PURCHASE TAX (No. 3) ORDER (Hansard, 3 April 1951)

§ Mr. Boyd-Carpenter
I hope we are going to have some explanation of this matter even though the Financial Secretary to the Treasury in whose name I think it is, has only just arrived. If there is one thing that is more difficult to understand than the Order itself it is the explanatory note which does succeed in making the not inconsiderable confusion of the Order itself worse confounded. Perhaps the hon. Gentleman can give some explanation of what is the effect of this Order. The explanatory note merely refers to the groups of certain categories of article, and that in itself without reference to the Purchase Tax Schedules, does not take one very far.
The other matter on which I must confess I am in considerable doubt is why this Order is produced at all at this time. At Question Time the Financial Secretary and his right hon. Friend spend most of their time indicating with a becoming affectation of sorrow that they were unable to anticipate their Budget statement. They thereby remind us of the fact that we are within a week of the Budget. Can we be told what necessitates this Order being brought forward now, only seven days before the Budget? I am aware that Purchase Tax variations can be effected either through the Finance Bill procedure or by Statutory Instrument, but when we are so close to the Budget it would seem that some extraordinary degree of urgency must arise to justify the use of Statutory Instrument procedure now.
That there is such urgency is made the more curious when one recalls that the day before the House rose for the Easter Recess this Order was on the Order Paper, but that His Majesty's Government indicated their lack of belief in its urgency by the Leader of the House moving the Adjournment of the House immediately before this Order was due to be taken. It was apparently, therefore, not urgent before the House rose for the Recess. We are seven days from the 134 Budget, and therefore we are surely entitled to know what peculiar urgency makes it so urgent now that we cannot wait a week, when by the very action of the Government 10 days ago we were made to wait a further 10 days.

§ The Financial Secretary to the Treasury (Mr. Douglas Jay)
I am grateful to the hon. Member for giving me an opportunity to say a word about this Order. He asked first what urgency induced us to bring it forward at this moment so close to the Budget. I think he knows that a number of minor Purchase Tax changes are made by order throughout the year right up to the time of the Budget, and this order was actually made on 9th March—about four weeks ago. The only reason why it was not taken in debate before the Recess was because of the somewhat unusual events in debate of those few days. Had it not been for the various occurrences of that week, no doubt we should not be discussing this Order within seven days of the Budget.
This is really a clarifying Order which makes no material difference to Purchase Tax law. What it does is to remove the doubt about the application of Group 12 of the Eighth Schedule of the 1948 Finance Act, and it excludes from charge under that group what are defined as interval timers incorporating an alarum mechanism. The Order arises from an opinion given by independent counsel. Under the arrangement reached in 1949 with the Federation of British Industries and other industrial bodies, by which matters of interpretation were to be submitted to counsel, there was submitted the question whether a certain type of interval timer was chargeable under Group 12. The view of counsel was that the wording of Group 12 excluded appliances which did not either supply heat or transfer heat.
The relevant words of the group were: Cooking, heating, refrigerating and other appliances and apparatus, whether mechanically operated or not, being appliances and apparatus of a kind used for domestic purposes, except mechanical lighters. Looking at this as a matter of plain English, I cannot see that the words Cooking, heating, refrigerating and other appliances and apparatus can mean anything except cooking, heating and refrigerating appliances and also 135 appliances other than for cooking, heating and refrigerating. That is my view as a matter of language. That, of course, was what the wording had been taken to mean both by the Customs and by industry since the 1948 Act was passed.
Since the reference to counsel had been made as an agreed procedure, however, we felt bound to introduce this clarifying Order which, by the words in Section 1 (2), "appliances and apparatus," etc., makes it perfectly plain beyond, I hope, any conceivable doubt in the minds of lawyers or anybody else that the Group means what it has always been taken to mean. No new tax or increased tax is imposed on any goods by the alteration in the wording but the doubt about interpretation is removed.
Secondly, the Order excludes from tax the interval timer. An interval timer, as I am sure you will be aware, Mr. Deputy-Speaker, is not quite the same thing as a clock. An interval timer records the passage of predetermined intervals of time but does not record the time of day. It can be used to measure the length of an industrial process or the time to boil an egg or the time taken by an hon. Member in making a speech in this House. At the end of the period a chime or other sound indicates that the period had ended.
We propose the exemption of these timers partly because they are generally used in industry and also because the distinction between the domestic and the industrial type is rather vague. When such a timer is also a clock or watch, as in the case of an alarm clock or a stop watch, it will, of course, remain chargeable to tax under Group 17 of the Schedule. With that explanation I hope that the House will agree that we have taken the right course in exempting these appliances and at the same time removing doubts about the scope of the rest of the group.

§ Sir John Mellor (Sutton Coldfield)
I have some doubt as to whether this is merely a clarifying Order, as the Parliamentary Secretary said, because if I remember correctly under the Finance Act of 1948 the affirmative Resolution is required only where an Order extends or increases the incidence of Purchase Tax. In all other cases the negative procedure 136 is permissible, and one notices that the Government never adopt the affirmative procedure if they can possibly adopt the negative procedure. I am afraid I am being suspicious about this, for I believe the Order has the effect of increasing Purchase Tax on some articles and is not limited to clarification.
In answer to my hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), the Parliamentary Secretary said it is quite common, in making minor changes in Purchase Tax right up to the moment before the Budget, to deal with those things by Order. But when I have asked the Chancellor of the Exchequer questions on minor matters relating to Purchase Tax I have received the stock answer, "I regret I cannot anticipate my Budget statement." Again, I am afraid I am suspicious. I believe that the real reason why this matter is not reserved for the Finance Bill is that the Government do not want to put anything at all about Purchase Tax in the Finance Bill in order that they may avoid having a debate on the subject. We have had experience of that in the past. Perhaps the Parliamentary Secretary would like to reconsider his answer on that point and to give a little clearer answer to the House.