PURCHASE TAX (UMBRELLAS)

HC Deb 13 November 1952 vol 507 cc1208-44

8.2 p.m.

The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter)

I beg to move, That the Purchase Tax (No. 7) Order, 1952 (S.I., 1952, No. 1821), dated 15th October, 1952, a copy of which was laid before this House on 16th October, 1952, in the last Session of Parliament, be approved. The effect of the Order is to impose Purchase Tax at a rate of 100 per cent. on parts and fittings of umbrellas other than covers, ferrules or material shaped for use in the manufacture of covers. The purpose of the Order is to deal with a means, which has already been exploited by one company, of evading the Purchase Tax on umbrellas. Perhaps it would be for the convenience of the House if I explained the method of avoidance, as that of itself will make clear the method of checking the avoidance.

A certain manufacturer of umbrellas on a substantial scale has bought up a number of moribund companies in order to exploit the general Purchase Tax exemption limit under which manufacturers generally of output of less than £500 per annum are not registered for tax. The companies which have been bought up—they were originally some 26 in number, but I understand that the number has increased—purport to buy umbrella components in their own name and then purport to employ the parent company—which is, of course, the only real operating body in the whole outfit—to make up the umbrellas for them, and then they equally employ the parent company to market the umbrellas in the name of the subsidiary company. Each of the subsidiary companies then so arranges things that it has on its own account sold less than £500 worth a year and so comes underneath the registration limit. In this way tax is completely avoided.

As I told the hon. Baronet the Member for Middleton and Prestwich (Sir J. Barlow) on 30th October in reply to a Question, the loss of tax through the use of this expedient would be, so far as this company is concerned, at an annual rate of between £10,000 and £20,000. What makes it more necessary to deal with it is that if this wholly unfair method of competition against the manufacturers who follow the normal procedure were allowed to continue they would be placed in so bad a competitive position that I understand it would not be unlikely that they, too, would feel that they were bound in their own commercial interests to adopt the same method of avoidance.

The Order will certainly take most of the profit out of this method of avoidance. The registered manufacturers will be able to continue in the normal way to buy their umbrella components tax free, since under the ordinary Purchase Tax law registered manufacturers can buy the goods tax free. Unregistered manufacturers, such as the nominal subsidiaries in the case which I have described to the House, will have to buy their components subject to the tax. Their sales of the complete article, as they are below the registration limit, will continue to be free of tax.

The tax on the components has been placed in the Order at the rate of 100 per cent., whereas the ordinary rate of tax on a completed umbrella is 66⅔. The reason for the differentiation is twofold; first, that the made-up article is naturally, by reason of the labour put into it, of greater value than the separate components; and, second, because some of the components, for reasons which I will explain in a minute, have been omitted from the Order. That is the substance of the matter except for the exceptions to which I have referred.

The first of the exceptions is designed to ensure that wooden walking sticks and their ferrules shall remain tax free. The House will recall that those walking sticks were made tax free recently as the result of representations made to us by hon. Members on both sides of the House that there was something rather objectionable in subjecting the white walking sticks used by the blind to Purchase Tax. It was found that it was not possible to distinguish between those walking sticks and the others, and so we exempted all of them. That exemption is protected.

Mr. Eric Fletcher (Islington, East)

Will the hon. Gentleman be good enough to explain precisely how that protection arises in the form of the Order, because it is not apparent?

Mr. Boyd-Carpenter

I wholly sympathise with the hon. Gentleman, because, when the draft of the Order was first placed in front of me, I raised precisely that question as I had been a little concerned about the exemption in question. It arises this way. The articles subject to tax are parts of walking sticks and not walking sticks. Walking sticks of wood remain immune, and a specific exemption is made for the ferrules, so that a wooden walking stick and its ferrule shall remain tax free.

Perhaps a more important exception is in respect of the covers. They are also excepted from the Order, for it does not apply to them. Perhaps I might in that connection be allowed to mention the fact that two of my hon. Friends who are interested in the question of tax upon covers have intimated that interest to me. As I see it, this Order does not apply to covers, and I should not be able under the rules of order to deal with their points. However, I have no doubt that channels will be found in the ordinary way to discuss the matter with them.

The reason for the exclusion of covers is that the stuff of which they are made is subject under a totally different provision to tax at 50 per cent., and the cloth used in them is indistinguishable from the other cloth which carries that weight of tax. We have been anxious to avoid putting an undue tax on the umbrella repairer, and no doubt it is the experience of hon. Members who use these implements that the part of the umbrella most likely to require repair is, of course, the cover.

That is the reason for this Order. It is simply designed to block the hole which the ingenuity of one firm had already found in the tax system. Whatever hon. Members may feel either about Purchase Tax in general or about the particular rates applicable to particular articles, they will all agree that it ought to fall fairly and equally, and it would be quite wrong for the Government, when they become aware of a particular method of evasion, to allow that method of evasion to continue. We believe that the method we have adopted will take the profit out of this expedient and cause it to cease.

The Order is, of course, already in force under the normal procedure. It became operative on 20th October. It is too early for me to be able to tell the House that it has definitely checked this expedient, but, on the other hand, so far as we can gather it appears to be successful. However we shall watch its operation, and if it should prove inadequate we should not hesitate to come to this House and ask for any further measures that might be necessary.

Mr. R. T. Paget (Northampton)

Before the hon. Member sits down perhaps he will answer me this question. This appears to be a proposal which, in effect, imposes a new tax in the middle of the year and not by the Budget in the ordinary way. Can the hon. Member tell us what precedents there are for that?

Mr. Boyd-Carpenter

There are a great many. Speaking from memory, it is the Finance Act, 1948, which gives permission to vary Purchase Tax at any time by the use of a Statutory Instrument. The only difference is that where that tax is diminished it is done by the negative procedure; whereas here, as the hon. and learned Gentleman has pointed out, there is an increase, the affirmative procedure is required. That, of course, is why I am moving the adoption of this Order.

8.14 p.m.

Mr. Eric Fletcher (Islington, East)

Before saying a word about the merits of this Order, may I say that I think the House will appreciate the point my hon. and learned Friend the Member for Northampton (Mr. Paget) raised because, while it is perfectly true that Parliament gave the Treasury power in the Finance Act, 1948, to vary tax by a Statutory Instrument, the present Government will recognise, as the late Government recognised, that the power should only be exercised in exceptional cases. In other words, it is obviously desirable that, where changes in the rate of Purchase Tax or the addition of articles to the liability of Purchase Tax take place, that they should in the ordinary way form part of the discussion in Parliament following the introduction of the Budget and the annual Finance Bill. It is only in some exceptional cases that the machinery of the Statutory Instrument can be justified.

The whole House will agree that this is clearly one of those exceptional cases. The Treasury, having detected an ingenious device for avoiding Purchase Tax by manipulating various parts of an umbrella and similar articles and having a series of companies to do it, it was obviously very desirable that that method of evasion should be checked at once rather than wait until another Finance Bill was introduced.

I should like to ask the Financial Secretary how long this practice has been going on? Can he tell us whether the practice of having these numerous companies dealing with parts of umbrellas has been in existence for a long time? Can he tell us whether there is any reason to suppose that a similar scheme is being adopted in regard to other articles? As I heard the Financial Secretary's speech about the device of having a number of related companies selling below whatever is the minimum figure before tax is extracted, it occurred to me that if this were possible in connection with umbrellas, sunshades, walking sticks and canes, it was not beyond the bounds of possibility that other ingenious firms may be adopting a similar method of trying to avoid Purchase Tax on articles which are made up of relatively easily assembled small parts. I hope we can have an assurance that any similar device relating to any other comparable article is under observation, or, if not, that steps will be taken to look out for it.

With regard to the details of the Order in question, during the hon. Member's speech he was good enough, in answer to my question, to tell me that, as has always been the case in the past, ordinary wooden walking sticks are exempt from Purchase Tax.

Mr. Boyd-Carpenter

It has not always been so in the past. They were, in fact, relieved of tax a short time ago.

Mr. Fletcher

I am much obliged. They are still relieved from Purchase Tax, and that is so notwithstanding the fact that most of them have a ferrule at the end of them, because that is the normal and most convenient method of making a walking stick. The hon. Member did say that exemption applied only in the case of wooden walking sticks. I would not attempt to argue the question whether there should be any differentiation between wooden walking sticks and any other walking sticks. That possibly may be a question for consideration on some other occasion, but I do not think that that is a question which arises tonight. I merely mention it so that it can be considered.

Umbrellas and sunshades fall into a different category. I gather that one of the reasons why umbrellas and sunshades are referred to in this Order in conjunction with walking sticks is chiefly because the same kind of parts—ferrules and other parts—are probably interchangeable for umbrellas and walking sticks. I do not think it right that the latter part of the Order should remain in that form. I do not think that one can always draw a distinction between an umbrella and a sunshade. Doubts have been expressed in my hearing whether a particular article is an umbrella or a sunshade. Fashions in umbrellas change as they do with sunshades, particularly in some universities. It is desirable that they should be separately mentioned in the Order.

I am prepared to support the Order. I hope it will be agreed to. I am glad to have the assurance that walking sticks remain exempt, and that this particular device for evading Purchase Tax has been detected and will now be stopped.

8.22 p.m.

Sir John Barlow (Middleton and Prestwich)

I am grateful to the Financial Secretary for explaining this small Order so lucidly. There are one or two points I should like to mention, but before doing so I must, in accordance with the custom of the House, declare my interest in the matter. I have the honour to be President of the Federation of British Umbrella Manufacturers, and I am interested in the manufacture of umbrellas myself.

This evasion, which has gradually grown up in the manufacture of umbrellas, has been a running sore in the trade for some time. If it had been allowed to continue it would have caused chaos. I would point out that the proposals which the Financial Secretary has put forward tonight are not likely to close the loophole effectively. He described to us how certain companies have had a very large number of small subsidiary companies, each operating to a maximum value of £500.

Purchase Tax, which is 66⅔ on an ordinary ladies' utility umbrella valued at about 27s. 6d. in the shops, amounts to 8s. The manufacturer is making and selling to the wholesaler for about 10s. 6d. or 11s. 6d. The wholesaler would sell it for about 12s., and on that basis the Purchase Tax would be assessed at 8s. The article is finally sold in the shops at about 27s. 6d.

It is computed by the trade that the 100 per cent. tax on component parts would amount to only about 4s. for a similar umbrella. These small companies, which are already in existence, are getting an advantage of 8s. an umbrella. In the future they will only be able to get 4s. extra profit instead of the whole 8s. This alteration may prevent new companies from being formed, but it will not prevent existing companies from going on and continuing in this way. For this reason, I think the proposal is not sufficient to stop the gap, and I hope that the Financial Secretary will consider the matter again.

There is a further hardship. It has been the practice for a great many years for certain small shopkeepers, such as barbers, to do small repairs to umbrellas. They have purchased their components in the past free of tax. Now they will have to pay 100 per cent. duty on them. That heavy duty will largely kill that industry of small people. I am very reluctant to see that happen, and I again hope that the Financial Secretary will reconsider this matter.

There is the much larger subject, which I cannot go into tonight, of Purchase Tax itself. It should be out of order if I did so, but I can say that the anomalies in regard to Purchase Tax on umbrellas are as extraordinary as with other commodities. I again ask my hon. Friend to consider this matter further and, if he wishes to close the present loopholes, as I hope he does, that he will do it more effectively. I think he will find that reducing Purchase Tax on umbrellas from 66⅔ to 33⅓ is much the most effective way. That would help the trade and the Revenue, as well as exports, which are being very seriously affected at the present time by the diminished trade.

Exports in umbrellas were relatively small before the war. In 1938, they amounted in value to £133,000. in 1947 the value was nearly £600,000 and last year it was £846,000. Unless we have a really settled and reasonable home trade in umbrellas, we shall lose a great deal of those very valuable exports. For this reason, and for other reasons with which I will not trouble the House tonight, I hope that the Financial Secretary will consider this matter again most carefully.

8.28 p.m.

Dr. Barnett Stross (Stoke-on-Trent, Central)

The House is greatly obliged to the hon. Member for Middleton and Prestwich (Sir J. Barlow), who has just made his contribution and told us of his interest. He has warned us of something that we have not always tended to appreciate, that even the smallest fragment of legislation can be accompanied with serious complications unless the very greatest care is taken. I am affected by the hon. Gentleman's argument that a group of craftsmen who are accustomed to repair umbrellas must now pay 100 per cent. Purchase Tax for the small parts they need, and may in consequence be driven out of business. I am certain the Financial Secretary would agree that he did not have that in mind when he brought this Order before the House. I therefore add my plea to that of the hon. Gentleman in hoping that it can be reconsidered. This somewhat unhappy attempt at rationalising an industry by having innumerable firms who spend only £500 and manufacture one simple article, thus escaping their obligation, must be stopped, because nobody wants to support that unhappy enterprise.

The whole question of the £500 limit should be considered. We know it has been useful in certain circumstances. For instance, hon. Members would not get a cheap and attractive Christmas card so easily without it. Also the Financial Secretary will remember that not long ago I went with him on a deputation regarding artists who produce their own lithographs but I was not fortunate enough to persuade him on that issue. I mention that because I was interested in noting how he explained why this requires a positive Resolution. It is because it asks for an increase, whereas it would always be possible to decrease Purchase Tax by means of a negative Resolution without it having to come before us at the time of the Budget.

Either we reduce the tax to 33⅓ per cent., so that temptation is taken away from those who have been attempting to evade the law or using a loophole in the existing law, or we must get rid of Purchase Tax on umbrellas altogether. After all, the umbrella is not only a symbol of authority for a city gentleman who never unfolds it, it is a necessity for the housewife. Umbrellas are really needed by women who go shopping in all weathers. Men do not seem to wear them so much, and we unhappy masculine mortals when it rains have to find some lady who will give us the shelter of her umbrella. Sometimes we are fortunate, sometimes we are not so fortunate, and are lucky to escape an injury to our eyes or to some other part of our face or head.

With an export reaching £846,000, with an industry which contains an old-fashioned type of practitioner for its repairs who will perhaps be put out of business by this proposal, and after the plea made by someone who knows more about the industry than the rest of us put together. I hope that the Financial Secretary will reconsider the decision and meet us by withdrawing the Order and bringing before us another one in a better form.

8.33 p.m.

Miss Irene Ward (Tynemouth)

I appreciate the reason which has prompted my hon. Friend to bring forward this Order, and I am glad that his reason is supported by all sides of the House. I notice, however, that it is always possible for the Treasury to bring forward something which it feels to be essential, but that it is difficult to get proper consideration given to the other side of the case. I have no particular interest in umbrellas, so I have no interest to declare, but before I get out of order, Mr. Deputy-Speaker, let me say at once that it is ridiculous to have Purchase Tax on umbrellas when mackintoshes mostly do not carry it. It is grossly unfair—

Mr. Deputy-Speaker (Sir Charles MacAndrew)

The hon. Lady said she wanted to say something before she got out of order. She is out of order already.

Miss Ward

I have now made my point, Mr. Deputy-Speaker, but I think it is ridiculous to have competition between mackintoshes and umbrellas to the detriment of the latter. I want especially to emphasise the case of the small umbrella repairers. I come from a famous part of the country, Tyneside. Ever since I was a child, and that was a long time ago I have been in the habit of going with my family to a well known umbrella shop which has carried out for us a lot of small repairs. At the end of a letter to me this firm has put the following plea, which I commend to my hon. Friend: You might be misled by our letter heading as Umbrella Manufacturers, but during the war we were asked to concentrate on repairs by the Board of Trade. We have not been able to get back to manufacturing on account of Purchase Tax. That puts the case quite simply.

I should have liked to hear the names of the people who had been behaving in this fashion, because when people play dirty tricks it is a good idea that others should know about it.

The firm I have been quoting is Messrs. Scott and Son, and I want to put to the House some of the points they have put to me. They write: New umbrellas are taxed 66⅔ per cent., and in some cases have an Uplift of 6 per cent. Naturally we in the trade consider this tax too high… The particular point we want to bring to your notice, however, is a new Treasury Order… This Order puts a tax of 100 per cent. on all umbrella parts. These parts were previously tax free except elastic bands and tassels. It is just like the Treasury to concentrate on tassels— This tax will of course increase the charges of repairs to our customers, out of all proportion to the value of the umbrella to be repaired (these are usually in poor condition). The public expect prices to go down not up— That, I may say, is in the Conservative Party Manifesto— Another serious and most unfair position has arisen with regard to the 'D' scheme for umbrellas being re-covered. For 60 or 70 years our firm has dealt with … They are known all over the country as specialists in 'made-up' umbrella covers. We use … pattern book and order covers daily as required for our customers. These covers are put on in our own workrooms. The Purchase Tax on these covers is 50 per cent. Under the 'D' scheme it is possible—

Mr. Boyd-Carpenter

On a point of order, Mr. Deputy-Speaker. I shall be grateful for your guidance. As I understand her, my hon. Friend is discussing the question of Purchase Tax upon covers. In view of the fact that covers are excluded from this Order and that such tax as is payable is payable under some other provision, is their discussion in order? Were it to be in order it would be my duty to reply, and I do not wish to be inhibited in so doing.

Mr. Paget

Further to that point of order—

Miss Ward

Before you reply, Mr. Deputy-Speaker, if my hon. Friend would allow me to finish the letter, he would see my point, which is directly related to the Order. He does not need to reply to that part. I cannot believe that he wants to deprive small umbrella repairers of the right to have their case heard in Parliament. It is the only chance that we have, but if my hon. Friend wants to take this point I will gladly give way if he will give an undertaking that there will be another occasion when it will be in order. He can take his choice. I will leave out this part and I will go on to the other, because I do not want to put you in any difficulty, Mr. Deputy-Speaker.

Mr. Deputy-Speaker

I shall be put in less difficulty if nothing more is said on this point. The Order is perfectly simple. The Order relates only to Parts of and fittings for umbrellas. … The hon. Lady is going quite beyond the Order.

Mr. Paget

Further to that point of order. Surely parts of umbrellas other than covers are used by umbrella repairers. The complaint here is that in order to save some manufacturing interest which finds that it is having unfair competition by a side wind and accident, the umbrella repairers who are small people are being injured. Surely, that must be in order.

Mr. Deputy-Speaker

The hon. and learned Member is being very kind to help the hon. Lady, but that is not quite what she was saying.

Miss Ward

I did not need the help. Grateful as I am for it, I am perfectly capable of standing on my own feet. As I have heard with very great interest both my hon. Friend on the point and my hon. and learned Friend on the other side of the House—I call him my hon. and learned Friend because he agrees with my view—referring to small repairers, I will skip that little part, because I have made my case.

I will go to the next point, which is exactly what has been said already by the other two hon. Gentlemen. This is from a specific firm of repairers who are affected by the Order—I hope that this puts the matter in order—and who say: We quite realise that we can send our recovers to a manufacturer and not have to pay the 50 per cent. tax, but this would mean closing our workrooms and dismissing our old umbrella workers. … You will now see how serious our position is through these ridiculous regulations. Other firms … will send umbrellas to manufacturers, and can undercut us in our own speciality. … After all, the Financial Secretary dealt with all this. It is a wonderful thing what people can get away with when they are introducing Orders. It is only when the critics come along that it is so difficult to keep within the rules of order. The firm go on to say: We still intend to carry on our own workrooms if at all possible. By putting this 100 per cent. tax on these parts, the difficulty will be that when customers bring in their umbrellas to be repaired, the price for them must go up. Therefore, it will pay people to disregard the small shops which repair umbrellas and to try to buy through firms who get their umbrellas supplied by the big manufacturers.

I am now becoming a little more emphatic, because it has been my hon. Friend's intention to try to prevent my making the case that I want to make. So I now say quite emphatically that he is on the side of the big battalions, and I am on the side of the small repairers whom I have known since my childhood.

Mr. Deputy-Speaker

And I am on the side of the rules of order.

Miss Ward

Having made my point to the best of my ability, I ask my hon. Friend to remember that the Conservative Party stands for the small man. I do not want to see these small repairers being penalised by an Order, however right and proper the Order is. It is a very good thing to say that when one is doing justice one must also seem to be doing justice, and certainly to those to whom justice does not seem to be done.

Why should workers who have been employed in workrooms repairing umbrellas for years and years, and doing it during the war, have to lose their employment because some wretched manufacturer of umbrellas has broken the law and defrauded the Treasury? It is about time that we managed to find some regulation that will do justice to all sections. Having made my case, I will now sit down.

Dr. Stross

Has the hon. Lady not noted that men are allowed to carry walking sticks without paying Purchase Tax and that women cannot have umbrellas without paying it? Is the hon. Lady finishing her speech without some reference to this?

Miss Ward

I am grateful to the hon. Member. Of course, I had noted it. I thought, in fact, that it was very much a man's Order, but as I had been out of order so often I felt that a controversy between the sexes had better be left for a more suitable occasion.

8.45 p.m.

Mr. I. Mikardo (Reading, South)

The hon. Lady the Member for Tynemouth (Miss Ward) as always, has given a brilliant demonstration of the justice of her claim to be able to stand on her own feet and I am sure that all hon. Members on both sides of the House enjoyed it. I particularly enjoyed the devastating attack she made upon the Government, firstly for ignoring the interests of the small man, which they are always claiming to support—a promise which again they are breaking—and secondly, for failing to honour their promises to reduce Purchase Tax.

I hope it will not be misunderstood and that my motives will not be doubted when I say to the hon. Lady that the next time she feels in the mood to make such a devastating and, if I may say so, effective attack upon Her Majesty's present Government, I shall be delighted to offer her the hospitality of a platform in South Reading from which she could do it to a very appreciative audience.

We are always very glad when we see either a breaker of the law prevented from doing it again or an evader of the law finding that a loophole has been stopped. The hon. Lady made a serious point—and I am with her 100 per cent.—in pointing out that it is a pity when, in the interests of manufacturers, action is taken which makes it difficult for the small man to keep in business against the competition of the big organisation. I am sure that the hon. Baronet the Member for Middleton and Prestwich (Sir J. Barlow) will agree that the trade association is dominated by the large manufacturers.

This is all the more true, as the hon. Lady has with complete justice pointed out, when we are balancing a manufacturer against a repairer. One of the few remaining repositories of craftsmanship in British industry is places where things are repaired rather than places where things are made. The expert shoe repairer, the expert watchmaker, the expert umbrella repairer, all have a great deal of the craftsmanship which originally went into the manufacture of the goods but which has now, for various reasons, largely disappeared from the manufacture of the goods now that they have become a piece of mass production.

Like the hon. Lady, I have no interest to declare in this business, but I speak with some practical knowledge of it because I acted as a consultant to one of the most famous of umbrella manufacturers for a great many years. If I may be allowed to add the information, I initiated some quite revolutionary patterns which to a large extent changed the manufacturing of umbrellas.

I try to look at this matter from the practical point of view. I wish to make two points to the House. First, I want to reinforce a plea made to the Parliamentary Secretary by my hon. Friend the Member for Islington, East (Mr. E. Fletcher). Umbrellas are comparatively easy things to assemble. The frames are assembled with cheap and small hand tools and the cover is applied by sewing, or by a very simple form of rivetting. As my hon. Friend pointed out, there are many other things which are easy to assemble in that way. I stick to smokers' requisites; a pipe is one and cigarette lighters, or some simple forms of them, are such items, but there are many others.

Doubtless, the Financial Secretary can tell us whether there has been in any other industry other than that of umbrellas any use on a significant scale of the sort of device which this Order is intended to counteract. If it is not so, well and good, but if it were so, it would be a pity if, in doing the very good job of passing this Instrument, we nevertheless seemed to cast an unfair aspersion on one industry as against another. Here I am sure I carry the agreement of the hon. baronet.

The other point I make is a technical one. Exempted from Purchase Tax are ferules, covers, or materials shaped for use in the manufacture of covers. I should like to ask the Financial Secretary what happens to a roll of cover material. In the piece it is not, of course, to use the words of the Order, shaped for use in the manufacture of covers. It is shaped no differently from a roll of towelling, sheeting or suiting. It only becomes so shaped when it is cut into those nearly but not quite triangular portions—I say "not quite" because they are arc-sided, not straight-sided—technically known as gores, which in this sense has no sanguinary significance. Until so cut it is not shaped for use in the manufacture of covers.

What happens if one firm wishes to sell to another a roll of cover material? Does that transaction bear Purchase Tax, because if it does and Purchase Tax has been paid on it, I do not suppose that there would be any practical method of claiming a rebate on it once the piece had been cut. I may be wrong, and I should be grateful for clarification by the Financial Secretary, but it seems to me that the exception of the material is not as helpful as would appear on the face of it.

I join with other hon. Members on both sides of the House in supporting this Order, but there are some implications of it which do not appear to have been thoroughly considered. I hope they will be.

Mrs. Eveline Hill (Manchester, Wythenshawe)

It might be thought that I am interested in this subject because I come from Manchester, but I strenuously deny that we use umbrellas any more than they are used in any other parts of the British Isles. This Instrument reveals a rather sad state of affairs, though what particularly disturbs me is the rather complicated method of tidying up the whole matter. Because of that I would urge the Financial Secretary to look once more at this matter and see if he cannot evolve something easier, simpler and less time-wasting than the Order will be to be put into operation.

We are all glad that walking sticks are to remain untaxed, but I think, with other Members, that we should all like to see this particular form of taxation done away with altogether. I rather fancy that is impossible at the present moment, but I suggest to the Financial Secretary that it would surely be easier, simpler and certainly very much better to collect a 3⅓ per cent. over-all tax rather than to put these different rates of taxation on so many different parts of a small article such as an umbrella.

8.53 p.m.

Mr. Douglas Jay (Battersea, North)

I should hate to keep the Financial Secretary from his supper for the second evening running, but so long as the other Treasury Ministers insist on absenting themselves from the Chamber we are forced into the dilemma between our natural humanity to Financial Secretaries and our duty to examine the legislation, good, bad or indifferent, which the Government are now bringing forward.

Mr. Boyd-Carpenter

Will the right hon. Gentleman allow me to reassure him? On this most important matter, in the sense in which he has referred to it, I have had it.

Mr. Jay

Even if we have not to protect the hon. Gentleman from hunger, I thought we should have to give him physical protection from the hon. Lady the Member for Tynemouth (Miss Ward) behind him, but she has now departed.

We understand from the Financial Secretary that this is an anti-inflation measure similar to many which the previous Government brought forward under the Finance Act, 1948. It is intended to stop various loopholes and to prevent avoidance of tax. I expect the hon. Gentleman has had some learned and ingenious advice from the Customs and Excise on this matter. I have had enough experience of that Department to attach a great deal of weight to their recommendations. Nevertheless, it did seem to me that the hon. Baronet the Member for Middleton and Prestwich (Sir J. Barlow) raised one or two points which the Government ought certainly to consider. As I understood him, he argued that there were other loopholes—or perhaps leaks is the more correct word in this connection—which might break out if this one is stopped. If that is so an attempt should be made to stop up those also.

In addition it seemed to me that the hon. Lady the Member for Tynemouth—who, I warn the Financial Secretary, has now returned to the Chamber—also made a point which at least deserves consideration when she said there was a danger—and I am sure this was not the intention of the Government or the Customs and Excise—of this Order strengthening the hold of the trade associations and large manufacturers to the detriment of the smaller firms. There is sometimes a danger which one has to watch of the administrator listening a little too much to the trade associations. That is not to say he ought never to listen to them at all, but it is a danger which, I think the Financial Secretary would agree, ought to be watched.

I should like to ask one question which might arise from the fact that I did not entirely follow the Financial Secretary in his original speech. As I understand it, the tax on complete umbrellas is at present 66⅔ per cent. and the tax on walking sticks is nil. They are exempted. It is now proposed to put a tax of 100 per cent. on parts of umbrellas and walking sticks, according to this Order. I understand it is necessary to impose the higher tax of 100 per cent. on parts of umbrellas for the reason which the hon. Gentleman mentioned—because it is the most effective way of stopping evasion. I did not, however, quite follow why 100 per cent. tax had also to be imposed on parts of the walking sticks, but I am sure that he will be able to explain that.

I should also like to say one other thing, because I see that the hon. Member for Dumfries (Mr. N. Macpherson) is present and I know he takes an interest—or he did a few years ago—in this question of Purchase Tax on umbrellas; and maybe he will say something later on. The hon. Lady the Member for Tynemouth said that it was part of the Conservative Party's policy to look after the small man and to bring down prices, and I agree with her that there is a certain prima facie inconsistency between that general doctrine, which she says her party professes, and the action of the Financial Secretary.

There is also a similar inconsistency between what the Financial Secretary is now doing and an Amendment which the Conservative Party introduced and supported in the debates on the Finance Bill in 1948. It was the hon. Member for Dumfries who wanted the tax, not raised to 100 per cent. on parts of umbrellas, but reduced to zero. Indeed, he said at that time: I submit that it is wholly illogical to increase the Purchase Tax on umbrellas; if anything, it should be reduced or abolished. That was a very categorical statement, and we should like to know, before the Financial Secretary intervenes, whether the hon. Member still takes that view. He said: Logic demands that we reduce the tax in order to ensure that everyone carries an umbrella. That is a sentiment with which the hon. Baronet the Member for Middleton and Prestwich will, I am sure, agree. The hon. Member also said, and I dare say that the hon. Lady the Member for Tyne-mouth will agree with this: The real essence is that an umbrella is a necessity, especially for ladies. This proposition was then supported by perhaps an even more eminent Member of the party opposite. It was supported by the right hon. Gentleman the Member for Blackburn, West (Mr. Assheton), now one of the advocates of more extreme measures of economy in the Tory Party. He said: It is a tremendous addition to the tax when a manufacturer is subject to a tax of 66⅔ per cent. instead of 33⅓ per cent. In this case I am told that it is going to knock this trade about in a most surprising manner."—[OFFICIAL REPORT, 8th June, 1948; Vol. 451, c. 2096–8.] I remember that at the time the idea of the umbrella trade being knocked about in a surprising manner caused me a certain amount of concern. However, we see that here, as in so many other matters, so far from the Tory Party carrying out the propositions for lowering taxation which they so often tried to persuade us to do, they are doing exactly the reverse and in this Order actually raising the tax by a small amount.

We shall not oppose this Order, because we are opposed to evasion of taxation, but we note that this is yet another case where the party opposite have not merely failed to live up to their promises but in fact have done exactly the reverse.

9.1 p.m.

Mr. Boyd-Carpenter

I will pass over the concluding flourish of the right hon. Gentleman the Member for Battersea, North (Mr. Jay)—he enjoyed it: it did nobody any harm—and reply to the points raised in the debate. The hon. Member for Islington, East (Mr. E. Fletcher), who is not now in his place, but who no doubt will read my answer in the OFFICIAL REPORT, asked me two questions. First, he asked when the process which this Order is designed to stop was found to have started. So far as we know, it was in the month of June of this year.

He also asked, as did the hon. Member for Reading, South (Mr. Mikardo), whether there were other cases. I am advised that at the moment there are none. In view of the nature of these devices, it is perhaps material to point out that the likelihood of other cases developing or not may be closely connected with the question whether we show in this case that the Government are able to stop it.

The hon. Member for Middleton and Prestwich (Sir J. Barlow) rather doubted whether this Measure went far enough to stop it. I remind him and the House that in moving this Motion I said that we were proposing to watch the operation of this Order closely and that if, notwithstanding the indications which we have at present that it is serving its purpose, the hon. Baronet's fears turned out to be justified, then we should not hesitate to take such other measures as might be necessary.

I am glad to recall that hon. Members on both sides of the House have indicated that they agree that it is wrong to allow loopholes of this sort in any system of taxation, whatever one may think about the system. Other comments upon this Order came from a number of hon. Members, including the hon. Member for Stoke-on-Trent, Central (Dr. Stross), the hon. Lady the Member for Tynemouth (Miss Ward) and the hon. Lady the Member for Manchester, Wythenshawe (Mrs. Hill), all of whom raised the question of the effect of this Order upon the small repairer. Obviously that is an aspect of the matter which we shall have to watch.

We certainly do not wish to do injustice to the small man. I often under why the small human being is always a small man: we desire equally not to do any injustice to the small woman. We will watch this situation carefully. I think that I can give some consolation to hon. Members who raised this point. The large item in repairing is the fitting of a new cover. That is not affected at all by this Order. Therefore, so far as repairs to covers or the fitting of new covers are concerned, the Order will not affect the position. I believe that work, of that type is a substantial part of the small repairers' business. None the less, it is a point which, of course, we shall very properly have to watch.

The hon. Member for Reading, South raised the question of craftsmanship—and I may say I fully agree with what he said on that—and asked how the exclusion of covers operated. He raised the question whether covers could be exempted when rolls of the material of which they were made were subject to tax in the ordinary way. Covers, though not dealt with in this Order, are, as I explained in moving the Motion, none the less subject to tax under the normal Purchase Tax provisions relating to fabrics of this sort. This Order has nothing to do with that, but they have carried and do carry Purchase Tax at the rate of 50 per cent. under the ordinary provisions affecting similar fabrics. There is none of the difficulty, which the hon. Gentleman apprehended, of a tax-free cover with tax upon the material of which the cover is made. I hope that clears up the points he had in mind.

The right hon. Member for Battersea, North raised the question why it was necessary to include parts of walking sticks. The answer is that, in practice, it is quite impossible to distinguish between certain parts of umbrellas and certain parts of walking sticks. The simplest example is the curved handle, which can be seen adorning the arms of hon. Members from both sides of the House during their walks about London in the ordinary English weather. It is impossible to make a distinction between them, and that is the reason for their exclusion.

In view of that explanation, and of the general desire of the House to see that the tax is not evaded in this case, I hope the House will now see fit to give its approval to the Order.

9.7 p.m.

Mr. Niall Macpherson (Dumfries)

I think the House will sympathise with my hon. Friend the Financial Secretary in having to introduce this little Order. My hon. Friend the Member for Middleton and Prestwich (Sir J. Barlow) has really demonstrated that this Order will not go far enough to meet the difficulty. My hon. Friend says he will watch it to see if it is not going far enough to meet the difficulty, and that, in that case, in due course he will take some action to meet it.

What action will he take to meet it? What further action can he take? Surely there were two choices open to my hon. Friend in this case? Let me say at once that the reason why I am sorry for my hon. Friend tonight is that this is a legacy of the planners on the other side. They introduced this tax, or at any rate they raised it, and they failed to appreciate the loophole that now has to be met.

Mr. Glenvil Hall (Colne Valley)

Is the hon. Gentleman telling the House that the Purchase Tax was introduced by the late Labour Government?

Mr. Macpherson

No, it was introduced early on in the war, but hon. Members on the other side had the opportunity of dealing with matters of this kind, and they doubled the tax. What I am now saying is that my hon. Friend had a difficult choice to make. Either he could say, "We must do something to block up this leakage," or, alternatively, the other choice was to remove the tax altogether.

Hon. Gentlemen opposite have asked my hon. Friend whether this kind of difficulty has arisen on any other matter, and he said that as far as he knew it has not. Therefore, this is an isolated case. Surely the right line to take is to treat it as an isolated case, on which we should say that here is a tax which has really proved administratively impossible and that the right choice would have been to remove the tax altogether.

I am sorry that my hon. Friend is not doing so, though I fully sympathise with the position in which he has been placed. I hope that in future when administrative difficulties of this kind arise he will take the opportunity to do away with the Purchase Tax, instead of merely trying to stop up the gaps. I mean no disrespect, but I think this is a piffling matter and that it is really ridiculous that the time of the House should be wasted on matters of this kind. I hope that in future in cases like this when a Purchase Tax grows administratively impossible it will be removed instead of steps being taken to try and block up the leakage.

9.10 p.m.

Mr. Ede (South Shields)

I sincerely hope that no Government will take the advice that has just been tendered by the hon. Member for Dumfries (Mr. N. Macpherson), because it would merely mean that if any body of citizens object to a tax all they have to do is to raise administrative difficulties. Goodness only knows that that would be quite easy with regard to any tax, and the Government would be expected to give way to all kinds of pressure. That may be sound doctrine in Dumfries, but I very much doubt whether it would stand much examination in Westminster.

The reply from the Financial Secretary indicates that he is well aware of the fact that this Order does not remove all the difficulties and that it creates some that will need very careful watching. But I would have hoped that the House would be unanimously of opinion that where there is tax evasion steps should be taken to see that that evasion should discontinue.

Viscount Hinchingbrooke (Dorset. South)

Eggs.

Mr. Ede

I am not quite sure what the noble Lord means by that. They are not articles that should be thrown in the House, and I really do not see quite where they come into the debate on Purchase Tax. As far as I know, there is no Purchase Tax on eggs. There was one dark saying by my hon. Friend the Member for Islington, East (Mr. E. Fletcher) about umbrellas in universities which I did not follow at all.

I recollect going to a university, I believe even before the hon. Lady the Member for Tynemouth (Miss Ward) went to an umbrella repairing shop, and that was indicated as being somewhere in the Dark Ages. No member of my family having been to a university before, I went armed with a new umbrella. I regret to think what happened to that umbrella on the first occasion on which I tried to use it in the precincts of the university; because in those days nobody under the rank of a Master of Arts was supposed to carry an umbrella anywhere in the University of Cambridge. There may be some other less enlightened university where they go in for a system of colours in this matter.

Umbrellas, after all, are articles which might well be discussed on the basis of those who keep the law and those who do not. When I remarked once that the rain falls on the just and the unjust, I was reminded that it fell principally on the just because the unjust had pinched the umbrella of the just.

It is desirable that this House should do even-handed justice. This Order is an attempt to ensure that it should be done. We on this side of the House, while admitting that there are difficulties and that this Order does not entirely meet the situation, see no reason why the Motion should not be carried and the Order made in view of the Financial Secretary's promise that he will watch its operation and take all steps that are necessary, and incidentally secure that no injustice is done to anyone.

9.14 p.m.

Mr. R. T. Paget (Northampton)

I must say that I do not feel very happy about this Order. We have had a discursive debate. We have heard the Financial Secretary on the subject of the little woman, and we have heard my right hon. Friend the Member for South Shields (Mr. Ede) on the problem of umbrellas being articles found rather than bought. I have been stung to speak a little by the attitude taken by the hon. Member for Dumfries (Mr. N. Macpherson).

I do not like this way of imposing taxation. I know it has been done before, and by Governments which I have supported, but it is open to abuse. Inevitably when one is dealing with an industry, it is a convenience for officials to deal with the big people who are represented in the trade organisation, and it is the big people's organisation that has the ear of the Treasury on these occasions.

We heard in the opening speech that it had come to the notice of the Treasury that there was some evasion of this tax. How had it come? That came out later from the hon. Baronet the Member for Middleton and Prestwick (Sir J. Barlow). It had come from the big people in the trade who did not like the competition of the enterprising and ingenious lower down. That is how it came. So the big people have to be protected.

As so often happens—and here we heard from the hon. Lady the Member for Tynemouth (Miss Ward)—when a Measure is introduced to protect and maintain one man's position somebody else is injured by a side wind, and that is precisely what has happened here. The unfortunate umbrella repairers are the people who are really taking the injury of this proposal which is aimed at the tax evader, in order to protect the manufacturers' federation. In the very eloquent letter which was read to us by the hon. Member for Tynemouth, we have heard in what bitter terms they feel that competition.

To return for a moment to the hon. Member for Dumfries, whatever else this Order does, it does not put down the price of umbrellas. Whoever else it serves, it does not serve the purchasing public. We were told—and I think we were told it as a quotation from the Conservative Party Manifesto—that the public expects prices to come down. They had every reason to do so if they listened to speeches of Conservative Members in opposition, but nowadays all they hear from those benches are reasons why prices should go up. In this case it is a relatively small scale, but again the reasons are why prices should go up. In this case it is the prices of parts of umbrellas which are going up. We are told after that that the Conservative Party stands for the small man. It never does. It is always the large interests that are preferred.

Although the hon. Member for Dumfries says that he would prefer the total abolition of Purchase Tax on umbrellas—and doubtless that is also the view of the manufacturers—none the less he supports this Order. When he spoke on this matter before when this tax was imposed, he did not speak in terms of what suited the manufacturer. He was interested in the customer getting these articles cheaper, and in the need for these articles.

Mr. Macpherson

I did not mention the manufacturer in the whole of my speech. I was not putting it from that angle at all. I was putting it from the angle of the public, and the hon. and learned Gentleman knows that perfectly well.

Mr. Paget

Will the hon. Member then explain why he is supporting this Order? It makes things more expensive for the public, it makes the price higher and it protects the manufacturers from a competition which might bring their prices down.

Whose interest is involved here, except that of the manufacturers? The hon. Member adopted a different attitude last time, when he said: I submit that it is wholly illogical to increase the Purchase Tax on umbrellas; if anything it should be reduced or abolished.… Logic demands that we reduce the tax in order to ensure that everyone carries an umbrella.… Why should umbrella manufacturers have to pay 66⅔ per cent., while walking sticks, as long as they are only made of wood, are taxed at 33⅓ per cent.… The real essence is, that an umbrella is a necessity, especially for ladies."—[OFFICIAL REPORT, 8th June, 1948; Vol. 451, c. 2096–7.]

Mr. Macpherson

The hon. and learned Member asked what other interest is involved except that of the manufacturers. His right hon. Friend has told us that it is in the interests of good administration. That is an interest which his right hon. Friend has alleged, anyway.

Mr. Paget

Do we understand now that the hon. Gentleman is supporting this Order, not in the interests of the ladies, to whom, he told us, an umbrella is a necessity which they all ought to possess; but because there is another and wider interest which has occurred to him? This is not good enough. However much talk and "guff"—if I may use the word—there may be about the interests of the public, what hurts hon. Members opposite is the thought that the sellers' interests may be injured. They are not thinking of the buyers.

I look with a not too unfriendly eye at enterprising people who may discover means to create a little competition in these pretty closely held productive fields, and I should have thought that we could deal with this sort of thing in the next Budget. This is not the way in which we should introduce new taxation in the middle of a year, particularly when it is pointed out as was done in most eloquent terms by the hon. Member for Tynemouth—that we are thereby injuring the interests of people whose activities are perfectly innocent and have never been attacked.

When this sort of thing is dealt with in the Budget there are preliminary negotiations; there is a full debate; there is an opportunity to consider these questions and there are various suggestions, and when it is found that some innocent party is being accidentally injured something can be done to amend it. But where the Government seek to legislate by Order it cannot be amended. The Government cannot say, "We will think again." It is a question of take it or leave it, which should be confined to the narrowest possible sphere—simply to those cases where there is a perfectly plain case of evasion and where other people are not hurt.

Surely this case is one where we could wait until the Budget? There is plenty to think over when we get to the Budget. Here we have umbrellas and sunshades under Group 21 in the second category, walking sticks and canes wholly of wood, except for the ferrules, in the first category, and all other kinds in the third category. Now we are going to have umbrellas and sunshades in the second category and bits of them in the third. Surely this requires a little logical thinking.

Section 20, which is the governing one, contains in subsection (5) the words: In determining the question which of two rates of purchase tax is chargeable under the said Part I in respect of a vehicle, where that question depends on the retail value of the vehicle, the provision of Part II of the Fourth Schedule to the Finance Act, 1947.

Mr. Speaker

I do not see what all this has to do with the Order. The hon. and learned Gentleman seems to be going back on the whole subject of Purchase Tax.

Mr. Glenvil Hall

On a point of order, Mr. Speaker. What we are doing is amending Group 21 of the Schedule, and therefore, subject to anything that you may say, I take it that we are entitled to discuss anything which happens to be in that group, since it is that group which we are amending.

Mr. Boyd-Carpenter

Further to that point of order. All that we are doing by means of paragraph 1 of the Order is to insert a paragraph into the group, and that does not open up, I submit, a debate on anything else that may happen to be in that Schedule.

Mr. Speaker

That was the point which had occurred to me. The Order before us is quite clear and limited in scope, and it would not be in order to stray as far as the hon. and learned Gentleman the Member for Northampton (Mr. Paget) is purporting to do.

Mr. Geoffrey Bing (Hornchurch)

Surely it is of importance to decide whether other articles in the same group are treated in the same way. As I understood the argument of my hon. and learned Friend the Member for Northampton (Mr. Paget), it was that this was due to a pressure by various interests who were upset by this competition which was, as he thought, lowering the price to the public. Surely one of the things we should look at is whether other articles in the same group, which might be manufactured in the same way in order to avoid the attraction of tax, have been similarly dealt with, because that would or would not substantiate his point.

Mr. Speaker

I should never agree to that interpretation of the rules of order. That would be to extend every little Order we discuss over the whole realm of Purchase Tax.

Mr. Glenvil Hall

If I understood my hon. and learned Friend the Member for Northampton (Mr. Paget) aright, he was explaining to the House—no doubt many hon. Members have forgotten it—just what the different classifications are. We are putting something into the third column of the Schedule. My hon. and learned Friend had perhaps not quite got to the third column. He was indicating to the House just what the different columns meant and what the incidence of taxation on an article in a certain category meant.

Mr. Speaker

I have sufficient confidence in the hon. and learned Gentleman the Member for Northampton to know that he will take what I have said in the spirit in which it is meant and will confine himself to what is relevant to the Order.

Mr. Paget

I am most grateful to you Mr. Speaker for what you have said, and I am also most grateful to my hon. Friends who have come to my assistance. Perhaps I might preface the point I wanted to make by saying that we are dealing here with Schedule 21 and that a Schedule does not stand by itself. It has no meaning of its own. It has a meaning and an effect only as an addendum to an operative section, and it is to the section to which the Schedule is an addendum that I was drawing attention. Save by considering the terms of the operative section, we simply do not know what this addition, which is an addendum by this Order to an addendum, should mean.

It is Section 20 about which I wanted to ask the Financial Secretary. That is the section on which the Schedule hangs. It says: Without prejudice to the generality of any existing definition in the enactments relating to purchase tax, any treatment of goods which affects the get-up of the goods and which results in the goods becoming chargeable goods or becoming goods in respect of which tax is chargeable at a higher rate shall be deemed for all the purposes of the enactments relating to purchase tax to be the application of a process in the course of making the goods. In this section, the reference to get-up includes a reference to marking, labelling"— Maybe that does not arise here— packing or any other treatment adopted for identifying or presenting goods to the user or consumer. If this process to which objection is taken is part of the treatment to these goods, then does not part of that treatment become by this Section part of the goods? I do not quite see how the hole, which it is proposed to fill up, comes to be empty. Perhaps the Financial Secretary could give us an explanation as to how these manufacturers keep themselves out of the provisions of Section 23 or Section 24, which also might have something to do with it. May be we can have a reply to that from the hon. Gentleman when he comes to speak.

9.30 p.m.

Mrs. Jean Mann (Coatbridge and Airdrie)

I am glad that I caught your eye, Mr. Speaker, because I am anxious to say a word on this Purchase Tax (No. 7) Order, 1952. I consider it despicable and mean to introduce this Order at this time. I am surprised that it has been put forward by the hon. Gentleman. He has sat on the Treasury Bench for the past half-hour with a benign Father Christmas look on his face, whilst in cold blood he has introduced an Order more like Ali Baba surrounded by the other forty.

The Government Front Bench have constantly asked the women of this country to bear the bigger share of the burdens of our economic recovery. If one notices men and women with umbrellas, one generally sees that the gentleman's umbrella is beautifully folded, indicating that it is seldom used for a useful purpose and that he does not use it as a woman does. If one watches a woman with an umbrella, it will be noticed that she uses it to protect from the wet what the doctors tell us we need most to protect when it is raining—across the back of the shoulders.

The Financial Secretary wishes to make it more difficult to obtain an umbrella. He has discovered that private enterprise can be too enterprising for him, because someone discovered how to make the parts and the fittings and how to avoid the payment of Purchase Tax. I am surprised that the benches opposite are not filled tonight. Where are the noble and gallant band of Conservative M.P.s who pledged themselves in the columns of the "Daily Express" during the Election that they would do all in their power to abolish Purchase Tax? Are they accepting this Order? It would appear from their absence that they are, and whilst I am not in sympathy with people who try to evade their obligations, I have in this scheme sympathy with those who have been trying to get round Purchase Tax, because I consider it includes necessaries like umbrellas. They have been trying to produce a cheap umbrella, and I should have thought the Treasury would have encouraged them.

If umbrellas are not bought, hats will have to be replaced more often. The Chancellor is therefore encouraging spending and discouraging saving. I ask the Financial Secretary how much he will save in imposing a tax upon sunshades. The Order must come into operation on 20th October. How many people will use sunshades in November, December, January, February, March, April, which is a rainy month, and May, which is also a rainy month? Indeed, one might say that of all the other months of the summer. How much does the Chancellor expect to catch in the net by bringing sunshades into the Order and making it operative from 20th October? Could he not have given us a little warning, and let all of us have purchased umbrellas before the Order operated?

It now appears that Christmas gifts are to be cancelled. The Chancellor is imposing a set-back on the Christmas spirit and on the merchants who were hoping to get rid of a great number of umbrellas between now and Christmas, and he ought to reconsider this Order. I do not know how much he will get out of it, but if all he will lose were put in the balance against it, I think he would be financially better off by allowing these people to escape the net. I have pleasure in opposing the Order and in asking the Minister to relent and to withdraw it.

9.38 p.m.

Mr. Geoffrey Bing (Hornchurch)

I have heard only a little of the debate, but I intervene to congratulate the Financial Secretary on behalf of his chief. The Chancellor was an umbrella man par excellence. He was the man who took the place of his right hon. Friend when umbrellas were triumphant in the party opposite. In the days of Munich, all Members of that party carried umbrellas, except two, who said they would not carry umbrellas. The Chancellor saw fit to step into the shoes of his right hon. Friend. This Order is appropriate to the source from which it comes.

It is a great pity that we have heard little about this Purchase Tax method. Many of my hon. Friends think it is right and proper that Orders of this sort should be made at this sort of time and that there should be a degree of fiscal flexibility. I should be straying beyond the bounds of order were I to suggest that the need for an annual Budget is nothing like so clear as it would otherwise be if we did not have Orders of this kind coming forward all the time. Why should we not have certain taxes at certain times, and be able to readjust them at any time that it suits public convenience, in matters of this sort?

The matter to which we are addressing ourselves is whether this particular—and not particularly important—Order should or should not be passed by the House. One of the difficulties which is universally acknowledged is that this is merely stopping one gap, and the question which my hon. Friends have been addressing to the Financial Secretary is why this gap was chosen for stopping. There are immense numbers of similar gaps. For instance, everyone knows that it is possible to buy envelopes apart from stationery, and there are a hundred and one methods by which Purchase Tax can be evaded.

I do not want to press the hon. Gentleman. I merely want to put on record my view that we ought to have a general discussion instead of one confined to this Measure. We should have a general discussion at an early date as to the position of Purchase Tax as a whole. I take the same view as my right hon. Friends in regard to this tax, but hon. Gentlemen opposite do not. It is unfair to them only to have Orders of this kind in which they are circumscribed in the type of criticism they can make. They were returned by a policy which was to abolish all types of tax—

Mr. Speaker

Order. This is far beyond the order.

Mr. Bing

I appreciate that, Mr. Speaker, and I will merely say that I hope the hon. Gentleman will give us an opportunity to discuss these matters within the rules of order and then we can put this within the general framework of a rational Purchase Tax arrangement, which is what we all hope to achieve.

9.42 p.m.

Mr. Glenvil Hall (Colne Valley)

I was delighted when my hon. Friend the Member for Coatbridge and Airdrie (Mrs. Mann) intervened, because she said something which came as a piece of news to me. My hon. Friend told us that ladies use their umbrellas to keep the backs of their shoulders dry. I always thought they used their umbrellas to make certain that the new hat in which most of them look so charming did not spoil.

We have had a useful debate, and it has been shared by hon. Members on all sides of the House. I listened with great care to what the hon. Member for Dumfries (Mr. N. Macpherson) said. He was obviously against this Order because he is against Purchase Tax as a tax. We all agree that it is a bad tax. It offends against all the canons of taxation as laid down by the early economists. For that reason, if for no other, it is a tax we should like to abolish. However, I am glad the Financial Secretary resisted the suggestion of the hon. Gentleman that, because this loophole had been discovered, umbrellas and sunshades and the parts of these articles should therefore be relieved from taxation.

The Financial Secretary assured us that so far as he knows there are no other cases of a similar kind. I do not know why he is so certain, because it is obvious—and it is one of the difficulties about this tax and one of the things about it to which most of us object—that it is easy to evade. I thought there was some point in the criticism made particularly from the opposite side of the House, that here we were picking out a certain firm. I can remember clearly that we were much criticised by the then Opposition for doing a similar thing when the Labour Government were in office and we prevented two large industrialists from getting away with large sums of money tax free. Here in another field, so it seems to us, the Government are doing much the same thing, legislating for an individual. It is regrettable and we do not like it, but we are willing on this occasion to realise that it has to be done.

I rose chiefly to say that the hon. Baronet the Member for Middleton and Prestwich (Sir J. Barlow), who knows a great deal about this industry, said that the Order would not prevent the evasion it was aimed to stop. The Financial Secretary, although he made a good reply to some of the other points that were raised, very cleverly evaded answering that statement of the hon. Baronet.

What is the answer? If what the hon. Baronet, who knows this industry extremely well and who stated categorically that the Order will not stop the evasion it is aimed to stop, says is true, what does the Financial Secretary propose to do? The hon. Baronet said that an umbrella which costs 12s. now bears Purchase Tax at the rate of 8s. and that it is eventually sold for 27s. What effect will the Order have on the price of that 27s. umbrella? Twenty-seven shillings for an umbrella is quite a lot of money compared with what people used to get umbrellas for in the old days. How much more will the Order put on the price of an umbrella costing somewhere between 25s. and 30s.?

We should have liked to have from the Financial Secretary some indication of what the effect of the Order will be on prices. We agree in all quarters that tax evasion must be stopped if we can stop it, but we have it seems to watch the effect this Order will have on the price of umbrellas to people who are not evading taxes at all but who do want an umbrella at a reasonable price.

One other question put by the hon. Baronet and which was referred to by other Members was not answered by the Financial Secretary to the satisfaction of some of us on this side. We realise that often when an Order of this kind is made it must affect individuals who are quite innocent and who are also in the particular trade. We were told of the umbrella repairer who is likely to be hit by the Order. Barbers and other small men who mend umbrellas as a sideline were mentioned, but many of us can remember the umbrella man who used to come round and, I suppose, in some parts still goes round the streets. I should like to feel, and, I am sure, Members in all quarters of the House would like to feel, that men of that kind are not penalised by the additional tax which is now to be levied.

Even at this late hour, if the Financial Secretary does not feel too tired, we would like to have some assurance, either from himself or from some other Member on the Government Front Bench, as to whether they are certain in spite of what the expert on the benches behind them said earlier this evening, that the Order will do what the Financial Secretary says it will do. If it does not close the gap, we would like to hear from him what, with those associated with him and advising him at Customs and Excise, he proposes to do.

The Financial Secretary did not tell us how much the Treasury hope to gain by this Order. I suppose it is impossible

for him to say, but it seems to us that they should watch this matter carefully.

Mr. Edward Heath (Lord Commissioner of the Treasury)

rose in his place and claimed to move, "That the Question be now put."

Miss Margaret Herbison (Lanarkshire, North)

On a point of order, Mr. Speaker, I understood that you called me.

Mr. Speaker

No, there can be no point of order. The Closure can be moved at any time.

Question put, "That the Question be now put."

The House divided: Ayes, 218 Noes, 172.

Division No. 2.]	AYES	[9.50 p.m.
Aitken, W. T.	Doughty, C. J. A.	Lookwood, Lt.-Col. J. C.
Allan, R. A. (Paddington, S.)	Douglas-Hamilton, Lord Malcolm	Longden, Gilbert (Herts, S. W.)
Amery, Julian (Preston, N.)	Drayson, G. B.	Low, A. R. W.
Amory, Heathcoat (Tiverton)	Drewe, C.	Lucas, Sir Jocelyn (Portsmouth, S.)
Anstruther-Gray, Major W. J.	Duncan, Capt. J. A. L.	Lucas, P. B. (Brentford)
Arbuthnot, John	Finlay, Graeme	Lucas-Tooth, Sir Hugh
Ashton, H. (Chelmsford)	Fisher, Nigel	McCallum, Major D.
Astor, Hon. J. J.	Fleetwood-Hesketh, R. F.	McCorquodale, Rt. Hon. M. S.
Baldwin, A. E.	Fletcher-Cooke, C.	Macdonald, Sir Peter (I. of Wight)
Banks, Col. C.	Fort, R.	McKibbin, A. J.
Barber, Anthony	Foster, John	McKie, J. H. (Galloway)
Barlow, Sir John	Fraser, Hon. Hugh (Stone)	Maclay, Rt. Hon. John
Beach, Maj. Hicks	Fraser, Sir Ian (Morecambe & Lonsdale)	Maclean, Fitzroy
Beamish, Maj. Tufton	Fyfe, Rt. Hon. Sir David Maxwell	Macpherson, Maj. Niall (Dumfries)
Bell, Philip (Bolton, E.)	Galbraith Cmdr. T. D. (Pollok)	Maitland, Comdr. J. F. W. (Horncastle)
Bennett, F. M. (Reading, N.)
Bennett, Sir Peter (Edgbaston)	Galbraith, T. G. D. (Hillhead)	Maitland, Patrick (Lanark)
Bennett, Dr. Reginald (Gosport)	Godber, J. B.	Manningham-Buller, Sir R. E.
Bennett, William (Woodside)	Gomme-Duncan, Col. A.	Markham Major S. F.
Bevins, J. R. (Toxteth)	Gough, C. F. H.	Marlowe, A. A. H.
Birch, Nigel	Gower, H. R.	Marples, A. E.
Bishop, F. P.	Graham, Sir Fergus	Marshall, Sir Sidney (Sutton)
Black, C. W.	Gridley, Sir Arnold	Maude, Angus
Bossom, A. C.	Grimston, Hon. John (St. Albans)	Maydon, Lt.-Comdr, S. L. C.
Boyd-Carpenter, J. A.	Grimston, Sir Robert (Westbury)	Medlicott, Brig. F.
Boyle, Sir Edward	Hall, John (Wycombe)	Mellor, Sir John
Braithwaite, Lt.-Cdr. G. (Bristol, N. W.)	Hare, Hon. J. H.	Monckton, Rt. Hon. Sir Walter
Bromley-Davenport, Lt.-Col. W. H.	Harris, Frederic (Croydon, N.)	Mott-Radclyffe, C. E.
Brooke, Henry (Hampstead)	Harrison, Col. J. H. (Eye)	Nabarro, G. D. N.
Brooman-White, R. C.	Harvey, Air Cdre. A. V. (Macclesfield)	Nicholls, Harmar
Browne, Jack (Govan)	Heath, Edward	Nicholson, Godfrey (Fareham)
Bullard, D. G.	Henderson, John (Cathcart)	Nicolson, Nigel (Bournemouth, E.)
Bullock, Capt. M.	Hill, Mrs. E. (Wythenshawe)	Nield, Basil (Chester)
Bullus, Wing Commander E. E.	Hinchingbrooke, Viscount	Noble, Cmdr. A. H. P.
Burden, F. F. A.	Hirst, Geoffrey	Nugent, G. R. H.
Campbell, Sir David	Holland-Martin, C. J.	Oakshott, H. D.
Carr, Robert (Mitcham)	Hollis, M. C.	Odey, G. W.
Carson, Hon. E.	Horobin, I. M.	O'Neill Phelim (Co. Antrim, N.)
Cary, Sir Robert	Howard, Greville (St. Ives)	Ormsby-Gore, Hon. W. D.
Channon, H.	Hudson, Sir Austin (Lewisham, N.)	Orr, Capt. L. P. S.
Clarke, Col. Ralph (East Grinstead)	Hudson, W. R. A. (Hull, N.)	Orr-Ewing, Ian L. (Weston-super-Mare)
Clarke, Brig. Terence (Portsmouth, W.)	Hulbert, Wing Cdr. N. J.	Osborne, C.
Cole, Norman	Hutchison, Lt.-Com. Clark (E'b'rgh W.)	Partridge, E.
Conant, Maj. R. J. E.	Hutchison, James (Scotstoun)	Peake, Rt. Hon. O.
Craddock, Beresford (Spelthorne)	Hylton-Foster, H. B. H.	Perkins, W. R. D.
Cranborne, Viscount	Jenkins, Robert (Dulwich)	Peto, Brig. C. H. M.
Crookshank, Capt. Rt. Hon. H. F. C.	Joynson-Hicks, Hon. L. W.	Peyton, J. W. W.
Crosthwaite-Eyre, Col. O. E.	Keeling, Sir Edward	Pickthorn, K. W. M.
Crouch, R. F.	Kerr, H. W. (Cambridge)	Pilkington, Capt. R. A.
Crowder, Sir John (Finchley)	Lambton, Viscount	Pitman, I. J.
Darling, Sir William (Edinburgh, S.)	Lancaster, Col. C. G.	Powell, J. Enoch
Davidson, Viscountess	Legge-Bourke, Maj. E. A. H.	Price, Henry (Lewisham, W.)
Deedes, W. F.	Legh, P. R. (Petersfield)	Profumo, J. D.
Digby, S. Wingfield	Lennox-Boyd, Rt. Hon. A. T.	Raikes, H. V.
Dodds-Parker, A. D.	Lindsay, Martin	Rayner, Brig. R.
Donaldson, Cmdr. C. E. McA.	Linstead, H. N.	Redmayne, M.
Donner, P. W.	Lloyd Maj. Guy (Renfrew E.)	Renton, D. L. M.
Roberts, Peter (Heeley)	Stoddart-Scott, Col. M.	Vosper, D. F.
Robinson, Roland (Blackpool, S.)	Storey, S.	Wakefield, Edward (Derbyshire, W.)
Rodgers, John (Sevenoaks)	Stuart, Rt. Hon. James (Moray)	Walker-Smith, D. C.
Roper, Sir Harold	Studholme, H. G.	Ward, Hon. George (Worcester)
Ropner, Col. Sir Leonard	Summers, G. S.	Ward, Miss I. (Tynemouth)
Ryder, Capt. R. E. D.	Sutcliffe, H.	Waterhouse, Capt. Rt. Hon. C.
Schofield, Lt.-Col. W. (Rochdale)	Taylor, William (Bradford, N.)	Webbe, Sir H. (London & Westminster)
Scott, R. Donald	Thomas, P. J. M. (Conway)	White, Baker (Canterbury)
Scott-Miller, Cmdr. R.	Thompson, Kenneth (Walton)	Williams, Rt. Hon. Charles (Torquay)
Shepherd, William	Thompson, Lt.-Cdr. R. (Croydon, W.)	Williams, Gerald (Tonbridge)
Simon, J. E. S. (Middlesbrough, W.)	Thornton-Kemsley, Col. C. N.	Williams, Sir Herbert (Croydon, E.)
Smyth, Brig. J. G. (Norwood)	Touche, Sir Gordon	Williams, R. Dudley (Exeter)
Spearman, A. C. M.	Turner, H. F. L.	Wills, G.
Speir, R. M.	Turton, R. H.	Wilson, Geoffrey (Truro)
Stevens, G. P.	Tweedsmuir, Lady	Wood, Hon. R.
Steward, W. A. (Woolwich, W.)	Vane, W. M. F.
Stewart, Henderson (Fife, E.)	Vaughan-Morgan, J. K.	TELLERS FOR THE AYES:
		Mr. Butcher and Mr. Kaberry.
NOES
Acland, Sir Richard	Hall, Rt. Hon. Glenvil (Colne Valley)	Parker, J.
Adams, Richard	Hall, John T. (Gateshead, W.)	Peart, T. F.
Anderson, Alexander (Motherwell)	Hannan, W.	Plummer, Sir Leslie
Anderson, Frank (Whitehaven)	Hargreaves, A.	Popplewell, E.
Awbery, S. S.	Harrison, J. (Nottingham, E.)	Porter, G.
Bacon, Miss Alice	Hayman, F. H.	Proctor, W. T.
Barnes, Rt. Hon. A. J.	Henderson, Rt. Hon. A. (Rowley Regis)	Rankin, John
Bartley, P.	Herbison, Miss M.	Reid, William (Camlachie)
Bellenger, Rt. Hon. F. J.	Holmes, Horace (Hemsworth)	Rhodes, H.
Bence, C. R.	Houghton, Douglas	Robens, Rt. Hon. A.
Bevan, Rt. Hon. A. (Ebbw Vale)	Hubbard, T. F.	Robinson, Kenneth (St. Pancras, N.)
Bing, G. H. C.	Hudson, James (Ealing, N.)	Ross, William
Blackburn, F.	Hughes, Emrys (S. Ayrshire)	Royle, C.
Blenkinsop, A.	Hynd, H. (Accrington)	Schofield, S. (Barnsley)
Blyton, W. R.	Hynd, J. B. (Attercliffe)	Shackleton, E. A. A.
Boardman, H.	Isaacs, Rt. Hon. G. A.	Shinwell, Rt. Hon. E.
Bowden, H. W.	Janner, B.	Short, E. W.
Braddock, Mrs. Elizabeth	Jay, Rt. Hon. D. P. T.	Shurmer, P. L. E.
Brook, Dryden (Halifax)	Jeger, Dr. Santo (St. Panc[...]as S.)	Silverman, Julius (Erdington)
Brown, Thomas (Ince)	Jenkins, R. H. (Stechford)	Simmons, C. J. (Brierley Hill)
Burke, W. A.	Johnson, James (Rugby)	Slater, J.
Butler, Herbert (Hackney, S.)	Jones, Jack (Rotherham)	Smith, Ellis (Stoke, S.)
Callaghan, L. J.	Jones, T. W. (Merioneth)	Snow, J. W.
Carmichael, J.	Keenan, W.	Sorenson, R. W.
Castle, Mrs. B. A.	Kenyon, C.	Soskice, Rt. Hon. Sir Frank
Champion, A. J.	King, Dr. H. M.	Sparks, J. A.
Clunie, J.	Lee, Frederick (Newton)	Steele, T.
Coldrick, W.	Lee, Miss Jennie (Cannock)	Stewart, Michael (Fulham, E.)
Craddock, George (Bradford, S.)	Lindgren, G. S.	Strachey, Rt. Hon. J.
Cullen, Mrs. A.	MacColl, J. E.	Sylvester, G. O.
Dalton, Rt. Hon. H.	McInnes, J.	Taylor, Bernard (Mansfield)
Darling, George (Hillsborough)	McLeavy, F.	Taylor, John (West Lothian)
Davies, A. Edward (Stoke, N.)	MacMillan, M. K. (Westorn Isles)	Taylor, Rt. Hon. Robert (Morpeth)
Davies, Harold (Leek)	MacPherson, Malcolm (Stirling)	Thomas, David (Aberdare)
de Freitas, Geoffrey	Mallalieu, J. P. W. (Huddersfield, E.)	Thomas, Iorwerth (Rhondda, W.)
Deer, G.	Mann, Mrs. Jean	Thomas, Ivor Owen (Wrekin)
Delargy, H. J.	Manuel, A. C.	Thomson, George (Dundee, E.)
Dodds, N. N.	Marquand, Rt. Hon. H. A.	Thorneycroft, Harry (Clayton)
Driberg, T. E. N.	Mellish, R. J.	Timmons, J.
Dugdale, Rt. Hon. John (W. Bromwich)	Mikardo, Ian	Ungoed-Thomas Sir Lynn
Ede, Rt. Hon. J. C.	Mitchison, G. R.	Weitzman, D.
Edwards, W. J. (Stepney)
Evans, Albert (Islington, S. W.)	Morgan, Dr. H. B. W.	Wheatley, Rt. Hon. John
Evans, Stanley (Wednesbury)	Morley, R.	White, Mrs. Eirene (E. Flint)
Ewart, R.	Morris, Percy (Swansea, W.)	White, Henry (Derbyshire, N. E.)
Fernyhough, E.	Morrison, Rt. Hon. H. (Lewisham, S.)	Whiteley, Rt. Hon. W.
Field, W. J.	Mort, D. L.	Wilkins, W. A.
Finch, H. J.	Moyle, A.	Williams, David (Neath)
Fletcher, Eric (Islington, E.)	Murray, J. D.	Williams, Rev. Llywelyn (Abertillery)
Follick, M.	Nally, W.	Williams, W. R. (Droylsden)
Foot, M. M.	Neal, Harold (Bolsover)	Winterbottom, Ian (Nottingham, C.)
Forman, J. C.	Oliver, G. H.	Winterbottom, Richard (Brightside)
Fraser, Thomas (Hamilton)	Orbach, M.	Woodburn, Rt. Hon. A.
Freeman, John (Watford)	Oswald, T.	Wyatt, W. L.
Gibson, C. W.	Paget, R. T.	Yates, V. F.
Glanville, James	Paling, Rt. Hon. W. (Dearne Valley)
Greenwood, Anthony (Rossendale)	Paling, Will T. (Dewsbury)	TELLERS FOR THE NOES:
Greenwood, Rt. Hn. Arthur (Wakefield)	Palmer, A. M. F.	Mr. Pearson and Mr. Arthur Allen.
Grey, C. F.	Pannell, Charles

Question put accordingly, and agreed to.

Resolved,

That the Purchase Tax (No. 7) Order, 1952 (S.I., 1952, No. 1821), dated 15th October, 1952, a copy of which was laid before this House on 16th October, 1952, in the last Session of Parliament, be approved.