

This Amendment is put down in order to clear up what may be a confusion in regard to the designation of children. When the Chancellor announced the decision to leave out from the scope of the tax garments or footwear suitable for children, he did not use the phrase "young children." When those engaged in the sale of children's goods saw the Schedule, they observed that "young" had been inserted in front of "children." It raises the question of whether there is a legal definition of "young" or "children." Generally speaking, in the dry goods trade there is not a great deal of difficulty about determining what are children's clothes or children's garments or children's boots and shoes, although, as I think the Chancellor will appreciate, a stage is reached at which children's goods merge into maids' and youths'. In view of the fact that in column 3 there is a large range of items that will fall to be taxed which, I think, can be fairly classified as babies' garments, that raises the issue as to whether "young children" covers babies as well. Has the Chancellor an age factor in mind? If so, we should like to know what the age is. I trust that the Chancellor will be able to give a clear indication of why he has inserted the word "young."

3.55 p.m.

Mr. Lunn (Rothwell)

I do not like this Purchase Tax in any way. I should have much preferred conscription of wealth. But, having got this tax, we should know what it is to mean. The Chancellor indicated that children's clothes and boots would be exempt from the tax. I had a letter this morning from a mother who asked me what are "children's" boots? She has a girl aged 12 who wears size six. [Interruption.] That is quite common. There are very big children in my part of the country, even if there are not in some other parts. I have a nephew, aged 12, who wears size nine in shoes, which is the same size as my own. He attends an elementary school, and is the son of a widow. Is it intended to take into account the size of the shoes, or the age of the child? I suggest, as a personal opinion, that it would be better if the exemption applied to all children under the age of 16, rather than that the size of shoes should be taken into account. Unless that is done, we shall be asking for tuberculosis and all kinds of disease' when the winter comes, because people will not be able to afford good boots. What is the use of cheap milk if the children cannot have good boots? Let the Chancellor tell us plainly what he means by "young children." Do not let him keep it hidden, as he keeps almost everything hidden. This is an important matter.

3.58 p.m.

Mr. Logan (Liverpool, Scotland Division)

Could the Chancellor not give us some more definite information, in order to clear up the ambiguity of this phraseology? I do not suppose that the Chancellor has ever stood behind a boot counter, so he would not know that the ordinary classifications of sizes are seven to 10, 10 to 13, and two to five. Sizes two to five are considered to be juvenile sizes, and then come what are described as "children's" boots. Size six would be considered abnormal for a child. I have seen children in my neighbourhood wearing size 10, because they wore their father's boots; but I do not want such boots brought within this category. I wonder whether it will be necessary to have a birth certificate in order to buy children's boots, just as it is necessary to have a scholar's ticket to obtain cheap fare facilities on a tramcar.

3.59 p.m.

The Solicitor-General (Sir William Jowitt)

I will endeavour to explain our object in putting the adjective "young" before "children." The word "children" in law means anyone under the age of 21, unless you find a special definition in the Act of Parliament, as is the case, for instance, in the Factory Act, which defines a "young person" as being under the age of 14. We all know of those who are only children in years but who are as long, and as broad and as fat as persons of adult age. I am sure we have all heard of the fat boy of Peckham.

Mr. Mathers (Linlithgow)

Does that definition of "children" as persons up to the age of 21 years, apply in Scottish as well as in English law?

The Solicitor-General

So I am given to understand, although I am not an expert in Scottish law. In those circumstances it would be impossible to devise a test which was dependent on the particular child concerned. A very young child may be abnormally large. At school I knew a boy who was under 14 years of age and was 6 feet 6 inches in height. He wore boots of a colossal size. Therefore it is impossible to depend on the idiosyncrasy of the child. It must be a matter of sizes. The Treasury has the right under Clause 19 of the Bill to issue definition lists. This definition will be by sizes and the sizes will be those which are, normally, appropriate to young children. As regards the meaning of the term "young children" the hon. Member opposite need not fear that my right hon. Friend the Chancellor of the Exchequer has in mind toddlers. The sizes which he means are those regarded in the trade as appropriate for children up to the age group 12 to 14.

Mr. Lunn

From birth?

The Solicitor-General

Yes, from birth up to and including 14 years of age. Any of the sizes which are required by the normal child up to that age, will be excluded altogether under this definition of young children.

Mr. Lunn

What does the right hon. and learned Gentleman mean by a "normal child"?

Mr. Logan

Do I take it that what the Solicitor-General means is the usual trade definition of children's boots and that boots of the ordinary stock sizes 2 to 5, will be regarded as children's boots?

The Solicitor-General

What I mean is the ordinary trade definition of the sizes in articles of wear, regarded by the trade as being appropriate to children up to the age of 14 years.

Mr. Lunn

What is to happen if a parent is able to prove that his boy is within these age limits but takes a larger size?

The Solicitor-General

This has nothing to do with the idiosyncrasy of the particular child. A child of 12 might be malformed in such a way as to require boots even larger than those of a policeman. This will be defined by reference to the sizes and the sizes will be those normally regarded in the trade as appropriate for children up to 14. In that way we shall define what we intend by the use of the words "young children." If we did not put in some qualifying words it would mean treating children's clothing just the same as the clothing of grown-ups because a person of the age of 20, generally speaking, takes about the same sizes as a grown-up.

4.5 p.m.

Mr. Tinker (Leigh)

Does this mean that any particularly well-developed child who takes a size rather larger than the ordinary, is not to have the benefit of exclusion from the tax? If so, surely the Committee will not agree to such a proposition. It is to be expected that all children should benefit under this proposal.

The Solicitor-General

There might be a child of 16 who was very small, so that it cuts both ways, but it would be quite impossible to have an inquiry in every case, as to the particular child concerned.

Mr. Tinker

A person spoke to me about this matter recently and said, "My child must have boots larger than those of the ordinary child and how am I to get the benefit of this provision about children's clothing?" I told this person that I did not think the House of Commons was beyond finding a way out of that difficulty and I gave him an assurance that children up to a certain age—which I understand now to be 14—would all benefit alike. I hope that some means will be found of meeting the difficulty, otherwise we shall penalise many families. I do not think it would be right for this Committee to allow such a proposal to pass as that of the Solicitor-General. Surely the Chancellor of the Exchequer can apply his brain to finding some way out of the difficulty. If a parent, for instance, supplied a written statement that the goods were for the use of a particular child should not that be sufficient?

4.7 p.m.

Major Milner (Leeds, South-East)

I suppose the real difficulty is that this being a tax on the wholesale price, it is practically impossible to make the adjustment required, but I suggest to the Solicitor-General that it is a rather serious matter. One knows the difficulties experienced by people of more than normal size. Sometimes one's own wife or daughter may have to take what is called "outsize," and they pay a good deal more for the articles they require than the normally-sized person. It seems rather hard if we are to apply the principle of the Biblical saying, For he that hath, to him shall be given, and he that hath not, from him shall be taken away even that which he hath, to people who are abnormal through no fault of their own. Perhaps "abnormal" is not the right word. They are people who are either smaller or larger than the average. It should not be beyond the wit of the Solicitor-General to find some way out of the difficulty. I cannot at the moment suggest one. I recognise that there is a difficulty, having regard to the fact that the tax is on wholesale prices, but I hope the Chancellor of the Exchequer will do what he can to remedy what seems to be a rather serious matter.

4.9 p.m.

Dr. Edith Summerskill (Fulham, West)

I am disturbed by the Solicitor-General's statement. I thought when it was decided to exclude children's clothes from the tax, it meant that the parent would be helped in the cases where, as the result of the rapid growth of children, constant replacement of clothing was necessary. Now it seems that only the normal child in the normal family will benefit. My experience is that education authorities throughout the country differ as to what is the size of the normal child. It depends a great deal upon the standard of feeding of the child. I ask the Chancellor of the Exchequer to think carefully over this consideration—that he may exclude from this benefit a vast number of children who have been well-fed as a result of the sacrifices of their parents. Thus he will penalise the best parents in the country. There is another point which has not yet been mentioned. What about the children from 14 to 16 who get free places in secondary schools?

The Chairman

I have not interrupted this discussion so far, but I must point out that it is, now and then, getting out of Order. The principle of this tax has already been decided to the extent that it is to be a tax on goods sold wholesale. Therefore, any discussion as to retail customers who will be affected by it individually, would be out of Order.

Dr. Summerskill

If I may say so, Sir Dennis, I think you are narrowing the discussion rather severely. After all, the retailers have to buy from the wholesalers, and the repercussions of tax are so wide that we should surely be able to raise these points on this Amendment.

The Chairman

Perhaps the hon. Lady is stretching my Ruling rather further than I intended. I have allowed the discussion to proceed for some time, and I did not see anything wrong in what was said by the Mover of the Amendment, but the hon. and gallant Member for South-East Leeds (Major Milner) put his finger on the spot when he said that the difficulty was that this was a tax on wholesale sales and not on retail sales to individual customers. The hon. Lady and, I am sure, all hon. Members will see that since that principle of a tax on wholesale sales has been definitely established, it would be out of Order to argue points as to applying the tax individually to various retail customers.

Mr. Barnes

May I submit that even though we are discussing a wholesale price problem, it would not affect the point made by my hon. Friend.

The Chairman

I am not saying that the whole of the hon. Lady's speech was out of Order, and I intervened merely to ask her and others to bear in mind one particular point. I am sure she realises that. Indeed, I may say that as regards being in Order her speech was like the curate's egg.

Dr. Summerskill

Good in parts.

Mr. Barnes

May I point out that in the manufacturing, wholesale and retail trades clothing for secondary-school children is quite easily distinguishable?

The Chairman

That may be, but all that I am ruling out of Order is discussion on individual children and on individual retail customers. I do not think it is necessary to take up any more time in discussing a point of Order on which, I think, my Ruling is fairly clear and I think the Committee must leave it to me to pull up any hon. Member who is transgressing the Ruling which I have given.

Dr. Summerskill

May I then put my point in this way? I would refer to a category of children whose clothes are, very often, bought directly from wholesalers. Many school authorities deal with the wholesalers and then sell to the parents. Perhaps the Chancellor of the Exchequer has not appreciated this point. Many parents have sacrificed a great deal in order to give these children a chance. Many of them have the grant for clothes. If this extra tax is put on, in their case, the grant will not be sufficient to meet the expense.

4.13 p.m.

The Chancellor of the Exchequer (Sir Kingsley Wood)

Perhaps I may add a few words to the statement of my right hon. and learned Friend the Solicitor-General. I would suggest, in the first place, to the Committee that I have fairly carried out the undertaking which I gave previously. The reason why the word "young" appears in the Schedule, as distinct from the statement which I made in the House, is simply because my right hon. and learned Friend advised me that it was necessary. Otherwise, according to the ordinary legal interpretation, a "child" would mean any person under 21 years of age. That is the only reason why the word "young" has been put in. There is no other reason and it is not an attempt in any way to minimise the concession. On the other hand, it is necessary to consider the practical application of the tax. It was obvious that you could not ask the parents to present birth certificates every time they purchased articles, and we decided that the best and the most convenient way to deal with the matter was by means of sizes applicable up to a certain age group, and we took the age group 12 to 14, which, I think, is a fair one.

The point has been made that it is unfair to the very big child, but let me say a word on behalf of the small children. It works both ways. You might have a child of 15 or 16 who would come within this particular size and therefore get the benefit of the concession. Therefore, whether we are doing an injustice or not, it really works both ways. In some cases a very big child might suffer, but, on the other hand, a very small child might benefit. I think from that point of view it is a fair arrangement and is most convenient and one that will work with the trade. As far as children above that age are concerned, as my hon. Friend, who is very much more conversant than I am with matters of education, reminds me, there are grants available in that respect. I suggest that I have done my best in the most practical way to carry out the undertaking that I gave.

Mr. Tinker

I take it then, that if a child happens to have this foot size at the age of, say, 16, his parents will not be breaking the law if they purchase footwear of such a size.

Sir K. Wood

Certainly not.

Mr. Tinker

It is interesting to know-that.

Sir K. Wood

In fact, one of my advisers is so small that he suggested that he might come in under the arrangement.

Mr. Barnes

Will the Chancellor of the Exchequer consider on the Report stage including the words "and school garments"?

Sir K. Wood

I will consider anything that the hon. Gentleman suggests.

Mr. Barnes

Surely there can be no dispute about school garments.

Sir K. Wood

I will have a look at the point and see what it means.

4.17 p.m.

Mr. Viant (Willesden, West)

I agree that the Chancellor of the Exchequer has done his best to meet the point; nevertheless, it does not avert the penalty that a parent will incur if he happens to have a well-developed boy or girl.

Sir K. Wood

It works the other way in respect of the very small child.

Mr. Viant

I want to meet that point. I do not suppose for a moment that the Chancellor of the Exchequer has been in the happy position of being able to say, "Because we have had a well-developed boy, we must have a less-developed girl," If that were possible, his proposal would work out with equity, but the point is that one family will be penalised because they happen to have well-developed boys and girls, and, on the other hand, parents will enjoy the benefit who have less-developed boys and girls. His proposal does not meet the suggestion at all. It is penalising the parents who have well-developed children and subsidising, or giving an undue advantage to, parents with less-developed boys or girls. I admit the difficulty of the position, but the Chancellor does not do away with the hardship which is symptomatic of the tax itself. I hope that further consideration may be given to the proposal that the Chancellor of the Exchequer has already offered.

4.19 p.m.

Mr. Logan

I have some knowledge of these things, and I agree with the position in the trade in regard to footwear. A mother once brought a boy about six feet tall to see me with respect to a job, and I would not want to include such a boy as a child. Firms doing a large trade in children's clothing for secondary schools will be handicapped in regard to the definition of "child." Taking the age at from 12 to 14, as the Minister stated, it might be found, in regard to bootwear, that things would be all right, but serge uniforms for gymnastic suits and such like, and jumpers, would prove to be a more important item altogether. This would be specially felt in respect of garments for secondary school children where the scholars were State-aided. To put on an impost to that extent would be entirely wrong. Wholesale houses of repute regard the garments of children up to the age of 16 as children's garments, and now the Chancellor proposes to make a line of demarcation. If he does not include children up to the age of 16, he will be giving the trade an opportunity of saying that certain children's clothing will be outside that category. The question of bootwear is a different matter entirely.

During the last 25 years a system has grown up in which schools purchase clothing from the manufacturers and so avoid the goods going through the hands of retailers and possibly having perhaps to pay exorbitant prices. If the age of 14 is to be taken, it will present great difficulties with regard to school clothing. In these days it is very hard in industrial cities for parents to maintain their children while at the secondary school and clothe them in accordance with the standards of the children of parents who are better off. There can be no degradation worse than that of the child with ability, qualification and aptitude for learning having to sit in school in a garment which may be ragged, when other children are wearing the full uniform adopted by the school. Such people have to make great sacrifices. In the trade, children's clothing up to the age of 16 has always been recognised in the secondary schools. I therefore ask the Chancellor to accept that part of the Amendment suggested by my hon. Friend the Member for East Ham, South (Mr. Barnes) and make provision for school garments.

4.25 p.m.

Mr. Glenvil Hall (Colne Valley)

My hon. and gallant Friend the Member for South-East Leeds (Major Milner) put his finger really upon the difficulty from which we are suffering. If the Bill, as drafted, insists on the tax going on when goods change hands between the wholesaler and the retailer, there is very little that we can do. When the tax is paid, the wholesaler will not have the faintest notion who will be the ultimate purchaser, whether it will be a woman with a small foot in the matter of size or a child. In one way we have been frustrated in this matter. A number of us, including myself, tried to raise individual items when we were dealing with the main body of the Bill, and the Chairman at that time insisted that we should bring forward those particular points when we came to the Seventh Schedule. I raised the question of garments of children and wanted to know whether, if a mother bought the stuff in order to make the garment, it would be exempt from tax.

Sir K. Wood

We shall debate that matter.

Mr. Hall

Nevertheless, it would have been much better to have dealt with the whole thing generally before we committed ourselves to the principle that the tax should be taken off when the goods leave the wholesaler. That being so, there is very little we can say, except add to the appeals made by the hon. Lady the Member for West Fulham (Dr. Summerskill) and others that the Chancellor of the Exchequer and the Solicitor- General together should see whether it is not possible to meet the case of children who are round about 14 but actually are of greater physique than is normally the case. Will clogs be included in footwear mentioned in this Schedule?

Sir K. Wood

There is an Amendment down on that question.

Question put, "That the word 'young' stand part of the Schedule."

The Committee divided: Ayes, 197; Noes, 66.

Division No. 67.]	AYES.	[4.28 p.m
Acland, Sir R. T. D.	Hall, G. H. (Aberdare)	Pownall, Lt.-Col. Sir Assheton
Acland-Troyte, Lt.-Col. G. J.	Hammersley, S. S.	Price, M. P.
Albery, Sir Irving	Hannah, I. C.	Procter, Major H. A.
Astor, Major Hon. J. J. (Dover)	Hannan, Sir P. J. H.	Radford, E. A.
Attlee, Rt. Hon. C. R.	Harland, H. P.	Ramsbotham, Rt. Hon. H.
Baldwin-Webb, Col. J.	Harris, Rt. Hon. Sir P. A.	Read, Sir H. S. (Aylesbury)
Beamish, Rear-Admiral T. P. H.	Haslam, Henry	Raid, J. S. C. (Hillhead)
Beauchamp, Sir B. C.	Headlam, Liaut.-Col. Sir C. M.	Roberts, W. (Cumberland, N.)
Beechman, N. A.	Hely-Hutchinson, M. R.	Robinson, J. R. (Blackpool)
Benson G.	Henderson, J. J. Craik (Leeds, N.E.)	Ross Taylor, W. (Woodbridge)
Bird, Sir R. B.	Heneage, Lieut.-Colonel A P.	Rothschild, J. A. de
Blair, Sir R.	Hepburn, P. G. T. Buchan	Royds, Admiral Sir P. M. [...].
Boles, Lt.-Col. D. C.	Herbert, A. P. (Oxford U.)	Russell, Sir Alexander
Boitom, A. C.	Higgs, W. F.	Russell, R. J. (Eddisbury)
Bracken, Rt. Hon. B.	Hill, Dr. A. V. (Cambridge U.)	Samuel, M. R. A.
Brass, Sir W.	Holdsworth, H.	Scott, R. D.
Broadbridge, Sir G. T.	Holmes, J. S.	Seely, Sir H. M.
Brocklebank, Sir Edmund	Horsbrugh, Florence	Selley, H. R.
Brown, Rt. Hon. E. (Leith)	Hudson, Rt. Hon. R. S. (Southport)	Shaw, Captain W. T. (Forfar)
Brown, Brig.-Gen. H. C. (Newbury)	Hume, Sir G. H.	Shepperson, Sir E. W.
Browne, A. C. (Belfast, W.)	Hunter, T.	Shute, Colonel Sir J. J.
Burghley, Lord	Jarvis, Sir J. J.	Silkin, L.
Burgin, Rt. Han. E. L.	Jowitt, Rt. Hon. Sir W. A.	Smith, Rt. Hon. H. B. Lees- (K'ly)
Burton, Col. H. W.	Kerr, Sir John Graham (Sco'sh Univs.)	Smith, Sir R. W. (Aberdeen)
Butcher, [...]. W.	King-Hall, Commander W. S. R.	Smithers, Sir W.
Campbell, Sir E. T.	Lamb, Sir J. Q.	Somerset, T.
Carver, Colonel W. H.	Lambert, Rt. Hon. G.	Somervell, Rt. Hon. Sir Donald
Cazalet, Thelma (Islington, E.)	Lathan, G.	Somerville, Sir A. A. (Windsor)
Chapman, A. (Rutherglan)	Law, R. K. (Hull, S.W.)	Southby, Commander Sir A. R. J.
Chapman, Sir S. (Edinburgh, S.)	Leach, W.	Spans, W. P.
Churchill, Rt. Hon. Winston S.	Lee, F.	Storey, S.
Colman, N. C. D.	Leighton, Major B. E. P.	Strauss, H. G. (Norwich)
Cooke, J. D. (Hammertmith, S.)	Lewis, O.	Stuart, Lord C. Crichton- (N'th w'h)
Cox, H. B. Trevor	Lindsay, K. M.	Stuart, Rt. Hon. J. (Moray and Nairn)
Cranborne, Viscount	Lloyd, Major E. G. R. (Renfrew, E.)	Sutler, Rear-Admiral Sir M F.
Davidson, Viscountess	Lloyd, G. W. (Ladywood)	Sutcliffe, H.
Davies, Clement (Montgomery)	Loftus, P. C.	Tasker, Sir R. I.
Davies, Major Sir G. F. (Yeovil)	Lucas, Major Sir J. M.	Tate, Mavis C.
Davison, Sir W. H.	Mabane, W. (Huddersfield)	Thomas, J. P. L.
De la Bère, R.	M'Connell, Sir J.	Thurtle, E.
Denman, Hon. R. D.	McCallum, Major D.	Tinker, J. J.
Drewe, C.	Macdonald, G. (Ince)	Touche, G. C.
Duckworth, W. R. (Moss Side)	Magnay, T.	Train, Sir J.
Duggan, H. J.	Maitland, Sir Adam	Walker, J.
Ede, J. C	Makins, Brigadier-General Sir Ernest	Walker-Smith, Sir J.
Eden, Rt. Hon. A.	Mander, G. le M.	Wallace, Capt. Rt. Hon. Euan
Edwards, Rt. Hon. Sir C. (Bedwellty)	Margesson, Capt. Rt. Hon. [...]. [...] R.	Ward, Lieut.-Col. Sir A. L. (Hull)
Ellis, Sir G.	Mathers, G.	Ward, Irene M. B. (Wallsend)
Elliston, Capt. G. S.	Mayhew, Lt.-Col. J.	Wardlaw-Milne, Sir J. S.
Emmott, C. E. G. C.	Mills, Sir F. (Leyton, E.)	Waterhouse, Captain C.
Emrys-Evans, P. V.	Moore Brabazon, Lt.-Col. J. T. C.	Webbe, Sir W Harold
Erskine-Hill, A. G.	Morgan, R. H. (Worcester, Stourbridge)	Wells, Sir Sydney
Fox, Sir G. W. G.	Morris, J. P. (Salford, N.)	Westwood, J.
Frankel, D.	Morrison, G. A. (Scottish Univ's.)	White, H. Graham
Fraser, Captain Sir Ian	Morrison, Rt. Hon. W. S. (Cirancester)	Whiteley, W. (Blaydon)
Fremantle, Sir F. E.	Mort, D. L.	Wickham, Lt.-Col. E. T. R.
Fyfe, Major D. P. Maxwell	Muff, G.	Williams, C. (Torquay)
Galbraith, Comdr. T. D.	Munro, P.	Williams, T. (Don Valley)
George, Major G. Lloyd (Pembroke)	Noel-Baker, P. J.	Winterton, Rt. Hon. Earl
Goldie, N. B.	Nunn, W.	Womersley, Sir W. J.
Graham, Captain A. C. (Wirral)	O'Neill, Rt. Hon. Sir Hugh	Wood, Rt. Hon. Sir Kingsley
Gridley, Sir A. B.	Paling, W.	Woolley, W. E.
Grigg, Sir E. W. M.	Peake, O.	Young, A. S. L. (Partick)
Grimston, R. V.	Pearson, A.	TELLERS FOR THE AYES.—
Groves, T. E.	Pethick-Lawrenee, Rt. Hon. F. W.	Major Sir James Edmondson
Gunston, Capt. Sir D. W.	Pickthorn, K. W. M.	and Mr. Boulton.
Hacking, Rt. Hon. Sir D. H.	Ponsonby, Col. C. E.
NOES.
Adams, D. (Consett)	Griffiths, G. A. (Hemsworth)	Parker, J.
Adams, D. M. (Poplar, [...].)	Hall, J. H. (Whitechapel)	Poole, C. C.
Banfield, J. W.	Hall, W. G. (Colne Valley)	Pritt, D. N.
Bartlett, C. V. O.	Hardie, Agnes	Quibell, D. J. K.
Bellenger, Capt. F. J.	Harvey, T. E.	Rathbone, Eleanor (English Univ s.)
Bevan, A.	Henderson, J. (Ardwick)	Sexton, T. M.
Broad, F. A.	Henderson, T. (Tradeston)	Silverman, S. S.
Bromfield, W.	Hicks, E. G.	Sloan, A.
Burke, W. A.	Hollins, J. H. (Silvertown)	Smith, E. (Stoke)
Chater, D.	Isaacs, G. A.	Smith, T. (Normanton)
Cluse, W. S.	Jackson, W. F.	Sorensen, R. W.
Clynes, Rt. Hon. J. R.	John, W.	Stephen, C.
Cocks, F. S.	Key, C. W.	Stokes, R. R.
Gove, W. G.	Leonard, W.	Strauss, G. R. (Lambeth, N.)
Daggar, G.	Leslie, J. R.	Summerskill, Dr. Edith
Davidson, J. J. (Maryhill)	Lipton, D. L.	Thorne, W.
Dobbie, W.	McGhee, H. G.	Viant, S. P.
Douglas, F. C. R.	Maclean, N.	Wedgwood, Rt. Hon. J. C.
Edwards, N. (Caerphilly)	Martin, J. H.	Welsh, J. C.
Gallacher, W.	Maxton, J.	TELLERS FOR THE NOES.—
Gardner, B. W.	Morgan, J. (York, W.R., Doncaster)	Mr. Barnes and Mr. Lunn.
George, Megan Lloyd (Anglesey)	Morrison, R. C. (Tottenham, N.)
Green, W. H. (Deptford)	Naylor, T. E.

4.38 p.m.

'Mr. Gallacher (Fife, West)

I beg to move, in page 41, line 14, column 3, at the end, to insert: Garments or footwear of a kind manufactured for the use of workers for wear at their ordinary employment. I do not know whether my persuasive ability is sufficient to influence the Chancellor, but I am certain that if he will give this matter the consideration it deserves, he will have no hesitation in accepting this Amendment. I would like to have the Chancellor's attention when the Patronage Secretary has finished. The Patronage Secretary is in enough trouble already, and I would not like to see him get into any more. As the Chancellor may be aware, the average worker has to do a considerable amount of overtime in addition to his routine daily work to-day and has thereby to meet increased expenditure on the garments and boots which are used in connection with his job. Apart from the ordinary clothing that he has to purchase for his social life he has, as a rule, to purchase clothing specially adapted for his employment. In many cases workers hi heavy industries find it impossible to wear at their work the same clothing that they wear when they are not at work, and there is a very big section of the manufacturing industry which is devoted to the making of working clothes, including overalls, and working boots. In column 3 of the Schedule the Chancellor has exempted from tax protective boots designed for use by miners. I suggest that all footwear and clothing used by such men should be excluded from this tax. When a miner goes to his pit to- day he takes with him a certain type of clothing for use down the pit, which he puts on before he descends the mine. When he returns to the surface at the end of the day he takes off his mining clothes and changes into his ordinary clothes. Workers in the mines and in the engineering industry, and others engaged in mills and on excavation work, have to have a particular kind of heavy boot and coarse clothing which has been adapted for their work, and it seems to me that the Chancellor should give some consideration to those who have to buy this footwear and garments. They should, I suggest, be exempt from the tax.

Sir K. Wood

I regret I cannot accept this Amendment. The Committee is aware of the scheme of the Bill and how, in the first column of the Schedule, there are goods chargeable at the basic rate. In the second column garments and footwear not of a luxury character are chargeable at the reduced rate. And in the third column of the Schedule the garments and footwear of young children are not chargeable at all and I cannot alter the scheme of the Bill at this stage.

4.44 p.m.

Mr. T. Smith (Normanton)

I wish the Chancellor would give a little more consideration to the part of the Amendment which deals with footwear. The Chancellor exempts from taxation protective boots worn by miners, and if there is to be a distinction, there will be a good deal of dissatisfaction. The protective boot is a particular kind of boot which has been developed during the past 10 years, and I, personally, wish every mine worker wore this kind of boot. It not only has a reinforced sole, but it has a protective cap which will withstand a tremendous weight without doing injury to the toe. They are to be exempted, yet not all miners wear them. The miners who wear hob-nailed boots will thus have to pay the tax, but those who wear the protective boots will not be taxed. You might say that all miners ought to wear protective boots. We have been attempting to get protective boots and helmets, and even gloves, for all miners, but there is not the supply of boots. I should be very pleased if there were. A miner who has protective boots will be in this position, that one kind will be taxed and the other exempt, and there will be a difference in price of 5s. or 6s. a pair. Whilst I appreciate the right hon. Gentleman's difficulty in not being able lightly to interfere with the scheme of his Bill, I think there is an anomaly which ought to receive some consideration.

4.46 p.m.

Sir K. Wood

I deliberately put in protective boots designed for miners for two reasons. The first was to encourage the use of these boots. It has been represented to me by Members who understand the subject that it would be a very good thing. The second reason is of a more technical character and not so important. Directly you try to include other kinds of boots you cannot get clear definition, and the words may very well be applicable to all kinds and classes of industry. It was for the special reason of giving encouragement in that direction that these words were there inserted.

4.48 p.m.

Mr. Logan

I should like to draw attention to the definition that the Chancellor gave in regard to children. He brought the young person within the category of 14 years of age. I am at a loss, in dealing with this Amendment, to understand how this is going to apply. As I understand it, it will cover all the garments that are mentioned and those in working use, if I am right, will come within the category of the tax of a sixth. There are many thousands, perhaps hundreds of thousands, of young boys to-day engaged with engineering firms. Between the ages of 14 and 16 some of them go into indentured apprenticeship and on the mothers there falls the job of making provision for them. In the trade they have always been considered as youths. Suits of drills, or overalls, or combinations are essential to protect their clothing. These goods must be washed every week. The dirty clothes are not allowed inside the home. They are thrown in the scullery or outside the house. They are not allowed to be brought inside on account of the stench. That is a very big tax on the home. It is only when they are getting journeymen's money that some of them dispense with their overalls. This question of overalls in household' expenses is going to be a very heavy cost indeed. I am wondering whether the definition of children does not require alteration. I do not think it can have been intended that working clothing should be brought within the purview of the tax. If I am wrong in that, there is much that is objectionable to be said against the Bill. If it means that every article that comes into the home is to be taxable, we are doing an injustice to the worker. If we are going to have concessions, some exception ought to be made in regard to these youths who are known as children but not as men. This is the only time I have been in thorough agreement with the hon. Member for West Fife (Mr. Gallacher) and I hope it will be the last, but I agree that in this case a concession ought to be made and I ask tire Chancellor to assent to it.

4.53 p.m.

Mr. Graham White (Birkenhead, East)

I fully appreciate the reasons which the Chancellor of the Exchequer has adduced, but I am not sure that there is not a case for further consideration of a somewhat limited aspect of the question, and whether the tax should in fact be levied upon those garments whose use is now reckoned under the Income Tax rule as a charge for deduction from tax. For example, men who are employed in the cleaning of oily tanks have to provide a suit of overalls every day when they are employed, because there is no process yet devised by which they can be made fit to wear on a second occasion. The right hon. Gentleman may say that I am destroying my own argument. I do not know, but on the information which comes to me with regard to the Income Tax rule and the heavy burden which falls on thousands of workers who may have to buy and throw away or burn six pair of overalls a week, I think there-is a case for investigation.

4.54 p.m.

Mr. Stephen (Glasgow, Camlachie)

I think the Chancellor of the Exchequer was not very helpful in his answer to the Mover. He said the Amendment would not fit into his scheme. I do not think that is a sufficient answer to the Tightness or wrongness of the Amendment. The clothes and boots in the instances cited by the hon. Member are on the same level as tools, and they should be free from tax. The Chancellor said that if he were to take a sympathetic view, there would be difficulty in getting a suitable definition. Surely it is not beyond the experts in the Treasury to get a suitable form of words to describe these garments and boots. The Chancellor made play with the fact that there was a desire to encourage the use of particular boots in the case of miners, but there are other workers who are in a similar position with regard to the boots which they wear in connection with their calling. Working in the mud and wet, they wear their boots out very quickly, and they will be put in an invidious position compared with other members of the community. A special tax is being put upon them because they have to carry out specially dirty and uncomfortable work. It is a preposterous position that he has taken up. The whole question is one which should have had special consideration in drafting the Bill, and the right hon. Gentleman should have been aware that people in these circumstances woud require concessions. I hope the Chancellor will take a more serious view of the Amendment than to say he can do nothing about it because it is difficult to find a form of words. I hope he will intimate that he is prepared to reconsider the whole question and seek a definition which will put this class of garments into a different position from ordinary garments, so that the worker will not have an extra tax put upon him because he has to work harder than others.

4.58 p.m.

Mr. Glenvil Hall

I should like to appeal to the Chancellor of the Exchequer and ask whether he cannot meet us part of the way. I agree that the Amendment as drafted is pretty wide. "Workers" might be anyone. I take it that we are workers and that our clothes, and even the clothes of Noble Lords in another place, might, in their view at any rate, be considered as workers' clothes. But it seems to me that we can identify pretty clearly the clothes which the Mover had in mind. If the Chancellor would meet us and adopt the suggestion that overalls and working boots of all kinds should be included, he would go a long way to meet the wishes of hon. Members on this side. He has already put into the Schedule miners' boots of a special type, and also miners' helmets. The miners in my division will be extremely grateful for that. Textile workers, however, will wonder why one section of the working community should be given a concession while they are left out in the cold.

Mr. Ellis Smith (Stoke)

And moulders.

Mr. Hall

One might say that men working in the fields require special clothes. It seems to me that the answer which the Chancellor has given is not sufficient, and that he has not met either the criticism or the justice of the case. I hope that he will do his best to meet us at any rate on some of the points that have been raised.

5.1 p.m.

Mr. A. Bevan (Ebbw Vale)

I am a little frightened by the criticisms that have been made of the Chancellor's proposal. I have taken part in negotiations with representatives of the Inland Revenue on the subject of what should be disregarded for purposes of Income Tax. Am I to understand that the position now being taken up by my hon. Friends is that if a certain garment, say, dungarees for mechanics, were to be exempted from the Purchase Tax, it would not be possible for a trade union representing the workers in the industry concerned to ask that consideration should be given, in connection with Income Tax assessments, to the using up of an abnormal quantity of dungarees in the earning of wages?

Mr. Hall

If my hon. Friend is referring to my remarks—

Mr. Bevan

I was referring to the whole tenor of the arguments of my hon. Friends.

Mr. Hall

The point I was making is that clearly it is impossible to say that one suit is a working suit and another is not, and the only way in which we can help in this matter, now that we have agreed to the tax, which is a bad tax in any case, is to try to get exempted those articles of clothing which are definitely working clothes. I was not referring to the Income Tax position.

Mr. Bevan

That is the difficulty. When I worked in a pit, I wore for the purposes of my work ordinary clothes that had been almost worn out. It would be impracticable to make a distinction in such a case.

Mr. Stephen

Does my right hon. Friend forget the case of workers whose incomes are such that they do not pay Income Tax? Such workers may have to provide dungarees for themselves.

Mr. Bevan

There is a case, and the Chancellor has tried to meet it. It has been suggested that boots and garments used by a worker in the earning of wages can be technically differentiated from other clothes. If a category of that kind can be suggested, I am sure the Chancellor will be quite ready to meet us.

Mr. E. Smith

Moulder's shoes.

Mr. Bevan

Let them be discussed, then, as a technical category; but the difficulty which I foresee is that workers use up cast-off clothing, and clothing that is almost worn out, for the purposes of work—

Mr. Gallacher

Will my hon. Friend understand that my Amendment relates to goods of a particular kind, manufactured for a particular purpose, and that it has absolutely nothing to do with workers' cast-off clothes?

Mr. Bevan

If my hon. Friend the Member for West Fife (Mr. Gallacher) will read his Amendment, he will see that what he has said has nothing to do with the Amendment. The Amendment reads: Garments or footwear of a kind manufactured for the use of workers for wear in their ordinary employment. If my hon. Friend will look at the third column of the Seventh Schedule, he will see that the Chancellor has attempted to define goods that are manufactured for the purpose of being used by workers in their employment. This is my position. I am against the tax as a whole, for it is a silly tax, but if it is accepted, it seems to me to be impracticable to introduce a distinction of the kind suggested by my hon. Friend. He has spoken about the miners. Apart from helmets and boots, I challenge him to mention anything that is manufactured specifically for use by miners in the course of their employment.

Mr. Gallacher

There are many miners who buy moleskin trousers and boots that are manufactured for no other purpose than for use by a miner in his employment. They are not for ordinary wear.

Mr. Bevan

Moleskin trousers are worn generally, and not only in the course of earning wages. I am exceedingly anxious about this matter. In the mining industry we have been discussing for years what articles of clothing can be defined as being essential in the earning of wages and consequently be subject to a rebate in respect of Income Tax. What I am exceedingly anxious to avoid is a discussion in the Committee which will blur the distinction which we have been able to establish. If my hon. Friend really meant what he said, he ought to have inserted moleskin trousers in his Amendment. He has not done so. In the Amendment there is a general statement which it would be impossible to interpret in practice. Rather than spend time in attempting to make distinctions which cannot be made, I would much prefer that we should deal with the broad principle of the Purchase Tax. It is quite impossible to make a distinction in this matter, and therefore, it would be far earlier for us to argue the matter from the point of view of the Purchase Tax as such than to try to obtain exemption of certain articles of clothing which are not specified in the Amendment and which, if they were specified as being articles of clothing or footwear used in the earning of wages, would have the result of preventing us, in our negotiations, from arguing that the use of any other articles of clothing or boots ought to be taken into account for a rebate in respect of Income Tax. Once one category is defined, all others are excluded.

Mr. Gallacher

Nonsense.

Mr. Bevan

My hon. Friend has no experience in this matter. For years he has been engaged in political propaganda, and his experience of industrial negotiations is negligible.

Mr. Gallacher

rose—

Mr. Bevan

I will not give way to my hon. Friend again. Hon. Members will see that the point which I have made is one of substance.

Mr. Gallacher

The hon. Member said that I have no experience of trade union problems—

The Chairman

Order. The hon. Member for West Fife (Mr. Gallacher) has already made his speech and he must allow other hon. Members to make speeches on the subject.

Mr. Bevan

The fact of the matter is that my hon. Friend cannot take what he wants to give. If we put into the third column of the Schedule to the Purchase Tax all articles of clothing which we consider to be used in the earning of wages, then by inference we rule out any other garments that are not mentioned in that Schedule. Therefore, unless we exhaust all the categories, every trade union representative engaged in negotiations with the Inland Revenue in an attempt to have certain garments or boots taken into account for a rebate in connection with Income Tax will be met with the argument that those articles are not in the Schedule of the Purchase Tax, and therefore, ought not to be taken into account. For that reason, I suggest that it is inadvisable to try to exhaust the categories by Amendments now if we want to conduct negotiations with regard to the Income Tax in a proper fashion. Of course, there is the argument, with which I entirely agree and which arises entirely out of the whole Purchase Tax, that if there is a tax on the clothes which a worker uses ordinarily and then uses for work afterwards when they are almost worn out, it amounts to taxing the clothes which he uses for work. That is an argument against the Purchase Tax as a whole, and not an argument for making a distinction such as the hon. Member for West Fife wishes to make. I hope that we shall not be handicapped in the way in which the hon. Member suggests that we should be.

5.12 p.m.

Mr. Sloan (Ayrshire, South)

I am sure the Chancellor of the Exchequer is indebted to my hon. Friend the Member for Ebbw Vale (Mr. Bevan) for making out his case. My hon. Friend has argued the matter more fully than the Chancellor would have dared to do, and he has used his knowledge of mining to buttress his argument. I was interested to hear my hon. Friend say that when he was a miner, which must have been a consider- able time ago, he wore cast-off clothing. When his clothes were no longer suitable for wearing in the kirk, he wore them in the pit. All I can say is that the job on which he was working underground must have been of a very light character, and I am afraid that he must have been what is known in Scotland as a "cod gaffer"—that is, one of the men who do not do any work in the pit, but see that others do it.

The Chancellor will be well advised to consider this question very seriously. As my hon. Friend the Member for Cam-lachie (Mr. Stephen) said, a worker's clothes are his tools. I should like to deal with the matter from the point of view of the miners. When a miner goes to the pit, he changes into working clothes at the pit. There is a clear distinction between ordinary clothes and the clothes which the men wear down below. There are special sorts of clothes made for use in the pits. There are moleskin trousers and semmits. These things are worn out very quickly. Some of the miners have to work in seams which are as low as 22 inches. There are seams as low as the Bench on which the Chancellor is sitting, although the Chancellor might not believe it if he got underneath the Bench. A miner can wear out these clothes in a single day. They wear them out quickly by constantly rubbing against the roof. The miners have special clothes for that purpose.

Mr. Bevan

What are they?

Mr. Sloan

Only last Thursday I was told in my district that a pit semmit was made specially for the purpose, and that it was sold before the war at 1s. 2d., and now costs 3s. 4d. These clothes are worn out in a week, and even quicker. The hon. Member for Ebbw Vale was a youth in the pits at some time. In the case of boys they have to do most arduous work in the gallery. They are engaged on transport in working the hutches and pushing them out and in the roadways, and in doing so their boots wear out very quickly. They do not wear the safety boots mentioned in this Schedule, and they could not perform their work with them. They are not working on the coal face, but in the haulage roads. They have to work clips and work these with their feet, consequently their boots wear out very quickly. Boots to these boys are just as important as picks for the men.

Mr. Bevan

Is that a special boot?

Mr. Sloan

It is not a special boot.

Mr. Bevan

Exactly.

Mr. Sloan

It is an ordinary boot which has to be worn by the boy to enable him to do his job, and therefore it should be excluded from this Schedule. The question of Income Tax abatement does not arise. What is the Income Tax abatement? It is about 30s. per annum. The amount of tax which would be levied on these clothes will amount to ten times that in the course of the year.

Mr. Bevan

Does the hon. Member suggest that the amount of tax will be ten times 30s. in the course of a year? That is a ridiculous suggestion.

Mr. Sloan

Perhaps it is so long since the hon. Member for Ebbw Vale has been in a mine that he simply does not know what is taking place.

Mr. Bevan

If the hon. Member can prove to me that the amount of increased tax upon a gallery worker's boots amount to £15 per year, I will resign from Parliament.

Mr. Sloan

That is, boots and clothes.

Mr. Bevan

Then I will add clothes. I will resign from Parliament if the hon. Member can show that the tax upon boots and clothes amounts to £15 a year.

Mr. Sloan

I should not be surprised, after the constituents of the hon. Member have read his speech this afternoon, if he will be out of Parliament anyway.

The Chairman

I think we have had enough of this personal altercation. I must remind the hon. Member who is making his speech that if he gives way and allows another Member to interrupt him, he must sit down. I cannot have two hon. Members on their feet at the same time.

Mr. Sloan

The hon. Member has been getting up like a jumping Jack.

The Chairman

Will the hon. Member please proceed with his speech on his Amendment?

Mr. Sloan

I am trying as best I can, but I have been interrupted so much that it is very difficult for me to do so. All I want to say is that the Chancellor should seriously consider this matter. I regret that he has made up his mind definitely on a certain line, and that he is going to make no concession. I would point out, on behalf of the mining community, that with rising costs the expenditure on working clothes is now becoming enormous. We should be very grateful if the Chancellor could see his way to make a concession in this respect.

5.21 p.m.

Mr. Bevan

I rise to clear myself of the misrepresentations which have been made. I shall vote against the Purchase Tax as such. I regard it as entirely undesirable and as imposing an unjust burden on the workers standard of living. Perhaps the hon. Member for South Ayrshire (Mr. Sloan) will allow me to proceed with my argument. The fact is that attempts are being made to make a distinction which is incapable of being made. The hon. Member for South Ayrshire pointed out that miners used ordinary boots for work, but these are boots used in every other occupation. It is impossible to introduce in the Schedule, exempting particular classes of boots capable of differentiation, the classes of boots mentioned by the hon. Member. Furthermore, it is perfectly true that when a man goes to the pit he goes with ordinary clothes which are no longer of any use for evening or ordinary wear.

Mr. Burke (Burnley)

On a point of Order. Have we got to listen to the same speech again?

The Chairman

Order.

Mr. Bevan

I really must protect myself.

Mr. Sloan

On a point of Order. The hon. Member has made that point already about the ordinary clothes; why should he be allowed to make it again?

The Chairman

Perhaps the hon. Member will be good enough to leave my business to me.

Mr. Bevan

I am really trying to find out the distinction which the hon. Member is trying to make in the Amendment. I cannot see how it will work out in practice. If he is arguing that there are certain categories of boots used in the mining industry which are not used in any other industry, he should put it in the Amendment. But that is not what the Amendment says. The Amendment is too vague and general, and it is incapable of being worked out in practice. The hon. Member is engaged in pushing an argument on an Amendment which ought to be pushed against the Purchase Tax as such, and, in so doing, he is embarrassing negotiations going on in connection with the trade unions with regard to the Purchase Tax.

5.25 p.m.

Mr. Gallacher

The Chancellor of the Exchequer said there would be very great difficulty in making any classification in connection with this proposed Amendment. I would ask him to consider seriously whether there are not leading manufacturing firms in the country which will, without the slightest trouble, provide him with specific categories of boots and garments which can quite easily be classified, and which would come under the Schedule, and which would, as a consequence, be excluded. I am certain that the manufacturers would be prepared to give him a classification of that kind.

Amendment negatived.

The Chairman

The hon. Member for Westhoughton (Mr. Rhys Davies) has two Amendments standing in his name on the Order Paper. I am asking for information whether it would be convenient for him to deal with both those Amendments at the same time.

5.26 p.m.

Mr. Rhys Davies (Westhoughton)

I beg to move, in page 41, line 17, column 3, after "miners," to insert "quarrymen and steelsmelters."

As this Amendment is probably related in some way to the Amendment appearing later on the Order Paper, I hope to deal with the points raised at the same time. The Chancellor has turned down, relentlessly, the suggestion of the hon. Member for West Fife (Mr. Gallacher). That Amendment was, of course, rather wide in its scope, and there were technical difficulties in putting such an Amendment in operation. The right hon. Gentleman will see that in the third column of the Schedule he has the words "protective boots designed for use by miners." As an old miner myself, I am beginning to wonder how it comes about that the right hon. Gentleman seems to exclude every other class of worker from this Schedule. What about the teachers, the textile operatives, the agricultural workers, the steelsmelters and quarrymen? If the right hon. Gentleman will not mind my saying so, and especially my hon. Friend the Member for Wentworth (Mr. Paling), who is one of the Whips whom I now see sitting on the Front Bench, I have some sort of suspicion that somehow miners are expressly included here because so many Labour ex-miners are members of the Government. The hon. Member laughs, but I have been thinking that if we had textile operatives, quarrymen and steelsmelters in the Government, possibly we should have been able to exclude all these occupations.

Sir K. Wood

I hope to meet the hon. Member on this Amendment.

Mr. Davies

I am glad that the eloquence which I have introduced into my speech has already convinced the right hon. Gentleman that my proposal is a good one.

Sir K. Wood

I am anxious to meet my hon. Friend in this matter, and if he will withdraw the Amendment I will try and see what form of words can be introduced to meet it. It is not a question of representation in the Government, but, as was pointed out in the discussion on the last Amendment, the miners' boot was put in because there is a special protective boot which can be identified. I understand that there is a similar boot for quarrymen and that it is used by steelsmelters.

Mr. Davies

In view of the generous gesture of the right hon. Gentleman, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

5.31 p.m.

Mr. Burke (Burnley)

I beg to move, in page 41, line 17, col. 3, at the end, to insert "clogs."

The Chancellor has just intimated that the protective boots designed for miners have been included because they can be easily defined. It is just as easy to define clogs which are as necessary to the Lancashire cotton operatives as the protective boots are to miners. Lancashire is peculiarly the home of the clog and it is so generally used there that the miners in Lancashire also wear them. If the Chancellor is anxious to protect the miners because they are a hard-working section of the community, who are badly paid and cannot afford this high taxation, he has a greater reason for putting clogs in the Schedule because the cotton operatives are as hard-working a section of the community as any and their wages are even worse than the miners have been for a long time. For many years they have not enjoyed even a slight boom of prosperity.

The Solicitor-General

As a Lancashire Member, I am delighted to say that the Chancellor has been quite unable to resist the eloquence and arguments of my hon. Friend, and that he will accept the Amendment. We Lancashire Members will show our gratitude on a suitable occasion hereafter by inviting my right hon. Friend to one of our clog dances.

Mr. Glenvil Hall

The West Riding of Yorkshire will be equally pleased. They wear clogs there as well as in Lancashire, and for once in a way we congratulate the Chancellor on doing the right thing.

Amendment agreed to.

5.35 p.m.

Sir Arnold Gridley (Stockport)

I beg to move, in page 41, line 18, to leave out "Headgear," in column 1, and to insert "Headgear" in column 2.

It is seldom that I intervene in the Debates, either in the House or in Committee, but this is a matter upon which it is impossible for me to keep silent. In my constituency there are many large hat manufacturing concerns employing thousands of men and women. The same applies to Denton, Luton, Nuneaton, London and elsewhere. We fear that this treatment of headgear as a luxury subject to the higher tax will deal a serious blow to the industry and create a great deal of unemployment in it. I cannot understand why the Chancellor has made this differentiation between hats and other articles of clothing. Does he say that a hat is not a necessity, but that it is a luxury? If it is a non-essential industry, I wish my right hon. Friend would say so definitely. One can understand his looking upon the motor-car industry on its luxury side as non-essential because men employed in that industry are skilled and can be turned on to work of greater national importance. In the hat industry that is not possible, because, like those engaged in the cotton industry, men and women who have been accustomed to work for years on hatting have not the hardness of hand or type of skill that can be usefully turned to other occupations. Therefore, one effect of this tax will be to throw hundreds, and possibly thousands, of operatives on to the unemployment market at a time when no one wants to do that unless it is unavoidable.

I wonder how those who had to draw up the lists in the Seventh Schedule approached a task which, I should have thought, passed the wit of man. There is no doubt that those who sat down to draw it up probably decided what industries should be left out altogether, and then, having come to some conclusion as to what articles should be brought in, had to scratch their heads to decide in which column the articles should be put. Coming to debatable items, they no doubt said, "We will put them into the first or second column and if we have made a mistake Members of the House of Commons will bring the matter up and our mistake will be rectified." I think that headgear is one of those mistakes, and I feel strongly that the Chancellor must, in spite of his need for raising every penny, in which I fully sympathise with him, really ask himself in this case whether it will be worth while.

The industry has already suffered a severe diminution. Men in the Forces do not want the ordinary type of hat made in the felt factories. That drop will be accentuated if this tax at the higher rate goes through. Although the hat manufacturers have, at the request of the President of the Board of Trade, after a lot of work, formed an important export group, they will now be faced with the far greater difficulty of competing in the export market. Their output will have gone down because of the drop in home consumption, their costs will be put up because of this tax, and, therefore, their possibility of entering the export market will undoubtedly be seriously diminished. There is no demand upon shipping space for the raw material of this industry. The bulk of it is a by-product of the wool industry. The Chancellor will not benefit if the export market is not developed, as the hat manufacturers wish to develop it, or get any benefit from the exchange. When the Chancellor considers what this tax is likely to produce—and I question whether he knows what he will derive from it—and sets against it what will have to be found out of the Exchequer for unemployment assistance for those who will be thrown out of work, what he will get in the till on balance is not a sum that will justify him sticking to the higher tax on headgear and bringing hardship into many homes where at present the breadwinner is at work.

5.42 p.m.

Sir K. Wood

My hon. Friend has put his case with great fairness and force, and I appreciate many of the considerations which he has put forward. As always, he has voiced the views of his constituency with ability and fairness. I must put before the Committee the other aspect of the matter and give the reasons why I have placed headgear in the Schedule and differentiated it from clothing. I stated in my Budget speech and on one or two occasions since that in the column which carries the tax of 33⅓ per cent., I was not concerned only with luxuries. I was concerned also with goods which, in the hard circumstances of the war, we can either do without or of which we can at least postpone replacement. That is why headgear is in this column. I think that if we can, in the circumstances of the time, reduce our expenditure on headgear it is not unreasonable to do so and it is a wise thing to do. My hon. Friends will know that hats will certainly last, if they are properly used—with one exception, which I will mention later—much longer than most clothes. They can be made to last much longer—

Mr. George Griffiths (Hemsworth)

You are not telling the ladies that, are you?

Sir K. Wood

I will say a word about ladies' hats later. Even if they are a bit shabby or not in the latest fashion this is a time when we should reconcile ourselves to that fact. It may be that in a few months' time when a man walks along wearing a shabby hat or a shabby suit people will say, "What a patriotic man!" He will not be pointed out as a bad man because he is wearing a shabby suit or last year's hat. That would be a mark of patriotism. Hats in war time can undoubtedly be made to last longer; there is not that constant need for replacement, and that is the reason why I have placed them in the first column. Finally, I would point out to the Committee that this Amendment would include women's hats, and there there is a great field for economy, a very wide field indeed. I do not think anyone would say it was unreasonable in the circumstances of the time that women's hats should be put in the first column. We know how adaptable and clever women are. They will be able to put a new ribbon on one of their old hats and go about as proud and pleased as though it were a new one, because they will not only have an attractive hat, but will have made a contribution to the war. Therefore, while I appreciate all that my hon. Friend has said, and know the difficulties of his constituents, I hope, having regard to the case which has been put, that he will see that I cannot in this instance afford to miss a contribution to the Exchequer.

5.47 p.m.

Mr. Barnes

There is one hat with whose ultimate fate the Chancellor has not regaled the Committee, and that is the shining "topper" of the Financial Secretary to the Treasury. That hat has long been the envy of the House of Commons. When I saw this Amendment, I was inclined to support it, because the issue appeared to be clear and beyond dispute, but when the Chancellor was announcing the differential tax he gave us clearly to understand that those articles that would bear the 33⅓ per cent, would definitely be luxuries.

Sir K. Wood

I did not say that, and I should like to get the point clear, because that statement has been made once or twice. What I did say was: Goods subject to charge at the full rate are either luxury goods or those which, in the hard circumstances of the war, we can do without or of which we can postpone the replacement."—[OFFICIAL RKPORT, 6th August, 1940; col. 72, Vol. 364.]

Mr. Barnes

Accepting the correction, the point I want to make is that one has only to look at the Chancellor and the Financial Secretary to realise that head covering is an absolute necessity for both of them. I hope they will re-examine their own requirements on Report stage.

Amendment negatived.

5.50 p.m.

Mr. Chater (Bethnal Green, North-East)

I beg to move, in page 41, line 18, column 1, to leave out "and haberdashery," and to insert "haberdashery" in column 3.

If I were asked to select from all the items in the Schedule the one which is most mean from the point of view of working-class homes, I should select this one. In working-class families the mother has to do much more than in other classes of society; she has not only to mend, but to make clothes for her children. Very often garments have to be patched and mended and made to serve a further purpose when they ought to be replaced. As a man I am not sure how many articles come within the definition of "haberdashery," but it undoubtedly includes cottons, tapes and a variety of other things which are required by the working-class housewife in order to economise the working-class income, always too small. Clearly, therefore, this tax will bear with special hardship on such families. I wonder whether, in imposing this tax, the Chancellor had in mind some of the remarks he made on introducing his Budget, suggesting that the time had come when the process of what he called "soaking the rich" had reached its limits, and that he made up his mind to substitute for it the "soaking of the poor." In any case I hope that, first of all, the definition of what is or what is not haberdashery will be made more clear, and although I have little hope, in view of the attitude which the Chancellor is adopting to similar appeals, that he will give us a concession on this Amendment, I hope that perhaps he may soften his heart and remember how hardly this tax presses upon working-class homes and decide to exempt from this Schedule articles which come under the definition of haberdashery.

5.53 p.m.

Mrs. Hardie (Glasgow, Springburn)

I wish to support the plea to transfer haberdashery to the other column and would emphasise what was said by the hon. Member for North-East Bethnal Green (Mr. Chater) regarding sewing cottons. Perhaps the Chancellor would in particular consider the question of excluding sewing cottons, because many women who are employed in making garments have to provide their own cotton. That is the practice in many industries such as tailoring and the making of underclothes. This proposal will mean an extra tax upon ill-paid workers. While the housewife who is thrifty and mends up old clothes or trims up her hats and makes them do for next year—I am very doubtful about that—will have to pay, I make an appeal more particularly on behalf of women workers, on whom this will be a fairly heavy tax, that sewing cotton should be excluded.

5.55 p.m.

The Financial Secretary to the Treasury (Captain Crookshank)

I am afraid that my right hon. Friend must keep haberdashery in the first column. It is true that the term covers all sorts of small articles, but many of them come within the definition which he gave in the speech he made just now, that: is, things which people may be able to do without, or the use of which may be curtailed in view of the fact that we are in a difficult period of the war—belts and all sorts of things, for example. The point which the hon. Lady alluded to is one of very great substance and if she had not got up I was minded to recall to the Committee what I said the other day on the subject of knitting wool. I pointed out that knitting wool, as such, was outside the scope of the Schedule. The point has been raised whether wool on the card as sold in the haberdashery department of a shop and used for mending was or was not in the Schedule. It is our intention, if it is not already absolutely clear, to make it clear that both sewing thread and mending and knitting wool are outside the scope of the tax, and therefore free. To that extent I am glad to be able to meet the hon. Lady, but on the wider question of excluding haberdashery I cannot accept the Amendment.

5.57 p.m.

Mr. Woods (Finsbury)

While appreciating the statement which the right hon. and gallant Gentleman has just made, it seems to me that the Government ought to go a little further. "Haberdashery" is such a vague term that even the Financial Secretary and his advisers were not certain whether it included wool, and I do not think there is an authority in the country which could give a satisfactory definition of what "haberdashery" does or does not cover; but a few items come within the term "haberdashery" would justify the Financial Secretary in excluding haberdashery from this column. There are, for example, cards of hooks and eyes, buttons and all the little items which go to the making of garments, especially children's garments. Only when persons have to scrape and struggle to make both ends meet will they go to the trouble and expense of making children's clothes in these days, yet they are the people who will be hit by this tax. The button is just as necessary as the cotton with which it is sewn on. We need a considerable clarification of what is covered by "haberdashery," because it undoubtedly includes many items which are purchased only by the very poorest people and the thriftiest and most hard-working of mothers.

Mr. Chater

In view of the concession which has just been made by the Financial Secretary, I beg to ask leave to withdraw the Amendment, because I recognise that the concession is a very valuable one.

Amendment, by leave, withdrawn.

6.0 p.m.

Mr. Levy (Elland)

I beg to move, in page 41, to leave out lines 25 to 28 in column 1, and to insert those lines in column 2.

I venture to suggest that this Amendment is not only one of very great substance but that there is not a Member whose constituents will not be affected by it. There is no constituency which does not include a large number of hard working and thrifty housewives, all of whom have been called upon to make sacrifices and have willingly done so. The households that have made the greatest sacrifices are those where the breadwinners are in the Services, and they have to enforce strict economy in order to live, with their children, on the small amounts that they receive from Army pay.

The justification for the Amendment is that the operation of the proposed tax will inflict great hardship upon the most deserving sections of the community. I am sure that the Chancellor of the Exchequer has no wish to do so. A higher rate of tax is proposed on all fabrics used in the making of wearing apparel, with the exception of those employed by factories which make up ready-made garments. That means that many thousands of mothers, who, for reasons of economy, make garments instead of buying them ready-made, will have to pay the full tax when they buy material. When they buy ready-made garments they will escape the tax altogether. Obviously, such an arrangement puts a very heavy premium on the praiseworthy efforts of these women and upon the domestic economy. Everybody familiar with family life in the industrial and rural areas knows that in countless homes the children's clothes cupboard is filled, not with ready-made clothes, but as the result of the busy needle of the hardworking mother, who must try to make one shilling do the work of 1s. 6d. or even of two shillings. At a time when costs are going up in all directions, the incentive to such home economy is greater and much more necessary, and anything which penalises and discourages it is therefore the more to be condemned.

The bad incidence of this tax does not end there. Unless relief is given, the tax will extinguish hundreds of small businesses. I refer particularly to small dressmaking businesses, of which there are thousands, and which specialise in the making-up of customers' own materials, as well as supplying, from small stocks, fabrics for garments. Such small businesses abound throughout Yorkshire and the North of England, as well as existing in large numbers in other parts of the country. They have no trade in ready-made clothes, and they sell materials by the length or piece. As such, the material will be taxed at the full rate. I am sure that the Chancellor of the Exchequer does not desire to make this tax penal, but that is what it will be unless it is modified. It is certain that mothers of young families who make their children's clothes, and probably their own as well, will not be able to continue to do so, as a result of the heavy tax upon the material. They will find, paradoxically, that their economy has now become an almost impossible luxury.

The small tailor will also be taxed. He has been accustomed to making clothes for men and boys, but he will find his customers deserting him to go to the big firms which deal in ready-made clothing. I see from the schedule that sanitary ware, household brushes, pots and pans, and so on, will pay a reduced rate of tax. For the life of me I cannot see the element of justice in this arrangement at all. Mothers of young families will find that they need pay only half the rate of tax on earthenware pots, or on a broom, but the maximum tax, twice as much, on the materials they need to make garments for their children.

I anticipate the Chancellor of the Exchequer's answer. He will probably say that it is difficult or impossible to distinguish administratively between materials bought for one purpose and materials bought for another, and that, with the best will in the world, one cannot keep check upon the accuracy of the statements of a woman who says that she is buying material to make her own and her children's clothes. For that reason, I propose that the tax shall be at the lower rate. This change presents no administrative difficulty, because it merely puts fabrics for clothes into the raw materials class for the mothers' sewing machines, and upon the same taxation footing as sanitary ware, pots and pans, brooms and ready-made garments. Surely there is justice in that suggestion.

It is common knowledge that the bulk of the piece goods sold lately have been for black-out purposes. No one will suggest that they are a luxury. They are compulsory. Unless the black-out is effective in the house, the husband may be fined or even sent to gaol. Should black-out materials be taxed at the higher rate? The Home Secretary has very properly said that a number of the paper arrangements put upon windows have become worse than useless, and he is advocating that net curtains be pasted to the windows to prevent casualties should the glass be shattered. This precaution may be made compulsory, but whether it is or not, will anyone suggest that the women in the households of this country would consider such purchases luxuries and be willing to pay upon them 33⅓ per cent, increase? Is the proposal fair or just?

Let us look at the matter from the point of view of the Chancellor of the Exchequer. What will be the effect upon the revenue? He is rightly concerned with revenue, as we all are. We recognise that the war has to be paid for, and that the Chancellor of the Exchequer has to collect the taxes. If he finds that, by transferring these words from the first to the second column there is an alarming loss of revenue, what is wrong with increasing the tax above the maximum upon such things as candelabria, electroliers, fur coats and jewellery? He would get back on the swings in that case what he had lost upon the roundabouts. It has often been said that Chancellors of the Exchequer are men who have a certain amount of human misery to distribute, and that the one who distributes equitably is the best Chancellor. I commend that observation to the present Chancellor of the Exchequer. Let him lay on the taxes, but do it equitably.

6.11 p.m.

Mr. Broad (Edmonton)

I beg to support the Amendment. I understand that the Amendment standing in the name of my hon. Friends and myself, in Schedule 7, page 41, line 25, column 1, to leave out "Tissues and fabrics," and to insert those words in column 3, will not be called, and so I support the Amendment now before the Committee, because half a loaf is better than no bread. If the Chancellor of the Exchequer had been well advised when drawing up this Schedule, he would not have included the kind of piece goods mainly used by the poorest housewives with the greatest responsibilities. He has included them in the Schedule as though they were luxury articles. If he doubts what I say, I would advise him to tour the less important streets of an industrial dormitory such as that which I represent. He will see in the shop windows a large amount of cheap piece-goods of a kind not to be found in the better-class areas. It is imperative, if a working-class woman is to see her children decently clad, that she shall make the children's clothes herself. Many poor women sit up night after night until after midnight, making clothes for their children.

Mr. E. Smith

My wife does so now.

Mr. Broad

My hon. Friend, who has an income of a Member of Parliament, says that his wife does so now. I should think she is almost unique in that respect. [HON. MEMBERS: "No."] It is not the middle class, but the poorer classes, who are mainly to be found doing so. There may be people who buy piece goods and then pay a dressmaker to make them up, but the making of children's clothes is not done by such classes in the main, but in the poorer working-class areas. This is a discriminating tax, because it bears heavily on housewives and mothers and almost entirely misses single men and women, whatever their incomes may be. That is a very wrong way of discriminating. We quite understand that there should be, in the circumstances of the times, a tax upon things which people can do without or can postpone buying for some time. I dare say that the Chancellor of the Exchequer and myself will still wear out suits of clothes. This consideration has no bearing upon the problems of the mother. Her children are out playing, wearing out their clothes. Even if these clothes are a little more substantial than the average, the children will soon grow out of them. It is a continual task to provide clothes, where there are two, three or four children. This is the main way in which this tax will hit the poorest people, who can afford it least.

This proposal will not have the effect of keeping people content with the wages they are getting because of the idea that they are helping, in a time of emergency, by going without things they otherwise might have. It imposes an unavoidable tax on housewives and mothers, in addition to all the other difficulties which confront them at the moment. Additional taxes on many articles of food and clothing which are absolutely necessary will mean either persistent demands of husbands that they should join with their unions and demand higher wages or that their children will be badly shod and clad throughout this winter, because it is as much as they can do to keep up with the increased cost of living all the way round. We shall again have the sight of ill-clad and ill-shod children shivering with cold, because the Chancellor is putting a sumptuary tax on the greatest needs of the poorest and most helpless section of the community. We should do everything we can at this time to encourage the mother in her home to make clothes for her children, instead of putting a penalty on her for doing so. Those working-class housewives are such wonderful managers and far better Chancellors of the Exchequer than any who ever sat on the opposite Bench, because they know how to adjust conditions fairly between every member of the family.

The present Chancellor of the Exchequer proposes to put the heaviest burdens on those with the biggest families. He is only following out the methods of his predecessor, but I wish he had had the courage to abandon the ill-advised Purchase Tax when it was first proposed. These housewives are not only excellent Chancellors of the Exchequer; they are skilled cooks, nurses, far better psychologists than ever wrote books at a university, needlewomen, tailoresses and dressmakers. I ask the Chancellor of the Exchequer to realise the strength of our case, to remove this tax, not from column 1 to column 2, but to column 3, and to give the working-class woman a chance to be contented with the very hard lot which she has at the present time.

6.18 p.m.

The Solicitor-General

The hon. Member who has just concluded his observations revealed, I think, a dislike of this whole tax. I quite understand his point of view, but for the moment the position is this: The House of Commons has accepted the principle of this tax. Accepting the principle of this tax, we have to consider these various Amendments, The Chancellor would like to be able to accept a great many Amendments, but there is one obstacle to accepting Amendments, and it is this, that the object of this tax is to raise money, and the Chancellor is bound to raise money. He is bound, therefore, to consider each Amendment from that point of view. Roughly speaking, tissues and fabrics represent in all a taxable field of something in the order of £60,000,000. A tax of one-third would represent some £20,000,000; a tax of one-sixth would represent some £10,000,000. Therefore, the difference between putting them in column 1 or column 2 represents some £10,000,000, while leaving them out altogether represents some £20,000,000. The Committee must see that this raises a very serious question indeed, it being a regrettable fact that we have to raise as much money as we can.

Having shown what a serious proposition is here involved, let us consider the Amendment on its merits. The first point to be clear about with regard to tissues and fabrics is that they have a number of different types of uses between which you cannot possibly differentiate. For instance, fabrics can be used for furnishing, repairing, or for curtains, and this matter having been considered by those who have given much time and thought to it, they have come to the conclusion that it is not possible to set out satisfactorily various types of fabrics for any one of these various uses. This is not a subject of which I pretend to have expert knowledge at all, but flowered cretonne, for instance, I believe I am right in saying, is frequently used for curtains, furnishing or for dresses. The Committee must realise, therefore, that it is not possible in any way to separate these articles. The hon. Member, in his moving speech in both senses of the word, drew the distinction between buying piece goods and buying the ready-made articles. Here again, some figures were obtained in order to see how this matter works. The Committee will, of course, remember that the tax on the material is only upon the value of the piece goods, whereas the tax on the clothing in column 2 is on the value of the goods made up, including the manufacturing cost. As a general proposition, these figures clearly show that it will still remain appreciably cheaper for persons to buy the fabric in the piece and to make up their own clothes, rather than to buy clothes ready-made. A home-made frock might take, say, 4½ yards of material; 4½ yards of material at 5s. would cost 22s. 6d. Now add a tax of 25 per cent, on the retail price, and you bring it up to 27s.

Mr. Levy

Plus the labour.

The Solicitor-General

I am talking of a case where the mother does the labour herself. A comparable frock bought ready-made would cost 35s., so there remains the difference between 27s. and 35s., which is very considerable. At 35s. a tax of 12 per cent, on the retail price would be 4s. 6d., and the frock ready-made, therefore, would cost 39s. 6d. Therefore, I am really comparing the 27s. with the advanced price of the home-made article, and the 39s. 6d. with the advanced price of the ready-made article.

Mr. Levy

What about Marks and Spencer?

The Solicitor-General

If you wish me to take a cheaper frock, I can do so. Four yards of cotton material at 1s. 3d. a yard is 5s. Add 25 per cent, to the retail price, which is 1s. 3d., and that brings the price up to 6s. 3d. The same frock which you buy ready-made to-day costs 10s [An HON. MEMBE: "How do you know that?"] I need hardly say that I have not given these figures out of my head. I have asked for the figures to be obtained from people who do know. I have no knowledge of this matter at all, but there are some hon. Members opposite who do know that the figures which I am giving are approximately right. The same ready-made frock to-day would cost 10s.; add a tax of 12 per cent. and the cost of the ready-made frock would be 11s. 3d., that is to say, the difference between 6s. 3d. for the home-made article and the corresponding article ready-made at 11s. 3d. So that there is still a very substantial difference between the price of the home-made article with the tax at the full rate and the cost of the ready-made article with the cost at the appropriate rate for that article. Under the circumstances, having regard to these considerations and having regard to the urgent necessity to raise money, the Chancellor very much regrets that he has to instruct me to tell the Committee that he cannot possibly see his way to accept this Amendment and to move these articles in column 1 to column 2, and still less can he consider the possibility of removing the tax altogether.

6.26 p.m.

Sir Reginald Clarry (Newport)

I do not think that the right hon. and learned Gentleman who has just spoken has answered the case made by my hon. Friend the Member for Elland (Mr. Levy), who made an unanswerable case. The only answer which the Solicitor-General can give is, "We want the money. We must not argue about it; we must have it." But there is no logic at all in the way in which this matter has been dealt with. I do not pretend to be an expert on frocks and ladies' clothes, but I am a provider in a family where there are several females who require frocks and clothes, and they tell me that beyond question as a general rule one can buy ready-made clothes of the cheaper variety for less money than one can buy the raw materials to-day before there is any question of tax. The only way by which I can account for that is the bulk buying by large houses and mass production. The result is that women can get a frock which is finished and ready to wear at less price than the raw material which it would be necessary to purchase to make it themselves. The imposition of this tax only aggravates the position. It is not in any way logical. Here are gowns in the second column at half the tax, and here are the raw materials for making them at the full tax. There seems to be no reason at all. It is not a luxury to have these raw materials. They are essential, and our proposal is a compromise. The hon. Member opposite suggested that the tax should be removed altogether and that it should go into column 3. We are suggesting that it should go into column 2. I hope that the Chancellor will think again about this matter. I do not think it can rest where it is, because I am prepared to go to almost any lengths to see that this anomaly is not perpetuated.

Mr. G. Griffiths

Do not turn the Government out.

Sir R. Clarry

I think that an answer able case has been made and that no attempt has been made to answer it. My hon. Friend the Member for Elland did suggest that 33⅓ per cent.—

The Deputy-Chairman (Colonel Clifton Brown)

I must stop the hon. Member, as this is not an occasion on which he can make other suggestions.

Sir R. Clarry

I will conclude by saying that there are other ways of raising money without penalising people who should not be penalised to any further extent. This tax is putting a premium on manufactured goods as against home-produced articles to which housewives have been accustomed, on the grounds of economy. It is putting them at a serious disadvantage, and I hope that the Chancellor will think again.

6.29 p.m.

Mr. Woods

I should be much happier in supporting the Amendment which is in my name and to suggest that these goods should go into column 3, leaving the Chancellor to make a selection of goods which he should put into columns 2 and 1 if necessary. However, seeing that our Amendment is not to be called, we shall have to do the best we can to ensure that the Committee shall at least accept this Amendment that piece goods should go into column 2. It would be not an entirely satisfactory compromise, but it would go some way in the direction which we desire. Of all the Amendments which are down on the Paper, this Amendment brings us right up to the fundamental issues involved in this kind of legislation. If we pass the Schedule as it is, and put all these piece goods into the 33⅓ per cent. category, we shall unquestionably be lowering the standard of living of those who have already the lowest standard in the community. Who is it that, after the day's work is done and the children are put to bed, often settles down to work at the sewing machine, perhaps until the early hours of the morning? It is not the well-to-do woman; she can spend her evenings, probably, in mere entertainment.

I think the Chancellor was quite sincere when he stated that, as a general principle, he was prepared that children's clothing should contract out of this scheme, and that there was no intention to put burdens on the family, additional to those borne by the single man. But in this case the family, especially the young family, is being heavily burdened. The simplest and best known of all material for children's garments is the plain square, which in almost every working-class family is bought by the yard and just hemmed up. That is being taxed at 33⅓ Per cent. Old-fashioned housewives of the type which still exists in country districts have to pay 33⅓ per cent, on babies' flannel binders. The Chancellor may smile at that, but those acquainted with the economy of the ordinary working-class home do not think this a smiling matter. Either the baby or the mother has to go without something as a result, although they may be already living on a sub-normal standard. I think that if the Chancellor persists in this, he will throw overboard any respect that is felt for him among a certain community in this country. People who cannot afford flannel have to be satisfied with flannelette. The pre-war wholesale price of the common variety of flannelette was 7⅞d. per yard. Today, the wholesale price is 11¼d. per yard. There is an increase in the wholesale price of 87 per cent. [HON. MEMBERS: "No."] Yes, with the Purchase Tax. Take woollen goods. In many working-class homes they know that a piece of woollen or flannel goods is a sound investment. The average price of genuine woollen goods, flannels, serges, and so forth, with this tax, is just double the pre-war price. I hope that this will go to a Division unless the Chancellor sees the error of his ways and makes a concession.

The only argument advanced by the Solicitor-General was that of the difficulty. If this were the most serious problem that he had, it would not be necessary for him to get very expert advice. You can see advertisements in the fashionable papers of very elaborate curtain materials, the cost of which runs into guineas per yard. If people are so fastidious about their curtains and black-out material that they will pay for such materials, they can afford an additional 33 per cent, upon that price, and their standard of living will not be affected. At the other end of the scale, you have flannelettes, winceyettes and voiles, which the working-class mother uses for making children's garments. Even a baby wants a Sunday frock. If she goes out in voile on Sunday, she has to be satisfied with muslin on Monday. It may be that it is not possible to particularise by saying that one kind of material should be used for upholstering, and so on; but we can say that all fabrics up to a certain price are purchased by people who cannot pay more. Therefore, certain kinds of fabric could go into column 3, others into column 2, and still others into column 1. Then, if the Chancellor invented a column "A.1," in front of that, with taxation at the rate of 66⅔ per cent., for these very expensive fabrics to which I have referred, no one could complain.

It is true that, as the hon. Member for Newport (Sir R. Garry) said, there are certain types of children's made clothing that can be purchased at roughly the price which it would cost to buy the material plus the haberdashery—the buttons and so forth. The costs of manufacture of that type of garment are negligible, and the economy of bulk purchase more than compensates for the trivial cost of mass manufacture. I heard one of my hon. Friends say, "Then why make them?" Such a remark shows an utter failure to understand the problems of the average housewife. These very cheap garments—which will carry no tax at all, as children's clothing—very speedily fall to pieces. The cottons employed are the very cheapest. They are chain-stitched, and once the cotton breaks it comes out down the whole seam. The thrifty mother knows that it will be sound economy to pay a little more for the materials and to make the garment herself. Why should the hard-working, thrifty mother be penalised, by being taxed in this way, while the other kind of mother who says, "Let the clothes wear out: I do not care whether the children have a rag on their backs," goes tax free?

I am sure that if the Solicitor-General had known more about these matters he would not have used the arguments which he did use. After all, he is regarded as one of our most learned men. If the average woman hears what he said she will say, "He wants to come here, and I will give him lessons." After such lessons he would go on strike if the Chancellor told him to get up here and tell such a story as he has told us to-day. Such a story would not be accepted by a single intelligent woman from Land's End to John o'Groats. If the Chancellor will not give us some promise that certain categories of piece goods shall be taken out altogether from this table, if he says that he wants money and does not care whether he is lowering the standard of living of the people or not, I appeal to the Committee to prove that it has some sense of decency, some sense of proportion, some sense of responsibility to the people who are being burdened by this tax beyond what it is within their capacity to bear.

6.42 p.m.

Sir Herbert Williams (Croydon, South)

I always respect the Solicitor-General, because I know that he can make a very good case. But, despite his great ability he cannot make a good case without a good brief. On this occasion he has been supplied with a very bad brief. He told us that this concession could not be made because if £20,000,000 can be obtained from these goods as the Schedule stands, the amount will be only £10,000,000 if you transfer those goods to the other column. Surely that is not the Treasury's argument? Are we to be told that the tax has no influence on the volume of sales? With every Budget that is produced, it is said to the Chancellor, in connection with taxes that are imposed, "Have you taken into account the decreased consumption that will come about?" The Chancellor always says, "Yes." His estimate of the decrease may be wrong, but it is a factor that he always takes into account. The Solicitor-General, with a brief supplied, presumably, by the Treasury, solemnly assures us that the only effect of transferring these goods from column 1 to column 2 is that the revenue will be precisely half. I am sure that he does not believe that.

That is not the only direction in which his argument is unsound. There will be a cut in consumption beyond what the material resources of the nation call for. We already have in operation a Limitation of Supplies Order, affecting some of the commodities concerned. That is presumed to have effected a certain cut. There are presumably raw materials equal to the consumption after that cut has been made. This new burden will make a cut in sales beyond that. There will be losses of wages, losses of profits, and losses of taxable capacity in other directions. I am not going to be misled by the assertion that the difference between the Schedule as it stands and the Schedule as it would be if this Amendment were made, is one of precisely £10,000,000. If that is the argument why have anything in the second column? Why not transfer the lot to the first column? Why not make the tax 50 per cent. instead of 33⅓ per cent.? What was the serious consideration which led the Chancellor's advisers to say that if I wash my hands in a wash-basin fixed to the wall I pay one-sixth on the purchase of that washbasin, but that if I have a portable washbasin I pay one-third. There must be some process of logic in their minds, if there is any process of logic in the minds of people who draw up Budgets. I do not see the argument. There must be some logic behind it. I have quarrelled with hon. Members behind me, and with some in front, when arguing the question of tariffs, but I have never heard anybody say that a tariff on the raw material ought to be higher than on the manufactured article. If anyone solemnly proposed that in this House, he would be regarded as a lunatic, whatever side he took in the controversy. We must have arguments of greater weight and substance than those yet produced if my hon. Friends and I are not to do what we think to be right, namely, to carry this issue into the Division Lobby.

6.46 p.m.

Mr. Crowder (Finchley)

The Solicitor-General just now said that the object of the tax was to raise money; I think he said some £10,000,000 in one column, and £20,000,000 in another. The Chancellor of the Exchequer sometimes tells us that the object of this tax is to reduce consumption and sometimes that it is to raise money. I have not yet been quite able to understand what is really the object of the tax—to raise money or to reduce consumption. As regards these fabrics, the well-to-do will probably have a good many dresses in the cupboard for themselves and their children, and also, in many cases, they may have two sets of curtains, and perhaps two sets of chair covers. Therefore, the tax in regard to the well-to-do in this case will operate in one way only and will reduce consumption. The well-to-do will be able to manage probably for the rest of the war, if it does not go on too long, with what they have got. Therefore, the burden of the tax, and presumably the £10,000,000 or £20,000,000, in whichever column these articles appear, will be borne to a very great extent by the poorer classes because they will not have these reserves, and will have to buy from time to time. I hope that the Chancellor of the Exchequer will consider putting these fabrics into different categories so that articles which are really absolutely necessary, such as children's clothing and other articles which have been mentioned, can be bought at the cheaper rates, and therefore, unless the Chancellor of the Exchequer is able to meet us in some way, I intend to go into the Lobby in support of this Amendment.

6.49 p.m.

Sir K. Wood

I desire to add one or two words to what has been said by the Solicitor-General. It is curious how-things strike you differently. A great deal depends upon the side you are on. I very much admired the speech of the Solicitor-General. It was an excellent presentation of the case, and certainly I do not think that I can add to it, and certainly not better it. He gave some very strong arguments for the course we are taking, and I can only supplement what he has said. May I say to my hon. Friend the Member for Finchley (Mr. Crowder) I have never said at one moment that this tax is for the purpose of raising money and at another moment that it is for the purpose of reducing consumption. I have always said that this tax is for both purposes, and strangely as it may appear to some of my hon. Friends, I think that most Members of the Committee, whether they agree with the tax or not, will agree that both these objects will, in fact, be achieved.

Sir H. Williams

At the same rate?

Sir K. Wood

Perhaps my hon. Friend will allow me to continue. I am answering one question at a time. My hon. Friend has brought in all his troops this afternoon and it is my business to deal with them. The friends of my hon. Friend always seem to be together in these affairs, and they have offered valuable support to my hon. Friend this afternoon. From the point of view of logic and good reasoning, it is the right thing to include articles of this kind in the first Schedule and to impose a tax of 33J per cent. One side of the case has been presented this afternoon and great emphasis has rightly been placed on fabrics and tissues which may be used for certain purposes by the mother and child, and also the widow, I suppose. But tissues and fabrics are used for very different purposes. Some of the most expensive things you can buy—and again, like the Solicitor-General, I can only speak of what I am told—are tissues and things which go to make expensive curtains, upholstery and articles of that kind. When the country is in a position of great stress and needs money, and when consumption ought to be reduced, it is right that articles of this kind should be placed in the first column and pay the higher tax.

The argument might very well be used in certain circumstances that the tax on a certain variety of fabrics and tissues ought to be much higher than it is. That would be a fair argument. It is very unfortunate that certain of these cheaper fabrics should be used for the clothing of the poorer people in this country, and I appreciate that fact. If you examine the position of the poorer section of the community, as I said in my Budget speech, we always hear of the impositions that are put upon them, but we have to remember the great assistance that the Government have given in recent times to meet the situation. It is only fair to say that a great deal has been done to help them. I have heard the argument very often about the poor, thrifty mother who wants to make up an article for her child, and have noticed how she has been compared with the person who buys the ready-made article. When you make comparisons, you ought to be pretty sure that you are comparing like with like. I suspect that when my hon. Friend opposite was dwelling upon the position of the ready-made goods, he was referring to persons who buy a very inferior article.

Mr. Woods

It is the only thing they can afford.

Sir K. Wood

But you want to compare like with like. I have made inquiries, and many inquiries have been made by officials of the Treasury, who go to a great deal of pains before they put forward examples for Ministers to use, and I think it can be said, if you take the case of the thrifty mother who wants to make up the article for her child—and the tax is only charged upon a particular piece of material that she uses for making-up clothes, which, it is true, is at the higher rate of 33⅓ per cent.—and compare it with the case of someone who buys a similar class of ready-made clothing, the thrifty mother is able to do it much cheaper. We have gone to a great deal of trouble to meet the position so far as we can, and I hope in these circumstances my hon. Friend will not press the Amendment.

Sir H. Williams

The Solicitor-General told us that if you had a thing in the first column it might bring in £20,000,000, and if it was in the second column it would only bring in £10,000,000. The argument is very elusive and vague.

Sir K. Wood

I think the Solicitor-General was right, but a considerable sum is at stake here for me as Chancellor of the Exchequer. If you like to decrease it £1,000,000 or so you can, but as far as the money side is concerned, there is a considerable sum at stake, which, hon. Members know, it is very necessary for me to obtain, and I hope in these circumstances the Committee will support the Government.

Mr. Levy

There is the position of the thousands of small dressmakers throughout the country who make up the requirements of customers from their own materials?

Sir K. Wood

I think that dressmakers would be able to carry on. In a large number of cases you might compare the same type of material either in the piece or in the made-up goods. In imposing a small tax upon a small quantity of material, I do not anticipate that disaster will overcome these people. Regrettable as it is, when you are at war in a grim struggle for existence, you have to raise the money with which to fight the war and to reduce consumption to enable people to make savings towards winning the war. These are the two vital considerations and nothing matters except those considerations.

6.58 p.m.

Mr. Silverman (Nelson and Colne)

I do not think that anybody who has listened to this Debate will feel that the Solicitor-General, and still less the right hon. Gentleman have at all met the case that has been put in support of this Amendment, or have sought to meet it. Everybody sympathises with the appeal to the emotions with which the right hon. Gentleman concluded. It is recognised that war imposes hardship and that everybody must bear their share, rich and poor alike. Many of us had hoped that the Budget would have been framed bearing that more closely in mind. I do hope the right hon. Gentleman is not leaving the Chamber, but is going to listen to the conclusion of the argument, because I want to make an appeal to him. These Amendments that are put down and carried to a Division are not put down and carried to a Division, as they used to be, in a sort of partisanship or party warfare. They are put down precisely because many of us feel that on this and other questions the right hon. Gentleman is distributing the burden unfairly. I do not suppose that he wants to distribute the burden unfairly; I am sure that he does not. If he will listen to the argument I think he is bound to come to the conclusion that he has had the worst of it on this occasion. Already he has exempted from this tax children's clothing, provided you buy it ready made. He has not attempted to tell us why he proposes to penalise those homes which choose not to buy the children's clothing ready made, but to buy the material and make it up at home.

On what conceivable principle does he propose to apply no tax at all if clothing is bought ready made, but to apply the full tax when it is made up at home? That is the issue, and neither he nor the Solicitor-General attempted to meet it. I do not know who it was who told the Solicitor-General that if the raw material costs 6s. 3d. and a garment is made at home, therefore it costs 6s. 3d., but that it would cost 5s. more to buy it in a shop which gets its goods made up for it. It just is not true. If you are comparing like with like, I do not suppose the extra cost would be more than 6d. at the most. In many cases it costs more to make a garment at home than to buy it. The short point on which the whole argument breaks down is the one I have put. Having decided in principle that children's clothing shall be free of this tax, how can the Chancellor justify imposing the tax whenever in a working-class home it is decided to buy the raw material and make it up? It cannot be defended, and none of the right hon. and learned Gentleman's eloquent appeals to assist the State in the prosecution of the war have anything to do with the argument.

I would like to say one other word. The cotton producing industry in this country has had for many years, largely by reason of sheer mismanagement, a very bad time—a worse time than almost any other part of the country, and certainly a worse time than many areas classified as Special Areas. I say without any fear of contradiction that it has had a worse time than any other industry in the country. There was a period—I speak for my own constituency, which I think is representative—when for a few months after the last war they were doing fairly well. That period has gone. There has been a set back, and unemployment in these areas is rising and imposing a national burden. This tax is going to deal a further blow and a serious blow to that industry—an industry which is important and which has always been important, from the point of view not merely of the home market, but of export trade, which is nowadays even more a matter of national importance than it used to be. This seems to me to be a blow levelled at the poorest of working-class homes, levelled at the working-class homes that take their responsibilities most seriously, levelled at the working-class homes that are most industrious, and on top of that levelled at an industry which has always been the Cinderella of industry in this country, levelled at an important branch of the export trade, levelled at all these things in defiance of the principle already accepted by the Government that children's clothing shall be exempt from the Purchase Tax.

Really, having listened to the Debate on this Amendment and having listened to what I can only describe as the halfhearted attempt either to answer or to evade the arguments used in support of this Amendment, one is driven to the conclusion that the Government in this instance are not being guided in their obstinacy by a belief in the rightness of their case but by sheer determination that they will not give way whatever the truth of the matter may be. In other words, they are falling back on partisan debating warfare as if there were no war in progress at all. It seems to me that the Government are resisting this Amendment merely because they have made up their minds that when they have said a thing they are going to stick to it. It is not in that spirit that the unity of this House or the unity of the country will be maintained.

7.7 p.m.

Mr. Gledhill (Halifax)

May I call attention to the fact that much of the fabric which we have been discussing under this Amendment is used in trolley buses? It is proposed to exempt them altogether from the tax. What is to be the position then? Is the fabric to be taxed, or is it not? That seems to me a serious anomaly, and I should like it to be cleared up.

7.8 p.m.

Mr. Gallacher

I want to call attention to some remarks made by the Chancellor of the Exchequer, but before I do that I would like to observe that on an earlier Amendment the hon. Member for the Scotland Division of Liverpool (Mr. Logan) remarked that this was the first occasion on which he had been associated with the hon. Member for West Fife and he hoped it would be the last. That is the feeling I have about the sponsors of this Amendment. The hon. Member who moved the Amendment on Thursday night accused me of passionate emotion. I observe that this evening he became contaminated. Perhaps if he gives continuous attention to my oratory or lack of oratory, he may develop along the lines of sincerity in arguing a case. The remark of the Chancellor of the Ex- chequer to which I want to refer is that he recognised that this is going to bear very heavily on the poorest of the poor. Then he had the temerity to say that we are doing quite a great deal for the poor. I want to make this challenge. There is more being done to keep the poor in their poverty than there is to get them out of it. That is proved by the fact that they remain all the time in poverty.

The mere use of a phrase that we are doing a great deal for the poor can never justify a tax of this kind. We are told that the Minister and those associated with the Minister do not want to be unfair. Of course they want to be unfair. They want to protect the wealthy and make the masses of the people pay. That is why we have a tax of this kind on fabrics, on the pretext that certain materials are used for luxury purposes. Any manufacturer could specify a category of fabrics which are used for making up clothes as distinct from categories which can be used for luxury purposes. To talk about fabrics being used for luxury purposes is only a cover for attacking the standard of living of the poor people of the country. The Minister said that in this grim struggle for existence we must get money, but when I look around at Members of the Committee and think of some of the big financial houses and industrial concerns represented here—

The Deputy-Chairman

The hon. Member is going far beyond the Amendment. Financial houses and things of that kind cannot be brought into this Amendment.

Mr. Gallacher

I did not want to transgress, but I was talking about a phrase used by the Chancellor when he spoke about the struggle for existence. I am quite certain that many Members on the other side have never understood what is meant by the term "the grim struggle for existence." For generations the people who will be affected by this tax have had one long grim straggle for existence, and now in the midst of it what do we get? New burdens imposed upon them. I make this declaration. If hon. Members on the other side were genuinely consistent in their attitude to this question of raising finance—

The Deputy-Chairman

The question of raising finance is certainly not in order on the Amendment that we are discussing.

Mr. Gallacher

With regard to the money to be raised by this particular Amendment, we were told by the Solicitor-General that it was £20,000,000 in the first column, £10,000,000 in the second column, and nothing in the third column. The sum of £20,000,000 is expected from this tax, much of which will come from the very poor families in which mothers are trying to make both ends meet by buying fabrics and making clothes themselves. I say it is a crime that a penny should be taken from those who have not sufficient, while others have a surplus. Will the Solicitor-General face up to that fact when he is talking about £20,000,000 coming from fabrics? Are there not other surpluses to be obtained instead of getting the money by this means? I ask the Solicitor-General and those other Socialists on the Front Bench what they have to say about taking the surpluses which are in existence, instead of squeezing money out of the masses of the people—

The Deputy-Chairman

On an Amendment of this kind one cannot discuss alternative methods of raising finance.

Mr. Gallacher

Then I will conclude by once again directing the attention of the Solicitor-General to the fact that much of this £20,000,000 is being taken from people who are already in the position of not having sufficient to make ends meet.

7.15 p.m.

Mr. S. O. Davies (Merthyr)

I have not only been disappointed but rather surprised that the Chancellor has not taken the least step to meet the Amendment which the Committee are now discussing. Judging from what has already been described as the half-hearted defence put up by the Solicitor-General and the Chancellor, I really thought they were allowing the Committee to express their views before a reasonable concession or final compromise was made. Personally, I regret the compromise that this Amendment suggests. I wish it had not appeared on the Paper and that the Amendment following it had been debated, instead of the one we are now debating. But that having been ruled out, I more than hoped that, after the speeches made by the Government spokesmen, the Committee would have been met instead of having been met by the present miserable and almost spineless refusal put before us by the Solicitor-General and the Chancellor of the Exchequer. The effect of this tax, if it is imposed, will be incalculable, but it certainly will effect a reduction in the consumption of the goods referred to. What I did not like in the Solicitor-General's attempt at justifying this tax was the suggestion that the Government could not meet us because the tax covered a multitude of things. That is my principal quarrel against most of the categories which are laid down in this Schedule. Tissues and fabrics cover a multitude of things, and there is no justification for any case when we were told by the Government spokesmen that this tax hits the poor almost as savagely as it hits the rich. We know the poor must feel the burden of this tax more than the more well-to-do sections of our population.

There has been no answer to the admirably detailed case put forward from these benches this afternoon, particularly that from the hon. Member for Edmonton (Mr. Broad), who vividly brought back to me scenes in homes where mothers always made the family dresses. We have encouraged young women to attend evening classes, to become experts at needlework and to make their own dresses. The sewing machine has become as much an institution in working-class homes as the table from which the meals are eaten. In the last few weeks I have seen girls home for their vacation, and there is almost a squabble to decide who shall use the one sewing machine. They make their own dresses because they know that the father's income is insufficient to get the new dresses which I think are necessary.

In villages throughout my constituency there are expert needlewomen who are kept going day after day making dresses for the women of the village, and on them you place this added penalty. It is no use juggling with arithmetic, as has been attempted from the Front Bench opposite. The burden will be so substantial that probably in many cases the village dressmaker will become extinct, just as the old village tailor has already become extinct. It is not making out any case at all for the Solicitor-General or the Chancellor of the Exchequer to tell us that this covers such a multitude of things that they really cannot accept it. Of course they can. What is to stop them excluding the cheaper kinds of material which the working classes are forced to buy? I was brought up in a working-class home, but I did not recognise the terminology used by the Solicitor-General in dealing with fabrics and tissues. I do not think I have heard those words before in my domestic family experience. You can draw a distinction; you can exclude in such a way that you will not deliberately and wantonly, as is now proposed, make the burden upon working-class families greater than it is at present. It is no justification, by means almost of a trick or subterfuge, to say that this covers such a multitude of things that the working class cannot escape from the consequences of an extremely onerous tax of this kind. We are satisfied that it can be done. We are also being forced to the conclusion that the Government have made no effort to

meet the appeals and the highly practical suggestions which have been made from all sides of the Committee. Consequently we are forced to the unpleasant task, being conscious of our responsibilities to our own people who placed us here, of expressing our profound opposition to this tax.

The Solicitor-General

The hon. Member for Halifax (Mr Gledhill) asked about charabancs, which are exempt in the Schedule. Any raw material which a manufacturer buys is exempt; therefore any manufacturer buying fabric does not have to pay the tax.

Question put, "That the words proposed to be left out stand part of the Schedule."

The Committee divided: Ayes, 171; Noes, 67.

Division No. 68.]	AYES.	[7.26 p.m
Acland-Troyte, Lt.-Col. G. J.	Grimston, R. V.	Munro, P.
Albery, Sir Irving	Guest, Lieut.-Colonel H. (Drake)	Nail, Sir J.
Ammon, C. G.	Hall, G. H. (Aberdare)	Nield, B. E.
Aske, Sir R. W.	Hambro, A. V.	O'Neill, Rt. Hon. Sir Hugh
Assheton, R.	Hannah, I. C.	Paling, W.
Astor, Major Hon. J. J. (Dover)	Hannon, Sir P. J. H.	Parkinson, J. A.
Baldwin-Webb, Col. J.	Harris, Rt. Hon. Sir P. A.	Pearson, A.
Beamish, Rear-Admiral T. P. H.	Haslam, Henry	Pethick-Lawrence Rt. Hon. F. W.
Blair, Sir R.	Headlam, Lieut.-Col. Sir C. M.	Pickthorn, K. W. M.
Boles, Lt.-Col. D. C.	Hely-Hutchinson, M. R.	Pownall, Lt.-Col. Sir Assheton
Bossom, A. C.	Henderson, J. (Ardwick)	Price, M. P.
Boyce, H. Leslie	Henderson, J. J. Craik (Leeds, N.E.)	Procter, Major H. A.
Brocklebank, Sir Edmund	Heneage, Lieut.-Colonel A. P.	Radford, E. A.
Brooke, H. (Lewisham, W.)	Hepburn, P. G. T. Buehan-	Ramsbotham, Rt. Hon. H.
Brown, Brig.-Gen. H. C. (Newbury)	Holdsworth, H.	Reed, Sir H. S. (Aylesbury)
Burgin, Rt. Hon. E. L.	Hollins, J. H. (Silvertown)	Reid, J. S. C. (Hillhead)
Butcher, H. W.	Hopkinson, A.	Reid, W. Allan (Derby)
Campbell, Sir E. T.	Horsbrugh, Florence	Ridley, G.
Cazalet, Thelma (Islington, E.)	Hudson, Capt. A. U. M. (Hack., N.)	Ritson, J.
Chapman, A. (Rutherglen)	Hudson, Rt. Hon. R. S. (Southport)	Roberts, W. (Cumberland, N.)
Chapman, Sir S. (Edinburgh, S.)	Hume, Sir G. H.	Ross Taylor, W. (Woodbridge)
Colman, N. C. D.	Hunter, T.	Rothschild, J. A. de
Cooke, J. D. (Hammersmith, S.)	Jarvis, Sir J. J.	Royds, Admiral Sir P. M.R [...].
Cox, H. B. Trevor	Jenkins, A. (Pontypool)	Russell, Sir Alexander
Crookshank, Capt. Rt. Hon. H. F. C.	Jones, Sir G. W. H. (S'k N'w'gt'n)	Russell, R. J. (Eddisbury)
Culverwell, C. T.	Jowitt, Rt. Hon. Sir W. A.	Samuel, M. R. A.
Davidson, Viscountess	Kerr, Sir John Graham (Soo'sh Univs.)	Scott, R. D.
Davies, Clement (Montgomery)	King-Hall, Commander W. S. R.	Selley, H. R.
Davies, Major Sir G. F. (Yeovil)	Knox, Major-General Sir A. W. F.	Shepperson, Sir E. W.
Denman, Hon. R. D.	Lamb, Sir J. O.	Silkin, L.
Drewe, C.	Lathan, G.	Simmonds, O. E.
Ede, J. C.	Leach, W.	Smiles, Sir W. D.
Edwards, Rt. Hon. Sir C. (Bedwellty)	Leighton, Major B. E. P.	Smith, Rt. Hon. H. B. Lees- (K'ly)
Ellis, Sir G.	Lindsay, K. M.	Smith, Sir R. W. (Aberdeen)
Elliston, Capt. G. S.	Little, Sir E. Graham-	Somerset, T.
Emery, J. F.	Lloyd, Major E. G. R. (Renfrew, E.)	Somervell, Rt. Hon. Sir Donald
Erskine-Hill, A. G.	Loffus, P. C.	Somerville, Sir A. A. (Windsor)
Etherton, Ralph	Lucas, Major Sir J. M.	South[...], Commander Sir A. R. J.
Evans, E. (Univ. of Wales)	M'Connell, Sir J.	Stewart, J. Henderson (Fife, E.)
Foot, D. M.	McCallum, Major D.	Storey, S.
Fox, Sir G. W. G.	Macdonald, G. (Ince)	Stuart, Lord C. Crichton- (N'thw'h)
Frankel, D.	Magnay, T.	Stuart, Rt. Hon. J. (Moray and Nairn)
Fraser, Captain Sir Ian	Makins, Brigadier-General Sir Ernest	Sueter, Rear-Admiral Sir M. F.
Fremantle, Sir F. E.	Mander, G. le M.	Sutcliffe, H.
Fyfe, Major D. P. Maxwell	Margesson, Capt. Rt. Hon. H. D. R.	Tasker, Sir R. I.
Galbraith, Comdr. T. D.	Marshall, F.	Tate, Mavis C.
Gardner, B. W.	Mayhew, Lt.-Col. J.	Thomas, J. P. L.
George, Major G. Lloyd (Pembroke)	Mills, Sir F. (Leyton, E.)	Thurtle, E.
Gibbins, J.	Milner, Major J.	Tinker, J. J.
Goldie, N. B.	Morris-Jones, Sir Henry	Touche, G. C.
Gower, Sir R. V.	Morrison, G. A. (Scottish Unlv's.)	Ward, Lieut-Col. Sir A. L. (Hull)
Granville, E. L.	Mort, D. L.	Ward, Irene M. B. (Wallsend)
	Muff, G.
Waterhouse, Captain C.	Whitelay, W. (Blaydon)	Woolley, W. E.
Watkin,, F. C.	Williams, C. (Torquay)	Young, A. S. L. (Partick)
Wayland, Sir W. A.	Williams, T. (Don Valley)	TELLERS FOR THE AYES.—
Webbe, Sir W. Harold	Willink, H. U.	Major Sir James Edmondson
Wells, Sir Sydney	Winterton, Rt. Hon. Earl	and Mr. Boulton.
Westwood, J.	Wood, Rt. Hon. Sir Kingsley
NOES.
Aclend, Sir R. T. D.	Gretton, Col. Rt. Hon. J.	Morgan, H. B. W. (Rochdale)
Adams, D. (Consett)	Gridley, Sir A. B.	Morgan, J. (York, W.R., Doncaster)
Adams, D. M. (Poplar, S.)	Hall, J. H. (Whitechapel)	Morris, J. P. (Salford, N.)
Adamson, Jennie L. (Dartford)	Hall, W. G. (Colne Valley)	Naylor, T. E.
Banfield, J. W.	Hardie, Agnes	Oliver, G. H.
Barnes, A. J.	Harvey, T. E.	Parker, J.
Barr, J.	Henderson, T. (Tradeston)	Silverman, S. S.
Broad, F. A.	Hill, Dr. A. V. (Cambridge U.)	Sloan, A.
Bromfield, W.	Hollins, A. (Hanley)	Smith, E. (Stoke)
Burke, W. A.	Isaacs, G. A.	Sorensen, R. W.
Chater, D.	Jackson, W. F.	Stephen, C
Cluse, W. S.	Key, C. W.	Stokes, R. R.
Clynes, Rt. Hon. J. R.	Lee, F.	Summerskill, Dr. Edith
Cove, W. G.	Leonard, W.	Thorne, W.
Daggar, G.	Leslie, J. R.	Viant, S. P.
Davidson. J. J. (Maryhill)	Lipson, D. L.	Wedgwood, Rt. Hon. J. C.
Davits, S. O. (Merthyr)	Lunn, W.	Welsh, J. C.
De la Bère, R.	McGhee, H. G.	Wilson, C. H. (Attercliffe)
Dobbie, W.	MacLaren, A.	Woods, G. S. (Finsbury)
Douglas, F. C. R.	Maclean, N.	TELLERS FOR THE NOES.—
Gallacher, W.	MacMillan, M. (Western Isles)	Sir Reginald Clarry and Mr.
Gibson, R. (Greenock)	Mathers, G.	Bevan.
Gledhill, G.	Maxton, J.
Green, W. H. (Deptford)	Messer, F.

7.35 p.m.

The Deputy-Chairman

Mr. Woods.

Mr. Woods (Finsbury)

Before moving my Amendment, I should be obliged to you, Colonel Clifton Brown, if you would give an explanation as to which Amendments will be covered by the modified Amendment.

The Deputy-Chairman

The Amendment covers the Amendments on the Paper in the name of the hon. Member for Consett (Mr. David Adams)—in line 30, column 3, insert "bedding," and in line 31, column 1, leave out "and bedding"; and the hon. Member's own Amendments at the bottom of page 130 of the Paper—in line 33, column 1, leave out "Kapok '5 and insert "Kapok" in column 3, and in line 35, column 1, leave out "mats, linoleum" and insert those words in column 3.

Mr. Woods

I beg to move, in page 41, line 29, column 1, to leave out Oil baize, oil cloth, leather cloth, Textile articles of a kind used for domestic purposes, soft furnishing and bedding. The object of this Amendment will be obvious to the Committee. This range of commodities consists of articles which are necessities in homes, where in most cases they serve as substitutes for more expensive commodities. In some homes, for instance, people can afford to have in the dining room a table with a polished top, but in many homes the dining-room table, if it has any permanent covering at all, has a covering of oil baize or leather cloth, which are very cheap and efficient as permanent coverings. In many homes there are parquet or hardwood floors of walnut, oak or mahogany, and they have expensive carpets on them, but in the mass of homes the only covering which is sanitary and satisfactory is a cheap linoleum or oil cloth. These commodities are sold almost exclusively to people who must have them because they cannot afford the genuine article. They must have these substitutes which custom and tradition have come to accept as being satisfactory in the homes of the working classes. Some of us with Utopian ideas dream of the day when every home will have a solid floor and every dining-room table will be the genuine article and have on it the best commodities which the world can produce; but we have to face the fact that millions of our fellow people have to take these substitutes, and because they are in the position that they must have these substitute articles, they have to pay a tax of 33⅓ per cent. We have an overwhelming case agains a tax on these commodities, which will press far more heavily upon the poorer families. If a person has a solid oak floor, he does not dream of covering it with oilcloth or linoleum.

In replying to the Debate on the last Amendment, the Chancellor's only argument was that he wanted the money. If that be the Chancellor's only argument, he places himself in absolutely the same category as the burglar whose excuse for pilfering a home is that he wants the money. If our system of taxation has been reduced to such a level that the only argument that can be made is, "I want your money and my need justifies me in despoiling your home and reducing your standard of living," the war has brought us to a low ebb ethically and morally. As the Amendment has been modified, I take it that, in addition to the goods covered by it, bedding and Kapok for stuffing pillows are also covered. This argument has been made several times, but it still seems to be one that has not made an impression on the Government Front Bench. At the present time very few people are buying additional bedding unless they are compelled to do so, either by an increase in family, or as a result of the exigencies of war. If one analyses the purchases of bedding at departmental stores or at the emporiums of the co-operative society, as we have done, it will be found that such purchases can be divided into two categories.

Into the first category comes those who are getting married. In spite of the suggestion put forward the other day by the Financial Secretary, people are getting married, and, therefore, in many cases they are involved in expense in setting up separate homes. At any rate the right hon. Gentleman advised them to wait until the war is over. Although they may be grateful for that advice, they have no guarantee when the war will be over, and they may be in their old age and probably wanting crutches instead of the commodities set out in these Amendments if they have to wait until then. I know of a case of two young brides who, because their husbands died, were compelled to furnish a home and live together in order to economise. It is useless to say to this Committee that the soldiers' wives or brides are not buying bedding. They are, and that can be confirmed by consulting any shop selling bedding. A certain percentage of the customers are young women who are expected, in spite of the inadequate allowances, and in spite of the increased prices, to pay this additional 33⅓ per cent.

In the second category come those who have to buy bedding because they have had placed upon them the responsibility of finding accommodation for refugees, or people who have been shifted from more vulnerable areas. In the overwhelming majority of working-class homes there is no spare bed, and if people are compelled to take additional persons, then they must buy additional bedding. Then there is the case of those who have lost their all as a result of enemy activity. One thing that almost certainly goes up in smoke is a bed, and when a house collapses a bed is very little use afterwards. In spite of the fact that these people are already the victims of the war, and are compelled to purchase bedding, if they are fortunate enough to find alternative accommodation, they are expected by this tax to pay an additional 33⅓ per cent. In spite of the Chancellor's desire to raise this money, we ought to stand rigidly by the equitable collection of the money, and not make this tax an unnecessary burden upon those who are the victims of war circumstances, and who already have to pay vastly increased prices. We suggest that these commodities should be completely excluded. Those compelled to buy them should not be the victims of the war and at the same time its financiers.

7.45 p.m.

Mr. W. H. Green (Deptford)

I rise to support the Amendment moved by my hon. Friend the Member for Finsbury (Mr. Woods), and in doing so I agree entirely with the argument that he has put forward. In supporting the Amendment, we desire to protect the poorest section of the community from the imposition of a tax which is unjust in its incidence and a grievous burden for many of those who will have to bear it. I am confident that the country has not yet realised what this Purchase Tax will mean. There were signs, in the early days when the late Chancellor first introduced the subject, that the public were beginning to realise what it might mean. There was such a storm that the Government were compelled to withdraw it. I am not going into the details of the last Purchase Tax, because I know I should be ruled out of Order; however, I am convinced that the public does not realise that this second introduction is identical in almost every aspect with the first. We were told just now when we were discussing the last Amendment that the factor which impelled the Chancellor to persist in his resistance of the Amendment—and I presume the same argument will impel him to resist this Amendment—was the urgent necessity to raise money. We are conscious of that urgency, and I do not believe there is a Member in this Committee who would say a word to hinder the Government in getting all the money necessary for the successful and speedy prosecution of the war. What we are trying to do in this Amendment is to point out where, in our view, the imposition is unjust and undesirable. I am convinced that if the Government realise, as some of us do, that the imposition of this tax, and particularly the section we are now discussing, will cause untold bitterness, disunity and ill-feeling among the masses of the people, they will hesitate before persisting in it.

Unfortunately, in all these Amendments which have been moved to-night, the same argument must, to a certain extent, be used, because the same principle is involved, namely, that the Chancellor of the Exchequer is making a mistake in assuming that the degree of consumption in food or goods is the financial measure of the income or means of a family to pay. We have heard it said on many occasions that the object of this tax is to limit consumption and to produce revenue. How it is to do both is a little mysterious to some of us. I suggest that this particular Schedule, although it will have the effect of restricting consumption among the poorest sections of the community, will not debar the wealthier sections from buying these things. In devising this scheme, the Chancellor has gone with a microscopic eye into the kitchens and living rooms of the homes of the poorest section of the community. There is nothing in the homes of the poor which will escape this tax, and the tax will have little effect on the wealthier sections of the community who will buy the goods in spite of it.

As another Amendment which is not to be called indicates, this tax will further increase the cost to local authorities of running their institutions, for the various articles and commodities they have to buy are to be taxed. I presume that we shall be met on this Amendment with the same arguments as were made on the previous Amendments. One would hardly think that the House of Commons was now a council of State in which all sit down and try to hammer out the best methods of financing and fighting the war, for we find all the old party divisions existing. From this side of the Committee arguments have been adduced to show the regrettable character of this tax as it affects the poor, and yet Members on the other side, as in the days of old, go into the Lobby against Amendments moved by this side. I wish the Committee would realise that the question is not that the Chancellor has to get the money, for that is agreed on all hands, but whether he has chosen the best method of obtaining it. On that ground we feel that our Amendments are more than justified. There is not an article or a commodity mentioned in these Amendments which is not a prime necessity in the houses of the poor, more so than in the houses of the well-to-do. I do not imagine that oil baize troubles the inhabitants of Mayfair very much, nor that leather cloth and many of the items specified here would seriously affect the well-to-do. In the homes of the poor the replacement of these things is necessary and continuous. When the poor realise how this tax is hitting them, I feel sure the Chancellor will wish that he had listened to some of the arguments advanced on this side of the Committee.

7.53 p.m.

Mr. David Adams (Consett)

Your predecessor in the Chair, Colonel Clifton Brown, has decided that there will not be called an Amendment standing in my name relating to bedding, and that an opportunity is afforded on this Amendment to make some observations relating to that subject. We are advised that if it is thought desirable, we may carry the Amendment to the vote. The Committee originally believed that goods which we could well do without would justly be called upon to pay the higher rate of tax, and when the original Bill was withdrawn it was believed that there would be a more equitable distribution of the burden between goods which might be termed luxury and those which were mere commodities. Bedding can be described not only as a working-class commodity, but as a prime and urgent necessity from which no section of the community can escape. For this reason we are glad to support the Amendment, because the tax adds a special burden on the lower-paid workers, pensioners, unemployed, small people with fixed incomes and the workers generally. Bedding cannot be described as a luxury. It is an article of common necessity. The workers must content themselves with the lowest quality, and for that reason they have to renew it more quickly than if it were of the highest quality which may be described as luxury. The richer sections of the community need not repeat their purchases of bedding so often; indeed, it is frequently so excellent that it lasts a lifetime.

Bedding and sleeping facilities for the working-classes are as important as good food for their health, and anything which tends to impair it is detrimental to the real interests of the State. We have seen that in the care which local authorities in the evacuation areas have shown in regard to the sleeping facilities of the children in the reception areas. I know from experience that in many cases children were moved from the proposed foster parents on the grounds that there was not adequate bedding accommodation for them. I was grateful to the Parliamentary Secretary to the Ministry of Health, who made peregrinations into the reception areas to satisfy herself that the bedding and sleeping accommodation were adequate. Here the Chancellor is taking a directly contrary view, adding to the burden and tending to depreciate the standard of life of the very people whom we on this side of the Committee are here to help whenever the opportunity occurs.

I contend that cleanliness and comfort, as well as health, can be secured only by frequent changes of bedding. In my judgment this will be rendered virtually impossible in the case of many thousands of our fellow citizens. It is a melancholy statement to make in this Committee, but I think most Members who are connected with industrial areas know that large sections of the people are so poor and have such inadequate supplies of bedding that they utilise the clothes which have been worn throughout the day, both in the case of adults and children alike for bed clothes. That being so, one sees how imperative it is that bedding, at least, should be spared this taxation. It has been the experience in the North of England that enemy action has compelled large numbers of people to renew their bedding, and any increase of enemy action and the use of incendiary bombs will certanly entail more expenditure. The evacuation scheme, too, has caused considerably increased expenditure, which has proved to be burdensome to large numbers of people. The Lord Mayor of the Northern Metropolis, Newcastle, was invited to organise a public fund for the purpose, among other things, of assisting people to meet the expenditure entailed by evacuation, and the cost of bedding was certainly one of the items.

This tax will add greatly to the expenditure of local authorities and will inevitably mean a substantial increase of the rating burdens in many relatively poor districts. Further, the Chancellor does not appear to have contemplated the probability that demands for increased wages by the workers owing to the expenditure which will be occasioned under this tax will have the effect of robbing the Chancellor of the advantages to be gained by the tax. In spite of our colossal expenditure upon war purposes there is a vast population which has a bitter struggle for existence. This tax will add most unjustly to that struggle. No one can say that the burdens which are placed upon Income Tax payers are equitable by comparison with the burdens which will be placed upon the poorer section of the community under this Purchase Tax. I hope that the Chancellor will harken to the voices of those who have spoken on this Amendment, and see whether it is not possible, as regards bedding, to place it in the third column.

8.4 p.m.

Captain Crookshank

As we have had some discussion on this Amendment and have a lot of business to get through it may be convenient if I now express the views of the Chancellor upon it. It has been very persuasively moved and supported by hon. Gentlemen opposite, but the hon. Member for Deptford (Mr. W. H. Green) was forced to say that on all these Amendments the arguments were much the same and that he and his friends were really advocating the same principles time and time again; and if that be true in respect of their arguments I am afraid it will be equally true of what I have to say in repelling them. As my right hon. Friend has already pointed out, he is trying to meet some of the more difficult cases which have been presented, but he has to keep the main objectives in view—the raising of cash and the checking of consumption. When all is said and done, in spite of special cases which have been mentioned by hon. Gentlemen, the purchase of beds is not, perhaps, the most frequent thing that happens to people in their lifetime. Beds are not one of the most frequent purchases in a household. [Interruption.] Even in the case of cots, I do not think it is necessary to buy a new one every time, because people make the old one do.

Mr. Woods

They may have twins.

Captain Crookshank

That is an exceptional case. The field which is covered by the whole group of taxable expenditure is a large one, somewhere in the nature of £70,000,000, and it is the fact that we started by excluding from the scope of the tax 80 per cent, of the articles which come within the cost-of-living index, while a further 12 per cent, are to be found in the middle column It must be borne in mind that my right hon. Friend spent many successful years at the Ministry of Health, and is quite cognisant, from his own experience, of the points which have been put this afternoon; but in spite of that, and in spite of the eloquence with which the case has been argued, he is very sorry, and so am I—because we are at one in this matter—to have to say that we cannot meet our hon. Friends in this matter.

Mr. Woods

I should like to ask a question about kapok. It appears that if it is used for lifebelts it will be free from taxation, and if it is used in the upholstery for tramcars it will not pay tax, but if used for the cheapest pillows it will be taxed.

Captain Crookshank

I am sorry that I overlooked kapok, but as it was not mentioned I did not speak about it. The other night the hon. Member for South Croydon (Sir H. Williams) said that kapok was one of the raw materials in the making of lifebelts. Lifebelts are outside the Schedule altogether, and therefore kapok used for that purpose is free. As to the case of tramcars, my right hon. and learned Friend dealt with them on the last Amendment by referring hon. Members to Clause 18 (2), under which purchases of goods by a registered manufacturer as materials would not be chargeable purchases. So that we are left with kapok as one of the possible alternatives for stuffing cushions. As such there is no reason that I know of why it should be in a preferential position to other material with which cushions might be stuffed, so, for that reason, it has to be left where it stands.

8.11 p.m.

Mr. G. Griffiths

The miners of this country support the Government in practically every thing. I want the Chancellor of the Exchequer to think about them. The Minister of Supply said to them: "Go to it," and they have gone to it; but, since 1926, the miners have had the hardest and rawest deal of any industrial workers in this country. They have worked for only two or three days a fortnight. I have gone into miners' homes, and I can tell the Committee that the homes are bare. The beds are bad. The furniture is bad. Now, some miners have started to work, and things are getting a bit better, although the miners are not getting increases of wages as are some other people.

The Chairman

I must remind the hon. Member that the subject under discussion is bedding. We have already, on other Amendments, debated very fully the special position of miners as a class, and I hope that the hon. Member will not repeat that Debate too far.

Mr. Griffiths

Surely the miners must have beds to sleep on. I am talking about their beds.

The Chairman

The hon. Member was developing an argument about the special position of the miners, but that is not the subject under discussion.

Mr. Griffiths

I feel very keen about this question of the furniture and beds of the miners and their wives and children, because these people are only just becoming enabled to renew some of their bedding, after 15 years. Now the Chancellor of the Exchequer says that they must pay 33⅓ per cent, on the price. My folk are rather anxious about this matter. I was in my division this weekend, and I showed this Schedule and its three columns to people, and they were amazed. "Do you say, George, that, according to this first column, I have to pay one-third extra, after a certain date, on what we have been paying?" they asked me; and I said, "It is so." They nearly went black in the face, and they "blue-pencilled" it. The working class have not had proper consideration in this matter. They are helping to pay rates, but those rates will be increased. For 10 years before I came to this House I was a member of the West Riding County Council, and was chairman of the sanatorium committee. I know what bedding costs a local authority like that county council, and if they are to pay an increase of 33⅓ per cent. it means an increase in the rates, and those chaps will have to pay the addition.

I am sorry that the Financial Secretary to the Treasury got up to speak before I had an opportunity, although I do not suppose that it made any difference. It is

my business to put across the Floor of this Committee the views of the people I represent. I have been in some of their homes during the last four or five years, and I know that, in some cases, they had nothing but the beds, and those were worn through. Now these people are having a bit of luck but they will have to pay 6s. 8d. in the £ on top of the price of what they buy. That is not fair. There are not many Members on the other side of this Committee just now, but I believe that most Members agree that this proposal should receive further consideration. I suggest that the Chancellor of the Exchequer and the Financial Secretary should act accordingly.

Question put, "That the words proposed to be left out stand part of Column 1 of the Schedule."

The Committee divided: Ayes, 159; Noes, 57.

Division No. 69]	AYES.	[8.18 p.m.
Acland-Troyte, Lt.-Col. G. J.	Granville, E. L.	Muff, G.
Albery, Sir Irving	Greenwood, Rt. Hon. A.	Nall, Sir J.
Aske, Sir R. W.	Grenfell, D. R.	Nield, B. E.
Attlee, Rt. Hon. C. R.	Guest, Lieut.-Colonel H. (Drake)	Noel-Baker, P. J.
Balfour, G. (Hampstead)	Hall, G. H. (Aberdare)	Owen, Major G.
Beamish, Rear-Admiral T. P. H.	Hambro, A. V.	Paling, W.
Bevin, Rt. Hon. E.	Hannah, I. C.	Petherick, M.
Blair, Sir R.	Hannon, Sir P. J. H.	Pethick-Lawrence, Rt. Hon. F. W.
Boles, Lt.-Col. D. C.	Harris, Rt. Hon. Sir P. A.	Pickthorn, K. W. M.
Bossom, A. C.	Haslam, Henry	Pownall, Lt.-Col. Sir Assheton
Boulton, W. W.	Headlam, Lieut.-Col. Sir C. M.	Price, M. P.
Boyce, H. Leslie	Hely-Hutchinson, M. R.	Radford, E. A.
Broadbridge, Sir G. T.	Henderson, J. J. Craik (Leeds, N.E.)	Ramsbotham, Rt. Hon. H.
Brooke, H. (Lewisham, W.)	Hepburn, P. G. T. Buchan-	Reed, Sir H. S. (Aylesbury)
Brown, Brig,-Gen. H. C. (Newbury)	Herbert, A. P. (Oxford U.)	Reid, J. S. G. (Hillhead)
Browne, A. C. (Belfast, W.)	Hill, Dr. A. V. (Cambridge U.)	Reid, W. Allan (Derby)
Burgin, Rt. Hon. E. L.	Hopkinson, A.	Ross Taylor, W. (Woodbridge)
Butcher, H. W.	Horsbrugh, Florence	Rothschild, J. A. de
Butler, Rt. Hon. R. A.	Hudson, Capt. A. U. M. (Hack., N.)	Royds, Admiral Sir P. M. R.
Campbell, Sir E. T.	Hume, Sir G. H.	Russell, Sir Alexander
Cary, R. A.	Hunter, T.	Russell, R. J. (Eddisbury)
Cooke, J. D. (Hammersmith, S.)	Jarvis, Sir J. J.	Samuel, M. R. A.
Crookshank, Capt. Rt. Hon. H. F. C.	Jones, Sir G. W. H. (S'k N'w'gt'n)	Scott, R. D.
Culverwell, C. T.	Jowitt, Rt. Hon. Sir W. A.	Selley, H. R.
Dalton, Rt. Hon. H.	Kerr, Sir John Graham (Sco'sh Univs.)	Shepperson, Sir E. W.
Davidson, Viscountess	King-Hall, Commander W. S. R.	Simmonds, O. E.
Davies, Clement (Montgomery)	Knox, Major-General Sir A. W. F.	Smiles, Sir W. D.
Davies, Major Sir G. F. (Yeovil)	Lamb, Sir J. Q.	Smith, Rt. Hon. H. B. Lees- (K'ly)
Denman, Hon. R. D	Lathan, G.	Smith, Sir R. W. (Aberdeen)
Drewe, C.	Leach, W.	Somerset, T.
Ede, J. C.	Little, Sir E. Graham-	Somervell, Rt. Hon. Sir Donald
Edwards, Rt. Hon. Sir C. (Bedwellty)	Lloyd, Major E. G. R. (Renfrew, E.)	Somerville, Sir A. A. (Windsor)
Ellis, Sir G.	Loftus, P. C.	Southby, Commander Sir A. P. J.
Elliston, Capt. G. S.	Lucas, Major Sir J. M.	Spens, W. P.
Emery, J. F.	Mabane, W. (Huddersfield)	Strauss, H. G. (Norwich)
Erskine-Hill, A. G.	M'Connell, Sir J.	Stuart, Rt. Hon. J. (Moray and Nairn)
Etherton, Ralph	Macmillan, H. (Stockton-on-Tees)	Sueter, Rear-Admiral Sir M. F.
Evans, E. (Univ. of Wales)	McCallum, Major D.	Sutcliffe, H.
Foot, D. M.	Magnay, T.	Tasker, Sir R. I.
Fox, Sir G. W. G.	Makins, Brigadier-General Sir Ernest	Tate, Mavis C.
Fraser, Captain Sir Ian	Mander, G. lo M.	Thomas, J. P. L.
Fremantle, Sir F. E.	Margesson, Capt. Rt. Hon. H. D. R.	Tinker, J. J.
Fyfe, Major D. P. Maxwell	Mathers, G.	Touche, G. C.
Galbraith, Comdr. T. D.	Mayhew, Lt.-Col. J.	Wakefield, W. W.
George, Major G. Lloyd (Pembroke)	Moore, Lieut.-Col. Sir T. C. R.	Walker-Smith, Sir J.
George, Megan Lloyd (Anglesey)	Moore-Brabazon, Lt.-Col. J. T. C.	Ward, Lieut.-Col. Sir A. L. (Hull)
Gledhill, G.	Morris-Jones, Sir Henry	Ward, Irene M. B. (Walisend)
Glyn, Major Sir R. G. C.	Morrison, G. A. (Scottish Univ's.)	Waterhouse, Captain C.
Gower, Sir R. V.	Morrison, Rt. Hon. W. S. (Cirencester)	Watkins, F. C.
Wayland, Sir W. A.	Williams, C. (Torquay)	Wood, Rt. Hon. Sir Kingsley
Webbe, Sir W. Harold	Williams, T. (Don Valley)	Woolley, W. E.
Wells, Sir Sydney	Willink, H. U.	TELLERS FOR THE AYES.—
Whiteley, W. (Blaydon)	Winterton, Rt. Hon. Earl	Major Sir James Edmondson
Wickham, Lt.-Col. E. T. R.	Wolmer, Rt. Hon. Viscount	and Mr. Holdsworth.
NOES.
Adams, D. (Consett)	Griffiths, G. A. (Hemsworth)	Morgan, H. B. W. (Rochdale)
Adams, D. M. (Poplar, S.)	Hall, J. H. (Whitechapel)	Naylor, T. E.
Banfield, J. W.	Hall, W. G. (Colne Valley)	Oliver, G. H.
Barnes, A. J.	Hardie, Agnes	Parker, J
Barr, J.	Harvey, T. E.	Parkinson, J. A.
Bevan, A.	Henderson, J. (Ardwick)	Procter, Major H. A.
Broad, F. A.	Henderson, T. (Tradeston)	Silverman, S. S.
Bromfield, W.	Hollins, A. (Hanley)	Sloan, A.
Burke, W. A.	Isaacs, G. A.	Smith, E. (Stoke)
Chater, D.	Key, C. W.	Sorensen, R. W.
Cluse, W. S.	Lee, F.	Stephen, C.
Cocks, F. S.	Leonard, W.	Summerskill, Dr. Edith
Cove, W. G.	Leslie, J. R.	Taylor, R. J. (Morpeth)
Daggar, G.	Lipson, D. L.	Viant, S. P.
Davidson, J. J. (Maryhill)	Lunn, W.	Watson, W. McL.
Davies, S. O. (Merthyr)	McGhee, H. G.	Welsh, J. C.
Douglas, F. C. R.	Maclean, N.	Wilson, C. H. (Attercliffe)
Dunn, E. (Rother Valley)	MacMillan, M. (Western Isles)	TELLERS FOR THE NOES.—
Gallacher, W.	Maxton, J.	Mr. Green and Mr. Woods.
Gibson, R. (Greenock)	Messer, F.

The following Amendments stood upon the Order Paper in the name of Sir JOSEPH LAMB:

In page 41, columns 1 and 2, leave out lines 39 to 44.

In line 39, column 2, at the beginning, insert: Articles of china, porcelain, earthenware, stoneware and other pottery when of a kind used for domestic purposes or for table and kitchen use. Sanitary ware.

The Chairman

Hon. Members will observe that the second Amendment in the name of the hon. Member for Stone (Sir J. Lamb) and the three Amendments in the name of the hon. Member for Stoke (Mr. E. Smith) bear on this first Amendment. Therefore, I do not propose to call those Amendments unless, for purposes of decision only without further debate.

8.26 p.m.

Sir Joseph Lamb (Stone)

I beg to move, in page 41, columns 1 and 2, to leave out lines 39 to 44.

I understand, Sir Dennis, that you are calling the first Amendment in my name and not the second. That places me in a difficulty, because it would appear that if we took the first Amendment, without the second one, that I was asking for total exemption. I must admit that that is what I would like, but I have to remember that the Chancellor of the Exchequer has to get so much money—

The Chairman

I hope I have not put the hon. Member in a difficulty. Quite obviously the second Amendment is capable of being discussed with the first and it is very likely that I shall not call the second one.

Sir J. Lamb

Thank you, Sir Dennis. You are giving me a certain amount of hope. It makes the position clearer, because if one reads the second Amendment in my name it shows the real object of my Amendment. I was saying that while I should desire total exemption on behalf of the industry, I have to remember that the Chancellor of the Exchequer requires money and, therefore, I am seeking a halfway house, whereby the industry could make a contribution, but a contribution which would not be as disastrous as that which appears in the Bill. I am not asking for the total exemption of the articles in column 1, but that they should be treated, equally, with the articles in column 2. That would mean that instead of china and those articles mentioned in column 1 paying one-third, they would be asked to pay one-sixth.

I am aware that this tax does not affect the export trade as such, but although that may be academically correct it does affect the export industry because there are certain industries so interwoven that you cannot benefit one without benefiting the other. Consequently, any ill-effect which this will have on the home trade will naturally be felt by the export trade at a time when, at the request of the Minister, and I believe very rightly, the industry is doing all it possibly can to increase, with others, the export trade. I should like to mention that the extra prices which would have to be charged, whatever the tax, would have an effect on the export trade. There is no home market for expensive china, which might be looked upon as a luxury. Nobody can pretend that to-day with taxation and other burdens, expensive china is a market which can be considered worth while discussing. The export trade is a trade where expensive china is rather more in demand.

The cheaper china comes on a level with earthenware, which is already in the second column. It has practically the same use; in fact, I question whether many people in this Committee would be able to distinguish between earthenware and the cheaper kind of china. They are used—and, therefore, purchased—by the same people; and those are people who are not overburdened with the world's goods. The home market for the cheaper china is confined very largely to renewals. A person who happens to have a set of china and who requires to replace any of the pieces, cannot buy earthenware; he must buy china, of the same kind as the set. Then there are Government requirements. I do not suppose the Government wish to pay tax on them because there would be no purpose in their doing that. There is also the question of institutional use. I do not want to speak at great length, or to repeat what has been said by others, but there is a market for which I would make a special plea. One thing to which I object is a cracked or chipped cup. In some countries restaurants are forbidden by law to put them on the tables. I am chairman of a sanatorium, and I know the dangers of using cups which are cracked or chipped. It is a serious matter. If we make these articles expensive there will be a restriction on the replacement of those which really ought not to be used. The industry is not in a flourishing condition. Unemployment is still an indication of conditions in industry; and for the one month of June-July last, there was an increase of nearly 2,000 in the number unemployed in this industry—and a large proportion of the people employed in this industry are women. I hope that the Minister will consider whether he can accept the principle underlying my second Amendment. I do not know whether another Amendment which I handed in, to exclude sanitary ware, is to be called or not. It is not on the Paper.

The Chairman

The hon. Member's second Amendment includes sanitary ware.

Sir J. Lamb

That proposes to put sanitary ware into the second column. I handed in another Amendment, to put it into the third column.

The Chairman

The hon. Member must wait and see about that. It is a little difficult for me to say at present what I shall do as to Amendments before they are reached.

Sir J. Lamb

Thank you for your guidance, Sir Dennis. I will say a word now about sanitary ware. I hope that it will be totally excluded. Sanitary ware was not mentioned by the right hon. Gentleman in his speech, and it has come as a complete surprise to me to see that it is in the Bill, because it is really "builders' material." To-day there is no private house building; and, consequently, the demand for sanitary ware is practically entirely for purposes of replacement. If we have a lot of bombing there will be considerable breakage of these fittings, and corresponding need for replacement. The greatest demand for these things is not for private houses; it is for camps, canteens, Government offices, and so on. I will not go further into that, because I promised the Chancellor that I would not speak too long.

8.36 p.m.

Sir K. Wood

I know that many hon. Members are interested in this matter, as they have made representations to me. I intervene now, in order to say something which I am glad to say, and which I have not had an opportunity of saying often this afternoon—that I am anxious to meet hon. Members on this matter. On the Report stage I will see what I can do to meet hon. Members in all parts of the House, and to transfer articles of china and porcelain into the second column, especially those for use in serving food and drinks. I recognise, and I am sure my hon. Friends will recognise, that that will give the reduced rate to what may be called expensive china. I am informed that in that respect there is practically nothing doing at the present time; and, therefore, I am not running any great risk or offending against the principle of the Bill. I will also examine the question of sanitary ware, which is important in many respects, and see whether I can put down a satisfactory Amendment. I hope my hon. Friends will appreciate that, although I am very hard in some respects, I am reasonable in cases of this kind. If necessary, I will have a word with some of my hon. Friends as to the form the Amendment should take.

8.38 p.m.

Mr. Wedgwood (Newcastle-under-Lyme)

All of us who are interested in this matter are extremely indebted to the right hon. Gentleman for the way in which he has met us. I think that, as the tax stood originally, it was deplorable. The real danger in this war is that there should arise in any quarter in this country a sense of injustice. It would have been manifestly unjust to tax, in the same trade, one manufactured product at 33⅓ per cent. and another at 16 per cent. It is not the tax which hurts—all are prepared to pay. What does hurt is the sense of injustice. The other point that I want to make is one which I am afraid affects even the right hon. Gentleman's amending tax. We are all anxious to encourage the export trade. It happens that the export trade to America is regulated by the domestic price at which china and earthenware are sold by the wholesaler to the retailer in this country. I am afraid that 16 per cent, tax will mean in effect 16 per cent, rise in tile tariff on our goods going to America. That must be avoided in some way or another. I cannot think at present of any way in which it can be done, but in the interests of our export trade, it is of enormous importance that we should have the lowest possible tariff into the neutral markets of the world. Therefore, if the right hon. Gentleman could get into contact with the American Government before he brings in this tax and secure from them the recognition that the price should be less tax, it would make an enormous difference to trade and the prosperity of the country at the present time.

The next thing to which I want to call attention is a small item, and I will not press it. There are certain forms of china and earthenware production that are made especially for the poorer people. The cheaper forms of production—I refer to the Longton pottery from the district represented by my hon. Friend the Member for Stoke (Mr. E. Smith)—are made particularly for the cheapest market in this country. I do not think they ought to bear the tax. Our argument is fortified in that respect in that those firms are engaged on pottery partly for export and partly for domestic use. If they are deprived of the domestic market, the result will be that they will close down and we shall lose their export trade. I cannot speak on that question half so well as my colleague, who speaks for Longton especially, but, on behalf of that particular factory in which I am interested, I am particularly grateful to the right hon. Gentleman that he has in this case considered what I believe to be the legitimate interests of the trade concerned and also avoided a particular form of injustice which looked like hitting certain selected manufactures.

8.43 p.m.

Mr. Ellis Smith (Stoke)

As the firms involved are in my division perhaps I may be permitted to ask the Chancellor of the Exchequer what this offer means? When consultations are taking place, I hope that the people representing the firms, and the operatives involved—and I am most concerned about the operatives—will be taken into consultation along with others. Some of us, including my hon. Friends representing the mining industry, had the experience a few weeks ago of taking a certain step on the Workmen's Compensation Bill, and we came to a certain understanding. Although I know it is a matter of interpretation, we have found that that understanding was not the correct one. Before we part with this Schedule I would like to know exactly what the Chancellor of the Exchequer means when he suggests that he is proposing a transfer from one column to another, because that will not satisfy me. While I am prepared to agree to certain suggestions, I believe that, as far as table and domestic pottery is concerned, no case at all can be made out for the tax. If that is not going to be included in the concession, then I cannot associate myself with it. I have received a letter from the British Pottery Manufacturers' Federation which states: The Federation will be grateful if you will press strenuously for the exclusion of sanitary ware from the provisions of this tax. I am in agreement with that letter, but what applies to sanitary-ware applies equally to ware for the table and for domestic use generally. This industry has already been severely affected by the Limitation of Goods Regulation, and the time has arrived for the industry to take a stand upon this question. It is a most important export industry. More and more, as my correspondence shows, we are obtaining the good will of the American people. If there had been time, I would have read a number of letters that I have received, but I will read a few extracts to show the importance of the question and why we should get an understanding of what the concession means before we part with this Schedule. Here is an extract from the letter of one firm: We are the largest makers of bone china tea-ware in this country, and, due to our adoption of a progressive policy of quantity production at low prices, we have been enabled to extend very considerably our export markets. This statement can be confirmed on application to the Overseas Department of the Board of Trade. I would like to ask the Chancellor of the Exchequer at this point whether consultation has taken place between the Treasury and the Board of Trade with regard to the imposition of the Purchase Tax on the pottery industry. Here is another important extract from the letter: We would therefore submit to the earnest consideration of the Chancellor of the Exchequer the effect that this proposed Purchase Tax will have on our export of bone china tea-ware. The directors of this company are of the opinion that the tax will virtually cut off all our home market business and consequently raise our manufacturing costs for our export to a state where we shall be unable to export further. It means, in effect, that this country will lose somewhere between £30,000 or £35,000 worth of foreign exchange which could be used for the purchase of armaments. I quote that in order to show the Committee the importance of this export trade. My right hon. Friend the Minister without Portfolio, the President of the Board of Trade and the Financial Secretary to the Treasury, and responsible industrial representatives, have during the past few weeks made statement after statement about the importance of maintaining our export trade. The policy of the Board of Trade is to extend the export trade wherever possible. This industry has spent an enormous amount of money in preparing itself to take advantage of the situation that now prevails in America, and in the Southern American States in particular, in South Africa and the Dominions and Colonies, and the good will which this country has now got in those countries cannot be measured. If the Chancellor of the Exchequer imposes this tax upon the export trade, or upon the home trade, it will have very serious effects on the export trade.

Many may ask: If it is only limited to the home trade, how can it affect the export trade? It will affect it in this way. Suppose a firm is manufacturing 60 per cent. for the home trade and 40 per cent. for the export trade. Immediately the tax is put upon the home trade it is bound to reduce consumption. That will, automatically, indirectly increase the cost of production. When you increase the cost of production, it prevents you from meeting foreign competition. Therefore, no matter how much good will we may have in other parts of the world, if our prices do not compare favourably with those of other countries, it is bound to have a very serious effect. Before we part with this problem, remembering the experience of my hon. friends in the mining industry in regard to the Workmen's Compensation Bill, I hope that the Chancellor of the Exchequer will make a more concrete statement in regard to his concession than he has done up to the present.

8.51 p.m.

Mr. Arthur Hollins (Hanley)

I agree in the main with all that has been said by my hon. Friend the Member for Stoke (Mr. E. Smith). He has made a special plea, as far as the Purchase Tax falls on the china trade, because Longton and Fenton are in his constituency. I also have a special plea to make from the trade union point of view on behalf of those engaged in the china trade. Naturally, one does not want to see any tax imposed which will send a few thousand people to the Employment Exchange or put them on the funds of my society. I feel that to tax domestic table-ware means putting a tax on things used by the very poorest of the poor. One cannot tell people that they should use a cup a little longer, or use a jug or plate a little longer. Once such an article falls on the floor it is broken, and has to be replaced. That replacement has to be made by the poorest people. You cannot expect them to replace a cup by a jam jar. They are entitled to a new cup and saucer.

I am thankful to the Chancellor of the Exchequer for having gone as far as he has gone in the matter, but the mandate I have from the people concerned is that, although his concession will help considerably, it is not entirely satisfactory. What we want to avoid is benefiting the earthenware trade by putting a super-tax on the china trade. If hon. Members took the opportunity of going to stores where poor people buy their table-ware, they would find that at the distance of a yard or so it is not possible to tell the difference between some kinds of china and earthenware, and there is very little difference in price. The question is whether it is possible to put the two on an even keel. There are cases where a coffee service or a tea service is decorated by the earthenware trade and actually put on the market by the china trade at a cheaper price than earthenware. When you go from the common or garden teacup or saucer, to the decorative processes, you may get a more expensive line in earthenware than in china. Therefore nobody can say that if you exclude the earthenware trade you must include the chinaware trade. I am extremely grateful to the Chancellor of the Exchequer for having met us so far, and I hope that he will be prepared, also, to consider the sanitary-ware trade. If we have another severe winter there may be damage by frost, and there is also the question of damage by air-raids which will make replacements necessary. I think a special case has been made out, and I hope that the Chancellor of the Exchequer will give special consideration to it.

8.55 p.m.

Dr. Summerskill

May I put a point to the Chancellor of the Exchequer because I can only feel that the concession he has made is extremely niggardly? He said it would make very little difference to his revenue.

Sir K. Wood

No, I never said anything like that.

Dr. Summerskill

I am sorry if I misunderstood the right hon. Gentleman. I hoped the Chancellor of the Exchequer would say that he would exclude the cheaper chinas and earthenwares. I was very much struck by the argument of the Financial Secretary on the question of bedding. He said that no new argument having been brought from this side, the Treasury must say "no," and he also said that, after all, bedding was only an occasional expenditure. Perhaps the Chancellor of the Exchequer also thinks that china is only an occasional expenditure, but I would remind him that there is no surplus in any poor home which can be used for this occasional expenditure. When a jug has to be replaced, it is not a question of taking a shilling or two off some luxury. That shilling or two must come, either off the rent or off the expenditure on food in a poor home. One hon. Member on the other side said he did not like chipped cups. I am not asking that chipped cups should be replaced but that broken cups should be replaced, because most poor people have to put up with chipped cups and use them until they are broken. When the time comes to replace those broken things, as the rent has to be paid, it is inevitable that the extra expenditure must come from the food. The Chancellor of the Exchequer was Minister of Health long enough to know that what I say is correct. I ask him once more to consider this cheap china as a necessity of the poor and to make this small concession, so as to prevent the standard of living of the poor becoming lower than it is.

Mr. J. J. Davidson (Glasgow, Maryhill)

May I ask the Chancellor of the Exchequer, in the consultations that are to take place regarding the transfer of items to the second column not to restrict it to that, but to consider also, transfer to the third column?

8.58 p.m.

Sir K. Wood

As a matter of fact, my right hon. and gallant Friend the Financial Secretary has already seen representatives of the trade and discussed matters with them. I would be very happy before to-morrow to send to one or two of my hon. Friends who are particularly interested, the form of the Amendments which we propose to put down. I am, of course, very much aware of the importance of the export trade in this and other matters, and we are, as has already been stated in consultation, to see what can be done as far as America is concerned, with a view to meeting the situation. As regards the Dominions I think the situation is much more hopeful. What I propose to do is to get equality in this matter and to transfer china into the second column, and particularly to frame it so as to deal with articles used in the preparation of food or drink.

Mr. Wedgwood

I would like to explain that I have not had any communication with the Treasury on this matter and have had no arrangement with them.

9.0 p.m.

Mr. E. Smith

We are bound to consider the suggestion made by the Chancellor and I hope that during the consultations regard will be paid to the Amendment on the Order Paper in the names of my hon. Friends the Members for Hanley (Mr. A. Hollins), Burslem (Mr. MacLaren) and Newcastle-under-Lyme (Mr. Wedgwood) which had as its object the exclusion of table and kitchen crockery. Nothing will satisfy me unless the crockery which is used by people on their own tables, is exempt from this tax.

Sir J. Lamb

I would like to express my thanks to the Minister for what he has said. I can assure him that a large number of my constituents are vitally interested in this matter and will appreciate what he has said. I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

9.2 p.m.

Sir Francis Fremantle (St. Albans)

I beg to move, in page 42, line 27, column 1, at the end, to insert: except as specified in the third column. With this Amendment I would like to combine the one which follows it on the Order Paper, in the name of my hon. Friends and myself, which seeks to exclude from the tax aids to hearing which are duly approved by the Ministry of Health. It is not necessary to enlarge upon these Amendments because I think everyone will realise how much deaf people are handicapped. Their handicap is comparable with that of blind people and is in some ways even greater because a blind person attracts sympathy, while a deaf person often attracts antipathy. It is difficult to speak to deaf persons and when they say the wrong thing and do not hear what is said, they get moody. It is very difficult for them to get employment, but if they are to do so and not be a burden on society they must have aids to hearing. These are of a varied kind and range in price from £5 to £50 and very often deaf people have the greatest difficulty in meeting the initial expense. If they do overcome the initial expense, they are faced with the cost of the upkeep of the electric dry batteries which are necessary for these instruments. This Bill already gives great relief to the blind and we ask, therefore, for similar relief for the deaf.

9.4 p.m.

Sir K. Wood

I would like to meet my hon. Friend and other Members interested in this matter and I propose to do it in fairly extensive terms, by including a number of other things. I cannot deal with a minor question of batteries, because it is not possible to distinguish dry batteries which are used as aids to hearing, from ordinary dry batteries used for other purposes. But what I would like to do is to exclude from the tax altogether surgical and medical appliances. In doing that, I shall meet my hon. Friends. The Committee will appreciates that I have already exempted artificial limbs and spinal jackets but it has been brought to my notice that I ought to include things like surgical boots and trusses and, therefore, to meet all these points, I propose to put down for the Report stage an Amendment which will exclude from the tax surgical and medical appliances.

Mr. Barnes

Will the class of boots which the Chancellor has mentioned cover boots that have to be made specially for a person, but which, nevertheless, in the trade are not classified as surgical boots? They are expensive to make, as they have to be made specially to suit a person's peculiarity, but they are not necessarily surgical in the medical sense.

Sir K. Wood

The hon. Member knows the difficulty I am in from the technical point of view, because I must have a definition that will apply to the trade. Perhaps the hon. Member will have a word with me about the matter to which he has referred, and if there is anything I can do, as long as I keep within the lines I have mentioned, I shall be glad to do it.

9.6 p.m.

Sir F. Fremantle

I should like to thank my right hon. Friend the Chancellor for the way in which he has met us. I ask him also to consider whether it would be possible to confine the medical and surgical appliances to those which are approved by some proper body, since there are many fraudulent devices which we want to keep out.

Sir K. Wood

I will have regard to that and to the interests of the medical profession.

Sir F. Fremantle

I hope my right hon. Friend will have regard to it in the interests of the people. After my right hon. Friend's remarks, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

9.8 p.m.

Mr. Broad

I beg to move, in page 42, column 2, to leave out lines 34 to 41, and to insert those lines in column 3.

The object of this Amendment is to exclude from taxation those articles of domestic use which are purchased in every house, not for purposes of ostentation, or simply for the sake of adding to a person's possession, but only when they are absolutely required for culinary and domestic use. In these days of rising prices, when it is so difficult for the ordinary housewife who does her own housekeeping to provide the potatoes, it is wrong to deprive her of the pot in which to cook them. These articles are not capable of being repaired. They are used to the last, and then have to be renewed if the domestic operations are to to be carried on. It is not here a question of taking from people their surplus income. It is not a question of asking them to do without articles or to defer purchasing articles until after the war. It is not a question of finding a substitute. It is a question of articles of daily use which are required if the food is to be put on the table in the condition necessary for human health and sustenance. We are told that necessary foodstuffs are not to be taxed; yet, the Chancellor proposes to add to the household expenses in this way. There is no justification for including these goods under the taxation Clauses. They should be removed to column 3 and exempted from taxation.

I do not think anything can be said here about the difficulties of discrimination between one class of goods and another. That is the argument which has been used by the Chancellor of the Exchequer, the Financial Secretary to the Treasury, and the Solicitor-General on other Amendments, but where there is a will there is a way. This Amendment does not come within that class at all because there is no question here of taste or luxury. All these articles are in every-day use in every household, and to put a tax on them under column 1 or 2 means another addition to the expenses of carrying on the ordinary household. I think it is very ill-advised to put a tax on indispensable articles in this way. It will produce inflationary conditions and the Government in the end will lose more by it than they will gain. I ask the Chancellor to consider where this tax will lead him. He will be faced with an irresistible demand for increases in wages in almost every direction. I hope he will realise that many of us are much alarmed at the prospect of an inflationary period, the end of which we cannot foresee. Those of us who have had a long connection with the trade union movement would be wrong in urging our members not to press for advances in wages, when unjust taxes are put on to the working classes. I hope the Chancellor will agree to accept this Amendment.

9.14 p.m.

Sir K. Wood

I hope that this Measure may help to prevent inflation. I should like to point out to the Committee exactly what this particular Amendment means, because I do not think that in the circumstances the hon. Member for Edmonton (Mr. Broad) would desire to persist in it. The effect of the Amendment would be to exempt all iron and steel domestic hollow-ware. These articles, which of course are chargeable at the reduced rate in many cases, would be used for similar purposes, with articles manufactured of pottery, glass and bakelite. In my judgment, and I hope in the judgment of the Committee, there is no justification for granting exceptional treatment to encourage expenditure on articles of iron and steel hollow-ware, which would be the effect of the Amendment. I would remind the Committee that specialised hollow-ware articles for medical or surgical use in hospitals will be outside the scope of the tax. To exempt articles for ordinary domestic purposes would not only involve a loss of revenue, but give special treatment to those made of iron and steel as distinct from the others I have mentioned to-night. Therefore, in the circumstances, I suggest that my hon. Friend, having made his point, should not press the matter further because it would be obviously unfair.

9.16 p.m.

Mr. Gallacher

The Chancellor of the Exchequer is to discuss this matter with Members representing the pottery industry, and in all probability domestic pottery-ware will come from column 1 to column 2, but the hon. Member for Stoke (Mr. E. Smith) is fighting to get domestic ware eliminated altogether. The Chancellor has given the impression that he intends to bring domestic pottery from column 1 to column 2.

The Chairman

We have passed that. The hon. Member must come to the present Amendment.

Mr. Gallacher

Will the Chancellor not be logical and consider removing iron hollow-ware from column 2 to column 3? The right hon. Gentleman in discussing my Amendment expressed deep sympathy with the poor. The Financial Secretary said the Chancellor was sorry for the poor, and that he also was sorry for them. Hon. Members should note the flimsy and specious arguments put up by the Front Bench. Their grief, I am sure, will be of great help in times of trial and tribulation. They said it was impossible, however, to make a concession which would benefit the poor, because the material referred to could be used on a large scale for luxury furnishing and what not. In this case there is no such argument. Enamelled iron-ware, the cheapest form of material for household utensils, is used almost exclusively by those who are in very difficult circumstances and, if there is anything in the sympathy expressed by the Chancellor and emphasised by the Financial Secretary—I have very great doubt about it—here is an opportunity to make it effective. I ask the Chancellor in view of his own argument—I think about the worst I ever heard—to consider removing this item to column 3.

Mr. Broad

In view of what has been said by the Chancellor and in recognition of the concession which has been made already, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

9.20 p.m.

Mr. Barnes

I beg to move, in page 42, line 42, column 2, to leave out "Household brooms and brushes," and to insert those words in column 3.

The description which the Chancellor has given to this class of goods brings out clearly the issue before the Committee. We have to face a simple and clear problem. The Chancellor proposes to impose this tax on brooms and scrubbing brushes necessary to keep the household clean. This will represent a substantial—

Sir K. Wood

I propose to accept this Amendment.

Mr. Barnes

That is one of the best items of news we have had to-night.

Amendment agreed to.

9.22 p.m.

Mr. Hannah (Bilston)

I beg to move, in page 43, line 33, column 3, to insert chronometers and stop watches for use by scientific and technical workers and in research and other laboratories. In its present form the Bill means a tax on learning if these chronometers and stop watches are taxed. This concession will cost very little. We have also to consider the export trade. Our stop watches and chronometers are specially good, and we hope after the war, with the extension of universities in China, to get a large expansion of trade in these instruments there. I therefore urge this small concession in the interest of learning at home and the export of scientific instruments abroad.

9.23 p.m.

The Solicitor-General

The Amendment is largely covered in the sense that the hon. Member wants. There are certain types of stop watches which are not watches; that is to say, they have no hands which indicate the passing of time. There are instruments for measuring certain resistances and that sort of thing which are commonly called stop watches, but they indicate some figure which is not time. These things are not watches and are outside this tax. A thing which indicates time is, of course, a watch, and "chronometer" is merely a word used in the trade for a watch of high precision. We cannot except chronometers because there is no real distinction between a chronometer and a first-class watch. I hope that when the hon. Member realises that the type of stop watch used for scientific purposes which he has in mind is outside the scope of the tax, he will be satisfied.

Mr. Hannah

I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

9.25 p.m.

Mr. Woolley (Spen Valley)

I desire to move, in page 44, column 2, to leave out lines 11 to 19. I realise that the granting of all the Amendments which have been put down to the Finance Bill would be a literal impossibility, but I suggest that this Amendment has one distinction. In the main the other Amendments have been concerned with the things that people use in the course of their normal life, and in many cases the Chancellor has rightly dealt with articles which are normal requirements by applying to them the Purchase Tax on either the higher or the lower scale. Here we are dealing with a section of the products which the community use under abnormal conditions, in ill health, when, in many instances, the family income is reduced, and by reason of the needs of drugs and chemicals expenditure has been increased. In the case of many previous Amendments the plea has been that we must make some concession to the poor, and here we are dealing with no small section of the community who are not only poor, but are poor in particularly distressing circumstances, that is, in ill health, when, as I say, income is reduced and expenditure rising. I feel that unless this Amendment is accepted there is a distinct danger that certain people will be retarded in their efforts to regain their health, and will not be able to take their proper place in industry as soon as would otherwise have been the case, and therefore the general war effort will suffer.

I would thank the Chancellor for the exemptions which he has already granted. He has exempted insulin, liver extract and the active principles of liver and also medical and surgical appliances. Those are exemptions for which we are truly grateful. I think the expressive words in column 3 are, "exceptionally costly." Those are the words which stand out in my mind as being difficult to interpret. Exceptionally costly to whom?

Mr. Barnes

On a point of Order. May we know which Amendment the hon. Member is actually moving? Is it the first Amendment in his name or the second? I am interested in the first Amendment.

The Chairman

It was my intention that the two Amendments should be taken together, but upon looking at them I think the simpler method would be to make them into one. In marshalling Amendments we have to go line by line according to the printed line and regardless of the column. Therefore, his Amendments would best be moved if they were in this form: Schedule 7, page 44, leave out lines 11 to 23. That would cover both points, all points.

Mr. Barnes

May I submit that other Member of the Committee are interested in the Amendment which deals with the second column and it would rather—

The Chairman

No, the hon. Member misunderstands my intention. That is the form in which I invite the hon. Member to move his Amendment. The way I put the Question to the Committee will be another matter. I am considering how I should put that Amendment in order to save following Amendments. I can only say that I shall be careful that those following Amendments which come within the scope of this one and are in Order and which are discussed on this Amendment will not be shut out. The later Amendments will not be called unless it is necessary to do so for the purposes of a decision without further Debate.

Mr. G. Griffiths

Why does the hon. Member desire to move the second Amendment, to leave out up to line 23?

The Chairman

I have tried to explain to the Committee and to the hon. Member the course which I suggest should be followed.

Mr. Glenvil Hall

On a point of Order. Before the hon. Member proceeds to move his Amendment, may I recall that the Chancellor of the Exchequer said earlier that he was prepared to meet the Committee on this matter? Could we have some idea now what the Chancellor of the Exchequer has in mind?

The Chairman

That is not a point of Order, but is merely a suggestion in the nature of an interruption of a speech at the wrong time. The hon. Member was moving an Amendment. He has not yet moved it. Perhaps the hon. Member for Colne Valley (Mr. Glenvil Hall) will wait until that has been done, and then he will get a chance to make his suggestion.

Mr. Woods

Do I take it that the whole of the other Amendments will be ruled out?

The Chairman

The hon. Member must wait and see. I have said several times that I cannot pledge myself as to Amendments I shall select until I see what happens to Amendments with which we are dealing. I said a minute ago that a number of following Amendments would obviously be in order to be discussed on the present Amendment, which the hon. Member for Spen Valley (Mr. Woolley) is trying very hard to move. Therefore they should be discussed on this Amendment. The other Amendments will be selected merely for the purposes of a decision.

Mr. Woolley

I must say how grateful I am for your Ruling in these matters, and I very gladly accept the method which you have suggested.

I beg to move, in page 44, to leave out lines 11 to 23.

The words in this Schedule which must have appeared rather strange to many hon. Members are "exceptionally costly.' We must relate those two words to one thing, before they can be intelligible. To what are we to relate them? To the actual cost of the commodities, or to the capacity of people to pay for them? I suggest that the only intelligible way of interpreting those words is in relation to the capacity of people to pay. If we adopt that method, we see how poor people and others who are not only poor but are suffering from ill-health, will be seriously affected by this inclusion. We have had instances of exceptionally costly drugs and chemicals. We were informed that insulin and the active principles of liver were included. I very gladly accept that concession, but what about a poor person suffering from a secondary anaemia? This trouble requires prolonged treatment, and chemicals or drugs which are not excessively expensive when we relate the treatment to the actual cost of the drug. If we relate it to the capacity of a poor person to pay it becomes an exceptionally costly drug, and that particular example will be multiplied if we look at one of the sufferings which, perhaps, is greater than any other in this country to-day, namely, rheumatism. It is one of those maladies which is treated by certain chemicals or drugs and there has to be prolonged treatment. Those chemicals or drugs in themselves are not exceptionally costly, but if they are related to the capacity of a poor person to pay, they do become excessively costly, and, therefore, they come in that category.

May I give an example of the question of anaesthetics? Anaesthetics are not mentioned in this third column. They are essential, and they should come into the free category. The Financial Secretary to the Treasury said the other day that the basis for creating these various columns was, first, to supply more cash for the Treasury and, secondly, to reduce consumption. He also said that they wished to avoid hardship for those with smaller incomes and particularly those with children. There are three points which, in my opinion, apply adversely in connection with these particular commodities. For example, how can folk who are ill and with increased domestic expenditure be expected to pay this extra tax? How can the use of essential drugs be reduced unless the health of the individual is to suffer? The greatest hardship will occur when the pocket is light and the requirements are heavy. I therefore look confidently to the Chancellor of the Exchequer, not necessarily to show sympathy in dealing with this Amendment, but to grant what, after all, is something to which poor people in adverse circumstances have a right.

9.39 p.m.

Mr. Wakefield (Swindon)

I desire to support the Amendment which has been proposed by the hon. Member for Spen Valley (Mr. Woolley). At this late hour I do not want again to go over the very careful and logical arguments which he has put before the Committee and the reasons which he has given for moving this Amendment. I would like, however, to draw the attention of the Committee to the phrase: medical and surgical appliances and essential drugs of an exceptionally costly character. The hon. Member, in moving this Amendment, drew attention to the vagueness of this phrase. He pointed out, quite rightly, that what was costly to one person perhaps was cheap to another. There is another point in connection with that, to which I would like to draw-attention. What is this list about which we are voting? Who has seen it; who has drawn it up; who were consulted about it? Who are the people who were able to define whether a drug or a surgical instrument was costly or not? The Committee ought to have a great deal more information. I understand that, earlier, the right lion, and gallant Gentleman the Financial Secretary said that there was a list. Nobody knows anything about this list, or where it is; but he said that it had been drawn up by some eminent medical people, and that they were unanimous about it. This is the first time I have heard of medical gentlemen being unanimous about anything; and, for that reason, I have very grave suspicions about this list.

I urge the Chancellor to consider very carefully indeed the wisdom of including these words in the Schedule. By greatly increasing the cost of a number of drugs his proposal would bring hardship to many people who could ill afford the addition. For example, there are drugs which relieve headaches. [Interruption.] The hon. Member, I know, speaks with feeling on that matter; but there are many people who suffer from headaches. Why should they be unable to relieve headaches because they cannot afford the extra cost of the drug? There are other drugs which have to be taken continuously, such as liquid paraffin and Epsom salts. Drugs of that kind, taken once a month, are not expensive, but, taken every day, they undoubtedly cause considerable expense to the family. Are those drugs included in this list as being of "exceptionally costly character"? If not, why not? I hope that we may have more information about this mysterious list, and that the Chancellor will consider this Amendment, and accept it.

9.43 p.m.

Mr. Barnes

I am exceedingly anxious that one aspect of this problem of patent and branded medicines should receive consideration. That aspect is likely to be overlooked, unless it is taken into consideration apart from the general problem of medicines. This is a matter with peculiar a history. In the first place, the Chancellor, when considering the Purchase Tax, laid down a general principle that articles should not be subject to the tax if they were already subject to special and heavy taxation. I do not want to raise the question of the opinions of Members about these proprietary medicines; I want them to consider a very important point of financial principle. The Chancellor indicated that any article or commodity already subject to heavy taxation, would not come under the Purchase Tax. This class or article is already subject to taxation ranging from 25 per cent, to 35 per cent. The lower percentage tax is levied on the cheaper price of medicines. When we impose the Purchase Tax on these cheaper medicines, it will lift a great range of them to the level of the higher-priced medicines, thereby attracting the heavier percentage of Stamp Duty. Therefore the cheaper range of medicines will become subject to a three-tier type of taxation—first the original Stamp Duty, then the Purchase Tax, which lifts them into the higher grade, and the higher Stamp Duty which would follow automatically. I do not feel that on reflection the Committee would wish to see a process of that character introduced. I remember that when the late Chancellor of the Exchequer, in response to the recommendation of a Select Committee, proposed to abolish the Stamp Duty it raised very considerable feeling. I am not in any way anxious to raise that problem to-night, but the Committee will see the fairness of this point. This type of article should not be subject to a double system of taxation.

If the Chancellor of the Exchequer feels that this group of commodities should come under his Purchase Tax and that the revenue he would get by levying the Purchase Tax would yield him a bigger sum on this class of goods, he ought to repeal the original Stamp Duty. I believe that the revenue from the Purchase Tax would prove to be larger, but I do not know. If, on the other hand, he feels that the original Stamp Duty should be adhered to, I do not think that he ought to impose the Purchase Tax upon that group of goods. The Chancellor of the Exchequer should recognise that very material point and make some concession, either by repealing the original Stamp Duty or withdrawing the Purchase Tax on this class of goods.

9.49 p.m.

Captain Sir Ian Fraser (Lonsdale)

In view of the request of the Chairman that all these various medicine matters should be taken in one Debate, I wish to draw the attention of the Committee to the Amendment which stands in my name—in page 44, line 23, column 3, after "liver," to insert: and including all medicines liable to duty chargeable under the Medicines Stamp Act, 1802, the Stamp Act, 1804, and the Medicines Stamp Act, 1812, and any enactment amending those Acts"— to which the hon. Gentleman the Member for East Ham, South (Mr. Barnes) made reference. I am very glad to feel that I have his support, and, in view of what he has said, I will not detain the Committee for more than a very few minutes. I will remind the Committee of the Debate which took place during the Committee stage of the Finance Bill in 1939. Sir John Simon brought to the Committee a proposal that the Medicine Stamp Acts should be repealed. He was acting upon the advice of a Select Committee which had gone thoroughly into the whole question of the anomalous position of those Acts, which are over 100 years old, and have imposed taxation upon certain proprietary medicines in a manner which was judged by the Committee at that time to be extremely unfair. One medicine is taxed and another is not taxed, and no one can explain why the one is taxed or the other is not. There is no distinction and indeed there is no difference between the medicines. Sir John Simon probably made the mistake of coming to the Committee and proposing that these taxes should go by the board without having anything to put in their place. The Committee, generally, felt two things. The first was that medicines, particularly proprietary brands of medicines, which are heavily advertised and are known to make considerable profits, were a fit subject for taxation and that it was reasonable that they should bear taxation to help the country. The other was that there should be some method of control so that those household remedies in which people have come to believe and which, in fact, are very often recommended by doctors and are of real value, might continue to be sold whereas nostrums and quack remedies which very often are harmful, or at any rate of little use, might be prevented from being sold.

It was generally felt, I think, that there should be taxation and that there should also be some discrimination. Sir John Simon did not bring to the House any proposals to take the place of the legislation he was going to repeal. In those circumstances a very considerable Debate took place and the House of Commons showed itself very unwilling to take Sir John Simon's advice. These Stamp Duties were, therefore, retained and the same anomaly remains. Sir John Simon proposed that between then and his next Budget, that is between 1939 and 1940, he should consult with the interests concerned and try to bring in a proposal which would be fair and on which there would be agreement. No doubt he would have done that if war had not broken out. War did break out, and this small matter had to go by the board. We find ourselves now with the anomalies remaining—some medicines paying Stamp Duty and some not paying it—and the Chancellor of the Exchequer proposes to place a tax on practically all medicines except those on the list which the hon. Member for Swindon (Mr. Wakefield) mentioned.

The effect of this is peculiarly inequitable and whether we, individually, care for proprietary medicines or not, there is a principle involved—a principle of equity and a principle of taxation which I feel the Committee ought not to allow to pass without comment. The tax on patent medicines works in this way. On a shilling bottle or box of medicine there is a duty of 3d. If the retail price of the medicine rises to is. 1d. or is. 2d. the 3d. Stamp Duty rises to 6d. The Chancellor of the Exchequer proposes to put a tax of 16 per cent. on the retail price of 1s., and the cost of the medicine is increased by 2d. That immediately causes this commodity to attract a duty of 6d.— one of the hundred-year old taxes—instead of 3d. The medicine is, in fact, taxed at 8d., where at present the tax is only 3d. Even fur coats and diamonds and other luxury goods which can be bought only by the very rich are only taxed at the rate of 30 per cent.

It seems wrong to me that through an accident of ancient legislation this particular industry should be taxed as if the goods they were selling were luxuries bought by the few. They are not luxuries bought by the few; they are household commodities bought by the many. A great many people have faith in them, and they do people good. It therefore seems to me that a strong case has been made out for the Chancellor of the Exchequer giving way on the Amendment which is to be moved later. He may ask, "How can I give way on this when I have had to refuse on matters which appear more important?" May I point out to him that the principle here involved does not operate in any of the other cases debated to-day. There is no other case in which a special tax, due to special legislation, is levied on any commodity. I cannot help feeling that injustice is being done to this particular industry and also that an unwarrantable increase will be made in the tax on medicines which are bought by people of limited means. Finally, while probably the Chancellor must reject proposals to exclude medicines as a whole, because such a concession might cost him many millions, this concession will only cost about £100,000. If he grants this Amendment, or some variation of it, he will not lose much revenue. He knows that he ought not to have the revenue, because it is a pure fluke that he is getting it, and he can therefore afford to do what is equitable and just. I ask him to consider this matter should I move my Amendment at a later stage.

9.56 p.m.

Sir K. Wood

I should like to say a few words first about the question of patent medicines and the special tax. I had to take the position as I found it. I have read the Debates which took place when ray predecessor brought the matter forward and proposed to remove the duty, and at that time I think there were no fewer than 300 Members who signed the memorial—it was far worse than the question of the book tax—saying that in no circumstances should we do this.

Sir I. Fraser

We are not asking the right hon. Gentleman to remove the Stamp Duty.

Sir K. Wood

I agree. I am explaining my position in the matter. In those circumstances, and for the reasons which have been mentioned by my two hon. Friends, the Chancellor met the wishes of the House of Commons and did not proceed with this proposal. It is in those circumstances that I have to deal with the matter to-night and I felt that at this juncture, with a Budget of this particular character, I could not embark upon a solution of the problem. I came to the conclusion that I had better deal with the situation as I found it and re-impose the tax. It is true, I agree, that there is a considerable anomaly in the matter. I am prepared to give an undertaking to endeavour, between now and the next Finance Bill, to see whether I cannot get the parties together and get some reasonable solution of the matter. I feel that that is the only possible way of tackling it. I could not possibly, at this stage, make an exception and let out a particular class of medicines or drugs. As a matter of fact, at present the Medicine Stamp Duty is chargeable on certain medicines when sold by grocers or general retail stores, but not on those medicines if sold by chemists. If I accepted the Amendment on the Paper, which I could not possibly do, and which the Committee would not desire me to do, the result would be to impose the Purchase Tax on those medicines when sold by a chemist but not when sold by grocers or others. That shows the difficulty of the situation. Therefore, though I admit all that has been said, I feel that we must face the position as it is, but I will make an earnest effort, if I can get the support of both sides, to get a reasonable solution, because the present position is perfectly impossible.

I want to say a word or two about the general position of medicine and drugs and the proposals in the Bill. I again endeavoured to meet the situation and at the same time secure a certain amount of revenue which I thought ought to be contributed from this source. I have set down, in the third column of the Schedule, surgical and medical appliances which are of an exceptionally costly character, and of which some illustrations are given in the Schedule. What we had in mind was that those medicines which were already very costly ought not to enter into the mind of the medical practitioner when he was giving them to his patient. We have indications in the Schedule of the various kinds of medical and surgical appliances we had in mind, and the Committee will have a full opportunity of seeing this particular list because it will come forward on a particular section of the Bill which allows the Treasury to make the necessary definitions, within the terms of the Section, and will come before the House for approval. Nearly all the matters mentioned by my hon. Friend in his speech will be covered. He asked about persons suffering from secondary anaemia, and I understand from advice I have received that this is connected with the liver and will be free. Various other matters are also set out in the Schedule.

Dr. Morgan (Rochdale)

Pernicious anaemia is primary anaemia, not secondary anaemia.

Sir K. Wood

I stand corrected. The advantage is that by the method we have adopted in the Bill we shall be able to add to it from time to time in the light of experience. It is also true that in the other column of the Schedule we are asking the Committee, with these exclusions as specified in the second column, to permit a duty of 16⅔ per cent, upon drugs and medicines, manufactured or prepared. In this I am supported in many quarters of the Committee. When this matter was debated during the Debate on the Medicine Duty a great body of opinion in the House considered it was a proper thing that if you made the exceptions I have referred to, there should be a contribution towards taxation from this source. I am fortified in my observations by the Chief Medical Officer of Health, in his annual report for 1935, in which he almost invited taxation of medicines, even of the sort prescribed by doctors. On page 66 of the report he says: A considerable proportion of the total outlay on drugs prescribed by the medical profession, averaging 3s. per head, could be limited without detriment, indeed with advantage, to the proper treatment of the people. A year later, in his report, he said: In some areas insured persons have acquired a habit of medicine drinking which the practitioners in those areas are reluctant to control. It has been stated by representative practitioners that a very large proportion of the present medicinal treatment of the population is wholly unnecessary, and if all doctors felt themselves free to order only such medicinal treatment as in their unfettered judgment they considered necessary, the total cost of prescribing would at once fall spectacularly. It is difficult to reconcile ourselves to the wasteful expenditure on drugs and the large sums which otherwise would be available for more effective treatment. I have also read in this connection a speech by an hon. and gallant Member who has passed away during the present crisis and whom we all respected and admired for his speeches on this matter—the late Sir Arnold Wilson. The speech which he made on medicines on 22nd June, 1939, is well worth reading. He reminded the House on that occasion of some observations of his nurse, who said: Remember, child, that doctors think more men have died from drugs than drink."—[OFFICIAL REPORT, 22nd June, 1939; col. 2579, Vol. 348.] That may be perfectly true. I think the proper thing for the Committee to do is to protect those kinds of medicines, drugs and appliances which are necessary, but at the same time I think it is right that a contribution should be made from the general class of medicines. I need not again remind the Committee of the very large exemptions I have made in relation to surgical appliances. In the circumstances, I suggest that we are taking a reasonable course to-night and one that could well be defended.

10.8 p.m.

Dr. Morgan

I am sorry that my first speech on my return to the House should deal with a medical matter, because it is very difficult for a medical man to speak to a lay audience, or to a Committee consisting of lay Members, on medical matters.

Mr. MacLaren (Burslem)

It is a matter of condescending to speak.

Dr. Morgan

Just as the Member does when he speak on land values. The speech to which we have just listened was quite unworthy of the Chancellor of the Exchequer. It was ribald, ironical and cynical about a great profession whose services the right hon. Gentleman may need at any time. We have to-night heard some of the most extraordinary statements from all sides of the Committee. We have, for example, heard the hon. Member for Spen Valley (Mr. Woolley) talking of secondary anaemia when he meant primary anaemia.

Mr. Woolley

I did not mean primary anaemia. I said what I meant—secondary anaemia.

Dr. Morgan

The hon. Member also mentioned the treatment of secondary anaemia by certain organic substances, including liver.

Mr. Woolley

I did not make any reference to the treatment of secondary anaemia by liver.

Dr. Morgan

I apologise if I made a mistake in interpreting the hon. Member, bat I thought he referred to secondary anaemia being treated by certain organic substances, including liver. We also heard the hon. Member for Swindon (Mr. Wakefield) talking about the continuous administration of paraffin. But in medicine we try, unlike the law, to speak a little carefully, with some regard to meticulous accuracy. In medicine you cannot pour, so far as I know, paraffin continuously down anyone's intestinal trap. You may take intermittent doses three times a day or one nightly, but you cannot do it continually. The thing is impossible. I have heard of a river of water, but not of paraffin flowing through the human body. Perhaps those who do not practise every day, and those who do not visit the sick every day, may know better than I do.

This is an unworthy tax. It is a tax on the sick and suffering at a stage when things worthy of taxation are left untouched. To think that the Chancellor is to put a Purchase Tax on things which may relieve suffering, making doctors think twice before ordering certain medicines, is really a scandal to the financial system of the country. What does the Chancellor do to back up his statement? He produces a statement from a medical bureaucrat, sitting in a comfortable office in the Ministry of Health. In medicine no person is so hateful as the medical bureaucrat, the man completely isolated from his patients, the man who remains in an office with a nice salary and a nice pension, and leaves other people to do his work, talking pontifically to those outside, and saying people are taking too much medicine. There are plenty of people in this country who need more medicine than they are getting at the moment, and I am not quite sure in my own mind whether that does not apply to the Front Bench. There are individuals who are too poor to buy medicines, even patent medicines not prescribed by doctors. You have only to walk through the East End to see crowds of anaemic women whose health would be considerably improved if given, not organic liver extracts, but simply a little chemical treatment, such as iron, arsenic or things of that kind. Arsenic is quite a useful drug. The point I wish to make is that the Chancellor, in trying to defend this tax, gave a quotation from a Ministry of Health official, completely out of touch with the common people. He had not practised medicine for years or seen a patient for years, but sat in his chair and wrote, as medical officers of health frequently do, a lot of complete nonsense, absolutely foreign to medicine. I suggest that in a serious discussion in the House of Commons in taxing suffering the Chancellor should really use a stronger argument than to use a quotation five years out of date to bolster up a case which is as weak as anything presented to this Committee.

This tax is a serious matter for many poor individuals and many institutions which have to cater for the poor. I am associated with one in which the poor patients pay one penny a week in order to get proper treatment from their hospitals which they cannot get anywhere else. This penalisation of the poor from the point of view of the treatment of disease should not be carried out at the present time. It is not a tax deserving of Parliament in a national emergency. Go through the factories to-day and consider the risk the workers are running in industry; go through Government factories, as I have done recently. I could spot one by one patients needing treatment, but no doctor was attached to the premises. All things needed for their treatment are now to be taxed. I suggest that the Chancellor should recast the tax and I appeal to him to do so on behalf of the poor who will have to pay. I do not appeal for the rich, who can always go to the Riviera and elsewhere. [Laughter.] My information is that they are still going to the Riviera, and they are still being allowed to take out money whether they go to the East or to the West. I am not concerned with the rich who can afford to pay these taxes. I am concerned with the poor and those institutions catering for the poor who will have to pay taxes on these medicines and surgical appliances. If there is one thing in any fiscal system which should be exempt from taxation it is drugs of any kind, whether they are chemical, organic or vaccine.

10.17 p.m.

Mr. G. Griffiths

Column 2 refers to medical and surgical appliances except as specified in the third column. In the third column it says: Medical and surgical appliances and essential drugs, being appliances or drugs of an exceptionally costly character. I should like to ask the Chancellor whether the words in the second column include the syringe which I have to use every day. I have to pay 15s. for a syringe. The needles have been taxed once since I have been in the House. They used to be 4d. and are now 6d. I was told I could have German needles, but I preferred British because they are better. Are these needles and syringes included in the 33⅓ tax?

Sir K. Wood

If they are medical and surgical appliances, as I should think from the hon. Member's description they are, they are exempt.

10.19 p.m.

Captain Elliston (Blackburn)

As it has been decided to discuss all the medicine Amendments together, I desire to draw attention to that in the names of my hon. Friend the Member for Twickenham (Mr. Keeling) and myself to exempt drugs and medicines supplied to registered medical or dental practitioners for use in the discharge of their professional duties and supplied to registered pharmacists or registered medical or dental practitioners for use in dispensing as a component part of medicines prescribed by such practitioners. Unfortunately my hon. Friend is serving his country in another capacity this evening. If he had been present he could have spoken with authority as a member of the Select Committee on the Medicine Stamp Duties which reported in 1937. We have heard an account of the proprietary remedies as affected by these duties, and something of what happened during the Budget Debate of 1939. But we have not been reminded that the Select Committee recommended the retention of the Stamp Duties. It was felt that the prosperous proprietary medicine industry, with a turnover of £20,000,000, was suitable for taxation in the national interest, and this opinion was endorsed by the House of Commons in the most emphatic manner when the Chancellor of the Exchequer, in 1939, proposed to repeal the duties.

That is all I want to say about the Medicine Duties; but the Select Committee also recommended that medicines dispensed by or on behalf of registered medical practitioners should be exempted from tax, and that is the proposition which I would submit to the Chancellor to-night. The opinion of that Committee was that although the luxury remedies, so popular with those of us who enjoy self-medication, could make a handsome contribution to the revenue, the drugs which were essential to the needs of pharmacists and registered medical practitioners were necessities like food and, like food, should not be subjected to taxation. The arguments in support of that view have been repeated again and again in this Committee, and I inflicted them on the House when I asked for the exemption of drugs and appliances used by hospitals. I do not propose to restate them; but I must emphasise the point that any increase in the cost of drugs and appliances may mean delay in seeking early treatment or at best inflict serious extra expense on a patient at a time when he can least afford it.

I do not want to introduce any controversial matter at this late hour, but while the hon. Member for Swindon (Mr. Wakefield) thought that it was a shocking thing that a person suffering from headache should not be able to buy a cheap remedy I am thinking of cases with headaches as a symptom, in which it may be a matter of life and death for a man to get skilled medical attention without delay. I submit that anything which delays early treatment or places it beyond the means of the patient is bad, and that anything which may be detrimental to the health of the people in these days of stress and strain, is bad. In the opinion of those with most experience of conditions of health among the people, the imposition of the Purchase Tax on drugs and medicine could not fail to have detrimental effects on the health of the community. I hope that it is not too late to convince the Chancellor in this matter. One can understand other requests for exemption being refused, but, in regard to the proper treatment of diseases and the protection of the people, we ought not, for the sake of a few thousands of pounds, to take risks which are not justified.

10.26 p.m.

Commander Sir Archibald Southby (Epsom)

I support what was said by my hon. and gallant Friend the Member for Lonsdale (Sir Ian Fraser), and I am very sorry that the Chancellor could not find it in his heart to do something to remedy what his speech showed he thought was an injustice and an anomaly. He gave an undertaking—and we know that half a loaf is better than no bread— that the matter would be gone into before the next Finance Bill; is he prepared to tell the Committee when that is likely to be, and how long the pharmaceutical profession are to exist with this grievance before any remedy is forthcoming? The Committee should realise that the Amendment of the hon. and gallant Member has the support of the Pharmaceutical Society.

I welcomed the Chancellor's promise to consider this matter with a view to putting matters right, but if it is to take a long time, it seems hardly fair to leave matters as they are. I do not want to enter into the controversy between the two medical Gentlemen on either side of the Committee, but when I heard the hon. Member for Rochdale (Dr. Morgan) suggest that what we needed was more medicine and call attention to the Front Bench—although he did not specify which Front Bench—I noticed signs of alarm. I am reminded of the old adage contained in the lines: Better to hunt in fields for health unbought, Than fee the doctor for a nauseous draught. Certain medicines are good for health, but too much self-doctoring by the community is very dangerous. I want to see this anomaly of taxation of patent medicines remedied. Nobody wants them to go untaxed, but the unfair incidence of taxation must be put an end to at the earliest possible moment.

10.28 p.m.

Mr. Woods

There are one or two points I should like to put to the Chancellor, on which he might make a genuine concession. His generous heart has been moved to sympathy for the blind; he is prepared to exempt altogether gramophone records specially prepared for them. There might be some hope for people who become maimed and afflicted. They should not be compelled to suffer, and then be fined by the State because they have sought some cure. The Chancellor seemed to arrive at the position of Samuel Butler in "Erewhon," where those were penalised who were ill or infirm, while those guilty of normal crime roamed the country free. [An HON. MEMBER: "They were sent to hospital."] Yes, and the others were sent to gaol. They were sent to hospital so that they would be able to roam the country free.

In a previous discussion, the Chancellor suggested it was difficult to divide fabric piece-goods into the more expensive and the cheaper grades. But now at this stage drugs and medicines can be separated; and the costly ones are those which are to go free, and the cheaper ones which the people can afford, will be taxed. Almost every hon. Member will have amongst his personal acquaintances men who went through the last war and were either wounded or gassed so that they are now in receipt of a pension. That pension is the total of their income. They are being hit by the increased cost of living and they are probably the chemists' best customers, because of their desire to get some relief from the wounds of 20 years ago. They have gone through 20 years of suffering, and now when we have another war these people are being singled out to pay special taxation because they are the victims of the last war.

I notice that the Financial Secretary seems to treat it as a joke. It is not nearly such a good joke as the Chancellor of the Exchequer reading from a medical authority, who had a more profound knowledge of human realities. I do not ask the Financial Secretary to take my word for it. If he wants confirmation let him go to a chemist's shop and the chemist will inform him that among his best customers for certain articles, are men who were wounded in the last war. If he does not believe that these people exist—evidently they do not in official minds, but they do in fact—let him take the victims of this war. In every air-raid when property is demolished there are a number of minor casualties. The least wounded will need a bandage and some iodine. Those simple remedies are included in the tax. If we are caught by splintered glass in an air-raid, let us thank God for it, because it will mean more money for the Exchequer.

Take the case of every workshop, factory and shop. By law, a first-aid outfit must be provided, and for that additional tax will have to be paid. Here is one point where the Chancellor could give way to some extent with the approval of the whole community. We are glad to have the assurance with regard to patent medicines, but I would like the Chancellor when he goes into the matter to bear in mind the fact that the consideration which he himself mentioned bears very heavily on a considerable section of the community. The chemist is now able to make a greater profit. Under this arrangement there will be a difference between the chemist's price for a patent medicine and that of the village grocer. Some of them charge the extra amount, but not all. The whole village community of this country are shut off from chemists' shops. Very few villages in England are of a sufficient size to make it profitable for a chemist to open a business there. Therefore, in almost every village there is a general store where all these patent medicines, for which there is a regular demand, are stocked. The country folk, who for the most part live on agricultural wages, are being told, "If you want them at the lower price, you must wait until you can go into the town." I hope the Chancellor will take into consideration the position of the country folk in relation to these patent medicines.

10.34 p.m.

Mrs. Tate (Frome)

I disapprove heartily of this tax, but I hope that if the Chancellor makes any concession, he will on no account consider making concessions on the lines suggested by the hon. and gallant Member for Blackburn (Captain Elliston). I can imagine nothing more unwarranted than exempting from taxation medicines recommended by qualified practitioners. Doctors have had a great deal of knowledge available to them, of which they have made singularly little use. Had they done their work better, much less medicine would have been needed. A very great deal of the suffering in the world is being stamped out by those who come from outside the medical profession. The medical profession is the closest trade union in the world, and I hope that no further unjustifiable advantage will be given to it.

Mr. A. Bevan

Is it proposed to tax bandages and other first-aid appliances? There is some difficulty in the minds of hon. Members about this.

Sir K. Wood

Bandages are exempt, and I have already announced that I propose to accept the Amendment dealing with surgical appliances.

10.36 p.m.

Sir I. Fraser

In view of the assurance which the Chancellor gave us, my hon. Friends and I feel that we would like the Committee to allow us not to move our Amendment. But Sir John Simon gave us exactly the same assurance as my right hon. Friend gave us to-night; then the war came and prevented him from redeeming his promise, while, when the next opportunity came, he was not here to redeem it. We cannot be sure, although we may hope, that the present Chancellor will be here for the next Finance Bill. Can he give any assurance on behalf of the Government that this situation, which he himself says is bad, and which it is commonly known must be dealt with, will be dealt with by the next Budget?

10.37 p.m.

Mr. Woolley

I understood the Chancellor to say that there was some list at the Ministry of Health. Did I correctly understand him to say that there would be some consultation in order to get an agreed list? I do not want to press this Amendment to a Division. If we could get some indication that there would be time to get an agreed list—which request, I think, is more than justified in view of the fact that hon. Members have no knowledge of it at the moment—that would meet the view of my hon. Friends and myself.

10.38 p.m.

Sir K. Wood

As regards the Patent Medicines Tax, I have already stated that I will try to come to an arrangement on this matter which, I think, will be acceptable to hon. Members. An assurance in this matter by the Chancellor of the Exchequer is obviously given on behalf of the Government of the day.

Sir I. Fraser

Are you speaking on behalf of the Government?

Sir K. Wood

Obviously, the proposals of the Government of the day are expressed by the Chancellor of the Exchequer. With regard to the point made by my hon. Friend the Member for Spen Valley (Mr. Woolley), I propose to put down an Amendment on the Report stage dealing with the list, which will be formulated by the Treasury, and which will have to come before the House. The Amendment will provide that notice shall be given in some form or other of the proposals in the list. Obviously, it must be notice that will give the House time to make any reasonable representations.

Mr. Woolley

In view of that assurance, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

The Deputy-Chairman (Colonel Clifton Brown)

That disposes of all Amendments down to that of the hon. Member for Halifax (Mr Gledhill) in page 133.

10.41 p.m.

Mr. Gledhill (Halifax)

I beg to move, in page 44, column 1, to leave out lines 24 and 25, and to insert those lines in column 2.

The object of the Amendment is to transfer typewriters, dictaphones, calculating machines and other office machinery from the higher rate of tax to the lower rate of tax. This principle has already been accepted in the case of account books. Office equipment and machinery are equally necessary, I submit, under modern conditions.

Mr. Pethick-Lawrence (Edinburgh, East)

Speak up.

Mr. Gledhill

If hon. Members would not talk, they would probably hear me. Statistics of all kinds have to be kept by firms to-day due to the large number of regulations issued by Government Departments who also ask for many returns, all of which entail many hours of hard work and the use of office machinery such as typewriters and duplicating machines. I understand that the Chancellor of the Exchequer is also expected to make a concession to exempt books on the ground that a tax on books would be a tax on knowledge. If that is so, a tax on office machinery would be a tax on efficiency.

My final point, which I hope will have some influence upon the Chancellor of the Exchequer, is that in his Budget statement he said he needed cash. These, like many other products, are subject to the Limitation of Supplies Order, and their sales are limited by one-third already. If the higher rate of tax is put on the remaining sales, it will drive out of the market the ordinary buyer, and the position will then be that the only remaining buyer of any size will be the Government themselves. Therefore the Chancellor of the Exchequer will find that he has levied a tax which his Department and other Departments are paying for him. Ordinary buyers will be ruled out by the Government more or less taking in their own washing. I submit, therefore, there is a case for either total exemption of these goods or at least their removal from the higher rate of tax, and I appeal to the Chancellor to give consideration to the proposal.

10.43 p.m.

Sir K. Wood

The Amendment which my hon. Friend has moved will have the effect of reducing the charge on typewriters and other office machinery to the reduced rate instead of the basic rate. At the present time I am proposing that typewriters and other office equipment should be taxed at the higher rate, and I commend that proposal because I think it is right. At this particular time—and I think it is gradually taking place—men of a special or a semi-skilled character previously engaged on the manufacture of typewriters can be much better employed. They are the type of men required in many branches of our machine works, and we ought to give every encouragement to that particular type of men to become employed on our special war effort. We must, as best we can, as far as typewriters and things of that kind are concerned, rely upon the typewriters we have already and do the necessary repairs. Such revenue as I can collect in that matter I shall collect. I think I am right in putting this provision in the Schedule.

Amendment negatived.

10.45 p.m.

Sir H. Williams

I beg to move, in page 44, column 1, to leave out lines 35 to 37, and to insert those lines in column 2.

It seems to me undesirable to tax tools of trade. I agree that the tools in this case are not so important as those we have just been discussing, but I understood that the Purchase Tax was to be primarily a tax on luxuries. I cannot think that a tax affecting as it does in this case pencils, pens, fountain pens, ink, drawing pins, and other stationery and office requisites can come under any definition of a tax restricting luxuries. No doubt the Chancellor of the Exchequer will give some reason why his advisers have somewhat strangely included these things, and in order to give him an opportunity of doing so I beg to move.

10.46 p.m.

Sir K. Wood

The position is that I have included in column 1 pens and pencils and other articles of that kind because I suggest they should pay 33⅓ per cent. I did not say that the first column should be confined to luxury articles only. I said it would include other articles which could be done without or postponed. My hon. Friend who has just sat down has suggested that as a certain number of pencils may be used for business purposes they may therefore be considered tools of trade. He would be the first to realise, I think, that a good many pencils are used for other purposes. It would be impossible for a person who sold pencils to know whether they were in fact going to be used for some necessary purpose such as the equipment of my hon. Friend's office, or whether they were going to be used, say, for marking bridge scores. In those circumstances it is impossible to make a distinction, and I do not think there will be any hardship in carrying out the suggestion I have made.

10.48 p.m.

Sir H. Williams

I was interested to hear the explanation of my right hon. Friend, and I know it is no use pressing the Amendment, but, on the other hand, I do not think his explanation was very adequate. In what way do you postpone a pencil? I have sometimes drafted Amendments to Finance Bills, but as my handwriting is so bad, I have always used a typewriter. I think the Chancellor of the Exchequer will in due course, in his next Budget—which I presume will be introduced immediately after the Recess—have an opportunity of examining this Schedule with greater care. His predecessor who invented the Purchase Tax did not know what it meant and took three months to prepare the Bill. That Bill was abandoned and this Bill was introduced, having been drafted in a much greater hurry than the right hon. Gentleman indulged in when instructing his right hon. Friend and giving him briefs. If the briefs had not been better drawn there would not have been so successful a combination. I would seriously ask my right hon. Friend to give some reconsideration to this tax on what I have described as tools of trade. To a very large extent these things will be bought by people who will bear a tax which will be an increase in their business expenses. That will diminish their liability to Excess Profits Tax, and therefore he will only go through a process of transferring items from one side of the ledger to the other without getting any extra revenue. However, as it is useless to press the matter at this moment I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

10.50 p.m.

Mr. Mander (Wolverhampton, East)

On a point of Order, may I ask whether it is intended, on the next Amendment on the Order Paper, to have a discussion covering newspapers, periodicals and books altogether? Would it not be better, as different arguments will be adduced, to have a separate discussion?

The Chairman

I have said several times before, with regard to following Amendments, that hon. Members must wait and see. It is quite obvious that the Amendment to leave out lines 38 to 53 is an Amendment to leave out a whole item, and is one that has a number of particular items linked to it, which can be discussed separately or all together. I cannot rule it out of Order.

10.51 p.m.

Mr. Bevan

I beg to move, That the Chairman do report Progress, and ask leave to sit again. Am I in order in asking how far it is intended that we should go to-night? We are now about to enter into a discussion which will be protracted unless the Chancellor is generous. If the Chancellor makes a statement, and it is unsatisfactory, will he insist upon a Division to-night or will he allow the Committee further to consider the statement? A great deal of progress has been made with the Bill this evening, and if we are to have a controversy about this tax, it ought not to be at this hour.

10.52 p.m.

Sir K. Wood

When the hon. Gentleman opposite has moved his Amendment, I propose to make a short statement which may perhaps relieve the difficulties and anxieties. We can then see how the statement goes. I do not think that the sitting ought to be protracted.

Mr. Bevan

I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.

10.53 p.m.

Mr. Isaacs (Southwark, North)

I beg to move, in page 44, column 2, to leave out lines 38 to 53.

In view of the hint which the Chancellor has thrown out I will not deal with this Amendment at great length, but I think it is necessary to put on record one or two facts about it. First of all, a tax of this character, especially at this time, would be a very great disaster to an industry which has already suffered great injury. It will in no way assist export trade of this country because this trade is not one that does any exporting. In addition to difficulties of the moment the industry is suffering from a paper shortage, and with the increase in the cost of inks, etc., there has been a great falling off of trade. The result has been that the balance of work now being produced by the printing industry has to bear the whole of the overhead costs. Printing is now costing more than it reasonably should cost. If you put a tax on the wholesale selling price, then you will tax it on the industry's inflated difficulties.

Then there is the difficulty of distinguishing between the various classes put down in column 2. I have been associated with the industry for many years, but I would not like to distinguish between a pamphlet, a leaflet, a book, a magazine and so on. Where one starts and the other ends it is almost impossible to say. There is one other factor, too, which ought to be borne in mind. The printing industry has been described as the "art preservative of all arts." I think it can safely be said that it is an industry that is indispensable to all other industries, for no industry can flourish unless it has the service of the printing industry. To tax print in general would be a disservice to industry. When we come to periodicals and books, there are one or two points that I should like to mention. What do we mean by "periodicals and books"? Can anyone describe the difference? Do you mean that a book has a stiff cover, or that if it has a paper cover, it is a magazine? If you consider the case of Penguins, you will find some difficulty in coming to an understanding without a clear definition. Those interested in education are anxious that books should be free of tax. We want all literature free of tax. We have the wireless, but sometimes we are glad to get away from it. In these days of rumours when we hear of "silent columns" and are told "You must not talk" we should remember that it is not silence or talk which defeats rumours but statements in print, in papers that can be trusted. There are papers that you can trust. [HON. MEMBERS: "Name."] I should expect the ordinary advertising rates if I mentioned names. You can do more to stop rumours by having announcements that people can trust than by all the talk on the wireless telling you, "Do not be worried," or "There is nothing to be worried about." Even the B.B.C. believes in the immense value of the printed word because, if there is a talk of special value, they take particular care to reprint it in the "Listener" so that it shall be recorded for all time.

I ask that newspapers shall not be taxed, and I ask it not purely on the question of finance. The only country in the Empire that has a Purchase Tax is Canada, and they do not tax newspapers. There are several factors of importance about that. The main question is that of retaining a free Press. There is a danger of killing that if you put a tax on newspapers. Our newspapers are as good as any in the world, not only from the point of view of print but on account of the balanced way in which they present their opinions—in spite of the fact that many might be more balanced than they are. In the main, we have a Press which serves the country fairly and decently. Some of the best papers are living on their resources. If you put on this tax, a paper must either increase its price to the purchaser, or reduce the commission to the retail newsagent, or pay the tax itself. If they pass it on to the customer, there is a risk of a shortage of purchases and of the trade going down. On the other hand, the purchaser will be making a present to the management of something in addition to the amount of the tax, and that will not be fair. It will not be fair to make the retailer pay it. The danger is that there are some groups of papers which would pay the tax themselves and not pass it on, whereas their competitors would be compelled to increase their price and in that way put themselves out of business, or possibly they would put themselves out of business by not increasing the price, and then not being able to carry on.

We should be faced with the position that the splendid local newspapers in the provincial towns, the wonderful newspapers in Manchester, Liverpool, Sheffield and Bristol—let every hon. Member think of the newspaper in his own town—would be in danger. I ask every hon. Member whether he would not prefer his own little local newspaper, with its intimate expressions of opinion, to a huge octopus Press printed in the locality, but spoonfed with news sent from London. There are many other things that could be said, but in view of what the Chancellor has said, I ask that, on the ground of the necessity of keeping literature as reasonably priced as possible, but above all, on the ground of keeping our small Press as free as possible and keeping out of the domination of a Press run either purely for money-making or to satisfy the whim and ambition of an individual, printing should be set free from the danger of this tax.

11.1 p.m.

Sir K. Wood

I think it will be convenient for me to intervene at this stage and give my views on the general claim which is being advanced for the exemption of newspapers, books and other printed matter from the operation of the Purchase Tax. There are also various Amendments on the Order Paper which propose exemptions for particular classes of books or periodicals. In the brief statement that I now propose to make, I shall deal with the wider question, which I recognise involves other considerations than those that we have been discussing this afternoon and this evening with regard to other items in the Schedule. As regards the taxation of newspapers, the industry have put their case to me, by way of representation and reasoned argument through deputations from all sections of the newspaper industry. They have particularly put to me in an objective manner the present general financial position of each section, and the possible consequences of this tax on the circulation of newspapers, and even the prospects of continuance in some cases. I need hardly say to the Committee that I have examined most carefully these representations in the spirit in which they were submitted to me.

As far as books are concerned, at an early stage I received a representative deputation, and since then more than one eminent publisher has been good enough to provide me with facts and figures comparable to those in the case of newspapers, to which I have just referred. The Committee is familiar with what has happened since then. I must say that I feel that a great deal of the sound and fury of the campaign has been unjustifiable, but in spite of the human reactions to certain aspects of it—and to which even the Chancellor of the Exchequer may be entitled—I have endeavoured to sift the wheat from the chaff, and to give careful attention and impartial consideration to all the matters that have been put to me in this case.

I should like to deal with only one aspect of the suggestion that this is a tax on culture, a tax on knowledge and a direct blow at those very things of the mind and spirit for which we are now fighting. I must confess that I feel myself in some difficulty here. It is obvious in the first place that the more I accept the advice of some of my hon. Friends, and certain advisers outside, the more difficult I shall be making it for the people of this country who spend their money on books, periodicals, and to a lesser degree newspapers. Already I believe many taxpayers must find it virtually impossible to maintain expenditure of this kind at anything like its pre-war level. Yet I do not conceive that Parliament would wish any Chancellor to refrain for this reason from such measures of taxation, however severe, as he might think for the prosecution of the war.

The effect, of course, of severe taxation would be felt by the newspaper trade, and by the book trade, just as it is being felt by others; and, if the time comes when we have to choose between money for books, and money for such despised articles as boots, or between magazines and milk, then we shall have to choose boots and milk, and, with all due respect to some of my hon. Friends, that choice will be right. In the case of newspapers, as I have said, I have had the benefit of consultation with all sections of the industry, and I have paid particular attention to some of the results which, as I have said, might follow from the application of this tax. Either the price of the ordinary penny newspaper would need to be increased to 1½d. or the newspapers would need to absorb the cost with other increases of costs arising from the war and in an endeavour to recoup themselves alter to such extent as they could the services which they provide to the public.

It has also been suggested to me that some papers would be unable to continue. At any rate the figures which have been placed before me show there might well be, in certain events, a substantial decrease in circulation of newspapers. I certainly do not think that in this time of war it would be in the national interest that there should be either a decrease in the circulation of newspapers or a diminution of the service which they provide for the public. Not only a free Press, but a widely distributed Press is, I recognise, a vital factor, particularly to-day in the dissemination of information and in the maintenance of public morale. This, of course, would not affect so considerably, I think, the circulation of the principal national newspapers, but I have particularly in mind he many local and provincial newspapers which serve our interests so well. They would suffer and with them the public which they serve.

I have of course to balance these considerations against the loss of revenue which would be involved, but, on the whole, though I cannot accept the contention that the printed word should necessarily be immune from taxation I have reached the conclusion—and in this I may say I have been helped by the co-operation which the Committee has extended to me in other respects—that the revenue, although important, does not justify me, having regard to the important considerations I have mentioned, in maintaining the tax on newspapers in present circumstances.

I now turn to the claim for the exemption of books, and I will try in this instance, too, to give the case as I see it without the ornamental additions. There are many factors which will necessarily discourage the sale and purchase of books in this country during the war. I have already alluded to some of them, such as the increasing burden of taxation upon the incomes and spending power of the people. There are also, I recognise, strong points in the economic case which can be made for the exemption of books. There is the undoubted fact that, apart from any action which I may take, difficulties may well increase as the war goes on, thus making it more difficult for the publishing business to continue its work and for the people to purchase new books. Above all—and this is the matter to which I attach the greatest importance in the considerations I have had to weigh—there is the undoubted importance to this country of the export trade in books, an importance which springs both from the financial results of that trade and from the necessity of the continued spread of British thoughts and writings throughout the world. The success or failure of that trade is related particularly closely to the success or failure of the home trade, because, as some of my hon. Friends know, this is one of the trades where there is a very big disparity between the price at which goods are sold at home and the price at which they are sold abroad. In other words, for a book to be a successful export, it must also provide a lucrative investment at home.

Finally, I do not under-estimate the importance to be attached to the publication of valuable but unremunerative books, which is only justified and made possible by the sale of less original, but more fashionable works. I can appreciate arguments of this kind, and, while there is much to be said to the contrary, in view of the considerations to which I have referred, which do not apply to other articles in the Schedule, I think that, on the whole, I should agree that books, as well as newspapers, should be exempt from the tax—at least, for the present. This decision must extend to printed music and printed leaflets and pamphlets, including, I may say, "The Book Crisis," if further copies should be required, and such others items as trade catalogues, trade lists, trade posters, and other trade advertising materials, as revenue from these would be comparatively small and not worth maintaining in themselves alone.

As it has been represented to me that the Purchase Tax will involve traders in keeping special accounts and that in those circumstances it is little short of something evil to charge a tax on account books, or even on plain books whether ruled or not, I propose to extend the exemption in that direction too. Diaries, I think, should continue to be the subject of taxation; a great book lover included these among the books that are no books. I shall therefore agree to the deletion from the Schedule of the paragraph concerned.

Amendment agreed to.

11.15 p.m.

Sir J. Lamb

I beg to move, in page 45, line 7, column 3, after "omnibuses," to insert "trolley vehicles."

I cannot conceive that the Chancellor intended that trolley buses should be taxed. I move this Amendment in order to enable him to make a statement, and I think I shall find that his intention was that they should not be taxed.

11.16 p.m.

Captain Crookshank

My hon. Friend is quite right in thinking that my right hon. Friend did not wish to exclude trolley vehicles from column 3. I can assure my hon. Friend that they are regarded as being covered by the exemptions in column 3.

Amendment, by leave, withdrawn.

11.17 p.m.

Sir J. Lamb

I beg to move, in page 45, line 10, column 3, after "fire-engines," to insert: vehicles used for or in connection with the extinction of fires or the protection of life or property in case of fire. I think the inclusion of fire-engines is an admission of their usefulness to the community, but they are only of use if they are supplemented by the accessories, that is to say other vehicles which are necessary, and in the opinion of those who have asked me to put down this Amendment those other vehicles should be included in column 3.

11.18 p.m.

Captain Crookshank

As a matter of fact fire-engines ought not to be here at all. The fact that they are inserted here makes it look as though they were road vehicles for the conveyance of passengers, but they are not that at all. We shall in due course move to take out the words "fire-engines" and that will meet my hon. Friend's point.

Sir J. Lamb

I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Schedule, as amended, agreed to.

Remaining Schedules agreed to.

Bill reported with Amendments; as amended, to be considered upon Thursday, and to be printed. [No. 81]

The remaining Orders were read, and postponed.