PURCHASE TAX (CHANGES)

HC Deb 09 February 1954 vol 523 cc1013-84

3.55 p.m.

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

I beg to move. That the Purchase Tax (No. 1) Order, 1954 (S.I., 1954, No. 1), dated 1st January 1954, a copy of which was laid before this House on 4th January, be approved. I understand that it would be for the convenience of the House, Mr. Speaker, if this Order were to be discussed with the two following Motions on the Order Paper in the name of the right hon. Gentleman the Member for South Shields (Mr. Ede)— That an humble Address be presented to Her Majesty, praying that the Purchase Tax (No. 2) Order 1954 (S.I., 1954, No. 2), dated 1st January 1954, a copy of which was laid before this House on 4th January, be annulled. That an humble Address be presented to Her Majesty, praying that the Purchase Tax (No. 3) Order, 1954 (S.I., 1954, No. 3), dated 1st January 1954, a copy of which was laid before this House on 4th January, be annulled. I understand that this course would meet the convenience of the Opposition, subject to your permission.

Mr. Speaker

If that is agreeable to the right hon. Gentleman?

Mr. Douglas Jay (Battersea, North)

Yes, Mr. Speaker, that would suit our convenience.

Mr. Speaker

Then I agree to it, but I would ask for the co-operation of the House in this matter. From the point of view of the Chair, the difficulty of extending the debate on the Motion of the Chancellor of the Exchequer to include the Orders which are the subject of the two Prayers is that it widens the scope of the discussion somewhat. As the House knows, in dealingwith these Orders we are supposed to deal only with the commodities which are mentioned in the three Orders concerned. So I ask for the co-operation of the House with the Chair in not enlarging the debate into general questions about Purchase Tax, which would be more appropriate to the Budget debates. As long as the House agrees to deal only with those commodities which are the subject of the Orders, I have no objection to the proposal.

Mr. Boyd-Carpenter

Subject, then, to your Ruling, Mr. Speaker, with which I will of course endeavour sedulously to comply, we can discuss together the three Orders which embody all the Purchase Tax changes which my right hon. Friend made at the beginning of this year.

As the House will be aware, the difference in procedure flows from the fact that under our procedure Statutory Instruments which have, or might have, the effect of increasing taxation require an affirmative Resolution such as the one I have risen to move, whereas others which have the effect of reducing taxation are subject only to the negative procedure, and therefore fall to be discussed only on a Motion such as that put down by the right hon. Gentleman the Member for South Shields (Mr. Ede).

It would probably we both convenient and in accordance with your Ruling, Sir, if I were to deal in some detail with the contents of this first Order and perhaps more broadly with Statutory Instruments No. 2 and No. 3 which deal with the relaxation of tax upon a considerable number of articles. That would be convenient, among other things, because I am not in a position to know at this stage to which of the particular remissions of taxation embodied in these Orders the Opposition take exception. Therefore, I will start with some observations upon Statutory Instrument No. 1.

This Order deals with three matters. It clears up the largely marginal anomalies relating to the rather diverse subjects of plain elastic fabrics, on the one hand, and gold-plated teapots, on the other. It deals also with the rather more substantial matter of the reimposition of tax at the rate applied to other floor coverings, that is, 25 per cent., on certain tiles, strips and blocks. I should like to deal first with the two minor anomalies, on which I doubt whether the House will desire any prolonged discussion.

Plain elastic fabrics were accidentally exempted in the 1948 Purchase Tax Schedule, in an exemption that was intended to cover only fabrics used for industrial purposes. In point of fact, the plain elastic fabric used in ordinary consumption has paid tax without any question until recent months, if less than three inches in width as haberdashery and, if more than three inches in width, as cloth. It is only in recent months that the validity of the tax has been questioned and it has appeared that there was a technical error in the 1948 Schedule. The provision of the Order which is now before the House puts that right, and makes it clear that tax is lawfully payable, as it has been paid until recent months.

Similarly, the provision in respect of gold-plated containers of food and drink arises from a rather curious error in the 1948 Purchase Tax Schedule. The House will recall that plain containers of food and drink were exempted from tax, for fairly obvious reasons. It was provided that theexemption should not apply to silver-plated articles of that sort and they have continued to pay tax at 25 per cent. But those who were then drafting forgot the gold-plated ones and as a result we have the rather curious anomaly that gold-plated teapots, which are perhaps not amongst the more elementary necessities of life, have through accident been exempted from tax. This Order reimposes it but, with admirable impartiality, at the same rate as for silver teapots. The House will recall that on previous occasions it has been necessary to move Motions of this kind to tidy up a tax in this way.

The first Statutory Instrument also re-imposes tax on tiles, strips and blocks, and places them in the same position as other floor coverings, that is to say, taxable at the rate of 25 per cent. To put this matter in perspective, it might be helpful to recount briefly the history of the subject. From 1940–41 until 1948 these articles were taxed at the same rate as other floor coverings, at whatever were the current rates then ruling. In 1948 the then Government exempted them with the intention that these materials, as a result of the exercise of the then building controls, should be used only in newly-built houses erected by public authorities. It is perhaps relevant to our discussion to note what was said at the time. It so happened that the Order making this exemption was subject to a Prayer, which was moved by my hon. Friend the Member for Sutton Coldfield (Sir J. Mellor). Discussion took place, to which the right hon. Member for Battersea, North (Mr. Jay), then Economic Secretary to the Treasury, replied for the Government.

The arguments which were adduced in favour of the Prayer, that is, for the annulment of the Order, can be summarised under two heads. The first argument suggested that the exemption of these floor coverings introduced an element of unfairness as between them and other floor coverings. The second argument was that the Order provided an incentive to cut rolls of linoleum or rubber flooring into little pieces in order that the little pieces should qualify as tiles for tax exemption. Unless he wishes me to do so, I do not want to quote his characteristic, admirably clear reply in extenso, but the right hon. Member for Battersea, North indicated two things.

He said that in fact there was at that time no unfairness from the point of view of competition, because other competing floor coverings were in such short supply—that is the language of those days—that competition would not really arise. Everybody could sell all they could make, and he said that there was no evidence that manufacturers were seeking to avoid the burden of tax and having taxable floor coverings out into little pieces and calling them tiles. He said that if evidence arose on either point this matter would be given reconsideration.

I carry the argument from that point. Both these circumstances, which the House in general and the right hon. Member for Battersea, North in particular, admitted would involve consideration of the matter, have arisen for some little time now. Perhaps it would be of assistance to the House if I went into that aspect of the matter. Indeed, so obviously have they arisen that in November last the right hon. Member chided the present Government on their lack of diligence in connection with this subject, and perhaps he will now show his gratitude for the fact that action is being taken.

Mr. Jay

The right hon. Gentleman is going a little far. What I did was to ask the Government what they intendedto do, without giving any advice as to the proper course, one way or another.

Mr. Boyd-Carpenter

The right hon. Member will recall that he indicated that we ought to get on with the matter. He said: This is why I want him to correct the present position.…"—[OFFICIAL REPORT, 11th November, 1953; Vol. 520, c. 1045.] If the right hon. Gentleman then wanted to correct the present position, I hope that he is grateful to us for now so doing.

I ask the indulgence of the House for going into this rather complicated matter a little, but I should like now to bring the account of it down to recent months. Some 18 months ago my hon. Friend the Member for Lancaster (Mr. F. Maclean), in whose city a large part of the linoleum industry of this country is concentrated, brought a deputation to the Treasury to urge a rectification of the present position. The deputation indicated that the linoleum industry was suffering seriously from the competition of tax-free materials, and facts were submitted whichsatisfied my right hon. Friend of this. Equally, it has become clear beyond dispute that the practice which in 1948 the then Opposition benches indicated might grow—the practice of taking perfectly good rolls of linoleum and rubber flooring and cutting them into squares so that they might go through the sieve of Purchase Tax—has developed to a substantial extent. We are faced, therefore, with the position which hon. Members who are now in opposition said in 1948 would compel reconsideration if that position should arise.

My right hon. Friend, therefore, was faced with two plain alternatives—either to withdraw Purchase Tax from all floor coverings, no doubt a much more popular course, or to impose it equally on all floor coverings. I think that the House will agree that there is a great deal to be said in fairness for adopting one or other of these courses. The first, and patently the more attractive alternative has the disadvantage that it would be extremely expensive. Last year the yield of taxation on floor covering was no less than £17 million a year, a substantial sum.

Consequently, the alternative course of trying to treat all floor coverings on the same basis seems to be the only course consistent with fairness as between manufacturer and manufacturer and worker and worker. Faced with the evidence that competing industries were suffering from the competition of tax-free com- petitors and consequently that time and energy were being wasted in the process of cutting up perfectly good linoleum and rubber flooring to make it tax-free, it was not possible to retain the existing position.

Mr. Gerald Nabarro (Kidderminster)

My right hon. Friend will appreciate my special interest in the carpet industry. Is he in a position to say what, out of the £17 million Purchase Tax on floor coverings as a whole, is attributable to carpets and rugs? It is my impression that the overwhelming bulk of that £17 million is on carpets and rugs and not on the type of floor coverings referred to in the Order.

Mr. Boyd-Carpenter

My hon. Friend is entirely right; none of the types of floor covering in this Order has contributed to the yield of tax, because they are exempt from tax. I will certainly give my hon. Friend the figures for thecarpet industry if they are available, and I will endeavour to obtain them for him. We are concerned with the whole field of floor coverings and with the competition at the lower end of the scale between cheap tiles and linoleum and, at the top end, between more expensive carpets and tax-free parquet flooring. With his considerable knowledge of the subject, I do not think my hon. Friend will have any difficulty in discovering—if he does not already know—that the degree of competition which exists between tax-free and taxed products is not confined by any manner of means to any one part of the price scale, but is effective at the top and the bottom. Certainly carpets, of which he is a valiant defender, are in close competition with other floorings.

Mr. Arthur Colegate (Burton)

Has my right hon. Friend set off against the £17 million the increased cost per house which will arise due to the fitting of floor tiles, which are quite different from the linoleum squares—the "little pieces" as my right hon. Friends calls them?

Mr. Boyd-Carpenter

I am coming to that point; in fact I shall come to it almost immediately in my notes. If my hon. Friend will allow me to develop this complicated argument in my own way, I shall not seek to avoid that. That way, I shall not seek to avoid that.

That is the problem which I ask the House to consider, faced with the two facts to which I have referred—how to secure that the tax system operates fairly and equitably between competing products and producers. When I say, "competing producers," I mean those concerned either as employer or as employee in manufacture.

The problem which arose for consideration is that to which my hon. Friend the Member for Burton (Mr. Colegate) has referred—the effect that any such change as this may have on the cost of housing. It is undoubtedly the case that the exemption in 1948 was intended to be part and parcel of the operations in the sphere of housing of right hon. Members opposite. It was the tile rather than the wooden flooring with which they were concerned and tiles, if used to cover the entire floor of a council house, would bear tax which would have the effect of increasing the total price of that house by between £3 and £4. That is the figure in respect of the whole of the ground floor of the house. I do not think the higher floors, except in very exceptional cases, would be covered.

Sir Robert Boothby (Aberdeenshire, East)

Only the very cheapest tiles, or the slightly more expensive?

Mr. Boyd-Carpenter

That is the type of tile which, I am informed, is habitually used in local authority houses. The more expensive are more often used for public buildings, for cinemas, restaurants, liners, and so on. We are concerned with the local authority houses, where the increased cost would be a matter of £3 or £4. That, of course, is not negligible—no amount in connection with housing is negligible—but it is one of a number of factors in the cost of housing which change frequently without affecting the general picture. This is a once-for-all addition to capital cost which is about the same as local authorities will save every year for 60 years by the reduction of the P.W.L.B. rate last October. That sets the scale. It is a very small factor in the general calculation of housing costs.

A more difficult problem is the one with which my hon. Friend the Member for East Aberdeenshire (Sir R. Boothby) is concerned, the precise line of demarcation of where the tax should fall. The intention is that it should fall on floor coverings and, of course, it is a matter of legitimate argument when a certain article ceases to be a floor covering and becomes a floor. It is a matter of almost metaphysical difficulty and one, therefore, upon which my hon. Friend the Member for East Aberdeenshire is peculiarly well qualified to speak. The difficulty is in drawing the precise lines of demarcation, and it arises particularly in connection with various types of wooden floors. The intention, which I think the House will regard as sensible, is that the expensive parquet floor should pay its share in competition, as it is, with other more expensive floorings. The difficulty comes in deciding on the precise thickness of the tile which will make it a floor covering as opposed to an ingredient of a floor.

Sir R. Boothby

That is the point.

Mr. Boyd-Carpenter

The figure we have used, as my hon. Friend the Member for East Aberdeenshire knows, is five-eighths of an inch thickness—

Sir R. Boothby

The wrong figure.

Mr. Boyd-Carpenter

It may well be the wrong figure, but it is the figure which was in fact agreed with the trade when the tax was originally imposed in 1940–41. For that reason, largely, that figure has been used in this Order. Hon. Members will appreciate that this is just the sort of matter, now that the tax changes have been made, which is very appropriate for discussion with the trades concerned. As hon. Members are aware, there are obvious difficulties in discussing possible tax changes with outside interests in advance. The House will not need reminding of the obvious need for security in contemplating changes, but once they are made, it is perfectly proper and appropriate for particular interests who feel, rightly or wrongly, that the line of demarcation or other technical issues are wrong, to make representations on the subject.

As I have told my hon. Friend the Member for East Aberdeenshire, my right hon. Friend and his advisers will be happy to discuss these technical matters with the trade interests concerned. Yesterday I saw the representatives of another side of the trade, the manufacturers of thermoplastic tiles, and told them that, now that the Order had been published, consultations are perfectly possible and it would be open to them to make such representations as they thought fit in order to suggest that the precise line of demarcation had been wrongly drawn.

These are technical matters with which I do not want to weary the House. They are matters which are more susceptible to detailed representation. I refer to them only in order to make it abundantly clear that my right hon. Friend—as always—is prepared to listen to representations which suggest that the line of demarcation, or any of the technical details involved, has been inappropriately drawn. I understand that the particular interests concerned are likely to respond to that invitation and to put their views. The matter is one for detailed discussion.

What is clear, and what the House will expect, is that the broad purpose of this proposal is that there should be fairness as between one floor covering and another and that competition should not be adversely or unfairly affected by tax discrimination, and equally that wholly wasteful processes—legal, no doubt, but wholly wasteful—of cutting rolls into little bits, should not be encouraged by the tax system. That is the broad purpose of the provision.

Statutory Instruments Nos. 2 and 3, as I have already indicated, embody the reductions in tax which my right hon. Friend authorised at the beginning of January. I do not know which of these reductions the Opposition will desire to criticise. It will probably suit the convenience of the House if I deal rapidly with the broad picture, briefly picking out the more conspicuous points. Criticisms, if there are any, can then be made and answered.

The main effect of Statutory Instrument No. 2 is to reduce the Purchase Tax on a series of articles from 75 to 50 per cent. The first item dealt with is mirrors. The reason is twofold. In the first place, the trade was adversely affected. In the second place, mirrors have become practically the only articles of domestic furniture taxed at the very high rate of 75 per cent.

The next item comprises electric space heaters, immersion heaters and geysers, which come down from 75 to 50 per cent. They come down to the same rate as other domestic electrical appliances, and they also come down to the rate bearing on equivalent gas apparatus. It seems reasonable to bring them to that level, particularly as there is some evidence that the high rate of tax has had some effect on production and there has also been some tendency to lowered quality and, therefore, perhaps to lowered safety.

The larger item is that of jewellery and silverware, where a similar reduction is effected. The argument here is that these are important and valuable craft industries, depending upon acquired and, in many cases, inherited skill, which were suffering in considerable degree from the very high rate of tax of 75 per cent. There was the consequence also, particularly in the jewellery field, of considerable tax avoidance which the high rate of tax made rather worth while to those indulging in it, and which it was somewhat difficult to check. For these reasons, my right hon. Friend thought the time appropriate to bring the rate of tax down to 50 per cent.

This topic has been the subject of a very considerable number of representations by hon. Members on both sides of the House, notably my hon. Friend the Member for Handsworth (Sir E. Boyle), who had an Adjournment debate on the subject, the hon. Member for Sheffield, Park (Mr. Mulley) and my hon. Friend the Member for Heeley (Mr. P, Roberts), whose combined eloquence has suggested from time to time that this group of industries was suffering from the weight of tax.

The remainder of Statutory Instrument No. 2 deals with another anomaly. Gold and silver-plated articles have always been taxed at the rate appropriate to the article. Rolled gold and rolled silver were treated as jewellery. To clear up that anomaly, rolled gold and rolled silver are put in the same position as plated gold and plated silver; that is to say, the rate of tax appropriate is not that appropriate to jewellery but that appropriate to the article. A rolled silver or rolled gold pencil is taxed as a pencil, which seems to me to be sensible.

Sir R. Boothby

Hear. hear.

Mr. Boyd-Carpenter

Statutory Instrument No. 3 makes a number of further reductions. I will run through it quickly. Fabric lampshades come down from 50 to 25 per cent.; that is, to the same rate as ordinary lampshades. There is no particular reason to discriminate against fabric lampshades, and my right hon. Friend decided to bring them down to the same level as the others. Hand-operated washing machines come down from 50 to 25 per cent., being put on the same level as other manually-operated domestic appliances. Most walking sticks and canes are already tax-free as a result of an order made by my right hon. Friend some little time ago. A few ornamental ones were still left at the 75 per cent, rate, and they come down to 50 per cent.

A big change from the point of view of clearing up the anomalies about which the right hon. Gentleman opposite used to indicate that my hon. Friends made such entertaining speeches is the reduction in the tax on prints and engravings from 75 to 50 per cent. This means that an ornamental article which would otherwise pay 50 per cent. will not be upgraded to 75 per cent. because it is in the form of a picture or engraving.

The special charge of 75 per cent. on components of umbrellas, which was put on to check a form of tax evasion a little time ago, is removed. The reason is that the tax on umbrellas, having now fallen to 25per cent., is low enough to make that form of tax avoidance not worth while. It is therefore possible to remove the protective measure, and this will give some relief to repairers who suffered a little difficulty as the result of the necessary anti-evasion provision adding to the cost of the components which they used.

Mr. M. Follick (Loughborough)

Does the reduction to 25 per cent. apply to all umbrellas, including gold-mounted umbrellas?

Mr. Boyd-Carpenter

This Order deals not with the tax on umbrellas but with the tax on umbrella components—the special 75 per cent. tax on bits of umbrellas, if the hon. Member prefers that description. Umbrellas themselves do not come under the Order, and, therefore, subject to Mr. Speaker's Ruling, I cannot have the pleasure of discussing them with the hon. Member.

Sir R. Boothby

And if they are gold bits, they are subject to tax?

Mr. Boyd-Carpenter

If they are gold bits, it depends whether they are rolled gold or plated gold. I recommend my hon. Friend to take advice before he goes out to buy one.

Finally, there is a provision which will be very helpful from the point of avoiding the sillier anomalies which exist under this tax. The present law is that if an ornament or article of fancy goods is in the form of a figure, it carries a higher rate of tax than it would otherwise do. A classical example was the dog with a corkscrew emerging from some portion of its anatomy, with which the hon. Member for Sparkbrook (Mr. Shurmer) had such fun a little time ago. Under this provision, that sort of anomaly is, I believe, eliminated, and the dog can now have a corkscrew emerging from its anatomy at any possible angle without attracting any higher rate of tax as a result.

Sir Harold Webbe (Cities of London and Westminster)

If the figure were a copy of one of Mr. Henry Moore's statues, would it be regarded as a figure?

Mr. Boyd-Carpenter

I should like to see the statue first.

To sum up, the three Orders embody the changes which my right hon. Friend thought it necessary to make, and broadly they are designed to give relief to industries adversely affected by the rate of tax and to clear up anomalies, inconsistencies and unfairnesses in the actual operation of the tax. As has already been announced, the net cost of thesechanges will be some £2 million in a full year. Owing to the fact that Purchase Tax is payable quarterly in arrears, they will not affect the revenue receipts in the current year, but they will begin to operate very early in the next financial year.

Mr. Derek Walker-Smith (Hertford)

Would it be convenient for my hon. Friend to give the House the answers to Questions Nos. 64 and 67 on today's Order Paper, which were not reached, for they affect the issue of Purchase Tax Order (No. 1), that is, the revenue expected to be collected by means of Purchase Tax on floor coverings which were hitherto exempt? If that were possible, it would assist those who wish to take part in the debate.

Mr. Boyd-Carpenter

I was not aware of the Questions which it would have fallen to my right hon. Friend to answer had they been reached. With regard to the revenue on floor coverings, the best calculation we can make is that there will be an increased yield of about £1 million. That is the best figure I can offer, but here we are concerned with a wide variety of articles, and I should not like to lead my hon. Friend to believe that that is a precise answer.

The decision in accordance with the broad plan to which I have referred—the relief of industries suffering from a high rate of tax, and the clearing up of anomalies and inconsistencies—is a matter of considerable difficulty. This is clearly a matter on which opinions can, and do, legitimately differ as to whether one article should be preferred against another. My experience is that those who manufacture the articles which have benefited approve of the changes and those who manufacture articles which have not benefited do not approve of them.

But, in the last resort, it is a matter of judgment as to what, within the limits of the finance available, is the most generally advantageous change to make. It is therefore particularly convenient, Mr. Speaker, that you have allowed me to present the argument for these Orders together, because it is as a consistent whole aimed at those two objectives that they are best and most fairly judged.

Mr. John Arbuthnot (Dover)

Is there any significance in the timing of these announcements? Why do they happen to be made now?

Mr. Boyd-Carpenter

Because my right hon. Friend thought it an appropriate moment at which to make them.

4.31 p.m.

Mr. Douglas Jay (Battersea, North)

I can relieve one of the anxieties of the Financial Secretary straight away by assuring him that we put down the two Prayers not because we wished to oppose these reductions in tax, but because we thought that the House ought to have an opportunity to discuss the matter.

There are two good reasons why the House should scrutinise all three Orders with a good deal of care. The first one, about which the Financial Secretary was most reticent, is that the Government have introduced one slice of their Budget by Statutory Instrument in January. The Chancellor of the Exchequer has literally anticipated his Budget statement by three months. That is a sufficient innovation in itself to be worthy of some notice. Secondly, the changes proposed raise several major issues of tax policy, as the Financial Secretary agrees.

First, as to the new idea of a January Budget, what the Chancellor has done has been to carry out certainly the biggest batch of Purchase Tax changes, if not the biggest batch of tax changes of any kind, outside the main April Budget. And he has done it in the form of delegated legislation under the powers which we introduced in the Finance Act, 1948.

The Financial Secretary, the once great opponent of delegated legislation, now not merely believes in it, but he believes in using it on a scale never before attempted as far as our taxation is concerned. It is gratifying and encouraging to us on this side of the House to discover that the Chancellor and the Financial Secretary have not merely found our arguments on this point conclusive, but his own totally unconvincing.

The decision to make the changes just after Christmas obviously has some advantages from the point of view of the still obstinate problem of retailers'stocks and the losses which the retailers suffer when tax is reduced. I imagine that that is the reason the Chancellor has done this, and I do not know why he should not say so. It is true that retailers'stocks of many goods are low just after Christmas. But there are disadvantages on the other side about which I should like to hear the views of the Government later. Next year traders will have come to expect a change early in January. Though no doubt that will not alter the whole course of Christmas trade, it will have some effect.

Secondly, and more serious, there is nothing in the present action of the Government to prevent them making, not individual reductions, but sweeping changes in one or more of the three rates of tax in the April Budget in addition. Indeed, since the Chancellor cannot say this, it is perhaps for me to warn industry that that is probably just exactly what the Government intend to do this year—to make the individual changes in items by Order in January, and then to lower rates in April as well. But, of course, since the lowering of rates can cause much larger losses to retailers if it is done over the whole field, as it was last year, then this procedure does not really touch the major part of the problem of retailers' stocks. We must bear that in mind.

Thirdly, and most serious, this method imposes the greatest possible limitation on the essential rights of the House of Commons to discuss and amend these changes in taxation. The individual changes in Purchase Tax are made by Order, and they cannot be amended. The rates are altered in the Budget, and the Budget Resolution, as last year, is so framed as to prevent Amendments throughout the whole of theFinance Bill. If that course is followed then, although the Government make a whole lot of changes, at no time can the House of Commons propose any Amendment of its own. I should like to know whether that is what the Government now intend. Do they regard that as a precedent for the future?

If we are not careful, by proceeding with this method, we may fail to solve the problem of retailers' stocks, and at the same time severely limit the rights of the House. In the 1950 and 1951 Budgets when we made alterations in separate items of Purchase Tax, we so framed the Resolution that hon. Members could propose similar Amendments to alter items between at least those rates of taxation. But even that right is taken away by the procedure now adopted.

The Orders also raise issues of tax policy. What exactly is the Government policy on Purchase Tax behind this selection of increases and decreases? We approach these Orders from this point of view. We should like to see Purchase Tax steadily removed from ordinary householdgoods and necessities, and preserved as a tax on luxuries and, to a lesser extent, as an instrument to assist exports, productivity, fuel efficiency and other desirable ends of that kind. But to judge by these Orders the Government appear to be moving inprecisely the opposite direction.

First, taking the three Orders together, they lower the tax on electric fires, jewellery, mirrors, pictures and prints, ornamental walking sticks and canes, including, I believe, shooting sticks, garden ornaments and ivory and mother-of-pearl.

That is a remarkable list which suggests a nostalgia on the part of the Chancellor for Victorian days. But while he is doing that, he raises the tax on floor coverings used in ordinary houses—and not, of course, only in council houses—and schools.

There is no reduction at all in Purchase Tax on any textile material, despite all the difficulties of Lancashire and the strong appeal that Lancashire has made against many aspects of the tax. Indeed, as if it were intended to add insult to Lancashire's injury, on the one textile product mentioned—admittedly a small one of elastic fabrics—the Government put the tax up and not down. It is typical of this Government that once again we find the tax on jewellery and ornaments going down and the tax on clothing and household materials going up.

I should like, in passing, to ask the Government whether their decision to reduce the tax on electric fires means, in spite of all that has been said about fuel efficiency in many learned reports, and the peculiarly wasteful character of electric fires, that they propose to abandon Purchase Tax altogether as an instrument for achieving greater fuel efficiency. The most glaring feature of the Chancellor's selection are that these elastic fabrics—

Mr. Boyd-Carpenter

May I point out that tax has been paid at this or higher rates on elastic fabrics for many years? It is only in recent months it was discovered that the authority under which the tax had been levied by this Government was not in fact valid, owing to an error on the part of the Government of which the right hon. Gentleman was a Member.

Mr. Jay

What I was arguing at the moment was that the Government, having the opportunity of making these changes and having made many reductions in the tax on jewellery and articles of that kind, have refrained from making any reduction—as I think the Financial Secretary will agree—in any textile material whatever.

I must say—and this was the comment made by the Press on these changes—that it would appear that the Chancellor has deliberately decided to give no relief to any section of, the textile industry. It is remarkable that the Chancellor should show such indifference to the case put forward by Lancashire and to the pleas of his hon. and right hon. Friends who represent constituencies in that part of the country. I see the right hon. Member for Blackburn, West (Mr. Assheton) has not joined us this afternoon to stand up for the cotton industry—

The Chancellor of the Exchequer (Mr. R. A. Butler)

I thought the Ruling was that we were not at liberty to discuss items other than those in the Purchase Tax Orders. If I may, I am perfectly ready to answer in this debate anything to do with any matters which the right hon. Member for Battersea, North (Mr. Jay) is raising. But if we are to adhere to Mr. Speaker's Ruling, I do not see how I may be permitted to answer.

Mr. Jay

It is not my intention to discuss articles not included in the Schedules. But when remarking on some articles which are included, I thought we were entitled to mention the fact that others are not.

Mr. Deputy-Speaker (Sir Charles MacAndrew)

I understood Mr. Speaker allowed the three Orders to be discussed together on the understanding that only articles contained in the Orders may be discussed.

Mr. Sydney Silverman (Nelson and Colne)

But it happens to be the fact that textiles are mentioned in one of the Orders.

Mr. Jay

I agree entirely—

Mr. Deputy-Speaker

There are three Orders here. In which one of them are textiles mentioned?

Mr. Boyd-Carpenter

The only articles which could be called textiles, as I understand it, are these elastic fabrics to which the right hon. Gentleman is referring.

Mr. Jay

I accept your Ruling, Mr. Deputy-Speaker, I was pointing out the significance of the fact that elastic fabrics are included, but that there are no other textile materials included in these Orders. I thought I was entitled to do that.

I was going on to say that, in addition to the omission of textile materials, the Chancellor has included jewellery in the No. 2 Order. It would seem to me that his fondness for Birmingham is almost as great as his indifference to Manchester. Sheffield also, and very properly, has benefited in the matter of silverware.

The Financial Secretary to the Treasury argued, in defending the selection of these articles, that the purpose is to correct anomalies and to assist certain producers. That is certainly desirable, but it should not be the only criterion for Purchase Tax changes. Somewhere the Government should consider the housewife and the consumer. It is an outstanding mark of these changes that scarcely one of them seems to have been made with the consumer in mind. The housewife has been almost completely ignored and the whole thing decided from the point of view of bureaucratic tidiness, with an occasional eye on the producer.

It is perfectly proper that our efficient Customs and Excise Department should propose tax changes to Ministers largely from the point of view of administrative simplicity. But surely it is the duty of the Minister to look at the matter from a human and social point of view. Under this Government we always seem to get the original bureaucratic mixture served up neat. It would seem that either the Financial Secretary does not argue the social issues with his experts at all, or else he does and is defeated almost every time. Knowing how talkative he is, I would guess that the latter be the truth.

Even though the correction of anomalies were the sole and proper aim of tax policy, so far as I can see these Orders create just as many anomalies as they remove. Let us take a few examples of the tax now in force after these Orders have been made. Of course they are already in force, although we are discussing them today. Lipsticks, 75 per cent.; mirrors, 50 per cent.; eyebrow brushes and toothpicks, 25 per cent.—I admit the rates are rather a jungle, and if the Chancellor tells me I am wrong on any of these figures I shall be grateful for his correction. That is a curious example of the way by which the Chancellor is at present trying to remove anomalies.

Let me give another example, and again I hope that the Financial Secretary will correct me if I am wrong. Ornamental walking sticks are now 50 per cent. Umbrellas and sunshades are 25 per cent. Ordinary walking sticks made wholly of wood are exempt. That is a curious arrangement. To quote one more, furs and perfumes are still at 75 per cent.; jewellery, 50 per cent.; candelabra—in which, of course, we know that the Lord Privy Seal takes a special interest—and garden ornaments, are 25 per cent. I do not think the Chancellor can claim that these Orders go very far in cleansing the whole Purchase Tax Schedule of anomalies.

The most objectionable feature of this batch, against which we intend to vote tonight—supported no doubt by hon. Gentlemen opposite who are keen on keeping down living costs—is the imposition of this new 25 per cent. tax on tiles, strips and blocks for laying on or fixing to—if that is the correct phrase—floors. Here the Government have had the audacity to reimpose a tax which we specifically removed in 1948 in order to lower housing costs. In those days these matters were regarded from the point of view of the consumer.

It is true, as the Financial Secretary said, that we were aware then that if this encouraged too much competition and the cutting up of linoleum into strips and so forth, some other solution would have to be found. I think I merely said at that time that there would have to be reconsideration. I did not say that the tax would necessarily have to be imposed on tiles and strips. If we accept the existence of this objection, the imposition of new taxes ontiles and strips is not the only solution. The obvious alternative is to remove the tax from the linoleum and certain other types of flooring materials with which these strips are competing. That indeed was what we considered at the time, and we intended to carry out as soon as general tax reliefs became possible. [Interruption.] I hope that it will be remembered that in the 1951 Budget both defence and social service expenditure were rising rather steeply.

The Financial Secretary suggested again today, as he did in November, that that was quite impossible because the remission of tax on all floor coverings would cost £17 million. He said £15 million last November. That surely, as the hon. Member for Kidderminster (Mr. Nabarro) points out, includes the revenue from carpets. If linoleum and some of the other cheaper floor coverings such as felts and mattings were exempted without carpets, the cost, so far as I can remember—perhaps we can be told later—would be something more of the order of £3 million or £4 million or £5 million. I should have thought that that would have been the right course, on the assumption that we could not go so far as to exempt carpets altogether, which is probably what the hon. Gentleman wishes to do.

Mr. Nabarro

Hear, hear.

Mr. Jay

However, it must surely be at least as easy to maintain the tax on carpets and not on linoleum as it has been for all these years to maintain it on linoleum and not on tiles and strips.

Mr. Nabarro

The right hon. Gentleman has constantly referred to me. He said that I am in a muddle about this matter. However, the £17 million to which my right hon. Friend referred as being the total yield from floor coverings is overwhelmingly contributed to by carpets and by linoleum, which are all floor coverings. The yield from the two is more than equal. That is not in line with the figures the right hon. Gentleman is giving the House now.

Mr. Jay

That is precisely what I was saying. The great bulk of the revenue comes from linoleum and carpets. I differ from the hon. Gentleman on this if he says it is half and half.

Mr. Nabarro

I said approximately.

Mr. Jay

My memory of the figures is that the exemption of linoleum would have cost less than half, with the retention of tax on carpets.

Mr. Nabarro

I said approximately.

Mr. Jay

I think the hon. Gentleman has now got it clear. There is some case, surely, on the general lines of the D Scheme for exempting linoleum and cheaper floor materials, even if we do not go so far as to exempt carpets in the same way.

Similarly with the elastic fabrics, is there not some case for extending the exemption to get rid of the anomaly, instead of reimposing the tax, even if the Financial Secretary may be right in saying that it has been paid in recent years? After all, a large number of industrial fabrics are already exempt. Would it not really have been possible in this case for the Chancellor to have got rid of this anomaly, to have given a little more relief, and to have made some gesture of sympathy with Lancashire in its difficulties at the present time, by extending the exemption which we introduced some years ago?

For all these reasons, although we do not oppose the reductions in tax in these Orders, we condemn the tax increases in Order No. 1 both on floor coverings and on the fabrics because they take no account of (the interests of the consumer, because they tend to raise living costs rather than reduce them, because they are all the more provocative to the housewife at a time when the tax on jewellery has for the second time come down, and because they are a rebuff to all the feeling that exists in Lancashire about the Purchase Tax at present, in response to which the Chancellor has done absolutely nothing at all.

4.54 p.m.

Sir Edward Boyle (Birmingham, Handsworth)

I rise because, in earlier debates, I have drawn attention to the problems of the jewellery and silverware industries, and I should like to tell my right hon. Friends how pleased all Members who represent the City of Birmingham, and those also, I am sure, who represent the City of Sheffield, feel that something has been done further to reduce the burden of Purchase Tax on groups 26 and 27.

The right hon. Gentleman the Member for Battersea, North (Mr. Jay) referred to the jewellery trade a number of times in his speech, and seemed to speak as though that was a typical luxury trade that should be placed very low in the queue for priorities in tax reduction. I would tell him, in the first place, that no trade is a luxury trade to those who take part in it and earn their living by it. If he had made that speech in the City of Birmingham, in any part of the city, he would not have got a very good reception.

In the second place, I would say to him that no trade is a luxury to an hon. Member in whose constituency that trade is represented, and I can assure him that there are many hon. Members on his side of the House who are as interested as I am in this trade, and that a Motion I moved on this subject last March received warm support from both sides of the House and was seconded by his hon. Friend the Member for Aston (Mr. Wyatt).

Mr. S. Silverman

I am following the hon. Gentleman's point with great interest and sympathy, and I hope that he will make a similar speech tomorrow night when we are debating the Anglo-Japanese Trade Agreement. In the meantime, since he talks of the reception my right hon. Friend would have got if he had spoken in Birmingham about a luxury trade, as the hon. Gentleman says he did, what sort of a reception does he think the Economic Secretary to the Treasury would have got in Nelson or Colne if he had made his announcement about the Japanese Agreement in my constituency?

Sir E. Boyle

I do not think I should be in order if I followed that interjection very closely, but if I am lucky enough to catch Mr. Speaker's eye tomorrow night, I think I shall be able to show that the Japanese Trade Agreement has been well received by the City of Birmingham.

Mrs. Barbara Castle (Blackburn, East)

Yes, the hon. Gentleman is having it all his own way.

Sir E. Boyle

If the right hon. Member for Battersea, North looks up the debate we had last March, he will find that his hon. Friend the Member for Aston devoted his speech to criticism of the Purchase Tax on jewellery, and said: I suggest only that the rate of tax should be more comparable with that paid by other trades in the country, and that it should not be what I think can only be described as a penal rate."—[OFFICIAL REPORT. 20th March, 1953; Vol. 513, c. 372.]

Mr. Jay

I would make it clear to the hon. Gentleman that I was not opposing the reduction of tax on jewellery. I was only criticising the Chancellor for selecting this reduction and omitting to make any other equally important or more important reductions which he might have made.

Sir E. Boyle

If the right hon. Gentleman was not opposing the reduction of tax on jewellery, he was certainly damning it with very faint praise. I think that that must have been the impression of any one who listened to his speech.

It is too early, of course, to say what the full effect of this reduction of tax has been, but from such inquiries as I have been able to make there is no doubt that it is already having a very beneficial effect in getting rid of large-scale tax evasion that was going on in the jewellery trade. I pointed out, when I spoke on this subject last March, that manufacturers of diamond rings were finding it very difficult indeed to sell rings costing more than £5 or £6 because of the enormous amount of tax evasion that was going on, through retailers selling what purported to be secondhand rings and were nothing of the kind. I have no doubt at all that this tax reduction will help the manufacturers producing rings, and do a great deal to get rid of tax evasion.

I fear that the craft section of the industry and of the silverware trade will still be in rather a bad way. I have always thought myself that one could overstate the extent to which Purchase Tax, by itself, affected these craft industries, though it certainly has been one factor among others, and I do not think one wants to be too optimistic where they are concerned. So far as they go, these reductions will be very welcome indeed. I congratulate my right hon. Friend upon them, and, as I have said, I am sure that in all parts of the City of Birmingham, and in Sheffield as well, they will be welcomed by men of all parties.

5.0 p.m.

Mrs. Barbara Castle (Blackburn, East)

It is very difficult to make a coherent speech on these Purchase Tax Orders this afternoon because they reflect only a very incoherent policy. Quite frankly, after listening to the remarks of the Financial Secretary, I am more bewildered than ever in trying to understand what the Government are up to.

When these Orders were published some weeks ago, a wide range of trade interests and newspapers in this country asked the same question as I am asking this afternoon. What do these Orders set out to do? What sort of reason is there for producing them at this unusual time?

I must say that I had a great deal of sympathy with the comments of the "Manchester Guardian" of 5th January, when, in a most damning leading article about these Orders, it said: There is no sign of considered policy in these concessions. I do not think that the explanation we have received this afternoon gives us any sign of that considered policy.

In our last discussions on Purchase Tax in this House, we had two main complaints to make to the Chancellor. One of them was that in his Purchase Tax policy he was giving undue emphasis to the reduction in price of inessential articles and an inadequate emphasis to the reduction in price of essentials. At that time, we had reason to complain that his last Purchase Tax concessions had been made at the rate of 5s. in the £ on the wholesale price of such things as bird baths, chin straps, furs and perfumes, at 3s. 4d. in the £ on paper doyleys, cake ornaments, bead curtains and gramophone records, and only at the rate of 1s. 8d. in the £ on goods which were of the greatest essentiality in the home.

In these Orders we have a continuation of that process. Indeed, it is carried even further, despite the protests which were made from both sides of the House in the last Budget debates that essential articles such as clothing were being ignored, and that if the Government had any money to give away—and these concessions involve some millions of pounds—they ought to give it in other directions.

The second complaint which we made to the Chancellor at that time was in connection with the very difficult problem of a rebate for retailers on tax-paid stocks. If the right hon. Gentleman speaks in this debate, I hope he will say something about the matter, because I was one of those who, in the last Budget debates, moved a Clause dealing with the rebate of Purchase Tax for retailers.

It could be argued that these Orders are the Government's way of meeting our complaints at that time, that Purchase Tax reductions confronted retailers with very serious loss on tax-paid stocks. I was told at the time that the Clause I moved was not a practical Clause. The suggestion was made from the benches opposite that one way of meeting the problem would be for the Chancellor to make unexpected Purchase Tax concessions at different times in the year so as to avoid the usual pre-Budget slump in trade, which not only hits the retailers, but also hits the producing industries right along the production line.

It may be, though we have not been told this by the Financial Secretary this afternoon, that the introduction of these Orders is the way in which the Chancellor has decided to meet the rebate problem. If that is so, then the right hon. Gentleman has only remedied one complaint by very much intensifying the other. What he is, in fact, telling us is that these will be the only Purchase Tax concessions this year, and that so far as Purchase Tax is concerned Lancashire and textiles have "had it."

I think the House is entitled to know whether this is the Chancellor's purpose. It really is not good enough for the Financial Secretary, when asked a serious question on this point, and one which retailers, trade papers and trade interests have been asking, namely, whether this is the sum total of the Purchase Tax concessions for this year, and whether they are being made at this time for any particular reason, merely to say, "We are making them now because we think it an appropriate moment to make them."

The burden of our complaint this afternoon is that with regard to the two main attacks which we made on the Chancellor in the last Purchase Tax debate—attacks made from both sides of the House—he has, by these Orders, intensified those complaints. He has intensified uncertainty. As the "Manchester Guardian" said in the leader to which I have already referred: Mr. Butler's sudden generosity to a few may even stimulate hopes in the many. It. went on to say: Outside the particularly favoured trades, the customary pre-Budget slump may very well be intensified. That is a most serious thing for Lancashire and for the textile trades which have suffered from this uncertainty, and which are suffering from many other blows inflicted by the Government during the last few months. Therefore, let us have the blessing of certainty, even if that certainty carries with it a death knell to Lancashire's hopes. At the moment, we have the worst of both worlds. On the one hand, we have the uncertainty, and, on the other hand, the lack of concessions to Lancashire.

I ask the Chancellor to explain these Orders a little more fully today and in the context of the Government's whole economic policy. The more we study that policy, the more bewildered we become. What are we trying to do to our economy? Again, I agree with the "Manchester Guardian" when it says: It is hard to see expediency, let alone equity, in this curious list of goods on which these big tax concessions have been made. What sort of economic message is going out to the country this afternoon from this piece of Government policy? Are we now really telling the country that we are going to curb inflation at home and are going to win our export drive by protecting and encouraging luxury industries and sacrificing essential industries? We have had a remarkable catalogue of examples in that direction. Just before Christmas we had a great move by this Government to protect that vastly important industry conducted by two firms in this country who grow hot house grapes. The Government increased the horticultural tariff on cheaper grapes coming from abroad. They did this to protect an inessential industry and one which is certainly not vital to the economy of the country.

Now we have another Purchase Tax concession on jewellery, fancy goods and knick-knacks of one sort or another without any adequate explanation for giving it. What does Lancashire and a key industry like the textile industry in Lancashire get out of the Government? It gets the full blast of Japanese competition and no kind of Purchase Tax concession. This is really another message to Lancashire indicating the contempt with which this Government regard what some of us still consider to be one of the vital industries of this country.

When I listened to the Financial Secretary giving his reasons for the individual items, I found there was not one reason that could not equally appropriately have been applied to textiles. He is reducing by 25 per cent. the Purchase Tax on mirrors. Why? Because the trade has been adversely affected. I am willing to bet that the trade in mirrors is nowhere near as adversely affected as the trade of Lancashire will be by reason of the Japanese Trade Pact.

Mr. R. A. Butler

On a point of order. If the hon. Lady wants the proportion of Japanese goods which are to enter this country, I will give it to the House so that hon. Members may be properly instructed on the extent of Japanese competition. If I am in order I shall be glad to give that information.

Mr. Deputy-Speaker

I do not think we should discuss Japanese goods at all, but if it is the wish of the House to discuss the subject perhaps the Chancellor might give the figures. I do not think that it is in order.

Mrs. Castle

I am discussing the reasons given by the Financial Secretary for reducing Purchase Tax on certain items which are before us this afternoon. We are asked to approve these Orders; therefore, we must examine the reasons why the tax has been reduced. I was saying that one of the reasons given which applies equally to the case of Lancashire textiles is that trade in a particular item is adversely affected. May I not be allowed to relate that argument to other articles and to say that it is invalid in this case when the trade in more essential articles is also adversely affected?

Mr. Deputy-Speaker

If the hon. Lady is asking me, I reply that Mr. Speaker made it quite clear, I gather, in a Ruling given before I came into the Chair, that we are allowed to discuss only the articles mentioned in these three Orders and not other things. To discuss Japanese goods will be out of order, and it will be even more so because the matter is to be discussed tomorrow.

Mrs. Castle

I am not in any way trying to discuss the Japanese trade pact, but whether or not the textile industry is more adversely affected than certain other items on which we are asked to make tax concessions. We are asked to make a concession of public money, so we should inquire whether we are giving that money away in a proper and useful form.

I should like to give the Chancellor another example. We were told about the case of Birmingham today. It is remarkable how Birmingham is dominating the thinking of the Government, which is pro-Birmingham and anti-Manchester. We have been told that the jewellery industry needed the healthy stimulus of these tax concessions. I would refer the Chancellor to a very interesting news story which appeared in the "Manchester Guardian" on 5th January, when these Orders were published. The story gave the opinions of Manchester retailers on the effect of the concessions. One of the opinions related to the concession on imitation jewellery.

Several Manchester shopkeepers said, according to this story, that they were astonished that the Chancellor should be making this concession at this time because Manchester shops had been having an absolute boom for many months in the sale of costume jewellery. The shopkeepers believe that the sales of imitation jewellery were probably at their peak and that all the Chancellor was doing was making a gratuitous gift by this tax concession to an industry which did not need it.

When we are asked to approve these Orders we have a right to ask the Government how the Orders fit into their economic policy. What sort of message is to go out to the wage earners of the country as the result of these Purchase Tax concessions? What kind of light are we throwing on their problems? I suggest that these Orders add to the confusion about what is to happen about Purchase Tax, that they add to the distress and confusion of retailers and to trade dislocation by increasing uncertainty, and to the confusion in the minds of the wage earners about the economic policy of the Government. I am as entitled to protest at the snub which is given to my constituency by these Orders as the hon. Member for Handsworth (Sir E. Boyle) is entitled to congratulate himself on the gift that is given to his constituency by these Orders.

I ask the Chancellor whether these Orders, by their timing and scope mean that the Government have deliberately chosen Lancashire to be the Cinderella of their economic policy. My constituency and its cotton industry are looking back to the days of Sir Stafford Cripps as to the days of Prince Charming, while the present Chancellor of the Exchequer has become the two ugly sisters rolled into one.

5.17 p.m.

Sir Robert Boothby (Aberdeenshire, East)

I was relieved when I heard the hon. Lady the Member for Blackburn, East (Mrs. Castle) say that Her Majesty's Government had been swinging over to Birmingham and against Manchester. What has been giving me sleepless nights lately is the thought that Her Majesty's Government were abandoning the Birmingham school and cleaving to the Manchester school. To judge from the speech of the hon. Lady, the reverse is the case, and the Government are now coming back to Birmingham. That suits me down to the ground.

With regard to the timing of these Orders, it is, on the whole, better that these changes should be made in January than at the time of the Budget; but I do not think that this change of timing will solve the problem of retailers' stocks. In fact, the problems associated with changes in the Purchase Tax can never be solved, which only shows what a rotten tax it is. I hate the Purchase Tax—I want to make that clear at the outset—except on flamboyant luxuries. I am prepared to concede that on all real luxuries there should be Purchase Tax. It is, for example, quite fair to tax gold-plated containers, and those who buy them seem to be rightly assessed. As I do not want to be pernicketty or finicky in any way, I think I should add that it is reasonable to treat rolled-gold pencils as pencils.

The Purchase Tax itself is pernicious. On both sides of the House we are far too inclined to accept it as an integral part of our national life. Asa tax, particularly on household goods, I deplore it. Rightly or wrongly, I take the view that a floor is a necessity—for me, at any rate. We must have floors. I have no personal interest in this matter, but I should like to point out that there is a flooring called Windsor flooring, now manufactured in this country.

Mrs. Jean Mann (Coatbridge and Airdrie)

There is a more important thing, and that is Kirkcaldy flooring.

Sir R. Boothby

The hon. Lady is talking about linoleum?

Mrs. Mann

Yes.

Sir R. Boothby

I shall have a word to say about linoleum; I would not leave linoleum out for anything, but I will start off with what seems to me to be an enormous anomaly.

There is a certain kind of wooden flooring known as Windsor flooring which was first manufactured in this country under the stimulus of the Ministry of Health, then presided over by the right hon. Member for Ebbw Vale (Mr. Bevan). It was originally produced in Switzerland, and it is three-eighths of an inch thick. The Purchase Tax was removed in 1948, because softwoods at that time were in short supply, and we wanted to economise in the use of imported wood to the maximum possible extent. As a result a factory was built at Andover, and machinery was imported from Switzerland.

Since 1948,a quarter of a million square yards of this particular flooring have been laid at a remarkably cheap price. The wearing surface is equivalent to three-quarters of an inch of woodblock flooring, and it uses only 50 per cent. as much timber. I wish to emphasise that this is not a floor covering, but a floor. What will be the effect of this Purchase Tax Order No. 1? To avoid the tax the manufacturers will have to increase the depth—without any increase in the wearing quality—from three-eighths of an inch to five-eighths of an inch, using that much more wood. That is 66 per cent. more raw material. Yet the whole object of bringing this machinery from Switzerland and setting up the factory was to economise in the use of imported timber.

What becomes of the argument of increased productivity and lower costs for houses? The fact is—and I state it quite bluntly—that under the Order as it now stands we are exempting from tax the deep wooden floors, five-eighths of an inch thick, which the rich can afford to purchase, and subjecting to a 25 per cent. tax the equally good wearing floor which is much cheaper and which is used for the cheaper houses—not only public buildings but private houses as well. In other words, we are letting the rich off the tax, and putting it on the poor man's wooden floor.

Mr. S. Silverman

That is the Government's policy throughout.

Sir R. Boothby

Rubbish.

This is all wrong. A frightful mistake has been made. I do not know how or why, but supposing the tax were taken off wooden floors altogether, on the admission of the Financial Secretary himself it will cost only £1 million, because most of this Purchase Tax is derived from linoleum and carpets. The Financial Secretary has an argument about cutting up linoleum into these little squares to avoid tax. I do not want to see either floors or floor coverings taxed at all; but if we have to tax floor coverings, and linoleum is getting away with it unfairly, it is surely possible to devise an Order to bring linoleum within the tax, because linoleum cannot be described as a floor. It is a floor covering. This Purchase Tax Order will undoubtedly raise the cost of houses. We cannot get away from that. The Financial Secretary says by £3 or £4. I say by £5 or £6. Whichever it be, with our tremendous and triumphant housing progress it seems madness to impose a tax at this time which will raise the cost of houses at all.

Was the Ministry of Housing and Local Government consulted beforethe Order was introduced? Did it examine the whole question? I am quite sure that it cannot really believe that this is a good Purchase Tax Order. I am equally sure that, if the Order had been carefully examined before introduction, a means could have been devised to smooth over the present admitted anomalies without raising the cost of houses generally, and without imposing a tax on this particular wooden floor, which is one of the triumphs of modern house building. To put a 25 per cent. tax on this flooring seems to me a monstrous thing to do.

I beg my right hon. Friend to follow up what the Financial Secretary has said, and to give an undertaking that he will re-examine this particular matter with great care in the light of the representations that have been and will be made to him. I myself am free from the necessity of injuring or damaging my conscience in any respect by voting with the Government in the Division Lobby, because, fortunately, I am paired with the hon. Gentleman the Member for Coventry, East (Mr. Crossman), who is at present in Berlin—where I should be. I do not have to vote on the matter, but I feel very strongly about it.

What upsets me is the feeling that the whole thing has been slapdash, ill-considered, and put forward without sufficient consultation with the highly technical trades concerned. It is an example of inefficient administration from which Her Majesty's present Government have been singularly free up to date; but it is an exception which I deplore, and which I hope to see rectified in the immediate future.

5.27 p.m.

Mrs. Harriet Slater (Stoke-on-Trent, North)

Though I am glad that the hon. Member for East Aberdeenshire (Sir R. Boothby) has a conscience it would be interesting to know how that conscience would have worked if he was not paired for tonight's Division.

I wish to emphasise the point made by my hon. Friend the Member for Blackburn, East (Mrs. Castle), that it is absolutely essential, not only to the retail trade but to the manufacturers, that there should be some certainty as to when reliefs or changes are made in Purchase Tax. The timing of the tax reliefs at this juncture may, in some respects be good, but the trade does not know whether this is the only relief which it can expect, or whether further reliefs or changes will be made in the Budget. It is vital that the retail trade should know that there is some measure of certainty as to the timing, and that manufacturers should be able to go ahead with their programmes.

I would also emphasise the criticism of the tax which is now being levied on floor coverings—tiles in particular. It is no consolation to those who are perhaps having to buy a house; to local authorities who use many of these floor tiles—such as Marley tiles, plastic tiles and the small thin wooden blocks to which the hon. Member for East Aberdeenshire has referred—to be told that this tax had to be imposed to bring those goods into line with floor coverings such as linoleum and carpets because the hon. Member for Lancaster (Mr. F. Maclean) brought a deputation to see the Chancellor of the Exchequer to point out that there was this difference between these kinds of floor coverings and linoleum, in which he was particularly interested. The answer is that the tax should have been taken off all floor coverings, including linoleum, and not put on the tiles.

Mr. Nabarro

What about carpets and rugs?

Mrs. Slater

We could include carpets.

We have been told of the marvellous programme and achievement in housing, but it is upon the young people who are being given new houses that the tax on floor coverings bears heaviest. They just have to buy floor coverings, which are just as essential a part of household purchases as the mirrors the Purchase Tax on which has just been reduced by the Purchase Tax (No. 2) Order.

If we continue to tax linoleum and the smaller rugs which are needed in these new houses we are, in effect, saying to these young married couples, "You must either do without comfort or you must pay more for it," just at a time when they are involved in very heavy expenditure on the new furniture which they all want to put into their new house. I add my plea to those already made to the Chancellor to reconsider the tax on floor coverings.

The tax on tiles and wood blocks is, in effect, a new tax, because it has not operated since January, 1949. We have been told that it will add something like £2 or £3 to the cost of a new house, although I am assured that it will cost more in the region of £4 or£8. That may not be very much on the individual house, but it is a considerable amount in the large housing programmes which many cities are desirous of undertaking.

In addition, many of these kinds of floor covering are being used in our new schools. We are using Marley tiles in most of the new schools in my own area. In the large new schools which are being built this added cost is an extra burden, which may mean that something else which is essential has to be cut out.

We have to remember that this new imposition is being put on at a time when the Purchase Tax on luxury commodies, such as garden ornaments and rolled-gold drinking vessels, is either being reduced or removed altogether. I agree with the hon. Member for East Aberdeenshire that this tax enables the rich to get away with it, and the poor, once more, have to pay the added burden.

Mr. Nabarro

If the hon. Lady wishes to argue that the cost of a local authority house is going to be inflated by this additional impost on certain floor coverings, will not she be fair-minded enough to set off against any slight increase the saving to a local authority which will flow from the reduced Purchase Tax on electrical appliances?

Mrs. Slater

That makes very little difference. I was pointing out that, although the tax may have little effect on one house, it is considerable added burden when considered in relation to large numbers of houses.

The Financial Secretary said that these Orders sought to do away with certain anomalies, and that it was sometimes found that some articles had passed through the sieve of Purchase Tax. I want to refer to the Purchase Tax (No 3) Order, which reduces the Purchase Tax on figures, vases, reliefs and busts.

Mr. Follick

And engravings.

Mrs. Slater

I have already taken up with the Financial Secretary the question of two types of vase, one which bears no tax and one which bears tax at the rate of 75 per cent. I have the vases here. I am sure that all hon. Members know what I mean when I talk about a posy ring—the little ring into which one puts flowers—or a bar. Neither of those is subject to Purchase Tax. Neither is the posy holder which, by no stretch of imagination, can be said to be used for anything other than a bunch of primroses, violets or very small-stemmed flowers. But the vase I have here, which is, in effect, a vase cut in two, bears a tax of 75 per cent., plus 10 per cent. uplift.

The person who can afford only the smaller type of vase is compelled to pay just 3d. less than has to be paid for alarger vase. That is an example of something which has slipped through the sieve of Purchase Tax. Yet, just because a group of people have made recommendations that the small vase should be taxed because it is not as "squat" as the double one, we must not upset their dignity by altering their recommendations when representations are made that this is an injustice because those persons who can afford to buy only a small vase are being condemned to pay a larger amount of tax.

That is in keeping with the tone of these Orders. Those who can afford to pay are getting away with it, and those who can least afford to pay are being asked to bear an added burden. I ask the Chancellor to give further considera- tion to this question of vases and floor coverings, such as linoleum, and free them from tax if he feels that there is some need to even up the discrimination which exists at the present time.

5.39 p.m.

Mr. Derek Walker-Smith (Hertford)

The hon. Member for Stoke-on-Trent, North (Mrs. Slater) has obviously appreciated the truth of the maxim that an ocular demonstration is always more convincing and attractive than a mere spoken submission. I rather regret that I have not brought any exhibits with which to commend my argument to the House. I do not share all the criticisms which have been made with regard to these Orders.

I have no criticisms of the No. 2 and No. 3 Orders. I rejoice at the reductions in Purchase Tax which they have made and, unlike some hon. Members opposite, I do not regret a reduction in these items of tax merely because it has not been possible to make a simultaneous reduction in certain others; nor do I agree with the criticism made by hon. Members opposite about timing. As I understand it, the timing of this particular type of order is helpful to the difficult and apparently almost insoluble problem of retailers' stocks when there is a cut in Purchase Tax.

I now turn to the Purchase Tax (No. 1) Order, with which I am most concerned. With regard to its main substance, I am able without difficulty to confine my enthusiasm within the bounds of decorum. I found the matter of gold-plated metal a little too rarefied for consolation one way or the other. I was glad to hear from my hon. Friend that the third matter dealt with in the Order, that of elastic fabrics, was merely the correction of a mistake.

My disappointment is focused on the question of the tax on flooring. As the House knows, there was no exemption for floor coverings originally in the Eighth Schedule to the Finance Act, 1948, but that was very quickly amended by a Statutory Instrument which exempted strips or tiles not exceeding 450 square inches, a figure presumably calculated to give exemption to the normal size of 18 inches by 24 inches. The Finance Act of that year came into force on 30th July and the Statutory Instrument on 5th November, so that the tax was in force only for a very short time.

In this case, unusually enough, my right hon. Friend's little finger is proving thicker than Sir Stafford Cripps's loins because my right hon. Friend is imposing Purchase Tax on something from which Sir Stafford Cripps shrank from imposing it at that time. In the general context, it is unfortunate that at a time when one would wish to see a retreat from Purchase Tax on essential commodities there should be any reversal of that tendency.

My hon. Friend did not say much about the revenue aspect of the matter when he commended the Order to the House, but in any Purchase Tax matter revenue is a salient point. My hon. Friend was good enough tosay, in answer to my question, that about £1 million might be expected from the imposition of the tax in a financial year. The sum is difficult to assess because in any Purchase Tax calculation one cannot be sure how much of the demand will be diverted to some other material or substance by reason of the imposition of the tax. I was not sure whether the £1 million assumed the same consumption as when there was no liability for Purchase Tax; but, in any event, it is a very small proportion of the £17 million which my right hon. Friend gave as the total Purchase Tax on the various floor coverings.

It is obvious that the amount of linoleum which ranks competitively with the tiles and other floor coverings which are now brought under the tax is also very small. My right hon. Friend was right when he enunciated the principle that competing floor coverings should pay the same rate of tax, so far as they have to pay tax at all. He drew the picture of a competition at the top level between parquet flooring, carpets and high quality linoleum and at the lower level between tiles and cheap linoleum.

Disappointing as it may be, I believe it is necessary in present circumstances to maintain the Purchase Tax on those materials at the top level of competition, which accounts for by far the greater part of the £17 million; but regarding the competition at the lower level, it would seem in principle that it would be better to see whether both could not be exempted if an adjustment is necessary to bring them into correct competition.

Wood block flooring, apart from the special case to which my hon. Friend the Member for East Aberdeenshire (Sir R. Boothby) so eloquently referred, is probably not very much affected, because the ordinary wood floor is far more expensive than the sort of floorings with which the House is concerned in this Order, and even with the added Purchase Tax, it would not pay anybody to substitute normal wood floor coverings for the tile coverings.

Sir R. Boothby

It is the additional Purchase Tax which will knock out the cheap wood flooring. Without the Purchase Tax, the cheap wood flooring is an economical and widely used material. The 25 per cent. tax will bring it to the level of the most expensive floorings and will knock it out.

Mr. Walker-Smith

The special case to which my hon. Friend refers comes into that category, although floor coverings generally come into the top level category, which he and I agree must be left under Purchase Tax in present circumstances.

My right hon. Friend said that the intention here was that tax should fall on floor coverings and not on floorings. That is an admirable intention, but it is a little difficult to apply in practice, as he candidly admitted. For example, there is the flooring or floor covering called mastic asphalt, which is a composition material. When it is put on the floor it becomes integrated with the structure and, consequently, does not bear Purchase Tax.

These are very difficult principles to apply in practice. The difficulty is similar to that encountered when considering what sort of building work should be subject to a licence. If linoleum is gummed down, that is licensable work and one commits a criminal offence if one does it without a licence, but if the linoleum is tacked down, it is non-licensable work. My right hon. Friend is trying to apply the same rather fine metaphysical distinction in this case.

The question of mastic asphalt is important. In some cases it may be that the result of imposing Purchase Tax on floor coverings will be to divert demand not to a taxed linoleum, as my hon. Friend suggested, but to non-taxed mastic asphalt. Mastic asphalt is really an industrial floor covering, but in present circumstances it is used a good deal in local authority houses. If one of the effects of the Order is to increase the use of what I should have thought was a fundamentally less attractive and less suitable floor covering for local authority or other houses, it would be a regrettable outcome.

A good deal has been said about the financial effect. My right hon. Friend put the figure for a local authority house at between £2 and £3.

Mr. Boyd-Carpenter

I said £3 or £4.

Mr. Walker-Smith

I should have thought that even that was almost certainly an under-estimate. My right hon. Friend did not specify the figures on which his estimate was based. I have here some figures for a small private enterprise house which can reasonably be adjusted to give the proportionate figures for a local authority house.

In the case of a house of 1,000 superficial feet in area, which is the average non-luxury private enterprise house under Government licence, there would be an area to be floored of about 470 square feet, taking the ground floor only. At 11s. a square yard that works out at £28 12s. which is £7 3s. in terms of Purchase Tax. The local authority figure would, of coure, be lower than that for two reasons. First, the superficial area would be rather smaller and, second, a cheaper quality of tile would probably be used. Even taking the figures at 44 square yards instead of 52 and 9s. instead of 11s. we get a cost of about £20, which in terms of Purchase Tax means about £5.

Those are not large figures, but I think that my right hon. Friend most probably under-estimated the financial consequences. Although the amounts are not large it is, in my view, regrettable that at the present time anything should be done to increase the cost of house building and to give the impression that it does not matter very much if we take a step which may be calculated to have that effect.

Mr. Nabarro

Will my hon. Friend deal with the perfectly sensible argument which I used against the hon. Member for Stoke-on-Trent, North (Mrs. Slater), that while there may be a very slight increase on account of tiles, we have to set against that the decline in cost arising from the reduction of Purchase Tax on electrical appliances.

Mr. Walker-Smith

My hon. Friend does not have to explain that the arguments used by him are sensible ones because I always assume that in the face of any clear evidence to the contrary. I am in favour of the reduction of Purchase Tax on electrical appliances. I am generally in favour of all reductions of Purchase Tax on things which are necessities or near-necessities, but that is not part of the actual cost of house building.

I am suggesting to the House that it is unfortunate at a time when it is vital to keep down the cost of house building that any step should be taken which may increase it, because although the housing figures are very much more satisfactory than in 1948, when the exemption was granted, the cost of house building is still a very urgent problem. That applies both to local authority houses and to private enterprise houses.

In the case of local authority housing it is necessary to try to keep the cost down, not least to save cost on the subsidy. So far as private housing is concerned, it is vital to keep the cost down so as to extend the range of people who can afford to buy such houses. I hope that my right hon. Friend will take into account the possible saving on subsidies if costs can be reduced, which has to be balanced against the very trivial amount of tax which is expected from this Order.

As I said at the beginning of my speech, I see a good deal to criticise in this Order, although I accept the principle of the competitive equality of taxation which my right hon. Friend has announced. I shall, therefore, vote for the Order because I think that that principleis basically right, although I think its application in this case is unfortunate. I certainly hope that this will be the last Order which the House is asked to approve providing for an increase in Purchase Tax on any commodity which is a basic ingredient in house building when it is so vitally necessary to reduce the cost of houses in the interests of the nation.

5.55 p.m.

Mr. James MacColl (Widnes)

I should be the last person to blame the hon. Member for Hertford (Mr. Walker-Smith) for voting with his party. That is a thing which we all do from time to time against our consciences. What I do blame him for is not having the good grace to retire into a corner and weep instead of blazoning the fact to the House that, after the devastating speech which he has made against the No. 1 Order, he is still going to support it. It seems to be an astonishing point of view in one who has a great reputation as an authority on housing that he should have subjected the Order to such an analysis and, having pointed out so clearly for everyone's benefit the effect that it is going to have on housing and the cost of housing, should then announce that he is going to support it. That, I confess, fills me with a good deal of alarm and despondency as to the hon. Member's future.

I do not speak on behalf of any vested interests. I have no constituency interest in the producers' side; I am merely representing an area where the local authority has in fact used this flooring for all its houses. It has done so because it has been encouraged to do so, and as a result it has found that this is a most satisfactory way of flooring houses. Now, having launched on that arrangement, having prepared its plans, having based its housing programme on the use of this type of flooring, it is faced for no apparent reason which anyone on either side of the House has been able to explain with an increase in taxation on something which is a standard part of housing.

I do not pretend to be a financial or technical expert and I cannot go into all the arguments as to whether it is easy or difficult to make a distinction between this type of flooring and other types of floor covering, but I feel that the ordinary local authority which is trying to wrestle with these problems and trying particularly to deal with the problem of keeping down rents at a time like this will think that this is a stab in the back from the Treasury at a time when local authorities are being led on with carrots by the Minister of Housing and Local Government.

The right hon. Gentleman's explanation is that, after all, this is a very small amount. I think that shows that the Government are getting themselves into a pretty parlous state when they are reduced to using the conventional form of explaining away a bastard. I think that the right hon. Gentleman has given an under-estimate. I think that the additional cost is as much as £8 and, even if it is £4, that is about a penny a week on rents.

That is only one factor to be taken into account. Every local authority is having a very serious problem to face in trying to keep rents down. This problem will be even more serious if and when the Government's housing proposals for slum clearance are launched. The problem of housing the person at present living in a slum and paying a very low rent will become a very acute and difficult one.

I should have thought that this was the least opportune time to choose to do anything, however small, to put a tax on an essential part of a house. It may be that there are technical difficulties, I do not know, in distinguishing a flooring from a floor covering. I should have thought that the simplest criterion was not that of thickness, because the fallacy behind that is that it is discriminating against more modern types of flooring, when in fact, owing to the use of modern research and scientific improvements in house building, it is possible to get a good result by using less materials. That, I should have thought, was something to be encouraged.

Here is something which is modern and a contribution to building materials which has proved to be effective and is in fact used by progressive local authorities all over the country. I should have thought that the least that the right hon. Gentleman could have done would have been to encourage them to use this flooring, instead of which he is adopting this savage method of imposing a tax to prevent them from doing so.

I should have thought that the test of whether a thing was a floor or a floor covering was whether it was taken away when anyone moved from the house. If it is permanently part of the house, if it is put in by the local authority which builds the house and is not bought by the tenant coming in and taken away by the tenant going out, that would be, to my lay mind, an adequate definition of a floor. I do not believe, therefore, that the right hon. Gentleman and his Department have seriously considered the effect that this will have on people who really care about housing.

It is not so much a question of the amount that it is involved, although we cannot put pennies here and there on the rent. What is much more important is the matter of principle, that the Government should go out of their way, not simply to leave on a tax, which would be bad enough, but to impose a new tax on a modern, efficient and well-tried system of flooring. That is indefensible and I beg the Chancellor of the Exchequer to think further about it. Surely, the argument from his own party, if not from this side of the House, must be sufficient to convince him that something is seriously wrong and to cause him to think long and hard before he presses the matter to a vote.

6.2 p.m.

Mr. W. R. A. Hudson (Hull, North)

Not often do I find myself in agreement with hon. Members opposite, but I found myself a little in agreement with the hon. Lady the Member for Stoke-on-Trent, North (Mrs. Slater) when she suggested that the imposition of the tax on flooring tiles is a retrogressive step. I have no interest in this matter except as a consumer of floorings, both privately, as we all are, and in my business, but I want to confine my remarks briefly to the No. 1 Order and to relate them to the question of flooring tiles.

My right hon. Friend the Financial Secretary indicated that the affirmative procedure in connection with the Order is because it imposes or reimposes a tax burden. It is an admirable example of such Orders, because they provide by this procedure an opportunity for the fullest discussion, for some of us to register our objections, and sometimes they provide for second thoughts. I was hoping that on this occasion my right hon. Friend might have had second thoughts in regard to the Order.

Having said all that, I join with my hon. Friend the Member for Hertford (Mr. Walker-Smith) in that I intend to go into the Lobby in support of my right hon. Friend. I am able to justify that because I should prefer to see my right hon. Friend at the Dispatch Box on this side of the House than some of those who might be taking his place in other circumstances. As my hon. Friend the Member for East Aberdeenshire (Sir R. Boothby) very strongly urged, except for this unfortunate lapse—and it is an unfortunate lapse—we on this side of the House are well pleased with the financial improvements that have been made by my right hon. Friend the Chancellor of the Exchequer.

Two principal reasons have been advanced in justification of this tax. First, it is said that in the interests of equity in relation to other like products, there should be a tax upon thermo-plastic tiles and that kind of thing. Second, it is suggested that evasion is rife. I want to look at both these reasons and to see how much or how little is in them.

In regard to equity, it is said that linoleum manufacturers at a time of ample supplies are penalised and subjected to unfair competition. Is that, in fact, the case? Are thermo-plastic tiles really comparable with linoleum? My view is that they are not interchangeable except for limited uses. Who nowadays would use linoleum in place of thermo-plastic tiles, for example, in a kitchen or any place in which work is carried out in damp conditions or involving water? I suggest that thermo-plastic tiles are not competitive with linoleum, for example, in a hospital. They may be used in place of linoleum on some occasions, but the difference is that the thermo-plastic tile is a permanent feature of the building in which it is used, while linoleum is movable and, therefore, a fitting.

It might be equally logical to tax concrete or bricks, because they too are parts of the structure, as, indeed, are the plastic tiles which are used for flooring. Plastic tiles are much more comparable with the bituminous and semi-liquid floors that are laid and which still remain free of tax. When one considers that that is the case, the argument for equity completely disappears, because there is no equity when mastic asphalt and things of that kind still remain tax-free. It is clear, as has already been pointed out, that earlier Regulations clearly intended both mastic floors and things of this nature to remain free of tax, because they are part of the permanent structure.

In regard to evasion, manufacturers have cut up linoleum into small sections so that they may avoid paying tax. That is ingenious. It is perfectly legitimate, and wherever there is taxation, brains will always be used to find the proper and legitimate means of avoiding payment of it. That is a tribute to the manufacturers rather than a criticism of them. Linoleum cutting up may be wasteful, but it is not half as wasteful as the use of the five-eighths of an inch, or a greater thickness than the five-eighths, tile that will now become used and which will involve the wasteful use of a good deal of imported raw material.

I cannot altogether agree with my right hon. Friend when he suggests that the cost may be only £3 a house. I have figures which indicate that in one local authority housing undertaking 28 houses will cost an average of £6 15s. more owing to the tax. But it is not only on house-building that this tax burden will fall quite heavily. I have two more examples. A Territorial Army drill centre, which surely is in line with our defence effort, will cost an extra £269. I have figures for schools and other buildings, and I feel that my right hon. Friend in making his estimate has not given full weight to the extra cost of the Purchase Tax on some of these undertakings.

We are within two months of the Budget statement, and I hope that between now and then my right hon. Friend will reconsider this matter and especially will consider its best solution, which, in my view, is the removal of Purchase Tax on linoleum, however difficult it is to differentiate between floor coverings of this kind. In conclusion, I urge that the Chancellor give full weight to the remarks of my hon. Friends and, indeed, of hon. Gentlemen opposite, and will reconsider the position.

Mr. Ivor Owen Thomas (The Wrekin)

Would the hon. Gentleman answer me this question? He has made a devastating argument against the Orders. Are we to understand that despite that, when the Division takes place, he will support them?

Mr. Hudson

I am perfectly willing to answer that question, and I did answer it in my opening remarks. I indicated that my right hon. Friends who now occupy the Treasury Bench have made an excellent job of the financial affairs of this country, and I would much sooner see them remain there than contemplate the possibility of a change.

6.10 p.m.

Mr. Frederick Mulley (Sheffield, Park)

I regret very much that the hon. Member for Hull, North (Mr. W. R. A. Hudson) concluded his speech, with which I agreed except for the last few sentences, by advocating a course which we cannot accept. I hope he will excuse me if I do not follow him into the arguments on the Purchase Tax (No. 1) Order, and, if I might be excused an outrageous pun, I would say that I could find no flaws in the arguments adduced against this Purchase Tax Order.

My concern is to say, very briefly, what my reaction and the reactions of the trades concerned are to some of the arguments on the Purchase Tax (No. 2) Order. As I have made, privately and in the House, quite a number of representations to the Chancellor of the Exchequer and to the Financial Secretary concerning the Purchase Tax on silverware and cutlery, I think it is only right that I should welcome the reduction that has been made. I would say, without wanting to weary the House, that if these trades come forward, like Oliver Twist, asking for more, the Chancellor will recognise that they do so for the same reason as Oliver Twist—they are finding themselves in distressed economic circumstances.

I should like to make a special point of drawing the Chancellor's attention to paragraph 6 of the No. 2 Order, which is concerned with the concessions to Group 28. I have previously argued that mother-of-pearl and ivory should not be included in that particular Order, which is mainly concerned with semiprecious stones. I can find no reason for assuming that mother-of-pearl is a semi-precious stone. I do not want to delay the House with lengthy arguments on this, because it has already been demonstrated to the Financial Secretary by actual exhibition by people better qualified than I am to do it.

The actual shell, which comprises the mother-of-pearl used in manufacturing, can be cut up in a number of different ways to make the most economic use of the shell. To insist on a special rate of tax for articles of mother-of-pearl puts a very great handicap on the export trade of mother-of-pearl handles. This particular tax on semi-precious stones means that the less favourable parts of the shell, which cannot be used for cutlery and similar purposes, have to be thrown away because Purchase Tax prevents the ready sale of articles like egg spoons and so on, which could be made from the less suitable portions of the shell.

I ask the Parliamentary Secretary to draw the Chancellor's special attention to the problem of mother-of-pearl, which was explained to him previously at length and, I know, was actually demonstrated by people from Sheffield who are concerned with mother-of-pearl. We do not object to tax on articles containing mother-of-pearl if that category of article attracts tax. What we do contend is that mother-of-pearl by itself should not attract tax to an article which would be untaxed or taxed at a lower rate if it had not some portion of mother-of-pearl upon it.

As one who has consistently suggested to the Chancellor—and I welcomed the special provisions that were in the last Finance Act for the purpose—that there should be more variations of Purchase Tax throughout the financial year, I should like to say a word about the timing of these Orders. I think it would be very wrong if every 1st January or Budget day comes to be the reckoningtime on the part of business people for changes in Purchase Tax. Purchase Tax, although it is a bad tax, is likely to be with us for some time, and it should be viewed not only as a fiscal instrument to raise revenue, but should also be reviewed from time to time in the light of the economic consequences of the tax on a particular article. If it can be shown at any time in the financial year that, because of changed circumstances, the tax is having a specially adverse effect on an industry, then it is right and proper for an Order to be brought in to amend the tax. I commend the Chancellor's reduction of the tax on the silverware and cutlery industry as far as it goes, and congratulate him on introducing the Orders before the Budget.

Finally, I commend to the right hon. Gentleman's attention for future occasions the fact that the cutlery and silverware trades are the only trades producing what I regard as absolute essentials which are still subject to tax. I will not waste the time of the House by repeating arguments I have endeavoured to explain to hon. Members before, but I will say this, that no matter what may be the economic circumstances of an individual I regard the knife, fork and spoon as articles of essential use. I suggest they should be freed from tax, and I hope that this will be borne in mind in a future Budget.

6.18 p.m.

Brigadier Terence Clarke (Portsmouth, West)

I hope that the hon. Member for Sheffield, Park (Mr. Mulley) will forgive me if I do not follow him in his remarks, but I want to say a word or two about the No. 1 Order, which refers to thermoplastic tiles. In 1948, these tiles were exempt from the tax on floor covering because at that time, apparently, they were not in competition with linoleum and other floor coverings. Since then there has been a great deal more linoleum available, and it can be cut into strips, made into tiles and compete with firms making thermoplastic tiles.

In my opinion these tiles are not floor coverings at all, and I ask my right hon. Friend to consider them from the point of view of what is a floor covering. A floor covering is something which can be picked up and shaken out of a window, or which can be taken to another house if a person is moving, articles like carpets, cork matting, rubber matting, linoleum and similar things.

Mr. James Carmichael (Glasgow, Bridgeton)

Whoever shakes linoleum out of a window?

Brigadier Clarke

I might shake the hon. Member out of the window.

Mr. Carmichael

That is violence.

Brigadier Clarke

These tiles are attached to a floor and cannot be moved. They are part of the house, and therefore, to all intents and purposes, they are not a floor covering at all. They are the means of putting a floor into a house, and on top of them floor covering is laid. That is the technical difference between these two articles.

It seems to me that the Government are extremely foolish—at this time—[Hon. Members: "Hear, hear."]—I said, at this time, to raise the cost of a house by between £4 and £8 by putting on this tax. A considerable number of houses are going up in my constituency with this type of tile on the floors. I thought it was the policy of this Government to try to keep down the cost of housing to a minimum. In the circumstances, it is absurd that, just because people have cut up linoleum and other things, a tax should be put on tiles fixed to the floor.

If the Government want to stop people cutting up linoleum, rubber matting and other things, surely the ingenuity of my right hon. Friend the Financial Secretary can find a way of stopping them doing this without putting on an additional tax? I thought it was the policy of the Conservative Party to take taxes off, not to introduce new ones. Tiles do not compete with linoleum, rubber matting or cork matting, but they do compete with bitumen and other substances that can be spread on the floor, and it is unfair to tax them in the same way as cork linoleum and rubber when they are in competition with something quite different.

Also, these tiles provide a considerable export trade and their cost cannot be kept down to a point at which they are easily exportable unless there is a reasonable home market for them. It is absurd for the Government to spoil one of our export industries by imposing a tax where one was not imposed previously by a Socialist Government.

I have no intention of voting against the Government tonight—[An Hon. Member: "Throwing stones."] Far worse monstrosities were thrown by supporters of the Socialist Government. I ask my right hon. Friend the Financial Secretary to think again on this matter and not to worry about what the right hon. Member for Battersea, North (Mr. Jay) did in 1948—

Mr. Jay

May I point out to the hon. and gallant Gentleman that my speech then, recommending exemption, was commended today by the Financial Secretary as lucid?

Brigadier Clarke

I have heard many speeches of the right hon. Gentleman, but I have never heard him say anything yet that was worth memorising. However, I looked up that debate and I saw that the right hon. Gentleman exempted these tiles from tax at the time and that he was criticised. I hope that my right hon. Friend will be big enough to admit that the right hon. Member for Battersea, North was right for once and that he will exempt these tiles today.

6.24 p.m.

Mr. Percy Shurmer (Birmingham, Sparkbrook)

It is not my intention to detain the House for more than two minutes, but, as I interviewed the Minister and also made statements in this House regarding certain articles on which the imposition of Purchase Tax constituted an anomaly, I want to express my appreciation of the fact that the hon. Gentleman has been able to remove the tax from some of them. For instance, I could never understand why Purchase Tax should be applied to an egg-timer because it was artistically decorated, or because a little hand-bell was in the shape of a lady or because a knocker was decorated, or because a corkscrew was made into a model dog.

While we all wish to see Purchase Tax reduced on many essential household goods, we must remember that the factories making such articles, especially in Birmingham, employ men who would be out of work if these things could not be exported. Therefore those firms are grateful for this reduction in the tax on these small articles which, if not essential, decorate some of our homes. I hope it is a forerunner of a reduction of tax on other domestic articles, so I say to the Chancellor, "Thank you very much for the concessions, and I hope you have more in store when the Budget comes along."

6.26 p.m.

Mr. Gerald Nabarro (Kidderminster)

A great deal of our discussion today has revolved around the question of floor coverings, and therefore it might not be inappropriate if the voice of the carpet industry were heard in so far as it has a bearing on the impost that the Chancellor has made on certain types of floor coverings. I shall be the first hon. Member on either side of the House to defend the action taken by the Chancellor in this regard.

Much as I dislike Purchase Tax on any form of floor covering, I think that if we are to have the tax, there should be reasonable equality in its incidence and application to all types of floor coverings. I could never understand why the great bulk of these floor coverings manufactured in this country—carpets, rugs, linoleum and so on—were subject to a Purchase Tax which was at the rate of 33⅓ per cent. but was reduced in the last Budget to 25 per cent., whereas a minority of the goods in this classification were exempt from the tax, for one reason or another. In that regard, I believe that the reference in the Schedule to Order No. 1, placing a Purchase Tax of 25 per cent. on those floor coverings formerly omitted, is a wise and equitable step.

With that, however, my general support of the Orders must cease, because there is one item about which I am somewhat dubious. I refer to the decision to reduce, in discriminatory fashion, the Purchase Tax on electric space heaters. This is a complicated, technical andfinancial argument which I shall not attempt this evening to cover in any detail. Suffice it to say that the decision of the Socialist Government in 1948 to take violently discriminatory fiscal action against the use of electric space heaters and the imposition of 100 per cent. Purchase Tax on them, because of the interference caused at that time by power cuts and the loss of industrial production, was a right decision. It was not only a right decision because of the question of power cuts but it was alsoa right decision because of the overriding importance of conserving coal for export.

Electric space heaters are notoriously wasteful of coal. Yesterday there was a certain amount of jubilation when my right hon. Friend the Minister of Fuel and Power announced that there had been hardly any power cuts this winter, in spite of the severe weather of the last few weeks. Yes, we have avoided power cuts in that period, but only by a tiny margin, and only by bringing into operation every generating set in every power house in the country. A minority of those generating sets were the very old ones which burn coal at an excessively wasteful rate. In fact, those old sets are only used during periods of peak demand, and it is during that very peak demand—in fact it often causes the peak—that electric fires are burned in a very large number of homes in this country.

I shall not go into details, but I should like the Chancellor to look at appendix number 20 on page 213 of the Fifth Annual Report of the British Electricity Authority for the year 1952–53. In the top table, and in the right-hand column, there is set out the efficiency with which power stations were operated in the last full year of the Authority's activities. In the last line of that table, under the description "under 10 per cent. efficiency,"it will be seen that quite an appreciable part of the total power station output came from these very old generating sets of extremely low efficiency.

Mr. I. O. Thomas

On a point of order. Has anything connected with electric space heaters anything to do with these Orders?

Mr. Speaker

Order No. 2 reduces the tax on electric space heaters. The hon. Member for Kidderminster (Mr. Nabarro) has made his point, which is perfectly relevant to the matter under consideration, but it would not support an analysis of the efficiency of power stations and, having made that point, I think that the hon. Member should be content with having put it to the House.

Mr. Nabarro

I am grateful, Mr. Speaker, and I promise that I shall not exploit that point. I merely say to the Chancellor that his overriding requirement is surely to increase exports and, above all, to increase the export of the only commodity that has a 100 per cent. conversion value, which is coal. By the proposal which is now before us the Chancellor, in my view—although I may be ploughing a lonely furrow in this debate—is stimulating the sale of a type of appliance which, when used at peak hours, is notoriously wasteful of coal. I should like the Chancellor to consider that point.

In similar fashion to many of my hon. Friends who have criticised certain aspects of the Orders, I find myself in a special difficulty. If electric space heaters formed the subject of an Order on their own, I would have no hesitation in pronouncing what my action would be tonight, but unfortunately electric space heaters have been put in very craftily by the Treasury with six other categories of goods for Purchase Tax reduction. For example, one of those is concerned with jewellery, in relation to which there has been a reduction of Purchase Tax, thus helping to stimulate trade in the city of Birmingham. I happen to be a resident of that city. I find it very difficult, therefore, on the one hand to oppose just one part of the Order and on the other to support the remainder of it.

I conclude with this simple statement of undeniable fact. If we want to raise our coal exports the Chancellor's economic policy must be directed to that end, and economic policy includes appropriate fiscal provisions. I would have no hesitation in taking all necessary and discriminatory fiscal action against any equipment which, in the course of its use, is responsible for wasting coal. Electric fires fall into that category.

6.36 p.m.

Dr. Horace King (Southampton, Test)

The Chancellor's heart must have been warmed to find that he had one friend in all Israel in the hon. Member for Kidderminster (Mr. Nabarro), but he must have been disappointed as the hon. Member continued his speech.

The Financial Secretary to the Treasury, who opened the debate, took pride in the fact that he was removing certain anomalies. But these Orders introduce a new anomaly. I wonder what kind of metaphysical speculation led the Treasury to decide the thickness at which a floor covering becomes a floor. The whole of the debate has shown how serious the matter is. While the taxing of a dog with a corkscrew tail may be a joke, the taxing of a floor because it is thin enough to be regarded as a floor covering is serious indeed. I hope that the Chancellor will withdraw the Order which imposes this new tax on floor covering.

I should like to return to the much more serious aspects of these Orders, to which my hon. Friend the Member for Blackburn, East (Mrs. Castle) has already referred. I complain of the uncertainty which the Orders and the statement made by the Chancellor in January have brought to British business. There seems to me to be two defensible, two intelligent attitudes to Purchase Tax. One is that Purchase Tax shall be reduced; and, if it is reduced, it seems clear to the business world that it must be reduced very early in the year, and, when it has been reduced, that the reduction made at the beginning of the year should be final. The other is that Purchase Tax should be left as it is, but, against that, the Chancellor's intention to leave it alone should also be made perfectly clear.

What is utterly indefensible is to move towards the reduction of Purchase Tax and to do so, rightly, at the beginning of the year, but, at the same time, to introduce an increase in Purchase Tax and not let the industrial and business world know whether that is the beginning of a new policy or the end of Purchase Tax changes for that year. As I usually do, I want toargue from a simple example in my constituency. I visited a small carpet factory in Southampton during the Recess. A group of people are engaged there in valuable work both for the home and export markets. I was assured by the owner of the factory that the effects of the January announcement had been to freeze almost entirely the orders to that little factory.

Possible purchasers are wondering whether the January announcement was the forerunner of a new Purchase Tax policy to be announced in the Budget and they are unwilling to buy. Retailers are certainly unwilling to buy goods bearing Purchase Tax when they know how unjustly they are treated when they are left with Purchase Tax to meet after the tax has been cut in the Budget. Small factories, particularly, cannot stand the recession this dip in the demand for their products which uncertainty about Purchase Tax means at present.

I have had many communications from businesses, not only in my own town but elsewhere. I want to quote from a particular one of which the Chancellor must know, since the letter concerned was sent to him on 19th January by the chairman of Toilet Preparations Federation Ltd. The company make the simple case that …any cuts in Purchase Tax must be welcomed as a step towards total elimination of tax…. but they are concerned at what they call the increased industrial anxiety engendered by the deficiencies of your (the Chancellor's) announcement on 4th January. They complain: That you should take such an unprecedented step in advance of the Budget without at the same time, giving any indication of policy in connection with the vast range of taxed goods not included in the present reductions, must give rise to Press and public speculation as to whether, when and how often similar steps may be taken. Such uncertainty is bound to aggravate severely the very fears of a retailers' and public buying strike which the Government has been persistently admonished to take steps to prevent; especially since its precipitate acceptance and implementation of the Hutton Report. It is because we have had as yet no indication whether this is the beginning of a new policy of granting whatever Purchase Tax concessions are to be made at the beginning of the year—the business world has been asking for that—or whether we are to have a programme of fiddling about with Purchase Tax and even putting new Purchase Tax on at various times in the year, that some of us are exceedingly troubled about the policy of the Government. We hope that the Chancellor will be able to give a clear indication to the country of his policy this evening.

Mr. Ralph Assheton (Blackburn, West)

I wish to intervene for only a moment to tell the Chancellor that I have had several representations from manufacturers of greetings cards, who are very disappointed that they are specifically excluded from concessions given in respect of prints and pictures.

6.41 p.m.

Mr. James Hudson (Ealing, North)

Something has been said in this debate about the astonishing character of the introduction of a Budget by instalments, which seems to be what is happening at present. There has been one advantage in the process. We have been able, perhaps, to give more concentrated attention—particularly on the part of hon. Members oppositie—to the very defective character, not merely of the special items within the Purchase Tax with which we are dealing, but of the whole principle of the Purchase Tax against which condemnations have come from hon. Members opposite as much as from hon. Members on this side.

I do not know whether the Chancellor has been struck by the fact that hon. Members opposite who have examined the burden of the tax with which we are dealing, particularly the burden of the tax in connection with floor covering, have been impressed by the fact and are all quite sure that the burden of the tax is very much heavier than the Treasury says it is. We might say that they have been quoting from the same brief. Although their examples have been drawn from a very wide field, they all went to show that, instead of being £2 or £3 on the cost of a house, which at first seemed likely—or even £4 a house—it is more in the nature of £5, £6, £7 or £8. The burden is of a sufficiently substantial character for hon. Members who have got a new enthusiasm for housing policy to face this as an effective increase in the cost of production of housing which should be seriously taken into account.

I do not know whether the fact that in much of the debate the Minister of Housing and Local Government and the Minister of Works have been present, and are still present, is an indication that some Ministers may themselves be suspecting what hon. Members on the back benches suspect—that there is a definite obstacle to an effective house-building programme imposed by the tax on floor covering, which has been so fully debated tonight.

I want to say a word or two about the other Orders and some of the other commodities to which reference has been made. I cannot understand why, as the hon. Member for Kidderminster (Mr. Nabarro) indicated, there should be such a willingness to accept a tax on floor coverings and yet concern when we come to the question of space heaters, water heaters and so on. I find the water heater as much a part of a modern housing necessity as the covering over the floors. Indeed, a modern house, unless it has "jerry boards"because unseasoned woods have been used, may be left without any floor covering, if there is effective staining.

Floor covering is much less of a necessity than an effective means of heating water in the house. That we should still be considering a 50 per cent. tax for water heating, whether it be by gas or electricity, despite all that the hon. Member for Kidderminster said about the effective use of coal, and putting an obstacle in the way of people having a housing necessity of that sort is, in my judgment, entirely wrong. If the hon. Member can take one attitude about water heating, he ought to take the same attitude in regard to all the other com- modities which enter into the general use of a modern house.

Turning from the question of housing, several issues arising under the other Orders have interested me, particularly the one referred to by my hon. Friend the Member for Sheffield, Park (Mr. Mulley), who protested against a tax still being imposed on mother-of-pearl. I suppose that a tax of that sort will inevitably lead to an increase in the price of those very necessary articles, the small mother-of-pearl button, or similar appurtenances which hon. Members know are extremely useful when, after washing day, one turns to a clean shirt and finds that the buttons have gone. The consumption of buttons in these days of what are called improved washing machines, but which in my experience I find to be very unimproved as far as the life of the button is concerned, and the increase of the price of mother-of-pearl or anything used in producing a shirt button, is a matter of importance, at any rate from the point of view of those who use pearl buttons.

I do not see what case the Chancellor has in these days for the retention of Purchase Tax at all on articles of that sort. It may be that people are being driven away from mother-of-pearl in order to use nylon buttons and other instruments which, I am informed, do not cut the cloth, but they do not look so nice as the good old-fashioned pearl button. It seems a pity that we should lose that delicate piece of ornamentation which many of us are glad to have.

There are so many issues that I am surprised at the Chancellor and the Treasury wishing to retain Purchase Tax on many items. I am sure that a great overhaul of the whole business of Purchase Tax is long overdue. The matter ought to be carefully considered by the Chancellor and new and better proposals ought to be brought before us.

6.48 p.m.

Mrs. Eveline Hill (Manchester, Wythenshawe)

I find myself in agreement with many others who have spoken in criticism of the Purchase Tax Order No. 1. I regret having to differ from the Chancellor, but I also regret that at this late date it should be found necessary to put a tax on something fresh. I would have hoped that taxes could have been removed. It does not console me in the least that tax has been reduced on something I use in the house if I find that, when I want to put down a floor covering of thermo-plastic tiles, I have to pay tax on them.

This tax will affect all those young people who are building houses. A further important factor is that it will prove a great burden to local authorities with vast housing schemes, such as that in my town, not only in the case of houses, but in schools and hospitals. It really seems inequitable that at this late date we should have to pay Purchase Tax on something which is not a floor covering. There is great confusion there, but there is the greatest difference between a tile which has been fixed and is part of the building of the house and a roll of linoleum, or even a carpet. I regret that we have not been able to remove all tax on carpets.

I beg the Chancellor to have another look at this matter, because it is no use robbing Peter to pay Paul. I appeal to the Chancellor to endeavour to help all these people who have to shoulder this great burden.

6.50 p.m.

Mr. Eric Fletcher (Islington, East)

The House is grateful to you, Mr. Speaker, for allowing us to debate Orders No. 2 and No. 3 together with the one with which we are primarily concerned, and thereby to have a fairly general discussion about related questions of Purchase Tax. As was pointed out by my right hon. Friend the Member for Battersea, North (Mr. Jay) it is only in this way that nowadays we have an opportunity to deal with these subjects in a coherent fashion. The Budget Resolutions last year were so drawn as considerably to fetter the rights of this House, and in any case those rights are limited when we are dealing with a specific Order.

I think that by this time the Chancellor has realised that the changes in Purchase Tax rates which he announced in January have had a very bad reception, not only in the Press but in this House. They were criticised in most sections of the Press, and today they have been adversely criticised by hon. Members opposite. I hope that the Chancellor will enlighten us about his object in announcing these changes at this time. We do not criticise the fact that some changes in Purchase Tax rates are made at the beginning of the year and do not await the Budget, but the House and the country are entitled to know what underlies that change in policy.

Traders, particularly retail traders carrying stocks, are continuously and increasingly concerned about the losses they may incur as a result of the whole operation of the Purchase Tax system. What may be deduced from the changes which the Chancellor announced in January? Are traders in textiles and other commodities to assume that there will be further reductions when the Budget is announced, or are they to assume that the changes which have been announced are final, and intended to stiffle their hopes of further changes? The Chancellor must realise by now that he has done nothing whatever to remove the very considerable uncertainty which exists not only in Lancashire, in the textile industry, but throughout the whole of those sections of industry—and they are legion—affected by Purchase Tax. Therefore, for the benefit of traders who are so vitally affected, I hope that we shall hear from the Chancellor something of his underlying policy.

I do not propose to say more than has already been said about the two Orders giving relief from existing rates of tax, except that I find it difficult to see on what basis of principle some articles have been selected for relief rather than others which I should have thought equally deserving. As was stated in the "Manchester Guardian,"in the article referred to by my hon. Friend the Member for Blackburn, East (Mrs. Castle), it seems difficult to justify these changes on the grounds of either equity or expediency. It is not the intention of hon. Members on this side of the House to oppose any of the proposed reductions in Purchase Tax. We believe that, apart from glaring cases of luxury goods, there should be a steady and continuous reduction in Purchase Tax on all items, and particularly on articles of a domestic or household nature.

It has emerged from this debate that the most pressing problem, the one which divides hon. Members who have spoken and the Government, is the proposal to increase the tax on floors. That proposal has suffered devastating criticism from one hon. Member opposite after another. For instance, the hon. Member for Hertford (Mr. Walker-Smith) made a devastating criticism of the effect of this proposal, and it was only by some subtle equivocal reasoning of his own that he has been able to persuade himself to vote for the Order, notwithstanding his admirable criticism of it.

Mr. Walker-Smith

If the hon. Member will do me the honour of reading tomorrow what I said—although I hesitate to inflict that upon him—he will see that I said the principle enunciated by my right hon. Friend of obtaining equality of taxation was right, and that therefore I should vote for the Order, while regretting the result of its application in this particular case.

Mr. Fletcher

If I may say so, that is highly equivocal. If all that concerns the hon. Member is equality in tax burden, there is a much better alternative method of securing that objective.

The hon. Member for East Aberdeenshire (Sir R. Boothby) was equally devastating in his criticism, and he is only spared the necessity of voting against the Government, as he told us, by his good fortune in having some weeks ago arranged a pair for this evening. The hon. Lady the Member for Wythenshawe (Mrs. Hill) made a moving appeal to the Chancellor, to which I hope he will give attention. I hope he will listen to representations which have been made to him from both sides of the House.

On what ground did the Financial Secretary try to justify this new tax, the admitted effect of which will be to increase the cost of housing throughout the country? It is not disputed that the result of putting a tax on floorings, as distinct from floor coverings, will be to increase the cost not only of houses, but of schools, hospitals and public buildings of every kind. The only argument is whether the amount is nearer £4 or £8 per house. There is no dispute that it will impose an inevitable burden on all local authorities. It will be a contributing factor to the increasing of rents and will occasion considerable hardship.

On what ground is it justified? The Financial Secretary said there were two alternatives before the Government. They wanted to do something because there had been tax evasion in connection with linoleum. People had been cutting up linoleum into strips. If that is the problem confronting the Chancellor, if there has really been tax evasion to any considerable degree, surely it would not have been beyond the wit of himself or his advisers to devise an appropriate form of words to curb that kind of tax evasion. As the Financial Secretary conceded, there was a clear alternative. The Government could cut out the tax altogether on floors. The cost involved would not be more than £1 million or, at the most, £2 million. If that were done, it would eliminate all this irritating confusion not only for traders but for local authorities and all others interested.

The Financial Secretary said that the problem was to know when a floor covering ceased to be a floor covering and became a floor. I assume from that that he agrees in principle that there ought not to be Purchase Tax on floors. We have heard from a number of hon. Members on both sides of the House that during the last few years the inventiveness and ingenuity of traders have produced tiles and other articles which are in every sense of the word floors and not floor coverings and, therefore, within the distinction made by the Labour Government, they ought not to be an appropriate subject for taxation.

The Financial Secretary also said that during the last day or two he had some discussions with those who produced thermoplastic tiles. I gathered from his remarks that the makers had not been consulted before the Order was introduced. The makers contend that what they manufacture is an improved type of floor, something which cannot by any stretch of the imagination be described as a floor covering. It is something which is not in the same category as carpets and linoleum. They, with great ingenuity, have been able to make these tiles of a limited thickness, which they now find brings them within the Order, whereas if they were thicker and of the same size as parquet flooring, which the rich can afford, they would continue to be exempt from Purchase Tax.

In other words, the effect of the Order is to penalise efficiency and inventive genious. It puts a burden on the new, modern, efficient type of floor which is gradually coming into use in the housing programmes of local authorities. Faced with the anomalies that will result, faced with the admission which the Financial Secretary made that, as a result of his discussions yesterday, some modifications in the Order may have to be made, I make my plea to the Chancellor that he should agree that the right way to deal with this problem is to withdraw this Order and adopt the alternative of abolishing Purchase Tax altogether on anything in the nature of floor covering. I hope that if the Chancellor is not prepared to accept that recommendation, we on this side of the House will have the support of all those hon. Gentlemen opposite who have spoken so forcibly against the Government's proposal.

7.4 p.m.

The Chancellor of the Exchequer (Mr. R. A. Butler)

We have had a useful debate which is ending at about the time we intended, so everything, so far, is going according to plan. If it is to continue to go according to plan, we shall certainly cheerfully accept the challenge so fiercely made by the hon. Member for Islington, East (Mr. E. Fletcher) and meet him in mortal combat which we shall shortly hope to win with the aid of my hon. Friends, some of whom have spoken in the debate.

The issue has boiled down to this: that I decided that it was worth while making certain Purchase Tax changes in the early part of this year. Under powers which, as the right hon. Gentleman the Member for Battersea, North (Mr. Jay) said, date from 1948, and other powers which date from the last Finance Bill, it is, I think fortunately, possible to change the Purchase Tax now at any time of the year. That, to a certain extent, is, I believe, an advantage.

I shall not shirk the questions which have been put to me by the hon. Member for Islington, East, the right hon. Gentleman the Member for Battersea, North, the hon. Lady the Member for Blackburn, East (Mrs. Castle) and others. I shall deal with them at the end of my remarks. At present, I am simply making the general observation that it is valuable to have the power to make changes in Purchase Tax. I found, in making these changes, that there were some which resulted from our discussions during the last Budget. Not for the first time, because changes in Purchase Tax have been made before at a period outside the Budget, these changes were made and, according to the usual practice, the No. 1 Order laid. We are now debating it in the ordinary Parliamentary manner.

Various criticisms and observations have been made. Let me remind the House that these Orders result in a net surrender by the Exchequer of about £3,200,000 and a gain—that is an imposition of tax—of £1 million, leaving a total surrender by the Exchequer of approximately £2,200,000. That is what is involved.

In looking at this packet generally, the criticisms or observations of hon. and right hon. Gentlemen have concentrated largely on the question of tiles under Order No. 1. There has been some reference to space heaters and there has been a generous recognition by the hon. Baronet the Member for Handsworth (Sir E. Boyle) of the concession on jewellery and silverware. I take that last concession first. I am not surprised that the right hon. Gentleman the Member for Battersea, North seemed to give all the arguments of an odious character he could to try to prove that a deep and sinister intention is in the breast of the Government and myself in presenting a packet of Purchase Tax alterations which involve a reduction of tax on two luxury trades.

The reason for that is exactly the same as I have explained to the House before, namely, that the jewellery and silverware trades, the economic circumstances of which I most closely examined before the decision was made, are such that they could not bear the tax at 75 per cent. which was on their products before. They were actually going downhill. Men were being dismissed and, what is most important, the old crafts were disappearing. We have had a mild success with our restoration of a little justice to the jewellery and silverware industries.

It is solely and simply for that reason—to help the trades and the men and women working in what is one of our most ancient crafts—that the decision was made to give them a little further exemption to 50 per cent. Even now, were the calls of the nation not so great, I would say that that level is as high as the trade can possibly stand. So much for that, which led to a most warm embrace from the City of Birmingham which I very much welcome in the chill times in which I live.

My hon. Friend the Member for East Aberdeenshire (Sir R. Boothby) said that our policy in this matter indicated a shift from the Manchester school to the Birmingham. Having just caused a sensation in the "Recorder" and other newspapers for my alleged move to Manchester, I am very much obliged to my hon. Friend for restoring me to the City of Birmingham. I trust that he may also restore me to my own incarnation out of that of Sir Robert Peel with which he invested me in the last debate. I assure hon. Members that I can stand on my own legs, quite apart from my devotion to my own constituency and the effect of this or that school or this or that city.

I am estopped by the rules of order from answering the hon. Member for Blackburn, East on the subject of Manchester. I am sorry about that, because I could otherwise have made an excellent speech about the textile industry which would have restored her morale and even caused her to cross the Floor of the House.

I now come to the question of space heaters, which was referred to by my hon. Friend the Member for Kidderminster (Mr. Nabarro). May I say with what astonishment and gratification I heard him supporting the Government in the first portion of his address? Nowadays, we are gratified if we get any support. [Hon. Members: "Hear, hear."] I am very much obliged to my hon. Friend. Let me assure him that I am not going back on his great campaign for fuel preservation. In fact, fuel conservation, and the general policy which he adopts, is very close to my heart.

The position with regard to electric space heaters is this. We were informed that the penal rate of tax dating from the last Administration, but reduced by my benign attentions last Budget to 75 per cent., was still a penal rate resulting in the production of cheaper, less efficient and sometimes dangerous appliances. We therefore found it necessary, on representations not only from the trade, but also from experts, to lower the extent of the tax, and we do not see any reason now for imagining that the policy of fuel wasting will be encouraged by this step.

After the consultations in which I indulged with the British Electricity Authority, we do not think that either the peak periods or any others will be affected by the reduction of the tax to that very small extent on these instruments. My hon. Friend may, therefore, feel satisfied that it is after the greatest possible care that we have examined this matter and that this decision has been made.

I now come to the question of tiles which has proved somewhat controversial, and the tax on which was not introduced by me or anybody else in a spirit of fun. We did it because a tendency, which was noticed by the right hon. Member for Battersea, North as long ago as 1948, has become an abuse. It is this. People have discovered that linoleum which bears Purchase Tax at the rate of 25 per cent., if cut into pieces, pays no tax at all.

Mrs. Mann

Why not?

Mr. Butler

Because there is no provision in the law for taxing bits of linoleum while there is provision for taxing a sheet of linoleum.

Mrs. Mann

Does not the right hon. Gentleman think that the extra labour involved in putting these pieces together really justifies their bearing a lower tax?

Mr. Butler

It also involves inequity, and that is something which it is essential that a Chancellor should not maintain.

Mr. I. O. Thomas

Would not the right hon. Gentleman admit that, although linoleum may be cut up into small pieces for the purpose of avoiding tax, it still remains a floor covering, whereas tiles, which are now included for tax purposes, form a permanent part of the floor and are not a floor covering?

Mr. Butler

I shall try to explain these difficulties as I proceed, but I want, first, to deal with the reason we had to take this step at all. On 13th December, 1948, the right hon. Member for Battersea, North, in answer to my right hon. Friend the Financial Secretary when in Opposition, who pointed out that linoleum was being cut into strips—which shows the prescience and foresight of my right hon. Friend—said: If the allegation is true it would be intolerable, uneconomic and a waste of labour. He then went on to say: If it were shown to be on a larger scale—and I say quite frankly we did not expect it—then it might be necessary to take some amending action."—[OFFICIAL REPORT, 13th December, 1948; Vol. 459, c. 976.] The answer is that that tendency has continued into an abuse. We are now faced with a definite evasion of tax and are amending the law in the manner prescribed by the right hon. Gentleman.

Mr. Jay

The Chancellor says he is amending it in the manner prescribed by myself. The Government are not doing that at all. The method I suggest for getting over the difficulty is that the tax should be removed from linoleum.

Mr. Butler

The right hon. Gentleman did not say that in 1948,whether he says it or not now. I will now deal with that aspect of the matter of which I had a note, because that was raised in the debate. I have, of course, considered whether it would be possible to remove the tax on all forms of floor covering. There has been a certain amount of questioning as to how the £17 million which is derived from this tax is made up as between carpets and rugs and linoleum and rubber.

The exact figures are that carpets and rugs account for some £12 million and linoleum and rubber for some £5 million. If I were moved to give a concession and put this in equity the other way round, namely, by taking off the tax altogether instead of making the tax equitable between the different types, then I would have had to sacrifice £5 million in revenue. Quite frankly, having considered that alternative in order to stop this evasion, I simply have not the money with which to do it. I could not afford it, and therefore, I had to take the opposite course, namely, to impose the tax on the cut-up strips.

Unfortunately, in coming into that sphere, I run into the difficulty put to me by the hon. Member for East Aberdeenshire, the hon. Member for Hertford (Mr. Walker-Smith) and other hon. Members on both sides of the House who have spoken on this matter. I run into the difficulty of wood. Under the Order, it is laid down that these tiles, strips and blocks should be of less than three-eighths of an inch if not of wood, but if of wood or cork that they should be less than five-eighths of an inch.

The hon. Member for East Aberdeenshire raised a particular case of a certain type of wood tile which is three-eighths of an inch. I am quite prepared to follow up what my right hon. Friend the Financial Secretary has said and to say that if representations are made to us and to the Customs after this Order has been approved, and if we find that we can in any way adjust this to make the situation fair, then we will do so. That, of course, would mean some form of amending action. I give no promise. I simply say that this debate has brought to light certain difficulties in this sphere as regards definition and that we are ready to hear representations as my right hon. Friend said.

That indicates that we are trying to achieve justice in this matter, but the idea that we can altogether leave out the parquet flooring which is put down on the floor and is not a floor and is normally in the more well-to-do households, and yet tax the other sort of tiles would be unfair. It is in this effort to maintain a certain degree of fairness that I have got myself into a certain amount of trouble with some hon. and right hon. Gentlemen, But I have, I believe, preserved a sense of equity in this very difficult question of floor covering.

So much for the main issues in this debate. I do not want to feel that this is imposing a great burden on housing. The actual cost will not be more than £4 and, in some cases, not more than £3 per house. Nor is this the material used in every house, and in the case of linoleum, where that is used, that has already been taxed for some time. Therefore, I do not believe that this constitutes quite the great economic revolution which some hon. Members have suggested.

I think it is a modest matter which we can take in our stride and which has enabled me to give certain concessions, in particular to the hon. Member for Sparkbrook (Mr. Shurmer). His dog with the corkscrew attachment is now taxed in the same way as any reasonable dog. That is a great advance and shows that the Government are able to remedy abuses when they are brought to their notice.

A big issue has been raised upon which I will now say a word or two. It was raised by the right hon. Member for Battersea, North, by the hon. Member for Southampton, Test (Dr. King), by the hon. Lady the Member for Blackburn, East and by other hon. Members, namely, that there is uncertainty about the future of the Purchase Tax, and with regard to the general policy.

I was asked by one hon. Member to bring the blessing of certainty. I say to the House that these representations have made a definite impression on my mind, and I would like the opportunity of considering what has been said on the matter in this debate. If I find that these arguments are valid, I want togive the House warning that I may find it necessary to make a very early statement on this matter, but I would rather not do it at the end of this debate tonight. For one thing, we are drawing the debate to a close, and I would rather do it at a time when I am not inhibited by your Ruling, Mr. Speaker, about the extent of the debate. If I have to make a statement I must not be inhibited by the rules of order, but must give what arguments I think there are in support of my statement. I shall pay attention to what has been said, and if my impression is that that statement is necessary, it must be made at the earliest opportunity.

I have had representations from a great variety of organisations, the retail distributors in particular, the Drapers' Chamber of Trade, the apparel and fashion industries, the Scottish retail drapers, the radio equipment manufacturers, the Briar Pipe Trade Association, and many individual firms. Two more of them came in during

the day, and it is obvious to me that it must now be brought home to people what our intention is in the future, so that the minimum of uncertainty will be created. If the House will let me have the opportunity of pondering on the debate and then taking the course I think best, that will answer the Question put to me today by the hon. Member for Southampton, Test, which has been deferred to Thursday.

In my position I do not think it is any good letting the House imagine that things are easier than they are. Things are not easy, and I do not want Lancashire Members to think that it will be easy to concede the somewhat large requests they have made in this field. I would much rather put myself squarely before the House and say that this is not the time, in my view, when large concessions, or, indeed, concessions of any type, are likely. I say that on purpose, so that there shall be no misunderstanding.

Although that may be a sombre note on which to end, I sum up by saying that I have undertaken to consider what has been said about uncertainty, and that if I make a statement I will make it in conditions that are constitutionally proper so that the House can hear and comment upon it. I hope that we can now have this Order. The debate has been very useful to me, because I have heard what hon. Members think, and that is the right way to do justice in this matter.

Question put,

The House divided: Ayes, 269; Noes, 241.

Division No. 28.]	AYES	[7.23 p.m.
Aitken, W. T.	Boyd-Carpenter, Rt. Hon. J. A.	Cooper, Sqn. Ldr. Albert
Allan, R. A. (Paddington, S.)	Boyle, Sir Edward	Cooper-Key, E. M.
Amery, Julian (Preston, N.)	Braine, B. R.	Craddock, Beresford (Spelthorne)
Anstruther-Gray, Major W. J.	Braithwaite, Lt.-Cmdr. Sir Gurney	Crookshank, Capt. Rt. Hon. H. F. C.
Assheton, Rt. Hon. R. (Blackburn, W.)	Bromley-Davenport, Lt.-Col, W. H.	Crosthwaite-Eyre, Col. O. E.
Astor, Hon. J. J.	Brooke, Henry (Hampstead)	Crouch, R. F.
Baker, P. A. D.	Brooman-White, R. C.	Crowder, Sir John (Finchley)
Baldwin, A. E.	Browne, Jack (Govan)	Crowder, Petre (Ruislip—Northwood)
Banks, Col. C.	Buchan-Hepburn, Rt. Hon. P. G. T.	Cuthbert, W. N.
Barber, Anthony	Bullard, D. G.	Darling, Sir William (Edinburgh, S.)
Barlow, Sir John	Bullus, Wing Commander E. E.	Davidson, Viscountee
Baxter, A. B.	Burden, F. F. A.	Davies, Rt. Hn. Clement (Montgomery)
Beach, Maj. Hicks	Butcher, Sir Herbert	Deedes, W. F.
Beamish, Maj. Tufton	Butler, Rt. Hon. R. A. (Saffron Walden)	Digby, S. Wingfield
Bell, Philip (Bolton, E.)	Campbell, Sir David	Dodds-Parker, A. D.
Bell, Ronald (Bucks, S.)	Carr, Robert	Donaldson, Cmdr. C. E. McA.
Bennett, F. M. (Reading, N.)	Channon, H.	Donner, Sir P. W.
Bennett. Dr. Reginald (Gosport)	Churchill, Rt. Hon. Sir Winston	Doughty, C. J. A.
Bevins, J. R. (Toxteth)	Clarke, Col. Ralph (East Grinstead)	Douglas-Hamilton, Lord Malcolm
Bishop, F. P.	Clyde, Rt. Hon. J. L.	Drayson, G. B.
Black, C. W.	Cole, Norman	Dugdale, Rt. Hon. Sir T. (Richmond)
Bossom, Sir A. C.	Colegate, W. A.	Duncan, Capt. J A. L.
Bowen, E. R.	Conant, Maj. R. J. E.	Duthie, W. S.
Eccles, Rt. Hon. Sir D. M.	Leather, E. H. C.	Remnant, Hon. P.
Elliot, Rt. Hon. W. E.	Legge-Bourke, Maj. E. A. H.	Renton, D. L. M.
Erroll, F. J.	Legh, Hon. Peter (Petersfield)	Roberts, Peter (Heeley)
Fell, A.	Lennox-Boyd, Rt. Hon. A. T.	Robertson, Sir David
Finlay, Graeme	Linstead, Sir H. N.	Robinson, Roland (Blackpool, S.)
Fisher, Nigel	Lloyd, Maj. Sir Guy (Renfrew, E.)	Robson-Brown, W.
Fleetwood-Hesketh, R. F.	Lloyd, Rt. Hon. Selwyn (Wirral)	Rodgers, John (Sevenoaks)
Fletcher, Sir Walter (Bury)	Lockwood, Lt.-Col. J. C.	Roper, Sir Harold
Fletcher-Cooke, C.	Longden, Gilbert	Ropner, Col. Sir Leonard
Ford, Mrs. Patricia	Low, A. R. W.	Russell, R. S.
Fort, R.	Lucas, Sir Jocelyn (Portsmouth, S.)	Ryder, Capt. R. E. D.
Foster, John	Lucas, P. B. (Brentford)	Sandys, Rt. Hon. D.
Fraser, Hon. Hugh (Stone)	Lucas-Tooth, Sir Hugh	Schofield, Lt.-Col. W.
Fraser, Sir Ian (Morcambe & Lonsdale)	McAdden, S. J.	Scott, R. Donald
Fyfe, Rt. Hon. Sir David Maxwell	McCallum, Major D.	Scott-Miller, Cmdr. R.
Galbraith, Rt. Hon. T. D. (Pollok)	McCorquodale, Rt. Hon. M. S.	Shepherd, William
Galbraith, T. G. D. (Hillhead)	Macdonald, Sir Peter	Simon, J. E. S. (Middlesbrough, W.)
Gammans, L. D.	McKibbin, A. J.	Smithers, Peter (Winchester)
Garner-Evans, E. H.	Mackie, J. H. (Galloway)	Smithers, Sir Waldron (Orpington)
George, Rt. Hon. Maj. G. Lloyd	Maclean, Fitzroy	Snadden, W. McN.
Glover, D.	Macleod, Rt. Hon. Iain (Enfield, W.)	Soames, Capt. C.
Godber, J. B.	MacLeod, John (Ross and Cromarty)	Spearman, A. C. M.
Gomme-Duncan, Col. A.	Macmillan, Rt. Hon. Harold (Bromley)	Speir, R. M.
Gough, C. F. H.	Macpherson, Niall (Dumfries)	Spent, Rt. Hon. Sir P. (Kensington, S)
Gower, H. R.	Maitland, Cmdr. J. F. W. (Horncastle)	Stanley, Capt. Hon. Richard
Graham, Sir Fergus	Maitland, Patrick (Lanark)	Stevens, G. P.
Gridley, Sir Arnold	Manningham-Buller, Sir R. E.	Steward, W. A. (Woolwich, W.)
Grimond, J.	Markham, Major Sir Frank	Stewart, Henderson (Fife, E.)
Grimston, Hon. John (St. Albans)	Marples, A. E.	Stoddart-Scott, Col. M.
Hall, John (Wycombe)	Marshall, Douglas (Bodmin)	Storey, S.
Hare, Hon. J. A.	Maude, Angus	Strauss, Henry (Norwich, S.)
Harris, Frederic (Croydon, N.)	Maudling, R.	Stuart, Rt. Hon. James (Moray)
Harris, Reader (Heston)	Maydon, Lt.-Comdr. S. L. C.	Summers, G. S.
Harvey, Ian (Harrow, E.)	Medlicott, Brig. F.	Sutcliffe, Sir Harold
Harvie-Watt, Sir George	Mellor, Sir John	Taylor, Sir Charles (Eastbourne)
Hay, John	Molson, A. H. E.	Teeling, W.
Heath, Edward	Moore, Sir Thomas	Thomas, Rt. Hon. J. P. L. (Hereford)
Henderson, John (Cathcart)	Morrison, John (Salisbury)	Thomas, Leslie (Canterbury)
Higgs, J. M. C.	Mott-Radclyffe, C. E.	Thompson, Kenneth (Walton)
Hill, Dr. Charles (Luton)	Nabarro, G. D. N.	Thompson, Lt.-Cdr. R. (Croydon, W.)
Hill, Mrs. E. (Wythenshawe)	Neave, Airey	Thorneycroft, Rt.Hn. Peter (Monmouth)
Hinchingbrooke, Viscount	Nicholls, Harmar	Thornton-Kemsley, Col. C. N.
Hirst, Geoffrey	Nicholson, Godfrey (Farnham)	Touche, Sir Gordon
Holland-Martin, C. J.	Nicolson, Nigel (Bournemouth, E.)	Turner, H. F. L.
Hollis, M. C.	Nield, Basil (Chester)	Turton, R. H.
Holt, A. F.	Nugent, G. R. H.	Vane, W. M. F.
Hope, Lord John	Oakshott, H. D.	Vaughan-Morgan, J. K.
Hopkinson, Rt. Hon. Henry	O'Neill, Hon. Phelim (Co. Antrim, N.)	Vosper, D. F.
Hornsby-Smith, Miss M. P.	Ormsby-Gore, Hon. W. D.	Wakefield, Edward (Derbyshire, W.)
Horobin, I. M.	Orr, Capt. L. P. S.	Wakefield, Sir Wavell (St. Marylebone)
Horsbrugh, Rt. Hon. Florence	Orr-Ewing, Charles Ian (Hendon, N.)	Walker-Smith, D. C.
Howard, Gerald (Cambridgeshire)	Orr-Ewing, Sir Ian (Weston-super-Mare)	Ward, Hon. George (Worcester)
Howard, Hon. Greville (St. Ives)	Osborne, C.	Ward, Miss I. (Tynemouth)
Hudson, Sir Austin (Lewisham, N.)	Page, R. G.	Waterhouse, Capt. Rt. Hon. C.
Hudson, W. R. A. (Hull, N.)	Peake, Rt. Hon. O.	Webbe, Sir H. (London & Westminster)
Hulbert, Wing Cdr. N. J.	Perkins, Sir Robert	Wellwood, W.
Hurd, A. R.	Peto, Brig. C. H. M.	Williams, Rt. Hon. Charles (Torquay)
Hutchison, Sir Ian Clark (E'b'rgh, W.)	Peyton, J. W. W.	Williams, Gerald (Tonbridge)
Hyde, Lt.-Col. H. M.	Pickthorn, K. W. M.	Williams, Sir Herbert (Croydon, E.)
Hylton-Foster, H. B. H.	Pilkington, Capt. R. A.	Williams, Paul (Sunderland, S.)
Iremonger, T. L.	Pitt, Miss E. M.	Williams, R. Dudley (Exeter)
Jenkins, Robert (Dulwich)	Powell, J. Enoch	Wills, G.
Jennings, Sir Roland	Price, Henry (Lewisham, W.)	Wilson, Geoffrey (Truro)
Johnson, Eric (Blackley)	Prior-Palmer, Brig. O. L	York, C.
Jones, A. (Hall Green)	Profumo, J. D.
Kaberry, D.	Raikes, Sir Victor	TELLERS FOR THE AYES.
Kerr, H. W.	Redmayne, M.	Sir Cedric Drewe and
Lambert, Hon. G.	Rees-Davies, W. R.	Mr. Studholme.
NOES
Acland, Sir Richard	Benn, Hon. Wedgwood	Brook, Dryden (Halifax)
Adams, Richard	Benson, G.	Broughton, Dr. A. D. D.
Albu, A. H.	Beswick, F.	Brown, Rt. Hon. George (Belper)
Allen, Arthur (Bosworth)	Bevan, Rt. Hon. A (Ebbw Vale)	Brown, Thomas (Ince)
Anderson, Alexander (Motherwell)	Bing, G. H. C.	Burke, W. A.
Anderson, Frank (Whitehaven)	Blackburn, F.	Burton, Miss F. E.
Awbery, S. S.	Blenkinsop, A	Butler, Herbert (Hackney, S.)
Bacon, Miss Alice	Blyton, W. R.	Callaghan, L. J.
Balfour, A.	Bottomley, Rt. Hon A. G.	Carmichael, J.
Barnes, Rt. Hon. A. J.	Bowden, H. W.	Castle, Mrs. B. A.
Bartley, P.	Bowles, F. G.	Champion, A. J.
Bellenger, Rt. Hon. F. J.	Braddock, Mrs. Elizabeth	Chapman, W. D.
Bence, C. R.	Brockway, A. F.	Chetwynd, G. R.

Clunie, J.	Johnson, James (Rugby)	Roberts, Albert (Normanton)
Coldrick, W.	Jonas, Frederick Elwyn (West Ham, S.)	Roberts, Goronwy (Caernarvon)
Collick, P. H.	Jones, Jack (Rotherham)	Robinson, Kenneth (St. Pancras, N.)
Corbet, Mrs. Freda	Jones, T. W. (Merioneth)	Rogers, George (Kensington, N.)
Cove, W. G.	Keenan, W.	Ross, William
Craddock, George (Bradford, S.)	Kenyon, C.	Shackleton, E. A. A.
Crosland, C. A. R.	Key, Rt. Hon. C. W.	Shawcross, Rt. Hon. Sir Hartley
Cullen, Mrs. A.	King, Dr. H. M.	Shinwell, Rt. Hon. E.
Daines, P.	Lee, Frederick (Newton)	Short, E. W.
Dalton, Rt. Hon. H.	Lee, Miss Jennie (Cannock)	Shurmer, P. L. E.
Darling, George (Hillsborough)	Lever, Leslie (Ardwick)	Silverman, Julius (Erdington)
Davies, Ernest (Enfield, E.)	Lewis, Arthur	Silverman, Sydney (Nelson)
Davies, Harold (Leek)	Lindgren, G. S.	Simmons, C. J. (Brierley Hill)
Davies, Stephen (Merthyr)	Lipton, Lt.-Col. M.	Skeffington, A. M.
de Freitas, Geoffrey	Logan, D. G.	Slater, Mrs. H. (Stoke-on-Trent)
Deer, G.	MacColl, J. E.	Slater, J. (Durham, Sedgefield)
Delargy, H. J.	McGhee, H. G.	Smith, Ellis (Stoke, S.)
Driberg, T. E. N.	McGovern, J.	Smith, Norman (Nottingham, S.)
Dugdale, Rt. Hon. John (W. Bromwich)	McInnes, J.	Snow, J. W.
Ede, Rt. Hon. J. C.	McKay, J. (Wallsend)	Sorensen, R. W.
Edelman, M.	MacMillan, M. K. (Western Isles)	Soskice, Rt. Hon. Sir Frank
Edwards, Rt. Hon. John (Brighouse)	McNeil Rt. Hon. H.	Sparks, J. A.
Edwards, Rt. Hon. Ness (Caerphilly)	MacPherson, Malcolm (Stirling)	Steele, T.
Edwards, W. J. (Stepney)	Mallalieu, E. L. (Brigg)	Stewart, Michael (Fulham, E.)
Evans, Albert (Islington, S.W.)	Mann, Mrs. Jean	Stokes, Rt. Hon. R. R.
Evans, Edward (Lowestoft)	Manuel, A. C.	Strauss, Rt. Hon. George (Vauxhall)
Evans, Stanley (Wednesbury)	Marquand, Rt. Hon. H. A.	Stross, Dr. Barnett
Fienburgh, W.	Mason, Roy	Sylvester, G. O.
Finch, H. J.	Mayhew, C. P.	Taylor, Bernard (Mansfield)
Fletcher, Eric (Islington, E.)	Mellish, R. J.	Taylor, John (West Lothian)
Follick, M.	Mikardo, Ian	Taylor, Rt. Hon. Robert (Morpeth)
Foot, M. M.	Mitchison, G. R.	Thomas, Iorwerth (Rhondda, W.)
Forman, J. C.	Monslow, W.	Thomas, Ivor Owen (Wrekin)
Fraser, Thomas (Hamilton)	Moody, A. S.	Thomson, George (Dundee, E.)
Freeman, John (Watford)	Morgan, Dr. H. B. W.	Thornton, E.
Gibson, C. W.	Morley, R.	Timmons, J.
Gooch, E. G.	Morris, Percy (Swansea, W.)	Tomney, F.
Grenfell, Rt. Hon. D. R.	Mort, D. L.	Turner-Samuels, M.
Grey, C. F.	Moyle, A.	Ungoed-Thomas, Sir Lynn
Griffiths, David (Rother Valley)	Murray, J. D.	Viant, S. P.
Griffiths, William (Exchange)	Neal, Harold (Bolsover)	Wallace, H. W.
Hall, Rt. Hon. Glenvil (Colne Valley)	Noel-Baker, Rt. Han. P. J.	Warbey, W. N.
Hall, John T. (Gateshead, W.)	O'Brien, T.	Watkins, T. E.
Hamilton, W. W.	Oldfield, W. H.	Webb, Rt. Hon. M. (Bradford, C.)
Hannan, W.	Oliver, G. H.	Weitzman, D.
Hargreaves, A.	Orbach, M.	Wells, Percy (Faversham)
Harrison, J. (Nottingham, E.)	Oswald, T.	Wells, William (Walsall)
Hastings, S.	Padley, W. E.	West, D. G.
Hayman, F. H.	Paget, R. T.	Wheeldon, W. E.
Healey, Denis (Leeds, S.E.)	Paling, Rt. Hon. W. (Dearne Valley)	White, Mrs. Eirene (E. Flint)
Henderson, Rt. Hon. A. (Rowley Regis)	Palmer, A. M. F.	White, Henry (Derbyshire, N.E.)
Herbison, Miss M.	Pannell, Charles	Whiteley, Rt. Hon. W.
Hobson, C. R.	Pargiter, G. A.	Wigg, George
Holman, P.	Parkin, B. T.	Wilcock, Group Capt. C. A. B.
Houghton, Douglas	Pearson, A	Wilkins, W. A.
Hoy, J. H.	Peart, T. F.	Willey, F. T.
Hubbard, T. F.	Plummer, Sir Leslie	Williams, David (Neath)
Hudson, James (Ealing, N.)	Popplewell, E.	William, Rev. Lywelyn (Abertillery)
Hughes, Cledwyn (Anglesey)	Porter, G.	Williams, Ronald (Wigan)
Hughes, Emrys (S. Ayrshire)	Price, J. T. (Westhoughton)	Williams, Rt. Hon. Thomas (Don V'll'y)
Hughes, Hector (Aberdeen, N.)	Price, Philips (Gloucestershire, W.)	Williams, W. R. (Droylsden)
Hynd, H. (Accrington)	Proctor, W. T.	Wilson, Rt. Hon. Harold (Huyton)
Hynd, J. B. (Attercliffe)	Pryde, D. J.	Winterbottom, Richard (Brightside)
Irvine, A. J. (Edge Hill)	Rankin, John	Woodburn, Rt. Hon. A.
Irving, W. J. (Wood Green)	Reeves, J.	Wyatt, W. L.
Janner, B.	Reid, Thomas (Swindon)	Yates, V. F.
Jay, Rt. Hon. D. P. T.	Reid, William (Camlachie)
Jeger, George (Goole)	Richards, R.	TELLERS FOR THE NOES:
		Mr. Royle and Mr. Holmes.

Question put, and agreed to.

Resolved,

That the (Purchase Tax (No. 1) Order, 1954 (S.I., 1954, No, 1), dated 1st January, 1954, a copy of which was laid before this House on 4th January be approved.

Mr. Speaker

Does the right hon. Gentleman desire to move either of the Prayers?

Mr. Ede (South Shields)

No, Sir.