HC Deb 16 July 1941 vol 373 cc668-72

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Mr. Tinker (Leigh)

In opening the Second Reading Debate, the Minister said that this Clause was the heart of the Bill. The duties which are to be repealed by the Clause are the Medicine Stamp Duty, which involves £800,000, and the Licence Duty, which involves £40,000. I take it that this money will go somewhere. Probably the manufacturer expects to get some of it by means of enhanced sales, probably the retailer expects to do well out of it for the same reason, and probably the consumers are expecting to get cheaper articles. I wonder whether this will be so or not? Information has been given to me that there may be some arrangement made between the manufacturers and those who buy the things from them that the value represented by the stamp duties should not go to the buyers or consumers, and that the whole thing will be so manipulated that the prices of the articles will not fall by the amount which the duties represent. I do not know whether I am correct in saying that or not, but if that be so, I want the Minister to make it known to the public and to the manufacturers that the repeal of these duties is meant largely to benefit the ordinary man in the street. People have had many burdens put upon their shoulders by way of the Purchase Tax, and so on, and as the Treasury have seen their way to repeal the stamp duties, the whole benefit ought to go to those why buy these medicines.

I hope the manufacturers are not looking forward to making something out of this repeal, because they did enough shouting, when the duties were imposed, about the fall there would be in the sale of the articles, and so on. I know how human nature goes. I am afraid they will put forward a number of excuses of this sort, "We have not reduced the price because we are giving you a little more of the article." I am afraid that in these ways they will pretend that they are giving back to the consumers the value involved when they are not doing so. I want to have a definite understanding from those who will benefit from this provision that they will see that the ordinary person gets back this value. The hon. Member for Harwich (Mr. Holmes) is concerned with this business. He is connected with a very big firm in the town in which I live. I had the honour of receiving an invitation to visit the works, and I went there, and was very pleased with what I saw. I hope the hon. Member will take the opportunity of giving me some assurance in this matter, because I would not put it beyond him to take advantage of a thing like this. Business men have an easy way of saying, "We are giving you a little more in each bottle or packet." I want an assurance from the Minister that he is watching this matter, and if he has no power to control it, I want him at any rate to appeal to the vendors of these things to realise that Parliament is doing them a good turn in this matter, and that it is up to them to see that the public gets the benefit.

Mr. Holmes (Harwich)

In acknowledging the tribute which the hon. Member for Leigh (Mr. Tinker) paid to me, I should like to give him an assurance with regard to the manufacturers, wholesalers, and retailers. At the present time, under the Prices of Goods Act, neither the manufacturer, wholesaler nor retailer can make more profit on any article than he made in August, 1939. Therefore, if the manufacturers, wholesalers and retailers of medicines are to keep within the Act, they will have to pass on any saving they make as a result of tile repeal of these duties.

Mr. Benson (Chesterfield)

I am not sure that the hon. Member for Leigh (Mr. Tinker) is asking for something that is possible, or that the Prices of Goods Act gives any real protection in this matter. Normally, articles which are sold in a shop are sold at prices which bear some relationship to their value and to the cost of production, but as everybody knows, patent medicines, which are so widely advertised, do not come within the cate- gory. The cost of production of patent medicines is a minute fraction of the selling price, and stuff that is sold at 1s. a bottle may contain material which probably cost one farthing a bottle to produce. There is an appalling discrepancy between the cost of production or value of the article and the selling price, and no guarantee that is made can give any adequate protection to the community. People buy patent medicines because they are widely advertised, and the price and the value have no relationship to their sale. How can any protection be given?

Sir Francis Fremantle (St. Albans)

I want only to say a few words to express the view of those who, for many years, have pressed for the repeal of these Medicine Stamp Duties. We now come to the climax of this campaign, and I think all those who have worked with me will agree that we see the end of this anomalous legislation with great relief. In its place there is to be a series of measures of control which will be capable of stopping the iniquitous proceedings that have accumulated around those who have exploited a gullible public. That being so, I want to say that we agree to the passing of Clause 9 only on condition that other conditions are laid down for the complete and effective control of advertisements and the disclosure of the ingredients of medicines in order to give the public the truth, on which they can act or not act as they please. Our agreement to the passing of Clause 9 depends also on the effective carrying out of the scheme, and in connection with that there are certain additional Clauses yet to be discussed.

It is because of our confidence in the Minister acceding to our general wishes, in so far as that is practicable, that we agree to the passing of this Clause. However, this is a very serious provision to make, and we feel that, as we have said all along, the patent medicine business is one that is properly the subject for taxation. At the present time, this business is taxed under the Purchase Tax far more heavily than it was under the Medicine Stamp Duties, but we feel that, when the Purchase Tax is removed, as presumably it will be removed to a large extent when the war is over, there will still be a case for the continued taxation of medicines, as originally intended by the Medicine Stamp Duties, not in the form of Medicine Stamp Duties, but in some other way, and perhaps by means of a partial remission only of the Purchase Tax. After the war, if we are still in the House, we shall support any Measure which has for its purpose the proper taxation of this business. Under these conditions, those for whom I speak, both inside and outside this Committee, would, I think, support the passing of Clause 9.

Mr. E. Brown

Of course, when the repeal becomes effective it will be for the trade to justify themselves to the public. I have no doubt whatever that the very powerful intervention by the hon. Member for Leigh (Mr. Tinker) will make the public aware of the effects of the repeal of the Stamp Duty.

Mr. J. Griffiths

Do I gather from the Minister that it is for the trade to justify themselves to the public? Surely if taxation is remitted the trade should satisfy the Government that they are not still charging to the extent of that taxation?

Mr. Brown

Perhaps my hon. Friend will wait a little while, as I can only deal with one point at a time. It is fundamental when Parliament passes legislation which has a certain effect, that those concerned should take action and justify their action in public. I would point out to the hon. Member that, whereas the Revenue loses about £800,000 on this repeal the Chancellor has already clapped on £3,000,000 by way of Purchase Tax. My hon. Friend will see that the £3,000,000 which the trade have to bear is almost four times as much as they paid in Medicine Stamp Duties. The Government will keep in mind the views of the Committee, but the Minister of Health cannot be expected to express a view on what the Chancellor of the Exchequer may or may not do in any particular Budget. The bulk of the representations made to me since it became my duty to go into this vast and formidable subject, have not been on the same lines as the argument of my hon. Friend the Member for Leigh. It has been the other way round, namely that unless some measure of control was introduced the country might be flooded with cheaper medicines, not that medicines might be dearer. I have noted my hon. Friend's point, and I have no doubt that the Chancellor will watch the position with due regard to the state of the Exchequer and to the public interest.

Mr. Tinker

In the course of his remarks the Minister mentioned the figure of £3,000,000 borne by the trade. If the trade has had to bear that figure I will give them all credit, but have they had to bear it?

Mr. Brown

I should not like that to be taken too literally.

Mr. J. Griffiths

It has been passed on.

Mr. Brown

The whole of the industry, from the manufacturer downwards, has been affected by it.

Question, "That the Clause stand part of the Bill," put, and agreed to.