§ Mr. Albu
I beg to move, in page 11, line 8, at the end to insert:save and except pottery made by hand.I appear in a guise slightly different from the one in which I appeared during the Committee stage when we debated the question of craftsmen's goods. The Economic Secretary is well aware that on that occasion I was not so much trying to suggest that there was not aesthetic value and satisfaction in the manufacture of those goods, but that there was considerable illogicality in the treatment by the Government of the different classes of craftsmen's goods. That was especially 628 the case as applied to the Amendment we were then discussing, which was concerned with cut glassware and silverware. There the Government were exempting types of craftsmen's goods which, in my view, are more likely to find their way on to the home market than to assist the export market.
We are dealing here with a rather different type of craftsmen's goods, namely, the wares of small craftsmen potters scattered in many parts of the country. There is at least one in the constituency of the right hon. Gentleman the Financial Secretary. He is well aware that there is a small craftsman potter in High Street, Hampstead, whose wares are to be seen in the shops round about and which give a great deal of satisfaction, so I am sure that the right hon. Gentleman appreciates what such craftsmen are doing.
As the right hon. Gentleman will be aware from that example, if not from any other examples, a good deal of this sort of craftsmen's wares is not very expensive. It happens to be a type of work which can be purchased by people of small means who would be unable to afford particularly large quantities of cut glass or silverware. I myself know that at this time of the year one can frequently buy inexpensive Christmas presents which are the work of hand craftsmen potters. I should have thought that there was a good case for relieving this form of manufacture from the very extortionate burdens which the increased Purchase Tax will impose.
I suspect that very little export market is involved, and I doubt if any of these craftsmen will be able to keep in business. It is the sort of business which is frequently started by artists. An artist friend of mine started up in a small way making pottery, with just a wheel and a furnace, partly because he liked to decorate the ware himself, and he sold the results locally or in some London stores.
It is a small business, but one which gives a great deal of aesthetic pleasure and satisfaction. It does not involve large quantities of expensive raw materials. Some of the other craft manufactures which have been relieved of tax employ very expensive raw materials, such as gold and silver, but the raw materials of the potter are indigenous, or practically all 629 indigenous, and they are not likely to involve us in any balance of payments difficulties even if they are not likely to earn very large sums of foreign currency as exports. This is a concession which can give a great deal of satisfaction at very little cost. It will make no difference whatsoever to the economy, but will make a great deal of difference to the personal happiness of a large number of people.
§ Mr. Anthony Greenwood (Rossendale)
I beg to second the Amendment.
We last discussed the subject of hand pottery on 22nd November, when we listened to speeches from the Economic Secretary and the Chancellor of the Exchequer. They turned on two of their four gramophone records. One was that which said that the purpose of the Purchase Tax was to reduce consumer demand, and the other was that which said that the purpose of the tax was to increase exports.
We then said that we believed that the effect of the new rate of 30 per cent. upon pottery would create unemployment in the pottery areas and especial difficulties for the artist or craftsman potter. On that occasion the Economic Secretary gave some wholly inaccurate, unreliable and out-of-date figures about the present short-time working in the pottery industry, and we had to correct him. On 2nd December, The Times correspondent in Stoke-on-Trent commented on the fact that there are now 330 workers in 26 pottery firms in the Stoke-on-Trent area who are working short time. The correspondent went on:Pottery deliveries for the Christmas trade were completed in October, and retailers, it is expected, will restrict their orders until the next Budget.That is a difficulty which is also affecting the artist-potter. During our previous discussions, we drew special attention to the position of 200 artist-potters. It is a matter which should occasion some comment tonight that, so far as we can see, none of the hon. Gentlemen opposite who expressed a special interest in the problem of the artist-potter on that occasion has honoured us with his presence in the Chamber tonight. On that occasion we were told by hon. Gentlemen opposite that there are 200 of these small potters in the country and that no fewer than 60 of them are engaged in this occupation in the County of Cornwall. No hon. 630 Gentlemen representing Cornish constituencies who spoke on 22nd November are here to continue the tight which we are now putting up.
In most cases the 200 potters are in only a very small way of business, but in most cases they are doing work which is of first-class importance and excellent design, and they are doing something which is of service to the general artistic life of the community. They are at present in grave difficulties. Many of them bought their equipment with the aid of Exchequer grants, and they are finding it very difficult to keep up their repayments of the grants. They have no export organisation to help them expand their sales overseas at a moment when their sales in the home market are being deliberately restricted by the Chancellor.
Most of them are actually working at the potter's wheel themselves, and most of them are inexperienced in all the technicalities and formalities which have to be completed if one wants to enter the export trade in present circumstances. Indeed, most of them do not even have printed catalogues which they can distribute overseas to attract attention to the wares which they have for sale. Practically all of them are living very much from hand to mouth.
During our previous discussion, the hon. Member for Bodmin (Mr. D. Marshall) said:… the sudden imposition of 30 per cent. tax upon them will make the great majority of these people go out of business."—[OFFICIAL REPORT, 22nd November, 1955; Vol. 546, c. 1349.]All of us will have read in The Times and other newspapers letters from these men and women which are, to say the least, sad because they constantly reveal the fact that more and more of the craftsmen and craftswomen are going out of business.
Apart from the other difficulties which I have mentioned, there is now the new difficulty of the Purchase Tax. It adds considerably to the work which the small craftsman has to do in the way of preparing invoices and all the other formalities which have to be complied with, and it means—this is of special importance—that at the moment shopkeepers are holding back from buying new supplies of hand-made pottery, at any rate until the uncertainty created by the Budget has been cleared up, and they 631 will no doubt, in many cases, continue to refrain from buying until the next Budget.
These men and women of whom I am speaking cannot carry the stocks, for they have not the money to do so, and more and more of them are having to close down. Something which is of great importance in the life of the country, and particularly the life of the countryside, appears to be in danger of extinction. Since our last debate, the Observer has commented on the fact that the Purchase Tax is halting the potter's wheel. It said:Many hand potters throughout the country are likely to close down within the next few weeks; others are having to reduce the scope of their activities considerably, get rid of assistants, and look for part-time teaching jobs. This is the result of the new Purchase Tax regulations …I hope that right hon. and hon. Gentlemen opposite feel proud of the effect which they are having on one of the foremost craft industries in our country.
When the Economic Secretary spoke to us on the previous occasion, he very charmingly and eloquently told us that the Government were prepared to look into the matter very carefully. Later in the debate, we had the benefit of hearing the Chancellor of the Exchequer, who told us why he did not think that there could be any special exemption for these craftsmen. He said:I am informed that the Pottery Advisory Committee of the Craft Centre are considering whether to ask that the assistance to craftsmen scheme should be extended to pottery. The Centre is finding it difficult to devise a workable scheme. It would be impossible, I am told, to check that each item came up to the required standard for the relief of Purchase Tax and the question of repeats—that is, repeated examples—would be difficult to adjust in line with the severe restrictions which are placed upon repeated examples within the assistance of craftsmen scheme."—[OFFICIAL REPORT, 22nd November, 1955; Vol. 546, c. 1392–3.]I find it difficult to believe that the Chancellor, with all the assistance that he has from his Department, is not able to devise some scheme which will give help to this very small number of people in the country. This is a serious plea which we put forward from this side of the House. We know that the Chancellor has done a great deal in other directions to encourage and develop the artistic life of the country, and I hope that tonight the Chancellor will find it possible to 632 tell us that he can make some concession, and thus given new hope and encouragement to the men and women who are contributing a great deal to the well-being and artistic prestige of the country.
§ Sir E. Boyle
I have listened with close attention to the speeches made by the hon. Member for Edmonton (Mr. Albu) and the hon. Member for Rossendale (Mr. Greenwood), and I realise that this is a subject upon which many people on both sides of the House feel honestly and strongly.
May I take up the point which the hon. Member for Rossendale has just made? He quoted the speech of the Chancellor of the Exchequer when we last discussed this matter, in which he said that the Craft Centre is finding it difficult to devise a workable scheme. I am afraid that all I can tell the hon. Gentleman is that the Craft Centre is still considering the matter, but it has not yet determined whether practicable proposals can be put to the Board of Trade. I ask hon. Members to believe that this is a difficult matter and that the Craft Centre is still very closely examining it.
I think that the House knows, from what was said when we last discussed this subject, that there are very real difficulties. The trouble is that pottery is not made by fully-mechanised or automatic methods, and there is some degree of hand work in the making or finishing of almost every article. The difficulty arises from the fact that it would be impossible to determine, over the whole range of products, what amount of hand work should be accepted to bring them into the class of pottery made by hand.
It may possibly be that hon. Members opposite who have given a lot of thought to this matter have especially in mind craftsmen who use no mechanical aid except the potter's wheel, and possibly they think that we might limit the proposed exemption in that way. But it is only when an article comes out in a rather imperfect state that it can possibly be identified as shaped by hand or in a mould. That is one of the difficulties which we have to face. While I understand the feeling of hon. Members about this, I am afraid that I have no practicable solution to put to the House, and it is for that reason that I am unable to accept the Amendment. My right hon. Friend 633 is, however, keen that the House should realise the interest which he takes in this subject, and, as I have said, the Craft Centre is still considering whether there are any possible proposals which it can put up to the Board of Trade.
§ 7.15 p.m.
§ Mr. Gaitskell
I listened carefully to what the Economic Secretary had to say about the difficulties of defining sufficiently precisely what is hand-made pottery. I do not pretend to be an expert on this subject, but the hon. Gentleman and all of us are aware that people who are in no doubt at all as to whether or not they make hand-made pottery have been very naturally and properly protesting against the imposition of 30 per cent. Purchase Tax upon their products. They have pointed out—I think with great justification—that if, in fact, this proposal goes through, it may very well mean the complete closing down of the little businesses which they have built up.
I myself know of at least two such cases of makers of very artistic pottery. They have not a big turnover. They are not perhaps extremely well known, but they are producing the kind of product which I am sure the Government ought to encourage rather than discourage by imposing a tax upon it. I am quite sure, from what the Economic Secretary said, that he has not completely closed the door on some way of achieving the purpose of this Amendment. He also said that the Craft Centre is trying to find a suitable definition. I should like to ask him just what the implication of that is. Does that mean that if the Craft Centre produce a definition, the Government will be prepared, presumably by order, to exempt hand-made pottery from Purchase Tax altogether? I hope that is what he meant. I think that we must be quite clear about the intention before we can decide our attitude in the light of his reply. I am sure that the House would not object if the Economic Secretary wished to speak again on this matter, in order to clarify the position.
§ Sir E. Boyle
By leave of the House, I would say that I do not want to mislead the House, but I cannot, this afternoon, enter into any commitment at all about this matter. I should not like to leave the House with any other impression. If the Craft Centre were to consider something which it regarded as a practicable definition, and this definition were 634 then proposed to the Board of Trade, then, of course, the Government would have to consider it. I cannot give any definite commitment beyond that.
§ Mr. A. Blenkinsop (Newcastle-upon-Tyne, East)
I apologise for intervening without having heard the debate, but, like many other hon. Members, I have had quite a number of representations made to me on this particular point. I was very sorry to hear that we have not had any clear statement from the Economic Secretary about the Government's attitude on this matter.
Correspondence in The Times and elsewhere makes it quite clear that many small firms are already closing down, if they have not already done so. I am sure that many of us on both sides of the House have thought that here was a case of the need for craftsmanship which should be encouraged. Indeed, I remember taking some part in our earlier discussions when the Government decided to withdraw from tax a small group of special articles purely for the reason that they recognised that there was a particular need to maintain craftsmanship.
That is true, for example, in connection with certain types of silverware and other particular goods. I remember that my hon. Friend the Member for Edmonton (Mr. Albu) had some criticisms to make about the Government's proposal on that matter, but, on the whole, the Committee then took the view that the Government were right to give some encouragement to craft industries. It seems to me astonishing that, having taken that decision about one group of craft industries, they should now apparently be taking a wholly different view.
Apparently, the Government are saying that it is not because they look with disfavour upon hand-made pottery, but rather that they find it difficult to produce a form of words which would meet this particular case. This matter has been under discussion for some considerable time, and presumably the Government had been well-advised of the views of those who speak for the people engaged in the hand-made pottery trade.
Surely it is only fair to expect that the Government should have come to a clear decision upon the matter by now. It is disappointing to find that they are not able to make a concession in this case, even if it might prove necessary to make 635 a slight change in the wording later. I am subject to correction, but I think that the Government could withdraw this proposal and then, later, if they experienced some difficulty, correct the matter by Statutory Instrument. If that is the case it is strange that the Economic Secretary has not been able to make a more encouraging statement, but has left us without any guarantee as to what action the Government are going to take. In view of that, the Government ought to be pressed further for a clearer statement of their intentions before we leave the matter.
§ Mr. Anthony Greenwood
May I, by leave of the House, put one further point to the Economic Secretary? This point was put by one of the chief artist potters to two hon. Members opposite, neither of whom has taken part in our discussions upon this subject. In the past, pottery made by these artist potters for purposes in connection with food and drink has been tax-free. Ornamental pottery, on the other hand, has been taxable beyond a sales limit of £500 gross per annum. That means that when a potter's sales rise above £10 gross per week all his output becomes subject to taxation. Can the Economic Secretary say whether the Treasury has considered the possibility of raising that sales limit from £10 to £30 a week? That would give some sort of working margin to the artist potter.
§ The Chancellor of the Exchequer (Mr. R. A. Butler)
I have been listening to this, as to all the debates upon this Bill. Before I answer the point raised by the hon. Member for Rossendale (Mr. Anthony Greenwood), I want to be quite clear whether he is referring to the £500 limit or to a special weekly limit for pottery sales. Are they one and the same thing?
§ Mr. Butler
I just wanted to get that point clear.
The problem of the £500 limit—which I had purposely examined before this debate began, and which I thought was one of the most human questions with which we should be dealing this afternoon—is a difficult one. There is no power to increase the limit in respect of 636 pottery only, and it would be extremely difficult to do so for pottery only. In any case, I am advised that to alter this limit would require a certain amount of procedure involving Parliament, that is to say, legislation.
The difficulty really arises in differentiating between pottery and other crafts. It is also very difficult to differentiate between large and small pottery firms. There is an almost unlimited graduation of size. To put the limit up to £1,000—which would be a figure corresponding to the weekly figure suggested by the hon. Member for Rossendale—would be difficult, because, although it might give some help to a firm which was just below the limit, it would be unjust to a firm that was just above it. From our examination of the pottery industry just prior to this debate we came to the conclusion that it would be very difficult to introduce a figure which would not be fair to one firm and unfair to another.
The second difficulty which would arise is that we should have requests, upon similar craftsmanship grounds, from the smaller men engaged in other trades, such as silverware, which has already been helped to some extent; jewellery, which is one of the most difficult of all the Purchase Tax problems, and was referred to by the hon. Member for Ladywood (Mr. V. Yates); lampshades, leather goods and so forth. It would be very difficult to single out pottery and leave aside the other craft industries.
In addition, we are informed that if we go above the £500 limit we shall afford a much greater opportunity for abuse, because there may be a tendency for a firm to record only a proportion of its production and sales. I am also informed that there would be very great difficulty in administering the provision, and a very great temptation to legal avoidance of the tax.
A firm which was selling £4,000 worth a year—which would be four times what the limit might be raised to—could split itself into four legal persons by setting up subsidiary companies, which would keep below the limit. We have experienced this problem to a very minor extent in connection with the £500 rate of exemption. We have had difficulty with one trade, although I shall not mention which one. I am informed that this 637 provision would be extremely difficult to administer.
The hon. Member for Rossendale may well see that for those five reasons I find it difficult to alter the £500 limit and raise it either to £1,000 or £1,500. The Economic Secretary has put the case very fairly and very conscientiously. He is perfectly right in saying that the Government can give no undertaking about the introduction of an order to deal with the object of the Amendment—and it is important for the House to differentiate between the question of altering the Bill as it stands and accepting the Amendment. The second point was in connection of an introduction of an order altering Purchase Tax, and the third was the question whether the Craft Centre of Great Britain could deal with this matter through, for example, its Pottery Advisory Committee.
Those are the three variants. The answer to the first is that we are unable to alter the Bill; to the second, that it would be wrong—as explained by the Economic Secretary—to give hope of an order being introduced; and to the third, that it has not yet been decided whether it will be possible to do something, through the Pottery Advisory Committee, under the assistance-to-craftsmen scheme. I had hoped to have a definite answer to that question before the Report stage, because I anticipated that this would be a subject in which hon. Members would take an interest.
Perhaps hon. Members will appreciate that this scheme was of particular interest to the late Sir Stafford Cripps. Some
|Division No. 76.]||AYES||17.30 p.m.|
|Ainsley, J. W.||Carmichael, J.||Evans, Edward (Lowestoft)|
|Albu, A. H.||Champion, A. J.||Fernyhough, E.|
|Allen, Arthur (Bosworth)||Chapman, W. D.||Fletcher, Eric|
|Allen, Scholefield (Crewe)||Chetwynd, G. R.||Forman, J. C.|
|Bacon, Mist Alice||Clunie, J.||Fraser, Thomas (Hamilton)|
|Bartley, P.||Coldrick, W.||Gaitskell, Rt. Hon. H. T. N|
|Bellenger, Rt. Hon. F. J.||Collick, P. H. (Birkenhead)||Gibson, C. W.|
|Benn, Hn, Wedgwood (Bristol, S.E.)||Collins, V.J. (Shoreditch & Flnsbury)||Greenwood, Anthony|
|Benson, G.||Corbet, Mrs. Freda||Grey, C. F.|
|Beswick, F.||Cove, W. G.||Griffiths, David (Rother Valley)|
|Bevan, Rt. Hon. A. (Ebbw Vale)||Craddock, George (Bradford, S.)||Griffiths, William (Exchange)|
|Blackburn, F.||Cronin, J. D.||Hale, Leslie|
|Blenkinsop, A.||Daines, P.||Hall, Rt. Hn. Glenvil (Colne Valley)|
|Blyton, W. R.||Dalton, Rt. Hon. H.||Hamilton, W. W.|
|Bowden, H. W. (Leicester, S.W.)||Darling, George (Hillsborough)||Hastings, S.|
|Bowen, E. R. (Cardigan)||Davies, Stephen (Merthyr)||Henderson, Rt. Hn. A. (Rwly Regis)|
|Boyd, T. C.||Deer, G.||Herbison, Miss M.|
|Braddock, Mrs. Elizabeth||Delargy, H. J.||Holman, P.|
|Brockway, A. F.||Dodds, N. N.||Hubbard, T. F.|
|Broughton, Dr. A. D. D.||Dugdale, Rt. Hn. John (W. Brmwch)||Hughes, Emrys (S. Ayrshire)|
|Burke, W. A.||Ede, Rt. Hon. J. C.||Hughes, Hector (Aberdeen, N.)|
|Butler, Herbert (Hackney, C.)||Edwards, Rt. Hon. John (Brighouse)||Hunter, A. E.|
|Butler, Mrs. Joyce (Wood Green)||Edwards, W. J. (Stepney)||Hynd, H, (Accrington)|
§ Members may not realise how it works. If a scheme is worked out it means that under the assistance-to-craftsmen scheme variable relief from Purchase Tax is granted upon various objects.
§ The difficulties which I envisaged during the Committee stage, in the speech to which the hon. Member for Rossendale referred, have not yet been resolved, for exactly the reasons which I gave then and which he repeated this afternoon. It is not impossible that those difficulties will be resolved, but that is the only hope I see of helping the craft potter at present. In making up their minds upon this matter, hon. Members opposite must realise that it is not now possible for the Government to alter the Bill, and that they must not count upon the introduction of an order, at any rate, so far as I can see.
§ If we can, however, through the aid of the Pottery Advisory Committee and the Craft Centre, find a scheme, under the assistance-to-craftsmen scheme, my right hon. Friend the President of the Board of Trade will give it every consideration. If it were accepted it would be followed by a suitable adjustment of Purchase Tax following upon the scheme invented under this method, which was dear to the heart of one of my predecessors. That is the position. I have tried to give as careful an answer to this difficult question as the House would desire.
§ Question put, That those words be there inserted in the Bill:—
§ The House divided: Ayes 160, Noes 202.
|Irvine, A. J. (Edge Hill)||Owen, W. J.||Strauss, Rt. Hon. George (Vauxhall)|
|Irving, S. (Dartford)||Padley, W. E.||Summerskill, Rt. Hon. E.|
|Jay, Rt. Hon. D. P. T.||Paling, Will T. (Dewsbury)||Sylvester, G. O.|
|Jeger, George (Goole)||Palmer, A. M. F.||Taylor, Bernard (Mansfield)|
|Jeger, Mrs. Lena(Holbn & St. Pncs, 8.)||Pannell, Charles (Leeds, W.)||Taylor, John (West Lothian)|
|Johnson, James (Rugby)||Parker, J.||Thomas, Iorwerth (Rhondda, W.)|
|Jones, Rt. Hon. A. Creech (Wakefield)||Parkin, B. T.||Thomson, George (Dundee, E.)|
|Jones, Elwyn (W. Ham, S.)||Pearson, A.||Tomney, P.|
|Jones, Jack (Rotherham)||Popplewell, E.||Turner-Samuels, M.|
|Kenyon, C.||Price, J. T. (Westhoughton)||Ungoed-Thomas, Sir Lynn|
|Key, Rt. Hon. C. W.||Price, Philips (Gloucestershire, w.)||Viant, S. P.|
|King, Dr. H. M.||Proctor, W. T.||Wade, D. W.|
|Lawson, G. M.||Rankin, John||Warbey, W. N.|
|Ledger, R. J.||Reeves, J.||Weitzman, D.|
|Lee, Frederick (Newton)||Reid, William||Wells, Percy (Faversham)|
|Lee, Miss Jennie (Cannook)||Rhodes, H.||Wells, William (Walsall, N.)|
|MacColl, J. E.||Robens, Rt. Hon. A.||Wheeldon, W. E.|
|McKay, John (Wallsend)||Roberts, Albert (Normanton)||White, Henry (Derbyshire, N. E.)|
|McLeavy, Frank||Wilkins, W. A.|
|MacPherson, Malcolm (Stirling)||Robinson, Kenneth (St. Pancras, N.)||Willey, Frederick|
|Mahon, S.||Ross, William||Williams, David (Neath)|
|Marquand, Rt. Hon. H. A,||Royle, C.||Williams, Rev. Llywelyn (Abertillery)|
|Mason, Roy||Short, E. W.||Williams, W. R. (Openshaw)|
|Messer, Sir F.||Silverman, Julius (Aston)||Williams, W. T. (Barons Court)|
|Mitchison, G. R.||Silverman, Sydney (Nelson)||Willis, Eustace (Edinburgh, E.)|
|Monslow, W.||Simmons, C. J. (Brierley Hill)||Wilson, Rt. Hon. Harold (Huyton)|
|Morrison, Rt. Hn. Herbert (Lewis'm, S.)||Skeffington, A. M.||Woodburn, Rt. Hon. A.|
|Moyle, A.||Slater, Mrs. H. (Stoke, N.)||Yates, V. (Ladywood)|
|Neal, Harold (Bolsover)||Slater, J. (Sedgefield)|
|Oram, A. E.||Sorensen, R. W.||TELLERS FOR THE AYES:|
|Orbach, M.||Sparks, J. A.||Mr. Holmes and|
|Oswald, T.||Steele, T.||Mr. G. H. R. Rogers.|
|Agnew, Cmdr. p. G.||Cunningham, Knox||Hurd, A. R.|
|Aitken, W. T.||Currie, G. B. H.||Hutchison, Sir Ian Clark (E'b'gh, W.)|
|Allan, R. A. (Paddington, S.)||Dance, J. C. G,||Hyde, Montgomery|
|Alport, C. J. M.||D'Avigdor-Goldsmid, Sir Henry||Hylton-Foster, Sir H. B. H.|
|Amery, Julian (Preston, N.)||Deedes, W. F.||Iremonger, T. L.|
|Amory, Rt. Hn. Heathcoat (Tiverton)||Digby, Simon Wingfield||Irvine, Bryant Godman (Rye)|
|Anstruther-Gray, Major W. J.||Donaldson, Cmdr. C. E. MCA.||Jenkins, Robert (Dulwich)|
|Arbuthnot, John||Doughty, C. J. A.||Jennings, J. C. (Burton)|
|Armstrong, C. W.||Duncan, Capt. J. A. L.||Johnson, Dr. Donald (Carlisle)|
|Ashton, H.||Emmet, Hon. Mrs. Evelyn||Johnson, Eric (Blackley)|
|Atkins, H. E.||Errington, Sir Eric||Jones, A. (Hail Green)|
|Baldwin, A. E.||Farey-Jones, F. W.||Keegan, D.|
|Balniel, Lord||Fell, A.||Kerby, Captain H. B.|
|Barber, Anthony||Finlay, Graeme||Kerr, H. W.|
|Barlow, Sir John||Fisher, Nigel||Kershaw, J. A.|
|Barter, John||Fort, R.||Kirk, P. M.|
|Baxter, Sir Beverley||Fraser, Hon. Hugh (Stone)||Lagden, G. W.|
|Bell, Ronald (Bucks, 8.)||Freeth, D. K.||Lambert, Hon. G.|
|Bevins, J. R. (Toxteth)||George, J. C. (Pollok)||Lancaster, Col. C. C.|
|Bidgood, J. C.||Glover, D.||Leavey, J. A.|
|Biggs-Davison, J. A.||Godber, J. B.||Leburn, W. G.|
|Birch, Rt. Hon. Nigel||Gomme-Duncan, Col. A.||Legh, Hon. Peter (Petersfield)|
|Bishop, F. P.||Gower, H. R.||Lindsay, Hon. James (Devon. N.)|
|Body, R. F.||Graham, Sir Fergus||Lindsay, Martin (Solihull)|
|Boothby, Sir Robert||Grant-Ferris, Wg.Cdr. R. (Nantwich)||Lloyd, Rt. Hon. Selwyn (Wirral)|
|Bossom, Sir A. C.||Green, A.||Longden, Gilbert|
|Boyle, Sir Edward||Crosvenor, Lt.-Col. R. G.||Lucas, Sir Jocelyn (Portsmouth, S.)|
|Braithwaite, Sir Albert (Harrow, W.)||Hall, John (Wycombe)||Lucas-Tooth, Sir Hugh|
|Brooke, Rt. Hon. Henry||Harris, Frederic (Croydon, N. W.)||McAdden, S. J.|
|Brooman-White, R. C.||Harris, Reader (Heston)||Macdonald, Sir Peter|
|Browne, J. Nixon (Craigton)||Harrison, Col. J. H. (Eye)||Mackie, J. H. (Calloway)|
|Buchan-Hepburn, Rt. Hon. P. G. T.||Harvey, Air Cdre. A. V. (Macclesfd)||McLaughlin, Mrs. P.|
|Burden, F. F. A.||Harvey, John (Walthamstow, E.)||Maclay, Rt, Hon. John|
|Butcher, Sir Herbert||Heald, Rt. Hon. Sir Lionel||Macleod, Rt. Hn. Iain (Enfield, W.)|
|Butler, Rt. Hn. R. A. (Saffron Walden)||Heath, Edward||Macpherson, Niall (Dumfries)|
|Campbell, Sir David||Hicks-Beach, Maj. W. W.||Maddan, Martin|
|Carr, Robert||Hill, John (S. Norfolk)||Maitland, Cdr. J. F. W. (Horncastle)|
|Cary, Sir Robert||Hirst, Geoffrey||Markham, Major Sir Frank|
|Chichester-Clark, R.||Holland-Martin, C. J.||Marlowe, A. A. H.|
|Cole, Norman||Hornsby-Smith, Miss M. P.||Marshall, Douglas|
|Cooper, Sqn. Ldr. Albert||Horsbrugh, Rt. Hon. Dame Florence||Mathew, R,|
|Cordeaux, Lt.-Col. J. K.||Howard, Gerald (Cambridgeshire)||Mawby, R. L.|
|Corfield, Capt. F. V.||Howard, Hon. Greville (St. Ives)||Maydon, Lt.-Comdr. S. L. C.|
|Craddock, Beresford (Spelthorne)||Howard, John (Test)||Medlicott, Sir Frank|
|Crookshank, Capt. Rt. Hn. H. F. C.||Hudson, Sir Austin (Lewisham, N.)||Monekton, Rt. Hon. Sir Walter|
|Crosthwaite-Eyre, Col. O. E.||Hughes Hallett, Vice-Admiral J.||Moore, Sir Thomas|
|Crouch, R. F.||Hughes-Young, M. H. C.||Nabarro, C. D. N.|
|Crowder, Sir John (Finchley)||Hulbert, Sir Norman||Nairn, D. L. S.|
|Neave, Airey||Remnant, Hon. P.||Thomas, P. J. M. (Conway)|
|Nicolson, Godfrey (Farnham)||Renton, D. L. M.||Thompson, Kenneth (Walton)|
|Nicolson, N. (B'n'm'th, E. & Chr'ch)||Rodgers, John (Sevenoaks)||Thompson, Lt.-Cdr. R. (Croydon, S.)|
|Nield, Basil (Chester)||Roper, Sir Harold||Thornton-Kemsley, C, N.|
|Oakshott, H. D.||Ropner, Col. Sir Leonard||Touche, Sir Gordon|
|O'Neill, Hn. Phelim (Co. Antrim, N.)||Russell, R. S.||Vaughan-Morgan, J. K.|
|Ormsby-Gore, Hon. W. D.||Sharples, R. C.||Vickers, Miss J. H.|
|Orr, Capt. L. P. S||Simon, J. E. S. (Middlesbrough, w.)||Wakefield, Sir Wavell (St. M'lebone)|
|Osborne, C,||Smyth, Brig. J. C. (Norwood)||Ward, Hon. George (Worcester)|
|Page, R. G.||Spearman, A. C, M.||Ward, Dame Irene (Tynemouth)|
|Pannell, N. A. (Kirkdale)||Speir, R. M.||Williams, Paul (Sunderland, S.)|
|Partridge, E.||Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)||Williams, R. Dudley (Exeter)|
|Pilkington, Capt. R. A.||Stanley, Capt. Hon. Richard||Wills, G. (Bridgwater)|
|Pitman, I. J.||Stewart, Henderson (Fife, E.)||Wilson, Geoffrey (Truro)|
|Pitt, Miss E. M.||Stoddart-Scott, Col. M.||Wood, Hon. R.|
|Pott, H. P.||Storey, S.||Woollam, John Victor|
|Price, David (Eastleigh)||Stuart, Rt. Hon. James (Moray)||Yates, William (The Wrekin)|
|Price, Henry (Lewisham, W.)||Summers, G. S. (Aylesbury)|
|Raikes, Sir Victor||Sumner, W. D. M. (Orpington)||TELLERS FOR THE NOES:|
|Ramsden, J. E.||Thomas, Rt. Hn. J. P. L. (Hereford)||Mr. Redmayne and|
|Rawlinson, P. A. G.||Thomas, Leslie (Canterbury)||Sir Wavell Wakefield.|
§ Mr. Gaitskell
I beg to move, to leave out "and (v)."
The Amendment seeks to exclude from the Purchase Tax of 30 per cent. which is now being imposed upon them coal or cinder sieves, and sifters. During the Committee proceedings, these important and useful articles were considered together with two other groups, pot scourers and steel wool, and pastryboards and rolling-pins. For some reason that I do not understand, during the debate on that occasion much more attention was paid to pot scourers and steel wool and even to pastryboards and rolling-pins, than to coal or cinder sifters.
It was for that reason and in the hope, this time realised, that you, Mr. Speaker, might therefore select it, that we put down the Amendment. The fact that on this occasion it is being considered on its own does not mean that we have changed our views about pot scourers and steel wool, or pastryboards and rolling-pins. But there are very special circumstances which apply in the case of coal or cinder sieves or sifters.
We are pleased that the Chancellor saw fit to make concessions, and to take out of the tax schedule altogether baskets, shopping bags, brushes, mops and brooms. His argument on that occasion was that those things were produced by blind persons—an argument which we all, naturally, appreciate—but whether or not coal and cinder sieves and sifters are produced by the blind there are equally strong arguments.
The argument is a very simple one. The Government must rightly be very much concerned with the coal situation. We are now importing a very large 642 amount of coal, costing about £80 million, a large part of which has to be paid for in dollars. It is not necessary for me to labour the immense importance to the country of fuel economy. When I was Minister of Fuel and Power I had the privilege of doing my best to encourage economy and of forwarding various schemes.
At that time we did, indeed, do our best, by propaganda, to encourage consumers to do this very business of sieving their cinders to save coal. An estimate has been made that the amount thereby saved is about three-quarters of a million tons a year. I cannot quote chapter and verse for that figure, but I believe that a Ministerial answer has confirmed it.
Since that is the case, one must ask how the Government can solemnly impose a 30 per cent. duty on the one article needed for this fuel economy. I do not know what the argument will be this time. If it is based on the saving of the metal involved, I would suggest that it is much more important to save the coal. Admittedly, we have to import some sheet steel, but the amount involved in these articles is obviously negligible in relation to the total demand. Nor do I think that the Economic Secretary is likely to press the point that a valuable export trade is being sacrificed for the lure of the home market, and that if only people would buy fewer coal and cinder sieves and sifters more of them would be exported.
I think that the hon. Gentleman will fall back on the long stop argument, as it might be termed, which, in the end, is always paraded by the Government, namely, that although the change in tax will not result in contraction of demand, nevertheless there will be a mopping up 643 of purchasing power, thus making it more difficult for the consumers, the housewives—or, indeed, as may be the case here, their husbands—to spend money on other things.
If he puts that forward, I would make two comments. First, the argument is really this, "We recognise that these articles are essentials, but we must tax them so that you, the consumers, will spend less on inessential articles and inflation will, to that extent, be controlled." I must point out that such an argument is the basis for a defence not only of a tax on coal sieves and sifters, but on any essential of life.
Indeed, the Economic Secretary could perfectly well defend a tax on food—and a very powerful argument that would be. Undoubtedly, if a tax were put on food, and more particularly on the most important articles of food for which the demand is inelastic people would buy as much as before, but would have less money to spend on other things. I do regard that argument, therefore, as a very dangerous one to use. I have wanted to say that for some time, but this has been my first opportunity.
My second comment is that, quite frankly, I am not so sure that in this case the demand is quite as inelastic as all that. I would not class coal and cinder sieves and sifters with dustbins for instance—or even with pot scourers and steel wool. The very prospect of sieving the cinders is an unattractive one and, in itself, is quite enough to put people off buying, but if there is added to that the further disadvantage that the prices of the sieves and sifters is to go up people may very well be discouraged from buying them and, as a consequence, less fuel will be saved.
I must say, therefore, that the argument for the exemption of this small group of articles from Purchase Tax is a very powerful one indeed. Perhaps the Economic Secretary agrees with me. He obviously agrees with all my arguments, because he cannot do anything else—there is no possible answer to them. I hope that he does agree with me and that the Chancellor is willing to make a concession here. If he does agree with me, and I say it in all seriousness, I will very shortly 644 discontinue my speech in favour of exemption.
I appreciate the Chancellor is feeling—it is evident in all his speeches—that if he gives way on one thing there will be repercussions. That is the familiar Treasury argument. It has been advanced from that bench year in and year out for as long as anyone can remember. In practice, it is not an argument that can be allowed to remain unassailed. Exceptions are always made in every law. There are still a great many articles which, thank goodness, do not attract Purchase Tax. It is quite true that if the present Government remain in office much longer the list will become smaller and smaller, but all of us hope that that will not be the case and that they will not stay there very much longer.
We have had exceptions made on brushes and brooms, on shopping baskets and shopping bags for particular reasons. I submit that there are overwhelming reasons for an exception to be made here. It is very much in the national interest that the maximum degree of fuel economy should be practised, and it is a decidedly foolish, and, indeed, a completely misconceived idea, to tax the very articles people must buy in order to save fuel.
§ Mr. Blenkinsop
It is important that one further point should be raised. We have discussed ad infinitum the problem of the Government's trying to mop up purchasing power, but I do not think that it is fully appreciated that not only are we suffering from this imposition of a 30 per cent. tax on this range of articles—and, of course, all the others that we have discussed earlier—but that manufacturers are taking the opportunity afforded by changes to make further additions to their prices.
There is a good deal of evidence to show that, not only in this specific case of cinder sifters but in the case of other articles which we cannot now discuss, the manufacturers are taking this opportunity to add various other cumulative changes and price increases which they have been holding back for some time. I have with me a number of comments from various firms in different trades making this very point. That, surely, is as true in this range as in others.
§ Mr. Blenkinsop
I have evidence here, which I shall be very glad to send to the Economic Secretary, of the way in which firms are generally—and very naturally—adding further increases of their own to the Purchase Tax increase of 30 per cent. There is, first of all, what they call the rounding-out charge. I notice that that always operates so that they add a little extra; it should really be called a rounding-up charge. If there is an odd halfpenny or farthing here or there, when a Purchase Tax addition of this kind is imposed the list prices are raised to a round figure to give a little extra margin.
§ Mr. Osborne
The hon. Gentleman has only examples where the price has been put up. He does not know exactly what has happened in all trades, and I should like to hazard that in some cases the margins have gone down.
§ Mr. Blenkinsop
I have not had an opportunity of investigating all trades. I hope that hon. Members may give their experiences in these matters, but I have described precisely what happens. Customers are not only being required to pay the increase being imposed by the Government; they are being required to pay what I call the rounding-up charge to bring this sum to an even figure.
In addition, the firms concerned claim that they have held back various increases over a long period, and they take advantage of this opportunity, as they say, to make matter easier for the retailer by imposing those increases now. They say that retailers do not like continually varying prices. They say that various increases have been held back for some months and that they are taking advantage of this Purchase Tax imposition to bring those other increases into force at the same time.
I believe that in imposing this and similar charges the Government are encouraging manufacturers to bring into force further increases which, had it not been for the Government's initiative, they might have held back. The Chancellor said at one time that he hoped manufacturers would reduce prices wherever possible, and I believe that a member of the Government—possibly I am doing the Chancellor an injustice—suggested that it might be wise on some occasions to reduce prices rather than to increase dividends. That seemed a little strange 646 coming from the Treasury Bench at present but some sort of statement of that kind was once made.
In fact, the reverse is happening here. Under the positive encouragement of the Government, manufacturers in these commodities and others are seizing the opportunity to increase prices far more than the Government's 30 per cent. imposition would require. People who have to buy these household commodities well know that to be the case. My right hon. Friend rightly said that these are household articles which everyone has to buy. It is common knowledge that they are having to pay bigger prices than those required by the 30 per cent. imposition.
We have the fantastic position, as many housewives can prove to be the case, that when we go into a shop at present we find that as long as some stocks remain, which have been purchased at pre-Purchase Tax level, they are in some cases being sold at the lower prices; but as the newer stocks come in, they have to be sold at higher prices, and we often find smaller-sized articles costing a good deal more than larger-sized articles of the same kind. Anomalies of this kind have been introduced by the Purchase Tax. Housewives are faced with this absurdity: articles which they know to be more expensive are available, for a time, and as long as stocks remain, at a lower price than articles which ought to be cheaper.
These anomalies add to the annoyance and bitterness of people doing their daily shopping. Absurd impositions of this kind appear wholly irrational to the ordinary housewife and, indeed, to us, because we see no rhyme or reason in them. They operate in such a way that no valid argument can be made for them, and that must create a great deal of ill-feeling among the general public and a determination to try to put the matter right in the only way open to them—by a new and intensified claim for wage advances.
In insisting upon taxes of this kind, the Treasury Bench are bringing down upon themselves the sort of contempt which Governments earned in the past when they tried to impose taxes on window space. I hope these taxes can be swept away as rapidly as was the window tax, although we see evidence all over the country of the effect of the window tax. 647 I believe that the Government will earn much contempt from the general public for insisting upon taxes of this nature.
§ Mr. Turner-Samuels
I feel called upon most firmly to support the Amendment in order to get rid of this fiddling, finicking farce in which the Government are indulging by imposing this tax upon coal sieves and cinder sifters.
I see that the hon. Member for Louth (Mr. Osborne) has evaporated from the Chamber. He is well upon his journey, because it is not possible to look upon him except as an innocent abroad. He was prepared, as the House saw, to challenge the statement made from this side of the House that by imposing a tax of this character upon these goods, which are essential in the kitchen, in the scullery and in the home, the Government were encouraging the trader to get a little more for himself as well, no doubt using the Budget as the excuse for the increase in price. To the addition made by the Budget, the trader will, as usual, add a little more for his own profit.
To the utter astonishment of myself, and I should think to the dubiety of the whole House, the hon. Member for Louth rose to assail that view. The Treasury Bench well know, and I do not suppose a single person who goes into a shop has not experienced it, that as soon as a tax of this character is imposed, the increase in price of the article is more than the measure of the tax; there is always a further addition. The Treasury Bench must have had experience of that fact for years. And with some reason. It requires much more money for the trader to purchase these articles. He has an increased capital expenditure to meet as a result of further taxation. In those circumstances, the trader not unnaturally wants to secure a profit on the extra outlay in which he is involved by adding to the price a sum which will protect him in that way.
The taxpayer and the purchaser is therefore hit twice; he is hit by the Exchequer, because the Government impose this miserable and unwarrantable tax, and he is hit by the trader, who is subjected to this nuisance and complication in his business, which is already sufficiently complicated. The public has, therefore, to meet this double, extra burden. Everyone in the country except 648 the hon. Member for Louth knows that it is a common practice that when one goes into a shop for any of the articles which are the subject matter of this fiddling, farcical impost put upon them by the Budget, one will be given the excuse that the reason for the price is the Budget.
One almost trembles with awe at the very names of these spectacular articles, coal sieves and cinder sifters. We are told that they are being used for getting rid of inflation. Their very potency is, it appears, so great that the Government believe they will really result in disinflation. This is the nonsense put over from the Treasury Bench in order to justify rejection out of hand of this most desirable Amendment. Of course anyone knows that there is no effect on disinflation in this impost at all. As a matter of fact the effect is the very reverse. The economic effect will be to add to inflation and not diminish it at all. This tax on coal sieves and cinder sifters is nothing more nor less than pillaging the public, and the Treasury Bench knows it.
These articles are necessities. They are goods which the housewife requires continually, regularly, and she has to renew them periodically. She could not carry on the work of her home hygienically, domestically or practically unless she had these articles. The Government, knowing that, and knowing the constancy with which they are bought and the volume of the goods involved, have deliberately put this tax on these household goods used daily by housewives as a discriminating tax in order that they may collect toll from that most worthy section of society.
I ask the Economic Secretary to the Treasury to remember that in making the public pay this tax on coal sieves and cinder sifters in this way he is materially raising the cost of living. These two articles are only symbolical. They are representative of all the other articles the Chancellor of the Exchequer is imposing taxation on in this Finance Bill. I cannot go into the other matters of course, Mr. Deputy-Speaker, or I should be out of order. No doubt I have been very near being out of order on several occasions so far—
§ Mr. Turner-Samuels
But these two matters are, as I say, merely symbolical. It is not a question of the Government—
§ Mr. Gaitskell
Is my hon. and learned Friend really saying that these articles are only symbolical? Has he ever done any sifting?
§ Mr. Deputy-Speaker
I must remind the hon. and learned Member that symbolism does not arise on this Amendment.
§ Mr. Turner-Samuels
My right hon. Friend has not sifted this question enough. I was not referring to these articles as being symbols and not being practical, but as being representative of all the other things on which tax is being charged in exactly the same way. If the Economic Secretary has not already gripped the fact that these and other imposts, will, because of the cost of living, lead to a rise in wage demands, he does not know the first elementary rule about the law of economics. It will happen, inevitably. It must happen, and the Government have fallen so low in these financial matters that they do not care whether it happens or not.
§ Sir E. Boyle
The description given by the hon. and learned Member for Gloucester (Mr. Turner-Samuels) to cinder sifters as symbolical rather reminded me of the time when as a schoolboy I was dining with the Provost of Eton. Someone made a flippant remark about angel's wings and professed doubt about them. The Provost said, "You deceive yourself. Angel's wings are purely allegorical."
I have listened to a great many of the speeches we have had in these debates, and I must admit, although I could not entirely agree with it, that none of the speeches to which I have listened gave the House more pleasure than that of the right hon. Member for Leeds, South (Mr. Gaitskell), in opening this discussion. If this had been an American debate competition I think the right hon. Member would have scored high marks on all the categories. The four categories as I remember them are: material, order, posture, and cleanliness.
650 The right hon. Member referred to the view which I have expressed several times in these debates that by extending the Purchase Tax over a wide range of goods, even if we do not directly affect the demand for those goods by increasing the tax, there will as a result be less purchasing power available for other things. As I understood him, the right hon. Member made two objections to that view. First, he asked how widely are we to apply that doctrine? I would only say to him on the general point that I do not believe the right hon. Member really disagrees with the Government in his heart in their policy of trying to hold down the level of consumer demand in order to leave as much room as possible in the economy for investment. I do not believe he really disagrees with that and I do not believe a number of his hon. Friends disagree, either.
I believe that the disagreement between us is on two rather different points. I will not spend long on this Mr. Deputy-Speaker, but I would like to state what are, I believe, our real points of disagreement. First, the right hon. Member does not believe that we can carry out this policy in the climate of a free economy and, secondly, if the right hon. Member were carrying out this policy—shall I put it this way—he would adhere more rigorously to progressive principles than we have done. I grant him those two differences, but I have no doubt that there is not quite as much difference between us on some of the main lines of the Budget policies of my right hon. Friend as one might think.
§ Mr. Deputy-Speaker
I am very interested in the argument, but I do not think it is relevant to the Amendment.
§ Mr. Gaitskell
I entirely agree, Mr. Deputy-Speaker. I know that you are very interested and will be interested to hear my comment on what the hon. Gentleman has said. I would point out to him that there is all the difference in the world between the view of the Government of how to restrict consumer demand at the expense of people who are too poor to bear the extra burden, and our view that if consumer demand has to be restricted because it was artificially expanded in the April Budget, it should be restricted by cutting down the purchasing power of those who can afford to carry the burden.
§ Sir E. Boyle
If I might be permitted to answer the right hon. Member in one sentence, Mr. Deputy Speaker, I promise that I will then proceed directly to cinder sifters. I would only say what I said on the Second Reading of the Bill, which true. I do not believe there is any evidence that the April Budget has had a substantial effect on the level of consumer demand.
Coming to the second argument of the right hon. Member—which was a serious point and interested me very much—he said that here we have something for which the demand may well be elastic. That is to say, as a result of the price of sieves and cinder sifters, people may buy fewer of them. The right hon. Member may be right about that. I have taken such advice as I can on this question and the estimate given to me is that that is unlikely to be so to any great degree. I will give the right hon. Member this assurance. As he has raised the question tonight, I will make it my personal responsibility to watch this matter as far as I am able. I will make a special point of trying to see—
§ Mr. Gaitskell
Can we have the hon. Gentleman's assurance that if it proves that there is any reduction in the demand
|Division No. 77.]||AYES||[8.13 p.m.|
|Agnew, Cmdr. P. G.||Butcher, Sir Herbert||Freeth, D. K.|
|Aitken, W. T.||Butler, Rt. Hn. R. A. (Saffron Walden)||George, J. C. (Pollok)|
|Allan, R. A. (Paddington, S.)||Campbell, Sir David||Clover, D.|
|Alport, C. J. M.||Carr, Robert||Godber, J. B.|
|Amery, Julian (Preston, N.)||Cary, Sir Robert||Gomme-Duncan, Col. A.|
|Amory, Rt. Hn. Heathcoat (Tiverton)||Chichester-Clark, R.||Cower, H. R.|
|Anstruther-Gray, Major W. J.||Cole, Norman||Graham, Sir Fergus|
|Arbuthnot, John||Cordeaux, Lt.-Col. J. K.||Grant-Ferris, Wg Cdr. R. (Nantwich)|
|Armstrong, C. W.||Corfield, Capt. F. V.||Green, A.|
|Ashton, H.||Craddock, Beresford (Spelthorne)||Grosvenor, Col. R. G.|
|Astor, Hon. J. J.||Crookshank, Capt. Rt. Hn. H. F. C.||Hall, John (Wycombe)|
|Atkins, H. E.||Crosthwaite-Eyre, Col. O. E.||Harris, Frederic (Croydon, N. W.)|
|Baldwin, A. E.||Crouch, R. F.||Harris, Reader (Heston)|
|Balniel, Lord||Crowder, Sir John (Finchley)||Harrison, Col. J. H. (Eye)|
|Barlow, Sir John||Cunningham, Knox||Harvey, Air Cdre. A. V. (Macclesfd)|
|Barter, John||Currie, G. B. H.||Harvey, John (Walthamstow, E.)|
|Baxter, Sir Beverley||Dance, J. C. G.||Heald, Rt. Hon. Sir Lionel|
|Bell, Ronald (Bucks, S.)||D'Avigdor-Goldsmid, Sir Henry||Heath, Edward|
|Bevins, J. R. (Toxteth)||Deedes, W. F.||Hicks-Beach, Maj. W. W.|
|Bidgood, J. C.||Digby, Simon Wingfield||Hill, John (S. Norfolk)|
|Biggs-Davison, J. A.||Dodds-Parker, A. D.||Hirst, Geoffrey|
|Birch, Rt. Hon. Nigel||Doughty, C. J. A.||Holland-Martin, C. J.|
|Bishop, F. P.||Duncan, Capt. J. A. L.||Hornsby-Smith, Miss M. P.|
|Body, R. F.||Emmet, Hon. Mrs. Evelyn||Horsbrugh, Rt. Hon. Dame Florence|
|Boothby, Sir Robert||Errington, Sir Eric||Howard, Gerald (Cambridgeshire)|
|Bossom, Sir A. C.||Erroll, F. J.||Howard, Hon. Greville (St, Ives)|
|Boyle, Sir Edward||Farey-Jones, F. W.||Howard, John (Test)|
|Braithwaite, Sir Albert (Harrow, W.)||Fell, A.||Hudson, Sir Austin (Lewisham, N.)|
|Brooke, Rt. Hon. Henry||Finlay, Graeme||Hughes Hallett, Vice-Admiral J.|
|Browne, J. Nixon (Craigton)||Fisher, Nigel||Hughes-Young, M. H. C.|
|Buchan-Hepburn, Rt. Hon. P. G. T.||Fort, R.||Hulbert, Sir Norman|
|Burden, F. F. A.||Fraser, Hon. Hugh (Stone)||Hurd, A. R.|
§ for cinder sieves and sifters, the Government will come forward with an Order to remove the Purchase Tax from them?
§ Sir E. Boyle
I was going on to say that I can enter into no commitment about that. What I will do is to take a special personal interest in the facts.
As the right hon. Member for Leeds, South says, it is always difficult to decide exactly where the line should be drawn. If one makes a concession, it is extremely difficult to limit it to one item and not to bring in a number of similar goods. For that reason, I cannot advise the House to accept the Amendment.
I share the right hon. Gentleman's regret that the last time we discussed the question, such a disproportionate amount of time was spent on pot scourers and the like, for I think that this is the most serious group affected in the collection of articles that we discussed in Committee. I cannot advise the House to accept the Amendment, but I will take careful note of the points that the right hon. Gentleman has raised, and I thank him very much for the spirit in which he moved the Amendment.
§ Question put, That "and (v)" stand part of the Bill:—
§ The House divided: Ayes 202, Noes 153.
|Hutchison, Sir Ian Clark (E'b'gh, W.)||Markham, Major Sir Frank||Russell, R. S.|
|Hyde, Montgomery||Marlowe, A. A. H.||Sharples, R. C.|
|Hylton-Foster, Sir H. B. H.||Marples, A. E.||Simon, J. E. S. (Middlesbrough, W.)|
|Iremonger, T. L.||Marshall, Douglas||Smyth, Brig. J. G. (Norwood)|
|Irvine, Bryant Godman (Rye)||Matthew, R.||Spearman, A. C. M.|
|Jenkins, Robert (Dulwich)||Mawby, R. L.||Speir, R. M.|
|Jennings, J. C. (Burton)||Maydon, Lt.-Comdr, S. L. C.||Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)|
|Johnson, Dr. Donald (Carlisle)||Moore, Sir Thomas||Stanley, Capt. Hon. Richard|
|Johnson, Eric (Blackley)||Nabarro, G. D. N.||Stewart, Henderson (Fife, E.)|
|Jones, A. (Hall Green)||Nairn, D. L. S.||Stoddart-Scott, Col. M.|
|Keegan, D.||Neave, Airey||Storey, S.|
|Kerby, Capt. H. B.||Nicholson, Godfrey (Farnham)||Summers, G. S. (Aylesbury)|
|Kerr, H. W.||Nicolson, N. (B'n'm'th, E. & Chr'ch)||Sumner, W. D. M. (Orpington)|
|Kershaw, J. A.||Nield, Basil (Chester)||Thomas, Leslie (Canterbury)|
|Kirk, P. M.||Oakshott, H. D.||Thomas, P. J. M. (Conway)|
|Lagden, G. W.||O'Neill, Hn. Phelim (Co. Antrim, N.)||Thompson, Kenneth (Walton)|
|Lambert, Hon. G.||Orr, Capt. L. P. S.||Thompson, Lt.-Cdr. R. (Croydon, S.)|
|Lancaster, Col. C. G.||Orr-Ewing, Charles Ian (Hendon, N.)||Thornton- Kemsley, C. N.|
|Leavey, J. A.||Osborne, C.||Touche, Sir Gordon|
|Leburn, W. G.||Page, R. G.||Vaughan-Morgan, J. K.|
|Legh, Hon. Peter (Petersfield)||Pannell, N. A. (Kirkdale)||Vickers, Miss J. H.|
|Lindsay, Hon. James (Devon, N.)||Partridge, E.||Vosper, D. F.|
|Lindsay, Martin (Solihull)|
|Lloyd, Rt. Hon. Selwyn (Wirral)||Pilkington, Capt. R. A.||Wakefield, Edward (Derbyshire, W.)|
|Longden, Gilbert||Pitman, I. J.||Wakefield, Sir Wavell (St. M'lebone)|
|Lucas, Sir Jocelyn (Portsmouth, S.)||Pitt, Miss E. M.||Ward, Hon. George (Worcester)|
|Lucas-Tooth, Sir Hugh||Pott, H. P.||Ward, Dame Irene (Tynemouth)|
|McAdden, S. J.||Price, David (Eastleigh)||Webbe, Sir H.|
|Macdonald, Sir Peter||Price, Henry (Lewisham, W.)||Williams, Paul (Sunderland, S.)|
|Mackie, J. H. (Galloway)||Raikes, Sir Victor||Williams, R. Dudley (Exeter)|
|McLaughlin, Mrs. P.||Ramsden, J. E.||Wilson, Geoffrey (Truro)|
|Maclay, Rt. Hon. John||Rawlinson, P. A. G.||Wood, Hon. R.|
|Macleod, Rt. Hn. Iain (Enfield, W.)||Redmayne, M.||Woollam, John Victor|
|Macpherson, Niall (Dumfries)||Remnant, Hon. P.||Yates, William (The Wrekin)|
|Maddan, Martin||Ronton, D. L. M.|
|Maitland, Cdr. J. F. W. (Horncastle)||Roper, Sir Harold||TELLERS FOR THE AYES:|
|Maitland, Hon. Patrick (Lanark)||Ropner, Col. Sir Leonard||Mr. Wills and Mr. Barber.|
|Ainsley, J. W.||Ede, Rt. Hon. J. C.||MacColl, J. E.|
|Albu, A. H.||Edwards, Rt. Hon. John (Brighouse)||McKay, John (Wallsend)|
|Allen, Scholefield (Crewe)||Edwards, W. J. (Stepney)||McLeavy, Frank|
|Bacon, Miss Alice||Evans, Edward (Lowestoft)||MacPherson, Malcolm (Stirling)|
|Bartley, P.||Fletcher, Eric||Mahon, S.|
|Bellenger, Rt. Hon. F. J.||Forman, J. C.||Marquand, Rt. Hon. H. A.|
|Benn, Hn. Wedgwood (Bristol, S. E.)||Fraser, Thomas (Hamilton)||Mason, Roy|
|Benson, G.||Gaitskell, Rt. Hon. H. T. N.||Messer, Sir F.|
|Beswick, F.||Gibson, C. W.||Mitchison, G. R.|
|Blackburn, F.||Gordon Walker, Rt. Hon. P. C.||Monslow, W.|
|Blenkinsop, A.||Greenwood, Anthony||Moyle, A.|
|Blyton, W. R.||Grey, C. F.||Neal, Harold (Bolsover)|
|Bowden, H. W. (Leicester, S. W.)||Griffiths, David (Rother Valley)||Oram, A. E.|
|Bowen, E. R. (Cardigan)||Griffiths, William (Exchange)||Orbach, M.|
|Boyd. T. C.||Hale, Leslie||Oswald, T.|
|Braddock, Mrs. Elizabeth||Hall, Rt. Hn. Glenvil (Colne Valley)||Owen, W. J.|
|Brockway, A. F.||Hamilton, W. W.||Padley, W. E.|
|Broughton, Dr. A. D. D.||Hastings, S.||Palmer, A. M. F.|
|Burke, W. A.||Herbison, Miss M.||Pannell, Charles (Leeds, W.)|
|Butler, Herbert (Hackney, C.)||Holman, P.||Parker, J.|
|Butler, Mrs. Joyce (Wood Green)||Hubbard, T. F.||Parkin, B. T.|
|Callaghan, L. J.||Hughes, Emrys (S. Ayrshire)||Pearson, A.|
|Carmichael, J.||Hughes, Hector (Aberdeen, N.)||Popplewell, E.|
|Castle, Mrs. B. A.||Hunter, A. E.||Price, J. T. (Westhoughton)|
|Champion, A. J.||Hynd, H. (Accrington)||Price, Philips (Gloucestershire, W.)|
|Chapman, W. D.||Irvine, A. J. (Edge Hill)||Proctor, W. T.|
|Chetwynd, G. R.||Irving, S. (Dartford)||Rankin, John|
|Clunie, J.||Jay, Rt. Hon. D. P. T.||Reeves, J.|
|Coldrick, W.||Jeger, George (Goole)||Reid, William|
|Collick, P. H. (Birkenhead)||Jeger, Mrs. Lena (Holbn & St.Pncs, S)||Rhodes, H.|
|Collins, V. J. (Shoreditch & Finsbury)||Jenkins, Roy (Stechford)||Robens, Rt. Hon. A.|
|Corbet, Mrs. Freda||Johnson, James (Rugby)||Roberts, Albert (Normanton)|
|Cove, W. G.||Jones, Rt. Hon. A. Creech (Wakefield)||Rogers, George (Kensington, N.)|
|Craddock, George (Bradford, S.)||Jones, David (The Hartlepools)||Ross, William|
|Cronin, J. D.||Jones, Elwyn (W. Ham, S.)||Royle, C.|
|Daines, P.||Jones, Jack (Rotherham)||Short, E. W.|
|Dalton, Rt. Hon. H.||Kenyon, C.||Silverman, Julius (Aston)|
|Darling, George (Hillsborough)||Key, Rt. Hon. C. W.||Simmons, C. J. (Brierley Hill)|
|Davies, Stephen (Merthyr)||King, Dr. H. M.||Skeffington, A. M.|
|Deer, G.||Lawson, G. M.||Slater, Mrs. H. (Stoke, N.)|
|Delargy, H. J.||Ledger, R. J.||Slater, J. (Sedgefield)|
|Dodds, N. N.||Lee, Frederick (Newton)||Sorensen, R. W.|
|Dugdale, Rt. Hn. John (W. Brmwch)||Lipton, Lt.-Col. M.||Sparks, J. A.|
|Steele, T.||Wade, D. W.||Williams, Rev. Llywelyn (Ab'tillery)|
|Summerskill, Rt. Hon. E.||Warbey, W. N.||Williams, W. R. (Openshaw)|
|Sylvester, G. O.||Wells, Percy (Faversham)||Williams, W. T. (Barons Court)|
|Taylor, Bernard (Mansfield)||Wells, William (Walsall, N.)||Willis, E. G. (Edinburgh, E.)|
|Thomas, Iorwerth (Rhondda, W.)||Wheeldon, W. E.||Wilson, Rt. Hon. Harold (Huyton)|
|Thomson, George (Dundee, E.)||White, Henry (Derbyshire, N. E.)||Yates, V. (Ladywood)|
|Turner-Samuels, M.||Wilkins, W. A.|
|Ungoed-Thomas, Sir Lynn||Willey, Frederick||TELLERS FOR THE NOES:|
|Viant, S. P.||Williams, David (Neath)||Mr. Holmes and Mr. A. Allen.|
§ Mr. H. Brooke
I beg to move, in page 11, line 14, at the end to insert:Provided that the omission of the said paragraph (j) exempting household brushes, brooms and mops shall have effect only as respects the period ending with the first day of December, nineteen hundred and fifty-five.The purpose of the Amendment will, I trust, be acceptable to the House. About a fortnight ago I had the uncongenial duty of resisting an Amendment on this subject which was eloquently supported, among others, by my hon. Friends the Members for Surbiton (Mr. Fisher) and for Belfast, West (Mrs. McLaughlin). My hon. Friend the Member for Surbiton on that occasion, as one of his arguments, said that there was no question of buying brooms and brushes "just to keep up with the Joneses," and my hon. Friend the Member for Belfast, West insisted that the acceptance of the Amendment would be extremely popular. I trust, therefore, that popularity will now extend to the Government.
A day or two after that the Chancellor of the Exchequer answered a number of questions put to him about brooms and brushes and said that he would be very ready to examine any facts placed before him. He said that he felt great difficulty over one aspect of the tax on brooms and brushes, and that that was that a considerable number of blind and disabled people were employed in making brooms and brushes. He pointed out, also, that there were substantial problems of definition which would have to be tackled if the tax were to remain.
He gave the matter very careful and fresh examination. I stress that it was fresh examination, because brooms and brushes had not been taxed before. Therefore, this was a case of a tax being imposed without conversations with the trade in examination of the implications of the tax. As hon. and right hon. Members will appreciate, it is both impossible and improper to go to an industry and say, in advance of a Budget, "I think I will tax you. I want to examine with you how the tax will work." However, 656 discussions took place after the Budget speech had been made.
As a result of the debate in Committee on the Bill, and after further examination of the tax, my right hon. Friend came to the conclusion that the case was made in respect of the number of blind and disabled people employed in this industry, just as he had reached the decision that the case was made in respect of shopping baskets, which he relieved from tax during the Committee. In those circumstances, he felt that the right thing to do to minimise the period of uncertainty was to put down an Amendment on the Notice Paper at the earliest possible moment, and he put down this Amendment, to terminate the tax at midnight on 1st December.
As soon as the Amendment was published he authorised the Customs to issue a Press notice indicating to the trade precisely what the effect would be if the House, as he had reason to expect in view of the Committee's discussion, decided to accept the Amendment. He further wrote a letter to the hon. Member for Shoreditch and Finsbury (Mr. Collins), with whom he had been debating the matter and who had asked if he could send him certain facts. My right hon. Friend wished to follow the usual courtesies, and not to cut off any representations the hon. Member wished to make. He felt it his duty, however, to make a public announcement at the earliest possible moment.
That was the action my right hon. Friend took. He asks me to say he is fully convinced, on consideration, that it is right to exempt brooms and brushes from the tax. This remission will cost about £1½ million a year. I mention that simply because the House will wish to have full information. That sum has to be added to the £500,000 lost to the Revenue in consequence of the previous exemption of shopping bags and baskets. The total cost of the two exemptions will be £2 million, but it is £2 million only out of the additional revenue of £75 million which my right hon. Friend estimates 657 the Budget will produce. I do not think the House would wish me to expatiate at great length on this matter, considering the debates and views expressed in Committee, when I found myself in a little difficulty in defending the tax and resisting an Amendment. I hope that now I shall have fallen into step with hon. Members on both sides of the House.
§ Mr. Anthony Greenwood
I welcome the concession which the Chancellor has made in respect of brooms and brushes but, at the same time, must express our regret that he should ever have brought forward such a mean and miserable tax as the one which he has now abandoned. The Financial Secretary has talked about the difficulties that the Chancellor and he had in imposing the tax, but the right hon. Gentleman knows perfectly well that one of the Chancellor's predecessors, Sir Kingsley Wood, tried to impose the tax in 1940 and that his proposal was withdrawn within two minutes of the debate on the proposition having been begun. The right hon. Gentlemen should have taken much more care and examined the facts much more carefully before they went ahead with such a proposition as that.
The right hon. Gentleman referred to the hon. Members for Surbiton (Mr. Fisher) and Belfast, West (Mrs. McLaughlin), both of whom made powerful speeches in criticism of the Government, but I think that the Financial Secretary would be the first to agree that the most powerful attack upon this proposal came from my hon. Friend the Member for Shoreditch and Finsbury (Mr. Collins). It was he who drew attention to the fact that there is a number of small firms engaged in this industry, that over a thousand blind and disabled people are employed in it, that it involves a long apprenticeship, that it is extremely difficult to collect the tax on articles of this kind, and that there is no industry where the Purchase Tax is less appropriate.
Wiser counsels have prevailed. The last time the Financial Secretary concluded a debate on the subject, one of my right hon. Friends said that his reply had been even more miserably unconvincing than usual. However, wiser counsels have prevalied, and we welcome this new outbreak of generosity on the part of the Government, and wish that this new spirit had permeated the 658 Government earlier in our debates on this Bill.
§ Mr. Nigel Fisher (Surbiton)
Unlike the hon. Member for Rossendale (Mr. Anthony Greenwood), I do not wish to be in the least carping in my praise. On behalf of my hon. Friends, I should like to thank my right hon. Friend very sincerely indeed for withdrawing the tax on brushes and brooms. Many of my hon. Friends did not like the tax, and some hon. Members on this side of the House, of whom I am afraid I was one, went to the point in our dislike of speaking against it and abstaining in the Lobby. We did not enjoy our situation as rebels. As hon. Members opposite well know, unlike them, we are a completely united party on all major matters of Government policy.
§ Mr. Fisher
Did not the right hon. Member hear me say that we are completely united on all major matters of Government policy? It is perhaps because of that deep underlying unity of thought and purpose that we can afford sometimes to differ on comparatively minor matters such as this. We did not enjoy our position, but neither did we like the tax. Therefore, it is with sincerity and gratitude that we thank the Chancellor for resolving our double difficulty and graciously withdrawing the tax.
§ 8.30 p.m.
§ Mr. Donald Wade (Huddersfield, West)
I welcome and support the Amendment. It is true that at first sight it seems to me a little puzzling. There is a double negative, or a double-double negative in it, but I think that the House understands the purpose of the Amendment. There is little doubt that the inclusion of household brushes, brooms and mops in the category of goods subject to Purchase Tax would have led to a number of anomalies, and to considerable hardship to certain blind employees who are engaged in and depend for their livelihood upon this industry and who might have had considerable difficulty in finding other employment.
I am always a little chary of looking a gift horse in the mouth and for that reason I hesitate to examine too closely 659 the circumstances surrounding the imposition of the tax and surrounding its removal, but I feel impelled to make one or two observations. In the first place, I find it difficult to believe that the tax was justifiable a fortnight ago and unjustifiable now. I do not think that the Financial Secretary suggests that that is so. He has told the House quite frankly that there has been a change of mind, but there is a matter of principle involved which should be touched upon before the Amendment is passed.
It would be rather painful to read all that the Financial Secretary said in the debate on 22nd November on this subject. I remind him only of these words:It is logical that these goods should be included amongst household goods and therefore subject to tax under the general concept of the Budget, and I must advise the Committee to reject the Amendment."—[OFFICIAL REPORT, 22nd November, 1955; Vol. 546, c. 1419–20.]Obviously, it could not have been logical then and illogical now.
Therefore, while I support the Amendment, I feel bound to point out the arbitrariness and at times the almost capricious nature of the decisions on Purchase Tax, which I regard as perhaps an inevitable characteristic of the tax. One day the tax is off and one day it is on. I think that the Chancellor appreciates the fact that this uncertainty plays havoc with the normal flow of goods from the producer to the consumer, from the manufacturer to the retailer. Furthermore, whenever it is thought that a Chancellor might change his mind or impose some additional tax, trade is very often brought to a standstill.
An even more serious aspect of this matter, illustrated by the Amendment, is the very great power which the Chancellor has over the economic life of every industry. This has been illustrated also in one of our previous discussions on pottery. The arbitrariness of this method of taxation is even worse than the uncertainty which it creates. I do not wish to be cynical or flippant, because this is too serious a matter for either of those approaches, but in trying to follow some of these Purchase Tax decisions I am reminded of some Eastern potentate wielding absolute power with bewildering partiality.
660 It may be that the Chancellor is a warm-hearted potentate. He has shown himself warm-hearted in his concern for blind persons such as those employed in the industry with which we are now concerned, but that does not alter the matter of principle to which I am trying to draw attention. While welcoming the Amendment, I have an uneasy feeling that possibly those who have applied for relief in other cases might have been successful if there had been that extra touch of persuasiveness or greater pathos in their appeal.
If that is so, the success of an application for removal from the list of articles subject to Purchase Tax is not dependent upon reason or logic or any economic principle but upon finding the key to the Chancellor's heart. Without reflecting upon the humanitarianism of the Chancellor, or of Chancellors in general, I regard it as an anomalous state of affairs and a fundamental flaw in our Purchase Tax system that decisions about it should be dependent upon finding the key to the Chancellor's heart.
There is one other objection, which I think is relevant and arises from this Amendment—the amount of time and energy, and sometimes manpower, that is expended in trying to understand these Purchase Tax Regulations. I am not the only hon. Member who has had letters from firms engaged in the making of these brushes and brooms. I passed on one letter to the Financial Secretary. The main problem there, as I think was the case with many of these firms, was in trying to understand the application of Purchase Tax Order No. 78, which, as the House knows, lays down that the question whether an article falls within a tax group is determined by reference to the character of the article itself and not by reference to the particular purpose for which it is bought. The Financial Secretary replied with his usual courtesy, and explained that this matter was being looked into.
§ Mr. Wade
I will endeavour to follow your Ruling, Mr. Deputy-Speaker.
The firm engaged in this trade, to which the Amendment applies, pointed out that the proposal to impose Purchase 661 Tax had caused very considerable confusion in the trade, and it is clear, from an examination of that case—although I hope their problem has now been resolved—that it has been resolved only after many hours of investigation and days of uncertainty. If one adds to the problem of that firm the problem of all the other firms engaged in brush making, and considers all the other manufacturers, wholesalers and retailers who have to try to understand and collect this Purchase Tax, one gets some idea of the amount of time and energy, not to mention worry, that is inevitable under this system of taxation.
Therefore, I support this Amendment for two reasons. First, because it will grant relief to an industry that would have been adversely affected if Purchase Tax had been imposed, and, secondly, because it reduces in some small degree the range of goods which are subject to a tax which is inevitably complicated, is beset with anomalies, is expensive to administer and is very difficult to justify on any sound economic principles.
§ Mr. Roy Jenkins
I do not want to follow the hon. Member for Huddersfield, West (Mr. Wade) in his rather delicate discussion of the state of the Chancellor's heart. For the moment, I am more concerned with the state of the Financial Secretary's head. Although we support and welcome this Amendment, I must say that, from his speech, I find the whole of the original basis on which the Government's Purchase Tax proposals rests to be extremely doubtful indeed. I understood him to have been swayed by two speeches by his hon. Friends—the hon. Lady the Member for Belfast, West (Mrs. McLaughlin), and the hon. Member for Surbiton (Mr. Fisher), who addressed us, but did not stay very long with us.
The hon. Lady the Member for Belfast, West said that the Purchase Tax changes which this Amendment is designed to undo were unpopular and the hon. Member for Surbiton apparently said that there was no question of people buying the brooms, and whatever else we are discussing at the moment, because it was a case of keeping up with the Jones's. I understood that the Financial Secretary was so swayed by those two arguments that he, in conjunction with the Chancellor, has decided to rescind this proposal. I would have thought, however, 662 that these two arguments could apply to a much wider range of articles than those we are discussing. If unpopularity is to be the test of brushes and brooms and whether they should be subject to Purchase Tax, not only brushes and brooms but a wide range of other articles should be dealt with in this way. If the test is to be that it is not a question of people buying them for frivolous reasons of keeping up with the Jones's, it applies also to a wide range of things which we have been discussing.
Indeed, the Economic Secretary told us on the previous Amendment that he was convinced that the demands for the goods which he was then insisting on keeping subject to Purchase Tax was inelastic and that there could be no question of a falling off. I understand that the Economic Secretary has to reply to some debates and the Financial Secretary to others, but they ought to listen to each other's speeches because it is unfortunate when we have such contradictory views expressed.
We welcome this Amendment. I cannot feel that it has done the Government much good to chop and change in this fashion. I was surprised to hear the hon. Member for Surbiton saying that he regarded the budgetary policy of the Chancellor as a minor matter—at least, that was the implication of what he had to say—because he said that the party opposite were united on all major matters of policy. It is clear, however, that they are not united on the budgetary policy of the right hon. Gentleman and the Chancellor would have been distressed to hear those sentiments expressed.
§ Amendment agreed to.