HC Deb 17 April 1946 vol 421 cc2774-91

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."

Mr. Stanley

May I ask, Mr. Speaker, whether it is your intention to select any of the Amendments that are on the Order Paper?

Mr. Speaker

I think it is a question of calling all or none, and that it would be better if they were taken on the Committee stage of the Finance Bill. They could have no effect now, because there can be no question of reduction in taxation coming into this now.

Mr. Stanley

On a point of Order, Mr. Speaker. I gather that your Ruling is not on the ordinary question of selection between one Amendment and another, but a decision that on the Report stage of the Budget Resolutions, although we shall, no doubt, have many Amendments on the Purchase Tax, no Amendments are to he selected.

Mr. Speaker

On the Budget Resolutions this is not really necessary. This is not a question of raising money or reducing taxation, but of giving a general picture reflecting the Budget proposals.

Mr. Stanley

It provides a double opportunity, and it may be for the convenience of the House to discuss these matters now. It might mean that if some of the Amendments were selected now they could be discussed today, and that would leave further opportunities when we came to the Committee stage of the Finance Bill to discuss others. I noticed, Mr. Speaker, that you called an Amendment in the name of the hon. Member for Westhoughton (Mr. Rhys Davies) on a previous Resolution, after "music," insert "Eisteddfod." It would appear that that would also fall within the Ruling which you have given. This is not a matter of great importance, or one which affects taxation, but it would give an opportunity for discussion, at this stage, of a matter which otherwise would go in with a number of others. If particular Amendments can only be discussed on the Committee stage of the Finance Bill, it is not until we have the Finance Bill that we can see the necessity for them.

Mr. Speaker

I should have hesitated very much about moving any of these Amendments on the Report stage and getting a negative answer. If I had been Chairman of Ways and Means I should not have dreamt of selecting it. I should have thought it far better to act on the Committee stage of the Finance Bill because it gives the Chancellor of the Exchequer two or three weeks to consider the matter, by having it brought to his notice by seeing it on the Order Paper.

Mr. Stanley

I am much obliged for what you have said, Mr. Speaker. I hope that the Chairman of Ways and Means will read this in HANSARD. It would appear that when we are discussing this matter on the Committee stage of the Finance Bill all these Amendments can then be discussed.

Mr. Speaker

I have merely said what I would have done if I had been Chairman of Ways and Means. The Chairman of Ways and Means must be free to make his own selections uninfluenced.

Mr. Eccles

My Amendment on the Paper is to increase taxation—unpopular and unique though such a proposal is. Shall I have an opportunity, on the Committee stage of the Finance Bill, to raise it, if it is not called now?

Mr. Speaker

If it is to increase taxation, I should not call it because it would be out of Order.

Mr. Austin (Stretford)

Would it be in Order to put one or two arguments to the Chancellor of the Exchequer on these Amendments which have been ruled out of Order, with a view to the Chancellor giving them consideration?

Mr. Speaker

I have not said that they are out of Order. I have merely said that I have not selected them. It is open to hon. Members to raise any points they like and they will not be handicapped, by having had an adverse decision, in subsequent proceedings.

Sir A. Gridley

There is perhaps a little more in this, than first meets the eye. For example, I had an Amendment on the Order Paper which was not called, and I should have liked some indication from the Chancellor as to whether he would be prepared favourably to consider the suggestions contained in it in the Finance Bill. The value of a favourable indication now would be that those who are responsible for the production of the articles concerned would not lose even three weeks in placing orders for the raw materials to provide for housing, which, after all, is one of the most important matters with which this House and this Government are concerned at the present time. We have already heard from the Minister of Works how the housing programme is being delayed by the lack of household equipment and fitments, which are not coming forward in sufficient quantities and at the right time.

I was hoping that we might get from the Chancellor an indication that he would include in the exemption from tax suction cleaners, which I should have thought were absolutely essential for housewives in keeping their houses clean, and that he would also have exempted washing machines. I have often heard women say that those who deal with these things at the Treasury obviously know nothing of the difficulties of the housewife, otherwise they would deal differently with the problems with which they are faced now. Women often have no facilities for washing at home and they tell me that they have to send their soiled linen, at great expense, to the laundry and have to wait six, eight or ten weeks before it is sent back. If they had the facilities in the way of washing machines they could do it much better and more quickly at home. In addition to washing machines, irons should be exempted too to enable the women to finish off the job. Last autumn when I mentioned the need for exemption from Purchase Tax of kettles the Chancellor was good enough to promise that he would favourably consider the matter in this Budget. He has done so, but he has left out other things equally important and necessary for the convenience of the housewives. They have enough difficulties to face and we ought to do all we can to help them. I hope I shall get an indication from the Chancellor that he is prepared to make provision in the Finance Bill for what I ask.

There is one other point in connection with Resolution 7 which is really of some importance, and to which the Chancellor made no direct reference in his Budget speech. That is the problem of giving relief to the retailer for the tax which he has paid on purchasing goods which he may have had in stock at the time when the tax was reduced or cancelled. One of the difficulties which arise from this is that, although at the present time there is a shortage of some of these things, it still remains a fact that distribution of such things as are available is very unequal. In some parts of the country one can get things with comparative ease, but 50 or 60 miles away they are practically unobtainable. The result is that customers may refuse to purchase the goods that may be in short supply in one area, and will make arrangements to go and purchase them in another, where the supplies for the time being are more plentiful. This matter was discussed during the Debate on the Finance Bill last year, and I understand, rightly or wrongly, that discussions proceeded between the producer and the retailer and the Treasury officials to see if this difficulty could be overcome. I realise that this is not an easy thing to dispose of, and all I am asking is that the Chancellor will look at it and will give it further consideration between now and the passing of the Finance Bill. If I get that promise and also a promise in regard to the inclusion of further articles in the tax exemption I shall be satisfied.

7.45 p.m.

Mr. Austin (Stretford)

I should like to refer to Purchase Tax and exemptions in general without specifically mentioning any article. I do so on the premise that we on this side of the House represent the working classes, despite the superstructure imposed on us, by the Eton and Harrow backgrounds of some in our midst. Appreciating as I do the fact that Purchase Tax is a restrictive tax in times of short supply, I would point out that it bears most harshly on the working class.

Mr. Dalton

Harder than the Income Tax?

Mr. Austin

I believe a case might be made out to show that that is so, but I would be out of Order if I indulged in any arguments regarding Income Tax. I repeat, Purchase Tax is a restrictive tax on short supplies, and it is appreciated that it is applied for that purpose. However, it is a fact that in the main it does not affect the wealthy because they have the wherewithal to purchase whatever goods they like; nor does it affect the middle classes who are more or less in the same category. But I do submit that it affects the working classes. They have not the money available with which to buy articles, on which the Purchase Tax is still levied. I should like to adduce two points which I presented on the Finance Bill last November on this question. There are two main elements. First there is the Serviceman returning to civilian life with an all too small war gratuity. Sometimes, after six years of service, his total emoluments are £85, and he finds it impossible to set up a home on that sum with the Purchase Tax on household articles. Secondly, there is the question of reconstruction in every household as well as the reconstruction throughout the country. Every housewife after six years of war, of impoverishment and of trials has a right to buy household articles free of Purchase Tax. These are the two elements concerned, and, accordingly, I again plead with the Chancellor to con- sider these things favourably and exempt the lower range articles from Purchase Tax, thus lightening the burden on the working classes with which we on this side are concerned.

Mr. Carson (Isle of Thanet)

I should like to say a few words but I say them with a certain amount of embarrassment. I am aware that the Chancellor is in the very unpleasant position in having to say "I cannot" or "I shall not" to many suggestions. I am certain he does not like doing it, because his imposing exterior is matched by an even more enormous heart. I am certain he does not like always having to say "I will not" or "I cannot" Nevertheless, I do ask him to consider one point very seriously. I ask him to help one of the hardest hit sections of the community—hoteliers and the boarding house keepers in the country. These people in the so-called ex-defence areas suffered particularly, especially in regard to linen, towels and blankets, and they are in no position to buy at the present ruling prices. They have suffered badly during the war; they have made no profit; indeed, they have suffered loss over a number of years, and they have not the money now to buy in the open market. Those who were evacuated lost sheets and blankets, either through looting or theft, which were prevalent in my Division, the Isle of Thanet. Soldiers were there in large numbers, and it was impossible to take adequate precautions to see that property was safeguarded.

People were evacuated at a moment's notice, especially at the time of Dunkirk, and they left things in their homes as they were. When they came back they found that articles had gone. Where people did not evacuate, they had others billeted on them, and sheets were worn out. We have been told by the President of the Board of Trade that in the majority of cases it is impossible to issue priority dockets. If that had been possible the situation would have been met. For instance, sheets which can be obtained on priority dockets can be bought at an extremely reasonable price. But in the open market there is an enormous differentiation. I would remind the Chancellor that we in the coastal areas have a very important job to do. We are trying to provide holidays for the people of Britain, and we are in a difficult position. Often, hotels were bombed, or ruined by troops, and it would help us enormously if we could get some of the requisites we need to help us in building up our hotels and boarding houses for the holiday trade. I hope the Chancellor will grant this concession, and embody it in the Finance Bill when it comes before the House.

Mr. Dalton

With regard to the Purchase Tax generally, I am quite prepared, and, indeed, anxious, to collect from various parts of the House Members' suggestions as to what are the most urgent claims, either for the abolition of the tax altogether or a reduction of the rates. The Resolution which is before us, however, is in itself a reasonable advance—Members may think it does not go far or fast enough—towards the alleviation of the burden of Purchase Tax, partly by a complete remission of the tax on a wide range of articles, including household requisites and electric kettles in particular, on which I was pressed in my previous Budget by the hon. Member for Stockport (Sir A. Gridley). This Resolution provides for the sweeping away altogether of Purchase Tax over a wide range of articles of considerable importance to the housewife and to others, and for a reduction of the rate of tax on a number of other articles. It provides for a series of concessions which will cost, in a full year, £15¼ million, and £12 million this year. That money will be added to the purchasing power of the community.

I must be cautious on this matter. If I were to give way to the pleas which have been put forward so persuasively from all sections of the House, I should run a grave inflationary risk—and I am sure the House and the country would not wish me to do that. The next six months will be a testing time. If, during that time, we can get the upsurge I hope for—and for which there is a great deal of evidence—in the production of goods for the home market and for export, then things will look more hopeful in the Autumn and we may be able to contemplate that by that time a new outflow of goods will be available to meet increased expenditure on social services, postwar credits refunds and family allowances. In the next Budget I may be able, quite safely, without endangering the economic fabric of the country through inflation, to go considerably further than it would be wise to go now.

At this stage, the total additional relief I can give in regard to Purchase Tax must not be excessive. It must be strictly limited in terms of prudence. But I want to make it quite clear that I will, on the Committee stage of the Finance Bill, be prepared to make further concessions. They must not, however, add up to too large an amount. My mind is not yet finally fixed as to what I can best concede upon, and there will be opportunities, on the Committee stage of that Bill, for arguments to be deployed in favour of this or that concession, to which I will listen attentively. There are one or two directions in which I am inclined to hope that I can do a little, but the total must be limited.

Mr. Kirkwood (Dumbarton Burghs)

When will that be?

Mr. Dalton

On the Committee stage of the Finance Bill. If I may say so, I think Mr. Speaker's advice not to subject particular Amendments, at this stage, to debate, division, and perhaps defeat, was wise, because that would tend to rule them out. For instance, I make no special commitment with regard to electric irons, but they stand rather high in the list of further concessions, following on the concession already made in regard to electric kettles. If my hon. Friend the Member for North Bradford (Mrs. Nichol), who had an Amendment down today dealing with electric irons, had it rejected now, pending consideration of the whole group of proposals, that would have embarrassed me if I had felt that I was able, on the Committee stage of the Finance Bill, to agree to the concession. Therefore, I think that it is much better that divisions on particular items should not be forced today, and that I should have a little time to think further and to receive representations, which Members may care to make, in regard to items in respect of which they think concessions might be made. I promise to do what I think is reasonably safe to do, and not more.

With regard to retailers, I think they are very apt to exaggerate their own disabilities and difficulties. If the Purchase Tax is reduced or remitted, and a retailer has already paid tax on the stock he holds, he is under no obligation to reduce his price on that stock. The Board of Trade's price controls, which I know something about, provide that if the tax be remitted and the controlled price of the non-tax paid stock is correspondingly reduced, the price reduction, with the power of the law behind it, should not operate on stocks on which tax has been paid. I can assure retailers that there is no intention of treating them harshly or unreasonably in this matter. There is no doubt that retailers gain an advantage from a general tax reduction. If not, the only remedy for the retailers' grievance is never to reduce the tax, and if that is presented to them as an alternative, they do not jump at it. They gain much more on the swings than they can lose on the roundabouts, over a period of time. When a tax is reduced or remitted, trade increases and demand expands. I feel that the retailers are reasonably assured of fair treatment. I have made it abundantly clear that on tax-paid stock they are entitled to charge the same price as they would have charged if the tax had not been remitted or reduced. But I will look into the matter again and see whether there is any need to do anything further. I am inclined to think that there is no such need.

8.0 p.m.

I should like to make one general point about exemptions from the Purchase Tax. Almost all utility products are exempted from the Purchase Tax. As I mentioned in my Budget speech, the utility blanket has now taken its place in the list of utility goods, and is being exempted. Utility clothing, furniture, and goods marked "Utility" under the Board of Trade specifications, are exempted from the Purchase Tax. It was I who, when President of the Board of Trade, negotiated that with the late Sir Kingsley Wood when he was Chancellor of the Exchequer. Following our conversations, we agreed that, in order to encourage the utility lines of production and prevent the Purchase Tax from registering excessively on the cost of living index, into which these necessities of life entered very largely, utility productions should be, almost by definition, exempted from the Purchase Tax. I believe that is a thoroughly sound principle, and in so far as the Board of Trade produce further utility products, it will usually follow that they will not be subject to Purchase Tax.

My hon. Friend the Member for Stretford (Mr. Austin) raised the general issue of the Purchase Tax versus other kinds of tax. It would be out of Order for me to go too deeply into that question, but I will repeat in a sentence what I said in my speech at the end of the Budget Debates. I am absolutely sure—and I think I would get a majority in a vote at the end of any discussion in a local debating society composed of any group of thoughtful citizens—that much more importance is attached today to alleviating the burden of Income Tax. It is the Income Tax, much more than indirect taxation affecting the prices of goods many of which they do not want to buy, which concerns the people. This, of course, is opposed to the old-fashioned view, but I stand for the new outlook, and not for the old theories of generations ago.

Mr. Austin

The point I had in mind, with reference to the Purchase Tax, was the pathetic plight of a returning soldier who has a small gratuity, and who is not affected to any great degree by Income Tax, but who in very difficult circumstances is trying to set up a home on £40,£60 or £100.

Mr. Dalton

With him I am most sympathetic, but it will be found that, particularly when these new proposals come into operation, practically all the things which such a person wants to buy are free of Purchase Tax. A mink coat is not, but why should the mink coat of the millionaire's mistress be free of Purchase Tax? There is a large range of articles which really are not necessary for any reasonable life. Why should we debar ourselves, on the ground of some Victorian doctrine, from collecting taxation upon articles that are far outside the purchasing power of the working class? Why should not those people pay? Why should it all be lumped on to the workers in the form of direct taxation, as theorists sometimes demand and wartime Governments, to a great extent, endeavoured to bring about? Income Tax is the most vexatious of all imposts, and I shall continue to endeavour to lighten its burden on all sections of the community, and to give a preference to lightening Income Tax rather than to lightening the indirect taxation on things that are not really necessary. I hope it will be appreciated that we are moving forward prudently, and yet noticeably, in the direction of alleviating the burden of the Purchase Tax, by way of removing it from an appreciable range of goods and reducing the rate over a further considerable range. Between now and the Committee stage of the Finance Bill I will give careful thought to the various suggestions that have been made and which will be made in the course of further Debates on particular commodities. I give a definite undertaking to make some further reductions in the Purchase Tax. I must keep it within bounds, and I will do my best to arrive at a fair and reasonable conclusion as to what articles stand next in the reasonable priority for remission.

Mr. John Paton (Norwich)

With regard to direct taxation versus indirect taxation, is not the real point that indirect taxation is regressive in its incidence on the taxpayer, whereas direct taxation is not, and is the validity of that old argument refused now by the Chancellor?

Mr. Dalton

A tax which falls only on luxuries cannot be regressive upon those who are unable to purchase luxuries. With regard to the Purchase Tax, if Purchase Tax is increasingly restricted to luxury articles which are not bought by the majority of the people, it cannot be regressive on the majority of the people. I hasten to add that I think the arguments about regressive and progressive taxation cannot be usefully applied to single taxes. They can be applied only to the tax system as a whole. If, in the tax system as a whole there is a progressive tax on income, then the progressive character of the tax system will assert itself through this taxation, and there will not be a system that is regressive upon the general body of taxpayers.

Mr. Paton

rose—

Mr. Deputy-Speaker (Mr. Hubert Beaumont)

I cannot allow the hon. Gentleman to subject the Chancellor to a series of questions. The hon. Member must wait to catch my eye.

Mr. Butcher

I think the House welcomes very much the Chancellor's assurance that when we reach the Committee stage of the Finance Bill he will examine, subject to the limitation of safeguarding the Exchequer and preventing inflationary rises, such items as may be suggested to him. I venture to prophesy that there will be more suggestions than he is able to accept, but I ask him, in directing his mind to these matters, to endeavour to establish some definite line of principle and not to yield to what I would call pressure groups. I have examined Parts I and II of the Table, and I am bound to say that I cannot quite see the principle on which the Chancellor is working. The hon. Member for Stretford (Mr. Austin) made a clear case for the furnishing of the home of the ex-Service man. If the Chancellor will accept that as a principle, I am sure he will have the agreement of the whole House. Already certain items are exempted from the Purchase Tax—utility mattresses, utility blankets, and what the Chancellor euphemistically calls pots and pans. When we come to knives and forks, what about them? I have read Part I, and I feel that while hollowware of iron and steel may be exempted, a steel knife may attract tax because it is not hollow ware.

Will the Chancellor endeavour to establish it as a principle that, in the case of young people who are furnishing a home, or people who are re-equipping their home after the war, he will do all he can to see that everything they. may reasonably need is entirely free of Purchase Tax?

I do not believe that that is the principle upon which this Table has been drawn up. I believe it has been drawn up with a view to preparing what appears to be a rather impressive list without it costing the Chancellor too much money. There are other matters of principle upon which the Chancellor could approach this matter. The first is that nothing in the nature of luxuries should be allowed to escape tax at a high rate, but that is not the principle which the Chancellor has adopted. If the House will examine Part II it will be seen that player piano records are to be relieved of some part of their tax, but by their very nature they are of use only with a player piano, which is one of the more expensive forms of instrument, not likely to be found in a working-class home. The Chancellor is not maintaining the principle of keeping tax at a high rate on luxuries.

Another principle, on which the right hon. Gentleman could have worked, is to exempt those articles in the greatest demand by working-class people with the lowest income. That is a principle which I would endorse if it were enunciated in clear terms, but the Chancellor has not done this. The exemption he has given applies not to things which are purchased by the working classes but, for example, to lawn mowers—

Mr. Dalton

A good many working-class people have gardens.

Mr. Butcher

I do not dispute that, but I am thinking of the very poorest section of the community whom the Chancellor does not appear to have considered. He has allowed his mind to wander on the subject of the millionaire's mistress in her mink coat, but has not thought of the poor woman with several children. He has not exempted the bucket and spade with which the children will play on the sands this summer. Why should not children's toys be exempted before garden rollers and lawn mowers? Why does the Chancellor draw up the list in this way? Surely, the children have had a bad enough time in this war to warrant the exemption of their toys before garden rollers or public clocks. I really do not understand this Schedule. For example, "clocks designed for use as public clocks" are to be exempt, but garden furniture, not being garden ornaments, is not to benefit from the tax reduction. What is a sundial? Is it a public clock, is it garden furniture, or is it a garden ornament? How is the Chancellor's mind working in these matters?

I am very glad that the right hon. Gentleman has said that he is prepared to examine these various suggestions as they are put to him, and I know he will honour the pledge. If we must have this —in my view—thoroughly undesirable Purchase Tax for a further period of years, we should not exempt articles as such. What we must do is to exempt groups of articles which affect certain sections of the community. The principle upon which I suggest that the Chancellor should work is that the first claim for exemption and abatement of tax must be for those articles which are required by the young man and his girl as they establish their new home. If the right hon. Gentleman were to proceed in this way he would be working on principles which commend themselves to the whole House. Finally, I would urge once again that he should do all he possibly can to make sure that children's toys are also free from tax up to a certain limit.

8.15 p.m.

Mr. Godfrey Nicholson (Farnham)

I want to induce the Chancellor to be a little more explicit about his general attitude towards Purchase Tax. In his effort to be conciliatory this evening he has indicated, or hinted, that he dislikes the whole business, and that he looks forward to the day when, by the last of a series of concessions, Purchase Tax will he swept away altogether. In the next breath, in a sort of debating society manner, he is all in favour of modernity and of indirect taxation which is, in fact, one of the most antiquated forms of taxation in the world and, I should have thought, one of the most deleterious. When the right hon. Gentleman made his Budget speech he said he did not regard Purchase Tax as temporary but thought it had come to stay. He wanted it for two reasons; so far as I can see they are, first, in order to help to pay the bill for social betterment. I could tell him how to raise a good many more million pounds without recourse to the Purchase Tax.

Mr. Dalton

How?

Mr. Nicholson

If the Chancellor is good I will tell him at the proper stage in the Bill. [HON. MEMBERS: "Tell us."] It would be entirely out of order for me to do that now. As his second reason the Chancellor added that he liked the tax because at present it "mops up "purchasing Power. I think the House is entitled to be told by the Chancellor whether he thinks this is in essence an objectionable tax, only to be justified by the circumstances, or whether, when he said it had come to stay, he meant that it is to become a permanent part of our fiscal system and part of the wonderful superstructure of indirect taxation to which he looks forward. I hope the right hon. Gentlemen will enlighten us on this point because I believe it to be important.

Mr. Maude (Exeter)

I should like to do what we have been encouraged slightly to do by the Chancellor, namely, to call attention to certain matters which we believe are important at this early stage, although not on the principle that the early bird catches the worm. I should like to draw attention particularly to the fact that if we look at the Table in Part II we find that the greedy are provided for with vacuum flasks, and the corpulent with garden rollers, and, in Part III, the lame are to be relieved by walking sticks and canes, wholly of wood." The bald are to be slightly insulted by some relief on hair waving and drying machines, and those who hope to live in peace and quiet will be horrified to see that player pianos and other musical instruments, and parts of musical instruments, are to be given some relief, but the deaf are to get no relief at all. As many of us know, one of the most awful tragedies is the person who is struggling with deafness. Deaf aids are very expensive things indeed. I feel sure that the deaf will not be forgotten for although they represent such a small proportion of the population they are a very tragic one.

Mr. I. Pitman

I should like to take this my first opportunity of thanking the Chancellor for removing Purchase Tax from office machinery. At a very late hour I moved an Amendment on this question in a rather angry House, but I have since been supported in a most helpful way by hon. Members on the other side of the House and met by the Chancellor, and I am very glad gratefully to report the happy issue of all our labours. I had intended merely to express my thanks and nothing else, but the Chancellor has provoked me with his desire to decry Victorian financial principles. It seems to me that Mr. Gladstone in his preference for direct taxation rather than indirect taxation was doing something which the Chancellor is now reversing—in my opinion, quite wrongly so.

Mr. Dalton

Mr. Gladstone, if I remember rightly, said that he regarded direct taxation and indirect taxation as two charming ladies to both of whom it was his duty to pay court.

Mr. Pitman

The right hon. Gentleman's recollection is no doubt perfectly true, but he is doing rather the reverse of what Mr. Gladstone did. It is only to one charming lady that the right hon. Gentleman pays court, and it is on behalf of the other one that I am now pleading. The proposal to put and to keep Purchase Tax on certain articles is thoroughly damaging to the community, for a reason which ought to make itself commendable to hon. Members opposite. Direct taxation falls upon shoulders best capable of hearing it, whereas indirect taxation, in the expanding consumption for which we all hope, is bound to fall on those who are less well off and irrespective of their wealth.

I pleaded with the Chancellor for the removal of Purchase Tax on stationery. When an unemployed man writes a letter to apply for a job he is paying indirect taxation. The Chancellor of the Exchequer said he thought that a representative debating society would favour indirect taxation rather than direct taxation. He qualified that by saying that it would have to be an intelligent debating society. That being so, I do not agree with him. I think he would soon find that an intelligent debating society would take the view that indirect taxation fell upon the whole community irrespective of wealth, whereas direct taxation was properly rated to the shoulders of those best able to bear it. I seriously question the policy upon which the Chancellor is embarking Members opposite. It is contrary to their whole principles to prefer indirect taxation. Indirect taxation, it is true, is psychologically more acceptable than direct taxation. One thing that any debating society would immediately say is: "Yes, we give out 25s. 9d. and we get back if we want whisky."

Mr. Deputy-Speaker

This argument is very interesting, but I hope the hon. Member is proposing to link it up with the Resolution now under discussion.

Mr. Pitman

It is in reference to the Purchase Tax and the Chancellor's proposal to make the tax permanent and more universal. That is the issue, and I think he is wrong. The Chancellor of the Exchequer brought forward the question of the debating society. He said that the average citizen would prefer indirect taxation to direct taxation. I say that psychologically he is wrong True, the taxpayer who gets goods in return for his money does not recognise that he is paying tax and therefore accepts it, and when he pays his Income Tax he realises that he is paying tax, and resents it.

Mr. Deputy-Speaker

The Chancellor of the Exchequer may have digressed in that direction, but I cannot allow the hon. Member to continue to follow that line of argument. I do not find in the Resolution a proposal to make the Purchase Tax permanent.

Mr. Pitman

That being so, I will close with my opening remark, which is one of heartfelt thanks to the Chancellor of the Exchequer on behalf of myself and my hon. Friends who supported me in my plea.

Mr. Assheton

We fully understand the Chancellor of the Exchequer's apprehensions with regard to inflationary trends and so on. On this occasion there is no suggestion that we want to do anything to endanger the main fabric of the structure. Whether we agree with the Chancellor that the Purchase Tax is a desirable form of taxation can be debated upon another occasion. One of the features associated with the Purchase Tax which always struck me is that the Chancellor of the Exchequer and the Financial Secretary to the Treasury become subject to a tremendous amount of pressure. The existence of pressure groups is something which we have to consider in determining whether or not this is a desirable form of taxation. I do not propose to pursue that part of the subject now, particularly as I see your eye is upon me, Mr. Deputy-Speaker. We are not at the moment discussing the permanence of this tax.

Nor would I enter into an expression of my views on the question of direct and indirect taxation. I could say quite a lot about it on another occasion. I was very glad to hear the Chancellor say one thing. He said he was hoping that the Income Tax burdens on all sections of the community would be lightened in due course. I welcome that very much indeed. It is the first time any sort of expression of that kind has come from the Chancellor of the Exchequer, and many of my friends will wish to thank him for it. We had got into our heads that he was adopting a somewhat partisan attitude in these matters, but we are relieved to hear that his intentions for the future are more broad minded.

The hon. and learned Member for Exeter (Mr. Maude) referred to one of the most important points mentioned today, and that is the case of the deaf. When we come to the Customs Duty rather than the Purchase Tax I shall have more to say about the deaf. At present there is a Customs Duty of about 20 per cent. on deaf aids, and I propose to move when the appropriate time comes in the Finance Bill to get that matter discussed, and I hope the Chancellor will be able to make a concession. Here we are dealing with Purchase Tax. There is only one class of battery which is at present subject to Purchase Tax—the low tension—which is frequently used for deaf aids, and I hope the Chancellor will be able to find some means of relieving these batteries. The technical difficulty is very great, but it has been overcome in some countries by using a special colour for these batteries. Against that is the consideration that it is not so easy to get batteries for deaf people if they are not part of the general supply of batteries for the country, and that may be a disadvantage, but I hope the Chancellor will waive any Purchase Tax or Customs Duty on those used by the deaf. We have done a tremendous lot for the blind in this country and I should be gratified if we could do something for the deaf. I thank the Chancellor for his suggestion that we may make proposals to him in the course of the next few weeks. We shall certainly take advantage of his offer, and, meanwhile, we shall be glad to see this Resolution passed.