§ Subsection (2) of section twenty of the Finance Act, 1948 (which provides that in Part I of the Eighth Schedule of that Act the words "First," "Second," and "Third" indicate the first, second and third rates of Purchase Tax which are respectively one third, two thirds and one hundred per cent. of the wholesale value of the goods), shall have effect as if the words "one quarter" were substituted for the words "one-third."—[Mr. Lyttelton.]
§ Brought up, and read the First time.
§ Mr. Lyttelton
I beg to move, "That the Clause be read a Second time."
Let me at once reassure the House that I do not propose to recapitulate arguments which were used on this side when we moved a reduction of the Purchase Tax under three categories: 100 percent, two thirds and one third. The present Parliamentary procedure has very grave defects; I think that is agreed upon all sides. We have not yet discovered the right way of discussing this matter. If we had not had a discussion about Latin phrases I might say that we have not yet found a via media or an aurea mediocritas by which the House can keep proper control of taxation which is now placing £300 million into the hands of the Exchequer. I am entirely in agreement with my right hon. Friend the Member for Bristol, West (Mr. Stanley) who once said that if we were able to discuss every item of Purchase Tax the Debates on the Finance Bill would possibly be reduced to a farce—and a very long, tedious and exhausting farce at that.
The present situation is very unsatisfactory. It involves lumping a case which is made out for continuing the tax with many others where it can be held that no such justification exists at all. Under the Clause such a criticism would be justified, but we are precluded from any more selective or discriminatory form of action. My hon. Friend the Member 81 for Croydon, East (Sir H. Williams) had a new Clause on the Order Paper, but it was not selected because it was out of order as possibly imposing a charge. It attempted to deal with the difficulty which is very real, and I should think that something on the lines which be suggested would be found to contain a solution. I cannot see any other sort of solution except that individual rates of taxation should be studied by an independent body and their conclusions submitted to this House.
We have not, of course, had the benefit of hearing the views of hon. Members in other parts of the House upon my hon. Friend's suggestion, because his proposal was ruled out of order, so we are still labouring under the difficulty. I would ask the Government whether they are prepared to have this matter examined by an inter-party committee or meeting, but even if that is done some action is still necessary.
I am not going to recapitulate the arguments I used, except in one respect. We are interested in the alleviation of the simple articles of everyday use in every household which at present fall to be taxed. They seem to us to fall outside the original purpose for which this tax was devised. The tax was ostensibly to prevent consumer-spending upon articles which we regarded as outside the category of necessities.
The hon. Lady the Member for Blackburn, East (Mrs. Castle)—I am sorry for more reasons than one that she is not in her place—made great play with our proposal and some dialectical debating points of an agreeable nature, without understanding for one minute that we have to move the reduction of the tax en bloc. I interrupted her to suggest that we would be content, as a start, if Purchase Tax could be reduced to the extent of £15 million upon just those categories of household goods that are in the greatest use. This suggestion received no real reply at all, beyond driving the hon. Lady back towards the baseline and causing her to serve several double faults. Otherwise, it had no effect at all, and was not even referred to by the Financial Secretary to the Treasury. There was no response from the Government. If we had got this alleviation from the start I should have been content to withdraw the proposed new Clause.
82 5.30 p.m.
So far, the Government's defence of taxing things like toothbrushes and soap is a simple one. It is, "We like the Revenue." There is no other reason at all, and the Government are not prepared to argue upon particular cases. I think they are screening themselves behind a very convenient Parliamentary barrier. It is very convenient because many of these cases are completely unarguable and indefensible. Have the Government any second thoughts about which to tell us now, and what form will they take?
I do not want to prolong the discussion very much because we went into this fully on the Committee stage but I want to suggest that there is very considerable confusion over the anti-inflationary effects of taxation. None of us need be told that if, for example, taxation is levied upon the consumer, especially in a form which reduces his demand for unnecessary commodities, and if the money so raised is then invested in the purchase of plant or even spent in reducing debt, the general effect is anti inflationary. We knew that almost at school.
§ Mr. Lyttelton
I thank my hon. Friend. The word is "disinflationary," We must never say "deflationary," because that has memories associated with it.
It is necessary to look a little further when we get taxation on a scale like this upon consumer goods. I suppose that some of the argument against inflation is that inflation reduces real wages and increases the pressure for increased wages, increases costs, makes the calculation of business risks almost impossible and favours the debtor at the expense of the creditor, and so forth; but in many instances Purchase Tax is acting in an inflationary direction by raising the cost of living and making those in receipt of wages and salaries increasingly insistent that the rising cost of living must be adjusted by an increase in wages and salaries. So I suggest that it is quite possible that a tax originally designed—perhaps even rightly designed—to reduce inflation ends by increasing it, and I submit that that is exactly what has happened in the case of the Purchase Tax.
83 I feel very insistent upon the need for making some reduction in the 33⅓ per cent. category, and I feel it more strongly even than when I moved the original Clause. I see that the hon. Lady the Member for Blackburn, East, is now in her place. Now that her most agreeable presence is with us, I repeat my demand that the Government should give us the £15 million for which she spoke in those rare moments when she was not attacking me. She spoke so eloquently in their favour that I feel that she may have—what is the the phrase?—"melted the Iron Chancellor" or caused the feet of clay to be a little more molten than they were. I hope that we may hear some concession about this group of common goods which are in great use in every household.
§ Mr. Jenkins (Birmingham, Stechford)
I was surprised when the right hon. gentleman the Member for Aldershot (Mr. Lyttelton) said fairly early in his remarks that the original purpose of the Purchase Tax had now been abused and that it was never intended originally that a tax of this sort, designed to curb inflationary spending on articles of a luxury nature, should be applied to a wide range of household goods. I was surprised to hear him say that because I understood that when the tax was first introduced by Sir John Simon it covered a very much wider range of goods than it does now. It covered clothing of every sort, for there was no utility scheme. Therefore, certainly from the point of view of the criterion which the right hon. Gentleman has laid down this evening, the tax is now a far better tax with at least one abuse removed than when it was introduced by a Chancellor of the Exchequer of the party opposite.
I am not sure whether the right hon. Gentleman intends to lead the Opposition into the Lobby in support of the Clause, because most of the arguments which he adduced were not arguments in favour of the Clause but arguments in favour of a proposal which he might or might not have put before the Committee in the event of the rules of order being somewhat different from what they were.
§ Mr. Lyttelton
When the hon. Gentleman has been here long enough he will know that it is possible for the Treasury Bench to make concessions on these lines 84 and afterwards incorporate them in the Bill.
§ Mr. Jenkins
Yes, but it is competent for us to note that a great number of consequences would flow from the carrying of the Clause in favour of which the right hon. Gentleman did not adduce arguments. Apparently he wanted some selective remission of the Purchase Tax and some relief on the household articles which are in greatest use. But the carrying of the Clause would not be particularly selective—
§ Mr. Lyttelton
The hon. Gentleman has misunderstood the burden of my remarks, which was that we are precluded from putting down discriminatory Amendments and the only way in which these household articles can be relieved is by some concession being announced from the Treasury Bench. That is just the point.
§ Mr. Jenkins
It seems to me that that might be a logical course of action if the intention of the right hon. Gentleman was to move his Clause to see if he could get a concession. If he did, well and good; if he could not he would have to leave it there. But if he is going to lead his party into the Lobby in support of the Clause he will be voting for a great number of things when he knows that he will not get his selective adjustments. A tax concession of £50 million, which I understand this Clause would involve is a very substantial one and only a very small proportion of it would go towards securing the object which he said he wishes to attain. It is a very wasteful way of attempting to secure the concessions.
Although the new Clause would be less regressive in its effects than the Clause moved in Committee it would still be fairly regressive to the extent that while the Purchase Tax at the 33⅓ per cent. rate covers some articles of a semi-necessary nature it also covers a great number of articles—the bulk of the tax is provided by these articles—of a nature which could not possibly entitle them to be considered necessities.
When we were last debating this issue the Opposition made a good deal of play with the fact that it was very important to carry through substantial remissions of Purchase Tax not only because of the effect on the home consumer but also because of the effect on our export 85 trade. It was suggested that by an undue concentration upon goods of a more utility type than we had traditionally made we were greatly weakening our own ability to compete in important export markets
In this connection I should like to draw the attention of the House to what appears to me to be a striking extract from an article in the "Manchester Guardian," a week or so ago, describing the International Trade Fair at Toronto and referring to perhaps the most important of all the overseas markets with which we have to deal at the present time, for certainly no market is more important than the Canadian market. The "Manchester Guardian" article of 19th June said:The conclusion of exhibitors was that Canada was a price conscious country and that it offered a better market for utility than for luxury goods, in which—referring to luxury goods—very little interest was shown.It is easily possible to exaggerate the extent to which even North American customers are interested primarily in luxury goods from this country rather than in utility goods.
§ Mr. Walter Fletcher (Bury and Radcliffe)
Does the hon. Member not realise that to use the words "utility" and "luxury" in respect of goods produces an entirely false impression? What Canada wishes to import are not rigid utility goods as we know them, but the entire range of goods starting above the utility level and going up, in many instances, into what he calls luxury goods.
§ Mr. Jenkins
I was quoting from an article which appeared in the "Manchester Guardian," and it is odd that if there were this great revulsion against utility goods—not using that term in its technical sense—the "Manchester Guardian" correspondent should have used this phrase which, he knows, has a well understood meaning in this country.
My last point concerns the hon. Member for Chippenham (Mr. Eccles), who I am glad to see in his place. When we were last discussing this subject the hon. Member made a number of points about the correct relationship between direct and indirect taxation. He attacked this Clause from a third point of view, that in the last few years the Labour 86 Party had got into a position in which it was quite untrue to its earlier propaganda by allowing the proportion of indirect taxation to the total sum raised in taxation to rise rather sharply.
I am surprised that the hon. Member should have made this point during the Committee stage because I thought he was primarily in favour of reducing the burden of direct taxation. I certainly remember him using a phrase previously to the effect that Income Tax was the heaviest burden. I am surprised that he should have urged any readjustment in favour of reducing the proportion of indirect taxation against direct taxation.
It has been a traditional point of view of the party on these benches that, broadly speaking, direct taxation is to be preferred to indirect taxation. That is my own point of view, but that argument possibly has a little less force in it now than it had before the war because we now have such a much greater equality of income than we had in those days. Of course, Purchase Tax as we now have it, rising to very high levels on luxury goods and excluding altogether the overwhelming majority of necessity and semi-necessity goods, is different from any indirect taxation which we knew in the old days, which was always a flat rate of taxation that bore most heavily, proportionately, on the poorest people and those with the biggest families. And, of course, no one could argue that this is the case with the present Purchase Tax.
None the less, nobody likes indirect taxation and no one wants to keep it on longer than is necessary. However, as indirect taxes go, the Purchase Tax as we have it is not a bad tax—[HON. MEMBERS: "Oh!"] There might be many worse forms of indirect tax, and if and when concessions can be given I would prefer them to be given in a more selective way than would result by the acceptance of this new Clause.
§ Sir H. Williams
I shall only take two or three minutes to say rather more than the hon. Member for Stechford (Mr. Jenkins) said in three times that number of minutes. The hon. Member used the word "regressive". I remember that 40 years ago I argued with a distinguished professor of economics who tied me up in a corner by saying that something was due to the regressive action of the American railways. But that did not 87 mean anything. It is a word which economists use when in difficulties.
I am against Purchase Tax and always have been. I opposed it when it was first introduced. I regard it as a thoroughly bad tax, and if the hon. Member were engaged in any form of industry he would know how bad it is. The hon. Member thinks it is only applied to luxury goods. During the Committee stage I was handed a dish cloth by one of my constituents. It is now in my car. Tax at the rate of 66⅔ was paid on it.
§ 5.45 p.m.
§ Sir H. Williams
It was even worse than that. Hon. Members should not talk that kind of nonsense. Purchase Tax is not new. When I was reading history books they talked about tonnage—it referred to liquor—and poundage, which was Purchase Tax that used to be granted to kings. The moderation of Charles I compared with the present Chancellor was quite amazing. Only yesterday I was reading an ancient Journal of the House of Commons to find out how they dealt with these things. It was dated 21st November, 1640—rather before the date on which the word "regressive" was invented. I think it will be in order to read it out because in those days they had monopolies as well and, of course, the Chancellor today is the great monopolist indirectly because he is the custodian for all the nationalised industries and they are all monopolies. It seems so topical:It is ordered that Sir Nicholas Cripps attend the Committee for Grievances: and that he bring forthwith to the House the patent he hath for the sole trade to Ginney and Binney: and the sole importing of Red Wood: and the patent concerning Coporis Stones: and the patent for the sole making and vesting, of Beads and Beaugles.The firm of which I am a director makes bugles; not the ones the Members of the Labour Party are always blowing, but the things ladies wear on their garments which attract Purchase Tax sometimes at one third, sometimes at two thirds, sometimes at 100 per cent. because of trifling errors in design.
It is sad that we cannot go into these in detail. The only course open to my right hon. Friend is to move the reduction of the entire group. I only wish my new 88 Clause had been in order, but at some time or other the Government will be forced to give an opportunity to the trade to argue its case. If the hon. Member for Stechford had been round a few establishments where they have on view things with Purchase Tax noted on them, he would not have made the speech he made. It showed that he did not know the extraordinary folly being committed by the Customs and Excise under the direction of the Chancellor of the Exchequer.
§ Mr. Mikardo (Reading, South)
The hon. Member for Croydon, East (Sir H. Williams), began his oration by a gratuitously offensive remark directed at my hon. Friend the Member for Stechford (Mr. Jenkins). Then he said he would speak only for two or three minutes but he actually spoke for four minutes and 31 seconds. Apart from being somewhat amusing, a condition which his nature impels him to be, the hon. Member did not enlighten us any more than did the speech which he criticised. [Laughter.] Really, Mr. Deputy Speaker, when an hon. Member begins by blowing one of the bugles of his own manufacture about himself, we expect his speech to be at least three times as good as that of the previous speaker.
§ Mr. Mikardo
The hon. Member has an excellent conceit of himself. It would be as well if a few others shared it. Unhappily they do not. [An HON. MEMBER: "Take 31 seconds to say it."] I have plenty of time, the night is yet a pup.
I was about to say that I agree very much with the right hon. Member for Aldershot (Mr. Lyttelton) when he said that we need to find some way in which we can compromise between the present arrangement—under which we are prohibited from discussing these things except in the most general terms like those of this new Clause—and the situation in which, because we could argue endlessly about every item in a long Schedule, we could reduce the Finance Bill to a farcical debate. It is desirable, if it is possible, that we should find some way out of this but there are other occasions for doing that. All we are discussing at the moment is the Clause on the Order Paper and, as the hon. Member for Stechford pointed 89 out, if the Opposition want to use this as a propaganda demonstration, they are welcome to do so, but they will not be discussing the Clause before us.
If we are to have a serious Debate it can only be on the wordage printed on the Order Paper. That, as has already been said, is by no means selective. It raises the question of whether, in order to do a little good, we should be compelled, if the Clause were accepted, to do a great evil. That is the problem in all these issues of taxation—to make each penny of taxation do the highest possible amount of work, and it means in turn finding ways of giving a penny to a useful concession without at the same time giving a shilling to a comparatively useless concession.
It is true that in this group there are some articles which are necessities to a much greater extent than others and there are some articles which are necessities to all of us. The question of what is a necessity and what is not varies considerably from person to person; what is a necessity to one is a luxury to others. The major amount of money which would be involved in this concession would be involved not in respect of things like the dishcloth mentioned by the hon. Member for Croydon, East, or the highly necessary toothbrush which was the only specific instance given by the right hon. Member for Aldershot but would come from two or three, or four at the most, very broad classifications of goods which do not fall into the class of necessity at all. If this Clause were carried—and that is all we are discussing—in order to enable the constituent of the hon. Member for Croydon, East, to give him a dishcloth at less cost and to enable us all to buy a toothbrush at less cost a couple of times a year, we would be giving many millions of pounds in respect of things which are not to the same extent necessaries.
I believe we need some new thinking on this question of what is in general a necessity—leaving aside the subjective and individual considerations—and what is not. Take, for example, the case of non-utility clothing and footwear. Clothing, of course, is a necessity to every man. A thing, however, becomes not a necessity but a luxury for one of a number of reasons. It becomes a luxury 90 if it is something one can well do without, but equally it becomes a luxury if it is something for which there is readily available a cheaper substitute. In this respect, whilst clothing in general is a first line necessity, non-utility clothing is a non necessity because nobody has to have non utility clothing. I do not know the exact up to date figures, but something of the order of seven eighths or nine tenths of all clothing is now utility clothing, and it will be agreed in all parts. of the House that we cannot anywhere in the world find clothing of such good' value as the utility clothing of this country. It may well be argued that there are some gaps in the utility range, some things we cannot get and that the supply of some things is occasionally or often short.
It may be argued that there are some respects in which utility ranges are susceptible to improvement, but the remedy for that is for us to put pressure on the President of the Board of Trade continuously even further to improve the already excellent utility schemes. The wrong way would be to try to narrow the gap between the essential utility clothing and the inessential non utility clothing. There are many articles of which we can buy one or two virtually identical things, one with a utility label and one without a utility label at 50 per cent. or 100 per cent. more, or, in the case of some women's apparel, 300 or 400 per cent. more. They are virtually the same article. It has been held that it is not one of the functions of government to see that a fool and his money are not parted and if anyone wants to pay three or four times as much as he need for an article for the snobbish pleasure of having it without a utility label—which, if he is worried about it, he can cut off anyway—it is not the business of government to save him that sum of money.
I have not looked up most recent figures, but I believe it is a fact that non utility apparel is the one item in this Schedule which brings in the largest amount of taxation, and it would be profoundly wrong to reduce the expenditure of those who insist on buying non utility apparel and hence, directly and inferentially, disadvantage those with lower incomes, who find difficulty in clothing themselves and their families decently outside the utility range.
§ Mr. Frederic Harris (Croydon, North)
Is the hon. Member putting forward a case for doing away entirely with Purchase Tax by going over to 100 per cent. utility production?
§ Mr. Mikardo
No, I am not saying anything of the sort. If I may recapitulate in two or three sentences to make my point clear even to the hon. Member, I am saying that of the things we are discussing the one on which most money is spent and of which there are ample supplies is utility clothing and that we have no need for special tenderness in the tax on those who will not buy utility clothing. If there are not sufficient supplies of utility clothing we can make representations to the President of the Board of Trade. I cannot see why we should advantage the higher income groups who buy non utility clothes and object to the lower income groups buying utility clothes. That would be the effect of the Clause, an effect which those supporting it—including the right hon. Member for Aldershot—do not intend, but we can only deal with the Clause as it is and as it is it is giving away a great deal unnecessarily to do a little bit of good necessarily.
If we get to the stage where we can deal with this on a more selective basis there are many points in the arguments put forward for which I, and, I am sure, many hon. Members on this side of the House and Members of the Government will feel themselves in agreement, but, while we are so limited, it seems to me that in all logic every hon. Member has no alternative but to oppose the proposed new Clause in its present form.
§ Mr. Michael Astor (Surrey, East)
I wish to make a short intervention in view of what has been said by the hon. Member for Reading, South (Mr. Mikardo). He has drawn a rather elaborate picture in the particular context of clothing, of what is necessary and what is not necessary. By and large he has said that non utility clothes are not necessary. I am certain the hon. Member is wrong there. I do not myself stand as any good example of non utility clothes, but I would point out to the hon. Member that tailors and shoe and boot makers of the first quality in this country have a very live industry in the dollar area of North 92 America and South America and also in France and Belgium and this country from visitors and in the capitals of those countries. The reputation of British clothes is built up by the excellence of the superior and more expensive articles we sell.
§ Mr. Mikardo
I see the point the hon. Member is making, but I beg him to bear in mind that now we have ended clothes rationing the effect of reducing Purchase Tax on non utility clothing, and hence narrowing the gap in price between non utility and utility clothing, would increase the demand for those things the hon. Member is describing at home and would, therefore, lose export sale—[HON. MEMBERS: "No."] That, in fact, has been happening in recent months.
§ 6.0 p.m.
§ Mr. Astor
That is exactly where I disagree with the hon. Member. I do not believe we can lose these markets in any way other than by losing the home market. We are bound, both because of our materials which we manufacture and because of our craftsmen, to retain these markets unless the Chancellor loses them for us, and the real danger of losing them is that the home market is destroyed. I am certain that that is true and that there are a large number of people in all parts of the country who would avail themselves of what the hon. Member may call the slight luxury of dressing in what, for want of a better term, is known as non utility clothing if they could do so. It is largely a matter of their personal budget.
§ Mr. Astor
The hon. Member for Reading, South, has very clearly made the one point on which I and most of my hon. Friends are in complete disagreement; which is the general trend in Government policy on the matter of Purchase Tax. He says that an increased home market would deprive the export trade of these clothes. It is only on an increased market at home that the export trade will thrive. It was only on a large home market that the export trade in' these goods grew up, and I think that the line which the hon. Member for Reading, South, has been propagating, in respect of both tailored clothing and shoes, is a most dangerous line to follow and one which, I hope, the House will not accept.
§ Sir William Darling (Edinburgh, South)
I support the new Clause, which my right hon. Friend the Member for Aldershot (Mr. Lyttelton) has put forward, without qualification. I support it because I think the Government have to look very closely at the Purchase Tax as a means of taxation. Is Purchase Tax to last for ever? If not, would it be swept away at one fell swoop, or will it be devoured by the extension of additional lines of utility goods?
The Clause gives the Government the opportunity of beginning progressively to reduce the tax from 33⅓ per cent. to 25 per cent. The general effect of this, of course, would be to compel a review of the articles which would come under the reduced schedule of 25 per cent. Many of the articles now appearing in that schedule should not be there at all.
I agree with the hon. Member for Reading, South (Mr. Mikardo) that the majority of items which bring in most revenue cause a great deal of trouble and annoyance both to the merchant and to the public. If the Clause is accepted, and a reduction is made in the tax to 25 per cent., we can begin to extricate ourselves from the present difficulty and the first step will have been taken towards the final abolition of the tax. If that is not done, I point out to the Government that they are endangering the growth of utility goods; because if utility items are as good as they are claimed to be, if endeavours are being made to make them as good as possible, if every inducement is given to manufacturers to put good materials and workmanship into the utility lines, and if additional supplies become available, less Purchase Tax will be collected on the non utility items and the tax on articles of this kind will eventually disappear.
I need not elaborate the argument of the hon. Member for Reading, South. He said it is perfectly plain that no one nowadays, unless for reasons of snobbery or vanity, need buy non utility clothing. His argument is irrefutable. As more and more utility lines are established, however, there will be less and less received by way of taxation on non utility goods, and what better purpose could the Government now do to serve the Budget than to reduce the lowest schedule from 33⅓ to 25 per cent. We offer to the Government the better way, which is to 94 enable them to retain a certain measure of taxation, in having the opportunity of regrouping the items in the present 33⅓ per cent. schedule at 25 per cent. taxation and so preserving the revenue which they seek to enjoy.
I should like to say a word or two about the definition of "utility" in the Canadian market. I am sorry that such an acute observer of economic affairs as the hon. Member for Stechford (Mr. Jenkins) has made the word "utility" in the "Manchester Guardian" article appear as though it is spelt with a small "u." What the reporters on textiles and clothing were saying was that, in the main, the Canadian public are not very fashion minded, like my hon. Friend the Member for Surrey, East (Mr. Astor). The Canadian public are utility minded, with a small "u." Nobody exports utility goods. Utility goods are not known in the export market as such. The buyer from Canada comes and looks at the goods, caring not whether they are utility or otherwise, because he or she is not concerned with that peculiar classification which is imposed by the Board of Trade upon the British people.
§ Mr. Jenkins
I did not, of course, intend to imply that the "Manchester Guardian" reporter was using "utility" in the technical sense in which we have used it in this Debate. All I intended to suggest was that the article showed that the view of the hon. Member for Surrey, East (Mr. Astor), that our exports depended upon the maintenance of a large home market, was a view which could be easily exaggerated.
§ Sir W. Darling
I am grateful for the intervention, but it does not change my view. The Canadian buyer does not discriminate between utility and luxury goods as we understand those terms. "Utility" is a term which has no significance to the export market. It is an unhappy label which a Government bent on uniformity and upon the extinction of good taste have imposed upon the British people, and especially upon the textile industry. Our new Clause offers the Government a good means of escape and I hope they will see fit to accept it.
§ Mr. Redmayne (Rushcliffe)
I should like very much to refute the suggestion of the hon. Member for Reading, South (Mr. Mikardo) that clothing is in any way a large part of the total Purchase 95 Tax bill. If he refers to the Monthly Bulletin of Statistics, he will find that all the clothing, both utility and non utility, is less than one quarter of that proportion of consumer goods which could be regarded as being taxable—that is, the goods which are either utility or are taxed.
§ Mr. Mikardo
I am sure that the hon. Member did not mean to misquote me. Utility clothing, of course, has no tax at all. All I said was clothing is the largest single item in this first classfication of.33⅓ per cent., and I am sure that that is right.
§ Mr. Redmayne
I appreciate what the hon. Member says, and I am equally sure that he is wrong. I shall be only too happy to prove that to him with figures if he will give me the opportunity to do so in detail. [HON. MEMBERS: "Do it now."] I could not give it now because it is far too complicated; but it is all there in the Monthly Bulletin of Statistics. The argument that there is some extraordinary difference between utility and what are called luxury goods will mean the death warrant of British industry if hon. Members opposite persist in it. It is a complete fallacy which is being fostered officially by the Financial Secretary to the Treasury when he says that if Purchase Tax is removed altogether, it would affect the cost of living by only one point. That argument disregards entirely the fact that the cost of living index is made up on a working man's budget which largely includes utility items.
Mr. Leslie Hale
Would the hon. Member tell us—we are all very interested in the discussion and are anxious to know—whether it is his case that non utility clothing is not the largest contributor to Purchase Tax in the 33⅓ per cent. Schedule? Surely he can tell us, so that we may know and can discuss the effects of any alteration.
§ Mr. Redmayne
I can claim some authority in doing so, in that I am myself what is called a shopkeeper and I see the whole of the evil effects of this Purchase Tax going on day by day. Hon. Members continue to make the mistake of singling out some particular class of goods—in one case, clothing; in another case, something else—and pretending that bears the whole burden. In point of fact this scale of Purchase Tax runs right 96 through the range of goods that are normally purchased by the consumer in this country.
Surely the hon. Member will answer my question? He has said that my hon. Friend the Member for Reading, South, is wrong in saying that non-utility clothes are the largest contributor in the Schedule. If that is the hon. Member's view, what does he say makes the largest contribution? Surely he can answer that in one word. Is it motor cars, or radios, or what is it?
§ Mr. Redmayne
I did not wish to waste time in going into these figures, so I offered to discuss the matter with the hon. Member for Reading, South, privately. However, I will give some figures. Household goods account for about £575 million, footwear for £170 million, other clothing for £778 million and other goods and services £1,506 million, making a total of £3,029 million. It is a comparatively easy task, perhaps easier for me because I have to do it for my living, to work out from the total of goods and services what the tax would be, or to work out the reverse calculation. If we take the total tax paid in this class—£217 million one can by a simple sum work out that it applies to goods totalling £1,200 million in price. That, as I have tried to stress, and as the hon. Member so obviously does not believe, amounts to something like half the range of goods that can be regarded as taxable.
I leave that subject, which has occupied me rather longer than I should have wished. I wish that hon. Members who doubt the effect of this tax on the quality of goods in this country could have seen the admirable exhibition of such goods shown by the Quality Goods Committee just before the Committee stage of this Bill. The duster which has been bandied about was supplied as an example by Miss Wyatt, representing the Transport and General Workers' Union. Perhaps her opinion might be worth quoting. She said:In the home they use any old rags.The tax on the dishcloths which might be used is 66⅔ per cent. She said:
If we want a good race with a good mind and a good environment, we must cultivate a taste for good things".That puts the matter in a nutshell.
97 There are reasons why Purchase Tax can today be looked at from a point of view totally different from that directly after the war. There was not then the same effect on the quality of goods demanded in the shops. Wages were ahead of prices and there were demobilisation bounties, and the necessity for economising in coupons also meant that people did look for quality regardless of price. Both those factors are absent today. As a result, the great bulk of consumer goods cost on the average 22s. for 18s. worth of value, that is, there is a 4s. surcharge on every 18s. worth of goods in this country. This country's future lies in quality goods. Our future is to be the Bond Street of the world, and this tax is driving us into Petticoat Lane.
I wish to make one individual claim in respect of which I must confess I have some interest. The class of goods for which I wish to plead is the sports equipment which goes to youth clubs and schools throughout the country. It bears tax and it is in the country's interest that it should not do so. If one also bears in mind that a large part of such equipment is bought by Government Departments, particularly the Ministry of Education, one sees how fallacious is a tax which takes money out of one pocket and puts it into the other.
It is fallacious to argue that this tax affects the cost of living by only one point. That may be so but it also greatly affects the cost of life as it is lived, and as all classes wish to live it. As such it should not be regarded as a permanent part of the Revenue but as a war time expedient which has outlived its usefulness and is now a great handicap to industry.
§ Mr. Douglas Houghton (Sowerby)
The hon. Member, like other hon. Gentlemen before him, has taken us rather a long way from the Clause. The new Clause moved by the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) is a modified version of the Clause which he moved during the Committee stage.
§ Mr. Houghton
During the Committee stage the Clause we considered was to 98 scale down the rate of Purchase Tax in all three groups. The Clause now before us jettisons the proposed reduction of Purchase Tax in the case of two of the groups and confines the proposed reduction to one group. I hope that the hon. Member for Flint, West (Mr. Birch) is now familiar with the Clause to which he has put his name.
The cost to the Exchequer of the Clause moved during the Committee stage would, it was estimated, have been about £68 million. The Clause now before the House is estimated to cost the Exchequer about £50 million, so that the proposed scaling down of the other two groups of Purchase Tax would have accounted for only £18 million. It is a little difficult to understand why hon. Gentlemen opposite believe that one category of Purchase Tax alone is represenative of necessary articles when in fact that group contains many articles which would scarcely be called necessities by many people, whereas other groups of Purchase Tax contain articles which many would regard as necessities.
For example, if one breaks a mirror, whether a framed one or not, and one goes to buy a new one, that purchase attracts 100 per cent. Purchase Tax. If one is fortunate enough to be able to buy a new motor car that attracts only 33⅓ per cent. There we have the contrast between articles of vastly different use, of different degrees of necessity to different members of the community, which are differently taxed.
I suggest, therefore, that the one merit of the speech of the right hon. Gentleman in moving this new Clause was to suggest that the machinery of this House is really not suitable for sorting out the anomalies and the difficulties connected with the future of this tax. Many of us on this side of the House feel very much in agreement with that view. Wisely or unwisely, this House has almost imprisoned itself on Purchase Tax in the 8th Schedule to the 1948 Finance Act, where everything is set out in almost tedious detail; not only those items which are subject to tax, but those which are not.
There is a good deal of merit in the suggestion that in the near future consideration should be given as to how this House is to have control over taxation, and also have the advice from the trade 99 and from others on many of the difficulties and anomalies which have arisen in the imposition of the tax.
Hon. Gentlemen opposite must not, however, seek to put that proposal in this new Clause, which after all is a proposal to reduce, without qualification whatsoever, the tax on the whole range of articles which are now in the first group of Purchase Tax. That includes not only non-utility apparel which accounts for a substantial amount of revenue drawn from this group, but also motor cars, which also accounts for a substantial amount of revenue, radios and stationery, office requisites, and a host of other articles which are really not part of the domestic cost of living in the sense stressed by the right hon. Gentleman in moving this Clause.
I consider therefore that the right hon. Gentleman made his point that the machinery of considering and levying and revising the tax needs some attention. But he has not made out a case for a reduction of Purchase Tax for one only of the three groups of Purchase Tax. He has not made out a case for reducing the Purchase Tax on many articles which are not necessity articles. He has in fact not made out a case for reducing any direct taxation at all. In their programme for the General Election hon. Members opposite stressed that a reduction in direct taxation must be a first objective; and I wish to know why hon. Gentlemen opposite have not been stressing the need for a reduction in direct taxation in accordance with their election pledge, instead of concentrating on a reduction in indirect taxation. In those circumstances I am sure the House will reject the new Clause.
§ Mr. Birch
We have now had three distinguished financial experts from the other side of the House upon this subject, the hon. Member for Sowerby (Mr. Houghton) the hon. Member for Stechford (Mr. Jenkins) and the hon. Member for Reading, South (Mr. Mikardo). The hon. Member for Sowerby made out a very strong case against the tax and he seemed to be almost as keen on reducing the 664⅔ per cent. level as he was on reducing the 334⅓ per cent. He also pointed out in some detail how extraordinarily capricious was the tax, which is one great disadvantage of it upon which 100 we on this side of the House have always laid stress.
So far as sorting out the tax is concerned, and getting the classes in proper order, there was a proposal put down on Committee stage by one of my hon. Friends. Unfortunately, it was not called, and as the hon. Member knows we should be out of order in discussing that on this Clause, as, indeed, we should be out of order in discussing the level of direct taxation when we have before us a proposal to reduce a certain indirect tax. To sum up, the hon. Member for Sowerby seemed to think it was not a very good tax but then, as a Socialist, a horrible thought struck him; somebody might buy something of a slightly better quality and he could hardly bear that.
The hon. Member for Reading, South, who has left the stricken field, and who, incidentally, took 10 minutes on his speech, again pointed out the anomalies, and how in the case of some articles almost indistinguishable from one another, one would not be taxed while others would be taxed at 100 per cent. The hon. Member went on to say that it did not matter, because clothes are practically all non-utility. I happen to notice that he was wearing a double-breasted coat, and as I understand it, a double-breasted coat is non-utility. The hon. Member also said that a fool and his money are soon parted. I should be very sad if he himself had been a fool.
The hon. Member for Stechford, made an attack upon quality. He represents a division of Birmingham, a city where craftmanship and quality, particularly in the jewellery trade is a source of great pride. I very much hope that his constituents will notice the attitude he adopts in these matters.
It would be well if hon. Members opposite would remember that the only tax which they have reduced in this Budget is the tax upon Bentleys and that that was done for this reason, as the Chancellor of the Exchequer said:Business has, in fact, fallen below the point necessary to enable these cars to be manufactured at a price attractive to the export markets and it is desired to re-establish a home market sufficient for this purpose."—[OFFICIAL REPORT, 18th April, 1950; Vol. 474, c.73.]If it is done with Bentleys I do not see why it should be so extremely immoral to suggest it being done in other cases. 101 It is well to remember what was the original object of this tax. It was not so much to deal with inflation as to stop people buying consumer goods, because they were not available. The then President of the Board of Trade, now the Minister of Town and Country Planning, used to stump the country saying that people did not need any suits; that he had plenty of suits to go on with and he did not see why other people should be buying suits at all.
The whole basis of the thing was to try to stop people buying, but it is a little saddening to think that now, five years after the end of the war, and with the great process of Socialist democracy we have had since, it is still considered injurious to have a toothbrush or buy a greeting card or buy stationery. The hon. Member for Sowerby mentioned stationery, but is it really very luxurious to write a letter? Very many people write letters to me—
§ Mr. Houghton
I did not suggest that stationery was a luxury; I merely distinguished it from other items of domestic expenditure which were more important factors.
§ Mr. Birch
The hon. Gentleman thinks that no one should write a letter, but perhaps he is lucky with his constituents—I do not know.
Then there were electric fires, and lipstick. In the words of one of the greatest living American poets:
A girl whose face is covered with paintHas an advantage with me over one whose ain't.That is not the case with the Chancellor. I think that this attack upon any form of quality is very damaging to the reputation of our country. It is mean. It reveals a feeling of envy. Envy never takes a holiday. This envious feeling is extremely unattractive. We are continually told that we are in the "Century of the Common man." I believe that hon. Gentlemen opposite are looking forward to a still more glorious day, the "Century of the Very Common Man."
§ Mrs. Castle (Blackburn, East)
In moving this Clause the right hon. Gentleman prayed in aid a speech which I made on the Committee stage of the Bill. I was surprised and delighted at my powers of conversion over the right hon. Gentleman. I had not hoped to succeed so well. 102 I was very grateful to find that he realised the power of the argument I made then, when I pointed out to the House that in this situation of financial stringency in the country and in many modest homes, the important thing was to pick out first things for relief in the first place. Obviously the right hon. Gentleman went away, thought very seriously over my speech and as a result we have this new Clause today.
I should be prepared to go along with the right hon. Gentleman if I were satisfied that his conversion was complete; but, very regretfully, I have had to come to the conclusion, after listening to the Debate, that his conversion is entirely spurious. That is clear not only from his own speech but from the speeches of every one of his supporters. Those who have listened attentively will have found that the examples quoted by hon. and right hon. Gentlemen opposite have not been relevant to the Clause. We had the hon. Member for Flint, West (Mr. Birch), talking about lipstick. Is he not aware that lipstick is not in the category of 33⅓ per cent.?
Are we to understand that this is not a serious attempt by hon. Gentlemen opposite to get certain alterations in Purchase Tax, but that it is merely another of their propaganda efforts? The hon. Member for Croydon, East (Sir H. Williams) talked about dishcloths at 66⅔ per cent. Is he really agitated about that category or about the 33⅓ per cent. category which is nominally the objective of this new Clause? I am most concerned, as I said in my earlier speech, about the pressure of Purchase Tax on certain remaining essential items in the home. If this is an attempt by hon. Gentlemen opposite once again to make an appeal to the housewife and to say, "Look what we tried to do for you in the House of Commons yesterday," I repeat what I said before. It still remains the answer to this new Clause.
The items in the 33⅓ category which enter directly into the cost of living of the modest home are very small in number, thanks to the incidence of the utility scheme, to the reliefs given previously by the Chancellor and the exemptions in the Schedule. It would take something more like £15 million than £50 million to lift this remaining burden from the haber- 103 dashery items and the few toilet requisites, like tooth brushes and razor blades, about which the propaganda play will be made tomorrow. I am confident that if we were to say to the housewives of Britain that there was £50 million of concessions which the Chancellor would make, the housewives would not choose to make them on the items which predominate in this category.
Stationery has been mentioned. Unfortunately, I have not got my Schedule with me, but I believe that the yield from Purchase Tax on stationery is something like £17 million. The great proportion of that does not come from the little domestic envelope but from office stationery. If hon. Gentlemen opposite think that the housewives of Britain would vote for the relief to fall on items like that, they are wrong. I am confident that my right hon. and learned Friend is as anxious as any- one in this House to lift the burden from what are really the essential items. His difficulty, at a time when there is not much money to spare, is to get the agreement of the House on what really are the priorities. Hon. Members opposite are in an advantageous position. They only have to talk about alternatives.
§ Mr. Lyttelton
Is it the hon. Lady's argument that, since the Chancellor is unable to determine the priorities, he has found the easiest way out of his difficulty by doing nothing?
§ Mrs. Castle
Whatever the Chancellor would do in this situation—and some concessions have been made in this Budget—it would always be possible for hon. Members opposite to say that they would have done this, that and the other as well. They can suggest concessions amounting to something like £500 million without at any time having to say which concessions they would put into operation. They can say "These are alternatives; these are not final proposals."
In a situation where we have to choose our priorities extremely carefully, the housewives of Britain would not be grateful to the House for an expenditure of money in the way suggested by this Clause. The priorities of hon. Members opposite are not the priorities of the humble home. All their speeches have shown that. We have even had a plea for relief in taxation on ornamental 104 bugles worn in the coat lapel. How many housewives are weeping their eyes out today because they cannot afford the hon. Members' ornamental bugles? This Clause is not a serious contribution to the difficulties of the housewife. It is just another propaganda smokescreen, and I hope that the House will reject it.
§ Colonel Gomme-Duncan (Perth and East Perthshire)
Like the man in Henley's poem, we on this side of the House feel that we have suffered under the lash of the hon. Member for Blackburn, East (Mrs. Castle), with her Treasury brief; but, like that man, our heads are "bloody but unbowed." We maintain that we are just as interested in the affairs of the housewives of Great Britain as is the hon. Lady. I have experience of housewives considerably beyond that of the hon. Lady.
A generation is growing up which just does not know what quality means. That is nothing short of tragedy; I am sure that the hon. Lady would agree with that. They think that today is normal, but it is not. When Government spokesmen speak of "normal" they mean war-time. That is normal to them, but when we speak of "normal" we mean pre-war time for quality. [HON. MEMBERS: "Hear, hear."] I am glad that hon. Gentlemen opposite realise that fact. Perhaps they will consider the matter more deeply.
§ Mrs. Castle
Can the hon. and gallant Gentleman tell the House what experience of quality the cotton weavers of Blackburn were able to enjoy in their homes in the 'thirties?
§ Colonel Gomme-Duncan
I do not speak about people of whom I know nothing, but one thing they were able to enjoy was a much better quality of food. The hon. Lady knows that.
To return to the new Clause, as it is obvious that we shall not get concessions from the Chancellor, I ask him at least to look at some of the absurdities of Purchase Tax. I am not allowed to go into a lot of detail, but I will give one example. There is high Purchase Tax on a fireman's helmet whereas a miner's helmet is entirely free from tax. There are many other examples. This hits hard at local authorities and others concerned with the fitting out of forces like fire brigades.
Is this sensible? Does it bring in any revenue worth talking about? I see that 105 the Chancellor is in smiling mood. Perhaps the firemen, or at least the people who buy their helmets, can have a bit of hope. If it is not possible to give reductions of Purchase Tax, at least these absurd anomalies can be considered. They irritate people and interfere with the life of the country. I do not think that drastic reductions in Purchase Tax on items like this would affect the Revenue very much.
§ Mr. W. Fletcher
Like the hon. Member for Blackburn, East (Mrs. Castle), I represent a Lancashire working-class constituency, and I am concerned that she should have chosen to mention my right hon. Friend the Member for Aldershot (Mr. Lyttelton), though it may have the effect of enhancing his reputation as being the best dressed man in the House, entirely non-utility, whereas I have tried very often to get utility suits and have found, in common with the hon. Member for Reading, South (Mr. Mikardo) and others, that it is quite impossible to do so.
I believe that the speech of the hon. Lady was not entirely free from that propaganda element of which she talked when she pulled out the vox humana, no doubt in accordance with the red dot marked on her brief. We have had a rechauffé of her previous speech, in which she tried to create an entirely wrong prejudice about what we are trying to do. What we are trying to do, perfectly honestly, is to force upon the Treasury and the Chancellor the task which they ought to have taken upon themselves of going through the very many ridiculous anomalies created by this tax, which are not only handicaps to the housewife but are having a very serious effect on some of the industries of this country.
One of the acid tests concerning this tax is the question of frustrated exports. Whenever we send from this country to countries all over the world goods which are of the non-utility type, goods which we can sell abroad only because of their quality, very often there is complete frustration of these exports and then, when we get them coming back here for sale in this country, we have the absurdity that they cannot be sold, without a utility marking on them, unless they are subject to this ridiculous tax. This is one of the great handicaps of the export trade, and the bon. Lady knows this as well as I do. 106 We are facing this ridiculous anomaly concerning an export trade which has been built up on quality—luxury is not the right word to use—and we are placing on this trade a really unnecessary handicap at a moment when we can ill afford to do so.
The reason for this new Clause is to focus attention on the need, which we have continually urged, to do away with some of these really great handicaps. All the arguments which have been advanced concerning the handicaps to the housewife fade into complete insignificance in comparison with the vital question of what we are going to do and what we are doing now to keep going the export trade. The case was proved in the speech of my hon. Friend the Member for Flint, West (Mr. Birch). If hon. Members opposite think that they can in any way continue our export trade at its present level and to countries which have always demanded quality and always used the two words "Britain" and "quality" in the same breath, while a tax of this sort is imposed on the goods, they are making a very great mistake.
I say to the Treasury that this is their opportunity, although I know they will not accept it and it is no use talking to them when they are in that mood. The opportunity is being forced upon them by our action in submitting this new Clause so that, by the time we next discuss these things, they will have had the opportunity to reconsider not only the blocking and frustration of our desire to expand the export trade by all means available, but also to see that these things are properly discussed and that, in the result, they may take the advice which we offer, and not listen to the hon. Member for Blackburn, East.
§ 6.45 p.m.
§ Viscount Hinchingbrooke (Dorset, South)
It has been an unhappy feature of this Debate that every Socialist speaker has been asked to stand up and defend the indefensible position of the Chancellor, and in so doing they have done their consciences a good deal of damage. I do not know what the hon. Lady the Member for Blackburn, East (Mrs. Castle) wanted from the Committee or from hon. Members on this side. She came here the other day and complained because we were attempting to reduce 107 the Purchase Tax in its three ranges, and one of her arguments was that the 66⅔ per cent. and 100 per cent. levels included goods of high quality and high price which ordinary people could not afford and which did not justify their exemption from the tax.
As the hon. Lady knows, we are bound by certain rules in this Debate, which the hon. Member for Sowerby (Mr. Houghton) revealed. We have only two opportunities in the course of the proceedings on the Finance Bill, and can do only two things. We made an attempt to do the right thing on the first occasion, but the hon. Lady rejected it, therefore leaving us no alternative but to do what we are doing in putting forward this new Clause this afternoon.
I wonder very much whether, at the price of raising the hon. Lady's reputation as a debater in this House, she is not failing to deal honestly by her own constituents. Did she send her first speech to her own local paper? Does she propose to send the speech which she has made today to her local paper? Is she so sure that the mill girls of Blackburn never wear utility stockings? Is she so convinced that the simple people in her constituency and in the back streets, which I am certain she knows extremely well, do not have cutlery, wallpaper and other things for which they have to pay excessive prices because of this action of the Chancellor?
§ Mrs. Castle
Will the noble Lord allow me? I should like to point out that it was not my practice at any time to send copies of my speeches to the local paper, because they have perfectly good agencies of their own and have always adequately reported me without my doing so. The contents of my speech were reported in the constituency, and have not been criticised.
§ Viscount Hinchingbrooke
I am very glad—or very sorry, according to the way one looks at it—to hear that the hon. Lady does not communicate her speeches to her constituents, but they will have the opportunity of reading them in HANSARD and will probably draw the same conclusions as they would have done from the report in the local paper.
The hon. Lady should not make these charges against hon. Members on this 108 side, but should have inquired about the effect of this tax on her own constituents. All her constituents have to buy either gas mantles or electric light bulbs; many of her constituents have wireless sets, and all the children have toys. Does she really think that, five years after the war ended and with goods in greater supply, and when there is some unemployment, no doubt in her own constituency, which might well be taken up by a reduction in Purchase Tax leading to higher productivity—does she not think that, in those circumstances, she is not justified in spending time, as she did a fortnight ago and has done again today, in opposing every action that we are trying to take for the benefit of the people of the country?
I should prefer to believe that the hon. Lady had been asked to make the speech which she made a fortnight ago and has repeated today by the right hon. and learned Gentleman the Chancellor of the Exchequer and others sitting immediately in front of her, and that behind the scenes—I hope very much—she is taking the action that will result in positive measures of reduction of the Purchase Tax next year, if not before that time, under the powers which the Treasury have to reduce the tax by order; and that she will, by then, eventually reconcile herself to the belief that the principle behind our action is in the interests of the great mass of her constituents.
§ Mr. McAdden (Southend, East)
I wish to support the suggestion for the reduction of Purchase Tax from 33⅓ per cent. to 25 per cent., not because I believe that it is the only way of dealing with the Purchase Tax, but because it is the only way by which we are likely to gain any concessions from the Chancellor. In the discussion on a previous occasion, it was made perfectly clear that there was no possibility of a reduction of the tax in the other categories, but there was at least a hope held out by the hon. Lady the Member for Blackburn, East (Mrs. Castle) concerning the 33⅓ per cent. category.
I know that there are a large number of articles included in the different categories and that we cannot attempt to separate them, but it is reasonable that we should draw attention to those instances which are worthy of consideration by the House. For that reason, I hope we shall have 109 support, not only from this side, but from the other side of the House as well, for this very modest concession which I believe to be of great necessity for the people of this country. I have heard a number of arguments this afternoon which would have us believe that Purchase Tax does not press so heavily as it might because there are in existence ranges of utility articles, and so on. Surely hon. Members do not really think that the trade of this country has been built up in the past, and is likely to be built up in the future, merely by the production of utility articles. We do not want to go in for the cult of the commonplace. That is not the way the trade of this country was built up.
If we are to concentrate purely on utility articles and to penalise and tax heavily by varying stages anybody who manages to produce something which is not only useful but ornamental and attractive as well, then we shall certainly inflict a serious handicap on the producers of this country. It is within the knowledge of the Government Front Bench the stupid way in which this tax works. Very often an article which in itself is quite useful attracts only a very modest rate of tax providing it is of a utility character, but immediately it is made attractive we find it is removed into a higher category of tax.
If the trade of this country is to develop to the extent to which all of us desire. it can only be done by encouraging our manufacturers to be progressive and enterprising. Because I believe that this tax prevents manufacturers from being progressive, and because, although this is not the best way of dealing with it, I think it is a step in the right direction, I hope the concession asked for this afternoon will be granted.
§ Mr. Jay
The right hon. Member for Aldershot (Mr. Lyttelton) did not really argue in favour of this new Clause. He argued, instead that it would be desirable to give relief of Purchase Tax in the case of some of the more necessary items. I can well understand the right hon. Gentleman's procedural difficulty, because of course, the Government are involved in exactly the same difficulty. I agree that there is a case for giving relief, when possible, earlier on the more necessary household goods, but the Parliamentary difficulty in which we are involved is this: 110 I think it is fairly generally agreed that it is undesirable, at any rate under the conditions of this Finance Bill, to embark on what the right hon. Member for Bristol, West (Mr. Stanley), called a Dutch auction for individual items of Purchase Tax, but, if there is a way and we do not do that, then, of course, the Government, just as much as the Opposition and Private Members are bound by the terms of the Budget Resolution. Therefore, when the right hon. Gentleman challenges us to name items on which, as he suggested, we should give relief of f15 million, the answer is, of course, that in present conditions, and the House having passed the Resolution it has, it is impossible for us to do that.
I think I should say something about the Clause which has been the main subject of the discussion. At first sight, I think there is some attractiveness in the proposition that the 33⅓ per cent. rate should be reduced to 25 per cent. At any rate, it is more attractive than the former proposal made by the right hon. Gentleman in Committee for revising all the three rates downwards. That is because, as he said, a number of the more necessary items are naturally included in the 33⅓ per cent. rate.
When one examines this proposition more closely, however, it is much less attractive as an alternative to the reduction which we decided to make in this Budget in Income Tax, and that, mainly, for two reasons. The first is that as against the £70 million of revenue which would have been lost on the earlier proposal for the reduction of all the three rates, the reduction proposed today in the one rate would cost about £50 million. That is perhaps rather surprising, but the reduction of the one rate would cost that very substantial sum. Secondly—
§ Mr. Henry Strauss (Norwich, South)
In making that calculation, is the Financial Secretary assuming the same volume of sales, or is he making an allowance for the increased sales that would result from the reduction in the tax?
§ Mr. Jay
It is very difficult to say what the result would be, and, therefore, difficult to make the calculation, but, generally speaking, we are assuming that there would not be much change in the volume of sales.
111 The second reason is that most of that taxation of £50 million would, in fact, even at this rate, go on the rather less essential items. It is, of course, true, as I said in the earlier Debate, that we have placed nearly all the less essential items, or, at any rate, most of them, at the higher rates of tax and the more essential at the lower rates. There are, however, one or two commodities which would, I think, be called less essential, but which have for special reasons been placed at the 33⅓ per cent. rate. They include, for instance, non-utility clothes which we have been discussing this afternoon, motor cars, and wireless and television sets. They are three notable examples. There are special reasons why those three items were charged at the lower rate, but it so happens that they are the items on which the bulk of the revenue is raised among the goods in that category.
§ Mr. Douglas Marshall (Bodmin)
I assume that when he mentions wireless sets, the Financial Secretary is not including the dry battery in that category as well?
§ Mr. Jay
I think I am, but I could not tell the hon. Gentleman definitely now. I will let him know.
The hon. Member for Rushcliffe (Mr. Redmayne) maintained that non-utility clothes were not a large proportion of the goods charged at 33⅓ per cent. There, he is quite wrong. In fact, something rather more than one-quarter of the revenue raised at this rate comes from non-utility clothes. Therefore, we are, in fact, getting a substantial proportion of this revenue from clothes which represent not more than about 10 per cent. of the total supply.
§ Mr. Redmayne
You accused me of being absolutely wrong. I said that the proportion was rather under a quarter, and you said it was rather over a quarter. That is not being absolutely wrong.
§ 7.0 p.m.
§ Mr. Jay
I am very glad that we are agreed. I thought the impression created by the hon. Gentleman was that non-utility did not contribute the major part of the tax. If we include motor cars, 112 radio sets and television sets, we arrive at something very nearly one-half of the revenue raised at the rate of 33⅓ per cent. It follows that in all probability about half the revenue remitted would, in fact, apply to these commodities. Therefore, I think that, when examined, the proposition is not nearly so attractive as it is at first sight.
Moreover, I suggest that there is a serious doubt whether the reduction of Purchase Tax on non-utility clothes and motor cars would not be injurious to the export trade in both these items. Since both these industries are producing near to capacity, it is at least arguable, that a reduction of the tax would increase home demand and would have the effect of reducing rather than increasing exports.
The hon. Member for Flint, West (Mr. Birch) quoted yet again our decision to reduce Purchase Tax on the expensive cars with the express purpose of assisting exports; but I think he forgot two things. First, we reduced it from 66⅔ to 33⅓ and, therefore, it now stands at exactly the same level as the tax on non-utility clothes and ordinary motor cars. Secondly, that was a notable instance where a particular section of an industry was, without question, producing very much below capacity. Therefore, in our view, a case had been made out on the merits of the particular industry—as it must be made out in these cases—for a reduction with the purpose of encouraging exports.
The hon. and gallant Member for Perth and East Perthshire (Colonel Gomme-Duncan) argued, as did several other hon. Gentlemen, for a continuous effort to iron out the anomalies which he suggested Purchase Tax contained. As I think he knows, that process goes on throughout the year and, as hon. Gentlemen will have noticed, a steady series of Orders are made from time to time by this House to even out anomalies of that kind.
§ Colonel Gomme-Duncan
In view of the very encouraging statement the hon. Gentleman has made, may we assume that, during this year of grace, firemen's helmets will be evened out?
§ Mr. Jay
I will take note of the hon. and gallant Gentleman's suggestion, but I am afraid I cannot give a precise assurance this afternoon. He will remember 113 that we ironed out an anomaly in the case of Christmas cards recently.
It has been suggested to us this afternoon that there should be continuous consultations with the trade and the manufacturers on these matters. There again, hon. Gentlemen must really know that, of course, continuous consultation goes on all the year round between Customs and Excise, who are dealing with the tax, and the trades concerned. All the major decisions on Purchase Tax are made after consultation with the trade and usually, indeed very often, in accordance with suggestions made by them.
§ Sir Wavell Wakefield (St. Marylebone)
Is the hon. Gentleman aware that there is a feeling amongst manufacturers generally that when all their appeals go forward it is just like battering against a brick wall. There is no understanding of their difficulties and problems, and nothing happens when they put forward requests for help.
§ Mr. Jay
I should like to show the hon. Member a letter I have just received from a representative of the trade responsible for coach building in the motor industry. I assure him we have continuous consultations; and I do not think it is true to say that that sort of complaint prevails very widely. If it does, it is up to the trade concerned to make suggestions and representations to Customs and we shall be very glad to hear them.
I said that, when the time comes and the money is available, there was a case for selecting the more necessary types of household goods for early relief from Purchase Tax. For the reasons I tried to give, and that several hon. Gentlemen behind me gave today, we decided it would give more relief to the cost of living, more incentive to greater productive effort and, generally, more benefit where it was most needed if, this year, we made the reductions in Income Tax which we made in the Budget rather than a cut in the 33⅓ per cent. rate of Purchase Tax. Therefore, I must also ask the House to reject this Clause.
§ Captain Crookshank
Certainly, after the speech of the Financial Secretary to the Treasury, I shall ask my hon. and right hon. Friends to support us in the Lobby on the new Clause. I have hardly ever heard a more feeble defence than the one we have just had put 114 to us. In his opening words, the hon. Gentleman admitted there was a case for relief of household goods. That, of course, has been admitted by everybody else who has spoken on either side of the House. The hon. Member for Reading, South (Mr. Mikardo), for example, criticising this Clause, said it would do some good and a great deal of evil. Ever since he spoke I have been wondering, for the life of me, what kind of evil is produced by reducing taxation. I thought that, on general principle, a reduction of taxation was a good thing.
§ Mr. Mikardo
If the right hon. and gallant Member wants an answer, that is very simple. Money does not come out of the air, and if £50 million is to be cut in this way it would have to come from somewhere. Presumably, since it was the only concession, this cut would have come at the expense of the reduction of Income Tax we have decided to make. Therefore, it would have created a great deal of evil.
§ Captain Crookshank
It might also have come out of reduction of public expenditure. That was not the point that the hon. Member was making. He was dealing with the suggestions of remission in this Clause. The hon. Member for Blackburn, East (Mrs. Castle), said she wanted to reduce the pressure on certain classes of goods in modest homes. That is the object we have at heart in moving this Clause. She is not the only person who can speak for housewives in this House. Apart from that being one of the results that this Clause would bring about, owing to the way we have to discuss these matters other results also follow; but the other results are, in our view, to the good—that is that there should be a reduction in Purchase Tax in these other categories.
That has been one of the gists of the argument on this side. Another is that, by making the price of a whole series of articles higher than it need be, quality production is endangered. I do not criticise the constituents of the hon. Member for Blackburn, East except, of course, for sending her here. But I am perfectly sure that any housewife who had the argument put to her is not so selfish as to say, "I am not going to get any reduction myself from this particular change in taxation, so it should not take place." I am perfectly certain no one would take that 115 view, especially when the point was supported by the good economic arguments which have come from this side of the House today.
The fact remains that the Financial Secretary to the Treasury has really given away the whole argument. All he said fell to the ground when, in an unguarded moment, he reminded us that the Government has, as he called it, ironed out the Christmas cards. But they did that by producing a Treasury Order. He admitted in his first sentence that there is a case for relief of household goods; but if, as he says, the Government cannot accept this Clause, is he going to give any assurance that he is going to start ironing out these anomalies?
Christmas cards of course were a very gross case. There are many others, I am not going to read the list of things affected by the 33⅓ Purchase Tax, but they cover a very wide field. The hon. Gentleman was a little ingenuous when he said that something like half the full amount of this tax came from non-utility apparel, radio sets and motor cars. While those came out of the half, the rest of the half is made up of other articles in the same groups, including electric and gas fires, and new bicycles. Whatever views hon. Gentlemen opposite have about motor cars, they are surely going to admit the bicycle is something which even the modest housewife sometimes requires. Certainly most of the modest housewives' husbands require bicycles to get them to work. I quite admit that one could argue almost indefinitely as to what one means by necessity and semi-necessity.
In our view, it is a good thing to take a first step towards reducing Purchase Tax. This is an enormous burden on the people and plays a great part in making the cost of living so high as it is now. That in itself would be a reason for accepting our new Clause. Of course, we would have preferred the acceptance of the Clause which we proposed on the Committee stage, because that had even more influence on the point relating to exports than this, as was admitted in the Bentley case. It had more influence over a radge of goods which the hon. Member for Blackburn, East may like to describe as luxuries but which are also extremely valuable for the export trade in dollar countries. We would have pre- 116 ferred that on general economic grounds, but it was not possible.
Therefore, we now come forward with this other proposal, which incidentally does not cost as much. I think I can answer the query of my hon. and learned Friend the Member for Norwich, South (Mr. H. Strauss) about whether the Government took into account the increased sales which would result from a reduction in Purchase Tax if this Clause were adopted. If one makes a mathematical calculation one finds that it has not been taken into account. They have assumed roughly a quarter of the actual yield. To the extent that there would be more purchases of these goods in the home market, the return to the Treasury would be the higher.
To make a start in the general direction of reducing Purchase Tax would be welcomed everywhere, modest housewives in Blackburn included. Having failed in our first proposal we come forward with this, which is in itself useful. It does not go all the way, but we realise that there are limits to the amount which the Treasury thinks it can give away this year. Certainly the limits which we think it can give away are not quite the same as the limits which the Treasury thinks it can give away, because it has given so little during the discussion of the Finance Bill.
This Clause would certainly help with some of the most important household goods which still bear Purchase Tax. It would help because the prices would be reduced, and it would also help in concentrating once more the greatest amount of interest and effort in maintaining the quality of our goods for the export trade. However much hon. Members opposite may argue one way or the other, the fact remains that a sound home trade is essential for the development of the export trade. One cannot get away from that very platitudinous remark. Therefore, since by reducing the Purchase Tax we would increase the home market and, therefore, assist in developing quality for the export trade, this is a better Clause than hon. Members opposite seem to think.
Furthermore, this Clause will reduce the general burden. I am certain these things cannot be evaluated in terms of 117 the cost of living index, but the acceptance of this Clause would go part of the way in reducing the cost of ordinary purchases which have to be made from time to time at home. I know that great care is taken to try and make the cost of living index as accurate a picture as possible of the cost of living of the various groups which it covers, but in fact it cannot do so because so many things have to be bought from time to time but at differing intervals which could hardly be brought into a regular index. One need only think of some of the articles in the group covered by this Clause, such as the bicycle, the electric light bulb, household furnishings and cutlery. People are not buying cutlery all the time, but when they do they find 33⅓ per cent. Purchase Tax on it, and they find it a very heavy burden.
§ I hope that we shall be supported in our plea to the Government to tackle this problem. They can do it, but they have shown not the slightest inclination now or at any other time. The fact that the Financial Secretary did not even mention the possibility of a regular inquiry and consultation on this matter shows how little attention he has paid to the arguments put forward by my right hon. Friend in opening the Debate. I have heard poor defences before, and I dare say that in the view of some hon. Members opposite when I was Financial Secretary I made them myself, but I never heard worse than I have heard today. I hope the House will support us in this new Clause.
§ Question put, "That the Clause be read a Second time."
§ The House divided: Ayes, 273; Noes, 288.121
|Aitken, W. T.
|Crouch, R. F.
|Heald, L. F
|Alport, C. J. M.
|Crowder, F. P. (Ruislip-Northwood)
|Henderson, John (Cathcart)
|Amery, J. (Preston, N.)
|Crowder, Capt. John F. E. (Finchley)
|Hicks-Beach, Maj. W. W.
|Amory, D. Heathcoat (Tiverton)
|Cundiff, F. W.
|Higgs, J. M. C.
|Cuthbert, W. N.
|Hill, Mrs. E. (Wythenshawe)
|Ashton, H. (Chelmsford)
|Darling, Sir W. Y. (Edinburgh, S.)
|Hill, Dr. C. (Luton)
|Assheton, Rt. Hon. R. (Blackburn, W.)
|Astor, Hon. M.
|Davies, Rt. Hn. Clement (Montgomery)
|Davies, Nigel (Epping)
|Hogg, Hon. Q.
|Baldock, J. M.
|de Chair, S.
|Hollis, M. C.
|Baldwin, A. E.
|De la Bère, R.
|Holmes, Sir J. Stanley (Harwich)
|Baxter, A. B.
|Deedes, W. F.
|Hope, Lord J.
|Beamish, Maj. T. V. H.
|Digby, S. Wingfield
|Hopkinson, H. L. D. A.
|Bell, R. M.
|Dodds-Parker, A. D.
|Hornsby-Smith, Miss P.
|Bennett, Sir P. (Edgbaston)
|Donner, P. W.
|Horsbrungh, Miss F.
|Bennett, R. F. B. (Gosport)
|Douglas-Hamilton, Lord M
|Howard, G. R. (St. Ives)
|Bennett, W. G. (Woodside)
|Drayson, G. B.
|Howard, Gerald (Cambridgeshire)
|Bevins, J. R. (Liverpool, Toxteth)
|Hudson, Sir Austin (Lewisham, N.)
|Dugdale, Maj. Sir T. (Richmond)
|Hudson, Rt. Hon. R. S. (Southport)
|Bishop, F. P.
|Duncan, Capt. J. A. L.
|Hudson, W. R. A. (Hull, N.)
|Black, C. W
|Hulbert, Wing-Cdr. N. J.
|Boles, Lt.-Col. D. C. (Wells)
|Duthie, W. S.
|Hutchinson, Geoffrey (Ilford, N.)
|Eccles, D. M.
|Hutchison, Lt-Com. Clark (E'b'rgh W.)
|Bossom, A. C.
|Eden, Rt. Hon. A.
|Hyde, H. M.
|Elliot, Lieut.-Col. Rt. Hon. Walter
|Jeffreys, General Sir G.
|Erroll, F. J.
|Boyd-Carpenter, J. A.
|Johnson, Howard S. (Kamptown)
|Bracken, Rt. Hen. Brendan
|Fletcher, W. (Bury)
|Johnston, Douglas (Paisley)
|Joynson-Hicks, Hon. L. W.
|Braithwaite, Lt.-Comdr. J. G.
|Foster, J. G.
|Bromley-Davenport, Lt-Col. W.
|Fraser, Hon. H. C. P. (Stone)
|Keeling, E. H
|Brooke, H. (Hampstead)
|Fraser, Sir I. (Lonsdale)
|Kerr, H. W. (Cambridge)
|Browne, J. N. (Govan)
|Fyfe, Rt. Hon. Sir D. P. M.
|Kingsmill, Lt.-Col. W. H.
|Buchan-Hepburn, P. G. T.
|Galbraith, Cmdr. T. D. (Pollok)
|Lambert, Hon. G.
|Bullock, Capt. M.
|Gammans, L. D.
|Lancaster, Col. C. G.
|Bullus, Wing-Commander E. E.
|Garner-Evans, E. H. (Denbigh)
|Butcher, H. W.
|Gates, Maj. E. E.
|Law, Rt. Hon. R. K
|Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n)
|Gomme-Duncan, Col. A.
|Leather, E. H. C.
|Carr, L. R. (Mitcham)
|Gridley, Sir A.
|Legge-Bourke, Maj. E. A. H.
|Clarke, Col. R. S. (East Grinstead)
|Grimston, Hon. J. (St. Albans)
|Lennox-Boyd, A. T.
|Clarke, Brig. T. H. (Portsmouth, W.)
|Grimston, R. V. (Westbury)
|Hall, J. (Gateshead, W.)
|Linstead, H. N.
|Conant, Maj. R. J. E.
|Harden, J. R. E.
|Cooper, A. E. (Ilford, S.)
|Hare, Hon. J. H. (Woodbridge)
|Lloyd, Rt. Hon. G. (King's Norton)
|Cooper-Key, E. M.
|Harris, F. W. (Croydon, N.)
|Lloyd, Maj. Guy (Renfrew, E.)
|Corbett, Lieut.-Col. U. (Ludlow)
|Harris, R. R. (Heston)
|Lloyd, Selwyn (Wirral)
|Craddock, G. B. (Spelthorne)
|Harvey, Air-Codre. A. V. (Macclesfield)
|Lockwood, Lt.-Col. J. C.
|Harvey, Ian (Harrow, E.)
|Longden, G. J. M. (Herts, S. W.)
|Crookshank, Capt. Rt. Hon. H. F. C.
|Harvie-Watt, Sir G. S
|Low, A. R. W.
|Cross, Rt. Hon. Sir R.
|Lucas, Major Sir J. (Portsmouth, S.)
|Crosthwaite-Eyre, Col. O. E.
|Head, Brig. A. H.
|Lucas, P. B. (Brentford)
|Lucas-Tooth, Sir H
|Orr-Ewing, Charles Ian (Hendon, N.)
|Lyttelton, Rt. Hon O
|Orr-Ewing, Ian L. (Weston-super-Mare)
|Strauss, Henry (Norwich S.)
|McAdden, S. J
|Stuart, Rt. Hon. J. (Moray)
|McCallum, Maj. D
|Perkins, W. R. D
|Studholme, H. G.
|McCorquodale, Rt. Hon. M. S.
|Peto, Brig. C. H. M
|Summers, G S.
|Macdonald, A. J. F. (Roxburgh)
|Macdonald, Sir P, (I. of Wight)
|Pitman, I. J.
|Taylor, C. S (Eastbourne)
|Mackeson, Brig. H. R.
|Powell, J. Enoch
|Taylor, W. J. (Bradford, N.)
|Thomas, J. P. L. (Hereford)
|McKie, J. H. (Galloway)
|Price, H. A. (Lawisham, W.)
|Thompson, K. P. (Walton)
|Maclay, Hon. J. S.
|Prior-Palmer, Brig. O
|Thompson, R. H. M. (Croydon, W.)
|Maclean, F. H. R.
|Profumo, J D
|Thorneycroft, G E. P. (Monmouth)
|MacLeod, Iain (Enfield, W.)
|Raikes, H. V.
|Tnornton-Kemsley, C. N.
|MacLeod, John (Ross and Cromarty)
|Rayner, Brig. R
|Thorp, Brigadier R. A F
|Macmillan, Rt. Hon. Harold (Bromley)
|Macpherson, N. (Dumfries)
|Remnant, Hon. P
|Touche, G. C.
|Manningham-Buller, R. E
|Renton, D. L. M.
|Turton, R. H.
|Marlowe, A. A. H
|Roberts, Emrys (Merioneth)
|Marples, A. E.
|Roberts, P. G. (Hesley)
|Vane, W. M. F.
|Marshall, D (Bodmin)
|Robinson, J. Roland (Blackpool, S.)
|Vaughan-Morgan, J K
|Marshall, S. H. (Sutton)
|Robson-Brown, W. (Esher)
|Vosper, D. F.
|Maude, A. E. U. (Ealing, S.)
|Roper, Sir H
|Wakefield, E. B. (Derbyshire, W.)
|Maude, J. C. (Exeter)
|Ropner, Col. L.
|Wakefield, Sir W. W. (St. Marylebone)
|Ross, Sir R. D (Londonderry)
|Walker-Smith, D. C.
|Mellor, Sir J.
|Russell, R. S.
|Ward, Hon. G. R. (Worcester)
|Molson, A. H. E.
|Ryder, Capt R. E. D
|Ward, Miss I. (Tynemouth)
|Moore, Lt.-Col. Sir T.
|Sandys, Rt Hon. D
|Waterhouse, Capt. C.
|Morris, R. Hopkin (Carmarthen)
|Morrison, Maj. J. G. (Salisbury)
|Shepherd, W S (Cheadle)
|Webbe, Sir H. (London)
|Morrison, Rt. Hon. W. S. (Cirencester)
|Smiles, Lt.-Col. Sir W
|White, J. Baker (Canterbury)
|Mott-Radolyfle, C. E
|Smith, E. Martin (Grantham)
|Williams, C. (Torquay)
|Smithers, Peter H. B. (Winchester)
|Williams, Gerald (Tonbridge)
|Smithers, Sir W. (Orpington)
|Williams, Sir H. G. (Croydon, E.)
|Snadden, W. McN.
|Noble, Comdr. A. H. P
|Soames, Capt. C.
|Wilson, Geoffrey (Truro)
|Nugent, G. R. H.
|Spearman, A. C. M.
|Winterton, Rt. Hon. Earl
|Spence, H. R. (Aberdeenshire, W.)
|Wood, Hon. R.
|Oakshott, H D
|Spens, Sir P. (Kensington, S.)
|Young, Sir A. S. L.
|Odey, G. W.
|Stanley, Capt. Hon R. (N Fylde)
|Orimby-Gore, Hon. W. D.
|Stevens, G. P.
|TELLERS FOR THE AYES:
|Orr, Capt. L. P. S
|Steward, W. A (Woolwich, W.)
|Major Wheatley and
|Mr. T. G. D. Galbraith.
|Acland, Sir Richard
|Cocks, F. S.
|Evans, S. N. (Wednesbury)
|Albu, A. H.
|Allen, A. C. (Bosworth)
|Field, Capt. W. J
|Allen, Scholefield (Crewe)
|Cook, T. F.
|Finch, H. J.
|Anderson, F. (Whitehaven)
|Cooper, G. (Middlesbrough, W.)
|Fletcher, E. G. M.(Islington, E.)
|Attlee, Rt Hon. C. R.
|Cooper, J. (Deptford)
|Awbery, S. S.
|Corbet, Mrs. F. K. (Peckham)
|Foot, M. M.
|Ayles, W. H.
|Cove, W. G.
|Forman, J. C.
|Bacon, Miss A.
|Craddock, George (Bradford, S.)
|Fraser, T. (Hamilton)
|Freeman, J. (Watford)
|Cripps, Rt. Hon. Sir S
|Freeman, Peter (Newport)
|Barnes, Rt. Hon. A. J.
|Crosland, C. A. R.
|Gaitskell, Rt. Hon. H. T. N
|Crossman, R. H. S.
|Ganley, Mrs. C S.
|Bellenger, Rt. Hon. F. J
|Cullen, Mrs. A.
|Gibson, C. W.
|Glanville, J. E. (Consett)
|Bing, G. H. C.
|Dalton, Rt. Hon. H.
|Gordon-Walker, Rt. Hon. P. C
|Blackburn A R.
|Darling, G. (Hillsboro')
|Greenwood, A. W. J. (Rossendale)
|Davies, A. Edward (Stoke, N.)
|Greenwood, Rt. Hn. Arthur (Wakefield)
|Blyton W. R.
|Davies, Ernest (Enfield, E.)
|Grey, C. F.
|Davies, Harold (Leek)
|Griffiths, O. (Rother Valley)
|Davies, R. J. (Westhoughton)
|Griffiths, Rt. Hon. J. (Llanelly)
|Bottomley, A. G.
|Davies, S. O. (Merthyr)
|Griffiths, W. D. (Exchange)
|Bowles, F. G. (Nuneaton)
|de Freitas, Geoffrey
|Gunter, R. J.
|Braddock, Mrs. E. M.
|Hale, J. (Rochdale)
|Brockway, A. Fenner
|Hall, J. (Gateshead, W.)
|Brook, D. (Halifax)
|Dodds N. N.
|Hall, Rt. Hn. W. Glenvil (Colne V'll'y)
|Brooks, T. J. (Normanton)
|Hamilton, W. W.
|Broughton, Dr. A. D. D
|Donovan, T. N.
|Brown, George (Belper)
|Driberg, T. E. N.
|Hardman, D. R.
|Brown, T. J. (Ince)
|Dugdale, Rt. Hon. J. (W. Bromwich)
|Hardy, E. A.
|Burke, W. A.
|Butler, H, W. (Hackney, S.)
|Ede, Rt. Hon. J. C.
|Hastings, Dr. Somerville
|Edwards, John (Brighouse)
|Hayman, F. H.
|Castle, Mrs. B. A.
|Edwards, Rt. Hon. N. (Caerphilly)
|Hewitson, Capt. M
|Champion, A. J.
|Edwards, W. J. (Stepney)
|Hobson, C. R.
|Chetwynd, G. R
|Evans, Albert (Islington, S. W.)
|Evans, E. (Lowestoft)
|Holmes, H E (Hemsworth)
|Soskice, Rt. Hon. Sir F.
|Middleton, Mrs. L.
|Sparks, J. A.
|Hudson, J. H. (Ealing, N.)
|Mitchison, G. R.
|Stewart, Michael (Fulham, E.)
|Hughes, Emrys (S. Ayr)
|Mceran, E. W.
|Stokes, Rt. Hon. R. R.
|Hughes, Hector (Aberdeen, N.)
|Strachey, Rt. Hon. J.
|Hughes, Moelwyn (Islington, N.)
|Moody, A. S.
|Strauss, Rt. Hon. G. R. (Vauxhall)
|Hynd, H. (Accrington)
|Morgan, Dr. H. B.
|Stross, Dr. B.
|Hynd, J. B. (Attercliffe)
|Summerskill, Rt. Hon. Edith
|Irvine, A. J. (Edge Hill)
|Morris, P. (Swansea, W.)
|Sylvester, G. O.
|Irving, W. J. (Wood Green)
|Morrison, Rt. Hon. H. (Lewisham, S.)
|Taylor, H. B. (Mansfield)
|Isaacs, Rt. Hon. G. A.
|Mort, D. L.
|Taylor, R. J. (Morpeth)
|Thomas, D. E. (Aberdare)
|Jay, D. P. T.
|Mulley, F. W.
|Thomas, George (Cardiff)
|Jeger, G. (Goole)
|Thomas, I. O. (Wrekin)
|Jeger, Dr. S. W. (St. Pancras, S.)
|Noel-Baker, Rt. Hon. P. J
|Thomas, I. R. (Rhondda, W.)
|Jenkins, R. H.
|Thorneycroft, Harry (Clayton)
|Johnson, James (Rugby)
|Oldfield, W. H.
|Johnston, Douglas (Paisley)
|Oliver, G. H.
|Jones, D. T. (Hartlepool)
|Tomlinson, Rt. Hon. G.
|Jones, Frederick Elwyn (West Ham, S.)
|Padley, W. E
|Jones, Jack (Rotherham)
|Paling, Will T. (Dewsbury)
|Jones, William Elwyn (Conway)
|Pannell, T. C.
|Pargiter, G. A.
|Vernon, Maj. W. F
|Viant, S. P.
|Key, Rt. Hon. C. W.
|Wallace, H. W.
|King, H. M
|Watkins, T. E.
|Peart, T. F.
|Webb, Rt. Hon. M.(Bradford. C.)
|Lang, Rev. G.
|Wells, P. L. (Faversham)
|Lee, Miss J. (Cannock)
|Wells, W. T. (Walsall)
|Lever, L. M. (Ardwick)
|Price, M. Philips (Gloucestershire, W.)
|West, D. G.
|Lewis, A. W. J.(West Ham, N.)
|Pryde, D. J.
|Wheatley, Rt. Hn. John (Edinb'gh, E.)
|Lewis, J. (Bolton, W.)
|Pursey, Comdr. H
|White, Mrs. E. (E. Flint)
|Lindgren, G. S.
|White, H. (Derbyshire, N. E.)
|Lipton, Lt.-Col. M.
|Rees, Mrs. D.
|Whiteley, Rt. Hon. W.
|Logan, D. G.
|Longden, F. (Small Heath)
|Wilcock, Group-Capt. C. A. B
|Wilkins, W. A.
|MacColl, J. E.
|Willey, F. T (Sunderland)
|McGhee, H. G.
|Roberts, Goronwy (Caernarvonshir)
|Willey, O. G. (Cleveland)
|Mack, J. D.
|Robertson, J. J. (Berwick)
|Williams, Ronald (Wigan)
|Rogers, G. H. R.(Kensington, N.)
|Williams, Rt. Hon. T.(Don[...]alley)
|Mackay, R. W. G. (Reading, N.)
|Ross, William (Kilmarnock)
|Williams, W. T. (Hammersmith, S.)
|Wilson, Rt. Hon. J. H (Huyton)
|MacMillan, M. K. (Western Isles)
|Shackleton, E. A. A.
|Winterbottom, I.(Nottingham, C)
|McNeil, Rt. Hon. H.
|Shawcross, Rt. Hon. Sir H
|Winterbottom, R. E. (Brightside)
|MacPherson, Malcolm (Stirling)
|Shinwell, Rt. Hon. E.
|Woodburn, Rt. Hon. A.
|Mainwaring, W. H.
|Shurmer, P. L. E.
|Woods, Rev. G. S.
|Mallalieu, E. L. (Brigg)
|Silverman, J. (Erdington)
|Wyatt, W. L.
|Mallalieu, J. P. W. (Huddersfield,E.)
|Silverman, S. S. (Nelson)
|Yates, V. F.
|Mann, Mrs. J.
|Simmons, C. J.
|Younger, Hon. Kenneth
|Manuel, A. C.
|Marquand, Rt. Hon. H. A
|Smith, Ellis (Stoke, S.)
|TELLERS FOR THE NOES:
|Mathers, Rt. Hon. George
|Snow, J. W.
|Mellish, R. J.
|Sorensen, R. W.