§ (1) Garments trimmed with fur skin (including any skin with fur, hair or wool attached), but not otherwise made thereof, shall cease to be comprised in paragraph (f) of Group 1 in Part I of the Eighth Schedule to the Finance Act, 1948, and (except so far as they are comprised in some other paragraph of that Group) shall—
- (a) if of a kind suitable for young children's wear, be exempt from purchase tax; and
- (b) if not of such a kind, be comprised in paragraph (a) of the Group:
§ Provided that this subsection shall not apply to any such garment in the case of which the trimming of fur skin either—
- (i) represents a cost to the manufacturer of the garment greater than the cost to him of the other components; or
- (ii) has an area greater than one-fifth of the area of the outside material.
§ (2) Accordingly in the said Group 1 there shall be made the amendments provided for by paragraph 2 of the Third Schedule to this Act.
§ (3) For the purposes of subsection (1) of this section and of Part I of the said Eighth Schedule, the cost of any component of a garment to the manufacturer of the garment is to be taken to be the total cost to him of that component ready for assembly into the garment:
§ Provided that where the Commissioners are not satisfied both—
- (a) that the whole of the cost of the component was actually borne by the manufacturer of the garment; and
- (b) as to the amount thereof;
§ (4) If, in ascertaining the amount of tax for which any person is accountable, any dispute arises as to the amount which is to be taken for the purposes aforesaid to be the cost of any component of a garment to the manufacturer of the garment, subsections (2) and (3) of section twenty-one of the Finance (No. 2) Act. 1940 (which provide for arbitration in the event of disputes as to wholesale value), shall apply with the necessary modification of any reference to the wholesale value of the goods.
§ (5) Subsections (1) and (2) of this section shall have effect subject to any order made by the Treasury after the passing of this Act under section twenty-one of the Finance Act, 1948, and any such order varying or revoking subsection (1) of this section may, in connection therewith, vary or revoke subsection (3) of this section.
§ (6) Subject to any order made by the Treasury under the said section twenty-one after the passing of this Act, gloves made wholly or partly of fur skin (including any skin with fur, hair or wool attached) shall be comprised in paragraph (a) of Group 3 in Part I of the Eighth Schedule to the Finance Act, 1948, and paragraphs (b) and (c) of that Group shall accordingly be omitted.
§ The Purchase Tax (No. 11) Order, 1950 (which amended the said paragraph (b)), is hereby revoked.
§ (7) This section shall have effect as from the seventeenth day of March, nineteen hundred and fifty-two, except that the last foregoing subsection shall only have effect as from the fourteenth day of May, nineteen hundred and fifty-two.—[Mr. Boyd-Carpenter.]
§ Brought up, and read the First time.
§ Mr. Boyd-Carpenter
I beg to move, "That the Clause be read a Second time."
This new Clause was forecast during the debate on Clause 7 of the Bill. It has two effects. First, it substitutes for the original Clause 7 (2) provisions further redrafted for the concession made in respect of fur-trimmed garments.
1271 With the passing of the old Utility exemptions, cloth coats merely trimmed with fur would be liable to be treated as fur coats and taxed at the rate of 100 per cent., which would have a serious effect on the production of articles of this sort. This Clause provides for the reduction of the rate of Purchase Tax on fur-trimmed garments to 25 per cent.—the same rate as if they were made of cloth.
In view of the obvious possibilities of abuse, provisions are inserted. There are two in particular, to prevent abuse. They relate to the area which may be trimmed with fur and also to the proportion of the total value of the garment which may be of fur. If it were not for those provisions it would be possible to put an expensive mink collar on a cheap coat, get it through the Purchase Tax grid at 25 per cent., remove the coat and have a substantially tax free fur collar. To prevent that evasion it has been necessary to insert the provisions into the Clause.
At the same time, the new Clause introduces the concession in the case of fur gloves announced by my right hon. Friend during the general debate on the Purchase Tax. On the introduction of the D scheme, those gloves became chargeable at 100 per cent. on the amount by which they exceeded the D value, in this case 12s. The tax is reduced from 100 per cent. to the general rate of 25 per cent. applying to articles under the D scheme, which should help manufacturers of those articles, who, particularly those in the West of England, were somewhat perturbed by the incidence of the tax.
§ Mr. W. A. Burke (Burnley)
There is an Amendment down which I think is not being called, and perhaps I may be able to say a word or two now about this problem. My problem does not concern garments the exterior of which is trimmed with fur but concerns interior trimming of a shuttle. We have had some correspondence with the Treasury about this matter and I understand that it is a question of definition. It is a most important matter to the textile trade in Lancashire and, indeed, to the textile trade of other parts where they weave silk. It is more important to the silk and rayon trades than to the cotton trade.
Inside a shuttle, which is essential to the cotton trade, there has to be a small strip of fur. I understand that if the 1272 shuttle is sold with the fur in it to begin with, it is free of Purchase Tax, but of course the little strip of fur has to be renewed from time to time and then it is subject to Purchase Tax. It is only a small strip of fur, a matter of nine inches long and one inch wide, but it is essential if the cotton and silk trades are to produce the right quality.
§ The Temporary Chairman (Mr. George Thomas)
I think the hon. Member is going a little wide of this Clause, which deals with garments and gloves. I am sorry, because I should like to help him.
§ Mr. Gaitskell
I understood from the Chairman that it would be possible for my hon. Friend to raise this extremely important point on the Question that the Clause stand part. I hope that it will be possible for him to continue. Perhaps you could be a little elastic in your judgment of this matter, Mr. Thomas.
§ The Temporary Chairman
I am sorry that I was not here when my predecessor reached that understanding, but if it was in the hearing of the Committee—
§ The Temporary Chairman
Then I am afraid I must stop the hon. Member. I am very sorry. Perhaps he could try to keep in order.
§ Mr. Boyd-Carpenter
Perhaps I can assist. I do not know whether I shall be out of order if I say that we have been in touch with representatives of those concerned in this matter and are considering representations. As you have said, Mr. Thomas, it is clearly not within the ambit of this Clause, which deals with fur trimmed garments, whereas the matter to which the hon. Member is referring is that of fur trimmed implements of production; but the point that he has succeeded in making is one of which we are well aware.
§ Mr. Burke
It affects the fur trade in this respect, that it has to sell fur to the Lancashire textile trade. I should have thought that anything necessary to help the textile trade would have appealed to the Government at this time. I do hope the Chancellor will look at the matter and see if he can do something to enable the textile trade to use its implements at lower cost than that obtaining at the present time.
§ Mr. Assheton
I should like to add one word in support of what the hon. Member for Burnley (Mr. Burke) has said. I, too, have had similar representations made to me. I am quite certain that the case the hon. Gentleman has made is very sound, and I hope that the Board of Customs will find some way to meet it.
§ Mr. F. Blackburn (Stalybridge and Hyde)
I was going to add my support to what my hon. Friend the Member for Burnley (Mr. Burke) said, but, since it is out of order, perhaps I had better leave it, in view of the concession that has been granted by the Financial Secretary. I want only to say a brief word of thanks to the Chancellor for the concession that has been made with regard to the glove trade; but I would remind the Financial Secretary that it is not only in the West Country that gloves are made. I hope that the Chancellor will not think that, having made this concession, he has made all the concessions so far as the glove trade is concerned, and that he will not forget that he promised before the Report stage to look further into the matter to see if he could make further concessions.
§ Major Sydney Markham (Buckingham)
I should like to add a word, too, in view of the forthcoming Coronation, because this will affect those in another place who will have to invest in garments of which a fifth will be fur. The exact arithmetical proportion of fur is one fifth, the other materials comprising four fifths. I wonder if the Chancellor could give a ruling as to whether one fifth in this case is within the meaning of the Clause, of outside it.
§ Clause read a Second time, and added to the Bill.