§ Secondly, we propose to remove an obstacle which up to now has stood in the way of the full development of our export trade, particularly in the vital field of textiles. We shall do this by accepting the main recommendation of the Report of the Committee under the Chairmanship of Sir William Douglas. As this Committee was appointed by my predecessor, its parentage, chairmanship and membership is therefore presumably above reproach. Its Report, which was unanimous, puts forward a means of meeting the most frequent criticism made by exporters about the Purchase Tax arrangements in the utility field.
§ This arises from the fact that the main demand at home has been for utility grades, which have enjoyed complete tax exemption. An article which is just too expensive to qualify as utility has had practically no sale at home because of the big jump in the retail price caused by the addition of the tax. But many such articles, the Douglas Committee was assured, would command a ready sale abroad, if there were also sufficient home demand to make their production an economic proposition.
§ The effect of the new scheme is to remove the sudden jump in price and to substitute an evenly graduated tax. The scheme will remove a serious handicap under which our exporters have been labouring. It will also fulfil our international obligations and carry out an 1278 undertaking given in Geneva by the ex-President of the Board of Trade, the right hon. and learned Member for St. Helens (Sir H. Shawcross), in September last year. We are, therefore, seeking continuity of policy and pledge in this matter. At the same time, the great range of cheaper utility goods will remain untaxed.
§ I am taking the opportunity to make a further improvement on the present arrangements, in order to help farm and other workers as well as housewives. Certain goods, including such essential items as rubber boots, oil baize and a wide range of industrial protective clothing have hitherto been outside the utility schemes and have, therefore, been subject to Purchase Tax. I am now bringing them into the new scheme, with the result that on many of them no tax at all will be payable, while on the rest it will be reduced.
§ My right hon. Friend the President of the Board of Trade will enlarge on these matters in the Budget debates, and will describe his plans for the future of utility. As far as I am concerned the alterations in Purchase Tax are unlikely to raise any additional revenue this year.
§ These measures—the further import cuts and the other proposals I have just announced—form part of the third instalment of our emergency plan to reach our objective—balance with the non-sterling world in the second half of 1952. But this is not enough. We have felt the first rush of the storm and to lighten the ship we have had to throw a good deal overboard. We must now look to our rig and take in some sail.