HC Deb 27 November 1952 vol 508 cc600-1
25. Mr. M. Lindsay

asked the Chancellor of the Exchequer whether he is aware that statuettes of Her Majesty the Queen and His Royal Highness the Duke of Edinburgh do not attract Purchase Tax; that ash trays are subject to 66 per cent. Purchase Tax; and why, therefore, the Purchase Tax is raised to 100 per cent. when statuette and ashtray are combined.

Mr. Boyd-Carpenter

This matter is governed by the ordinary Purchase Tax law. The exemption in respect of statuettes of Her Majesty and His Royal Highness which I announced on 31st July for one year from 1st October, 1952, applies only to statuettes as such and not when statuettes of Her Majesty and His Royal Highness are used to decorate some other article. Ashtrays, to which such statuettes are attached, are taxable at the rate applicable to articles incorporating statuettes.

Mr. Lindsay

Is my hon. Friend aware, first, that, on the facts stated, this is an extremely illogical situation, and, secondly, that the result is that we shall lose a large number of overseas orders which we should otherwise have got because home sales, bearing 100 per cent. Purchase Tax, are likely to be negligible and manufacturers cannot afford to tool up on that basis? Will he look at this again?

Mr. Boyd-Carpenter

If my hon. Friend has any case which he desires to draw to our attention, I shall be very glad to examine it.

Mr. Assheton

Is my hon. Friend aware that this is but one of the illustrations of the many anomalies and follies of Purchase Tax and that a general review of the whole tax is long overdue?

Mr. Boyd-Carpenter

While I do not necessarily go as far as my right hon. Friend does, I should be the last man in the House to dispute that the Purchase Tax law sometimes involves intricate and difficult problems.