§ Now I turn to Customs and Excise, and in the first instance to the Purchase Tax. Let us begin by taking a backward glance at the changes that have been brought about in this tax since its introduction. A very wide range of goods, including all the prime necessities of life, are already completely free of Purchase Tax. Many were in the original list of exemptions when Purchase Tax was first introduced, 402 and from year to year since then the free list has been extended. The original free list, before this Government came into office, included foodstuffs, industrial materials and machinery, all utility goods—I emphasise this; they are all free of Purchase Tax except the so-called utility fur coats, of doubtful utility—books, cameras for cinemas, household brooms and brushes, and much else. All these articles have been free of Purchase Tax from the beginning—in the case of the utility goods, from their original institution. I recall discussions I had, when I was President of the Board of Trade in the Coalition Government, with the right hon. Gentleman the Member for the Scottish Universities and his predecessor on this matter, and the accepted view was then that utility goods should, by definition, be exempted from Purchase Tax. That has always been the practice, with the one exception I have mentioned.
§ Since I have held my present office I have, with the consent and agreement of the Committee—and indeed I have been pressed to go further than I have done—extended this free list considerably, and have exempted from the Purchase Tax pots and pans, as they are colloquially summarised, crockery, kitchen cupboards, cooking stoves, refrigerators, electric irons and kettles—we had quite a battle about that with some hon. Ladies—dustbins and buckets, typewriters and other office machinery—the hon. Member for Bath (Mr. I. J. Pitman) was very keen on that and we agreed to it—fuel economisers—I was anxious to help the Minister of Fuel and Power—wireless sets for the blind, equipment for children's playgrounds, and many other items which had been requested from different parts of the Committee and different Departments of State. [An HON. MEMBER: "And wigs."] And wigs.
§ We have given a very wide extension to this free list. It has been right to do that, and I do not now propose to bring back under Purchase Tax any article which is on the exempt list. I have been advised to bring a lot back, but that is one of the bits of advice I have rejected. I am bringing none back. Nor do I propose today to move any article subject to Purchase Tax from one group to another within the ranges of taxable articles. We have, in fact, over the last few years, moved quite a number of articles from 403 one group to another, and generally, as the Committee will recall, in a downward direction; some upward, but mostly down; but I do not now propose any movement of any particular article from one group to another. Such a transfer could be made, if necessary, in exceptional cases, by a Treasury Order under Section 20 of the Finance (No. 2) Act, 1940.
§ I hope that the Committee will agree that this interim Budget—it is only an interim Budget; there will be another in a few months' time—is not the occasion for that detailed and most interesting examination, item by item, of the many articles liable to different rates of Purchase Tax. I would hope that we could postpone any such discussion until the main Budget in the spring. At present the Purchase Tax serves three separate purposes. It brings in revenue; it absorbs inflationary purchasing power, and therefore assists the main purpose we have in mind; and it strengthens the export drive, since it does not fall on goods which are exported.
§ I propose, leaving the list of items within each taxable class unchanged, to increase the rates of tax as follows: the 16⅔ per cent. rate will be increased to 33⅓ per cent.; the 33⅓ per cent. rate to 50 per cent.; the 66⅔ per cent. rate to 75 per cent.; and the 100 per cent. rate to 125 per cent. These changes will apply to goods delivered by registered manufacturers and traders from tomorrow. They will produce an additional £80 million in a full year and £10 million this year. As regards motor cars, which we discussed at great length on the last Budget, I propose to retain the existing rates of tax on the two classes provided by the dividing line of £1,000 ex-tax, as was agreed, after the long debate, last summer.