HC Deb 20 June 1950 vol 476 cc1191-5

The following new Clause stood on the Order Paper in the name of Mr. LYTTELTON: (1) 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," the words "one-half" were substituted for the words "two-thirds," and the words "four-fifths" were substituted for the words "one hundred per cent. (2) The Treasury may by regulations provide for mitigating the financial loss to persons who own goods for the purpose of resale where purchase tax has become chargeable in respect of those goods prior to, and at a rate higher than that applicable by reason of the reductions set out in subsection (1) hereof. (3) Regulations under subsection (2) may contain incidental and supplementary provisions and may in particular provide—

  1. (a) for defining the classes of persons qualifying for payments;
  2. (b) for computing the quantity of goods of any description in respect of which payments are to be made;
  3. (c) for paying, to those persons and in respect of those goods, out of sums received by the Commissioners of Customs and Excise on account of purchase tax, the excess of tax at the rate which was chargeable in respect of those goods over tax at the rate subsequently chargeable in respect of goods of the same description by reason of a change in the classes of chargeable goods or in the rate of tax applicable to them;
  4. (d) for requiring, as a condition precedent to receiving payment in respect of any goods, an undertaking from the recipient that he has reduced the price at which he offers for sale goods of the same description by an amount not less than that by which the tax chargeable in respect of goods of that description has been reduced;
    5. 1193
  5. (e) for the imposition of penalties in respect of any contravention of or failure to comply with the regulations, so, however, that no person shall by virtue of this paragraph be liable for any offence to imprisonment for a term exceeding twelve months or to a fine exceeding five hundred pounds.
(4) This section shall be construed as one with Part V of the Finance (No. 2) Act, 1940.

The Chairman

With regard to the proposed new Clause in the name of the right hon. Member for Aldershot (Mr. Lyttelton), I think I should say at once that in my view only subsection (1) is in order, namely, that dealing with the question of a change in the rates. If the right hon. Gentleman desires to move the proposed new Clause in that form I shall be happy to call it.

Mr. Selwyn Lloyd (Wirral)

With great respect, may I make a submission to you, Major Milner, with regard to that matter? As you have indicated, subsection (1) deals really with the rates of Purchase Tax, but subsections (2) and (3) deal with certain methods which may be adopted with regard to administering any adjustments which might be made as a result of subsection (1). My submission to you, with great respect, is that it would be clearly in order to discuss the method of administering any reductions when we are discussing a Clause which deals with reduction. If I might remind you of the form of the Budget Resolution, it said: That it is expedient to amend the law with respect to the National Debt and the public revenue, and to make further provision in connection with finance, so, however, that this Resolution shall not extend to the making of amendments of the law relating to purchase tax except amendments, if any, reducing the first, second, or third rate of the tax generally for all goods to which the rate applies. I respectfully agree with you that if you were to say that any subsection dealing with Amendments to the general law of Purchase Tax would be out of order, but my submission is that subsections (2) and (3) are directly related to any reductions which may be made under subsection (1).

Although I quite appreciate that this is in no way binding on the Chair, because it is a matter for the Chair, I would point out that this point was referred to on 21st April, when my right hon. Friend the Member for Bristol, West (Mr. Stanley) asked the Chancellor in regard to this matter, and I myself put a question to the Chancellor on the administration of any reductions which might be made. The right hon. and learned Gentleman was good enough to say that, as far as the Government were concerned, they had no objection to that matter being raised. Of course, that does not bind the Chair on a question of order, but I do not think there would be any resistance from the Government Front Bench to this matter being raised. It is a matter of great importance that questions of Purchase Tax reductions and administration should be discussed in this Committee, and I therefore submit, with great respect, that a discussion on subsections (2) and (3) should be allowed.

The Chairman

I am obliged to the hon. and learned Gentleman the Member for Wirral (Mr. Selwyn Lloyd) for putting this case so clearly. I am, of course, bound by the Budget Resolution, which says quite clearly— … this Resolution shall not extend to the making of amendments of the law relating to purchase tax, except amendments, if any, reducing the first, second or third rate of the tax and so on. In my view, the first subsection comes properly within the exception in the last three lines of the Budget Resolution, in that it is an Amendment proposing to reduce the first, second or third rate of tax. The remainder of the new Clause, however, in my view, is out of order, because it goes beyond the Budget Resolution. If the Budget Resolution intended that subsections (2) and (3), for example, might be properly moved, then the Resolution, in my view, would have used some such words as "consequential thereon" or "incidental thereto." No such words are used, and I am bound by the terms of the Budget Resolution. In my view, that Resolution binds the Chair and the Committee, and limits Amendments to the reduction, or rather the changing, of the first, second or third rates of tax. In these circumstances, whilst fully appreciating the importance of the matter and the submission which the hon. and learned Gentleman has made, I am afraid I am bound to rule that only the first subsection is properly in order.

Mr. Selwyn Lloyd

Would you care to hear a further point in regard to this matter, Major Milner? As I understand it, your view is that it is impossible to discuss any method of reduction unless there are the words "and matters relating thereto" in the Budget Resolution. That would really mean that the Budget Resolution would be completely nugatory, because it is quite impossible to pass a Clause dealing with reductions of Purchase Tax without any reference at all to the methods by which those reductions are to be made. I should have thought it ought to be implied in the word "reduction" that there should also be discussed the method of reduction. With great respect, Major Milner, I do not think it is going very far, and I should have hoped it was the desire of the Committee, if possible, to discuss this matter, and that you would have found it possible to rule these two subsections in order, because they are definitely related to subsection (1).

9.15 p.m.

Mr. Messer (Tottenham)

Is there any onus on the Chairman to give any justification for his Ruling?

The Chairman

In reply to the last hon. Member, when an Amendment is ruled out of order and it is not merely a case of non-selection, it is not uncommon to advance reasons when requested, and I always endeavour to do so. Whilst again fully appreciating all that the hon. and learned Gentleman has said, I am afraid I cannot depart from my Ruling. It seems quite clear to me that any such proposal, even though limited to method, would be an amendment of the law relating to Purchase Tax and this particular Resolution has, no doubt, been so drawn, I imagine—although I have no authority for saying so—in order that discussion should be limited. That being so, I am afraid I must rule that only the first subsection of the new Clause is in order.