FOURTH SCHEDULE.—(Purchase Tax. Chargeable processes: relevant classes of goods.) (Hansard, 17 July 1946)

§ Lieut.-Commander Joynson-Hicks (Chichester)
I beg to move, in page 61, line 25, at the end, to insert: which is imported or of silver fox or mink or more than three pounds in weight. I will read the whole sentence in paragraph 1 of the Fourth Schedule, otherwise it will not be very clear: Chargeable Processes: Relevant Classes of Goods. 1. Apparel and rugs made wholly or partly of fur skin other than of rabbit (including any skin with fur, hair or wool attached) which is imported or of silver fox or mink or more than three pounds in weight. Hon. Members will probably recall the battle which we had at an earlier stage, to try to exempt from Purchase Tax the garments and uses to which the skin of the domestic rabbit was turned after it had been killed.

Mr. Tartan (Thirsk and Malton)
Or of the wild rabbit.

§ Lieut. Commander Joynson-Hicks
During that Debate the Chancellor met us most sympathetically, as a result of which he promised to exclude rabbit skins, or the chargeable process which was adopted in making them up into gloves, and so forth, from Purchase Tax. A question also arose—and I recall that I referred to it myself when speaking in the Debate—whether or not it might be easier, and more all-embracing, without departing from the principle which the Chancellor was following, to exclude from Purchase Tax chargeable processes in regard to all skins other than those imported. The matter was not pursued at the time, and it occurred to me afterwards, when considering it, that if we went as wide as that we should, of course, cover all cow skins, calf skins, horse hide and other animals, whether 1276 agricultural, domestic or even zoological, which might be embraced by such a definition, and which might very largely affect the trade. That was not our intention at all. The intention was simply to exclude from the effect of the Purchase Tax the, chargeable processes on something which is either a domestic pet or a side issue to something which is very largely used in connection with food production
We devised this form of words, which I believe would meet the case. They meet the case of the mole catcher, who is assisting agricultural production by keeping down the moles, but who is substantially remunerated for so doing by the price which he can get for his mole skins when they are made up into coats, gaiters and so on. If Purchase Tax is applied to that, once the chargeable process has been incurred it is out of all proportion to the production which is created. Another item which should be excluded, so as to escape the effect of Purchase Tax, is lambskin, and I should like to ask what is the intention of the Financial Secretary in that direction, because again it is a very useful item on the asset side of the balance sheet when the expenditure side shows to a farmer the loss of a lamb which has died prematurely. Lambskins have a substantial value, which is very useful to the small farmer; if a lamb dies prematurely it is a dead loss, but its skin, if it has a chargeable process carried out upon it, becomes an asset of some value. I think it would be quite outside the intention of the Chancellor to prevent this small but useful asset to the community being put upon the market as a result of the application of the Purchase Tax on the value of the chargeable process which has been done upon the skin. There are other small animals such as badgers, otters and moles, of which the profitable killing would be an advantage to agriculture and would to that extent assist food production. The matter is a small one, but it continues a principle which the Chancellor accepted in excepting rabbit skins from the effect of Purchase Tax upon the chargeable process. I believe that this Amendment is logical, that it would be very popular, and I hope the Chancellor will be able to accept it.

§ Mr. C. Williams
I beg to second the Amendment.
1277 I do not think the hon. and gallant Member who moved this Amendment fully realised how valuable it was, and I will endeavour to show him how, though the exemption for instance of moleskins may seem a very little thing in a small place, it may add up to something of bigger value over the whole of the country. I thought the hon. and gallant Member would have wished to emphasise that point, otherwise the Financial Secretary might not realise how important this is. The hon. Member mentioned the occasional lamb that might die, and I have no doubt that happens in Cumberland and in Scotland, where I am told there is never any shortage of mutton—but that is neither here nor there. There is, however, another form of skin which I will mention as an additional argument to the Chancellor, and that is the skin of the deer which are killed in considerable numbers in Scotland every year. I have no doubt that other hon. Gentlemen with greater ingenuity than I could ever hope to possess will be able to mention other forms as well. Perhaps there are hon. Members on this side of the House who might even wish to include fox skins, but that is a line which I need not follow, because I might get myself into trouble with hon. Gentlemen on the other side who take a very serious view of this matter.

Lieut.-Colonel Dower
I sincerely hope the hon. Gentleman will not omit the very valuable sealskins.

§ Mr. C. Williams
This has been sprung on me rather suddenly, and I have not had time to consult the hon. and gallant Gentleman who moved the Amendment, but if it would add to the burden of argument against the Financial Secretary, and if my hon. Friend at a later date would be able to prove that both in regard to weight and value they would come under this Amendment, then so far as I am concerned I certainly would not object to that. When I make a speech on an Amendment of this kind, I naturally mention only those forms of skin to which I have given adequate and mature consideration, and I do not think I could fairly expect the Financial Secretary to accept sealskins. [Laughter.] I mean the Amendment. I am not making him any present, he has been too brutal altogether for that kind of thing. 1278 I feel sure this Amendment is in keeping with the whole tone of the Chancellor's remarks today and for that reason I have pleasure in seconding the Amendment, while I regret that I have not been able to assemble more arguments in its favour. It is a constructive Amendment so far as many industries in the country are concerned, and it is important because it helps people who are really deserving.
I see that an hon. Friend of mine looks as if he might argue with me as to whether certain forms of skin, such as badger skin which have been mentioned, would, strictly speaking, come into this Amendment, and he might wish to dissociate himself from me on this matter. I hope he will not, because I shall have no chance to make a second speech. Hon. Gentlemen opposite seem to be very sad about that. But always before I make a speech on an Amendment of this kind, I ask myself very strictly if it is really necessary. This time I think it is absolutely and exclusively necessary, and the only thing now, after you have put the Question, Mr. Deputy-Speaker, is for the hon. Gentleman to get up and say he will give us the Amendment.

§ The Financial Secretary to the Treasury (Mr. Glenvil Hall)
The hon. Member for Torquay (Mr. C. Williams) would, I think, be the most surprised Member of the House today if I announced, on behalf of my right hon. Friend, that I was going to accept this Amendment. When we dealt with Clause 15 my right hon. Friend did meet the wishes which were then expressed in every quarter of the House, that something should be done about rabbit skins; and he met those who desired their deletion from the scope of Clause 15 and this Fourth Schedule, I thought, very handsomely. Now, not content with that —I am not complaining, but only stating the fact—certain hon. Members who sit on the opposite side of the House, are trying, on Report stage, to insert this together with other Amendments which you, Mr. Deputy-Speaker, have not thought fit to call. The effect of the Amendment, as moved, would be to limit the liability to Purchase Tax, under Clause 15 of the Bill, to imported fur skins, British silver fox and mink skins, and British fur skins weighing more than three pounds. It may be that lamb skin— these skins were referred to by the hon. and gallant Member for Chichester (Lieut.-Com 1279 mander Joynson-Hicks)—may be either below or above the three lb. weight, inserted in this Amendment as the limit. But so far as my information goes, it is possible to have them of varying weights, and it is by no means certain they will all be below that weight, which was, I think, the illustration which the hon. and gallant Gentleman gave.
We cannot possibly extend this concession any further. To do so would mean including, as has been said moles, squirrels, wild cats, the fox, the ordinary domestic cat, and even dogs in so far as their skins weighed no more than 3 lb.—and other small animals of various kinds. We cannot, quite frankly, see how the Amendment, if it were embodied in the Bill, could be worked. For example, how is one to judge the weight? Is it to be the weight before a skin is dressed, or after it has been dressed and sent to the maker-up? Many of these skins have to be soaked in brine, and kept for a period. Is the weight to be judged before the skin is soaked or afterwards? These and other queries arise, and they would have to be settled before this Amendment could be worked equitably and properly.

§ Mr. C. Williams
Would the hon. Gentleman allow me a moment? [HON. MEMBERS: "No."] I thank the hon. Gentleman for giving way so courteously. He did ask how one could judge the weight. It is perfectly simple -to answer, for this purpose that the Customs and Excise officials would be able to deal with that quite easily. So that argument goes by the board.

§ Mr. Glenvil Hall
It may well be that the hon. Gentleman has more knowledge of these matters than I have, but it is difficult to believe that Customs and Excise officials can easily levy duty on skins according to whether they are above or below a given weight. So far as I know, skins are dealt with as skins and though it is true that when they are sold weight may enter into consideration; here, if I understand the Amendment aright, the whole question will turn on whether, at some time which is not stated, a skin is above or below three pounds in weight. There would, too, if this Amendment is accepted, be the additional difficulty of deciding whether the skin has or has not been imported. In the course of dressing 1280 and other processes which go to the making up of a skin before it reaches the stage of a finished article, there comes a time when it often loses its identity, when it is quite impossible to say whether it has been imported or came from an animal bred in this country. For these reasons, if for no others, it is quite impossible for me to accept this Amendment, and I ask the House to reject it.

§ Mr. Turton (Thirsk and Malton)
The Financial Secretary has given tonight a most unfortunate reply to the speeches made by the hon. and gallant Gentleman the Member for Chichester (Lieut.-Commander Joynson-Hicks) and the hon. Gentleman the Member for Torquay (Mr. C. Williams). He has completely overlooked the fact that, on the previous stage, when we moved the Amendment about rabbits, we widened our discussion and talked about the local taxidermist, and the fox, the mole and the badger, as we have today. His right hon. Friend, I must say, was much more helpful and more knowledgeable than the Financial Secretary has been. He said he would accept it at first sight, immediately. When he learned how wide the question was, he said he would go into it in further detail, as it concerned other animals, to see how the matter could be dealt with. I should think that the Financial Secretary has not been called into those domestic consultations with the Chancellor, because he gave us no sign that he has argued this matter and thought it out in the interval; which shows how really dangerous it is to accept any assurance from the Treasury that a matter is to be considered carefully in the interval between Committee and Report.
The House always treats with levity any discussion of animals' skins. I do not quite know why. It has not, I think, been brought out, that this is going to affect a good many small tradesmen and people in rural areas, it they are to have to pay at 100 per cent. on their business, although their turnover is small; and who, were they fortunate enough to have a business not concerned with skins, would not have to pay any Purchase Tax at all, because they are under the £500 limit. Bearing that in mind, why is it that these rural craftsmen should be penalised, when the people in the towns engaged in small businesses are not being penalised by the Government? This is 1281 another example of how the Socialist Government and the Socialist Chancellor are weighting taxation against the rural areas in favour of the towns.
I hope that the Financial Secretary will recall the arguments we used on this question at an earlier stage. The weight specified in the Amendment is too low. It should be 5 lbs. and not 3 lbs.; because what we want to exempt is the large animal. Somebody has suggested the seal and the cow hide. Quite clearly, if they were to be used, they would come within the purview which the Chancellor of the Exchequer wants to include. But, really, it is not treating the House seriously to get up, as the Financial Secretary did, and say, "How are we to judge the weight, and at what stage?" Clearly, the answer is at the stage stated in Clause 15—the stage of the "resulting goods." Accordingly a man, in order to get exemption, would have to show that the resulting goods were under 3 lbs. in weight—as the Amendment says, although I should prefer 5 lbs. There is no real difficulty about that, because the onus would be on the small tradesman to prove that he is exempted. That is one of the good fortunes of the Treasury officials. They always make the taxable subject prove that he should not be taxable.
I see the Solicitor-General there. I think he would agree with me. I hope that he will apply his mind to the problem of whether this weight definition would not be practicable for the Customs and Excise. For these reasons I hope the Government will give further consideration to this matter. This is the first time they have carried out their assurance to consider this matter in the intervening stage. We have had a deplorable exhibition from the Government Front Bench.

§ Mr. I. J. Pitman (Bath)
Quite 99 per cent. of Britishers are decent, honest people, and we in this House suffer from having to make regulations for the odd one per cent. who do something which is definitely naughty. As I understand the situation, people have been going to this one per cent. of tradesmen selling furs, and have been told: "Do not pay 100 per cent. Purchase Tax. Let me buy the necessary number of skins. You can pay me then for making them up into a fur coat, and in that way you will 1282 not have to pay 100 per cent. Purchase Tax." That is the fundamental basis for Clause 15 and for all we have been discussing here. My hon. and gallant Friend the Member for Chichester (Lieut.-Commander Joynson-Hicks) was saying that the arguments which apply in the case of rabbits are as applicable to moles and other indigenous animals, and the point which my hon. Friend the Member for Thirsk and Malton (Mr. Turton) was making is equally sound.
It seems to me that hitherto Customs and Excise have been labouring under the disadvantage that the onus is upon them to prove that a fur coat had been genuinely made by the furrier, and was not, as alleged, a garment made up from skins the property of the customer. With this processing Clause in the Bill, and with the exception of mole skins as well as rabbit skins, the onus will be entirely the other way round. It will be for the retailer who sells a coat free of Purchase Tax to prove something which will have to be convincingly proved, that in point of fact the farmer in question brought him so many mole skins and they were made up into a fur coat. It seems to me clear that the Financial Secretary has not been giving the attention to this matter which the House is entitled to expect from him, because this is absolutely consistent with the whole principle which underlies the concession which the Chancellor has given, and it seems to be workable. He has said the opposite for both these things, and I do not think that anyone in the House thinks he is right in his contentions

Mr. McKie
Like my hon. Friends the Members for Bath (Mr. I. J. Pitman) and Thirsk and Malton (Mr. Turton), I am very disappointed with the reply made by the Financial Secretary. It seems to me that the Financial Secretary merely sought to shelter himself behind the impossibility of accepting the Amendment because of the last words—the words "more than three pounds in weight," My hon. and gallant Friend the Member for Chichester (Lieut. - Commander Joynson-Hicks), who drafted this Amendment, does not, of course, profess to be a professional, but the mere wording of the Amendment need not have led the Financial Secretary of necessity to reject it. It was open to him to come down to the House, if he had studied the Order 1283 Paper, and move a manuscript Amendment which would give effect to the idea which we have very much at heart, that there should be some general exemptions of skins from Purchase Tax. My hon. Friend the Member for Torquay (Mr. C. Williams) spoke about the traffic in deer skins in the North of Scotland. This is a very great source of livelihood to many people in the North of Scotland, and their livelihood is in serious danger of being jeopardised.

§ Mr. Glenvil Hall
Deer skins are not included in this Amendment.

Mr. McKie
The Financial Secretary did not tell that to my hon. Friend when he was speaking. There is one skin which is covered by this Amendment, and that is the mole skin. Earlier today the Chancellor was pressed, on an Amendment, to take vermin traps out of Purchase Tax, to make it clear that vermin traps would include traps for catching moles. It was pointed out to the Chancellor that if mole-catching was not to be encouraged, the agricultural industry, which hon. Members opposite are continually telling us they want to see in a flourishing condition, will suffer. I hope that I have made clear the double reason why I wish to see mole skins excluded from Purchase Tax. Firstly, I want to protect the livelihood of those engaged in catching moles and marketing what to them are valuable skins for various purposes, and, secondly, to ensure that there shall be efficient mole-catching throughout Great Britain. I very much hope that even now the Financial Secretary, on reflection, will see his way to move some form of manuscript Amendment which will give effect to our wishes. I wish to impress how important it is that mole skins should be excluded from the orbit of Purchase Tax, not only to protect the livelihood of those engaged in catching moles, but in order that there shall be efficient catching of moles to protect agriculture. [Interruption.] I could say a lot more about badgers and other animals, including the wild cat, and still be in Order. I hope that the Financial Secretary even now will see his way to move a manuscript Amendment which will give effect to the wishes of Members on this side, and which, I think, would have some support even from Members opposite.

§ Lieut.-Commander Braithwaite
The prolongation of this Debate, as so often happens in the House, is due to the extremely peremptory nature of the reply which the Financial Secretary has just made. He began by saying that my hon. Friend the Member for Torquay (Mr. C. Williams) would be surprised if the concession were made. That is an extraordinary thing. We have had some three hours of perfectly amicable discussion, with the Chancellor of the Exchequer in a yielding and forthcoming frame of mind, and an atmosphere of conciliation and friendliness, and then along comes the Financial Secretary, and in his first interjection today he introduces a jarring note.
I hope that the matter is not to be left where it is, because the speeches made since the Financial Secretary resumed his seat, particularly that of my hon. Friend the Member for Thirsk and Malton (Mr. Turton)—who speaks with such eloquence about rural areas so often forgotten by the Government—have adduced reasons why we should have another statement from the Treasury bench, or some reconsideration of the matter. With all respect to the Financial Secretary, he made one or two statements which were a little curious, such as that a lamb skin would be either above or below the weight of 3 lb. I do not know whether that is on his brief, but it seems to me to reveal the firm grasp of the obvious which the hon. Member has. Has it occurred to him that a lamb skin may be neither above nor below 3 lb. but may be the exact weight? Is that the Treasury brief? Or has this remark sprung solely from the brain of the Financial Secretary?

§ Mr. Glenvil Hall
The point was made by the hon. and gallant Member for Chichester (Lieut.-Commander Joynson-Hicks). I understood that he wanted to include lamb skins, and I pointed out to him that one could not be sure that a lamb skin would always be below 3 lbs, in weight.

§ Lieut.-Commander Joynson-Hicks
The three pound limit could be fixed for the skin of a still-born lamb.

§ Lieut.-Commander Braithwaite
I was not dealing with lambs, still-born or otherwise. I was dealing with the remarkable statement made by the Financial Secretary. If he will look in HANSARD tomorrow he will see that he said that "All lamb 1285 skins would be above or below the weight of 3 lbs." He was very proud of that remark. [Interruption.] I hope that the hon. Gentleman who represents the Whips' Office will soon be relieved from duty, and will be able to go to some more congenial part of the House. In the meantime, perhaps he will listen with courtesy. If one thing has arisen from this discussion, it is that the Financial Secretary is very ill-informed on this matter.

§ Mr. Gallacher
Do not get so indignant.

§ Lieut.-Commander Braithwaite
I hope that if the hon. Member for West Fife (Mr. Gallacher) is better informed than we are on this subject, he will see fit to intervene in the Debate. I see opposite, the hon. and learned Solicitor-General. He has a gift of lucid exposition, which we all envy, and perhaps, at the end of this long Debate, when a number of intricate points have been raised, which have been dealt with by his colleagues in such a way as to make confusion worse confounded, he will come to our aid to clear up some of those points, in that agreeable manner which we all enjoy. He is the one who can now come to the rescue. I am hopeful that, with his legal knowledge, he will be able to clear up some of the complexities into which the Financial Secretary has tumbled, and tell us if there are other considerations which may have weight in this discussion. He has listened to this Debate with the closest attention; his mind is clear, and he may be able to assist us.

§ Colonel Gomme-Duncan (Perth and Kinross, Perth)
I would like to add my support to what has been said on this question of mole skins. There is no doubt that in rural areas, such as mine, it is very important. It is important, as the hon. Member for Galloway (Mr. McKie) has emphasised, not only from the point of view of the fur skin trade, but from the point of view of agriculture. The Government have given way on the subject of rabbits, and I think that they might meet us on this question as well.

§ Mr. Harold Davies
On a point of Order, Mr. Speaker. There does not appear to be anything in this Amendment about mole skins.

§ Mr. Speaker
The Amendment refers to "three pounds in weight," and the question appears to be whether that can relate to mole skins.

§ Colonel Gomme-Duncan
I think that a mole skin is, normally, under 3 lbs. in weight, and, therefore, I think that I am in Order in mentioning it. If the Government will give way on this question of mole skins, which affects agriculture and also the fur trade, they will be conferring a very great benefit. It was largely due to the efforts of the Opposition that they gave way on the question of rabbit skins. I hope that the Financial Secretary will be a little more forthcoming on this question of mole skins, which is a very small matter to him but is of considerable concern to the fur trade and to agriculture.

§ Sir G. Fox
Will the Financial Secretary also consider the question of the skins of musk rats and Myopotomous coypu. These two small animals are increasing in great numbers in my constituency, and I believe that their furs or skins are of great value.

§ Mr. Orr-Ewing (Weston-super-Mare)
A great deal of the work of mole catching and the curing of the skins is carried on by men who have reached later years in life, and are not sufficiently fit to engage in heavy agricultural work. I hope that the Financial Secretary will bear that in mind in considering this matter. There are not a great many forms of employment in the countryside open to those of older years, and this is one of the few ancillary trades—one might almost call it a craft —which is still open to them. The hon. Gentleman will, I fear, do a great deal of harm if he pursues the line which he is taking.

§ Mr. Howard (Westminster, St. George's)
I cannot help thinking that the Financial Secretary has unintentionally over-complicated this matter by concentrating our attention upon the words on the Order Paper and omitting to remind us of the words in the Schedule to which this Amendment applies. The words in the Schedule refer to "apparel and rugs." The House has been led into considering the complicated question of chargeable processes, and at which particular point of that chargeable process the skin of a particular animal might not weigh more or less than three pounds. Surely, there is no difficulty in recognising when a skin has become an article of apparel or a rug.