HC Deb 18 June 1952 vol 502 cc1457-507

4.15 a.m.

Mr. H. Wilson

I beg to move, in page 83, line 21, at the end, to insert: the expression 'supplied as public service uniforms' means clothing supplied to the order of local authorities (including police authorities), public passenger transport undertakings and British Railways, for issue to members of their staff in accordance with the terms and conditions of their employment. If you agree, Mr. Deputy-Speaker, I think it might be convenient to the House if in the discussion on this Amendment we were to deal with all the Amendments to this Schedule relating to public service uniform.

Mr. Deputy-Speaker

I think it will be convenient to the House if all these Amendments are taken together.

Mr. Wilson

I do not propose to detain the House long, and I certainly do not intend to argue the case for individual D levels for the particular items of clothing which feature in the Amendments. I am more concerned to establish the general argument about the exemption from Purchase Tax of these items, and I can certainly promise the House that I do not intend to stage a mannequin parade on this occasion.

The point of these Amendments is that the D scheme—I do not think the Chancellor had this in mind when he introduced the scheme—does, in fact, impose tax on certain public service uniforms where no taxation existed before. It is true, of course, that railway uniforms to a considerable extent did carry Purchase Tax before, and to that extent the D scheme does represent some improvement. But a large part of the police and fire brigade uniforms, and more particularly the uniforms of road passenger transport undertakings, were within the Utility scheme, and now, because of the operation of the D scheme, they will be subject to Purchase Tax.

It is a fact also that they will be subject to Purchase Tax at a fairly high level, because many of these items are made of heavy and expensive cloth which carries them a long way above the median D figure fixed on entirely different bases in accordance with the system explained to us in Committee by the Minister of State for Economic Affairs, whose absence from these debates we have very much regretted. I agree that he has in fact been present, but we regret that he has not intervened in the debates to any large extent.

I know it may be argued—because I have already heard the views of the Treasury on this question, as I have taken it up with the Treasury—that there is no net loss to the public in all this because these uniforms largely involve public funds, and to some extent it is a transfer out of one pocket into another; but I must point out to the Financial Secretary that, of course, while there is a State grant for the purposes of police forces and fire brigades, there is still a large part of the expense of police forces and fire brigades—just to mention two cases covered by the Amendments—which involves local rates. Therefore, the introduction of this scheme may potentially affect local rates in many parts of the country.

I would point out that a considerable sum of money is involved on road passenger transport undertakings, and, therefore, this increased tax will increase the cost of passenger transport, which, presumably, will mean increased fares. So far as railway uniforms are concerned, as I have said, there is not likely to be an increase in tax in general, but of course, if the Government were to accept the Amendment—as, I hope, they will—it would mean a reduction in the amount of tax paid by the British Transport Commission, which would ease its position either as regards fares or as regards its annual balance sheet, or possibly both.

I want to deal with another question which I know is very much in the mind of the Treasury. It feels—as I know, because the Chancellor has told me this—the difficulty of defining essential uniforms. I quite agree that even if we could define uniforms in general, it would be a mistake to exempt them generally from the field of Purchase Tax by the device embodied in these Amendments. I do not think that the House would particularly want to exempt from Purchase Tax, for instance, commissionaires at cinemas or private chauffeurs, but I think that the House probably would want to exempt—or, at any rate, some hon. Members would want to exempt—the uniforms supplied by some of the public service undertakings.

I agree that the definition that we have put in the Amendment may not be entirely perfect. It has been pointed out, for example, that it does not cover gas, electricity and water undertakings, but I would suggest to the Financial Secretary, since the purpose of these Amendments is to establish the principle, that if the Chancellor will accept the principle of the proposal he will find it not difficult to define on the lines of the Amendment immediately before us—and define it to his satisfaction and perhaps, on a rather wider basis—in a forthcoming Treasury Order, which could give effect to what we are now proposing.

I feel that if the hon. Gentleman would examine this proposal he would find that there is a very strong case for it. The application of the D figure based on this median sampling we have heard so much about applies very badly to some of these public service uniforms. It is a fact that, whereas the median price for jackets may be reasonable, police jackets, which have to have a material specially prescribed by the Home Office, and some of the transport jackets, involve a much heavier cloth than is worn for ordinary purposes, as well as being strengthened with leather, and so on. This means that the median fixed for general purposes is not really applicable for this.

I hope the Government will accept the principle of these Amendments and give effect to them by a series of Amendments of their own, prescribing a new and appropriate D level, if the present Amendments are not satisfactorily drafted.

Mr. Pannell

When one is considering public service uniforms, I suppose that one should include the uniforms of the mayor, town clerk, and mace-bearer, but it goes to prove how modest we are that we have not put those in. [Interruption.] I am speaking about the mayor's uniform, and I do not know what the hon. Member for Croydon, East (Sir H. Williams) is muttering about. The robe alone cost about £75 before the war, and that was an item to be considered in the poorer boroughs. I do not know if Croydon is one of those.

When one looks at the local rates for this year, 1952–53—an average of 21s. for county boroughs, 18s. 4d. for Metropolitan boroughs, 21s. 1d. for non-county boroughs, and 21s. for urban districts—it should be remembered that the fact that the D level is not high enough will have its effect on the local rates. It is a fact that about 70 per cent. of local rates are paid in staff wages and salaries, and on top of this we have increased staff uniform costs.

Local authorities, as good employers, will not be concerned only with the items mentioned in this Amendment. There is the borough surveyor's department, for example, needing everything from boiler suits to duffle coats; and today library assistants have a kind of uniform, all helping to make inroads into a local authority's expenditure.

I do not know whether I am in order in referring to outsizes; but earlier there was a disputation between the hon. Mem- ber for Brighouse and Spenborough (Mr. J. Edwards) and the Chancellor, who thought we were trying to be ungenerous. But the Government never seem to have awakened to this question of outsizes.

Mr. Deputy-Speaker

That is not within the scope of the Amendment.

Mr. Pannell

With respect, I want to suggest that when considering policemen's uniforms one has to consider outsizes; and the point surely is made here on the basis that allowances were made under the old Utility scheme. The Government never awakened to the idea until we on this side raised it on a previous Amendment in Committee, and I should like to refer to what the Chancellor said to my hon. Friend the Member for Dartford (Mr. Dodds) when he asked a Question about outsizes on 25th March last. The right hon. Gentleman said: I fear that the suggestion that there should be separate D allowances for outsize garments and those of especial dimensions would unduly expand the scheme."—[OFFICIAL REPORT, 25th March, 1952; Vol. 498, c. 26.] He turned it down.

4.30 a.m.

Mr. Deputy-Speaker

I do not think the hon. Member can pursue that.

Mr. Pannell

I shall not pursue it any further, because I have made my point. I should have thought that of all times when one could discuss the question of outsizes, it would have been on the subject of uniforms for the police. We are asking for an exemption and we are arguing upon the basis that more cloth is needed, and nobody would suggest that the price of policemen's uniforms is not governed somewhat by the size of the people who get inside them.

For all those reasons, we suggest that this is another impost upon the local authorities. It will have a reflection in the rates figure, which it will cause to go up and up. It will have its reflection on bus fares, as has been suggested, and it will affect the cost of the fire brigades. I can remember being a member of a fire brigade committee, and the mere fact that fire brigades went back from nationalisation to the local authorities meant another 10d. on the rates; and that sort of process is continuing.

Firemen are complaining that they should have an increase in wages. I should be out of order if I discussed the standstill order; but it caused a lot of trouble here. But there is to be no standstill order upon the costs incurred by local authorities and the effect on the rates figure, which has almost caused a crisis in local authorities' affairs. As some small protest against that process, I support the Amendment.

Captain Duncan

The right hon. Member for Huyton (Mr. H. Wilson) obtained your agreement, Mr. Hopkin Morris, that all the Amendments on page 1828 of the Order Paper should be discussed together. I want very briefly to refer to one of them.

Mr. Boyd-Carpenter

Perhaps I could clarify your Ruling, Mr. Deputy-Speaker. As I understand the question of the Amendments on page 1828, the only ones which are being taken at this stage are those in the name of the right hon. Member for Huyton (Mr. H. Wilson).

Mr. Deputy-Speaker

The ones to be taken are the ones on page 1826 and the two standing in the name of the right hon. Member for Huyton (Mr. H. Wilson) on page 1828.

Captain Duncan

The point of my argument is that we are dealing with public service uniforms or parts of public service uniforms, and an undertaking was given by the Minister of State in these words when I moved a similar Amendment in Committee——

Mr. Deputy-Speaker

The hon. Member is not in order in discussing his own Amendment in page 1828. He must discuss the Amendment moved by the right hon. Member for Huyton.

Mr. A. G. Bottomley (Rochester and Chatham)

I rise to make one additional point which has not been discussed. I agree with the observation made by my right hon. and hon. Friends about saving the ratepayers' money. We do not want to inflict additional burdens on local authorities and those who pay the rates.

In regard to local authority employees, it is well known that, in calculating their wages and conditions of service, the cost of uniforms is taken into account. If this additional tax is put on and further wage negotiations take place in view of the rise in the cost of living, if public employees are told that they cannot have a further increase in their wages because of this tax, I think the Chancellor will agree that that would be an injustice. I ask him to give consideration to that point.

Mr. Boyd-Carpenter

As the right hon. Gentleman, the Member for Huyton (Mr. Wilson) said, he wrote to my right hon. Friend on this subject. Actually the series of Amendments in his name do not in form, at any rate, exempt these items from Purchase Tax. All that they seek to do is to set for these specified items a very much higher D—about twice the level of that for comparable articles not contained in these Amendments. It is important that we should be clear that what we are debating is not necessarily exemption of these uniforms but giving to them a much higher D than is given to comparable articles. I think it is clear that what he had in mind was exemption, though it is clear that his Amendments do not completely effect that, even in practice.

There are many difficulties in the way of this proposal. As the right hon. Gentleman knows, it is contrary to the Purchase Tax scheme to arrange the tax on the basis of the ultimate use of the article. Again and again it has been said that it would be impossible to work the scheme on the basis that special concessions were allowed because articles subjected to the tax were, or might be, used for some particularly admirable purpose. The difficulties of administration are obvious. For that reason, the late Government resisted pleas of this character with a blank refusal.

Mrs. White

In what category did it put fishermen's oilskin clothing? Was that not put into a special category?

Mr. Boyd-Carpenter

It sounds like a remarkably special category. It is not in this Amendment. The right hon. Gentleman has misapprehended the effect on these articles of the changes effected by the Chancellor's proposals. Before the Budget many of these articles paid Purchase Tax at the full rate. The effect of the proposals, in respect of uniforms generally, has been to reduce the tax on them. Therefore, the right hon. Member's proposal comes forward at an inapposite time when the burden previously imposed by the Purchase Tax has been reduced, though not in the discriminating way which he suggests, but in the more satisfactory way of general treatment of the categories concerned.

It is one of the merits of the Chancellor's proposals that a number of uniforms, for instance, those of the Services, for which previously it was not possible to find any Utility range and which therefore paid the full tax, have been given a D and secure some reduction of tax. The right hon. Gentleman has selected a highly discriminatory list. It is curious that if there is a case for exempting uniforms he should pick out the things mentioned in list and exclude others.

If uniforms are to be given special treatment above what they have already, why are the uniforms of the Services not to be dealt with on the same level as those of the local authorities? Why should certain of the uniforms of local authorities have special treatment, while others, such as those of firemen, are not to be given such benefit? I understand from what he has said that he had in mind, not the interest of the wearers of the uniforms, but the financial interests of the local authorities which employ them.

That raises a different issue. We are not being very strongly pressed about the interests of the wearers of the uniforms. In many cases that would not be a strong point, because the uniforms are provided by their employers. But we are now told that the local authorities should be relieved of the tax on the uniform when they provide it. That seems to raise a considerable question of principle, whether, in general, local authorities should be exempted from forms of taxation—a very serious question.

It is the wrong way to handle the problem. A most elaborate system was worked out under the late Government for the assistance of local authorities in financial difficulties under the Equalisation Grants procedure. I suggest to right hon. Gentlemen who put the scheme into operation that that is the medium for handling this problem. To give a special tax exemption to a limited sphere of uniforms, not even for the benefit of the wearers but for the financial benefit of the local authorities employing them, seems an extraordinary argument.

Mr. Bottomley

The wearers are affected because the uniforms become part of their wages and conditions of service. When a claim is made in due course to meet the increased cost of living, the fact that uniforms cost more will weigh against any increase that might otherwise be given.

Mr. Boyd-Carpenter

I shall come to that. I am seeking to show that the interest of the employing local authority is an unsound basis. In a certain number of cases it is the interest of the wearer of the uniform that is involved. I suggest that it is really a matter between the employer and the employee. If uniforms are provided, the employee is not affected by the tax. If uniforms are not provided by the employer, that may be a material factor in the arrangements made between employer and employee, and it would be quite wrong to use the machinery of taxation to intervene between the two.

In either case, however admirable may be the right hon. Gentleman's intentions, this is quite the wrong way to provide the relief for which he asks. In addition, it is a proposal which would raise very severe difficulties in connection with the administration of the tax. It would impose a heavy load on the administration, and it would give considerable opportunities for evasion. For those reasons, my right hon. Friend is unable to accept the Amendment.

Mr. H. Wilson

Perhaps I might speak again, by leave of the House, to indicate the considerations which would move me to withdraw the Amendment. The hon. Gentleman has replied to my case with his customary courtesy. At this time of the morning I will not weary the House with a long argument with him on some of his facts, which I would seriously contest. I think I could find an argument which even he would accept to deal with the point about the difference between local authorities and the Fighting Services.

Will he be prepared to consider, without committing himself, evidence which I will put before him to suggest that some facts are rather different from what he has stated, particularly in relation to the fairly heavy load of tax now to be carried by uniforms which were previously tax-free? I am not asking him to indicate that he is likely to change his view on the point of principle which he put very cogently. I ask whether he will be good enough to examine some evidence I should like to bring before him. If he will, I might ask leave to withdraw the Amendment.

4.45 a.m.

Mr. Boyd-Carpenter

I hope I need not tell the right hon. Gentleman that any evidence, views, or argument that he would like to put either to my right hon. Friend or to myself, we shall be happy to receive.

Mr. Wilson

I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Boyd-Carpenter

I beg to move, in page 85, line 19, column 2, to insert: 3 0 0 per pair (1 10 0 per article). This Amendment and the three which immediately follow it are consequential upon the decision announced earlier by my right hon. Friend to make certain reductions in the tax payable on certain types of footwear. These amendments adjust the D figure to give relief, for the reasons that my right hon. Friend then gave, to articles of footwear which, on reconsideration, we thought perhaps were not being as well treated as they should be.

Amendment agreed to.

Further Amendments made: In page 85, line 20, leave out from beginning, to end of line 26.

In line 36, column 2, leave out "15 0," and insert "1 5 0."

In line 37, column 2, leave out "7 6," and insert "12 6."—[Mr. Boyd-Carpenter.]

Mr. Boyd-Carpenter

I beg to move, in page 86, line 10, to leave out from "length," to the end of line 11, and to insert:

per article.
(a) of fur skin 12 0 0
(b) of Class A material 6 10 0
This is the first of the Amendments consequential upon the decision announced by my right hon. Friend to give a higher D in the case of various fur articles. This one gives a higher D for fur coats.

Amendment agreed to.

Further Amendments made: In page 86, line 29, at end, insert:

per article.
(a) of fur skin 8 0 0

In line 30, leave out "or of fur skin."

In line 38, leave out from "length," to end of line 40, and insert:

per article.
(a) of fur skin 4 10 0
(b) of any other description 1 0 0

In page 87, line 34, column 2, insert: 3 0 0 per pair (1 10 0 per article).

In line 35, leave out from beginning, to end of line 41.

In page 88, line 21, at end, insert:

per article.
27. Fur stoles containing not less than 2 sq. ft. of fur skin measured on the leather 4 10 0

—[Mr. Boyd-Carpenter.]

Amendments agreed to.

Mr. Dryden Brook (Halifax)

I beg to move, in page 88, line 36, to leave out "14 6," and to insert "1 0 0."

This is different from the previous Amendment in that it does not deal with a special category, but with a whole industry. This tax applies to the whole of the fine worsted industry and will affect Huddersfield, Halifax and Blackburn in a very particular way. I press this Amendment for three reasons. First, on behalf of the consumer; secondly, on behalf of the export trade; and, thirdly, on behalf of production in the home industry.

I wonder if hon. and right hon. Gentlemen realise that practically the whole of fine worsted clothing comes within the tax range, but that fine woollens can be produced at a price which excludes them from the tax. Therefore this tax, in a sense, penalises men as against women, because women's clothing is on the whole manufactured from fine wool cloths, while men's suits are manufactured from fine worsted. On this occasion we men have a complaint against the Chancellor for having penalised us against the other sex. If the D line is raised to £1 it will mean that many of the fine worsted cloths will escape the tax, and that men will be placed in the same position as they were under the old Utility scheme.

In relation to the export trade, I do not wish to develop the arguments I put forward in the Committee stage, but the export clothing trade depends to an increasing extent upon the basis of the home trade. If there is not a fairly big production of cloth in the home trade, obviously the price at which a unit can be manufactured will be high compared with the amount of cloth produced. If we are to reduce the cost of production, we must have long runs of any particular cloth.

In this connection, it is interesting to read in the morning's papers, particularly in the "Yorkshire Observer," the figures for the export of cloth to the United States in May. In the past the export of fine worsteds to the United States has been three or four times as great as the export of fine wollens. Now the emphasis is in entirely the opposite direction. In May, 800,000 yards of fine woollens were exported to the United States against 240,000 yards of fine worsteds. More than double the amount of woollens—although the export of fine worsteds to the United States has always been a major part of the export of woollen textiles in the dollar area. I am not suggesting this evidence is conclusive, but I believe that it is something which is weighing against the development of our export trade.

As far as production for the home market is concerned, every other section of the cotton and textile trade has benefited to a considerable extent more than has the fine worsted trade in relation to the Purchase Tax problem. Just because the fine worsteds are the most expensive cloths they come within the tax range.

I plead with the Chancellor to give this matter further consideration. It affects not merely one category of people but a whole industry scattered over the West Riding of Yorkshire. I ask him to accept the Amendment and to raise the D line in order to help an important section of industry in the home market and, more important still, in the export trade.

Mrs. White

I want to support the arguments of my hon. Friend the Member for Halifax (Mr. D. Brooke). I am all in favour of men having equal treatment with women but in this instance, while I would certainly grant him that men use worsted cloths for their suits to a far greater extent than women use them for their clothes, women do, in fact, wear tailor-made worsted suits; and they find that they wear very well indeed.

I am more concerned with the export trade. This Amendment touches upon the problem, which we shall find in subsequent Amendments, of combining quality goods for export with the type of goods we had under the Utility scheme and which we are now to have under the D scheme. This Amendment has been put on the Order Paper again because we believe that this country has a very great reputation abroad for fine worsted cloth. In almost every country in Europe, and certainly in the United States, we have an excellent reputation for men's suitings.

It would be most unfortunate if we should detract in any way from our prospects in the export market and more particularly, as my hon. Friend the Member for Halifax suggested, in the dollar market, where we have this great reputation. This applies not only to the cloth that we actually export. Our reputation in the United States for goods which are exported there means that when tourists come from the dollar countries to this country they are more inclined to order suits in this country. That, in turn, means that they support not only the worsted industry but high quality craftsmanship in tailoring.

We hope that for all these reasons the Chancellor will feel inclined to accept the Amendment. I am not going into the difficulty which we had in Committee of distinguishing between woollen and worsted. That problem appears to be still unsolved by anybody on either side of the House. But the arguments in favour of keeping our reputation for high-quality cloths for suits are well worth consideration.

Mr. H. Wilson

I should like to support this Amendment which was moved by my hon. Friend the Member for Halifax (Mr. Brook) with very great ability and with great knowledge of the wool trade. The House will have noticed that this Amendment and a corresponding one dealing with cotton goods only appeared very late on the Order Paper. The House will probably approve of our action in putting them down late because in previous debates all of us have stressed the dangers of creating new un- certainty in the trade. Although we have become accustomed, in relation to this Schedule, to a situation in which very few of our proposals are accepted by the Government, even the moving of an Amendment to a Bill presented by so obdurate a Chancellor of the Exchequer as the present one might be regarded as creating some degree of uncertainty in the trade. We were anxious to avoid any uncertainty and, therefore, this Amendment was put down extremely late.

5.0 a.m.

We ask, and I am sure the Chancellor will agree, that this matter be disposed of this morning one way or the other, so that if the Amendment is accepted, as I hope it will be, it can come into effect with the minimum of uncertainty. If the Chancellor is going to ask his hon. Friends, once again, to vote it down, at least, there will have been no uncertainty caused because the time at which we are meeting is one when very little trade takes place in the textile industry.

I understand that it is unlikely that the Amendment on cotton piece goods will be selected. I certainly do not intend to get out of order by trying to argue about cotton, when we are discussing wool, although it will be obvious to the House, and particularly to those hon. Members who sat through or studied the debates we had during the Committee stage, that many of the arguments applicable to the troubles of the cotton industry, are also applicable to the troubles of the wool industry in Yorkshire and other parts of the country.

My hon. Friend the Member for Halifax stressed three important reasons why it was desirable that this Amendment should be accepted. They are, first, the position of the consumer; second, the position of the export trade; and third, the position of the production industry. I do not want to repeat the arguments deployed during the Committee stage and in previous debates about the consumer. It is a fact that on most of the better graded suitings, and certainly on practically all of the worsted suitings of the range referred to by my hon. Friend, suits, which were tax free before, will now carry a tax. The Chancellor is familiar with that argument and we are equally familiar with his rather stereotyped reply to it.

Mr. R. A. Butler

As we are all familiar with the arguments and have debated them before, why do we debate them on the Report stage?

Mr. Wilson

We are debating them on the Report stage because the Chancellor must realise the very serious state of affairs in Yorkshire, as well as in Lancashire. It is a fact that we have had more debates and speeches about the position in Lancashire than Yorkshire. I know that the Chancellor is aware that the position in both counties is very serious. But just because he chooses to repeat what we consider to be totally unacceptable arguments, asking his hon. Friends to vote against this perfectly reasonable Amendment is no reason why we should be denied the right to bring this matter forward, especially when the welfare, not only of the two counties, but of the wool industry is at stake.

I want to pursue the argument about the position of the consumer. I want to follow my hon. Friend in his discussion of the export trade, though, I think, the Chancellor and the President of the Board of Trade must be two very worried men when they consider the probable future trend of textile exports. They were not very hopeful about them in their Economic Survey and had written off the textile trade as far as exports were concerned this year. Everything my hon. Friend said was of direct relevance to our balance of payments position and of direct relevance to this Amendment on the Order Paper.

I want to bring to the attention of the country the desperate state of the textile industry, including wool, due to a number of factors, which we have analysed at considerable length in the House and which I do not want to go into again in any detail, and due, as far as short-run difficulties are concerned, to the fact that the pipeline is thoroughly overstocked with production of all kinds. Anyone, who is trying to re-establish production in the textile industry today, whether in Lancashire or Yorkshire, knows how his efforts are inhibited by reason of this blockage of the pipeline.

We appealed to the Chancellor at the beginning of these debates to take Purchase Tax off the textile trade. We were powerfully supported by some strong arguments on the other side of the House. The Chancellor decided, because of this fantasy of maintaining revenue, that he could not do it. I repeat that his failure to take action to remove the blockage in the textile pipeline is having a most serious effect in Lancashire.

We have never said that the depression in the textile industries, whether in Lancashire or Yorkshire, was deliberately brought about by this Government, and indeed my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) and I went out of our way to reassure the Chancellor when he thought that we had been saying that. On the other hand, this recession has occurred for reasons which I will not go into now, and it is widely felt in Lancashire and Yorkshire that, the recession having occurred, the Government are not doing anything about it and are not taking any steps to remove it.

There is a difference between failing to cause a disaster and failing to deal with it. Thou shalt not kill; but need'st not strive Officiously to keep alive. It might be a cruel thing to say of this Government—I am not accusing them of killing the textile industry—but I am accusing them of failing officiously to strive to keep those industries alive.

One of the contributions which the Chancellor could make to clear the pipeline would be to raise the D levels and, therefore, remove the impact of Purchase Tax on these goods. He has refused to do it as a general measure. We appeal to him this morning to do it for this woollen cloth which is the subject of this Amendment. The Chancellor will be aware that if he does that it will not of itself entirely solve the problem. It will create one of the conditions in which the problem can be solved, but there is a grave degree of weak selling going on in Lancashire and Yorkshire today.

Merchants and manufacturers are going all over the country trying to sell these goods at prices a long way below minimum cost of production. That is an unhealthy state of affairs. I know that some hon. Members are taking credit for it in that they claim to have reduced the cost of living with respect to textile goods. I would only say that they should make those speeches in the textile areas and see what happens.

There are already serious signs that the unemployment in the textile areas will start off a further recession as the purchasing power of the workers in those industries is reduced and they have no money to buy other consumer goods. There are many other things which the Chancellor can do to clear the blockage in the pipeline. It would be out of order for me to go into them now, but I hope that he will recognise the existence of this problem. I hope that since he last spoke on the subject he will recognise that the problem has got a great deal worse. I am sure the Parliamentary Secretary to the Board of Trade can confirm that fact from the evidence coming into his Department, and I hope the Board of Trade are pressing the Treasury to take all the measures that are necessary.

As an immediate measure there is before us this proposal to raise the D level on woollen and worsted cloth—that is, for Class A material—to 20s. I hope that if the Chancellor will agree to do that he will, at the same time, in conjunction with the Board of Trade take all the other measures which are necessary to clear the pipeline and enable production to be resumed.

Mr. R. A. Butler

As the right hon. Gentleman said, this Amendment appeared on the Order Paper this morning, and we have done our best to look into it in the time available. It was moved in a very suitable way by the hon. Member for Halifax (Mr. D. Brook) and supported by the hon. Lady the Member for Flint, East (Mrs. White). I am fully aware of the anxiety which prompts their putting it down and of the districts they represent.

The right hon. Member for Huyton (Mr. H. Wilson) went into the question as it affected Lancashire. I do not think it would be proper for me to follow his long observations on this matter, however serious they are. We are fundamentally, I think, invading Yorkshire in this Amendment. I am trying to deal with the problems of Yorkshire. I will only say——

Mr. Wilson

I was not really basing most of my argument on Lancashire. I was talking about the textile trades. The problems of Lancashire and Yorkshire at present are the same.

Mr. Butler

In their desire to assist both Lancashire and Yorkshire the Government, as the right hon. Gentleman knows, have not only taken action in regard to Purchase Tax but also have certain amendments to offer in respect of the D, one of which we shall come to in an Amendment in my name which, I hope, we shall reach before long. Further, the Government have also placed certain orders, about which more will be heard at the proper time, to help overcome the unemployment in both Lancashire and Yorkshire. Within the limited powers of the Government we are trying to do our best. We have certainly not done all we should do, and we certainly shall not stop where we are.

This Amendment is exactly similar to one put down and debated in the Committee stage, and in order that hon. Members may see how faithfully we are following the Committee stage on this Report stage—and this is about the sixth example—I refer them to c. 1340, and onwards, for several pages, of the OFFICIAL REPORT for 13th May. I shall not repeat all the arguments here now. I have been very glad to deal with this Amendment myself to try to indicate the anxiety which the Government have on the subject of the industry.

We were discussing this before and we discussed the difference between woollens and worsteds. Expensive worsteds are, of course, above the D line, but we do not agree that 14s. 6d. is too low for the range of worsteds and woollen cloths taken as a whole. If anything, I think, it would be on the generous side. It is, of course, recognised as part of the D scheme that certain of the more expensive Utility goods now bear a small proportion of tax. We need not go back over that ground, but we do not think that the D fixed at 14s. 6d. is unsuitable for woollen and worsted cloths taken as a whole.

This Amendment refers to the worsted cloth, and I think hon. Members will remember that we had a debate in which the hon. Gentleman the Member for Ashton-under-Lyne (Mr. Rhodes) took a special interest in what is called the two to one ratio—that is, the ratio of the piece goods to the made-up goods. We have made investigations since I made the statement in the Committee on 13th May—on exactly the same subject as this, and reported in the OFFICIAL REPORT at c. 1381. We have made investigations as to whether my remarks about the working of the two to one ratio were correct, and our investigations so far prove my words to have been just. We shall have to make further exhaustive examination into this matter when the D scheme has had time to settle down, but the position would be very much upset if we were now to fix the D from 14s. 6d. to 20s.

The D levels of woollen garments would have to be adjusted throughout and that would mean further adjustments to the scheme. We have worked it out very carefully. These are important points. It would also react on the general relationship in which we try to preserve certain sorts of cloth—table cloths, curtains, bed sheets, and certain other articles, which are fixed in a certain ratio one to another. If we were to accept the Amendment the cost would be about £2 million, I am informed. It is a very considerable amount. We are at the end now, and there is no further stage at which we could make the adjustments we should be bound to make if we were to accept the Amendment in respect of the woollen garments themselves.

5.15 a.m.

Therefore, I hope that hon. Members who have moved this will realise that we do quite sincerely believe that the D level at 14s. 6d. will not be unfair to woollens and worsteds. We cannot make alterations to what has already been decided, but I give the House the assurance that I will watch the working of the two to one ratio, and the operation of the D scheme as a whole. I will do that, realising the difficulties of towns like Halifax and, indeed, the whole of Yorkshire; and, on that understanding, I hope that hon. Members will not press this matter to a Division, although it would be for reasons which I fully understand.

Mr. Anthony Greenwood (Rossendale)

We have heard so many conciliatory but unsatisfactory replies at this stage of the Finance Bill to the pleas which we have put forward that I cannot pretend that I am surprised the Chancellor has not been able to do more to meet the hopes of my hon. Friends this morning. But I am surprised that, so far as I can see, not one hon. Member from the woollen textile constituencies is on the other side of the House. Indeed, if, throughout our debates on the textile situation, we had had more representation from those areas we might have got more from the Chancellor.

However, as my right hon. Friend the Member for Huyton (Mr. H. Wilson) has said, although the situation in Yorkshire has attracted less attention than that in Lancashire, it is none the less serious; and what we have tried to do throughout is to remove as much woollen cloth as possible from the range of taxation and particularly to raise the D level in the case of worsteds. It was because of difficulties in differentiating that we proposed to raise the D level for all woollen cloth, including worsted; that would have had the effect of a difference of about 3s. a yard which is a not inconsiderable alteration.

My right hon. Friend the Member for Huyton spoke, too, about the President of the Board of Trade appearing to be a worried man. It has occurred to me that he is so worried, he is unable to sleep, because he has just made an appearance. I recall that we had to complain on another late Sitting of the House about the absence of the right hon. Gentleman, but we are glad to see his somewhat late arrival.

I would like to say, now that he is with us, that he is doubtlessly worried if he has seen the April summary of the Wool Industry Bureau of Statistics, published in the "Manchester Guardian" on 6th June. My hon. Friend the Member for Halifax (Mr. D. Brook) spoke about exports of fine worsteds to the United States, and if the President will refer to the statistics, he will see that consumption in April was 22 per cent. less than a year previous, and that the rate of delivery of worsted yarns was 32 per cent. less than a year ago, and woven wool fabrics were delivered at a rate 26 per cent. lower than in April last year.

Further, he should read the report issued by the firm, Gray's Carpets and Textiles, Ltd., which produces a wide range of textile goods. Some of the things which this firm has to say relates very closely to this situation, and it points out that, in the first three months of this year it incurred a loss of £139,895, as against a profit of £269,968 for the corresponding period of 1951. It is clearly impossible for firms to go on in conditions of that kind.

The Chancellor has told us something of what the Government has done. He has referred to the reduction in the rate of taxation. I cannot believe that the Government could not have done more than they have done to help this situation. For months now the industry has been waiting for some practical help from the right hon. Gentleman. A few minutes ago he said, "We shall not stop where we are." I hope that he was referring to the Government's position on the benches opposite, which I do not think will continue indefinitely. I was hoping that the right hon. Gentleman would follow up that statement by telling us what the Government are going to do to help the woollen textile industry.

We are still hoping for some indication from the benches opposite that the Government have a policy to help either the woollen or the cotton industry. Throughout the discussion on this problem I am afraid that the Chancellor has looked at it entirely from the point of view of revenue, which he is not going to get, anyway, on the scale he hopes. He has not looked at it from the point of view of the long-term interest of the industry. One of the most surprising features of this discussion was the light-hearted and complacent way in which the Chancellor rose in his place and asked why we were discussing this problem on the Report stage.

Mr. R. A. Butler

I had no intention of being light-hearted or complacent and I had no reason to be; but the right hon. Member for Huyton (Mr. H. Wilson) was referring to his arguments which, he said, had been heard before. That is what made me intervene. It was not because I have any doubts about the difficulties of Lancashire or Yorkshire.

Mr. Greenwood

The right hon. Gentleman may have no doubts about the difficulties of Lancashire or Yorkshire, but he clearly has very great diffi- culties in formulating a policy to cope with them. Certainly, the speech we heard from him a few minutes ago did not do anything to destroy the impression of complacency which his earlier attitude had encouraged.

Mr. Butler

On a point of order. Would it be in order, Mr. Deputy Speaker, when we are discussing an Amendment to increase the D level for wool cloth, to give a full description of the Government's attitude and policy to Yorkshire and Lancashire?

Mr. Deputy-Speaker (Sir Charles MacAndrew)

This Amendment is quite narrow. It is to leave out "14s. 6d." and insert "£1."

Mr. Greenwood

The right hon. Gentleman was prepared to range rather widely in order to discuss the problems of Lancashire on this Amendment. I should not have thought that he would have felt inhibited from addressing his remarks more particularly to the problem covered by the Amendment.

In view of the attitude he has adopted—and the right hon. Gentleman has twice tried to stop me from saying this—we propose to divide the House upon this question.

Question put, "That '14 6' stand part of the Bill."

The House divided: Ayes, 202; Noes, 188.

Division No. 179.] AYES [5.22 a.m.
Allan, R. A. (Paddington, S.) Duncan, Capt. J. A. L Lucas-Tooth, Sir Hugh
Alport, C. J. M. Eccles, Rt. Hon. D. M. McAdden, S. J.
Amery, Julian (Preston, N.) Eden, Rt Hon. A Macdonald, Sir Peter (I. of Wight)
Anstruther-Gray, Major W. J Fell, A. Mackeson, Brig. H. R.
Ashton, H. (Chelmsford) Fisher, Nigel McKibbin, A. J.
Asshaton, Rt. Hon R. (Blackburn, W.) Fleetwood-Hesketh, R. F. McKie, J. H. (Galloway)
Astor, Hon. J. J. (Plymouth, Sutton) Fletcher-Cooke, C. Macmillan, Rt. Hon. Harold (Bromley)
Baldwin, A. E. Foster, John Macpherson, Maj. Niall (Dumfries)
Banks, Col. C. Gage, C. H. Maitland, Patrick (Lanark)
Barber, A. P. L. Galbraith, T. G. D. (Hillhead) Manningham-Buller, Sir Reginald
Barlow, Sir John Garner-Evans, E. H. Markham, Major S. F.
Baxter, A. B. Godber, J. B. Marples, A. E.
Beach, Maj. Hicks Gomme-Duncan, Col. A Marshall, Douglas (Bodmin)
Beamish, Maj. Tufton Gough, C. F. H. Marshall, Sir Sidney (Sutton)
Bell, Philip (Bolton, E) Graham, Sir Fergus Maudling, R.
Bell, Ronald (Bucks, S.) Grimond, J. Maydon, Lt.-Comdr S. L C
Bennett, F. M. (Reading, N.) Harris, Frederic (Croydon, N.) Medlicott, Brig. F.
Birch, Nigel Harris, Reader (Heston) Mellor, Sir John
Bishop, F. P. Harrison, Col. J. H. (Eye) Morrison, John (Salisbury)
Black, C. W. Harvey, Ian (Harrow, E.) Mott-Radclyffe, C. E.
Boothby, R J G Hay, John Nabarro, G. D. N.
Bossom, A. C. Heald, Sir Lionel Nicholls, Harmar
Boyd-Carpenter, J. A. Heath, Edward Nicolson, Nigel (Bournemouth, E.)
Boyle, Sir Edward Higgs, J. M. C Nield, Basil (Chester)
Braine, B. R. Hill, Dr. Charles (Luton) Noble, Cmdr. A. H. P.
Bromley-Davenport, Lt.-Col. W H Hinchingbrooke, Viscount Odey, G. W.
Brooke, Henry (Hampstead) Holland-Martin, C. J. Ormsby-Gore, Hon. W. D
Brooman-White, R. C. Hollis, M. C. Orr, Capt. L. P. S
Browne, Jack (Govan) Holt, A. F. Osborne, C.
Buchan-Hepburn, Rt. Hon P G T Hope, Lord John Partridge, E.
Bullard, D G. Hopkinson, Henry Peto, Brig. C. H. M
Burden, F. F. A. Hornsby-Smith, Miss M P. Peyton, J. W. W
Butcher, H. W. Horobin, I. M. Pickthorn, K. W. M.
Butler, Rt. Hon. R. A. (Saffron Walden) Horsbrugh, Rt. Hon. Florence Pilkington, Capt. R. A
Carr, Robert (Mitcham) Howard, Greville (St. Ives) Pitman, I. J.
Carson, Hon. E. Hudson, Sir Austin (Lewisham, N.) Powell, J. Enoch
Cary, Sir Robert Hutchinson, Sir Geoffrey (Ilford, N.) Price, Henry (Lewisham, W.)
Channon, H. Hutchison, Lt.-Com. Clark (E'b'rgh W.) Profumo, J. D.
Clarke, Col. Ralph (East Grinstead) Hyde, Lt.-Col. H. M. Raikes, H. V.
Cole, Norman Johnson, Eric (Blackley) Rayner, Brig. R
Conant, Maj. R. J. E. Jones, A. (Hall Green) Redmayne, E.
Cooper, Sqn. Ldr Albert Kaberry, D. Remnant, Hon. P
Cooper-Key, E. M. Kerr, H. W. (Cambridge) Roberts, Peter (Heeley)
Cranborne, Viscount Lambert, Hon. G. Rodgers, John (Sevenoaks)
Crookshank, Capt. Rt. Hon. H F C Lambton, Viscount Roper, Sir Harold
Crosthwaite-Eyre, Col. O. E Lancaster, Col. C. G. Ropner, Col. Sir Leonard
Crouch, R. F. Legge-Bourke, Maj. E. A. H Russell, R. S.
Crowder, Petre (Ruislip—Northwood) Legh, P. R. (Petersfield) Ryder, Capt. R. E. D.
Darling, Sir William (Edinburgh, S.) Lindsay, Martin Salter, Rt. Hon. Sir Arthur
Deedes, W. F. Linstead, H. N. Schofield, Lt.-Col. W. (Rochdale)
Digby, S. Wingfield Lloyd, Maj. Guy (Renfrew, E.) Shepherd, William
Donaldson, Cmdr. C. E. McA. Lockwood, Lt.-Col. J. C. Simon, J. E. S. (Middlesbrough, W.)
Doughty, C. J. A. Longden, Gilbert (Herts, S.W.) Smiles, Lt.-Col. Sir Walter
Drayson, G. B. Lucas, Sir Jocelyn (Portsmouth, S.) Smithers, Peter (Winchester)
Drewe, G. Lucas, P. B. (Brentford) Soames, Capt C.
Speir, R. M. Thompson, Lt.-Cdr. R. (Croydon, W.) Ward, Miss I. (Tynemouth)
Spence, H. R. (Aberdeenshire, W.) Thorneycroft, Rt. Hn. Peter (Monmouth) Waterhouse, Capt. Rt. Hon. C.
Stanley, Capt. Hon. Richard Thornton-Kemsley, Col. C N Webbe, Sir H. (London & Westminster)
Stevens, G. P. Tilney, John Wellwood, W.
Storey, S. Touche, Sir Gordon White, Baker (Canterbury)
Strauss, Henry (Norwich, S.) Tweedsmuir, Lady Williams, Gerald (Tonbridge)
Summers, G. S Vane, W. M. F. Williams, Sir Herbert (Croydon, E.)
Sutcliffe, H. Vaughan-Morgan, J. K Williams, R Dudley (Exeter)
Taylor, Charles (Eastbourne) Vosper, D. F. Wills, G.
Taylor, William (Bradford, N.) Wakefield, Edward (Derbyshire, W.) Wilson, Geoffrey (Truro)
Thomas, Rt. Hon. J. P. L. (Hereford) Wakefield, Sir Wavell (Marylebone) Wood, Hon. R.
Thomas, P. J. M. (Conway) Walker-Smith, D. C.
Thompson, Kenneth (Walton) Ward, Hon. George (Worcester) TELLERS FOR THE AYES:
Mr. Studholme and Mr. Oakshott.
Acland, Sir Richard Gaitskell, Rt. Hon H. T. N Paling, Will T. (Dewsbury)
Adams, Richard Gibson, C. W. Panned, Charles
Albu, A. H. Glanville, James Pargiter, G. A
Allen, Scholefield (Crewe) Gordon Walker, Rt. Hon. P. C. Paton, J.
Attlee, Rt. Hon. C. R. Greenwood, Anthony (Rossendale) Pearson, A
Awbery, S. S. Grey, C. F. Peart, T. F.
Bacon, Miss Alice Griffiths, David (Rother Valley) Plummer, Sir Leslie
Baird, J. Griffiths, William (Exchange) Price, Joseph T. (Westhoughton)
Barnes, Rt. Hon. A. J Hale, Leslie (Oldham, W.) Price, Philips (Gloucestershire, W.)
Bence, C. R. Hall, John (Gateshead, W.) Proctor, W. T.
Benn, Wedgwood Hamilton, W. W. Rankin, John
Benson, G. Hannan, W. Reid, Thomas (Swindon)
Beswick, F. Hargreaves, A. Rhodes, H.
Bing, G. H. C Hayman, F. H. Robens, Rt. Hon. A.
Blackburn, F. Healey, Denis (Leeds, S.E.) Roberts, Albert (Normanton)
Blenkinsop, A. Henderson, Rt. Hon. A. (Rowley Regis) Roberts, Goronwy (Caernarvonshire)
Blyton, W. R. Herbison, Miss M. Robinson, Kenneth (St. Pancras, N.)
Boardman, H. Hobson, C. R. Rogers, George (Kensington, N.)
Bottomley, Rt. Hon. A. G. Houghton, Douglas Ross, William
Braddock, Mrs. Elizabeth Hoy, J. H. Royle, C.
Brockway, A. F. Hudson, James (Ealing, N) Schofield, S. (Barnsley)
Brook, Dryden (Halifax) Hughes, Cledwyn (Anglesey) Shinwell, Rt. Hon E.
Broughton, Dr. A. D. D Hughes, Emrys (S. Ayrshire) Short, E. W.
Brown, Rt. Hon. George (Belper) Hughes, Hector (Aberdeen, N.) Shurmer, P. L. E
Burton, Miss F. E. Hynd, H. (Accrington) Silverman, Julius (Erdington)
Butler, Herbert (Hackney, S.) Hynd, J. B. (Attercliffe) Simmons, C. J (Brierley Hill)
Callaghan, L. J. Irving, W. J. (Wood Green) Slater, J.
Castle, Mrs. B. A Jay, Rt. Hon. D. P. T. Snow, J. W.
Chapman, W. D. Jenkins, R, H. (Stetchford) Sorensen, R. W.
Chetwynd, G. R. Johnson, James (Rugby) Soskice, Rt. Hon Sir Frank
Clunie, J. Johnston, Douglas (Paisley) Sparks, J. A.
Collick, P. H. Jones, David (Hartlepool) Stewart, Michael (Fulham, E.)
Corbet, Mrs. Freda Jones, Frederick Elwyn (West Ham, S.) Swingler, S. T.
Craddock, George (Bradford, S) Jones, Jack (Rotherham) Taylor, John (West Lothian)
Crossman, R. H. S. Jones, T. W. (Merioneth) Taylor, Rt. Hon. Robert (Morpeth)
Dailies, P. Keenan, W. Thomas, David (Aberdare)
Dalton, Rt. Hon, H. King, Dr. H. M. Thomas, George (Cardiff)
Darling, George (Hillsborough) Lee, Frederick (Newton) Thomas, Iorwerth (Rhondda, W)
Davies, A. Edward (Stoke, N.) Lever, Leslie (Ardwick) Ungoed-Thomas, Sir Lynn
Davies, Ernest (Enfield, E.) Lewis, Arthur Wallace, H. W.
Davies, Harold (Leek) Lindgren, G. S. Watkins, T. E.
Davies, Stephen (Merthyr) MacColl, J. E. Weitzman, D.
de Freitas, Geoffrey McGovern, J. Wells, Percy (Faversham)
Deer, G. McInnes, J. Wells, William (Walsall)
Delargy, H. J. McKay, John (Wallsend) West, D. G.
Dodds, N. N. McLeavy, F. Wheatley, Rt. Hon. John
Donnelly, D. L. MacPherson, Malcolm (Stirling) White, Mrs. Eirene (E. Flint)
Dugdale, Rt. Hon. John (W. Bromwich) Mallalieu, J. P. W. (Huddersfield, E.) Whiteley, Rt. Hon. W
Ede, Rt. Hon. J. C. Mann, Mrs. Jean Wigg, George
Edwards, John (Brighouse) Manuel, A. C. Wilkins, W. A.
Evans, Albert (Islington, S.W.) Marquand, Rt. Hon. H. A. Willey, Frederick (Sunderland, N.)
Evans, Edward (Lowestoft) Mayhew, C. P. Willey, Octavius (Cleveland)
Evans, Stanley (Wednesbury) Mitchison, G. R Williams, Rev. Llywalyn (Aberlillery)
Ewart, R. Moody, A.S Williams, Ronald (Wigan)
Fernyhough, E. Money, R. Williams, W. R. (Droylsden)
Field, W. J. Mort, D. L. Williams, W. T. (Hammersmith, S.)
Finch, H. J. Moyle, A. Wilson, Rt. Hon. Harold (Huyton)
Fletcher, Eric (Islington, E.) Mulley, F. W. Winterbottom, Ian (Nottingham, C.)
Foot, M. M. Murray, J. D. Wyatt, W. L.
Forman, J. C. Nally, W. Yates, V. F.
Fraser, Thomas (Hamilton) Noel-Baker, Rt. Hon. P J. Younger, Rt. Hon K
Freeman, John (Watford) Orbach, M.
Freeman, Peter (Newport) Oswald, T. TELLERS FOR THE NOES:
Padley, W E Mr. Bowden and Mr. Popplewell.

5.30 a.m.

Mr. R. A. Butler

I beg to move, in page 88, line 37, to leave out "(b) Class B material," and to insert:

per sq. yd.
(b) Class C material 6 0
(c) Class B material of a weight per square yard, exclusive of non permanent loading, of not less than 6 ozs. other than Class C material 6 0
(d)Class B material not of such a weight as aforesaid, other than Class C material.
It would be convenient also to deal with the other Government Amendments to page 88, in lines 44 and 48.

These Amendments implement the decision, first, to increase the D figures for furnishing and other fabrics and non-wool material weighing 6 oz. or more per square yard from 4s. to 6s. per square yard from 3rd June and, second, to increase the D for linen cloth bedspreads, curtains, and so forth, from 4s. to 6s. per square yard from 18th June.

To deal first with the furnishing fabrics, the Amendment I have moved is the result of requests from right hon. and hon. Members on all sides during the Committee stage. I issued an invitation to my right hon. Friend the Member for Blackburn, West (Mr. Assheton), the hon. Gentleman the Member for Ashton-under-Lyne (Mr. Rhodes) and the right hon. Gentleman the Member for Huyton (Mr. H. Wilson), with the aid of others, to help me find some weightage and D to deal with the furnishing fabric problem.

The furnishing fabric problem is one which affects Blackburn among other places and also production a good deal and generally in Lancashire. The difficulty is to find a combination of a weight and a D which does not admit dress fabrics and cotton sheeting, for example. The difficulty, which is rather intense, is that in some cases dress fabrics and furnishing fabrics are of very much the same material. It has even been known that ladies have torn the furnishing fabrics off the curtain rails or furniture and placed them on their backs and been quite well dressed.

It was, therefore, important to find a D level which was sufficiently heavy to be slightly annoying as a dress but, at the same time, would meet the problem of furnishing fabric which is very important for our own production and, to some extent, for export. While I do not presume in the least to say that this arrangement is entirely satisfactory to the right hon. and hon. Gentlemen I have referred to—they might have liked more—they did very kindly co-operate in saying that this would work. I believe that it will work and will be substantially fair. It will bring in, for example, some 75 per cent. by volume, and much more by value, of all non-wool furnishing fabrics. To that extent it is a valuable concession to an important industry in Lancashire.

In the case of loading—which it is necessary to refer to—the qualifying weight is taken as exclusive of non-permanent load, otherwise there would be an incentive to load all cloth just under the dividing line with starch or other material in order to make it qualify for the higher D. We might thus be thought to be encouraging debasement of the quality and fraudulent deception of the public. That is the first and major concession referred to in these Amendments, in framing which I had the benefit of the aid of certain hon. and right hon. Gentlemen on both sides of the House. I am very grateful to them for their help and to those in the trade who advised us.

Then we come to the second concession, which relates to Northern Ireland. Unemployment in Northern Ireland is as severe as or more severe than almost anywhere in the United Kingdom, and quite apart from that there was a certain anomaly between the concession already given in Ds to Northern Ireland for the products of linen, leaving aside linen piece goods.

We therefore decided, after mature consideration, to give this special D for linen cloth in the piece. It is true that a great deal of the products of Northern Ireland are sold as products of linen and not in linen piece goods, and to that extent this concession will not affect the prosperity of Northern Ireland, in my view, as much as the original concession on linen products. But it does logically complete Part II of the Fourth Schedule, and it has the advantage that linen sheeting in the piece, which is used mainly by hospitals and other large institutions, now receives the same rate of D as finished linen sheets.

It is, therefore, a sensible concession and I hope that it will meet the needs and wishes of the Northern Ireland Members who have shown great activity in this matter and great interest in the difficulties of Northern Ireland at the present time.

Mr. H. Wilson

I want only briefly to comment on what the Chancellor has said. He mentioned that the right hon. Gentleman the Member for Blackburn, West (Mr. Assheton), the hon. Member for Ashton-under-Lyne (Mr. Rhodes) and I formed this somewhat unusual committee for the purpose of trying to help the Chancellor to get what we all thought it was possible to get—a definition of furnishing fabrics for the purpose. I think it is a very unusual procedure.

I do not know whether there have been many instances of this kind in the history of Finance Bills, and I must make it clear that we cannot always undertake, on this side of the House, to join with right hon. Gentlemen opposite in getting the Chancellor out of the mess in which he has landed himself. It is quite fair to say that because the existence of this scheme with the D levels has, as the "Manchester Guardian" and many other trading authorities have said, landed Lancashire in a very serious mess. This could have been avoided if a more intelligent scheme had been adopted in the first instance, or if the Chancellor had accepted our proposals at an earlier stage of the Bill for a higher D level for cotton piece goods in general. However, he did make this unusual proposal, and we were very keen to join in this examination.

I think one thing ought to be said, because there may be some misunderstanding about it, especially in Lancashire. It is that we did not set out, in the first instance, to get a definition based on weight. The Chancellor may have given the House that impression. We tried to do it on a basis of specification and, with the help of the Furnishing Fabric Federation and others concerned, we did work out that kind of proposal. I think the hon. Member for Blackburn, West and certainly the hon. Lady for Blackburn, West (Mrs. Castle) would agree that from every point of view that would have been better had it been really workable.

But officials of the Customs and Excise, who were most helpful throughout this work, satisfied us that the difficulties were too great in administering it, especially in dealing with some of the international aspects of the problem. Therefore, with very great regret we had to drop the idea of specifications whether based on the old Utility scheme or in another form, and come to this system of weight.

As the Chancellor fairly remarked, we would have liked something more—and so would Lancashire. But we must express our thanks to the Chancellor that he has moved as far as he has in accepting our proposals. I think we all take the view—and Lancashire takes the view—that half a loaf is better than no bread. This will give some advantage to Lancashire, although not as much as we had hoped. The fact that the Amendment is on the Order Paper is a step forward in what we all hoped to achieve when we debated this in the Committee stage.

Mr. Ralph Assheton (Blackburn, West)

I should like to add a word to what the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) has said on this question of furnishing fabrics and express my gratitude and that of many hon. Members on both sides of the House who represent Lancashire constituencies for the consideration which my right hon. Friend has given to this matter. We pointed out earlier the great difficulty in which the furnishing fabric industry had been placed, and the Chancellor has gone a very long way to meet their case.

Naturally, we have not got all we wanted. If I might give the House a few illustrations to show the very considerable improvement that has been made, I think they might be of interest. On a good quality mercerised cotton damask the Purchase Tax was previously 12s. a yard; now it is only 5s. On Utility cotton and rayon printed brocade the Purchase Tax, which was 3s. 4d., is now 1s. 2½d. per yard. To give an even more striking case, a wool tapestry which sold in the shops three months ago at 49s. 6d. a yard, including 16s. Purchase Tax, will only cost 35s. 3d., because the Purchase Tax is now only 1s. 9d. on this fabric. That illustrates the very substantial concessions which the Chancellor has made, and once again, on behalf of Lancashire in general, I should like to give him my best thanks.

5.45 a.m.

Mr. Anthony Greenwood

The right hon. Gentleman has been a little selective in the argument he has advanced. Would he not also agree that there are, for example, rayon damasks selling at EI tax free before the Budget which would have gone up to 30s. 6d. under the original D scheme and which are now reduced to 27s., but that people are still paying 7s. a yard more for these fabrics than they did before the Budget?

Mr. Assheton

That may be quite true. I should like to see a further reduction. But many furnishing fabrics are now quite free of tax, or only bear a trivial 1d. or 2d. a yard tax.

Mrs. White

At this hour of the morning I dislike striking a discordant note. [An HON. MEMBER: "Strike it hard."] While many of us are extremely grateful to my right hon. Friend the Member for Huyton (Mr. H. Wilson) and the right hon. Gentleman the Member for Blackburn, West (Mr. Assheton) for the hard work that they have put in on this problem of furnishing fabrics, and one would accept unhesitatingly the definition of furnishing fabrics as the most workable that can be found, I should be very sorry if we left this part of the Schedule with the House under the impression that all of us on this side are satisfied with the D level imposed by the Chancellor.

The Chancellor will recall that in the previous debates that we had on this subject we asked, first of all, and so did hon. Members opposite, that Purchase Tax should be remitted entirely in the present state of the industry. The real trouble is that the Chancellor is bound by the general structure of his own Budget. Having now budgeted without taking the state of the textile industry into account, he has made other dispositions of his Revenue so that what he can do in this particular is, of course, limited by wider financial considerations.

The main burden of our dispute with the Chancellor on this point is not over the minor matter of defining furnishing fabrics, but on the major question of his taxation policy with reference to this industry. Therefore, I repeat that it would be completely misleading for him or anyone else to leave this debate with the impression that those of us who represent constituencies in the textile pro- ducing areas are by any means satisfied with the D level which he has chosen.

I have refreshed my memory of the Chancellor's speech in the Committee stage in which he referred to the rate of tax which, as he well knows, stands at 50 per cent. on piece goods. The right hon. Gentleman has mentioned the argument put forward by my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) concerning the conversion rate, and so forth; but apart from that, piece goods are the most important part of our textile exports and there is still a very high rate of tax on many fabrics which are important in our export trade.

The right hon. Gentleman the Member for Blackburn, West was certainly highly selective in the examples he chose. I am still under the impression that we have a good many fabrics which will still bear a high rate of tax. If one goes beyond the weight of 6 oz. per square yard, chenilles, velvets, and so on, are, of course, expensive fabrics. Therefore, this difference in the D level of 2s. per square yard will make very little difference to export fabrics of that kind.

Furnishing fabrics are above the 6 oz. weight level. I grant that that is the only possible definition for furnishing fabrics but, nevertheless, we still think that the D level is too low. It is lower than that originally proposed on this side of the House for rayon and cotton textiles. I am thinking of high quality furnishing fabrics, chintzes, and so on, and I have particularly in mind the good marketing prospects which, immediately prior to the war, we had in the United States for fabrics which were not heavy but which had a certain distinction in design.

One of the difficulties of this way of defining furnishing fabrics is that it makes no provision for the exclusive designs, and what I might call the sophisticated designs, in which some of our leading manufacturers were making a great impression in the United States of America. One of the best known firms in the trade told me that owing to the high tax level at home, it is now impossible for them to attempt to export this kind of dollar-earning product which, as I say, was one of our most promising lines before the war. None of this seems to have been taken into account in fixing what is still, in our view, far too low a D level.

I want to say a word about linen. The Chancellor suggested that by adding a category for linen piece goods, he was making a concession. Surely, what he is doing is tidying up an anomaly in his original Schedule. As the Schedule said, and I think I have the support of hon. Members from Northern Ireland, there was no possible logical reason why the C fabric should be left out. To refer to it now as a concession seems to be entirely misleading. We have not put down the rather higher D level we had suggested as being more appropriate for linen.

I understand that, as no Amendment has been put down, the hon. Members for Northern Ireland constituencies accept the 6s. We thought that that, also, was on the low side, but we have not concerned ourselves this time to put down an Amendment because, and I should like to reaffirm what my right hon. Friend the Member for Huyton said during the Committee stage, that we have found the trade's representatives unhelpful as far as consultations with this particular part of the textile industry is concerned.

I myself was deputed, on behalf of some of my hon. Friends who are interested in this matter, to make appropriate inquiries in order to avoid annoyance to business people. I had no response and, since our last debate on this subject, I have been informed that one of the gentlemen concerned in the trade mentioned me by name at a trade meeting and said that he had been careful not to give me any information as I was a Socialist.

Apart from the personal discourtesy, which I consider was entirely unmerited, we, on this side of the House, as far as the details of these Schedules had been concerned, had done our utmost to be helpful and non-partisan. I do not pretend that that obtained towards the main malformation of the right hon. Gentleman's Budget, but, in this respect, we have done our utmost to be fair and helpful. But, from the linen trade representatives of Northern Ireland, we have had no credit, no help, and no information. That is not the most tactful way to treat people who may, ultimately, be the Government of this country.

I will leave this point by repeating that, while we are thankful for small mercies, we shall not pretend we are en- tirely satisfied, taking into account the present state of the textile industry.

Lieut.-Colonel Sir Walter Smiles (Down, North)

The hon. Lady the Member for Flint, East (Mrs. White), mentioned the linen industry. I spent most of the Whit-week holiday on the problems of this industry, doing my best to help, with the other hon. Gentlemen who represent Northern Ireland constituencies. If I had known that the hon. Lady would have joined us in a deputation, it would have given me the greatest possible pleasure to have seen her with us at any time.

The hon. Lady has put her finger on a most vital point. There is no doubt that linen was accepted in the old Utility scheme as being a more expensive fabric to manufacture than cotton, and we got a 50 per cent. preference. The amount of labour required to make a square yard of linen exceeds that required to make a square yard of cotton. This preference has almost gone, and when, in the middle of the last Recess, the concession was given to Lancashire the linen merchants in Northern Ireland were very angry indeed.

However, I must be very careful not to conclude without thanking wholeheartedly the Chancellor and the Financial Secretary for the help they gave us and the interviews which we had on several occasions. I get so carried away with this subject that I am liable to forget to pay these proper compliments. We in Northern Ireland are all grateful to the Chancellor. On bed sheets, table cloths and table covers Northern Ireland merchants are very anxious to get a preference of some 50 per cent. over cotton. We intend to pursue that matter.

As the Chancellor has mentioned, the unemployment situation in Northern Ireland is really worse than in any other part of the United Kingdom, and linen, of course, is our principal trade and has been for years. This D level only indirectly affects us, since 80 per cent. of our production goes for export, but it affects us in that we have no home market, as I and a third of the Ulster Members who spoke on the last occasion have said again and again.

I hope to bring some figures to the attention of the Chancellor of the Exchequer in the future to show him what the real position is. I conclude by thanking him and the Financial Secretary for the help they have given.

Mrs. Barbara Castle (Blackburn, East)

I make no apology for speaking at this hour on this subject because this is the last opportunity we shall have for the present of referring to Lancashire's need before the door closes finally this year on any possibility of financial help from the Chancellor for a situation which is worsening throughout Lancashire and shows no prospect of improving.

I have been astonished by the contribution of the right hon. Gentleman the Member for Blackburn, West (Mr. Assheton). He is probably the most easily satisfied man in the House of Commons. Here he was only, a few weeks ago, at the beginning of our debates on the Finance Bill, breathing fire, slaughter and rebellion. He was going to the stake for the abolition of Purchase Tax. He was going to put up a tremendous fight for Lancashire. Yet every time we have had a debate on this Bill affecting the cotton industry, the right hon. Member has said how satisfied he is with the Chancellor's non-existent or completely inadequate concessions.

Let us look at what we are pressing on the Chancellor. It is true that the committee that was set up to advise him on this matter agreed among themselves with regard to the definition of furnishing fabrics, but certainly they have no responsibility for the D level which the Chancellor has chosen to fix. It would be quite wrong if we gave the impression that there was a nice all-party agreement to this. Certainly, so far as we on this side of the House are concerned, we consider the D level mistaken.

The Chancellor having been given a workable definition for special treatment of furnishing fabrics has chosen not to use that definition as a basis for introducing a reasonable D line. We are being offered today something entirely different from what we on this side asked for—and what the right hon. Member for Blackburn, West asked for. When we first raised this question we asked for linens a D level of at least 9s. and for class B materials 7s. 6d. At that stage, the right hon. Member for Blackburn, West was quite unsatisfied with our suggestion. He outbid us gallantly with an Amendment to make the D level for class B material 7s. 9d.

6.0 a.m.

Mr. Assheton

I put down my Amendment long before the hon. Lady put down hers.

Mrs. Castle

All the more reason, I should have thought, for the right hon. Gentleman not being in such a hurry to abandon it.

What are we being offered today? The Chancellor has given us, for linens, a mere 6s. After all this deliberation about furnishing fabrics, and the advice given him by his three experts on the workable definition, he is to give us 6s. merely for the class B fabrics of 6 oz. weight and over, and for class B fabrics not in that definition it remains at 4s. Perhaps I misunderstood the right hon. Gentleman's remarks. I thought he said that this concession would cover 75 per cent. of the furnishing fabrics. Would that mean, therefore, that 75 per cent. of the furnishing fabrics will now be tax free?

If so, that does not correspond with the statement made by the Retail Distributors' Association, which has gone into this problem in great detail and has written to the Chancellor. It wrote on 18th April to put forward certain suggestions whereby furnishing fabrics might be treated in a separate definition. Its proposal was that cloths of 7 oz. weight should have a D figure of 7s. a yard with an extra 1s. a square yard in the case of those heavier fabrics which were printed or woven figured, giving an 8s. D level for the most expensive, better class fabrics. When it put forward this proposal it wrote: We believe it will be found on examination that the proposed D figure of 7s. per square yard together with the further modification suggested in proposition 2 is not greater than can be amply justified by the median concept if applied to furnishing fabrics alone. The Chancellor seemed to imply that he had been more generous. Here is a conflict of evidence which will only show that the Chancellor has been a little over-optimistic in the assessment of the effects of his own proposals. Indeed, I am sure the Chancellor would be the first to agree that what he is offering today is something much less than that for which the Furnishing Fabrics Federation itself originally asked.

It is true that, like so many hon. Members, the Federation has been so consistently disheartened by the stonewalling of the Chancellor in the face of its appeals that it has been beaten to its knees, along with the right hon. Gentleman the Member for Blackburn, West, and is now grateful for this small concession, but originally it asked that class C fabrics should be put at the same level as class A, which was even more generous than our suggestion. Here we have a concession by the Chancellor which is much less generous and a D level of a mere 6s.

The Chancellor has shown once again what can only be called cold-blooded complacency in the face of Lancashire's difficulties. He led the House to believe that if only some arrangements could be worked out for a workable definition for selected furnishing fabrics, he would meet their needs. Yet, having been given his workable definition, he comes along with this 6s. a yard and asks us to be grateful for the crumbs from his table.

Unemployment in Lancashire is relentlessly mounting; in the North-West region, on 12th May, there were over 150,000 persons registered as unemployed, and the average figure of unemployment in that region was over 5 per cent. compared with just over 2 per cent. for the country as a whole. But in my constituency, the figure was 6 per cent. and that is just not good enough in this modern age, when we can plan our resources and our finances. The manufacturers of furnishing fabrics in my constituency will be profoundly dissatisfied with the right hon. Gentleman's proposals.

I understand from official figures that the unemployment in Great Harwood is now over 18 per cent. yet the Government come along with a proposal to put on a tax on curtain cloth which, under the old Utility scheme was tax free at 16s. a square yard, wholesale. It will now carry a tax of 5s. a yard. Can it be said, by any stretch of the imagination, that such a thing is economic or financial sanity in the face of unemployment figures which I have quoted? To take a tax-free article such as this curtain cloth, at a time when there is a crying need to stimulate demand, and tax it heavily, is downright insanity.

I only wish that the Chancellor could have read a letter which I received from one of my constituents this morning; a man who, after a lifetime in the textile industry, and who has been enjoying a wage of £9 a week under the Labour Government, is now trying to live on unemployment benefit under a Conservative Government. That man asks us to fight the battle for his livelihood, and that of thousands like him, and I say to the Chancellor that he has betrayed his trust.

Mr. Rhodes

Although the Chancellor has made a concession, we are not satisfied, and shall not be until we have cleared out this Purchase Tax on all textiles. Within the next few months I think that the Chancellor will probably come to see the foolishness of putting on this tax on goods produced by an industry in the middle of a slump. Another ridiculous thing which has struck me since we started discussing Purchase Tax is that it is impossible to run a D scheme of this type unless there is a staple raw material.

We have argued today about the amounts by which we should raise the D level, but many of the proposals are quite meaningless; because, since the last debate in this House on the subject, the price of wool has gone up by 29d. a lb. On the other hand, cotton is being reduced; so, in theory, that should prove to be a benefit to the cotton industry. But supposing that in the second week of August—when the Cotton Bureau in America issues its report—there is a surplus of cotton in the world and cotton prices come down? What will the Chancellor do? Will he chase down his D level or leave it where it is and put his finances out of order—the ones which he has been trying to explain that he needs so badly?

The whole thing was never scientifically conceived and I am afraid that he will be bitterly disappointed before the end of the financial year at the amount of his receipts of Purchase Tax from textiles. We shall be relentless in our insistence on the removal of Purchase Tax from a consumer goods industry which is in the middle of a slump, because Lancashire and Yorkshire need all the assistance they can get and we shall not be satisfied until we get Purchase Tax removed.

Amendment agreed to.

Further Amendments made: In page 88, line 44, leave out"(b) of Class B material," and insert:

per sq. yd.
(b) of Class C material 6 0
(c) of Class B material of a weight per square yard, exclusive of non permanent loading, of not less than 6 ozs., other than Class C material 6 0
(d) Class B material not of such a weight as aforesaid, other than Class C material.

In line 48, after "material," insert:

per sq. yd.
"of a weight per square yard, exclusive of non-permanent loading, of not less than 6 ozs., other than Class C material 6 0
(d)of Class B material not of such a weight as aforesaid."

—[Mr. R. A. Butler.]

Mr. Rhodes

I beg to move, in page 89, to leave out lines 13 to 15, and to insert:

9. Filled quilts—feather, down or cotton and wool:
per article.
(a) not less than 53" in width 4 15 0
(b) less than 53" in width 4 0 0
10. Filled quilts—kapok or cotton wadded:
(a)not less than 53" in width 2 10 0
(b)less than 53" in width 2 0 0
11. Blanket (quilted) quilts 3 15 0
I heard the Chancellor's remarks about the assistance that was given by us on the question of furnishing fabrics. We were very willing to co-operate with him on the matter because furnishing fabrics stood out as one of the most badly hit of all the items in the Schedule. This little industry has been very badly hit. What has happened is that, in spite of the recommendations of the Douglas Committee that 50 per cent. should be tax-free and that a median should be found that would do that, I am given to understand that not more than 25 per cent. to 30 per cent. of the products of this industry are tax-free at the present time.

6.15 a.m.

I can quite understand how this situation has arisen. It is because the D scheme, as at present constituted, is a revenue-raising device, and one which has to be put as simply as possible by the Chancellor so that he can get it through the House. To simplify it a lot of grouping was necessary. The whole of the products of the quilt industry were grouped under one heading; that is, No. 9 in Part II of the Fourth Schedule, at £2 10s. 0d. for cloth not less than 53 inches wide and £2 for cloth less than 53 inches wide. That grouping was unjust, and I would point out that, apart from consideration of the D level, under the old Utility scheme there were five classes.

Those classes were down and feather and down filled quilts, wool filled quilts, kapok filled quilts, cotton wadded quilts, and blanket wadded quilts. It is impossible to condense these five classes into one class and to be fair. In the time at their disposal, the quilt manufacturers have tried to condense them and to come to an understanding with the Treasury. I will try to show why the five categories cannot be condensed into fewer than three.

Each of the categories needs different treatment. Manufacture is different, the equipment needed is different, the labour which has to be put into the several classes is different. There is a difference in the price levels of the material to be put into the quilts, and the material requires more handling in some cases than in others.

I suggest that the Chancellor of the Exchequer should meet us on the lines suggested in the Amendment. We put together the down and feather and down filled quilts and the wool filled quilts, not because they are similar in method of manufacture, but because they are comparable in price. Then come the kapok filled quilts and the cotton wadded quilts, for the same reason. There are different methods of manufacture, but the prices are about the same. Our third category is the blanket filled quilt.

These goods are made for pretty well every family in the country. One of the largest manufacturers of down quilts is the C.W.S., and its manager is the chairman of the Quilt Manufacturers' Association. I must thank the Financial Secretary for his courtesy in receiving the quilt manufacturers and myself to discuss this matter. During the debate on the Schedule earlier, a promise was made that this ridiculous and unfair position would be looked at again. Apparently there was not enough time for a favourable conclusion to be reached between the time when the promise was made and when we saw the Financial Secretary. However, I hope that by now he is in a position to say something of a favourable nature.

I shall be candid about the figures for the D level. I cannot sincerely back them to the hilt as being strictly a fair D level, but they are figures submitted by the manufacturers' association, who consider them to be just. It is up to the Chancellor to come to his own conclusions about the D level for these articles.

I am putting the case for a very hard-hit section of industry. It is having great difficulty. Many factories are nearly closed. Those which are running are having to scour the country for inferior material with which to fill the quilts so that they can sell them at any price in a desperate attempt to get below the D level.

This is not a good thing. I am sure that when the Customs and Excise Department fixed the D levels at £2 10s. and £2 they did not know that this would force many people out of work and out of business and that it would force some part of the industry to debase its quality to the extent that it has had to do. I hope the Chancellor will give a favourable answer, because this is one of the most serious and urgent matters in the Schedule.

Mr. Blenkinsop

I beg to second the Amendment.

I support everything that my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) has said about the range of the Amendment, but I wish to speak in particular about a special type of quilt manufactured in my constituency, the blanket-quilted quilt, which is in a peculiar position. Only three firms in the country manufacture it. It is particularly popular in the industrial areas of the north-east of England and South Wales and in some parts of Scotland. It has been in use for centuries in mining districts and elsewhere.

It acts as a blanket which tucks right over the bed. I see a number of hon. Gentlemen laid out on the benches opposite who might very well be tucked up at this moment. [HON. MEMBERS: "What about hon. Members opposite?"] My hon. Friends do not seem to be so completely recumbent as some hon. Members opposite, but that is purely a matter of opinion. One of the great advantages of the quilt is that it is large and is made to tuck round the bed, whereas the usual quilt dives off the bed in the middle of the night and one spends half the night chasing it. Another advantage is that it can be washed and used over a long period.

In the early days of Purchase Tax, this type of quilt was subject to tax. The sales of some firms were severely affected, and after representations to my hon. Friend the Member for Ashton-under-Lyne, it was agreed that such quilts should be brought into the Utility scheme. That improved the whole prospects of this small group of firms, and the firm I have in mind was able to open a new factory in my division, employing a large number of hands. Under the D scheme its prospects have been shattered and for the larger sized quilts there is next to no market, because they are now subject to a considerable Purchase Tax. Smaller quilts for single beds are exempt from tax, but they do not constitute as large a part of the trade as the larger quilts commonly used in industrial areas.

This particular firm told me that in September to November of last year they were selling 1,191 of the 70 by 90-inches quilts; in March to May the figure was only 158. There were comparable reductions in the larger size of 80 by 100 inches, which were in September to November some 1,700 and are now down to a mere 131. The larger quilts have been forced off the market. The firm assures me that if this position is to remain the whole prospects of the business are in jeopardy. They cannot hope to carry on merely with the small-sized quilt. Therefore, there is a real and serious problem, which could be solved by the adoption of the levels proposed in the Amendment.

It seems extraordinary that, while under the D scheme the smaller blanket quilt is exempt, exactly the same quality of cloth for the double bed is not exempt. That seems a fantastic and absurd anomaly. I urge the hon. Gentleman to consider this real problem of many of our constituencies.

6.30 a.m.

Mr. W. T. Williams (Hammersmith, South)

I hope the reply of the Financial Secretary will not be the usual disingenuous plea that this is born of the last Government, because it is a baby entirely fathered by this Government. I have a feeling that the problem facing many of us who have listened to the hard answers given from the Treasury Bench is to decide whether the Government exist to ensure that the country's interests are best served, or whether the country exists to ensure that the Chancellor has his Budget surplus.

I hope that the speech of my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) will have persuaded the Chancellor that here is a case in which he might be generous. My hon. Friend spoke in some detail about one of the two things of which I wish to speak. I would remind the Financial Secretary again of his comment about not permitting general grading in this section because of the differences which exist between the work and the material which go into the making of these three different types of quilt.

I should like to speak about the D level because, after all, the effect of the D scheme on this industry has been pretty well disastrous already. It cannot be otherwise when the D level has been fixed at a point which puts all kapok and cotton wadded quilts over the Utility level and 90 per cent. of the woollen blanket quilts above that level. The effect on the industry has been serious. Factories are already at a standstill or operating at a loss, and we are told it is possible they may never be brought back into the industry.

There has been considerable debasement in quality already. Expensive materials have been bought, but because of the low D level on quilts the industry is seeking where it can to find a cheap field for quilts in order that it may sell them below the D level. With Britain becoming increasingly poorer, when people cannot get coal and have to go to bed to escape the cold they will find that quilts will not enable them to keep warm.

Because of these things, will the Financial Secretary consider the possibility of reversing the categories and spreading them over the three categories for which we have pleaded, and will he raise the D level on quilts?

Mr. Boyd-Carpenter

This matter was debated in Committee and subsequent to that the hon. Member for Ashton-under-Lyne (Mr. Rhodes) was good enough, with a number of other hon. Members, to bring a deputation from the trade concerned to see me. They raised, as the hon. Member has himself raised today, a rather difficult point on the application of the tax to this particular commodity.

As I understand it, the point is whether it is right to apply one particular rate of tax to these articles regardless of the fillings which they contain or whether it is right to break them down, as this Amendment seeks to do, into three separate categories with separate D figures connected with the type of filling put into the article. As the House is aware, it is part of the principle of the D scheme to ensure that the cheaper type of article is clear of tax but that the tax begins to apply at the middle point in cost and rises gradually on the more expensive articles. Perhaps it is the clash between those two considerations that has given rise to the difficulties to which the hon. Member for Ashton-under-Lyne has referred.

As to the effect on the industry, to which several hon. Members have referred, when an industry finds itself facing certain problems it is always difficult in these matters to make sure whether those problems are attributable to the tax or to some quite other factors, or indeed, in some degree at any rate, to some uncertainty as to the future of the tax. It is certainly the case that where there is some genuine doubt about future arrangements for a tax of this sort buyers hold back because they are afraid of being left with stocks on which a different rate of tax might be imposed.

Mr. Blenkinsop

Surely where there is clear evidence that one range of articles is still relieved of tax and the sales are fully maintained and other ranges of goods are subject newly to tax and the sales go down to practically nothing, there is a clear case that the tax has had a disastrous effect upon the industry.

Mr. Boyd-Carpenter

Not perhaps as clear as the hon. Member thinks, because it follows that some of the articles which are free of tax are the cheaper articles: and it may be that for some reason the demand is attached to the articles which are cheaper. Although I agree that it is some evidence, I do not think it is as clear a case as the hon. Member believes.

Mr. Blenkinsop

But in addition to that fact, there is the size factor as well—which makes it clear that it is not a question of quality—and buyers buy the larger type of quilt because one is suitable for one type of bed and the other is not.

Mr. Boyd-Carpenter

The hon. Member made that point in his speech, and perhaps it is not necessary for us to repeat either ourselves or each other. All I say is that it is not quite as easy as the hon. Member suggests to isolate the tax factor from the price factor in forming a fair view of developments.

Mr. J. Edwards

The House would like to know whether the Financial Secretary can tell us which of the quilts are at present free of tax and what proportion that is of the total number of quilts. If we had that information, we could have some idea of the size of the problem.

Mr. Boyd-Carpenter

As the hon. Member will see from the terms of the Schedule, those free of tax are below the D figures concerned in this Amendment and those above are subject to tax. Though he could not have known it, the hon. Member, however, has rightly anticipated something that I was going to say.

I mentioned that the hon. Member for Ashton-under-Lyne was good enough to bring a deputation to see me. They raised a number of these very points and they have been good enough subsequently to submit in writing an amplification of what they then said. At the moment we are examining the details which they submitted. It may well be—I think it is probably the case—that further information will be required. For that reason, it is quite impossible for me to say anything very definite at this stage this morning.

My right hon. Friend the Chancellor, on the Committee stage, indicated our willingness to look into this matter and to receive evidence which anybody wished to submit. That invitation has been followed up to some extent during the last few days, as the hon. Member for Ashton-under-Lyne is aware. Therefore, it is impossible for me to say anything very definite other than that we are considering, as we always do, representations and evidence submitted to us on the manifold problems which arise in this case. I cannot anticipate what the result of that examination will be.

Some of the evidence is in process of being submitted, and it is for that reason that it is impossible to answer the type of question the hon. Member for Brighouse and Spenborough (Mr. J. Edwards) was intending to put. I can assure hon. Members that we are giving this problem a sympathetic examination and are prepared fully and fairly to weigh the evidance submitted.

Mr. J. Edwards

I think the Financial Secretary correctly stated one of the issues, although I do not think he disposed of it. We feel that the industry cannot be treated as one entity and that it ought not to be. It consists of five classes, producing at least three main types of goods. I do not know whether the President of the Board of Trade has any opportunity to look into this industry, but if he has he will confirm what I have said. If he goes to his Departmental officials concerned, I am certain they will confirm, having had abundant experience of the Utility programme, that the categories are clear and distinct.

I should like the Financial Secretary to address himself to the question whether the figure put down in the Schedule is a fair one. When I asked what was a fairly obvious question, he gave me a reply which was no answer at all, and merely told me that if it were below the D level, it was free of tax. I think he overlooked one or two things which have already been said, namely, that the D level has been fixed at a figure which puts out all previous Utility down, down and feather quilts, and all wool quilts, and places out 90 per cent. of the blanket quilted quilts.

A further thing which the Financial Secretary either does not know or did not think worth telling us is that the greater part of the industry's production is concerned with the manufacture of down quilts. It is because of that, I submit, that the figures are manifestly unfair. If that is so and if the Utility wholesale price of a down quilt ranged from 11s. 5d. to 85s. 1d. for the full bed size, it is manifestly clear that a D level of 50s. 0d. is quite ridiculous. If one takes the wool quilts, where the corresponding prices were 97s. 7d. to 88s. 11d., again it is equally clear, as it is if one takes the blanket quilted quilts, where the prices were 118s. 5d. and 63s. 5d., that the D level is ridiculous. In other words, the great bulk of this industry's production is well above the level which has been fixed for the D scheme.

I would say to the Chancellor very seriously that he just cannot treat this industry on the basis of a single category and that he is doing it a great injustice if he fixes the D level at this point. I therefore urge him to accept this Amendment as an honest attempt to set down

what we think was a fair scheme. The figures may not be precisely right, but we think they are broadly right having regard to the fact that quilts cannot be treated just as quilts; they must be divided into at least three kinds of quilts. I hope that even at this late hour the Chancellor will accept this point.

Question put, "That the words proposed to be left out stand part of the Bill."

The House divided: Ayes, 194; Noes, 185.

Division No. 180.] AYES [6.44 a.m.
Allan, R. A. (Paddington, S.) Garner-Evans, E. H. Nabarro, G. D. N
Alport, C. J. M. Godber, J. B. Nicholls, Harmar
Amery, Julian (Preston, N.) Gomme-Duncan, Col. A. Nicolson, Nigel (Bournemouth, E.)
Anstruther-Gray, Major W. J. Gough, C. F. H. Nield, Basil (Chester)
Ashton, H. (Chelmsford) Graham, Sir Fergus Noble, Cmdr. A. H. P.
Assheton, Rt. Hon. R. (Blackburn, W.) Harris, Frederic (Croydon, N.) Oakshott, H. D.
Astor, Hon. J. J. (Plymouth, Sutton) Harris, Reader (Heston) Odey, G. W.
Baldwin, A. E. Harrison, Col. J. H. (Eye) Ormsby-Gore, Hon. W. D.
Banks, Col, C. Harvey, Ian (Harrow, E.) Orr, Capt. L. P. S.
Barber, A. P. L. Hay, John Osborne, C.
Barlow, Sir John Heath, Edward Partridge, E.
Baxter, A. B. Higgs, J. M. C. Peto, Brig. C. H. M.
Beamish, Maj. Tufton Hill, Dr. Charles (Luton) Peyton, J. W. W.
Beach, Maj. Hicks Hinchingbrooke, Viscount Pickthorn, K. W. M.
Bell, Philip (Bolton, E.) Holland-Martin, C. J. Pilkington, Capt. R. A
Bell, Ronald (Bucks, S.) Hollis, M. C. Pitman, I. J.
Bennett, F. M. (Reading, N.) Hope, Lord John Powell, J. Enoch
Birch, Nigel Hopkinson, Henry Price, Henry (Lewisham, W.)
Bishop, F. P. Horobin, I. M. Profumo, J. D.
Boothby, R. J. G Horsbrugh, Rt. Hon. Florence Raikes, H. V.
Bossom, A. C. Howard, Greville (St. Ives) Rayner, Brig. R.
Boyd-Carpenter, J. A. Hudson, Sir Austin (Lewisham, N.) Redmayne, E.
Boyle, Sir Edward Hutchinson, Sir Geoffrey (Ilford, N.) Remnant, Hon. P.
Braine, B. R. Hutchison, Lt.-Com Clark (E'b'rgh W.) Roberts, Peter (Heeley)
Bromley-Davenport, Lt.-Col. W. H. Hyde, Lt.-Col. H. M. Rodgers, John (Sevenoaks)
Brooke, Henry (Hampstead) Johnson, Eric (Blackley) Roper, Sir Harold
Brooman-White, R. C. Jones, A. (Hall Green) Ropner, Col. Sir Leonard
Browne, Jack (Govan) Kaberry, D. Russell, R. S.
Buchan-Hepburn, Rt. Hon P. G. T. Kerr, H. W. (Cambridge) Ryder, Capt. R. E. D.
Bullard, D. G. Lambert, Hon. G. Salter, Rt. Hon. Sir Arthur
Burden, F. F. A. Lambton, Viscount Schofield, Lt.-Col. W. (Rochdale)
Butcher, H. W. Lancaster, Col. C. G. Simon, J. E. S. (Middlesbrough, W.)
Butler, Rt. Hon. R. A. (Saffron Walden) Legge-Bourke, Maj. E. A. H. Smiles, Lt.-Col. Sir Walter
Carr, Robert (Mitcham) Legh, P, R. (Petersfield) Smithers, Peter (Winchester)
Carson, Hon. E. Lindsay, Martin Soames, Capt. C.
Cary, Sir Robert Linstead, H. N. Speir, R. M.
Channon, H. Lloyd, Maj. Guy (Renfrew, E.) Stanley, Capt. Hon. Richard
Clarke, Col. Ralph (East Grinstead) Lockwood, Lt.-Col. J. C. Stevens, G. P.
Cole, Norman Longden, Gilbert (Herts, S.W.) Storey, S.
Conant, Maj. R. J. E. Lucas, Sir Jocelyn (Portsmouth, S.) Strauss, Henry (Norwich, S.)
Cooper, Sqn. Ldr Albert Lucas, P. B. (Brentford) Studholme, H. G.
Cooper-Key, E. M. Lucas-Tooth, Sir Hugh Summers, G. S.
Cranborne, Viscount McAdden, S. J. Sutcliffe, H.
Crookshank, Capt. Rt. Hon. H. F. C. Macdonald, Sir Peter (I. of Wight) Taylor, Charles (Eastbourne)
Crosthwaite-Eyre, Col. O. E. Mackeson, Brig. H. R. Taylor, William (Bradford, N.)
Crouch, R. F. McKibbin, A. J. Thomas, Rt. Hon. J. P. L. (Hereford)
Crowder, Petre (Ruislip—Northwood) McKie, J. H. (Galloway) Thomas, P. J. M. (Conway)
Darling, Sir William (Edinburgh, S.) Macmillan, Rt. Hon. Harold (Bromley) Thompson, Kenneth (Walton)
Deedes, W. F. Macpherson, Maj. Niall (Dumfries) Thompson, Lt.-Cdr. R. (Croydon, W.)
Digby, s. Wingfield Maitland, Patrick (Lanark) Thorneycroft, Rt. Hn. Peter (Monmouth)
Donaldson, Cmdr C. E. McA Manningham-Buller, Sir R. E. Thornton-Kemsley, Col. C. N
Doughty, C. J. A. Markham, Major S. F. Tilney, John
Drayson, G. B. Marples, A, E. Touche, Sir Gordon
Duncan, Capt. J. A. L. Marshall, Douglas (Bodmin) Tweedsmuir, Lady
Eccles, Rt. Hon. D. M. Marshall, Sir Sidney (Sutton) Vane, W. M. F.
Eden, Rt. Hon. A. Maudling, R. Vaughan-Morgan, J. K.
Fell, A. Maydon, Lt.-Comdr. S. L. C Vosper, D. F.
Fisher, Nigel Medlicott, Brig. F. Wakefield, Edward (Derbyshire, W.)
Fleetwood-Hesketh, R. F. Mellor, Sir John Wakefield, Sir Wavel (Marylebone)
Fletcher-Cooke, C Morrison, John (Salisbury) Walker-Smith, D. C.
Foster, John Mott-Radclyffe, C. E. Ward, Hon. George (Worcester)
Ward, Miss I. (Tynemouth) Williams, Gerald (Tonbridge) Wood, Hon. R.
Waterhouse, Capt. Rt. Hon C. Williams, Sir Herbert (Croydon, E.)
Webbe, Sir H. (London & Westminster) Williams, R. Dudley (Exeter) TELLERS FOR THE AYES:
Wellwood, W. Wills, G. Mr. Drewe and
While, Baker (Canterbury) Wilson, Geoffrey (Truro) Mr. T. G. D. Galbraith.
Acland, Sir Richard Gaitskell, Rt. Hon H T. N Padley, W E
Adams, Richard Gibson, C. W. Paling, Will T. (Dewsbury)
Albu, A. H. Glanville, James Pannell, Charles
Allen, Scholefield (Crewe) Gordon Walker, Rt. Hon. P. C. Pargiter, G. A
Attlee, Rt. Hon. C. R. Greenwood, Anthony (Rossendale) Paton, J.
Awbery, S. S. Grey, C. F. Pearson, A.
Bacon, Miss Alice Griffiths, David (Rother Valley) Peart, T. F.
Baird, J. Griffiths, William (Exchange) Plummer, Sir Leslie
Bence, C. R. Grimond, J. Popplewell, E.
Benn, Wedgwood Hale, Leslie (Oldham, W.) Price, Joseph T. (Westhoughton)
Benson, G. Hall, John (Gateshead, W.) Price, Philips (Gloucestershire, W.)
Beswick, F. Hamilton, W. W Proctor, W. T.
Bing, G. H. C. Hannan, W. Rankin, John
Blackburn, F. Hargreaves, A. Reid, Thomas (Swindon)
Blenkinsop, A. Hayman, F. H. Rhodes, H.
Blyton, W. R. Healey, Denis (Leeds, S.E.) Robens, Rt. Hon. A
Boardman, H. Henderson, Rt. Hon A. (Rowley Regis) Roberts, Albert (Normanton)
Bottomley, Rt. Hon. A. G Herbison, Miss M. Roberts, Goronwy (Caernarvonshire)
Bowden, H. W. Hobson, C. R. Robinson, Kenneth (St. Pancras, N.)
Braddock, Mrs. Elizabeth Holt, A. F Rogers, George (Kensington, N.)
Brockway, A. F. Houghton, Douglas Ross, William
Brook, Dryden (Halifax) Hoy, J. H. Schofield, S. (Barnsley)
Broughton, Dr. A. D. D. Hudson, James (Ealing, N.) Shinwell, Rt. Hon E.
Brown, Rt. Hon. George (Belper) Hughes, Cledwyn (Anglesey) Short, E. W.
Burton, Miss F. E. Hughes, Emrys (S. Ayrshire) Shurmer, P. L. E.
Butler, Herbert (Hackney, S.) Hughes, Hector (Aberdeen, N.) Silverman, Julius (Erdington)
Callaghan, L. J. Hynd, H. (Accrington) Simmons, C. J. (Brierley Hill)
Castle, Mrs. B. A. Hynd, J. B. (Attercliffe) Slater, J.
Chapman, W. D. Irving, W. J. (Wood Green) Snow, J. W.
Chetwynd, G. R. Jay, Rt. Hon. D. P. T. Sorensen, R. W
Clunie, J. Jenkins, R. H. (Stechford) Sparks, J. A.
Collick, P. H. Jones, David (Hartlepool) Stewart, Michael (Fulham, E.)
Corbet, Mrs. Freda Jones, Frederick Elwyn (West Ham, S.) Swingler, S. T.
Craddock, George (Bradford, S.) Jones, Jack (Rotherham) Taylor, John (West Lothian)
Crossman, R. H. S. Jones, T. W. (Merioneth) Taylor, Rt. Hon. Robert (Morpeth)
Daines, P. Keenan, W. Thomas, David (Aberdare)
Dalton, Rt. Hon. H. King, Dr. H. M. Thomas, George (Cardiff)
Darling, George (Hillsborough) Lee, Frederick (Newton) Thomas, Iorwerth (Rhondda, W.)
Davies, A. Edward (Stoke, N.) Lever, Leslie (Ardwick) Ungoed-Thomas, Sir Lynn
Davies, Ernest (Enfield, E.) Lewis, Arthur Wallace, H. W
Davies, Harold (Leek) Lindgren, G. S. Watkins, T. E.
Davies, Stephen (Merthyr) MacColl, J. E. Weitzman, D.
de Freitas, Geoffrey McGovern, J. Wells, Percy (Faversham)
Deer, G. McInnes, J. Wells, William (Walsall)
Delargy, H. J. McKay, John (Wallsend) West, D. G.
Dodds, N. N. McLeavy, F. Wheatley, Rt. Hon John
Donnelly, D. L. MacPherson, Malcolm (Stirling) White, Mrs. Eirene (E. Flint)
Dugdale, Rt. Hon. John (W. Bromwich) Whiteley, Rt. Hon. W.
Ede, Rt. Hon. J. C. Mallalieu, J P. W. (Huddersfield, E.) Wigg, George
Edwards, John (Brighouse) Mann, Mrs. Jean Willey, Frederick (Sunderland, N.)
Evans, Albert (Islington, S.W.) Manuel, A. C. Willey, Octavius (Cleveland)
Evans, Edward (Lowestoft) Mayhew, C. P. Williams, Rev. Llywelyn (Abertillery)
Evans, Stanley (Wednesbury) Mitchison, G. R. Williams, Ronald (Wigan)
Ewart, R. Moody, A. S. Williams, W. R. (Droylsden)
Fernyhough, E. Morley, R. Williams, W. T. (Hammersmith, S.)
Field, W. J. Mort, D. L. Wilson, Rt. Hon. Harold (Huyton)
Finch, H. J. Moyle, A. Winterbottom, Ian (Nottingham C.)
Fletcher, Eric (Islington, E.) Mulley, F. W Wyatt, W. L.
Foot, M. M. Murray, J. D Yates, V. F.
Forman, J. C. Nally, W. Younger, Rt. Hon. K
Fraser, Thomas (Hamilton) Noel-Baker, Rt. Hon. P. J
Freeman, John (Watford) Orbach, M. TELLERS FOR THE NOES:
Freeman, Peter (Newport) Oswald, T Mr. Wilkins and Mr. Royle.
Mr. Boyd-Carpenter

I beg to move, in page 89, line 49, at the end, to insert:

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