Hire Purchase (Hansard, 1 March 1955)

§ 13. Mr. Roy Jenkins
asked the Chancellor of the Exchequer how far his regulations provide that hire-purchase finance companies are required to disclose to the Inland Revenue the interest paid by them to depositors.

§ Mr. R. A. Butler
In general, it is considered that interest paid to depositors by hire-purchase finance companies is subject to deduction of Income Tax at source, and in such circumstances the paying company is not required to furnish details of the amounts paid to individual depositors.

§ Mr. Gaitskell
Is the Chancellor aware that some of these hire-purchase finance companies are apparently not deducting tax at source? In that case, can we take it that they will be covered by the 1952 Income Tax Act?

§ Mr. Butler
I have to go by the normal rule of taxation, but I will investigate the point made by the right hon. Gentleman.

§ 17. Mr. Roy Jenkins
asked the Chancellor of the Exchequer what estimate of the volume of hire-purchase credit outstanding he is making, with a view to calculating the extent of the inflationary danger.

§ Mr. R. A. Butler
I cannot at this stage add to the answer given by my right hon. Friend the President of the Board of Trade on 3rd February.

§ Mr. Jenkins
Is the position not becoming ridiculous when the Chancellor obviously thinks that hire purchase is an important element in the inflationary pressure which has been developing recently, but when neither he nor anyone else is able to give any reliable estimate of the figures involved? Will he not put pressure on the President of the Board of Trade to produce some reliable statistics such as the Americans have?

§ Mr. Butler
My right hon. Friend the President of the Board of Trade said that he would have to weigh the value of the information against the additional work which would be put upon traders. If it is possible to get the figures, we will certainly get them, but at present I could not give any reliable figures and, therefore, I would rather not give them.

§ Sir R. Boothby
Will my right hon. Friend bear in mind that while abuses in the hire-purchase system should certainly be checked, nevertheless if the system is properly run it does enable the working class to buy goods which otherwise would never be within their reach?

§ Mr. Butler
Yes, Sir.

§ Mr. Gaitskell
Will the Chancellor of the Exchequer give any estimate of the effect upon the amount of goods sold by hire purchase of the restrictions which he has just imposed?

§ Mr. Butler
We had better give the restrictions a little chance of operating before we give an estimate such as was so often wrongly given by the previous Administration. In reply to my hon. Friend the Member for Aberdeenshire, East (Sir R. Boothby), I am quite aware that many working families have relied on hire purchase for purchasing things they want. I do not consider that the terms disclosed to the House in the Order—namely, 15 per cent. down and the balance over either 24 or 48 months, according to certain classes of goods—are unduly onerous for the working people.

§ 20. Mr. Osborne
asked the Chancellor of the Exchequer, since hire purchase has attracted goods into the home market that ought to be exported, and since the balance of trade has worsened in recent months, what steps he is now taking to check the less desirable features of the hire-purchase system.

§ Mr. R. A. Butler
I would refer my hon. Friend to the statement which I made on the economic and financial position on 24th February, and also to the reply which I gave on 25th February to a Question by the hon. Member for Farnham (Mr. Nicholson) about applications for finance for hire purchase.

§ Mr. Osborne
Has my right hon. Friend any estimate of the amount of goods that he is driving from the home market to the export market each year by these measures?

§ Mr. Butler
No, Sir, I have no exact estimate.

§ Mr. Roy Jenkins
As the Chancellor of the Exchequer does not know the amount of hire purchase outstanding, and as he will not tell the House the figure by which he wants to reduce it, will he tell us what were the objects of the restrictions that he announced last week?

§ Mr. Butler
The object of the restrictions, as the hon. Member and the House know perfectly well, was to restrict a particular boom in hire purchase which was encouraging consumer demand to an extent which was fundamentally inimical to our interests.