§ Motion made, and Question proposed, "That the Clause stand part of the Bill,"
§ Mr. Barnes (East Ham, South)I am sorry to interrupt for a few moments the progress we were making, but I want to put a question to the Chancellor of the Exchequer for the purpose of eliciting information as to the intentions of the Treasury. The Clause says:
The Commissioners may, where it appears to them to be requisite for the security of the revenue so to do, impose, as a condition of issuing a certificate of registration to a registered person … a requirement that he shall give security up to an amount and in a manner approved by the Commissioners for the payment of the tax.That refers to the Purchase Tax, but I think it applies also to the Entertainments Tax. My point is that the Treasury are imposing upon the wholesaler, who is the collector of the taxes now, the added responsibility of putting up security for the revenue which he is collecting for the State, and there is some anxiety, or at least enquiry, as to the extent and the form of the security which will be required. On the face of it, it seems a little unfair that a trader who has had imposed upon him the functions of a tax collector and has to add to his capital commitments for the purpose of carrying the tax burden, is now in addition required to find some security. It transfers a burden which would normally fall upon the Treasury to the individual trader. I am not raising this point in a carping spirit, because probably it is difficult to avoid some action on these lines, but I should like to know whether the experience of the Treasury indicates that there is any great number of firms or companies who have not proved to be substantial and that that warrants the action which is proposed.
§ The Chancellor of the Exchequer (Sir John Anderson)I think I can explain this matter quite briefly. Under the Purchase Tax provisions a registered person, by using his certificate of registration, can purchase goods tax free from other registered persons, but he is required to account for the tax on disposing of the goods to non-registered persons. Under the law as it stands there is no power to refuse registration to a trader. No question arises in the ordinary case, but under war conditions a type of trader has come into existence—no doubt they are a small minority—who has no substantial position in regard to the trade in which he is engaged, and there is a danger that such a person, having used his registration certificate to obtain goods from other registered traders without payment of tax, may dispose, of the goods and disappear before he has discharged his obligation to the Revenue for the tax. The power is one which will be exercised with discretion in regard to persons whose suitability might appear doubtful. Experience has shown the necessity for it. It is not a very novel procedure, because it is quite usual to require security from traders who are dealing with revenue goods, and I submit to the Committee that the provisions of the Clause are justified by experience, are necessary to safeguard the revenue, and are such as the Committee may without hesitation concede.
§ Question, "That the Clause stand part of the Bill," put, and agreed to.
§ Clauses 15 to 18 ordered to stand part of the Bill.