HC Deb 03 December 1947 vol 445 cc460-9
The Chancellor of the Exchequer (Sir Stafford Cripps)

It might be convenient to the Committee if I were allowed to make a statement before Amendments to this Clause are moved.

Mr. Stanley

It would obviously be convenient if the right hon. and learned Gentleman made a statement, but, on the other hand, it may be that hon. Members may wish to discuss the statement. Would it not, therefore, be better to put the matter in Order by moving to report Progress and then making the statement?

Sir S. Cripps

I was under the impression that if hon. Members wished to debate the statement, that could take place on the Motion that the Clause stand part of the Bill.

Captain Grookshank (Gainsborough) indicated dissent.

Sir S. Cripps

I beg to move, "That the Chairman do report Progress and ask leave to sit again."

When the Second Reading of the Finance Bill took place, I stated that it was my desire, if possible, to avoid imposing any difficulties upon industry or commerce at this already very difficult time and that if some voluntary method could be devised of achieving the same end which I have in view, that of economising in materials and effort in advertising, I would be very glad to consider it and, if necessary, to substitute it for the provisions of the Bill. Since that time, I have had the advantage of a large number of discussions with a number of people who are very expert in this matter, and a fairly full correspondence with a good many people who are, or consider themselves to be, experts in this matter. As a result of these conversations, I have had a communication from the Federation of British Industries, which I would like to read to the House, in which they say: We have already acquainted you with the very strong objections we feel to the advertising provisions in the present Finance Bill. We were very pleased to notice your remarks in the House, when you offered to consider any voluntary scheme which might be put to you. I have now been charged by a group, which together covers all the interests concerned, to give you an undertaking that, if the provisions now incorporated in the Bill are withdrawn, the Federation of British Industries will take the lead in setting up a Working Committee to work out methods of achieving the results you wish by voluntary means, as soon as practicable. The organisations concerned, are the following: Association of British Chambers of Commerce, The National Union of Manufacturers, The Advertising Association, The Incorporated Society of British Advertisers, The Institute of Incorporated Practitioners in Advertising, The Newspaper Society, The Newspaper Proprietors' Association, The Periodical Trade Press & Weekly Newspaper Proprietors' Association, The British Poster Advertising Association. I am sure you will not fail to be impressed, as I have been myself, by the unanimity that exists in favour of the voluntary method. It is not possible for a scheme involving so many complexities to be worked out in time to anticipate the Committee, or even the Report Stage, of the present Bill, but I have no hesitation in assuring you that the encouragement you would give to the work of the proposed Working Committee by the withdrawal now of the provisions would go a very long way to assuring the successful outcome to that work.

(Signed)

FREDERICK BAIN:"

7.30 p.m.

Under those circumstances, I am quite prepared to try that voluntary method and to withdraw this Clause, and I hope very much that there will be success in these efforts that are being made. We shall have another opportunity of considering this matter in April next to see what progress we have been able to make.

Mr. Stanley

I am sure the whole Committee——

Mr. Gallacher

The right hon. Gentleman can speak for himself.

Mr. Stanley

I am sure all of us on this side, and perhaps those on the other side of the Committee who are not geographically situated with the hon. Member for West Fife (Mr. Gallacher), will congratulate the Chancellor of the Exchequer on the decision he has taken. We thank him for the infanticide which has been carried out so painlessly and with so much decision. Of course, the right hon. and learned Member had the advantage that it was not his own infant. It was just laid on his doorstep, and it is only fair to him to say that since he assumed office he has never omitted to show his aversion to this unwanted pledge of someone else's affection. [HON. MEMBERS: "No."] Well, it may be somebody else's dislike. When he withdrew it, I was reminded of the old epitaph in the church on an infant who suffered demise at just about the same age as this proposal: If so soon I was to be done for, I wonder what I was begun for. With all our gratitude at the end of this proposal, we are entitled to ask, why was it ever begun?

Mr. Ellis Smith (Stoke)

Why has it been dropped?

Mr. Stanley

The hon. Member can ask that question. I will ask mine. I want to know why it was ever begun because, immediately this proposal was made, the inequality, the unfairness and the impracticability of it emerged more and more strongly. In all the chorus of criticism of the Clause, I only heard one still, small voice raised in its defence, and that was the voice of the Financial Secretary to the Treasury who, on the Second Reading of the Finance Bill, made a gallant effort. The right hon. Gentleman has very high political courage. He has the particularly British type of courage, the type of courage which has brought to our armies some of their most glorious disasters. His not to reason why—he just had to read out the Treasury brief, if not with conviction, at least with concentration. However, I must confess that when the right hon. Gentleman brought out his culminating argument, which was that this Clause might mean less wood for hoardings, and that might contribute to solving the problem of shortage of timber, I felt that defeat was very imminent.

Now we are glad that this Chancellor has turned to the voluntary method to try to correct some evil which he sees, but we regret that that method was not adopted by the previous Chancellor. If as a result of some over-expenditure on advertising there was wasteful expenditure of men or material, and if thereby our inflationary position was more difficult, there seems to be no reason why such an appeal as is now being made by this Chancellor could not have been made months ago by his predecessor. The only result has been that, for the last three or four weeks, great sections of industry have been disturbed and distressed, and much time has been spent on deputations and correspondence, all of which might have been avoided by taking some weeks ago, the step which the Chancellor has announced tonight. I am sure he is right to trust industry to provide him in this instance with the savings he thinks essential. All of us will wish success to the committee which is being set up, and we trust that, as a result of their efforts, anything which can be done in this line to assist us in our economic crisis will be done.

One final word to the right hon. and learned Gentleman. This is a first step in reversing the proposals of his predecessor. I hope it will not be the last, and that what is on this occasion a courageous precedent will end by becoming a comfortable habit.

Mr. Gallacher

I would have supported the Amendment in regard to such things as art exhibitions and entertainment, but I cannot see why there should be any hesitation about excluding from expenses advertising carried on by big business in this country. It is unbelievable from my point of view. The advertisements which are seen all over the place are simply a means of inducing people to set money chasing goods in short supply, and for bringing in profit to big business. I cannot see why that should not be subject to taxation.

However, I do not want to go into that in detail; I want to raise an important point in connection with this matter. What would have been the attitude on the part of hon. Members opposite if there had been some tax directed against the working class and the Chancellor had come to the House of Commons and said, "As a result of representations from the Trades Union Congress, I have decided to drop this tax"? There would have been accusations from the other side of outside interference, outside influence. Yet this gang of robbers, the Federation of British Industries—[Laughter.] Hon. Members may laugh but I was in this movement 45 years ago and at street corner after street corner, at conference after conference, we demonstrated to the workers that they were robbed and exploited by the capitalists of this country. Then there came into existence this central body that represented all the worst and most vicious power of capitalism directed against the working class, the Federation of British Industries. Now we are confronted in the House of Commons with a statement that the Federation of British Industries, who represent the enemies of the working class of this country, have written a letter——

The Temporary Chairman (Mr. Diamond)

The discussion is getting much too wide. We are at present discussing a Motion to report Progress. There will be the opportunity for those who wish to speak on the Clause to do so when the Question is put, "That the Clause stand part of the Bill."

Mr. Gallacher

I do not want to come into conflict with you, Mr. Diamond, but register my strong protest against the action proposed about a tax of this kind. I would welcome a message or proposal from the Trades Union Congress, which is part of the great working class movement, an ally, I but I protest strongly that these advertisements which are part of the machinery of big business should be included as expenses because of something in the nature of a request, or dictation from the Federation of British Industries.

Sir S. Cripps

Before withdrawing this Motion, I would like to make one or two observations on the unhelpful speech which was made by the right hon. Member for West Bristol (Mr. Stanley). He will appreciate that under the stress of speeches of that kind, I shall not be prepared to make accommodating offers to the House of Commons. Let me first point out to him that the responsibility for a Budget lies in the Cabinet and not in individuals, and that I have just as much responsibility for the putting forward of this taxation proposal as my right hon. Friend the Member for Bishop Auckland (Mr. Dalton), and I was in agreement with it. The position that arose on the proposal was that certain hon. Members—I think the hon. Member for Bath (Mr. Pitman) was one of them—suggested in the course of the Debate that the aim which I had in mind, and expressed, could be more easily attained by a voluntary method.

There were undoubtedly very difficult matters involved in the implementation of this taxation, so that if the aim could be achieved more easily by voluntary effort it was to everyone's benefit, including the Administration, to arrive at the result that way. After that, a deputation, which included Members from both sides of the House, came to see me and asked me to withdraw the proposal for one on some other basis. Subsequently, due largely to the activities of the hon. Member for Bath, the Federation of British Industries collected together this group of people, and gave the undertaking which I have read to the Committee. If the right hon. Gentleman asks why the proposal was introduced, I venture to suggest that this undertaking and this offer would never have been produced had it not been for this Clause in the Finance Bill. It will be an entirely satisfactory solution so far as I am concerned, if the undertaking is duly carried out, as I am sure it will be. If it is not, we shall have plenty of time to review the circum- stances. I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.

7.45 P.m.

The Temporary Chairman

I take it that the right hon. Member for West Bristol (Mr. Stanley) does not wish to move his Amendment, in page 7, line 13, to leave out Subsection (1).

Mr. Stanley

No.

Mr. Emrys Roberts (Merioneth)

There is an Amendment in my name and the name of hon. Friends of mine, to leave out Clause 9. Would it not be the correct procedure for that to be called?

The Temporary Chairman

No.

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

Mr. Pitman

I, too, am very grateful to the Chancellor of the Exchequer, and I would emphasise that my right hon. Friend the Member for West Bristol (Mr. Stanley) began by warmly thanking him for deciding on the withdrawal of this Clause. I want to thank him particularly warmly for the ample way in which he met the suggestion, which I made in an interview, that we should reach this objective by an agreed approach, a voluntary method. I thank the right hon. and learned Gentleman for the open mind with which he approached the matter. I also believe that this action has been very statesmanlike. I am in a position to speak with knowledge of the genuineness of the offer which has been made to the right hon. and learned Gentleman to seek voluntary methods of reaching the objective. As he has told the Committee, the Federation of British Industries were responsible for bringing together that wide range of national organisations covering all the interests involved. As he said, a working committee is to be set up on their initiative. I have been asked to act as chairman of this Committee, and I have agreed to do so. It is on those grounds——

Mr. Gallacher

All arranged beforehand.

Mr. Pitman

—and on grounds upon which the hon. Member for Blackley (Mr. Diamond) could assure you, Mr. Diamond, from his own observations in delegations, that I can assure the Committee of the genuine nature of the offer that has been made. It is my opinion that with this goodwill all round there is every likelihood of a successful outcome.

Mr. Butcher (Holland with Boston)

I would like to join with those who have added their thanks to those of the right hon. Member for West Bristol (Mr. Stanley) to the Chancellor for the wise and statesmanlike action he has taken in withdrawing this tax on advertising. I had a feeling during the Chancellor's observations that he had rather lost his sense of humour. That was doubtless due to the heavy pressure of work which further Business which is on the Order Paper tonight will go some way to alleviate and ease. The more this tax was considered the more thoroughly unworkable it was found. I could have wished the Chancellor, in making his wise and statesmanlike statement of his intention to withdraw the Clause, had stressed some of the practical difficulties with which he found himself confronted in all the advice which he received from accountants, advertising consultants, Income Tax experts, business men, and, I do not doubt, from his own experts at the Treasury. We are grateful to him for his wise and statesmanlike statement, and I hope it will do him no harm with his party.

Mr. McAllister (Rutherglen)

I should like to join in thanking my right hon. and learned Friend for what I think is an extremely wise decision. I will not go into what "our movement" is, but it is certainly not represented by the hon. Member for West Fife (Mr. Gallacher).

Mr. Gallacher

The hon. Member is interested in advertising. Why does he not declare it?

Mr. McAllister

I very properly declared my interest in the Second Reading Debate on the Finance Bill. I have always taken a great deal of interest in taxation as it affects the arts, even before I became a Member of this House, and I took part in the fight to have the Purchase Tax removed from books when that proposal was made by the late Sir Kingsley Wood. There was a universal feeling that a tax on books was an unjust tax, and he withdrew his proposal. In the same way, a similar issue is involved here, and if the hon. Member for West Fife will look at the case from other than a purely ideological point of view, he will see that this tax, as proposed, would have affected the book industry. I imagine that even the Communist Party is interested in books, and every book advertisement would have been subject to tax. Similarly, the entertainment industry already pays, on the whole of the box office proceeds, 40 per cent. to the Exchequer in the form of Entertainments Duty. To have added this tax would indeed have been a very grievous additional burden. It is a matter for all-party congratulations to the Chancellor that he has come to this decision.

Mr. Emrys Roberts

I wish to add a word of praise to the Chancellor for his statesmanship and wisdom in taking this action. It pleases us on these benches very much. We had an Amendment on the Order Paper to leave out the whole of the Clause. We thought that we could not tinker with it and that the only thing to do was to leave it out altogether. Although we are suspicious when the Chancellor makes a deal with the Federation of British Industries, in this case we hope that it will have good results. I would like to make the point that it is desirable that the objects of a Clause of this description should be stated more specifically. The former Chancellor of the Exchequer said that the object was to save labour and materials, but it was quite clear when the Finance Bill was published that, so far as newspapers were concerned, that object was not secured in any way. Newspapers are already cut and any arrangement of this nature would merely result in money being switched from advertisements in the newspapers, where it does no harm, to the printing industry, where it might do a lot of harm.

I would like to say a word in protection of the smaller interests who may not be represented in the Federation of British Industries. A Clause of this description might easily do great harm to local weekly newspapers. In Wales our main newspapers are weekly newspapers. They form a large part of our culture and help to maintain our language. Already they have suffered severe difficulties from high costs and cuts in newsprint, and the loss of advertising revenue would be a very serious blow to them. I hope those considerations will be kept in mind when the control of advertising is inquired into.

Mr. Edgar Granville (Eye)

During the last two days the Chancellor has shown an accommodating spirit. This is not the first concession which he has made. I thought that the right hon. Gentleman the Member for West Bristol (Mr. Stanley) was a little ungracious in the manner in which he accepted this concession. The right hon. and learned Gentleman was pressed by hon. Members on both sides of the Committee. When he tries to meet opinion in a spirit of united effort, I think he ought to be encouraged. I accept this concession in the spirit in which it was given.

I was sorry to hear the hon. Member for West Fife (Mr. Gallacher) refer to this as a concession to the F.B.I. and big business. This would not have hit big business. Big business could have carried this tax either as a trading expense or otherwise. This would have hit the little man, the small enterprise man with new ideas. It would have hit the man producing something which he was trying to sell against the big combines and businesses which may have had a product advertised and established over 20 or 30 years. For that reason, I reinforce what my hon. Friend the Member for Merioneth (Mr. Emrys Roberts) has said. I hope that by this the interests of the little men with small businesses will be safeguarded. We know that they are not represented in the Federation of British Industries, but we hope that their interests will be protected.

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

Clause 10 ordered to stand part of the Bill.

Schedules agreed to.

Bill reported, with an Amendment; as amended to be considered upon Monday next.