HC Deb 18 June 1941 vol 372 cc746-63

Arrangements shall be made by the Commissioners to exempt from the Purchase Tax—

  1. (1)goods purchased by each person up to a maximum of twenty pounds for each financial year;
  2. (2)goods purchased to replace losses through enemy action. —[Mr. E. Smith.]

Brought up, and read the First time.

Mr. Ellis Smith (Stoke)

I beg to move, "That the Clause be read a Second time."

I am sorry that circumstances may make it difficult for me to obtain support, which might otherwise have been forthcoming, for this reasonable proposal, and which, I think, would have been sufficient to enable it to be carried. A number of lion. Members have said that they regretted they could not be present because of meetings taking place in various other parts of the House. Upon a proposal of this character it is unfortunate. The Clause which was last dealt with settled the principle of the Purchase Tax, and the principle is not at stake at this stage of the discussion. The proposed new Clause raises two aspects of the administration of the principle. A number of hon. Members have had Questions upon the Paper in which they have appealed to the Chancellor of the Exchequer to do something of this character, and I hope they will support my proposal. If the Chancellor is not prepared to give way, I hope that those hon. Members will back their Questions to the logical conclusion and will support the proposed new Clause in the Division Lobby.

When first this proposal appeared upon the Amendment Paper, hon. Members in several parts of the House said they did certainly support it if it were administratively possible. I immediately said: "This is being done in Germany." Anyone who has followed the publications of the Royal Economic Society, and the articles which have appeared in its journal, will have noticed how the Germans have managed their economy. Fortunately, we now have in this country what some of us thought ought to be introduced a long time ago, namely, we are gradually working towards a comprehensive financial policy, and, as a contribution to it, the coupon rationing system has recently been introduced. This system has simplified the administration proposed in the new Clause, and therefore the difficulties of administration have been cut out entirely.

I agree that in war-time, and especially with modern war, it is necessary to restrict consumption as far as possible. I also agree that it is necessary to cut out luxury consumption in every possible way, but many people can only afford bare necessities, particularly the people for whom I speak—and I desire to speak only for them. There are replacements which these people must have from time to time. The proposed new Clause is very restricted and is most reasonable. It is designed to meet the needs of the people with whom we are closely associated. Ministers and others defended the imposition of this tax on the ground that it was a levy upon luxury purchases, but, as I walk round Knightsbridge and the big stores in Manchester, London and other centres, I am forced to ask the Financial Secretary to the Treasury whether the tax has resulted in fewer luxuries being purchased.

I can answer for the ordinary people. I know the effect which the tax has had upon them, and my knowledge is borne out by statistical evidence that has been provided for us. It is estimated that it costs the average family 2s. 6d. per week, when the full effect of the tax is felt. I will give a few examples of the effects that cannot be calculated. I should like lion. Members to listen to this evidence. It comes direct from the homes of the people. It is a common practice among ordinary people to buy piece goods, on which they have to pay Purchase Tax. In order to carry out their domestic affairs as economically as possible, they have to make up the piece goods into dress, costume or coat. On goes the Purchase Tax again. It has been the custom to buy hat and coat together for young children. When a friend of mine lost all he possessed a few months ago in an air raid, he had to fix up his children with clothes, which are not subject to Purchase Tax, but he could no longer buy hat and coat together, because the hat is now classed as millinery; and on goes the Purchase Tax.

The £20 contained in the proposed new Clause is a calculation of my own. I consider it the minimum reasonable figure to put down. Since the proposal has been on the Paper I have read once again the Ministry of Labour's investigation into weekly expenditure in working-class households, and I find that my figure is confirmed by that report. The report states that the average family should be allowed approximately £75 a year, free of Purchase Tax, for replacements alone. Our proposal is reasonable; it would allow a family of three people £60 per year.

I will give a few examples of the increases due to the tax, and I ask hon. Members to remember them, when considering the matter. It: states in this report— and these words are similar to those used by the financial advisers to the Treasury — that the smaller a person's income the greater is the proportion spent upon consumption. I hope that the right hon. and gallant Gentleman will be good enough to listen to this argument, because it applies most particularly to us in the industrial centres. "The smaller a person's income, the greater proportion is spent upon consumption." If that is acceptable, it logically means that this tax hits the poorer people harder than any others, and here are a few examples of how wholesale prices—not retail prices— have gone up as a result of the Purchase Tax alone, not through any other costs having been added to them: Shoes 2s. 8d. per pair; hats, 2s.; a yard of casement curtaining, 8d.; a yard of winceyette—which means so much to the ordinary woman—3d. per yard; rayon, 8d.; a dozen cups and saucers, 2s.

The Financial Secretary says that under the war damage provisions people can go to the Assistance Board and make claims for losses they have sustained. I attended a meeting recently where strong indignation was expressed as a result of experiences of this kind. Fifty of the men represented there had lost the whole of their tools, in a certain area which shall not be mentioned, and the Financial Secretary should have heard the indignation expressed at the way these men have been treated—how the value of these tools was put right at the very minimum so that third-class tools had to be purchased. This is evidence of the effect upon our people of the way in which this is administered. We say there is only one right way to deal with this, and that is to make it perfectly clear to the people of this country that every purchase made under£60 per year per individual will be free of Purchase Tax. Remember there is always a lot of wrangling when compensation is being claimed, for people are sent to investigate who are well experienced and have great confidence, but when our people go before them they lack experience in dealing with public officials and public affairs. They are accustomed to putting down minimum figures and are not: used to business transactions in which it is necessary to add a few pounds in order to be certain of getting what you want. If, therefore, a person is bombed out and receives £50 compensation, as a result of this tax he can buy furniture and clothing to the value of only £37 10s. to replace what he has lost.

Throughout their lives our people have had a struggle to put together the homes they are proud of. They like to maintain their standard as far as possible, and even in war-time, from the point of view of maintaining their moral, we ought to do everything we possibly can to be sympathetic towards people who find themselves in such circumstances. They have nothing to play with, all their eggs are in one basket, and if they are not getting an income from the husband who is working, or if they lose their all, they have no bank balances to draw upon, no cheques to write. They can only just manage, and their purchases are, in the main, for replacements and should not be classed with luxuries as they are in a Purchase Tax of this kind.

In regard to replacements that have to be made as a result of loss through enemy action, the facts speak for themselves. I want it to be made quite clear that I am not now speaking critically of the people of this country. Generally speaking, it is the industrial centres and the seaports which have suffered most severely as a result of enemy action. The people in those areas are not complaining, because they realise that it is the result of modern war, but we in this Committee ought to be most careful that we do not place unfair or unnecessary burdens upon them. Some hon. Members may think there is not as much in this as I am trying to say. If they do, let us go out of our way to make it clear to these people that we want to deal with them as sympathetically as we possibly can, and make it quite clear that in circumstances of the kind I have described the Purchase Tax will not be applied to them.

Mr. Chater (Bethnal Green, North-East)

I desire to support the remarks made by my hon. Friend who has just sat down. In the second paragraph it has been found necessary that this Clause shall be substituted for one which stood in the name of myself and other of my hon. Friends. The second part refers to the exemption from Purchase Tax of purchases made by those persons who have suffered damage in their homes by enemy action. It seems to me that such a proposition must certainly commend itself to every hon. Member of this Committee. If the Members of His Majesty's Government could have had the experience, or would take the opportunity to gain the experience, of travelling through working-class areas for at least 15 miles around this great metropolis, and interviewing the families who have been bombed or burnt out, they would, like me, have had the experience of meeting families who, after a night raid, found themselves dispossessed of everything they had in the world. Such a family, on some very meagre allowance from the public assistance committee, have to go and make a few miserable purchases, just sufficient to enable them to live in a very minimum, not of comfort, but of discomfort. From people such as this a certain proportion of what they have received from the public assistance committee, in order to provide a few miserable sticks of furniture, is to be taken in the shape of Purchase Tax.

It is all very well for the Chancellor to say that a certain recompense will be made under the War Damage Act in days to come, or that some allowance is made now out of public funds for immediate assistance. But what is the real position? Suppose a person goes to the assistance committee and receives£5 for immediate necessities. I think IF would be generally agreed that that sum would buy another 25s. worth of commodities if there were no Purchase Tax, and therefore, in effect, the Chancellor and the Government are drawing revenue from the very disasters that overtake these people as a result of the war. I cannot help feeling that no arrangement which was entered into between parties in this House at the moment when this Bill was going through, or even at the time of its inception, should interfere with the freedom of Members of Parliament of any party, who discover certain injustices in the operation of a certain tax which could not Have been foreseen at the time the Bill was going through the House, to try and remedy grievances of that description. I want to insist as emphatically as I can that even if this Clause is taken to a Division, no one has the right to claim that that means disloyalty to the National Government or to any of our comrades who have left this side of the House an3 now sit on the other. It is the common right of every Member of Parliament to try and remedy a grievance, and if by any political arrangement whatever, we are to be barred from trying to bring these grievances to the notice of Parliament we have become mere automatons instead of Members of Parliament. Therefore I appeal on grounds of humanity, on grounds of justice, and on the ground that here is a grievance, not foreseen, which there is now an opportunity to remedy, that this Clause should be accepted by the Government.

Captain Crookshank

No one agrees more than I do with the hon. Gentleman in saying that the job of Parliament is to remedy grievances. We have our different ways of dealing with these problems. This Clause covers two quite different aspects. He wishes arrangements to be made whereby everybody should be exempted from Purchase Tax for goods purchased to a maximum of £20 a year. The second proposition is that people should be exempted from Purchase Tax on anything which they have to replace due to losses through enemy action. That is quite another matter. Let me take his first proposition, that everyone should be exempted for goods purchased up to a maximum of £20. Leaving aside for a moment the general issue of the Purchase Tax, which we discussed on the last two Clauses—that we cannot afford now to have any relief from that burden at the present time—let us look at the proposition from the point of view of its practicability. How in the world could it be carried out under the existing structure of the Purchase Tax? Exemption is asked from a tax which already exists? There are two rates, the full rate and the half-rate, and there are goods which are not taxed at all. The hon. Member made no reference to how any scheme could be worked out to meet his proposition.

Mr. E. Smith

I am sorry I did not deal with that. I did not expect the matter to be raised in this way. The coupon system has now been introduced. What is to prevent the Commissioners from making arrangements so that people, by making application, could have £20 of coupons which they could place before those from whom they were purchasing goods and, to that extent, their purchases would be free of Purchase Tax?

Captain Crookshank

That suggestion certainly requires a great deal of exploration, because coupons are applied only to clothes at the moment. The hon. Member's proposition is not limited to clothes, but covers everything. If we envisage coupons for everything in order to deal with this problem, the hon. Gentleman is really asking us to undertake a perfectly fantastic administrative task. I think if he reflects upon it he will see that that is so.

On the other point about the exemption from Purchase Tax for goods purchased to replace losses due to enemy action, I have already pointed out just now that the difficulty of immediate replacement of necessities has been met by the War Damage Act, and the arrangements which have been made for immediate payment, with regard to the general replacement of property, furniture and other goods, again come under Part II of the War Damage Act. Very large payments can be made under that Act for buying furniture and setting-up a house again. The hon. Member says that people would like to maintain the same standard as they had before. We should all like to do that but it must be realised that we are in the middle of a war and that very few people will be able to do that. As far as imme- diate necessities are concerned the point has been met. When the hon. Gentleman says that it has not been met very well in particular cases and speaks about what some 50 men stated at some office last Saturday, I am perfectly prepared to say to him in respect of any cases that come to his notice—as has happened in the case of many hon. Members—that if he likes to ask me to make inquiries I will certainly do so. I have had a lot of correspondence with Members and it has been my experience—I am sure it is not true of constituents of the hon. Member—that in dealing with constituents of other hon. Members there has not always been that strict honesty and rectitude on the part of the applicant he seems to think is the case.

Mr. Gallacher (Fife, West)

There is, in general.

Captain Crookshank

I quite agree, in general, but in particular cases there are people who try to get all they can whether they are entitled to it or not. If there are any difficulties in particular cases which the hon. Member and other hon. Members have in mind, I shall be glad to look into them. In so far as payment is made in cash, it is made in the light of replacement costs at the moment. When the hon. Member says that a man gets £5, and that if there were no Purchase Tax he would be able to purchase 25s. worth more goods, I should think it is the other way round, because payment would be 25s. less. Replacement value is a factor which is taken into account in assessing the claim of the applicant. An applicant is not given the money for what £5 will buy; he is given it because it is thought that the sum is the replacement value now for the necessities that have been lost.

Mr. Lipson

Is the argument of the right hon. and gallant Gentleman that it would cost the Government and the country nothing to make this concession because they are meeting this through the War Damage Act?

Captain Crookshank

What is done is that there is a payment made to replace necessities taking into account replacement costs at that moment and that is all there is to it.

Mr. Lipson

Am I right in assuming that the right hon. and gallant Gentleman's argument is that it would not cost the Government anything to make this concession because they are already paying for the Purchase Tax through the War Damage Act?

Captain Crookshank

To that extent, that might be one way of putting it. It is quite another thing to change the structure of the Purchase Tax for other reasons. In hardship cases the point is met by the payment which is made to the applicant, but to say that we should make arrangements for removing the Purchase Tax on goods purchased to replace losses is quite another matter. Payment is what is required for immediate necessities. The general proposition refers to goods purchased to replace losses of every kind, whether immediate and necessary or not. That is quite another point. For immediate hardship cases the matter is met by the amount now paid out. I am sorry if the hon. Member is disappointed, but I am sure he did not think it would be possible, in view of the Purchase Tax situation, for the Chancellor to be able to make a concession in this manner, the working of which would necessitate an enormously complicated administrative machine.

Mr. Gallacher

Is it not the case that where applicants overstate their losses, they are generally found to be supporters of, and often to have been corrupted by, the Tory party?

Mr. Silverman (Nelson and Colne)

I think the Committee is entitled to complain of the complete frivolity with which the right hon. and gallant Gentleman has met the perfectly reasonable case put forward by my hon. Friend. That frivolity does not do justice to the argument which has been presented, and, if the right hon. and gallant Gentleman does not mind my saying so, it does not do justice to himself. My hon. Friend's argument was divided into two propositions. The first was that purchases amounting to £20 per person per year should be exempt from the Purchase Tax altogether, and the second was that replacement of losses by enemy action should not be subject to the tax. What did the right hon. and gallant Gentleman say with regard to the first proposition? I did not understand him to advance a single argument against the principle. By his silence, he apparently concedes that the case is reasonable. [Interruption.] He said nothing to the contrary: not one word. He said that the Government could not consider granting this, because it was beyond his ingenuity to imagine any way in which it could be made operative. When my hon. Friend intervened to suggest a perfectly simple and practicable and easily-operated method whereby the principle could be put into operation, the right hon. and gallant Gentleman left the point, and said no more about the rights and wrongs of it or about its practicability. We must assume, therefore, that it is practicable.

Captain Crookshank

No.

Mr. Silverman

If you do not attempt to meet a man's argument, and then, when you are challenged to say whether your silence means that you agree with it, you say, "Oh, no, I do not," that is a frivolous way of dealing with the argument. The figure of £20 a year is substantially below the figure which appears in the Ministry of Labour's report of the amount normally spent by working-class people on the necessities of life. I think my right hon. Friend would have been perfectly justified in taking the figure mentioned in that report. He might have said, "We are not asking for treatment different from that given to other sections; we are asking only that if, by the misfortunes of war, people are singled out for special loss, that loss shall be equitably borne, and in so far as the victims have to bear any portion of the loss themselves they shall not have to pay a tax to the Government on the effects of Hitler's bombs." If my hon. Friend had chosen the figure in the report, that could not have been objected to; but he did not do so. He said, "We will bear a portion of this loss ourselves, although it is inequitable that we should do so."

If we go back to the origins of this tax we see how reasonable his argument is. A year ago it was said that we must have this tax for two reasons: in order to restrict consumption, and because the Exchequer wanted the money. Many of us on this side, especially my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) were concerned about it. My right hon. Friend was at great pains to point out that there was a conflict of purpose between those principles, that in so far as you succeeded in limiting consumption, you did not get the money, but in so far as you raised the money, you were not limiting consumption but increasing it. That seemed to me to be a logical dilemma and the Government did not get out of it. Various things have happened since. The limitation of consumption was not secured by the Purchase Tax and Limitation of Supplies Orders, and a wide extension of the rationing system was needed before consumption was reduced, and it is not yet reduced to such a figure as it will have to reach before this thing is through.

As far as raising the money was concerned, the logical step was taken—I did not like it but it was logical and inevitable—of lowering the limit at which Income Tax becomes payable. By the Purchase Tax you control consumption and put an extra direct tax upon these people and still you maintain the Purchase Tax after the purposes to be served by it have been served by other means. If the Government feel bound to maintain it, there are some exceptions which we are entitled to make. We say that you should go to the poorest section of the community, the people who would get the advantage of my hon. Friend's Clause and fix not the figure that they normally spend on necessities, but a substantially lower figure, and exempt them from Purchase Tax, in view of the fact that you have got more money from them directly, that their consumption is limited anyhow, and that at all times they consume very much less than other people. I put it to the right hon. and gallant Gentleman in all seriousness that his argument may be answered, but I do not think that it should be of such a nature that the Government should pass it by remaining completely dumb and silent. I leave that part of the argument there.

On the second part of the Clause which exempts from the Purchase Tax goods purchased for replacements, I would ask the right hon. and gallant Gentleman what he says about that. He says, in the first place, "You need not worry because the replacement of any necessities lost by enemy action in that way is already provided for and need not fall upon you at all. Go to your public assistance committee, who will give you enough money to replace them." If that argument is a sound one, it means, what my hon. Friend opposite asserted in his intervention, that it would cost the Government nothing to grant this concession. That must be so. If this concession would cost the Government something, what would be the cost? Obviously, it can only cost the difference between the value of the Purchase Tax in these circumstances and what the Government already provide. There is, therefore, that difference to be met. The truth is that this is not covered already. The replacement value that is given is subject to all sorts of calculations about depreciation. If a man has lost tools which he had had for five years, you do not give him the full cost that would enable him to go into the open market and replace them at to-day's figures. The right hon. and gallant Gentleman must not pretend in this Committee that public assistance committees do anything of the kind. If they did, the kind of indignation described by my hon. Friend the Member for Stoke (Mr. E. Smith) would not exist and let me assure the right hon. and gallant Gentleman that there is a great deal of passionate indignation about the handling of this kind of matter.

Supposing there were some cost to the Government on this arm of the Clause, it could only be very small and I do suggest that if the Government grant it the loss of revenue would be superabundantly made up in good will all over the country. It is very small concession indeed; it would cost little and would be of great worth in morale, temper and good will. My hon. Friend said something about loyalty to the Government and one's party and that kind of thing. Well, I cannot see that there has been any change in the merits of this case since my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) made his very powerful speech a year ago. The merits of the case have not changed since then. What has changed is the responsibility, and the share of responsibility, of different parties for Government policy and I cannot see why our opposition to the Government on this limited point, should be more embarrassing to the Government or to any members of the Government than the Amendment moved by my hon. Friend for East Ham South (Mr. Barnes) was embarrassing to the First Lord of the Admiralty.

I think we can dismiss considerations of that kind from our minds completely. The Committee should be realistic enough to deal with cases on their merits, as presented in argument and the inter-play of Debate. We are not in such a serious a set of circumstances that we are entitled to skulk behind anybody's back or behind an official Whip. If a case is made out let Members have the courage to vote as their conscience dictates. If anyone does that, I cannot see that he is doing a disservice to his party, to the House of Commons or to the country.

Mr. Lipson

I want to make a few observations with regard to the second proposal in the Clause now before the Committee—that the Purchase Tax should be removed from those articles which are bought to replace loss caused by enemy action. I must ask the Chancellor whether he does not agree that, in taxation, one has to consider to-day the effect on public morale of any action which is taken. I consider that there is nothing more dangerous to public morale than that when people are bombed out of their homes and lose everything, they should have to replace articles upon which the Government have imposed taxation. The effect on morale is not confined to the individuals concerned; the matter is talked about and generally has a disturbing effect which is quite out of proportion to the financial considerations involved. But the Financial Secretary replies, "These people are no worse off because under the War Damage Act they are given a sum of money in which the Purchase Tax is taken into consideration" Do they really understand that? When they go to buy something, all they know is that if they want to buy something for £37 10s., there is a Purchase Tax of £12 10s. on it. If, as his argument implied, although it was challenged in some parts of the Committee, it would cost the Government nothing, it would be a more effective way of dealing with the problem to say that these goods will be free from the Purchase Tax, so that a person can buy to the full amount, apart from any Purchase Tax.

Therefore, I ask the Financial Secretary whether he will not agree to accept the principle of the second part of the Clause, and try to work out how it can be put into effect at a later stage of (he Bill. I must say to the Chancellor that if he is going to insist on the Purchase Tax being paid on articles that are bought to replace those which are destroyed by enemy action, he will place himself in a very difficult moral position. He will be financially interested in the success of Hitler's bombers. The more damage they do, the more money he will recoup under the Purchase Tax. I am not a lawyer and I do not know whether, when Hitler and his accomplices are tried, the Chancellor will have to be tried also as an accomplice after the event, or for having shared in the spoils; but strong as is the argument that we should take the profit out of war, even stronger is the argument that the Chancellor should not take to himself the opportunity of getting any profit out of the sufferings of people who have been bombed by the enemy. I appeal to him to accept the principle and see whether the arguments which have been advanced from various sides of the Committee cannot be accepted.

Mr. R. C. Morrison (Tottenham, North)

I have been in the House long enough to know that once the Financial Secretary has replied to a Debate, there is not the slightest chance of his changing his mind, but there is one point I want to put to the right hon. and gallant Gentleman. Although the Treasury may not be prepared to accept this Clause, they ought immediately to direct their attention to the question whether there cannot be an entirely different attitude towards people who have had their property damaged by enemy action from that which is taken to-day. We have heard sometimes about the Ministry of Information sending round special gangs of investigators to find out what is the attitude of the people to the Sunday opening of cinemas, and things of that sort. I suggest that the Ministry of Information ought to send round bands of people to cross-examine people about their experiences in the matter to which I am referring.

If the Financial Secretary could have the opportunity of listening to the plain and unembellished stories which these people tell when they come before the officials who have to assess the amount of damage, he would be surprised. Hundreds of these people are interviewed, and they seem to have the impression—and all of them cannot be mistaken—that when they see the officials, they are treated as if they had committed some crime. For instance, a person is asked, "How much did your coat cost?" The reply is given "£2 10s."—"How long have you had it?"—"About 18 months."—"Then it is not worth £2 10s. now but only about 10s. or 15s.; if you have had it all that time, you have had good wear out of it." Finally, the amount is fixed, and if it is ultimately decided that the sum shall be only 15s., and the person gets that sum, plus the Purchase Tax, he or she cannot get a replacement of the article lost. The Financial Secretary to the Treasury should use his influence to see that something is done about the way in which these claims are considered.

Mr. Silverman

Does the hon. Member not realise that no amount of good will on the part of the investigators, and no amount of change of attitude would really produce the effect he desires, unless there is this change in the law?

Mr. Morrison

I am simply putting the point to the Financial Secretary to the Treasury. This war may be won or lost by the side which keeps up its morale the 'best, and I know of nothing—and I am speaking as a representative of a constituency where a great number of houses have been damagd by enemy action—which will discourage people more, and cause more discontent, at a time when they are keeping up their spirits wonderfully, than this kind of thing. It does get them down. If the Financial Secretary is obdurate and does not intend making this concession, I hope he will not leave the position as it is, but that he will look into the disastrous effect this assessing of damage is having on the morale of the people.

Captain John Dugdale (West Bromwich)

I happen to be serving at the moment with troops in an area which has not been bombed but every day I see men having to go back on compassionate leave because their homes have been destroyed by enemy action. I have been able to see the effects on people whose homes have been destroyed. An appeal has been made on behalf of every class of the community, and I would make a special appeal on behalf of serving troops, sailors and airmen. It may be that in certain cases wages have gone up, but the wages of soldiers, sailors and airmen have not risen to anything like the extent to which prices have increased. Their wages have remained much about the same. There have been certain increases, but, in general, it may be said that their wages are insufficient to allow for any appreciable savings. They cannot save to provide against the sudden destruction of their homes. To add to the cost of replacing these homes by the imposition of a special tax is unfair to them, and will not in any way help to improve their morale. I hope the Chancellor will recall that when this tax was originally imposed we had not experienced anything like the amount of bombing which has since taken place. We did not quite realise what the problem would be. We envisaged perhaps a greater loss of life, but not nearly so much loss of property. The Chancellor can, by a very small sacrifice, get good will among all classes of the community, and not the least among serving members of His Majesty's Forces. He is a man, I understand, with sound business instincts. Surely ft will appeal to him to get that greater good will for so small a sacrifice?

Mr. Gallacher (Fife, West)

Very few speakers have referred to the first part of the new Clause. I remember, during the Second Reading Debate, drawing attention to the fact that this was not a revenue-producing tax but a poverty-producing tax. As the Mover of the new Clause so clearly demonstrated, it is the poorest who have to bear the heaviest burden, because the biggest proportion of their incomes goes on those purchases which are taxed. When a proposition is made for a taxation limit on incomes, the Financial Secretary asks how it is going to work, but when it comes to getting money out of the workers, he knows how to go about it. All you have to do is to use coupons for clothes, boots and shoes.

There is no reason why, if hon. Members have any concern for the poor people of the country, the first part of the Clause should not be accepted. It is nonsense, humbug and trash to suggest that there is any equality of sacrifice or suffering. Everyone knows it is not true. Everyone

Division No. 20.] AYES.
Barnes, A. J. Hannah, I. C. Sloan, A.
Broad, F. A. Harvey, T. E. Stokes, R. R.
Buchanan, G. Leonard, W. Taylor, H. B. (Mansfield)
Chater, D. Lipson, D. L. Watson, W. McL.
Daggar, G. Maxton, J. White, H. Graham (Birkenhead, E.)
Dugdale, Captain John (W. Bromwich) Morrison, R. C. (Tottenham, N.) Wilson, C. H. (Attercliffe)
Dunn, E. Price, M. P.
Edwards, N. (Caerphilly) Roberts, W. TELLERS FOR THE AYES.—
Gallacher, W. Silverman, S. S. Mr. Ellis Smith and Mr. Woods.

knows that the heaviest burdens are placed on the suffering. What the hon. Member for North Tottenham (Mr. R. C. Morrison) says is quite right about those who are affected by replacement. The Financial Secretary was deliberately trying to fool the Committee. He gave the impression that those who investigate the position provide the money to get the necessary replacement at the prices operating to-day. It does not work that way. People are asked what they paid for their clothes and how long they have had them. With the money that they are given, and with the Purchase Tax on top of it, replacement of the articles is out of the question. The money that the Assistance Board pays out comes from the Exchequer, and you have the foolish, expensive process of handing out money to a particular individual and, when he has spent it, a lump of it is drawn back by the Chancellor. That is a most expensive and extravagant way of carrying on business. The hon. Member said that those who go to see these officials are treated as if they had committed a crime, and I agree with him. When the hon. Member for Dumbarton Burghs (Mr. Kirkwood) said that bombed-out people were treated as criminals he was subjected to an unprincipled attack from the Tory side. Some of the officials are all right, but the general attitude is that, having such a Chancellor, such a Financial Secretary, and such a Government, they have to cut down expenditure to the very minimum. That is what has happened, and these people are treated as though they had committed a crime. The Clause would not cost the Treasury a great deal of money, and it would create a very great feeling throughout the country that some effort was being made to consider the feelings of the bombed-out people and to help them to make their way along the rough road of life.

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes, 24; Noes, 97.

NOES.
Adams, Major S. V. T. (Leeds, W.) Heneage, Lt.-Col. A. P. Rickards, G. W.
Adamson, W. M. (Cannock) Holdsworth, H. Ridley, G.
Albery, Sir Irving Hurd, Sir P. A. Robertson, D. (Streatham)
Aske, Sir R. W. James, Wing-Comdr. A. W. H. Royds, Admiral Sir P. M. R.
Beamish, Rear-Admiral T. P. Jarvis, Sir J. J. Russell, Sir A. (Tynemouth)
Beechman, N. A. Jeffreys, Gen. Sir G. D. Salt, E. W.
Bossom, A. C Jewson, P. W. Samuel, M. R. A.
Boulton, W. W. Jowitt, Rt. Hon. Sir W. A. Sanderson, Sir F. B.
Brabner, R. A. Kerr, Sir John Graham (Scottish U's) Scott, Donald (Wansbeck)
Brocklebank, Sir C. E. R. Lamb, Sir J. Q. Seely, Sir H. M.
Brooke, H. Law, R. K. Shaw, Capt. W. T. (Forfar)
Cadogan, Major Sir E. Lindsay, K. M. Sinclair, Rt. Hon. Sir A.
Campbell, Sir E. T. Little, Dr. J. (Down) Smith, Rt. Hon. H. B. Less- (K'ly)
Carver, Major W. H. Loftus, P. C. Strickland, Capt. W. F.
Cooke, J. D. (Hammersmith, S.) Lyle, Sir C. E. Leonard Stuart, Lord C. Crichton- (Northwich)
Crookshank, Capt. Rt. Hon. H. F. C. McEwen, Capt. J. H. F. Stuart, Rt. Hn. J. (Moray and Nairn)
Culverwell, C. T. McKie, J. H. Sutcliffe, H.
Denman, Hon. R. D. Magnay, T. Tate, Mavis C.
Duckworth, Arthur (Shrewsbury) Maitland, Sir A. Thomas, J.P. L. (Hereford)
Erskine Hill, A. G. Makins, Brig.-Gen. Sir E. Touche, G. C.
Foot, D. M. Mander, G. le M. Wardlaw-Milne, Sir J. S.
Fraser, Capt. Sir Ian Mayhew, Lt.-Col. J. Webbe, Sir W. Harold
Fremantle, Sir F. E. Mellor, Sir J. S. P. (Tamworth) Whiteley, W. (Blaydon)
Goldie, N. B. Munro, P. Williams, Sir H. G. (Croydon, S.)
Graham, Captain A. C. (Wirral) Naylor, T. E. Windsor-Clive, Lt.-Col. G.
Granville, E. L. O'Neill, Rt. Hon. Sir H. Wise, A. R.
Greenwood, Rt. Hon. A. Paling, W. Wood, Rt. Hon. Sir K. (W'lwich, W.)
Gridley, Sir A. B. Peters, Dr. S. J. Wootton-Davies, J. H.
Griffiths, J. (Llanelly) Pethick-Lawrence, Rt. Hon. F. W. Young, A. S. L. (Partick)
Grimston, R. V. Peto, Captain B. A. J.
Hammersley, S. S. Pym, L. R. TELLERS FOR THE NOES.—
Hannon, Sir P. J. H. Rankin, Sir R. Major Dugdale and Major Sir
Harris, Rt. Hon. Sir P. A. Reed, Sir H. S. (Aylesbury) James Edmondson.
Henderson, J. J. Craik (Leeds, N.E.) Reid, W. Allan (Derby)