First Schedule.—(RELIEF AND REDUCTION OF PURCHASE TAX ON CERTAIN GOODS.) (Hansard, 10 June 1953)

§ Mr. Mulley
I beg to move, in page 34, line 24, to leave out paragraph 4.
The main purpose of this Amendment is to obtain from the Government an explanation of what at first sight appears to be an extraordinary decision. We have heard that for various reasons, and not very convincing ones, it has been impossible to reduce by more than 25 per cent., a great body of things which have been put forward as deserving of special consideration. Group 29 has been singled out for special reduction, so that in effect paragraph (a) gets a reduction from 100 per cent. to 50 per cent.—as I understand it—as a result of the adding of this Schedule to the Bill. Group 29 will consist of one category and the rate of tax on all articles will then be 50 per cent. instead of 75 per cent. as would otherwise have been the case.
The articles are defined as being, 'fancy goods', 'arts and crafts' wares or the like, including personal ornaments, domestic decorations and other articles suitable for personal or domestic use, which arc presented in a fancy or ornamental form. I should think that the corkscrew dog would come in that category. That may be the item which persuaded the 375 Chancellor to introduce this rather surprising exception to the general rule. It is surprising and difficult to see why An article is not regarded as imitating another article unless the article imitated is easily recognisable, i.e. an article which merely represents something which cannot clearly and readily be identified is not chargeable as an 'imitation' under this Group.
I was interested in the list of articles which will get the special reduction of 50 per cent. instead of the normal 25 per cent. given to what I would regard as more worthy goods. Reading down the Schedule we find that sofa dolls, tea cosies in the form of dolls and nightdress cases in the form of animals or dolls all have a special reduction of 50 per cent. I wondered why the Chancellor had introduced this special form of treatment and if he had become so popular that he wanted to make this 50 per cent. reduction for autograph albums so that he could sign his name more often.
Looking further down the list I wondered whether the Chancellor was wooing the new voter in preparation for a forthcoming election because I saw that twenty-first birthday keys were also articles which received a 50 per cent. reduction. It may be a small consolation to my hon. Friend the Member for Gloucestershire, South (Mr. Crosland), who is very firm on the subject of fuel economy, to know that, provided that it is in the form of a coal hod, a table cigarette container also enjoys special consideration and has a 50 per cent. instead of a 25 per cent. reduction.
I suppose it follows that when we reduce the rate of tax on umbrellas then the rate on umbrella stands should be reduced also, but apparently the extra reduction follows only if the stand is in the form of a milk churn. It is surprising that despite the pleas for the craft industries these are the sort of articles picked out by the Chancellor for special consideration. A further point, which may be taken because it is symbolic of the English character and is no doubt designed to attract tourists, is that warming pans are also given the 50 per cent. reduction provided that their diameter is less than six inches. No doubt that measurement also fits in with our ideas about fuel economy.
376 This is a surprising list. I cannot see that consideration is given to any special craft industries or employment problems, export promotion, investment or defence. It may be argued that the loss of revenue is negligible, but the Financial Secretary was good enough to inform me in answer to a Question that the cost of this concession, including the normal 25 per cent., is £1,200,000 in a full year. That is a considerable amount of money. To put the matter in perspective, it is almost exactly the sum which would be required to exempt the whole range of ordinary cutlery in Group 11. Before we can agree that it has been a wise choice that this set of articles should be given special treatment rather than knives, forks and spoons, to take one example, we shall need a very persuasive speech from the Financial Secretary in explanation of this extraordinary decision.

§ Mr. Boyd-Carpenter
The purpose of paragraph 4 of the First Schedule, which this Amendment proposes to delete, is to do one of the things which my right hon. Friend referred to in his speech on the previous Amendment when he spoke of clearing up anomalies in the Purchase Tax law. Most hon. Members who have concerned themselves with this subject have succeeded in amusing the Committee, or at any rate themselves, by recalling some incident or other showing a Purchase Tax anomaly. It is true, as my right hon. Friend said, that the Purchase Tax law as we found it was riddled with anomalies.
Paragraph 4 seeks to deal with one set of these anomalies. As the hon. Member for Sheffield, Park (Mr. Mulley) accurately pointed out, Group 29 of the Purchase Tax Schedule as it now stands provides for differential rates, the top rate for some and the second rate for others, with the distinction between the two turning sometimes on very narrow points of the decoration of the article. To illustrate the point, paragraph 29 (a), which deals with goods attracting the top rate of Purchase Tax, includes goods decorated by handpainting or those which are miniatures of or otherwise imitate other articles. Such fancy goods attract the top rate, but almost identical fancy goods not so decorated attract only the lower rate. That gives rise to a number of anomalies, to which hon. Members have invited our attention from time to 377 time, and I am bound to admit that I myself have often done so from the other side of the House.
They are really fantastic anomalies. I will not weary the Committee with a list of them, but perhaps example is the best illustration. Take the case of a brooch, not made of precious metals, but of what are called base metals. If the brooch is ornamented by some quite hideous geometrical design, it would under the old scheme attract the second rate of tax, but, if it carried a picture of a flower or a model of an animal, for that reason it would be in the top category. Another entertaining example is this. There are people with repressed martial instincts who like to poke their fires with pokers designed in the shape of a sword. Martial instincts, like most rearmament in these days, are expensive, and, under the old provisions abolished by this Bill, a poker looking like a poker is charged at the lowest rate, whereas a poker designed as a sword would have been charged at the top rate.
We have, therefore, substituted for this complicated Group 29 the much simpler one set out in the body of paragraph 4 of the First Schedule, which has only one category and attracts only one rate of tax. The purpose of this proposal has no relation to any great, broad conception of Purchase Tax law or high economic principles. It is designed to make one little clearing in the jungle of Purchase Tax law, and I hope that all hon. Members will welcome it. Narrow and fine distinctions of this kind are an awful nuisance both to conscientious traders honestly trying to find out in which category goods are taxed and to retailers who have to explain to incredulous customers the variations in price that flow from these distinctions.
It is obviously a sensible thing to try to clear up these anomalies, and we are certainly trying to find a sensible solution to the problems which arise as a result of these anomalies. We think it is a sensible solution which is embodied in the Schedule, simplifying Group 29 from one comprising different categories to one category which will attract one rate of tax. I am sure it is a commonsense proposal, and I hope the Committee will approve it.

§ Mr. Mulley
In view of the very persuasive speech of the Financial Secretary, and the fact that the anomalies are reduced by this amendment of the law. I beg to ask leave to withdraw the Amendment.

§ Dr. Horace King (Southampton, Test)
I apologise for detaining the Committee for a few minutes, but I have tried to interest the House from time to time in the special problems of the taxi industry, and I therefore welcome paragraph 6 of the Schedule, which gives some relief at any rate to the London taxi man, but, because the relief does not go far enough, I should like to see it widened before the stages of this Bill are completed. Wherever possible Purchase Tax should not fall on goods, instruments, or machines by which men make their living, and I appeal to the Financial Secretary to consider sympathetically the representations that are made from time to time during the proceedings of this Bill from groups of people like those in the hairdressing industry, mentioned today by the Member for Itchen (Mr. Morley).
11.15 p.m.
Taxi-men have been taxed almost out of existence. The petrol tax is to them a heavy burden, and all the replacements for their cabs are an additional strain, but the biggest burden they have to bear is the frightful cost of a new vehicle. Their vehicles have to conform to a high standard of efficiency and performance both in London and the provinces. So the concession under paragraph 6 by which London cabs are relieved of the crippling Purchase Tax is one I am certain the cabmen are grateful for.
I ask that this concession be extended in some way to the men in the provinces. The technical difficulty is that there is no uniform type of vehicle in the provinces as there is in London, but it should be possible to devise some method of including them. In a written reply to me today, the Chancellor suggests that provincial taxi-men can get the benefit of this paragraph provided they use the kind of cab specified for London, but it should not be beyond the wit of the Treasury to devise some method whereby using their present types of vehicles, and 379 provided they can be certified for use only as taxis and there is no evasion, they can benefit from the reduction which the Chancellor is giving to London taxi-men.
As he has been to other back benchers, the Financial Secretary has been very courteous to me on this question, and has consented to meet a deputation of taxi-men, both owners and drivers, from my constituency and from other places in the provinces so that he may know at first hand just what special heavy burdens they have to face. We grumble about high fares. I do not speak of the pirates, but the reputable taxi-men must pass on to their customers these heavy overheads. They watch their business shrink and sales resistance grow, and there is a good case for a special concession to them on this, and indeed every tax. I welcome the practical help which paragraph 6 gives to the London taxi-men, and I hope the Financial Secretary will consider whether it is not possible to extend this benefit to taxi-men in the provinces.