FINANCE BILL

HC Deb 22 November 1955 vol 546 cc1307-419

Again considered in Committee.

[Sir RHYS HOPKIN MORRIS in the Chair]

Amendment proposed: In page 11, leave out lines 4 and 5.

Question again proposed, That the words proposed to be left out stand part of the Schedule.

5.47 p.m.

Mr. Anthony Greenwood

When our proceedings were interrupted, Sir Rhys, I was venturing to help your predecessor in the Chair, who was raising the point that my hon. Friend the Member for Ladywood was not strictly in order in talking about jewellery. I was pointing out that in the notice issued by the Commissioners of Customs and Excise there is under Group 26 a special proviso drawing attention to the fact that a number of articles coming under that Group also come under Groups 4, 17, 27, 28 and 29. I was about to suggest that under those conditions it might be difficult to rule too rigorously against my hon. Friend discussing jewellery as so many of the articles in which he is interested come not only under Group 26, which your predecessor was suggesting was out of order, but under Groups 27 and 28, which we are now discussing in this series of Amendments.

The Deputy-Chairman (Sir Rhys Hopkin Morris)

The two groups which are being discussed under the Amendment are 27 and 28. If jewellery does not fall within Groups 27 or 28 it would be out of order to discuss it on this Amendment. The most appropriate point at which to discuss it would be on the Question, "That the Schedule be the First Schedule to the Bill."

Mr. Greenwood

It is a little difficult, unless one is a specialist in jewellery, to know whether the items in Group 26 also come under the other groups. I hope, Sir Rhys, that you will be able to extend some latitude in that respect.

The Deputy-Chairman

I do not know on which side the articles fall. If they fall within Group 26 they are out of order. It will certainly be in order to discuss them on the Question, "That the Schedule be the First Schedule to the Bill."

The Financial Secretary to the Treasury (Mr. Henry Brooke)

Might I seek to help? It is clear that jewellery, as such, falls within Group 26 and is outside the Amendment. On the other hand, Group 28, which is included in our series of Amendments, deals with articles made wholly or partly of a number of semi-precious stones. Jewellery of that character would be in order. As I feel that the hon. Member seeks to debate the main subject of the Amendment, which is the Purchase Tax treatment of craft ware, if we could do it on this Amendment rather than on the Schedule we might have one debate.

The Deputy-Chairman

I am in the hands of the Committee as to that. I do not know on which side the articles fall. If that suggestion meets the convenience of the Committee, be it so.

Mr. P. Roberts

I hope that the hon. Member for Ladywood (Mr. V. Yates) will not think that I am trying to check him, but under Group 28 he can discuss amethysts, opals, moonstone, cat's-eyes and garnets.

The Deputy-Chairman

That has already been said.

Mr. Yates

I was seeking to convince the Committee that craftsmanship in the silverware industry had been seriously declining and measures taken by the Government had not entirely saved the industry. It is still in a serious state. Not only is that true of that industry, but also of the allied industry of jewellery. It is rather difficult to discuss this matter owing to rules of procedure, but in Group 26 there is a reference to articles of personal adornment. The three paragraphs (b), (c) and (d) are bound up with the silverware industry. A silver medal is made completely of silver and, therefore, would surely be an article of personal adornment being an article made wholly or partly of gold, silver, or other precious metal. I am seeking to point out to the Financial Secretary and the Government that this medal I hold in my hand—which has been made by a Birmingham jeweller, is silver and has a small ring attached to it, which makes it capable of being worn on the person—is an article of personal adornment. I also hold another medal of exactly the same material, but without a ring attached. We have two articles which are identical, both made of silver, but one has a ring attached and the other has nothing attached to it. One has now to bear a tax of 60 per cent. while the one without the ring is exempt from tax.

A manufacturer in the silverware and jewellery industry is in a very serious position. He can put one of these medals on the market and it will sell for 4s. or 5s. more than the other medal. We are in the danger, to which attention was drawn in the House two years ago by the Economic Secretary to the Treasury, of these things being sold on the black market. All that needs to be done is for a man to supply the metal and, later, whoever receives it can go to a jeweller and, for 6d., can have a ring put on a medal or a hole bored in it and so evade the tax. One of the most serious results of the Purchase Tax has been to create a black market. In fact, in the silverware and jewellery industry there is probably more "fiddling" going on than in any single industry.

The Mace of the House of Commons is a wonderful creation of British artistic skill. It is exempt from tax entirely, but the gold chain of a lord mayor must carry 60 per cent. tax. I put it to the Financial Secretary, is that not absolutely ridiculous? A lord mayor carries a symbol of his office—a gold chain or gold and silver chain—which is regarded as an article of personal adornment. We have messengers in this House wearing gold chains to each of which a medal is attached. Is it suggested that they would be likely to walk along Oxford Street with those medals for personal adornment? Yet there is a chain to the medal they wear. It is absurd that we should have this distinction, which is something new.

My grievance is that the Government have not realised that the jewellery industry and the silverware industry have suffered enormously and that something ought to be done to save these great craft industries. There are other articles of personal adornment, such as brooches. My hon. Friends from the Potteries will probably be discussing later the question of brooches made of china to which there are silver or gold attachments by way of a clip or a screw.

Mr. Arthur Lewis (West Ham, North)

Before my hon. Friend leaves the question of mayoral robes or chains, in which we are all interested, can be explain why this tax is put on at all? The Chancellor told us that the objective of these additional taxes is to check inflation.

The Deputy-Chairman

Order, we are in Committee. The hon. Member should reserve his speech until he is called.

Mr. Lewis

With respect, Sir Rhys, I was asking my hon. Friend whether he could explain how this tax will check inflation. I should like to have his views on that.

Mr. Yates

The Government say that a mace shall be exempt, but that a mayoral chain shall carry 60 per cent. tax. The representatives of local authorities, the mayor or lord mayor, have to meet foreign visitors and show off products of our great craftsmanship. Are we to ask them to wear a lot of ironmongery around their necks? If they are made of tin, medals are exempt, but trophies or medals for sports organisations—for swimming, and so on—made of silver or other precious metal are to be taxed. This is having a very serious effect on the whole jewellery industry.

It has even been proved that craftsmanship has been declining in the silverware industry. I was informed this morning by a representative of the trade union in the goldsmiths' and silversmiths' trade that a number of workers in that industry are 80 years of age. There is no prospect of their being replaced. I think a very good case has been made for further relief. I support the Government so far as they have gone in that direction, but they should bear these anomalies in mind and do something more about them.

6.0 p.m.

I have mentioned the pottery manufacturers. A number of firms in Birmingham, one of which I have in mind, make the silver cases which go on teapots, silver teasets and so on—silverware which is attached to pottery. I am told that they are in a very serious plight and do not know what to do because of the present prospect of the tax on pottery and on the silverware which is added to it, being increased, making their situation very much worse. Birmingham and the Potteries are bound up together in the jewellery and pottery industries, which latter we shall probably be discussing later. The jewellery manufacturers are very disturbed about the effect of the present rates of Purchase Tax, even before the Government seek to increase them, and about the position of those industries in the Potteries which serve them with the goods on which they have to work.

I am told that, in connection with the British Jewellers' Exhibition which is to be held in January, one of the firms concerned has cancelled a stand because of the prospect of increased taxation on silverware, which is having a very serious effect. I believe that a case was made out two years ago by the Economic Secretary to the Treasury for the complete abolition of the tax on silverware and jewellery, and it is astonishing to me that he has now more or less taken back what he was then putting forward when he called attention to the plight of this industry.

We have to be careful when we talk about luxury industries. I do not consider that anything which brings culture to mankind is a luxury. It is a necessity. This is a very tragic situation for this industry, which has a very long history of creating art and culture, but which is fast declining. Something has been done to assist it, but not enough, and the Government will have to go a long way if they are to bring this industry to real life again. I ask that they will think again, especially on these anomalies, that they will think very seriously about the effect of Purchase Tax at the present rates, not only upon silverware, jewellery and fashion jewellery, but on the ability of our manufacturers to compete in the markets of the world. At present, it is absolutely impossible for them to compete, considering the problems which face them and the burdens which they have to bear.

I trust that the Financial Secretary will say something that will give the whole of the silverware and jewellery industries some hope of further concessions so that those industries can be revived and rebuilt.

Mr. Ede

What a hope.

Several Hon. Members rose—

Mr. H. Brooke

Perhaps I may be forgiven for recalling to the Committee the course of this very interesting debate. The hon. Member for Edmonton (Mr. Albu) has moved an Amendment which is designed to leave where they are certain rates of Purchase Tax which the Government were proposing to reduce. In fact, the hon. Gentleman finds himself friendless. Every subsequent speaker has said that in large or small degree they disagree with him, and hon. Members from all three parties have supported, in general, the line of action which the Government are proposing to take.

I want, however, to respond to the hon. Gentleman's invitation to me to make a logical case for the Government's action, because we are discussing, as the hon. Member for Ladywood (Mr. V. Yates) has said, an important matter concerning the future of craft industries. I hope to be able to show in a very few minutes that this is not an arbitrary action by the Government in selecting a couple of industries for special relief, but that it fits into the general pattern. I assure the hon. Member that these changes are not being made for planning purposes, as he alleged they might be, or as a means of looking for economic salvation for the whole country. They are designed to protect two craft industries from being strangled by the increased rate of tax of 60 per cent. which would be imposed upon them if the Government were taking no special action.

Briefly, the facts are these. Up to last month, cut glass and silverware bore tax at the rate of 50 per cent., even though the articles concerned, whether they were teapots or tumblers, would have borne a much lower tax, or very likely none at all, if they had been made of some material other than cut glass or silver. In the former Purchase Tax Schedule, cut glass and silver articles were singled out for this high rate of tax at 50 per cent.—a tax based on what they were made of, rather than what they were. As every hon. Member has pointed out, cut glass and silverware are both craft industries, and the special peculiarity of the craft industries is that they live by the supply of craftsmen. If the average age goes up, and if the industry is not attracting apprentices and young men from the technical colleges, sooner or later, the industry will pass out of existence, and an industry which has once gone can hardly be revived.

That is an extremely important aspect of the matter to which the Government gave special consideration. These goods made of silver and cut glass carry a distinguished name for British craftsmanship, and I really cannot accept the contention of the hon. Member for Edmonton that the phrase "British craftsmanship" has to be confined to the products of machines. This 50 per cent. tax which has been imposed hitherto, was, as my hon. Friend the Member for Buckinghamshire, South (Mr. R. Bell) has said, at the rate of 100 per cent., and I think even of 125 per cent. at some time. This 50 per cent. tax was making the goods costly in the home market, because they are relatively costly articles to produce in the first instance, and without an adequate home market, the trade could not live and could not export.

One or two hon. Members have suggested that there is no real need for a home market, but unless there is a home market, there will be no craft at all, and the craft will die. These trades depend on the supply of craftsmen, and I have to tell the Committee that, since I went to the Treasury, 18 months ago, representations have been made on behalf of both these industries, and they have been supported by hon. Members on both sides of the House. My hon. Friend the Member for Sheffield, Heeley (Mr. P. Roberts) joined with the hon. Member for Sheffield, Park (Mr. Mulley) in calling attention to the situation of the silverware industry, and similarly hon. Members from both sides of the House joined in urging the case of cut glass. They were able to make a cogent case that the technical colleges, which instruct young men in the art of the silversmith, are meeting with difficulty in finding permanent jobs for their students when qualified.

That will not surprise the Committee when I say that silverware sales in the home market since before the war have fallen by 80 per cent. in weight. Similarly, it is difficult to get apprentices to learn the cut glass technique. Indeed, cut glass has suffered, too, in recent years from the great improvement in the finish of moulded glass, so that the two articles, the machine-made and the hand-made article, are no longer so easily distinguishable as they were. Furthermore, both of these industries operate geographically in areas where there are plenty of alternative openings for boys and young men, so that there is any amount of attraction for them to look elsewhere if they feel that there is no future in these industries.

What would have happened had the Government taken no action? The rate of tax would have gone up from 50 per cent., which was already represented to us as being unreasonably high, to 60 per cent. A 60 per cent. rate of tax would have been crushing. The solution seemed to us to be to remove the special discrimination which existed against silver and cut glass and to let these articles bear tax in future according to the article and not the material. We have made one exception and we have kept the 60 per cent. rate of tax on watches, for I do not think that they are silverware in the ordinary sense.

The Committee will realise that even at the lower rate of 30 per cent., these articles will still pay substantial tax because they are costly in themselves. I should clearly be out of order in seeking to debate the jewellery trade, but I think I am right in pointing out that neither of the two other craft trades that have been mentioned—jewellery and leatherware—suffered from this discrimination in the tax schedule which injured silver and cut glass. There is a flat rate of tax on leatherware. It is not heavier on high-quality goods than on imitation leatherware. Similarly, there is the same rate of tax on high quality jewellery as on imitation jewellery. But in this case there was the exceptional tax on the goods that were made of the most expensive materials.

I should like, in conclusion, to mention the Amendment, to which nobody has yet called attention, which would reduce the tax on vases to 30 per cent. It was one of the notorious anomalies of the Purchase Tax that vases were charged at 50 per cent. and bowls were free of tax. At what point is a vase so squat that it becomes a bowl? At what point does a vase with a handle and a lip turn into a jug? It seemed to be the reasonable course of action, and I hope the Committee will agree, that there should be no differentiation between vases and bowls in the Purchase Tax rates. I hope that with this explanation, the hon. Member for Edmonton will join with the rest of the Committee in agreeing that there is not only a sentimental and an industrial case, but a logical case for the Government's action.

6.15 p.m.

Mr. Anthony Greenwood

The fact that the Financial Secretary rose to reply when a number of hon. Members wished to address the Committee further on this matter does not, I hope, presage the use of further strong-arm techniques on the part of the Chancellor of the Exchequer. There are a number of points which hon. Members on both sides of the Committee wish to deploy, and I hope that they will have an opportunity of doing so before the Committee comes to a decision.

We are grateful to the Financial Secretary for his lucid explanation. We are still more grateful to those hon. Members who have tabled Amendments which have given all of us, on both sides, an opportunity to make cases which are of special interest to our constituents and have enabled a fairly wide-ranging debate to take place. I am, however, not absolutely clear about the reasons why the Government have chosen these particular industries to help.

In spite of what the Financial Secretary has said, it seems to many of us often to be the case that there is no guiding principle behind what the Government do in respect of Purchase Tax. The Chancellor of the Exchequer tells his staff that he wants £75 million and they then suggest where the £75 million can be found. Having found the industries which will be able to cough up that amount, the officials of the Treasury and of Customs and Excise then look around for the reasons to use in defence of the course of action which they have urged upon the right hon. Gentleman.

Mr. Ede

The excuse is not the reason.

Mr. Greenwood

We well understand the argument about craftsmanship, to which the Financial Secretary is so recent a convert. Indeed, for a number of years we have argued from this side on exactly similar lines to those which the right hon. Gentleman is now using. I am quite sure that the last thing that was in the mind of my hon. Friend the Member for Edmonton (Mr. Albu) was in any way to disparage British craftsmanship or the contribution that it makes, both to the prestige of the country and also to our struggle to restore economic stability to the nation.

We are all aware of the contribution which craftsmen make. We are all aware of the essential need for craftsmen if we are to provide mechanised industry with the key workers that it requires. I have no doubt that when we come to discuss another industry—pottery—which depends largely upon craftsmanship, about which some of my hon. Friends will be moving later Amendments, they will pay tribute to the value of craftsmanship in that industry. Certainly, we have no wish to be churlish in our attitude to any of these industries which are being helped by the concessions that the Chancellor of the Exchequer is making.

Our criticism is not that there is a reduction in the tax on these industries but rather that it is being done at a time when the tax on other industries is being stepped up and also when some craftsmanship industries which, we believe, ought to be helped are not getting the help that they deserve. I liked the description in the special Budget number of The Economist, when it said: A tinker's miscellany of saucepans, bread boards, pot scourers, coal scuttles, irons, kitchen scales and shopping baskets are also subject to tax for the first time, while an even stranger collection of items, such as cut glass, vases, gold and silver picture frames and trophy cups get concessions that mean they are taxed at the lower, rather than the higher rates. It is the surprising selection which has been made and which the Financial Secretary has not completely cleared up which has led us to put down these Amendments tonight in the hope of obtaining clarification of the Government's motives.

It looks extremely odd to the public that the Government should be reducing the taxation on goldsmiths' and silversmiths' wares, cut glass and other commodities which are regarded as luxury goods, just at the time when they are adding a heavy new burden upon many household requisites and also upon various articles of clothing which have never borne taxation in the past.

All of us were moved when my right hon. Friend the Leader of the Opposition drew his picture of The young married couple … left sitting in a room without any furniture, looking sadly at the cut glass and silverware which their economic aunt bought for them on the cheap."—[OFFICIAL REPORT, 26th October, 1955; Vol. 545, c. 238.] That, I am afraid, is how this whole matter appears to the public.

I do not want to quarrel with the hon. Member for Buckinghamshire, South (Mr. R. Bell), who drew attention to the fact that there have always been anomalies in Purchase Tax. It is true that for every anomaly that we can point out, hon. Members opposite, if they wish to choose that form of argument, can draw attention to similar anomalies in the past. Our contention is that the farther we get away from the initial imposition of the tax, the more experience we have of its working, the farther we get from the difficult economic situation which made Purchase Tax necessary, the more experience we ought to have of avoiding just the kind of anomalies which have been newly created on this occasion. Although the hon. Gentleman is perfectly entitled to point out that there always have been anomalies in the imposition of the Purchase Tax—

Mr. R. Bell

I did not draw attention to an anomaly. I drew attention to the fact that the late Sir Stafford Cripps introduced just such measures in his Budget in 1950 and justified their juxtaposition.

Mr. Greenwood

I am sorry that the hon. Gentleman does not seem to follow the argument I was developing. I was saying that this kind of anomaly was, of course, inseparable from a tax like Purchase Tax.

We agree entirely with the Financial Secretary about the need for a healthy home market, and if these new concessions will help our export trade nobody will be more pleased than we on these benches. I would, however, remind the Financial Secretary, as I reminded him the other night, that in 1952 the Chancellor made the Purchase Tax (No. 4) Order which reduced from 100 per cent. to 66⅔ per cent. the tax on cut glass ware and on leather goods, and he commended both reductions on the ground that they would help to provide a healthy home market which would be the basis of an export trade. Now the right hon. Gentleman is reducing the tax on cut glass ware to 30 per cent. and just at the moment when he is increasing the tax on leather goods from 30 per cent. to 60 per cent.

I understand that over the last year or so the cut glass ware trade has been extremely prosperous. Many people in higher income groups than that to which I belong have great difficulty, I understand, in finding servants to employ to clean their silverware, and they have been tending to replace their silverware by cut glass, and, in consequence, the cut glass industry has not been doing too badly over the last year or so. I think that, perhaps, it may be of some encouragement to my hon. Friend the Member for Birmingham, Ladywood (Mr. V. Yates), who is anxious about the position of the goldsmiths' and silversmiths' industries, to hear what I read in the Sunday Express the other day. That newspaper reported: Out of sheer necessity Lord and Lady Scarsdale eat all their meals off silver plate. The Scarsdales have used the silver since 1760, and it would cost so much nowadays to replace it with china, says Lady Scarsdale. Now the right hon. Gentleman has made the price of china even higher, just at the time when that was stated in that newspaper, and presumably there will be a boom in the wares of the goldsmiths and silversmith.

However, it is very difficult to see why the right hon. Gentleman, in introducing these tax concessions, has left as he has the tax on leather goods and furs and other products of craft industries. By the Schedule the right hon. Gentleman is reducing the tax on cut glass from 50 per cent. to 30 per cent. At the same time he has put the tax on an ordinary glass powder bowl up to 90 per cent. from 75 per cent. On the cut glass article which John Tilley used to call a "varse, vawse or vaise" he is putting the tax down from 50 per cent. to 30 per cent. It is a little surprising that he should he reducing the tax on one commodity in that group from 50 per cent. to 30 per cent. just at the time when another article, wallpaper, which has been free from tax so far, is to be taxed at 30 per cent.

We appreciate the reductions the right hon. Gentleman has made on the wares of goldsmiths and silversmiths, but we do think it a little ironical that at the time when he is reducing the tax on those wares he should be putting on tax on cutlery. Therefore, while we do not object to the reductions in Purchase Tax on those commodities, we wish the Chancellor would be more generous in his approach to this problem and would not accompany his reductions with what we regard as a wholly indefensible increase in taxation on the other commodities.

Therefore, in the hope that the Chancellor, after the discussions we are to have later tonight on pottery, will show himself to be flexible and generous-minded, I would suggest that, when we have had a full and ample discussion upon the issues raised by these Amendments, my hon. Friend the Member for Edmonton will, perhaps, think it worth while not to press his Amendment, so that we can hope that the Chancellor will make concessions in respect of pottery.

Sir Hugh Linstead (Putney)

I take this opportunity briefly to express to my right hon. Friend appreciation of the concession which he has found himself able to make for cut glass. The hon. Gentleman the Member for Rossendale (Mr. Anthony Greenwood) suggested that the cut glass industry was not doing too badly, but an examination of some figures of the industry's production during recent years will hardly bear that out. For example, in 1951 the total production of the industry was running at £1,375,000 worth a year. It has fallen steadily. In 1953 it was £1,238,000 only, and for the first eleven months of 1954—I have not the figures for the full year—was £1,300,000. There is no indication in those figures that this industry is doing more than holding its own. Indeed, there have been some rather alarming falls in the total volume of sales by the industry.

It is a small craft industry, as the Financial Secretary has just said, and in spite of the suggestion made by—I think it was—the hon. Member for Edmonton (Mr. Albu), who moved the Amendment, that the industry has not much capacity for exporting, nevertheless its export sales and its home sales balance one another. Roughly speaking, and over a period of years, 50 per cent. of what the industry has made has been exported and 50 per cent. has been sold at home. Its export sales run to about £500,000 worth a year and its home sales to about £500,000 worth a year or a little more. It is not a large amount, but it is a substantial and useful contribution to our export trade, and it is a contribution which is of much prestige value, because the quality of British hand-made articles since the seventeenth century has been well appreciated throughout the world, especially in the United States of America.

In expressing to my right hon. Friend the appreciation of those who have made representations to him on behalf of the industry there are two things I would say, and they are these. I believe that the action which my right hon. Friend has taken is only just in time to save the industry from extinction. It had at the beginning of the war about thirty factories for making hand-made articles. They are now reduced to nine. At one time it employed 3,000 or 4,000 blowers and decorators. Those numbers have steadily fallen until, today, there are only 500 blowers and fewer than 500 decorators employed in the industry.

I have here some figures from one company which employs 83 blowers. It had only two apprentices in 1952, two in 1953, and none in 1954. By a special drive it has managed to recruit eight in the last year. That is a little picture of one corner of the industry, which is in a state—I will not say of decline—of great difficulty. I believe that the concession which my right hon. Friend has made will arrest that decline and do something to remedy the situation.

6.30 p.m.

Even in relation to cut glass there are quite substantial anomalies. I remember once taking a deputation to see the Financial Secretary to the Treasury in the days of the Socialist Government on the subject of Income Tax. He opened the proceedings by saying that all Income Tax law was based on injustice. I think that we can say that all Purchase Tax law is based on anomalies, and the cut glass industry is one of those hit by the anomalies. The industry appreciates the reduction in taxation, but it would prefer it if the articles that it makes were taxed in common with articles of the same kind rather than that there should be a special tax related to the materials of which the wares are made and the craftsmanship which goes into them. That is one of the anomalies that hits the industry, but I am sure that the concession made is well deserved by the industry and that those engaged in it are grateful to my right hon. Friend for finding it possible to make the concession.

Mr. Frederick Mulley (Sheffield, Park)

I wish, first, to apologise to my hon. Friend the Member for Edmonton (Mr. Albu) for the fact that owing to an engagement upstairs in a Select Committee I had no opportunity to hear his speech, which, I gather, was rather naughty. By the same token, I must congratulate the Financial Secretary on his speech, for which I might claim a small share of the credit, because the right hon. Gentleman recapitulated very forcibly many of the arguments which have been addressed to him over the years by hon. Members on both sides of the Committee and by those who have visited him in deputations.

I have had a similar Amendment to this to Groups 27 and 28 on the Order Paper year after year during our debates on Finance Bills but I have been in a difficulty about the Financial Resolution, which is not unfamiliar to the Committee but which the Chancellor, of course, is readily able to surmount. I hope, therefore, that we shall have further concessions of this sort to industries which are affected by the same kind of craft argument. I will not now furnish evidence to support the right hon. Gentleman's action in this matter. I only hope that he will go further and deal with silverware and cutlery, including the ordinary knife and fork.

The abolition of Group 28 is particularly of assistance to both the silverware industry and cutlers. We tried to persuade the Treasury that it was absurd to double the Purchase Tax on an ordinary pocket-knife because about 3d. worth of mother-of-pearl was attached to the handle or a silver disc was attached to it on which a person's name could be inscribed. Apparently, over the years, even the Treasury can be moved. I hope that my hon. Friends will try to press their point of view upon the Chancellor and that between now and three or four years hence, when the people will again have an opportunity to express their views at a General Election, we may have some results. The concession will be appreciated by cutlers and silversmiths in Sheffield.

Mr. Blenkinsop

It is strange that we had to wait until the hon. Member for Putney (Sir H. Linstead) spoke before we heard any valuable information about the craft industries which are covered by some of the Amendments on the Notice Paper. It is very difficult for hon. Members who may have no specific constituency claim to put forward, to make up their minds about the value of Amendments like the one which we are now discussing unless we have some kind of economic information provided for us. It seems very strange that the Financial Secretary contented himself with making certain claims about the Government's action without giving us any information about the size of the problem and the extent of the industries concerned and their relationships with other craft industries which are not being treated in this way in the Bill.

Unlike previous Governments who always made arrangements for the President of the Board of Trade or his Parliamentary Secretary to attend the Committee to deal with matters raised in debate on the Purchase Tax section of the Finance Bill, the present Government have apparently always succeeded in dissuading the President of the Board of Trade from attending our debates. Presumably, it is the Board of Trade that is in the best position to give us information about the extent of the home and export markets of some of the crafts which we have been discussing.

It is difficult for any hon. Member who is not an expert in these trades to distinguish between the different Groups in the Schedule. It has been explained, for example, that, in relation to one of the Amendments, we are discussing the position of goldsmiths and silversmiths in Groups 27 and 28. Group 28, in particular, includes a wide variety of what are called semi-precious stones. I was totally unaware of many of them until I consulted the list.

Group 26, which has not been dealt with in the same way in the Finance Bill, is concerned with jewellery and imitation jewellery. I am aware that it would not be in order for us to discuss that group now. Opportunities for discussion may arise in the general debate on the Schedule. But it makes it extremely difficult for hon. Members to discuss the matter in any logical way when it is quite impossible to distinguish between articles in one group and in another, or to discover how the Chancellor has come to certain decisions about semi-precious stones in Group 28 which are apparently regarded by him as relating to craft industry.

Mr. Mulley

This is a very simple point. It is that in the case of Group 28, even when only a fraction of the semiprecious stones, particularly ivory or shell, is included the whole of the article attracts the higher rate. The abolition of Group 28 merely provides that in future we shall have the very sensible arrangement that a penknife will be classified as a penknife and that an article of jewellery will be classified as an article of jewellery.

Mr. Blenkinsop

I am grateful for that explanation, but it still leaves the question whether the articles of jewellery themselves should not be treated in the same way as articles which are made of semi-precious stones. Group 28 includes all articles made wholly or partly of the semi-precious stones that are listed in that group.

If the Chancellor of the Exchequer is making the case that he is anxious to deal with the problem of certain craft industries, it still remains difficult for us on this side of the Committee to understand why he has chosen this group of craft industries and has not gone wider to deal with others at the same time. For example, there has been a good deal of correspondence in The Times about the difficulties of other craft industries which claim strongly that they are being put out of business by this Finance Bill.

Why is the Chancellor taking to himself the mantle of righteousness in saving, as he says, craft industries, in dealing with the difficulty of training new recruits for the industries, when according to the remarks made in this Committee as well as in the Press accounts there are many other craft industries which are in precisely the same predicament and to which the Chancellor has offered no concession?

For those of us who have not a specific constituency understanding of this matter, more facts and information are needed about the position before we pass from this group of Amendments. It is treating the Committee unfairly that the Treasury should have brushed aside so cavalierly the President of the Board of Trade— who, for all I know, may be waiting just outside the Committee—who would be in a position to give us the extra economic and factual information to which the Committee has a right, and without which we cannot make up our minds upon this matter.

Mr. Albu

As I expected, there have been a number of emotional speeches on this subject but very little factual information, except from the hon. Member for Putney (Sir H. Linstead). That is unfortunate. It is equally unfortunate that no logical case has been made out by the Financial Secretary. I still hold to my view that the exports of this group of industries are a bagatelle and that the loss of the home market is due to a change in the distribution of income as well as to a low standard of design. However, I do not want any hon. Member to feel that I have less appreciation of genuine craft industries than they have. For that reason, and not because I think the Government have any basis of principle behind their application of these ups and downs of the Purchase Tax. I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

The Temporary Chairman (Mr. Malcolm MacPherson)

It may be for the convenience of the Committee if the next Amendment in page 11, leave out lines 6 to 8, is taken with the following four Amendments, one on tableware and trays decorated by hand painting and the next three dealing with pottery.

6.45 p.m.

Dr. Barnett Stross (Stoke-on-Trent, Central)

I beg to move, in page 11, to leave out lines 6 to 8.

I am sure that we shall all be happy to have the next four Amendments discussed with this one, Mr. MacPherson. The purpose of this Amendment is to ensure that the present intention of the Chancellor, which is to charge for the first time 30 per cent. Purchase Tax on certain tableware, kitchen ware and similar articles, shall not be chargeable. The articles designated are described as follows: Vessels designed for use primarily as containers for food or drink in the course of its storage, preparation or consumption, lids for use with vessels so designed, serving trays, bread boards, bowls and jugs and ewers. It is not my intention to say much, if anything, about bread boards and trays and some similar household articles. I shall confine my pleas to the Chancellor and to his colleagues to pottery. If it were an interest I had, I would declare it, namely, that for many years I have served the Pottery Workers Society of Great Britain as their medical adviser, although now in a purely honorary capacity, so it may be said that I have no true interest. However, all hon. Members representing North Staffordshire—I hope I am allowed to include the hon. Member for Stafford and Stone (Mr. H. Fraser)—

Mr. Hugh Fraser (Stafford and Stone) indicated assent.

Dr. Stross

—have a deep affection for, and knowledge of, the industry of which I am about to speak. There are some, including the hon. Lady the Member for Stoke-on-Trent, North (Mrs. Slater), whose ancestors have been potters for many generations. We know that the Chancellor has had to face a problem. He cannot have been moved to apply Purchase Tax at 30 per cent. to this industry for the first time unless he felt himself in a dilemma. I and my colleagues who represent North Staffordshire have tried to look into his mind by asking ourselves what advice was given to the right hon. Gentleman and how the case was put to him by those who told him that it would be a reasonable thing to do.

We wondered whether the Chancellor thought on the following lines. First, was he told that here was an industry which had been enjoying full employment for a number of years? Secondly, was he told that there is a fair demand in what is a starved home market? We can discuss that point later. Thirdly, was he influenced only by the fact that he might get up to £7 million each year as a result of this imposition, assuming that the industry is not ruined? Fourthly—and I am sure that the right hon. Gentleman will accept that this has been in his mind—he may have been tempted to feel, or have been advised, that if he makes pottery dearer he kills two birds with one stone, in that he will tend to encourage pottery to be sold abroad rather than to be distributed at home. In that way he will bring about a deflationary action, because it will make people pay more for that which they buy at home if they still insist on doing so.

I think that that would not be an unfair picture of the type of advice which the Chancellor might be given by those who have to consider these decisions. In this case, however, the decision is one that affects us so seriously that I am sure the Committee will forgive us if we try to put the case not only logically and clearly but straightforwardly.

First, we must advise the Treasury, and particularly the Chancellor, that we cannot accept that this is a fair step to take. It is not fair that there should suddenly be imposed so high a Purchase Tax on the greatest existing craft industry in Britain which had a Purchase Tax imposed on it during the war of 15 per cent. and which was totally withdrawn from 1946. We have heard all the arguments adduced, both on Second Reading and during this Committee stage, about the need to buy less from abroad as well as the need to export more, especially that we should not import from abroad certain goods which distort our balance of payments position, for example, sheet steel.

But in our pottery industry over 99 per cent. of all the materials used in manufacture and decoration are prepared in this country. The metal that is used for the purpose of decorating may be silver or gold that is imported, but not much of that kind of pottery is kept at home. It is mostly sold abroad, particularly to earn dollars, and very successfully. I do not think that there is any other industry in the country which can boast that it exports as much as this industry does, and yet virtually it has to import nothing in order to manufacture its products.

Another point which we must put to the Chancellor is that this industry has an excellent background and reputation. I am sure that not only the Chancellor but the President of the Board of Trade recognises that this is a good dollar earner, but despite this the Chancellor should realise—and if he has not been so advised he is going to be so advised tonight—that this industry is particularly vulnerable, as I will show later, and vulnerable not only because of what is happening outside or inside this country by way of competitive production, but because of its own virtues, namely, that it has rationalised itself, and its processes are now of a different kind.

Mr. H. Wilson

I think, Mr. MacPherson, that it is quite unprecedented that we should be debating the fortunes of an industry in so far as they are affected by this revolutionary change in taxation, an industry which can and does make such a large contribution to exports, without the President of the Board of Trade or a representative of the Board of Trade being present. I put this forward quite seriously, because I do not recall a single occasion in the lifetime of the Labour Government, between 1945 and 1951, when Purchase Tax was discussed, affecting any particular industry, whether making a contribution to exports or not, when I myself or one of my colleagues at the Board of Trade was not present.

While I shall not seek to move to report Progress or anything of that sort in order to get the attendance of the President of the Board of Trade, I suggest to the Chancellor that someone should send for the President of the Board of Trade immediately, because the Committee ought to have his presence when debating an industry so important to our export trade.

Dr. Stross

I am not surprised that the President of the Board of Trade is not here. He is a Staffordshire man, and he must feel deeply aggrieved by this cruel imposition upon an industry which he knows so well. If he is on the premises, we should be happy to see him in the Chamber, because we have questions to ask him later.

On the Second Reading of the Finance Bill the Financial Secretary made what I think to be two conflicting statements in one speech, and I must put them to him. In one part of his speech he said: … I myself do not see how Parliament could, for instance, treat metal teapots differently from earthenware teapots, … It is really worth while to look at some other things which he said.

Mr. Geoffrey Wilson (Truro)

Can the hon. Gentleman tell us what proportion of the Staffordshire industry deals with hand-thrown pottery as distinct from mechanised?

Dr. Stross

The first observation I must make to the hon. Member is this. This industry has the highest labour content of any industry in this country. Forty-eight per cent. of all costs are due to the labour content in making the article. There are firms which specialise in making only hand-made pottery. They are not the largest potteries. The hon. Member knows of the rural potteries in the countryside which are essentially hand-craft, and there is also the artist potter who makes work of intrinsic merit which should be called not craft but art, and all of them, unfortunately, are under this ban.

This is what the Financial Secretary said on the Second Reading of the Finance Bill. He will forgive me if I do not repeat the interesting rhyme. He said: One suggestion mooted was that a distinction should be drawn between metal and nonmetal goods. These are the sort of matters which can be examined in Committee, but I must say that I myself do not see how Parliament could, for instance, treat metal tea-pots differently from earthenware tea-pots, metal pie-dishes differently from glass pie-dishes, metal trays differently from wooden trays, or metal jugs differently from plastic jugs, and SO on down the list."—[OFFICIAL REPORT, 8th November, 1955; Vol. 545, c. 1679–80.] To that, one must answer immediately two things. I do not know whether to deplore the carelessness of the Financial Secretary in making such a statement, but I refuse to accuse him of ignorance on the matter. It cannot be true that he believed this for he contradicted himself in the same speech, and he has contradicted that statement most profoundly and most emphatically today.

I will read what the Financial Secretary said on Second Reading, when referring to silver and cut glass. He said: The Purchase Tax on quality goods with individual craftsmanship in them needs to be watched especially carefully, and I have had representations in the last 18 months from hon. Members on both sides of the House concerning this field. Goods of this sort can do so much for Britain's reputation in overseas markets, but if high Purchase Tax prices them out of the home market, then the craft may die and there may be no basis on which to maintain exports."—[OFFICIAL REPORT, 8th November, 1955; Vol. 545, c. 1675.] What is the Financial Secretary going to say to us tonight, or the Economic Secretary? Is not the industry that we are discussing one which brings us a high reputation or is this industry not to be considered of any account? Are not great names like Spode and Wedgwood of any more avail in the mind of the Government? Are they not to be compared with silver and cut glass, or is it because this industry in Britain employs only about 64,000 people that it is to be treated shabbily? It may be that I am wrong in speaking like this and that the Government will tell us, as I hope, that they have been having second thoughts, and that the Purchase Tax which is threatened—a 30 per cent. imposition—will not be imposed.

The Financial Secretary will remember that he very kindly and most courteously met a deputation representing the export side of the industry and the manufacturers, together with the general secretary of the union. They put their case, and I think that he will agree that they put it simply, politely and vividly. There was no doubt about the emphasis. They showed some fear. I was certain the Financial Secretary would be able to impart this sense of fear and urgency to his right hon. Friend. He certainly said that he would, and I have no doubt that he did. The fact that the industry has had no answer yet, we in this Committee can understand, but the industry does not. They do not understand that until this debate is closed it cannot be informed.

If the Financial Secretary, who nods at what I have been saying, has fully informed the Chancellor of how seriously the industry, both workers and employers, consider this measure, I hope he will say that some reconsideration is still possible, even at this late hour.

7.0 p.m.

The truth is that there are many frightened men and women in North Staffordshire, and they are not only the workers, for the manufacturers are frightened, too. Those people remember the bitter years of the past. I am not referring only to pottery now, for we have also miners and steel workers. One may have in one home three brothers working respectively in the steel industry, the pottery industry and the mining industry. In the years between the wars our average unemployment was 20,000, and in the worst year there were 40,000 people completely unemployed. One can imagine how much short time was worked then.

Last week I received a telegram from the Director of the British Manufacturers' Federation. The Financial Secretary will remember that this gentleman introduced the delegation to him. The telegram reads: First survey since Budget shows 250 craftsmen on short time due to effects of Purchase Tax. Later, I shall read a letter which I received from him this morning, bringing the picture up to date.

I know that the Committee will agree that this cannot be regarded as a fragment of special pleading by these men. The men who came to see the Financial Secretary bear names which are known throughout the world. They are not impoverished people, merely pleading for their personal pockets. They are pleading for the industry as a whole. In doing that, they are pleading for those who serve the industry, and we ought all to think first in terms of the men and women who make the goods and whose forebears made them for generations.

One of my wife's ancestors, in 1740 at Whieldon, made a magnificent fragment of ware which still remains. If I may say so with respect, it was a much better piece of pottery than the Wedgwood pottery of that time or since, though everyone will appreciate that Wedgwood pottery is superb. We who know the dangers which the craftsmen are facing are very disturbed.

The number of people employed in the industry in the city is only 41,000, out of 64,000 working in the industry as a whole. A little earlier I said that one of the virtues of our craft now militates against us. I meant that we have modernised and rationalised the industry as far as possible and gone over to a new technique not only for preparation but for firing. Those who are interested in saving coal know that the change in firing in the Potteries since 1938, by means of a continuous process with tunnel ovens, has meant a saving of 500,000 tons of raw coal annually. We are rather proud of that. We expect to save a great deal more during the next few years. Within a limited number of years—perhaps three or four—we may not be using an ounce of coal at all for firing in the old-fashioned way. We fire by means of electricity and gas.

Here comes the rub. We have done what should be done and turned the industry into the most modern of its type. Hon. Members must surely know that nowhere in the world is there concentrated in one place such a large number of men and women engaged on this work. Not even in Japan, America, Czechoslovakia, West Germany, or East Germany is there so large a concentration. However, having rationalised the industry we are faced with this problem.

The manufacturer must keep his oven hot. He cannot let it cool, for it is too expensive to bring it up again to the heat which is required, which is 750°C. to 1,100°C. Some special types of ware are fired at a very much higher temperature than that. The result is that, if the manufacturer cannot keep his tunnel oven full of ware, he begins to lose his profits in fuel costs. This is a most interesting and important point. I apologise for stressing it, but it has to be made, because that is why the industry, having perfected itself, is more vulnerable now than it was in 1938.

With only 64,000 people working in this industry in the country, our record of exports is formidable. In 1952, exports amounted to £15 million. There was a sudden fall in 1953 to £12½ million, and many hon. Members will know that that was because of the import quota applied by Australia, our best single market. By 1954 we showed signs of recovery, exports amounting to £14¼ million. In the first nine months of this year our exports totalled £11¼ million. That is ample evidence of recovery and shows that the industry has taken its chance when it could to regain that part of its export market lost because of circumstances over which it had no control.

I must mention one more figure, and then I will try to mention no others. Forty-five per cent. of our exports go to the dollar markets of Canada and America. That is the figure given to me, and I believe it to be true. If hon. Members realise what an able recovery we made after 1952, they will see the importance of what I am about to plead.

Before I continue, I want the Chancellor to remember what he said so sincerely to us during our long sitting a few days ago. He said: Gone are the cries of 'Unemployment under the Tories'."—[OFFICIAL REPORT, 16th November, 1955; Vol. 546, c. 621.] I know the right hon. Gentleman meant that; he said it exultantly and proudly. I want him to think about that when I proceed a little further with my argument.

The pattern of our sales should be of some interest to the Committee. It may well be that the Economic Secretary—I presume that he will reply—will have been informed that we export roughly 50 per cent. of our manufactures of decorated ware and 50 per cent. remain in the home market. I wonder whether he has considered the breakdown of those figures a little more carefully. Does he realise that we never export "seconds," anything which is not perfect, and that some 20 per cent. of ware tends to be not absolutely perfect and that it is that which in the first place goes into the home market.

Let us assume that it is between 10 and 20 per cent. One sees at once that we must remove that from the 50 per cent. used at home, for we would not attempt to sell it abroad. No industry like this would dream of doing so, because reputation is of prime importance in view of the competition that we face from countries such as Japan, Italy, Western German and Eastern Germany, and we must adhere to our reputation at all costs.

Therefore, we must subtract 10 to 20 per cent. for "seconds," and we must also subtract the amount of pottery taken out of the country directly by tourists. We can then see that our real export figure is very much more than 50 per cent. The Chancellor may have been advised, "If Purchase Tax is imposed, shops and stores can use the personal exports scheme." We must tell the Chancellor that that would be true for large stores like Harrods and Barkers, but it would not be true for the smaller store which specialises mainly in the sale of pottery. Many retailers are not equipped to operate such schemes.

Secondly, they have not enough capital to hold stocks, nor enough staff to handle them. Nobody knows quite how much pottery is taken away from our country, nor do we know with certainty where it goes, but it is an appreciable amount; it certainly totals between £1 million and £2 million a year. If tourists visiting places like Edinburgh, York, Bath, and Harrogate find that they cannot obtain the pottery which they require and take it on to their ships free of Purchase Tax, they will not buy it at all—and, as I have said, the smaller stores cannot afford to run personal export schemes.

The points which I have made are not strange to the Financial Secretary, and I hope that they are not strange to the Chancellor of the Exchequer. With regard to the question of the vulnerability of the industry, I wonder whether the Chancellor will bear in mind the fact that it has been facing all sorts of difficulties in its endeavour to export its goods. There have been credit restrictions in New Zealand; reductions of quota in Uruguay; increased tariffs in Colombia; and credit restrictions in Greece. Our manufacturers pursue trade in any market which they foresee will be useful to them, and they go all over the world in their search.

Three years ago, at the behest of the President of the Board of Trade, the Export Promotion Committee was formed. Every member of the deputation which came to see the Financial Secretary was also a member of that Committee. It is fair to say that they have done their duty well and have done everything in their power to help the Government in their desire for further exports and, thus, to help the country. A few moments ago I said that I would read a letter which came to me this morning. It is of such importance that I think the Committee would be interested in it. It is again from the Director of the Manufacturers' Federation. He says: We are still waiting, at present patiently, for news of the result of our deputation. Things are getting no easier. You have no doubt gathered from my wire on short-time working that this, although in only a small way at the moment, is making itself felt, and we have rumours of a steady and possibly big increase in the next two or three weeks. Orders are being cancelled in substantial quantities; although this may be just a fit of nerves from the wholesale and retail trade and is a manifestation of their annoyance with the tax: nevertheless, the effect of this cancellation of orders which are near completion and ready for despatch, places the manufacturer in a very difficult position indeed from a physical point of view. He has no place to store these, and I know of a few firms who are feeling the effect of this already. He then goes on to a much more interesting point. He tells me that I will be interested to read a letter which he encloses from a member of the Federation—a director of one of the very great china firms in the constituency of my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith)—a man called Leslie Irving. His firm makes what is known as Paragon china. I am sure that many hon. Members will have heard that name. He is a member of the Export Promotion Committee and, as Vice-President of the British Manufacturers' Federation, he was in Canada when the tax was announced. He gives his views, and this is what he says: I thought I should put in writing one of the great difficulties as far as china is concerned, that the imposition of the Purchase Tax is likely to create. I think you will confirm that we have come to the stage in our sales of dinnerware in the United States—and to a great extent in Canada, when it will be necessary to fall in line with Continental, Japanese and American domestic manufacturers as far as deliveries are concerned. The sale of these commodities is so good and the delivery position, due to stocking in New York and elsewhere, that there would seem to be no real necessity for the buyer to bother to any great extent with bone china. I should tell hon. Members that bone china means china made in Britain; no other country makes it. The chinas made by other countries are all of hard-paste porcelain. Bone china is made from china clay, with the addition of a good proportion of animal bone when it is fired. I must add—and I say it bravely and proudly—that for appearance there is no other china in the world like it, and that it is most favoured in the American market for this reason.

The letter continues: He is prepared to do so, however, if the British manufacturer is prepared to offer the same facilities as regards delivery—as our competitors from other countries—namely within a week or 10 days. This can only be accomplished by carrying stocks in New York. It is obvious that this is a very expensive proposition and can only be financed by the home market, unless the Government are prepared to finance it for us. This, to some extent, also applies to Canada. I had arranged whilst I was over there to start stocking in Toronto and New York, and I think increased exports would have resulted almost immediately after this system had been put into operation. I don't see that it is possible to go ahead with this programme—which virtually means selling on long credit terms without the home market to finance it. If sales are reduced on the home market, we anticipate finding it very difficult in the New Year to keep our continuous ovens operating economically. It is a well-known fact that there are already china manufacturers firing empty saggers. The Chancellor should know that that means putting in saggers with no ware in them at all.

7.15 p.m.

In 1952, the Government allowed us to buy decorated ware. It was in that year that we had the sudden cut from Australia, and the Government granted this concession for two reasons. First, they wanted us to be able to retain our craft labour and, secondly, they wanted us to have a home market which would be healthy enough, wide enough and extensive enough to further the new designs which are the very life-blood of our industry. Does the Chancellor realise that I am re-echoing the words used by the Financial Secretary; that I am using them now to appeal for help for this industry in the very same way that they were used earlier this evening by the Financial Secretary to show why it was necessary to lower Purchase Tax upon cut glass and silverware to 30 per cent., namely, to enable those industries to survive? I say that this sudden imposition of tax from nothing to 30 per cent. is utterly wrong, and that it will do a great deal of harm.

We have done everything we can to make ourselves the most modern grouping of pottery manufacturers in the world. As things stand today, each craftsman we have is worth roughly £5 a week in the export market, and if we lose them—and the Financial Secretary and the Chancellor must again accept from me that this is true—the same thing will happen as the Financial Secretary suggested would happen in the jewellery, silverware and cut glass industries—we shall not get them back.

There are specific and real reasons why that is true. Vast sums of money have been spent to modernise this industry, but many of the medium and larger factories are more than 200 years old and they have not the type of amenity that the new light industry offers. We have new light industries. I am speaking without special pleading, in a way that every pottery worker and manufacturer in the city would accept. I speak on their behalf.

We cannot afford to lose these people because we cannot get them back. It takes years to train a painter, a turner or a good mould-maker. When they leave us, what do they do? I hope that the Chancellor of the Exchequer will bear in mind that they go to industries concerned in the main with the home market. That is an inflationary thing to happen. I said at the beginning that perhaps the right hon. Gentleman felt that these men would go to the great firms who are interested in the main in exports and so it would be good for the export trade. The Financial Secretary was told, however, by all those in the deputation, that exactly the opposite would happen. When we lose craftsmen we shall not be able to get them back if the demand again comes for us to export. We shall not be able to get the goods out in time, and once again we shall lose trade to competitors who can supply the goods much more quickly.

Enough has been said about the question of designs and the need to test the market. Surely everyone knows of the new and radical changes in taste in the North American market. They now like different types of pottery and decoration and are not nearly so traditional as they used to be, and as the people of Australia and New Zealand still are.

My hon. Friend the Member for Stoke-on-Trent, North made the point at the deputation to the Financial Secretary about the ceramic college. I hope she will speak about that if she is able to address the Committee. The new ceramic college, which was built expensively, faces the problem that it will not be able to get recruits, now that the industry is to be curtailed and the brakes put upon it by the financial administrative action of the Chancellor of the Exchequer. That will restrict the supply of individual or artist potters, and of countryside potters.

There was a letter in The Times on the 15th of this month from Mr. Bernard Leach, the son of a constituent of mine, in which he made it clear that the men who work in isolation at home or in a small factory will be very hard hit, because they have no export organisation, they cannot afford to produce a catalogue and will lose customers. The 30 per cent. imposition will be a very serious matter for them.

I plead, on behalf of a craft which is as old as civilisation, that the Chancellor should think again. I plead on behalf of the workers, and of the manufacturers who have invested large fortunes to modernise the industry. In appealing in this way, I hope that I do not appeal in vain.

Mr. H. Fraser

The speech of the hon. Member for Stoke-on-Trent, Central (Dr. Stross) has given the Committee a wealth of detail. I hope that it is information for which the Treasury Bench is more than grateful.

I do not intend to speak for very long, but I would like at once to declare that I do not propose to vote with my colleagues from North Staffordshire on this issue but to vote with the Government. I do that for the very simple reason that, much as I approve of the arguments put forward by the hon. Member for Stoke-on-Trent, Central (Dr. Stross)—perhaps I may refer to him as my hon. Friend—it would be unrealistic to do away totally with Purchase Tax. It is obvious that I must support my right hon. Friend the Chancellor of the Exchequer in his view—the increased value of the £ proves it—that one of the chosen instruments of the autumn Budget is the Purchase Tax and it must, unfortunately, be all-embracing. Once it ceases to apply to any one area, a flow of money will pour into that area and swell the home demand.

What I ask my right hon. Friend the Chancellor to do is to look at the question again and to reduce the Purchase Tax from the 30 per cent. now suggested to 15 per cent., which is the highest it has ever stood at. The arguments put forward by the hon. Member for Stoke-on-Trent, Central are conclusive. The object of the Chancellor, as I am sure the Economic Secretary will agree, is not so much fiscal to produce money or a Budget surplus, which in any case might only be a swollen one, but on the one hand the imposition of what one might call a collective fine or punishment, which is all that the Purchase Tax has ever been, and, on the other hand, to increase exports and to reduce imports.

I do not wish to discuss whether Purchase Tax is a deterrent to home demand, except to say that I believe it is. I want to turn to the other two objects of the tax, increased exports and decreased imports. As the hon. Member for Stoke-on-Trent, Central has said, the industry, which must use precisely 1 per cent. of the imported raw material, will not be advanced in any way. The Chancellor's objective will not be advanced, because the 1 per cent. importation is fixed. At the same time, there is a danger that by imposing so high a tax as 30 per cent. there will be an enormous increase in imports of foreign craft goods into this country.

That is a very serious danger indeed. The Economic Secretary is doubtless far better briefed than I am on this subject. If he looks at the import figures for the last three years he will see that between 1953 and 1955 the figure for the first eight months of each year has risen from £200,000, through a figure of £600,000, to more than £1 million today. That is how Tory freedom works. There is a grave danger that this weight of tax at 30 per cent. will operate against the industry. A 30 per cent. ad valorem tax obviously advantages disproportionately the cheaper rather than the more expensive products. One of my criticisms of Treasury officials is that they get almost to the position where they think they know the value of everything and the price of nothing.

7.30 p.m.

It is not a question of percentages, but of the price of goods in the shop. I have here some figures provided by the Pottery Federation, which briefs its local Members with extraordinary exactitude. I shall not quote Japanese goods, but those from German and Italian manufacturers. The selling price of United Kingdom china sweet dishes is 15s. 6d. per dozen; the foreign price, free on board at Continental port, is 7s. 9d. a dozen. A china candy jar made in the United Kingdom sells at 15s.; the Germans can produce it for 4s. 8d. That is a very wide differential, even when added to it there is the existing 20 per cent. import tax.

It can be put in this way. If a British item is selling for £3 today and an equivalent, or near-equivalent imported item, with some difference in quality, sells at £2, the imposition of a 30 per cent. tax means that the foreign item costs 12s. more and the British one 18s. more. That is the precise problem with which we are here faced. I therefore suggest that far from restraining imports this weight of tax may do precisely the opposite. [HON. MEMBERS: "Hear, hear."] I do not want hon. Members opposite to cheer quite so much. I know they are enjoying themselves; for once they are united in attacking the Government. Let them enjoy their short-lived happiness.

Mr. Norman Dodds (Erith and Crayford)

On which side does the hon. Member intend to vote?

Mr. Fraser

Had the hon. Member been present he would have heard me tell the Committee.

Next, there must be borne in mind the effect of this tax upon our imports. As the hon. Member for Stoke-on-Trent, Central has said, this industry is geared entirely to exports. It is an industry in permanent surplus; that is to say, 60 per cent. of its products have to be exported or the industry goes bust. The hon. Member made the most valuable point that this is a craft industry. That is important, especially after our debate a little earlier, which proved the disastrous effect that a high rate of Purchase Tax can have on a craft industry. Figures have been produced by my right hon. Friend and by other hon. Members to show the effect of a heavy and high rate of tax on the silverware and cut-glass industries. We fear that that effect will spread to the pottery industry.

There are many other points that can be made by other hon. Members but, as I said at the beginning of my remarks, it would be totally unrealistic to withdraw this tax altogether. If through this tax we are pursuing—as the Chancellor is successfully pursuing—a policy of reduction of home demand, there should be no loopholes in what might be described as a general sales tax, but I say that this tax, as framed, falls too heavily on the craft industries. It will not improve exports; in fact, for technical reasons which have been explained, it may well reduce them. Its imposition may also increase imports of cheaper foreign goods. I hope that the Chancellor of the Exchequer—who has already made an impression both in Europe and in North America by his measures to deter inflation—will, in this case, temper mercy with wisdom and reduce the tax from the proposed 30 per cent. to about 15 per cent., the highest which we have known in the industry.

Mr. Ellis Smith

If I were asked to express my greatest desire at present, it would be that the Committee should be packed with hon. Members on both sides. Many times have I been privileged to make remarks during the Committee stage on a Finance Bill. Never, I believe, have we had a stronger and better case than the one we are presenting. Never have I had greater confidence that I shall make out a reasoned case. I would first make an appeal to the Chancellor himself. During the all-night sitting last week I was impressed with his patience, and also with the very fine attendance on both sides. In the many all-night sittings in which I have taken part I have never known a better attendance.

Therefore, if the Chancellor agrees with the case I am making out, I appeal to him to make his own contribution this evening. We claim to be a democracy. Will the Chancellor allow democracy freely to express itself tonight? I hope that he is prepared to do that, and to assist him in every possible way I appeal to my hon. Friends not to chide hon. Members opposite who may speak in support of our case. Let us give them an opportunity of democratic expression. We welcome support in favour of this Amendment in any part of the Committee from which it may come.

I appeal also to the Whips. Will the hon. Gentleman on the Front Bench opposite tell his Chief Whip the line we are taking here and ask him if he will be as big in this Committee this evening as he has been on other occasions? I say that because, relatively, the Chief Whip has been a good deal different from others I have known. Will he continue in his present course, take the Whips off and allow democracy to operate? I have never known a more reasoned case to be opened in a more reasoned way than this one has been. We have heard such a great deal about exports and the need to increase the export trade. The working class for whom I speak has responded to the appeal to export to a greater extent, except for the war years, of course, than has any other section of the community. Because of that response, and speaking on their behalf, I ask for further instalments of democracy this evening. If the Chancellor feels that we have a reasoned case, will he consider withdrawing the proposed tax even at this late hour? If the pottery industry gave an undertaking that they would further increase exports, would he consider withdrawing the tax?

I cannot speak for the manufacturers; they are the political friends of the Chancellor and of the Government. Even they are strong opponents of the proposed tax. If it is applied, it will be equivalent to a tax on exports. That is how the Chancellor's political friends have described this proposal. The spokesman of the British Pottery Manufacturers' Federation described the 30 per cent. Purchase Tax on kitchen and tableware—until now free of tax—as an iniquitous imposition. That is from a political friend of the Chancellor. Even from the economic point of view adopted by the Government, the proposed tax on pottery should not be imposed. It is illogical having regard to the policy which the Government have been pursuing in maximising exports.

The purpose of the tax is restrictive. Already the customs of the people restrict their purchases of pottery, for they do not purchase pottery unless they require it. I am speaking of the mass of the people. Their incomes restrict their purchases of pottery. It would be a sales tax on the people's needs. The punitive effect of the tax on pottery will be even more serious than was at first thought. If hon. Members who have not copies will go to the Vote Office and obtain White Paper No. 78, September, 1955, and compare it with the White Paper of October, 1955, they will find evidence of the accuracy of my statements.

It has been stated this week-end in a number of newspapers that the tax will be equivalent to 6s. in the £ on the expenditure on pottery. That means that the poorest people, those with most children, who break the most pottery, will, in the main, be paying this tax. They will be paying a sales tax because they have had big families. Mother knows that she cannot keep her eye on all of the children and she knows that more pottery will be broken—and she will pay 6s. in the £ on her purchases of crockery.

Next year I shall be privileged to have been the Parliamentary candidate for the heart of the Potteries division for 25 years. I have never known more unanimity in that area than exists in the feeling against this tax. There is great disappointment in the industry over the imposition of the new tax. I have spent a large part of my life in productive industry. It is easy to talk and to act outside, but where we are all put to the test is in the contribution which we make in obtaining our daily livelihood in productive industry. I submit that productive industry should not be subject to this constant interference, discouragement and frustration. Will the Chancellor, on those grounds alone, consider withdrawing the tax?

7.45 p.m.

Hon. Members who are not familiar with the industry may like to consider this point: during the war the whole of that industry responded to the national need. Never did an area respond more patriotically. I am not saying that the area was better than any other area, for I am only talking of what I know—but I know that never did an area respond more patriotically. The whole of the pottery industry was concentrated. I can see now the magnificent pottery factory, one of the finest in the world, just opened by Wedgwoods, which swung over to the manufacture of armaments right away.

Thousands of pottery workers became engaged in some of the largest Royal Ordnance factories in the country—30,000 at Swynnerton, in the heart of this area. At Radway Green, Crewe and Stafford, thousands were working day and night. It gave the industry a terrible set-back. Many of them were broken-hearted, but they knew that it was nothing compared with the loss of lives which the country suffered.

At the end of the war Sir Stafford Cripps and I pleaded with this area to begin to build up, reconstruct, modernise and expand. Stafford appealed to the manufacturers and I appealed to the workers. They responded to an extent more than ever we expected. They gave maximum output and increased exports to a greater extent than the Board of Trade thought possible. At that time many of the manufacturers were sceptical of the plea made to them by Sir Stafford Cripps, but he and others showed patience and, as a result, the industry responded to the needs of the country and should have earned the thanks of most of our people.

Since those post-war days, they have responded to several special appeals for increased exports by various Presidents of the Board of Trade and Chancellors. They deserve thanks, not tax discouragement of this kind. We hope that, irrespective of what the Government agree, hon. Members in all parts of the Committee will respond to our plea in order that this discouragement on exports shall not be passed this evening.

If this tax is to be introduced, will whoever is to reply for the Government give us the economic reasons for its imposition? The union and the manufacturers have sent several memoranda and letters to the Chancellor. Have they been considered and, if so, may we have a reply? They had a joint deputation to the Financial Secretary, who said that their case would be considered. Was it considered and, if so, may we have a reply this evening? What does the Chancellor want? Does he want increased production and increased exports, or does he want cynicism of the kind we had just now, disappointment and frustration.

It may be said, "It is only a penny on this or three-halfpence on that." That is true, but the cumulative effect will be very serious for the poorest people in the country. There are thousands of day-wage people in this country. That seems often to be forgotten. The pottery industry functions in this way. It prepares shapes as a result of consideration over a long period, based on a background of experience, and prepares designs in a similar way, followed by decoration, colouring and appeal to taste. It carries out tests on the home market and, as a result of seeing how the goods are taken there, they are subjected to modification.

In that way we have built up the highest quality ware in the world. In that way we have reached perfection. That is how we have gained the admiration of the world. The success of our export trade has been based on the home market. A tax of this character is therefore equivalent to a tax on exports. In addition, as my hon. Friend the Member for Stoke-on-Trent, Central said, in this industry we are bound to have large numbers of "seconds." They are sold on the home market. The home market is the basis for the export trade, and that is why the industry is so concerned over this proposal. It can affect costs of production which may result in the loss of exports and in the importation of more foreign ware.

When we bring representatives of the industry to see the Chancellor so that he can make an appeal to them for further exports, will he withdraw this tax? After the pre-war uncertainties, after short time and unemployment between the wars, after the war-time concentration, workpeople were hesitant to enter this industry again. They were appealed to by various Ministers of Labour. My right hon. Friend the Member for Southwark (Mr. Isaacs), with Dame Florence Hancock, on behalf of the Trades Union Congress, addressed large meetings in Longton Town Hall and other places appealing to the workers.

Now we are faced with a tax which once again is introducing uncertainty and undermining the confidence of the workers in their future. For ten years the whole industry has had security. Never have I seen more confidence among the people of the area than since the end of the war. I used to see people going about with their heads down and their backs bent. Now they walk erect, nicely dressed, nicely shod, looking people straight in the eyes, as they have something to live for and something to work for. This tax will introduce the kind of uncertainty we had before the war.

Surely the Chancellor, who knows the industry, will agree that we have built up a very high standard of decorating. We have trained children in secondary schools in order that we might decorate better than any other people in the world. The industry should not be subjected to this kind of interference. The Chancellor should be big enough this evening to say that, having listened to this case, he can withdraw the tax on condition that the industry will respond to an appeal for greater exports than it has ever made in the past.

Mr. Douglas Marshall (Bodmin)

I shall not detain the Committee for more than a few moments, but I wish to speak on a rather narrow point affected by this Amendment. The Economic Secretary to the Treasury may be aware that there falls within the Amendment the class of goods which are more or less known as cottage industry goods and that in the rural areas there are many people who manufacture pottery at home.

The whole design of the policy of the Chancellor in the Budget and all his monetary policy is to try so far as possible to stem the jet of inflation and to correct the exchange position. It is certainly true that from time to time there is a certain amount of export trade created by these people who manufacture in a small way and by their own handicraft make these articles, but they could not possibly enjoy that export trade but for the fact that from time to time these articles are sold to people who visit us and that there is an overspill into the home market.

Up to now these articles have been entirely free of tax, and the sudden imposition of 30 per cent. tax upon them will make the great majority of these people go out of business. From time to time in this House these cottage industries have been recognised and have been aided by Treasury grants because of the art and handicraft attached to them.

I suggest to the Economic Secretary another point which I think is relevant. By the method of collecting the talc, how can the Treasury stop a black market developing in the type of articles I have been discussing? There will be no effective way of stopping that.

The Treasury argument might well be—what those of us who have been in the House for a long time are used to—that if the production of these goods was left out of the tax that would not be tidy and it would be extremely difficult to differentiate between the article which is hand-made and the article made on a larger scale. The industry says that is not the case. Be that as it may, I have suggested how a black market might readily develop. Exempting these goods from tax may be the lesser of two evils. That would at least help these people who, after all, are contributing in a small way to exports—I am not exaggerating the case—and do contribute by retaining an art and craft and at the same time managing to make their living and in a number of cases to beautify the things which they produce.

I sincerely hope the Economic Secretary will tell us that he has sympathy with the case I have put forward and that he will give further consideration to the matter. I would be the last to suggest to him that a quick or ready answer can be made in dealing with this question or that it would be a right or proper thing to give such an answer, but I think the case I have made is worthy of consideration. It is a matter of art, it is a matter of people in a small way of business, and it affects Cornwall, part of which county I represent. I trust that my hon. Friend will look at the question in that fashion.

8.0 p.m.

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

I speak in this debate as one who has spent all her life in the Potteries area and as the daughter of parents who spent their lives in the pottery industry. All my life I have lived in the midst of this great industry which contributes so much to the beauty, the art, and the well-being of this country.

My father took the trouble, as an adult, to go to night school night after night in order to get his chemistry certificates so that he should know the recipe—that is the term we use—for the body of the pottery of which, later, he was a firer. He took the trouble not only to know the chemical and craft side of the industry, but took a pride in turning out a job which was both well done and deserving of the praise of the industry.

While I have never worked in a factory, I often visit a pottery factory and whenever I go there I am always thrilled and amazed at the art and skill of those who work in it. I am quite sure that many hon. Members who have seen the interlude called "The Potter's Wheel," on television, will also have marvelled at the skill of the potter as his hands shape the vase. To go to one of these factories and watch the makers of the tea cups and the handles that are placed on them, to go into the painting and decorating shops and watch the painters and designers produce their lovely designs, is an experience of great joy.

In our pottery factories, particularly of those bearing famous names, we find that nearly all still go by the original family name. The Wedgwood, Spode, Copeland, Minton and Doulton factories all still carry their family names, and the workers refer to the sons and grandsons of the old master potters by their Christian names. In the case of the Wedgwood family, almost everybody would know to whom one was referring if one mentioned Mr. John, and that is true of the workpeople, also.

I could take hon. Members round factory after factory in which, in the decorating shop, they would see old ladies who had worked there for fifty or sixty years, painting and decorating these lovely wares, and they would find alongside them their daughters and granddaughters, because they had brought their families into the industry and had taught them also the craft and skill which only the experience of the ages can express in the pottery they produce.

All this represents very much hard work. It represents long years of training, much pride and devotion in the work, and it also represents much money which has been spent by the local authorities, by the manufacturers and by the students and the workpeople themselves so that they could produce the exquisite pottery which we now send abroad. It is also true that very many hard lives are being lived in that industry. Ours is a city which, until recently, has been built right on top of the factories. Many of the old factories, in fact, began as a house. Even Wedgwood started up by having a kiln built outside his house. Later, a few more houses were taken and more houses built as the factory was extended, and it could be true of our industry that the house in which the potters of old and those in which many workpeople live today were in fact, the "barracks of industry" to which Mr. Hammond referred in "The Town Labourer."

This industry has also known poverty. I remember very vividly, as a child, that whenever bad times fell on the country's industries, the factories in the Potteries were some of the first to suffer, because they were engaged in a luxury trade. We saw our factories being closed down and our children having to go hungry, our people badly clothed and shod, when the industry suffered.

I now want to mention how much has been done on the educational side, and express the hope that we shall not easily throw these benefits away. In almost all our secondary modern schools, and certainly in many of our primary schools, wonderful pottery is turned out. To a recent international exhibition, these schools sent a very large proportion of the pottery which was exhibited, which travelled the great cities of the Continent. The children in our schools were beginning to express in their own way the results of the inheritance which their parents had handed on to them. In our secondary modern schools, we have built kilns and established craftrooms in which our children are trained, in the hope that they will go into this important export industry rather than to better paid jobs in the light industries which are springing up all round us.

We also have an art college, which has a national standing in design and painting. To go to prize-giving day at that art college is a wonderful experience. We see there examples of the designs which the students have tried to place at the disposal of the industry, which show us very clearly the value of the work which that art college is doing. As my hon. Friends have already pointed out, it is vital to this industry that it should be up to date in design. One has only to visit a showroom in any one of our factories, and see there the old designs, such as the willow pattern, which is still very fashionable, and some of the very old patterns which I am sure all of us have seen in the possession of our grandparents and used on only very special occasions, to realise how important is design, and how vital it is to supply the type of design which the American market expects.

In addition to our secondary modern schools and our art college, we are at present building a completely new section of the Technical College for North Staffordshire, which will deal solely with ceramics. That section of the technical college will cost at least £308,772; that is not the whole of the college, but only one section of it dealing with the needs of the industry. The Ministry of Education has granted us permission to build this section because that Ministry at least recognises the needs of the industry. Further, the industry itself, through the manufacturers and the workpeople, has established a very valuable ceramics research station, which does very valuable work in research in all sections of the industry.

It is absolutely vital that the home market shall be retained if this industry is to be able to produce the exquisite pottery which we need for the export market. If we are to cope with the threat from other countries and with the demands of the dollar exports countries, it is absolutely vital that the home market should be retained so that the designs and experimentation may be tried out on the home market. A tax on household pottery is no way of retaining the home market or of keeping the export market. It is by no means an incentive for the industry to go on with the experimentation and research and the very great contribution which that work has made to the progress of the industry.

Last week, in my constituency there was held what was called the Burslem Felons Dinner, which was attended by the pottery manufacturers. One very well-known manufacturer said that to inflict more Purchase Tax on the industry would be most unfair, and that he found it difficult to understand why the Chancellor of the Exchequer should have chosen pottery for a tax which had not been previously imposed upon it. Later, The Recorder suggested that a period of silence might be observed in memory of the Budget. I am sure that that is not the whole story.

I have spoken about the needs of the industry. Let me now speak about the women who will be affected by the 30 per cent. tax on pottery. For many years, during and immediately following the war, the women had nothing but white pottery to use. We could not buy any decorated pottery. I might be prejudiced, but I would rather have a cup of tea from a nice china cup than from a plain thick earthenware cup. As in furnishing and in clothes, we housewives like some colour, design and beauty in the crockery which we put upon our tables at mealtimes. The tax of 30 per cent. will mean a real hardship to the women and particularly, as my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith) said, to folks whose wear and tear in crockery is heaviest because of their families.

I was astonished when the hon. Member for Stafford and Stone (Mr. H. Fraser) said that he could not come with us into the Division Lobby. He said that he hoped the Chancellor would do something, but he used a phrase which is very expressive about the new tax of 30 per cent. on household commodities. He said that it represented a collective punishment. That is true. It is a collective punishment on the ordinary working-class women in the fact that it means an added burden to them.

I add my plea to the Chancellor that he will look at this matter again from the viewpoint of an industry which has given of its very best during the difficult postwar years. The industry has rationalised itself. It was encouraged to do so during the period of office of the Labour Government. If one goes round our city, one can see the tremendous headway which has been made in the modernisation of our factories in the face of great difficulty.

I appeal to the Chancellor of the Exchequer in the light of these facts and of the fact that speakers from the Front Bench and back benches on the Government side, in almost every debate upon the Purchase Tax, have put forward the plea that it is essential that the craft of industries must not be lost to the nation. From that point of view, and on behalf of the women and of those who are most hard pressed, I appeal to the Government to look again at the question of this collective punishment of 30 per cent. on our industry.

8.15 p.m.

Mr. G. R. Howard (St. Ives)

I think all Members would agree that so far the debate has been extremely useful. It has: been conducted in terms which are constructive and fair. I should like to refer again to the small craft potter because, out of the 200 of them throughout the country, about 60 are to be found in Cornwall, a good many of them in the constituency which I have the honour to represent.

My right hon. Friend the Chancellor of the Exchequer may or may not have had an opportunity to peruse the letter I have sent him on this subject, which, amongst other points, mentions the fact that this is the season when the retailers are ordering for next summer, not forgetting the number of overseas visitors, in addition to the points which other hon. Members have already made. I hope to speak presently about the considerable value of wares that are sent abroad.

Whereas the average tax increase on most items will be about 5 per cent., in the case of the craft potter there is to be an imposition of 30 per cent. tax on items which at the moment are tax free. Some of these people in a small way of business, have bought equipment with the assistance of Treasury loans, and if this burden is to be imposed upon them it is difficult to know how they are to repay their loans.

It seems to me to be my right hon. Friend's policy to encourage craftsmen, and what better example of craftsmen can there be than these small craft potters? It is, I believe, the Government's policy to encourage the Craft Centre of Great Britain in Hay Hill, London, by making £ for £ grants to the Centre according to the amount that it can raise itself. But if by the Purchase Tax the small men, who in a place like Cornwall might have difficulty in finding other employment, are to be put out of business, there does not seem to be much use at the same time in encouraging the Centre to which they send their products. In addition to the big percentage of table ware that the craftsmen make, a small but equally important percentage of their output consists of works of art which are sold abroad and are highly valued.

The people for whom I am endeavouring to speak are those whose products are entirely hand made. One might find five or six men working together, many of them having started out following technical education to fit them for this type of work. They had just got going after the Purchase Tax was removed. Now, this imposition of tax will mean that those with, say, four or five employees must discharge some of them. As for those who work on their own, one letter which I have seen used the words: Does anybody want to buy a small pottery? I want to sell mine. It is only fair to say that the smaller craftsmen handle a fair proportion of the type of article that visitors buy when they come to Cornwall, and I am glad to say that we have quite a large number of overseas visitors. The articles sold in the shops cannot bear a much higher price, otherwise they could not compete with the bigger potteries which do not produce the entirely hand-made article. If prices have to be raised, it seems to me that the retailers will not be able to sell their goods. I may be wrong, but I believe that 90 per cent. of the output of these men comprises table and kitchenware. If they have to bear the tax, it will be a very heavy burden upon them. When I asked a Question some time ago I was, perhaps, given a small ray of hope—I would not put it higher than that—that the matter would be considered. I hope that something can be done to put these people out of their uncertainty.

Another point to which I should refer are the difficulties experienced by the small people who employ two or three workers on their premises. The shop- keepers who in the ordinary way would be ordering now for next summer will, because of these tax proposals, hold off for the time being. They will wait to see what happens in the next Budget, but these potters are in too small a way of business to be able to carry on unless they sell their products regularly. They cannot carry large stocks.

Therefore, I make my plea for them to my right hon. Friend. Those of us who like to see these old and skilful crafts surviving plead with my right hon. Friend on their behalf. The craftsmanship of these our people has won a world-wide reputation for this country. Numerically these potters may not be very great, but their importance to our country must be considerable. I do hope that my right hon. Friend will consider their case. I do not say that their products can be given complete exemption from tax, but perhaps, like the fur slippers, they may be reconsidered and some concession made for them so that these craftsmen are not put out of business. I feel sure it is not my right hon. Friend's intention to put them out of business or to take a step that would have such bad consequences for these few craftsmen who are so important to our country.

Mr. V. Yates

I shall detain the Committee only a short time to refer again to some of the things I tried to discuss earlier. I shall be in order in doing that now. In the city of Birmingham we have more than a thousand trades, and many of the tradesmen deal in pottery. I am informed that there are three classes of pottery in which Birmingham is particularly interested. The tradesmen there purchase selected pottery, "seconds" or "lump." I am informed by jewellery manufacturers that the selected pottery is purchased for perfect goods. The "seconds" are pottery goods which are faulty in some way. Perhaps the glazing is faulty; at any rate, they are faulty in some way. A considerable number of those "seconds" is used by tradesmen in Birmingham.

My hon. Friend the Member for Stoke-on-Trent, North (Mrs. Slater) talked about cups and saucers. I am informed that 80 per cent. of the working-class people in Birmingham who are replacing their cups and saucers replace them from that class of pottery which is sold as "seconds." However much people may wish to use the better-class pottery they are obliged to use the "seconds." Why, in these circumstances, should those articles rank for the same rate of Purchase Tax?

I am told that that which is sold as "lump is purchased by the ton, and much of it is used by the jewellers in Birmingham; but 75 per cent. of the "lump" is practically useless, only 25 per cent. being capable of use. It is used by many manufacturers. Although they can use so little of every ton which they buy, they have to pay tax on the whole lot.

Some of the small jewellers and manufacturers in Birmingham have been putting to me their special difficulties. Most of our jewellers operate small factories employing not more than ten persons each, but those manufacturers cater for 60 per cent. of the trade. One of our jewellery manufacturers informed me a few days ago that he had £1,000 owing to him from a number of small dealers in the Potteries, and that a fortnight ago he tried to collect some of the money, and that all he could get out of £1,000 was £20. That shows what a difficult situation they are facing in the Potteries.

As a pottery manufacturer in a big way of business put the manufacturers' dilemma to me, they are at their wits' end to know what to do to continue to employ their men. They are obliged to expend some of their capital, as much as they can afford, because they cannot sell very much at the present time, and they spend their capital to keep their skilled workers. That, of course, adds to their internal and production costs, and that, in turn, causes them to be outpriced in the international market. Jewellery firms in Birmingham which make metal cases for teapots are faced with cancellations of orders running into, not hundreds, but thousands of pounds. Their plight is very serious indeed.

Thus, Birmingham is linked with the Potteries, and I wholeheartedly support this Amendment and all that my hon. Friends who represent constituencies in the Potteries have said. These impositions on table ware are very serious, and but for them firms in Birmingham as well as in the Potteries would not be faced as they are with so serious a situation. I trust that the Economic Secretary will indicate his willingness to assist them— at least as much as he did two years ago here in this Chamber and also at a dinner of the jewellers in Birmingham, at which he told them, in effect, that he was the saviour not only of the teapots but of everything else. I, as a representative of Birmingham, which is linked in this way with the Potteries, ask the hon. Gentleman to tell the Committee that he sees the argument and, as a representative of Birmingham himself, will do something to ensure that this terrific burden shall not drive either jewellery or pottery manufacturers into bankruptcy.

8.30 p.m.

Mr. Geoffrey Wilson (Truro)

The hon. Member for Stoke-on-Trent, Central (Dr. Stross) and other hon. Members, representing constituencies in the Potteries, have made with great power and moderation the case for the Staffordshire industry. Those who represent the Potteries will certainly be pleased if the Chancellor accepts the Amendments, but it will be realised that they cover an enormous field. I doubt whether the Amendments could be accepted without making a large hole in the Bill and making a great difference to its general principle. Be that as it may, I hope that the Chancellor will consider some of the marginal cases that have been mentioned.

My hon. Friends the Members for St. Ives (Mr. G. R. Howard) and Bodmin (Mr. D. Marshall) have mentioned the small home pottery. There is a considerable number in Cornwall and there are also the small local potteries which deal in hand-thrown pottery. There has been one hand-thrown pottery in Truro for at least three hundred years. In addition to making ordinary breakfast sets, it is the sole surviving maker of the traditional Cornish pitcher, which is of unique design in Great Britain. It has been made in Truro for three hundred years and in Cornwall for at least two thousand and is probably of Phoenician origin. It was selected by the Fine Arts Committee of the British Council in 1945 as one of the examples typical of British handicraft which they sent all over the English-speaking world.

The pitcher is of quite simple design, but is an article of great attraction to visitors. It is widely advertised by travel agencies as an attraction. We in Cornwall earn about £10 million from visitors, a considerable proportion of whom come from overseas. Many of them go to see this pottery in Truro and, therefore, its intrinsic value is far greater than that of the goods it produces and exports. It is of value as a place of interest to visitors.

It would be a great pity if potteries of that kind were seriously hampered by a rise in tax which made it almost impossible for them to carry on. The pottery which I have mentioned only just managed to survive the war, when taxation was lower. I hope that something will be done for potteries of that kind and that some way can be found to distinguish between hand-thrown pottery and pottery produced in those sectors of the industry which are to a large extent mechanised.

Mr, Cyril Bence (Dunbartonshire, East)

Hon. Members who represent constituencies in the Potteries have brought home to us the fact that perhaps we take too much for granted many of the lovely things we use in our homes and elsewhere. I am thinking of the china used in the House of Commons and elsewhere. We take for granted also many other simple things which enter into our daily lives. I notice, for instance, that tax now falls on the humble milk bottle at 30 per cent. Milk bottles are very frequently broken, and milkmen are already complaining of the serious cost of distribution. A 30 per cent. tax will greatly increase the burden.

This tax on general kitchen ware and domestic hardware will be a very serious item in the cost of running British merchant shipping. The Chancellor has told us that the tax is designed to reduce pressure on the home market, to drive more goods into export, to save foreign currency and to improve the balance of payments, but shipping lines will be forced to pay 30 per cent. tax on brushes, pots and pans and all kinds of things that are used on board ship. Anyone who has seen a passenger liner like the "Queen Elizabeth" being refitted at Southampton, or knows of the enormous amount of business that is done in Glasgow in refitting merchant ships when they turn round at the end of a long voyage, will realise what an enormous quantity of these goods is used by our merchant fleet.

Now there will be this huge sales tax on a large range of goods entering into the requirements of such ships. It may be that as a result of this tax the owners will decide to buy these goods in Buenos Aires, Hamburg or even New York, where they are free of Purchase Tax and, therefore, cheaper. Will they get the hard currency necessary to make these purchases when refitting their ships? And it should be remembered that when a merchant shipper starts such a practice, for which he cannot be blamed, the refitting will extend to many other goods, such as pillow cases and mattresses and other articles beyond this range. He may even have repairs carried out at the same port at the same time.

This imposition of Purchase Tax on a large range of domestic ware must have the effect of making our owners of shipping lines consider seriously whether it would not be better to refit their ships as travelling hotels in foreign ports rather than in this country. We are in the absurd position that we put on a Purchase Tax here in order to stimulate exports and, we hope, to cut down imports while, at the same time, our shipping companies may require foreign exchange to buy the commodities affected, and which may well have been exported in the first place from this country to, say, New York. These goods will be bought in New York free of tax and the dollars for them will have to be provided from the dollar fund.

This is a most stupid operation which involves extra book-keeping and extra tax collectors to achieve nothing. We have been informed that the total collected as a result of this Purchase Tax will be between £2 million and £3 million a year. That is infinitesimal in comparison with the total annual budget, the huge turnover of international trade and our balance of payments.

I am dealing only with the shipping industry. No doubt other hon. Members on both sides of the Committee will deal with this tax as it affects other industries. Jewellery has been mentioned, for instance. I want to press home to the Parliamentary Secretary what a heavy cost this will impose on the shipping industry, on lines running passenger cargo ships, on the ships owned by British Railways, and also on the aircraft industry. They will all have to pay and they all use large quantities of china, as anyone knows who has travelled up the Clyde by British Railways ships. Incidentally, if hon. Members have not done so, I am sorry for them, and I hope that next summer one of the first visits they will make will be a trip up the Clyde through the Kyles of Bute up to Inverary. On those ships they will not find a cracked cup—

Mr. Harold Davies

I wish we did not.

Mr. Bence

That is because there was no Purchase Tax on cups but now there is a 30 per cent. tax on them and it is a tax on good health.

It is shocking that the Government should run a campaign urging people not to use cracked china and that just when they have got people into the habit of insisting on not having cracked cups—my wife now insists on throwing every cracked cup away—they come along and put on a 30 per cent. tax. Then there is the propaganda to make us a property-owning democracy, but as soon as the young people want to buy houses the Government impose on them harder financial conditions. It is really shocking to advertise a social idea and then when the people have caught on to it to take measures to see that they shall pay more if they want to conform to it.

That is a frightful thing to do. It reminds me of the Assyrian donkeyman who holds a carrot in front of the donkey to get it going. The donkey never gets the carrot because the carrot is carried on the end of a stick by the man on the cart. The carrot is always just in front of the donkey. That is what the Chancellor is doing.

The Economic Secretary, who is a Member of this House for whom I have always had a great respect, was my opponent in the Hansworth by-election in 1950. At meeting after meeting I was heckled by his supporters because I defended at that time the Purchase Tax on artificial jewellery. They were giving it to me hook, line and sinker and saying what an iniquitous tax it was upon jewellery. The hon. Gentleman was fighting to win the seat which was in the centre of the jewellery trade. I was also trying to win it, but my case was hopeless. He had the better case. Now he is in the Government, and he is where I was in regard to this matter, and I am where he was. This is a most extraordinary position. One of my hon. Friends says, "Send the hon. Gentleman to China." I do not want him to go to China. I am quite delighted to see him here, but I am surprised to see in four years such a turn over of view on this very important matter, especially when the hon. Gentleman was so emphatic then. I myself was not quite so emphatic because I thought that he had a strong case. I am one of those people who can see grey as well as black and white. He could only see black, and he gained because I was a little wobbly. I did not feel that it was really a good tax. The hon. Gentleman was certain that it was not. Now he is just as certain the other way.

I am now absolutely certain. My doubts have been resolved—in the right direction, the hon. Gentleman would have imagined four years ago. This Purchase Tax through a wide range of goods is going to be very injurious to our industry. I agree with what the hon. Gentleman said at that by-election, that a healthy export trade was dependent on a healthy home trade. I think that he was quite right. As one who has been in industry nearly all my life, I agree with him, because I know that is true. Here we have a Government which is reversing all that. We talk about inflation and reducing costs and competing with other countries, when our ships sailing from our ports will be compelled to bear Purchase Tax on nearly everything that goes into their accommodation and equipment before they go to sea. All this is meant to save foreign exchange, but what is most likely is that they will be forced to refit in foreign ports, using hard currency, and so the object will be completely defeated. I hope that the Economic Secretary will listen to the plea made by my hon. Friends representing Stoke-on-Trent, for I thought they put the best case that I have ever heard for an industry since I have been a Member of Parliament.

8.45 p.m.

Mr. R. Bell

I had no intention of interfering in a private dispute between the hon. Member for Dunbartonshire, East (Mr. Bence) and the Economic Secretary. At all events, it seemed to be very much like a private dispute, with the sides rapidly changing. I hope that the hon. Member will forgive me if I do not follow him in what he said, though I was very attracted by the picture which he painted of the carrot chasing the donkey on the end of a stick.

The point that I want to make is a very much narrower one than that which has engaged the attention of hon. Members during the past few speeches. The Amendment in my name which is being considered with that moved by the hon. Member for Stoke-on-Trent, Central (Dr. Stross) refers only to glass ware and china decorated by hand painting of high artistic quality. Following what the hon. Member for Dunbartonshire, East said, perhaps I ought to make it clear that I am not thinking of the china in the House of Commons.

I am referring to a very restricted craft industry producing a specialised article, the market for which is very largely in the export field, and the industry will undoubtedly encounter difficulty if it has no home market on which to base itself. Until now its products have not been subject to Purchase Tax, but under the Bill they will bear tax at 30 per cent.

We have heard from several hon. Members what may be the effects on the pottery industry as a whole of the imposition of Purchase Tax. On that, I am not qualified to express any opinion, for I have no knowledge of the pottery industry in general. However, the damage is likely to be far more severe when one is dealing with a product of the pottery industry enhanced very greatly in value by the hand workmanship upon it. Then the 30 per cent. tax is paid upon a very much higher wholesale price. Indeed, the main part of the tax is levied upon the process of embellishment, so it strikes directly at the craft element in the product. There is a home market for these expensive products, but the market is primarily with United States tourists or in direct export to the United States. Thus, it is particularly unfortunate that the industry should be struck at.

I have a constituency interest in relation to a business which has just started up in this line of activity. I cannot give any figures, but this is what I am told in a letter from the person controlling the business: We are striving to increase our export trade and have gone to considerable expense to advertise in the American market. If we meet with sales resistance on the home market, due to the addition of Purchase Tax, this will have an adverse effect on our export sales since we may be compelled to dismiss skilled staff. All our artists require considerable training and one cannot take on new staff and put them into production straight away as it takes a long time to train them up to our standard ‖ Equally, the Committee will realise that a business like this cannot lay off staff and take them on again. They are really very highly-skilled craftsmen. One should, perhaps, call them artists, because it is the quality of their artistic performance which sells the goods. The pottery, glassware or trays must be of good quality, but it is the artistic quality of the workmanship which is put into the product which wins the market—and many hours' very highly-skilled work is put into the production of the finished article.

I appreciate the difficulty which faces my hon. Friends in this matter. It is so easy for people to avoid Purchase Tax upon the general class of goods by painting, slapdash, a couple of daisies upon a vase and saying, "This comes under the handicraft exception." I agree that we cannot allow a loophole as wide as that, but is it not possible, to save this craft element in the industry, to levy Purchase Tax—if Purchase Tax there must be on this whole class of goods—only upon the actual vehicle for the artistic expression, and not upon the embellishment, which represents the greatest part of the price? That would make evasion impossible. If it is an administratively feasible system, I would press my hon. Friends to consider whether or not they could devise an appropriate form of words to cover it. There would then be no possibility of evasion, because nothing would be gained by such evasion.

So much has been said upon this subject that I shall not detain the Committee by repeating it. The difficulty experienced by small shops—as distinct from large department stores—in operating personal export schemes has been mentioned, as have many other matters, by hon. Members on both sides of the Committee.

I spoke in the discussion upon the last Amendment, dealing with the general question of safeguarding the home market for these craft goods, and I shall not repeat those arguments, but I do ask my hon. Friends to give this matter very serious consideration between now and the Report stage. I appreciate that the Amendment which I have put down is not in a form which they could accept, in view of the risk of tax evasion, but I ask them to see whether they can devise some form of words which will enable us to help this small but very specialised and worthy craft industry.

Mr. Stephen Swingler (Newcastle-under-Lyme)

I very much hope that the Treasury spokesmen will pay very serious attention to the marginal cases which have been supported by their hon. Friends. I am convinced that if they examine those cases they will appreciate the general case against this tax. What their hon. Friends have been saying is that the tax will kill the small potters—especially the most highly artistic potters—and create unemployment amongst the craftsmen who work for them. What it will do for the small men it will do for the industry as a whole. That is why a widespread opinion exists in North Staffordshire that the imposition of this tax is designed to cause bankruptcies and create unemployment.

In the past, Newcastle-under-Lyme and Stoke-on-Trent, although neighbours, have not always spoken in unison. In the days of my illustrious predecessor Colonel Josiah Wedgwood, they were frequently in violent dispute. In this instance the Treasury are making quite sure that North Staffordshire potters are absolutely unanimous. I hope that the Treasury spokesmen will pay attention to the fact that the Committee has been practically unanimous against the tax. We have so far heard nobody attempt to put forward a justification for suddenly putting a 30 per cent. Purchase Tax on pottery.

What case has been put forward? Some of us from North Staffordshire have been extremely foxed by the behaviour of the Financial Secretary to the Treasury. He received a very powerful deputation from the Potteries, representative of both employers and workers, and he listened very carefully and generously to the case which they put forward against the tax. A few days afterwards he came here and attempted to suggest a case for the tax upon pottery, in the following words: I must say that I myself do not see how Parliament could, for instance, treat metal teapots differently from earthenware teapots, metal pie-dishes differently from glass pie-dishes, metal trays differently from wooden trays, or metal jugs differently from plastic jugs, and so on down the list. It would look dreadfully unfair to tax the metal article while leaving the identical article in plastics, glass, or earthenware, free of tax."—[OFFICIAL REPORT, 8th November, 1955; Vol. 545, c. 1679.] As I understand it, that is the case that was mentioned by the hon. Member for Stafford and Stone (Mr. H. Fraser) for a sales tax. The Financial Secretary suggested that earthenware teapots had to be taxed because metal teapots had to be taxed, and that it would be dreadfully unfair not to tax everything the same. I do not want to go into all the various anomalies and discrepancies in the incidence of Purchase Tax or to attempt to repeat the wonderful speech of my hon. Friend the Member for Oldham, West (Mr. Hale) the other night on the way the tax works on different kinds of brooms and brushes, cosmetics and pictures, and so on.

I should have thought it was very clear that the Chancellor has deliberately set out in the Bill to be discriminating about the imposition of the tax, and its incidence. There is nothing like a flat rate or a uniform imposition of tax. Therefore, I do not understand why, because the Chancellor decided that metal teapots must be taxed, earthenware teapots have to be taxed. What has the Chancellor said about the tax? Not that it had to be levied to raise Revenue or as a sales tax. He said: At present, the budgetary situation is what is called satisfactory; that is, purely from a budgetary point of view, we have an adequate surplus. What is wrong is our balance with overseas countries. The answer now is to increase our exports in these ranges, and to relieve the pressure upon the metal-using industries."—[OFFICIAL REPORT, 16th November, 1955; Vol. 546, c. 492.] 9.0 p.m.

The Chancellor has argued entirely that the purpose of the tax is the saving of imports and the promotion of exports. He has invited us to judge it in all respects from that point of view. Last week he made a very interesting speech on industry to the National Production Advisory Council. He was explaining the reasons for the proposals contained in this Bill. He complained that although a number of industries had had great increases in output they had not shown comparable increases in their exports. After mentioning, in particular, such metal-using industries as motor cars and a number of others, he said: Unless an increase in imports of materials by these industries is matched by a rise in their exports, the balance of payments will be worsened. He went on to say that it was for that reason that he was compelled to reduce home spending on those goods.

We have to consider how all this applies to the pottery industry. The first question is a very simple one: what saving of imports will follow the imposition of the tax on pottery in order to curb the home market? The indisputable answer which either the Chancellor or the Economic Secretary must give is that there is no saving of imports because there are none—materials imported for the pottery industry are a negligible quantity. That means that here the imposition of Purchase Tax has no relevance to the saving of imports.

The next question is: what will be the effect of the tax upon exports? I presume that the Treasury spokesmen will argue that its imposition will create a surplus of pottery for export that would otherwise have been sold on the home market. In that connection, let me draw attention to what has been happening in the last few years. In the last three years the percentage exports of the industry have steadily risen. What the Chancellor said about the metal-using industries is simply not true of pottery.

In 1952, 46 per cent. of china and earthenware was exported; it is true that in 1953 it fell to 42 per cent., but in 1954 it rose to 46 per cent. In the first six months of this year it rose to 48 per cent. Since 1953 there has been a continuous rise in the percentage exports of china and earthenware. It cannot be said of this industry that there has not been a tremendous effort, under great difficulties, to increase its export contribution.

If the Chancellor imagines that the imposition of the Purchase Tax upon pottery will create the means of exporting more pottery, I suggest that he should have another consultation with the President of the Board of Trade. Is that the advice which the President of the Board of Trade gives about the difficulties of exporting pottery? We have observed that the representatives of the Board of Trade are not too keen to attend these debates about the pottery industry. That is understandable, because they know quite well that what we are up against in the export markets for pottery has nothing to do with the pull of the home market; it has to do with the restrictions deliberately imposed by other countries on imports of pottery from Britain.

If the Chancellor and the President of the Board of Trade will together examine the problems of trade and exports in the last few years, they will see that three times in Australia, a number of times in New Zealand and a number of times in other markets the exports of British pottery have been subjected to quotas, restrictions and licensing.

The expansion of pottery exports has nothing whatever to do with the pull of consumer demand in this country. It has to do entirely with successful trade negotiations with other countries in order to break down the barriers which have been artificially erected against the sale of British pottery in those markets. Since we cannot force pottery on to those markets when the Governments concerned are unwilling to import it, the result of the Chancellor's tax can be no other than the creation of unemployment in the pottery industry. That must be obvious.

Let us accept that it is not true that we could export more pottery today were it not for some lack of effort by the industry. If, as I believe to be the case, we could export more pottery—and the industry would certainly be willing to do so—were it not for the trade barriers imposed; and if the decisive factor is not the pull of the home market but the trade barriers; then clearly the answer is not a penal tax upon pottery in the home market.

The effect of the Chancellor's tax, as I see it and as many people in North Staffordshire believe to be the case, can only be not to increase exports but to increase the imports of foreign pottery. The effect of the tax, on the one hand, is to increase the price differential between cheap imported pottery in this country and, on the other hand, to do nothing to break down the artificial restrictions imposed by other governments against the sale of British pottery abroad.

I therefore believe that no justification has been made out for the tax on pottery. It is a swingeing measure. The people in North Staffordshire firmly believe that it is bound to lead to unemployment. It may well undermine the export capacity of many of the firms. As several of the Chancellor's hon. Friends have pointed out, it may put many of the most artistic potters and craftsmen in the country out of business and into bankruptcy. In every way it is an evil and undesirable thing, and I hope the Treasury will have the sense to withdraw it.

The Temporary Chairman (Sir L. Ropner)

Sir Edward Boyle.

Sir E. Boyle rose—

Mr. Harold Davies

On a point of order. May I have your guidance, Sir Leonard? Does this mean that the debate will be closed with the reply of the Economic Secretary? We were in a similar position the other night.

The Temporary Chairman

I have called the hon. Gentleman.

Sir E. Boyle

I am sorry if my rising has caused any offence to the hon. Member for Leek (Mr. Harold Davies), but I have listened to the whole debate, with the exception of two minutes, and I thought it would be for the convenience of the Committee if I said a few words at this stage.

We have had the advantage tonight of speeches from the three hon. Members who represent Stoke-on-Trent. No hon. Member who has been a Member for five years, as I have, could have any doubt about the enormous interest which those three hon. Members take in the industry and their knowledge of it. I should like to join with their names the name of the former hon. Member for Stoke-on-Trent, North, the late Mr. Edward Davies, whom I remember very well indeed. The hon. Member for Stoke-on-Trent, Central (Dr. Stross), who opened the debate on this Amendment, remarked that the pottery industry had a good record for efficiency and had rationalised its methods. I certainly do not disagree with him about that at all. I would be the last to wish to under-rate the fine record the industry has achieved in the last few years.

Probably it will be known to most hon. Members of the Committee that until 1952 only plain domestic pottery was allowed to be sold on the home market. The restriction before 1952 had the effect of keeping home sales down and stimulating exports. Since that restriction was lifted there was, in 1953, a peak of home sales amounting in value to something like £17,800,000. Thereafter, home sales tended to fall and that no doubt was due in large part to restocking by distributors and consumers having been largely completed. Exports, of course, were affected by import restrictions imposed by other countries in 1952 and 1953, but, at the same time, exports have recovered very considerably since that date. They have recovered from a total value of just under f13 million in 1953 to an annual rate of about f15 million in the first nine months of this year.

I fully realise that this industry remains very export-minded indeed and that it is making every effort to maintain, and wherever possible to increase, its exports in spite of the difficulties of import restrictions in some markets and the severe competition today from Germany and Japan. I am not quite so pessimistic about the effect of the increased tax on exports as some hon. Members who have taken part in the debate. I think that the hon. Member for Stoke-on-Trent. North (Mrs. Slater) said we must have home sales of the present size in order to support the export trade in pottery. I must say that that seems to me not really true; in fact, it is arguable that it is the reverse which is true. That is to say, with high-quality chinaware and pottery a large home market is not necessary for an export trade, as was shown by the restriction of home sales which persisted throughout the time when hon. Members opposite were in power.

Production of high-quality china is limited by a shortage of labour, particularly of skilled decorators. It does, therefore, seem quite probable that if home demand is limited somewhat by this increase in tax there will be more available for export and that the tax will help the trade in its export efforts just as the former prohibition on home sales did.

Dr. Stross

May I put this to the Economic Secretary? Has he forgotten to take into account the fact that immediately after the war and for some years after the war the world generally was very hungry for our products and we had no competition to face? Did he not note the argument I put, which is the argument acknowledged in all Staffordshire, that we must face radical changes in design and fashion now?

Sir E. Boyle

Yes, but I also take note of the fact, and want to put it to the Committee, that after all world trade is extremely high at the moment and is increasing. While I entirely appreciate what the hon. Member for Newcastle-under-Lyme (Mr. Swingler) had to say about import restrictions, I think it fair to say that that does not apply to the dollar area, to which the hon. Member for Stoke-on-Trent, Central referred specifically in his opening speech.

I would make the point that I think it very arguable that the pottery trade has been handicapped from the export point of view by rising costs. That is to say, higher costs of wages, fuel and transport have together caused this industry to increase its prices, and, therefore, I believe that the pottery trade is likely to benefit substantially from the measures which my right hon. Friend is taking to attack inflation in the country.

9.15 p.m.

Imports were referred to by my hon. Friend the Member for Stafford and Stone (Mr. H. Fraser). I cannot give the Committee complete figures tonight. The best that I can do is to say that these imports to a considerable extent come from Europe. At present, this trade is on open general licence, except for the dollar area and the Iron Curtain countries. I have no doubt that British industry in general has gained from the liberalisation of trade in Europe, and that we gained in increased exports far more than we lost through the freeing of European trade under the O.E.E.C. liberalisation code. It is also only fair to say when considering these imports from Europe that to a considerable extent they are coming from Italy.

Mr. H. Fraser

The whole trouble, surely, is that up to now we have had only what we might call ornamental ware coming from Italy, Germany and, to a smaller extent, Japan. The danger under the price differential, which this tax will heighten, is that we will get back imports of Japanese tea sets.

Sir E. Boyle

I can quite understand the apprehensions which my hon. Friend feels, but I think that so far these imports have been due in large measure to the liberalisation of European trade, which has benefited British industry on the whole.

Let me now come to this question of employment, because it is very much in the minds of hon. Members opposite. Of course, I entirely appreciate the point that if there were to be any substantial reduction of employment in this industry, it might be very difficult to gather again, as it were, the craftsmen who were dispersed. We take that point very seriously, and I think we have shown in our earlier discussions today how strongly we feel on this general subject of the craft trades. I must say, however, that if we look at the figures, it is difficult to believe that this tax will really have a serious effect on employment in the trade. After all, the pottery industry has insisted again and again that it could export more if it had more labour. It has, in fact, on many occasions pressed the Government to see if it could divert labour from these factories, generally speaking the smaller factories, which have little or no export trade.

It is significant that the latest Ministry of Labour figures I have seen for the Midland Region show that on 21st September last there were some 1,994 labour vacancies in the domestic pottery industry in the Stoke-on-Trent area. We fully understand, of course, the anxiety that is being felt, and this matter will be very carefully watched, but I cannot feel on the evidence available to us so far that there is any serious danger of large-scale redundancies as a result of these measures.

A number of my hon. Friends representing Cornish constituencies asked questions about the cottage industries, and I took very careful note of all they said. I think they know very well the difficulties about this matter, but may I say to my hon. Friends, and to all hon. Members in other parts of the Committee who are interested in this subject, that I did make full note of what was said and that we will certainly look at the question very carefully indeed. I am sorry that I can go no further than that tonight, but a note has been taken.

On a more homely point, now that the hon. Member for Dunbartonshire, East (Mr. Bence) has returned to the Chamber, I can give him the assurance that milk bottles will not be subject to Purchase Tax, nor will the ships' stores of foreign-going ships. I am glad to be able to reassure him on the two points which he raised.

My hon. Friend the Member for Buckinghamshire, South (Mr. R. Bell) referred to the Amendment which he has on the Notice Paper. My hon. Friend knows that the difficulty here is that of making a differentiation between hand painting and some kind of mechanical decoration. My hon. Friend made a further proposal at the end of his speech, which, I must confess, I tried to understand but am not sure that I completely succeeded. There are very real difficulties on the matter which he raises. The cheapest and crudest pottery frequently bears some kind of hand-painted line decoration and the most expensive china ware is often decorated by a transfer process. It would be difficult to make a differentiation of the type that my hon. Friend has in mind although I understand the reasons which prompted his Amendment. My hon. Friend himself admitted that he realised there were difficulties about the form in which his Amendment appeared on the Paper.

A number of hon. Members asked once again exactly what was the object of these proposals that we are discussing tonight. On many occasions during these debates, I have tried to explain the general economic case behind our proposals. We feel that if inflation is to be eliminated from our economy, we must take measures to bring down the general level of demand, including consumer demand.

Having listened to the debate and knowing very well the strong feeling on all sides of the Committee about the pottery industry, I genuinely believe that this industry, together with all other industries, will gain if we succeed in the objective of getting our economy back on to an even keel and of eliminating inflation so that our costs do not go on rising. I believe, furthermore, that hon. Members opposite are too pessimistic about the effect of these proposals on our export trade and that we may well find that they help exports.

Mr. Donald Chapman (Birmingham, Northfield)

I am very glad to be able to follow the Economic Secretary and to take up the last point he made. He said that if by these proposals he manages to some extent to damp down the general demand in the economy, it will, in the end, be for the benefit of this industry. The hon. Gentleman, however, will not face the fact—we have put this to him throughout the Committee stage—that if he uses a weapon such as this he will be trying to eliminate inflation generally, but will be creating it again by the wage demands which he provokes.

If a person is blind in one eye, it is no good his curing the blindness in that one eye and giving himself blindness in the other eye. That is precisely what these proposals are doing. I wonder whether the Economic Secretary has looked at what the Financial Times had to say about the proposals to which the Amendment relates. It said, as the hon. Gentleman has just told us, that the intention of the Chancellor was to bring home the needs of the financial situation but that, unfortunately, it has provoked a wave of resentment, a reaction which it is surprising the Treasury and the Cabinet did not foresee.

The Financial Times elaborates that by saying that this present proposal for Purchase Tax is on a particularly exposed part of the economy when it comes to the reckonings of trade unions about whether to demand wage increases. It is a particularly irritating part on which to impose a tax. The net result may be that the Chancellor will perhaps be deflating consumer demand generally but will be recreating inflation, on the other hand, by the wave of wage demands that the very taxes themselves set in train. Although, at times, the Economic Secretary goes into the details of the economic theory behind his speeches, I wish that he would face that one, which we have put to him time and time again in this Committee but which he has so far refused to face.

I rose not to continue the general debate on the pottery industry, but to speak about the effect of the tax on an industry in which I am engaged. I declare my interest in that I am an hotel owner, and I want to say a few words about the penal effect of the tax and the disadvantages that will fall upon the industry from the provisions of the Schedule.

The industry is singular in that its raw materials are subject to tax. I do not know of any other industry whose raw materials of every-day use, out of which it makes its products, are subject to tax in the way that the raw materials of the hotel industry will now be subject to tax. Moreover, as my hon. Friend the Member for Dunbartonshire, East (Mr. Bence) has indicated, while the equipment of the floating hotels—ships—will not be subject to tax, the hotels in this country trying to serve guests from overseas as well as our own people will have to pay tax on their equipment.

There was an attempt to relieve the hotel industry of Purchase Tax because of the good job it was doing. For instance, during the Festival of Britain there was a special agreement arranged under the control of the Board of Trade, and that enabled the hotels to get tax-free equipment, so that the standards of British hotels could be improved. I ask that a concession such as that should be reconsidered in present conditions for British hotels. No doubt it could be arranged with the President of the Board of Trade.

It ought to be realised that the hotel industry is our best dollar earner. It is earning for this country through tourism more than any other trade or industry. There is something to be said, therefore, for trying to lift its standards higher than they are at the moment. We have heard from my hon. Friend the Member for Dunbartonshire, East about the way in which this tax will cause a deterioration in standards of equipment in hotels. It certainly will.

Some of us in the hotel business have for several years been campaigning for an improvement in standards. We have, for instance, encouraged hotel and restaurant guests to protest at being handed chipped cups by throwing them, if not at the manager, then upon the floor, and stamping on them so that they can never be used again. We have encouraged them to do that in protest against some of the equipment which was and is still used in some British hotels and restaurants. Those of us who have been engaged in this campaign have found it has been reasonably successful, but this tax will undo a great deal of the good we have managed to accomplish in the last few years.

I do not know how our American visitors stand some of the things they have to put up with in British hotels and restaurants. They are asked to eat off plates of which the earthenware is showing through. They are asked to eat off plates which are chipped, even off plates in the chips of which decayed food is visible. I do not know how our foreign visitors stand for that sort of thing. The tax on the hotel and restaurant industry's equipment will be a permanent excuse for the lazy hotel keeper or restaurant keeper when protests are made about his equipment. Something could and should be done about it.

We want our hotels and restaurants to be equipped with good, clean crockery, and we want the tables to look attractive, but appearance is not the only consideration. There is also hygiene, and in so far as the tax will make it more difficult for the hotel keepers to use good crockery even for hygienic reasons, it will have a bad effect.

People are eating out nowadays more than they used to do, and it is a sad fact that the number of food poisoning cases has increased in recent years. It has more than doubled since 1949, from about 2.400 a year to about 5,300 a year. That is linked partly with the fact that our hotels and restaurants have not kept pace in the quality, cleanliness and newness of their equipment with the needs of hygiene and the increased use that is now made of hotels and restaurants. As has been said, this is a tax not only on the good appearance of the table but on hygiene itself. One of the great problems in the industry today is that many hotels are trying hard to keep down prices—

9.30 p.m.

The Deputy-Chairman

I do not think that the subject of the hotel industry arises on the Amendment.

Mr, Chapman

I took the trouble of consulting the Chair and asking whether this matter would be in order. I was told that as long as we spoke particularly of the impact of the tax on china and pottery on the hotel trade, that would be absolutely relevant.

The Deputy-Chairman

As long as the hon. Member directs his remarks to what is in the Schedule he is certainly in order, but I understood him to be talking directly of the hotel industry generally.

Mr. Chapman

I am speaking, Sir Rhys, and I will try to make it even more plain, of the effects of the tax on the hotel industry. I understood that to be thoroughly in order.

The only effect will be that next season hotel keepers will regard the tax as an excuse to increase their prices. This brings me back to the general argument on Purchase Tax—that its only result will be that another twist will be given to the wage-price spiral, which will undo all the good economic effects that the Economic Secretary to the Treasury is trying to tell the Committee will flow directly from Purchase Tax.

I believe that many hotels are today giving a very good service for very low charges. If a tax is applied suddenly to the raw material of the hotel industry, and to the penal extent of 30 per cent., it is a terrific blow at price stability and at the attempt to keep up our standards. I hope that at a later stage we shall hear from the Government whether there is the possibility of restoring the special exemption which was rightly accorded to the hotel industry for the Festival of Britain.

Mr. Ian Mikardo (Reading)

Every hon. Member, except the Economic Secretary to the Treasury, must have been convinced by the case made by my hon. Friends and some hon. Members opposite about the incidence of Purchase Tax on pottery. I have been quite convinced, and I would make one comment only on the Economic Secretary's speech. It is that when the hon. Gentleman is not satisfied with merely arguing that the tax will do no damage to the industry but actually goes as far as to say that it will benefit it, I wonder whether he intends to spend his next few weekends in North Staffordshire explaining to pottery manufacturers and pottery workers, with that cherubic manner which endears him to us all, exactly how they will be better off because the industry will be subject to tax.

I hope that I shall be forgiven if I depart from pottery and consumers' goods and make a fresh point about a quite different industry and quite different product which is affected by that part of the Schedule which the Amendment seeks to remove. It is natural enough that the debate and almost all public comments should have concerned themselves with things like pottery, tableware and kitchenware and other articles which are immediately used by the consumer because, of course, it is the rise in the prices of these things, as a result of the tax, which makes the most obvious, sharpest and most noticeable impact on the largest number of people.

The summary of paragraph (i) of Group 11, which is contained in the words we are now seeking to delete, is a short summary and refers only to certain table ware, kitchen ware and similar articles; that is to say, articles which are used broadly for the consumption of food. The relevant paragraph of Group 11 goes much further than that, however, and covers: -Vessels designed for use primarily as containers for food or drink in the course of its storage, preparation or consumption … In other words, the tax which is imposed as a result of this provision will fall not merely on the things that people use in their homes or in hotels as containers for food, but will also fall upon the things which manufacturers and distributors use as containers for food. The Committee will not be surprised to hear that one of these, which I have particularly in mind, is the container used for biscuits—biscuit tins.

The biscuit industry, as right hon. and hon. Gentlemen opposite well know, has done a wonderful job of sales promotion in export markets. Measured not in total volume but in terms of the worthiness of its sales promotion activity, I do not think there is an industry in the country which has done better than the biscuit industry. Last year we exported £5 million worth, and it takes a lot of biscuits and a lot of pounds of biscuits to make £5 million sterling. That is a large-sized sales promotion effort, and about a quarter of that total goes to the United States and Canada and rather more than that to dollar markets as a whole. I am happy to say that the great biscuit factory in my constituency, and its associate companies, account by themselves for about a half of those exports.

Most of those exported biscuits are sent out in fancy tins, which are used for the export trade and for the home trade as well. Under these proposals Purchase Tax will be levied on them and, of course, there will be in the ordinary way draw back for that part of the tins bought by the biscuit manufacturer which goes to the export trade. Yet it cannot be denied that the increase in the price of the tins—and these fancy tins are expensive, not only because of their decoration but because they are often in unusual shapes which require a great deal of tooling—will be substantial, and this will put up the price on the home market of biscuits in such tins and will undoubtedly cut down the sale in the home market of biscuits so packed.

Even now, of course, when a woman has a choice of buying biscuits in bulk out of a large tin—the "square" tin as the trade call it, though it is not square but a cube—or of buying them in a paper package or at a higher price in a decorated tin, she will often choose the cheaper method of packing. Of course, when the dearer method of packing becomes very much dearer as the result of Purchase Tax, she will almost always go for a paper packet or for a purchase in bulk unless she has some special reason to the contrary.

There is no doubt that the trade has recognised, and is worried about it, that the sale of biscuits in decorated tins on the home market will drop substantially as the result of this tax. That means, Sir Rhys, as I am sure you have seen, that the consumption of these decorated tins will drop very sharply. It is not possible in this trade when the total demand drops to deal with it by dropping the number of designs and maintaining a long run on a smaller number of designs. The demand in the export field is for constantly changing designs. Therefore, if there is a fall in the total consumption of these tins that is bound to increase the price of each design quite substantially, because the run is made very much shorter and the very considerable cost of design, preparation, layout and tooling is spread over a much smaller quantity.

We heard argument earlier in the debate today, and the Economic Secretary made reference to it in regard to pottery, about the extent to which our export prospects are injured by artificial restrictions put in one form or another upon the home market. Everybody who wants to relieve tax on goods sold in the home market always uses the export argument to do it. We have done it from these benches. Hon. Gentlemen opposite did it very cogently and very verbosely, if I may say so, when they were in opposition.

Sometimes I consider that the case for reductions of home taxation on the grounds that it injures exports is overstated. The validity of that case, as I am sure the Economic Secretary will agree, varies very much from product to product, and the criterion on which it varies—I am sorry that this is going to get a little technical, but the Economic Secretary, I am sure, will appreciate this point, and so will many other hon. Members—is the percentage of the total cost of the product which is represented by spreading the non-repetitive preparation costs.

When we have a product which is made with very little labour and largely by free hand methods so that most of its cost is in direct labour and raw materials, then, of course, the economies of scale are comparatively small and it cannot be argued that by lessening the home trade we are seriously injuring the export trade by putting prices up. But when we get a product with high costs of design, prototyping, preparation, layout and tooling, and where inevitably the runs are restricted because there is a fashion or a vogue demand and we cannot be too repetitive, then, of course, the extra cost per unit of reducing the length of the run is very great indeed.

Therefore, I am impressed by the argument about the inter-relationship of the home market with export trades only in so far as it concerns commodities where there is a high initial cost compared with the total cost of the product.

This is very much the case with regard to the decorated biscuit tins where, for reasons I have already given, we cannot inordinately increase the length of the run, and where because a good deal of tooling is involved in making fancy and unusual shapes and a good deal of design is involved in producing pretty pictures, colours and all the rest of it, the initial cost will be very high indeed. I hope that this will be very seriously noted. I do not always take representations from manufacturers in my constituency, whether they are biscuit manufacturers or others, as gospel, and I suppose that some of them complain that I do not act as their mouthpiece as often as they would like. Indeed, I do not think I have ever done so before. However, strictly on the merits of this case from what I myself know from my own experience of the manufacture of containers of this sort, there is no doubt at all that this very valuable export trade will be damaged by the shrinkage of the home market caused by the imposition of Purchase Tax.

9.45 p.m.

I said that last year we exported £5 million worth of biscuits, much of it in these decorated tins. This year exports are running at about 10 per cent. above last year's rate, and they are going up all the time. I am sure the Economic Secretary will recognise at once that this is a particularly valuable export as the conversion factor is so high because there is such a small use of imported materials in the product. I hope the Chancellor, who appears to be hugely amused by my case—

Mr. R. A. Butler

I was struck by the hon. Member's obvious control of economic metaphor and style. He is perfectly correct in what he says about the conversion factor in this matter.

Mr. Mikardo

I am honoured by the right hon. Gentleman's tribute. What puzzled me was that his admiration for my performance was combined with some apparent amusement. Perhaps he was admiring the matter and being amused by the manner. That is the most charitable explanation I can give.

Without being further diverted from my argument, I should like to ask for some enlightenment from the Chancellor or the Economic Secretary about non-decorated tins, the ones used in the home trade, to which, as I have said, the trade gives the incorrect description of "square" tins. These are, in fact, the conventional biscuit tins. I understand that some people in the trade are under the impression that the tins escape tax in exactly the same way as the Economic Secretary said milk bottles escape it. I am not sure how that can be so in view of the wording of the provision. I do not pretend to be an expert about this and would like some enlightenment.

The "square" tins used on the home market are, of course: … vessels designed for use primarily as containers for food … in the course of its storage … Thus they fall directly within the words of the provision. If that is so, and the tins go up in price, it will lead directly to an increase in the selling price of biscuits. Of course, nobody buys the tins; the tins are returnable and do not last for ever. Each time they go out, a part of their cost is absorbed and has to be charged as an on-cost on the biscuits which they contain. If the tins are subject to tax—I shall be grateful if someone will make clear whether they are or not; the matter is in some doubt—the part of the cost of the tins which falls on each pound of biscuits contained in them will rise. Biscuit manufacturers have no method of recovering that money by any charge on the tins. Their only method of recovering it is to increase the price of the biscuits.

The indirect result—it is not so indirect at that—of a tax on the tins, if in fact there is one, is that we shall for the first time be placing Purchase Tax on a food product. It will not be a very large increase, and I am not pretending that it will be. I am not trying to make a great alarmist case, but there will be an increase, and I am sure it was never the intention of any Government which used Purchase Tax as a fiscal weapon that it should apply even in small measure to food.

Consequently, I shall be grateful if a Government spokesman will tell us whether the tins will or will not be subject to tax, and, if they are, how the Government reckon that it will increase exports and save imports, and how they justify a tax which will fall on a food product. I shall be grateful if the Government will give serious consideration to the damage which will undoubtedly be done to the export trade in biscuits by the imposition of a tax on decorated tins.

Mr. Harold Davies

We have had a long and very valuable debate. I do not wish to detain the Committee for very long, but I want to recall its attention to the Amendment in the names of a number of hon. Members who represent North Staffordshire constituencies, either in Stoke-on-Trent or in contiguous areas. We have been told that the purpose of this tax is to strengthen sterling and to improve our export position. The Economic Secretary arrived at the strange conclusion that Purchase Tax might even help to increase pottery exports. When I listened to him I thought at first that we were going to have a bull in our china shop, but he was so kind towards the end of it that I recognised that we had, instead, a Boyle in the china shop.

I wonder whether, at the end of the debate, this great industry will be told something that will enable it to plan ahead at this difficult period. Can we be told how much this Purchase Tax on pottery would raise? Will it be £2 million, £1¾ million, or £3 million? If the amount that is going to be raised is about £2 million, the Committee must ask itself whether we shall not also lose £3 million, £4 million or £5 million worth of exports in the dollar market. If that is the result of raising £2 million in sterling at home we shall be weakening the £ instead of strengthening it. It seems to me that that is what will happen.

The pottery industry is a wonderful one. It is an industry about which all the world knows. Those of us who are in any way connected with it have already become accustomed, in whatever part of the world we may be, to picking up our cups and saucers to see in which part of North Staffordshire they were made. It is safe to say that every Member of the Committee, wherever he has been abroad, has at some time or other used pottery products made in North Staffordshire, Bristol, Derbyshire, or Worcestershire.

The debate has shown that hon. Members on both sides of the Committee disapprove of this tax, and I hope that if we are forced to take the matter to a Division some Conservative Members will courageously come through the open portals of our Lobby and vote with us. I would prefer that the problem was overcome more amicably. I hope that the reasonable arguments which have been pleaded by hon. Members on both sides of the Committee will be accepted by the Chancellor, who will abolish this tax in relation to the pottery industry. I am not convinced that he could not do so. If he did, he would not lose face; in fact, he would gain the appreciation of the industry in North Staffordshire.

There is another matter which we must consider. My hon. Friends who represent the city of Stoke-on-Trent have pointed out quite clearly that if unemployment occurs in this industry at this critical period we shall lose craftsmen. If we do so, when we try later on to regain them we shall not get into the export markets upon the same beat as our competitors.

In my teaching days I had the privilege to teach in the area of the Potteries for quite a while and, although I cannot prove it, as a generalisation I believe that it would be very near the truth to say that the instinctive artistic talent of the children of this part of Britain has been inherited as a result of the junction of the craft industry and art through the generations. We should do damage to the roots of British traditions if, in trying to raise £1 million, £2 million, or £3 million, we imposed a Purchase Tax which would do irreparable damage to the industry later on.

I took the trouble to find out what has been said by famous Chancellors of the Exchequer about our industry. We had a visit from Mr. Gladstone in North Staffordshire on one famous occasion. The House of Commons is often trying to find out what Gladstone said in 1863. I am able tonight to tell the Committee that in 1863 he said the last word on the pottery industry. When Mr. Gladstone came to North Staffordshire he took an interest in the Wedgwood schools of art and craft, because he realised their value to Britain and to the neighbourhood. He said in the Wedgwood Institute: Josiah Wedgwood was the greatest man who ever, in any age or any country, applied himself to the important work of uniting art with industry. When we interfere, by imposing Purchase Tax on this craft, with this unity of art and industry, for the sake of £1 million or £2 million, we may do damage that cannot be repaired for another generation because it will take that time to teach the craftsmen.

I am proud of this industry. I had the privilege to see in the United States wonderful examples of the craft being turned out in North Staffordshire. One of the most exquisite pieces of ware I saw in Russia was produced by Wedgwood for the Empress Catherine when he made 195 pieces of pottery second to none in the world. They were made by our craftsmen at that period. I hope that both sides of the Committee will realise that the industry has learnt its trade the hard way. If we apply this taxation today, I am certain we shall do damage for which we shall be sorry some years later.

I ask the Chancellor to give special consideration to helping this industry, which is getting very little help. Pottery manufacturers wrote to the Board of Trade. The President of the Board of Trade should have been here tonight. [HON. MEMBERS: "Where is he?"] They made an effort to get a change in the Merchandise Marks Act, 1926, because pottery coming into the country need not be marked with the country of origin but merely "foreign" or "Empire."

The Deputy-Chairman

The hon. Gentleman's speech is now going beyond the scope of the Amendment.

Mr. Davies

If you wait, Sir Rhys, until I have finished the sentence you will see that it is very apt. The hon. Member for Stafford and Stone (Mr. H. Fraser) showed with absolute clarity that Purchase Tax would increase the effort needed by the industry to compete against Japan and Germany. We have to increase our effort not only because of the tax but because of the Merchandise Marks Act, 1926. I hope that the President of the Board of Trade will look at that in relation to the Chancellor's present policy.

In view of the temper of the debate, of the appeal that there has been from both sides, of the fact that this industry earns more dollars per worker than almost any other in Britain, and that 99 per cent. of its raw materials come from our own soil, I appeal to the Chancellor to reconsider this. I sincerely hope that he will abolish Purchase Tax on the pottery industry's products.

10.0 p.m.

Mr. Anthony Greenwood

In three respects this debate on the Amendment moved by my hon. Friend the Member for Stoke-on-Trent, Central (Dr. Stross) has been remarkable. First, it has been remarkable because we have had throughout our proceedings, spasmodically, the presence of a representative of the Board of Trade. In discussions on the Finance Bill it has become traditional for the present incumbent of the Presidency of the Board of Trade to treat the Committee with what appears to be an almost studied lack of interest. On many occasions we have had to protest that a representative of the Department which is so vitally concerned with matters of this kind does not condescend to come here to give us the benefit of advice which—at any rate by virtue of his office—we might expect him to give.

Secondly, the debate has also been remarkable for the quality of the speeches made from all parts of the Committee. I have been greatly impressed by the case which has been made and, as my hon. Friend the Member for Leek (Mr. Harold Davies) has said, by the temper of the speeches. Thirdly, it has been remarkable because the Chancellor has maintained what must be a unique record for a Chancellor of the Exchequer of having so far had only one speech in his support from his back benchers during the Committee stage. From the way his hon. Friends are failine to support him in these discussions, it looks as though that record will be unbroken when we reach the end of the Committee stage.

I hope that we shall have from the Chancellor more than we had from the Economic Secretary. Frankly, I found the hon. Gentleman's speech most disappointing. From certain reports which appeared in the Press a couple of weeks ago, we had all been led to expect that the Treasury might be able to make some concessions in respect of non-metal kitchen goods. All that the Economic Secretary was able to say was that the pottery industry will be watched. We all know that when the Chancellor and his hon. and right hon. Friends promise to watch an industry it usually means the kiss of death. I am filled with foreboding by the fact that the Chancellor of the Exchequer is to show such keen interest in this industry from now on.

It is not good enough for the Economic Secretary to come here and to give employment figures for the pottery industry for the middle of September. Those. I think, were the figures which he gave. He told us that for the third week in September there were about 2,000 vacancies. My hon. Friend the Member for Stoke-on-Trent, Central said earlier that the figures for the industry in his own locality last week showed that there were about 250 men and women unemployed or on short time. What the Economic Secretary has not appreciated is that the figures which he gave related to a period unaffected by the imposition of this tax, and that the industry has reacted very swiftly—as anyone would expect it to do—to the serious threat of the Chancellor's proposals.

I wish that the Economic Secretary had been at least able to promise that he and his right hon. Friend would seriously consider the points which have been made during our discussions, because the case which was put forward on both sides of the Committee seemed to me to be an overwhelming case. As a representative of the cotton industry, I find it difficult to admit that any other industry can put up as good a case as can the cotton industry, but I must say that the pottery industry came very near to doing that today. We remember some figures which were brought out in the discussion—for instance, the fact that less than 1 per cent. of the raw material used have to be imported into the country. There can hardly be another industry of the magnitude of the pottery industry which is so little dependent on imported raw material. That means, as the industry has pointed out, that the net value of the industry's exports is probably higher than in the case of any other industry, with the possible exception of Scotch whisky.

I think we were all impressed by the figures given by my hon. Friend the Member for Stoke-on-Trent, Central about the percentage of the pottery industry's output which goes into the export market. The Economic Secretary said that the percentage of those exports has steadily risen and that now 45 per cent. of its exports goes into the dollar market. That does not take into account the considerable amount of pottery which is sold through big stores in Regent Street and other parts of the West End and also, of course, the small potters, to whom several hon. Members have referred.

I was, however, happy about one statement which the Economic Secretary made, when he paid tribute to the remarkable efforts which the industry has made to expand its export sales. It was at the direct request of the President of the Board of Trade that the industry formed an Exports Promotion Committee in 1952, and I do not think there is another British industry which has tried harder than the pottery industry to expand the sales of its goods overseas.

It is unquestionable that the fact that it has not increased its exports more is consequent upon the terms of trade in other parts of the world—restrictions in the South American markets, the three cuts in the Australian market, credit restrictions in New Zealand and the growing Japanese and Continental competition in markets in all parts of the world. There is no doubt that the pottery industry has the skill and the craftsmen and could undoubtedly expand its exports if conditions in those parts of the world were more favourable to the export trade.

I wish the Chancellor would show himself as sensitive to the claims of the craftsman in the pottery industry as he was earlier in the case of silverware and cut glass. When the first of the severe Australian import cuts became effective in 1952, the Chancellor and the President of the Board of Trade removed certain controls upon the sale of those goods in this market, which showed that at that stage they were aware of the importance of maintaining stability in the industry and not jeopardising its ability to retain its vital craft labour.

My hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith) summed up the case perfectly when he said that this is a tax on exports, because if the Purchase Tax is to make it more difficult to retain craftsmen in the industry, it will place an additional burden and an additional handicap upon the exporting capacity of the industry. It is an industry which has always relied considerably upon having a healthy home market where it could experiment with designs of presentation, designs of makeup and all the rest of it, and it will be very serious indeed if home sales are cut down, if there is instability in the industry and if craftsmen leave the industry.

I was most interested in what my hon. Friend the Member for Stoke-on-Trent, North (Mrs. Slater) said about the training of craftsmen in her city and the way in which Stoke-on-Trent recently spent £300,000 on building part of a technical college to train young people in the craft of pottery. That is the sort of initiative we want to encourage on the part of local authorities, but we do not want to encourage them to spend vast sums of money in that way and then impose a tax of the kind the Chancellor is now imposing.

Although the Economic Secretary said that the Government are taking the loss of labour in the industry seriously, I do not think that that is going as far as the Government ought to do. Earlier, we heard the case put for what were called the "artist potters," or individual craftsmen. I should have thought the Chancellor, who, normally, is sympathetic to claims of that kind, could go further than his hon. Friend the Economic Secretary saw fit to go. We have heard of the potters in the Duchy of Cornwall and the difficulties they are experiencing. I have in my hand a copy of a letter from an artist potter in the Midlands, addressed to two Conservative Members of Parliament, asking them for their help in this matter, but, so far as I know, I have not seen them present in our discussions in Committee tonight.

This man is a small craftsman running a small workshop with one assistant and making high-quality pottery. He says that in recent years he has found a gradually increasing market but by the nature of its manufacture the product remains rather expensive compared with mass-produced pottery. He goes on to point out that up to now what has been a sales limit of £500 gross a year and, before that, on ornamental pottery, the artist potter has not had to pay tax, but now, because of the Budget, all pottery will be taxable above the limit of £500. He says that there are two alternatives left to him. The first is to restrict deliberately his sales to £10 gross per week—that is to say £500 a year—but goes on to point out that his trade is retail and, therefore, 33 per cent. must be deducted at once as retailer's profit, which would leave him with £340. The cost of his materials works out at about £180 a year, leaving him with £160 on which to keep himself and his family. The second alternative is to enlarge the sales to such an extent beyond the £500 limit that the effect of the tax on him would, as it were, become diluted, and to lower the quality of the work he is doing.

It is really absurd, as the hon. Member for St. Ives (Mr. G. R. Howard) pointed out, that the Government, through the British Craft Centre and also the Rural Industries Council, are subsidising work of this kind yet the Chancellor is discouraging it by imposing on it what amounts to a penal tax. I am afraid that if the Chancellor goes ahead with this proposal he will be discouraging these craftsmen and depriving the industry of a number of recruits who would have a great deal to contribute to the future of the industry.

The Economic Secretary spoke of the liberalisation of trade having benefited British industry as a whole. That is an arguable point, but liberalisation of trade has certainly not benefited two of the major industries of the country, the textile industry or the pottery industry. Surely the Economic Secretary is not going to tell us that the pottery industry is expendable just as the President of the Board of Trade has been hinting to Lancashire that the cotton industry is expendable? In the pottery industry, because of the policy of liberalisation of trade with Germany and in consequence of the Anglo-Japanese Treaty, we are getting imported into this country—

The Deputy-Chairman

The hon. Member is getting far from the Amendment by dealing with the liberalisation of trade.

Mr. Greenwood

With great respect I think not, Sir Rhys, because I was going to argue that as a result of the liberalisation of trade and the Anglo-Japanese Treaty we are being faced with growing competition and cheap imports from Italy. Germany and Japan. I was making the point, which, incidentally, was made by the hon. Member for Stafford and Stone (Mr. H. Fraser) earlier, and which I made in earlier discussions on Purchase Tax, that when faced with increased competition the increase of Purchase Tax further widens the difference between the price of imported goods and the price of goods produced in this country. We much regret that at this very critical moment in the development of the pottery industry this additional burden should be placed upon it.

The hon. Member for Stafford and Stone, who spoke in the strongest terms of criticism of the Government, suggested that he would be happy if the tax was reduced to 15 per cent. We believe that the tax of 15 per cent., or, indeed, any tax on this industry at this present stage, would be wrong. We believe that the industry deserves more, that the men and women working in the industry deserve more and that the British housewife deserves more than that; and for these reasons we shall certainly press this Amendment to a division, unless the Chancellor is far more communicative and forthcoming than his hon. Friend the Economic Secretary has been.

Mr. R. A. Butler

One or two hon. Members have suggested that I should say a word or two before we come to a conclusion. I regret to have to tell the Committee that we are at difference on this, and therefore I am afraid that the only course that we can take is to divide against each other upon it. I am sorry that I can make no concession, but I think it is more important that I should be clear than that I should give any doubt to the pottery trade at the present time.

The hon. Members who put the case with great skill and success—[HON. MEMBERS: "Not success."]—success from the point of view of their oratory and the perfection of their own wit—the hon. Members for Stoke-on-Trent, Central (Dr. Stross), North (Mrs. Slater) and South (Mr. Ellis Smith), for Leek (Mr. Harold Davies), Newcastle-under-Lyme (Mr. Swingler), Northfield (Mr. Chapman), Reading (Mr. Mikardo), Bodmin (Mr. D. Marshall), Truro (Mr. G. Wilson) and St. Ives (Mr. G. R. Howard) have all put the case with great skill, as did my hon. Friend the Member for Stafford and Stone (Mr. H. Fraser).

The hon. Member for Rossendale (Mr. Anthony Greenwood) says that we have had the benefit of the Board of Trade. I should like to assure him that not only have I had constantly the strong, silent support of the Board of Trade throughout my endeavours, but I have also had the strong silent and almost unanimous support of my hon. Friends behind me throughout the Budget debates. It is due to the loyalty of their attention to my interests that they have not taken part in the debate in supporting my arguments. It is very difficult, because, as we know as Members of Parliament, it is the people who have grievances who write in. It is exactly the same with those Members of Parliament on my side of the Committee who have taken up their particular problems, as the hon. Members for the Cornish divisions have indicated, which they have been quite right to put, and which was so ably put by my hon. Friend the Member for Stafford and Stone. Strange to relate, and much to the disappointment of hon. and right hon. Members opposite, our party remains united and determined to support me when the Division comes.

There are one or two detailed points I should like to answer. The most important point is that raised by the hon. Member for Leek, who asked me what would be the result to the revenue. The result is not insignificant. This debate has lasted for nearly four hours, and it is justified, because it amounts to almost half the amount to be brought in by what is called the pots and pans section. If consumption remains, the revenue would be about £7 million, which is about half of the £15 million which will be brought in by the pots and pans section of the Purchase Tax £75 million. Not only is that very important from the revenue point of view, but also from the general economic point of view, and therefore I am afraid that on this matter, when I had deliberately decided, as one hon. Member has said, that the Purchase Tax must be used to deal with home consumer demand, it is very important that I should maintain the Government front on this Amendment when so large a figure as £7 million, and even if consumption declines, at least £51 million, is involved in our discussion during the last four hours.

The hon. Member for Reading asked a particular question about biscuit tins. It is remarkable what a Chancellor of the Exchequer has to know. It is the case that the square biscuit tin is not taxable, as it is not within Group 11 of the Tax Schedule. It is the case that the decorated biscuit tin, which might or might not compete with another receptacle of the same type, and might either be used for biscuits or for some Christmas amusement, is included, and to that extent the hon. Member is correct in having some apprehensions. But owing to the fact that the square biscuit tin is not affected and the fact that Purchase Tax does not affect exports, the hon. Member is showing a little too much apprehension about his local and very important trade in biscuits, on which I congratulate the industry in Reading.

The hon. Members for the Cornish constituencies and the hon. Member for Rossendale raised the question of craftsmen. 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 to craftsmen scheme.

There is not only a dialectical difficulty in the Government case, but almost a weakness in it in respect of the craft aspect of this pottery matter. I can do no more than undertake that we will keep the question under the closest possible review. From my answer, the various hon. Members will see that we have already been into it. I see no immediate solution but it is difficult, I agree, dialectically or in common sense, to reconcile this with the decision we have taken on the other craft trades.

My two general reasons for insisting on this are, first, that we wanted to use the Purchase Tax for the general purpose of reducing consumer demand with a view both to reducing imports and to increasing exports. The second reason gives rise to one of the rare tributes I have paid to the administration of hon. and right hon. Members opposite. When they were in power, they restricted the pottery trade to the export market and only about 20 per cent. of its products, many of them rejects, were sold on the home market. This was done purposely to encourage exports.

From the figures I have before me, obtained, I may say, from the Board of Trade and checked by the Treasury, exports in 1951, after making allowance for the points raised in the debate about the wider world markets, were definitely better to a marked extent than they have

been in the first nine months of 1955. As hon. Members have said on behalf of the pottery industry, it is true that a marked recovery has been made from the recession of 1952–53 and that we are almost back to a level of about £15 million of exports a year, taking the nine months' figures as an average. That is a very good level and is getting back to the earlier level. But there is justification for the Purchase Tax on home table ware and other similar goods because it may have a similar effect to the rather stricter measures which hon. and right hon. Gentlemen opposite had to take when they were in power. They had to deal with the pottery trade for the sake of exports. I am dealing with it in a different way.

I believe that this Purchase Tax will have an effect in improving exports. All I can say is that, for the two reasons that I must use the Purchase Tax and that I believe it will improve the export trade, I must ask the pottery trade to accept this disagreeable decision and to realise that the Government give it full credit for its achievements and for the manner in which its representatives have put their case.

Mr. Ellis Smith

I have been invited to wind up the debate for the Opposition, and I intend to do so. Knowing when to talk and not to talk, and when it is of no use to do so, I think it is best to let the Question be put.

Question put, That the words proposed to be left out stand part of the Schedule:—

The Committee divided: Ayes 272, Noes 231.

Division No. 57.]	AYES	[10.25 p.m.
Agnew, Cmdr. P. G.	Bidgood, J. C.	Chichester-Clark, R.
Aitken, W. T.	Biggs-Davison, J. A.	Cole, Norman
Allen, R. A. (Paddington, S.)	Birch, Rt. Hon. Nigel	Cooper-Key, E. M.
Alport, C. J. M.	Bishop, F. P.	Cordeaux, Lt.-Col. J. K.
Amery, Julian (Preston, N.)	Black, C. W.	Corfield, Capt. F. V.
Amory, Rt. Hn. Heathcoat (Tiverton)	Body, R. F.	Craddock, Beresford (Spelthorne)
Arbuthnot, John	Bossom, Sir A. C.	Crookshank, Capt. Rt. Hn. H. F. C.
Armstrong, C. W.	Boyd-Carpenter, Rt. Hon. J. A.	Crosthwaite-Eyre, Col. O. E.
Ashton, H.	Boyle, Sir Edward	Crouch, R. F.
Atkins, H. E.	Braine, B. R.	Crowder, Sir John (Finchley)
Baldock, Lt.-Cmdr. J. M.	Braithwaite, Sir Albert (Harrow, W.)	Crowder, Petre (Ruislip—Northwood)
Baldwin, A. E.	Brooke, Rt. Hon. Henry	Cunningham, Knox
Balniel, Lord	Brooman-White, R. C.	Currie, G. B. H.
Barber, Anthony	Browne, J. Nixon (Craigton)	Dance, J. C. G.
	Buchan-Hepburn, Rt. Hon. P. G. T.	Davidson, Viscountess
Barlow, Sir John	Burden, F. F. A.	D'Avigdor-Goldsmid, Sir Henry
Barter, John	Butcher, Sir Herbert	Digby, Simon Wingfield
Beamish, Maj. Tufton	Butler, Rt. Hn. R.A. (SaffronWalden)	Dodds-Parker, A. D.
Bell, Ronald (Bucks, S.)	Campbell, Sir David	Donaldson, Cmdr. C. E. McA.
Bennett, Dr. Reginald	Carr, Robert	Doughty, C. J. A.
Bevins, J. R. (Toxteth)	Channon, H.	Drayson, G. B.
Dugdale, Rt. Hn. Sir T. (Richmond)	Johnson, Eric (Blackley)	Pitman, I. J,
Duncan, Capt. J. A. L.	Jones, A. (Hall Green)	Pitt, Miss E. M.
Duthie, W. S.	Joynson-Hicks, Hon. L. w.	Pott, H. P.
Eccles, Rt. Hon. Sir David	Kaberry, D.	Powell, J. Enoch
Eden, Rt. Hn. Sir A.(Warwick&L'm'tn)	Keegan, D.	Price, David (Eastielgh)
Emmet, Hon. Mrs. Evelyn	Kerby, Capt. H. B	Price, Henry (Lewisham, W.)
Errington, Sir Eric	Kerr, H. W.	Prior-Palmer, Brig. O. L.
Erroll, F. J.	Kershaw, J. A.	Profumo, J. D.
Farey-Jones, F. W	Kirk, P. M.	Raikes, Sir Victor
Fell, A.	Lagden, G. W.	Ramsden, J. E.
Finlay, Graeme	Lambert, Hon. G.	Rawlinson, P. A. G.
Fisher, Nigel	Lancaster, Col. C. G.	Redmayne, M.
Fleetwood-Hesketh, R. F.	Langford-Holt, J. A.	Rees-Davies, W. R.
Fletcher-Cooke, C.	Leavey, J. A.	Renton, D. L. M.
Fort, R.	Leburn, W. G.	Ridsdale, J. E.
Foster, John	Legh, Hon. Peter (Petersfield)	Rippon, A. G. F.
Fraser, Hon. Hugh (Stone)	Lennox-Boyd, Rt. Hon. A. T.	Robinson, Sir Roland (Blackpool, S.)
Fraser, Sir Ian (M'cmbe & Lonsdale)	Lindsay, Hon. James (Devon, N.)	Robson-Brown, W.
Freeth, D. K.	Lindsay, Martin (Solihull)	Roper, Sir Harold
Galbraith, Hon. T. G. D.	Linstead, Sir H. N.	Russell, R. S.
Garner-Evans, E. H.	Lloyd, Rt. Hon. Selwyn (Wirral)	Sandys, Rt. Hon. D.
George, J. C. (Pollok)	Lloyd-George, Maj. Rt. Hon. G	Schofield, Lt.-Col. W.
Glover, D.	Longden, Gilbert	Scott-Miller, Cmdr. R.
Godber, J. B.	Lucas-Tooth, Sir Hugh	Sharples, Maj. R. C.
Gomme-Duncan, Col. A	McAdden, S. J.	Shepherd, William
Gower, H. R.	McKibbin, A. J.	Simon, J. E. S. (Middlesbrough, W.)
Graham, Sir Fergus	Mackie, J. H. (Galloway)	Smithers, Peter (Winchester)
Grant, W. (Woodside)	McLaughlin, Mrs. P.	Spearman, A. C. M.
Grant-Ferris, Wg Cdr. R. (Nantwich)	Maclay, Rt. Hon. John	Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)
Green, A.	Maclean, Fitzroy (Lancaster)	Stanley, Capt. Hon. Richard
Gresham Cooke, R.	Macleod, Rt. Hn. Iain (Enfield, W.)	Stevens, Geoffrey
Grimston, Hon. John (St. Albans)	MacLeod, John (Ross & Cromarty)	Steward, Harold (Stockport, S.)
Grimston, Sir Robert (Westbury)	Macmillan, Maurice (Halifax)	Stewart, Henderson (Fife, E.)
Gurden, Harold	Macpherson, Niall (Dumfries)	Stoddart-Soott, Col. M.
Hare, Hon. J. H.	Maddan, Martin	Storey, S.
Harris, Frederic (Croydon, N.w.)	Maitland, Cdr. J. F. W. (Horncastle)	Stuart, Rt. Hon. James (Moray)
Harris, Reader (Heston)	Maitland, Hon. Patrick (Lanark)	Summers, G. S. (Aylesbury)
Harrison, A. B. C. (Maldon)	Manningham-Buller, Rt. Hn. Sir. R.	Sumner, W. D. M. (Orpington)
Harrison, Col. J. H. (Eye)	Marlowe, A. A. H.	Taylor, Sir Charles (Eastbourne)
Harvey, Air Cdre. A. V. (Macclest[...]	Marples, A. E.	Thomas, Leslie (Canterbury)
Harvey, Ian (Harrow, E.)	Marshall, Douglas	Thomas, P. J. M. (Conway)
Harvey, John (Walthamstow, E.)	Mathew, R.	Thompson, Kenneth (Walton)
Hay, John	Maude, Angus	Thompson, Lt.-Cdr. R. (Croydon, S.)
Heald, Rt. Hon. Sir Lionel	Maulding, Rt. Hon. R.	Thorneycroft, Rt. Hon. P.
Heath, Edward	Mawby, R. L.	Thornton-Kemsley, C. N.
Hicks-Beach, Maj. W. W.	Maydon, Lt.-Comdr. S. L. C.	Tiley, A. (Bradford, W.)
Hill, Rt. Hon. Charles (Luton)	Medlicott, Sir Frank	Tilney, John (Wavertree)
Hill, Mrs. E. (Wythenshawe)	Milligan, Rt. Hon. W. R.	Touche, Sir Gordon
Hill, John (S. Norfolk)	Molson, A. H. E.	Turton, Rt. Hon. R. H
Hirst, Geoffrey	Monckton, Rt. Hon. Sir Walter	Tweedsmuir, Lady
Holland-Martin, C. J.	Moore, Sir Thomas	Vaughan-Morgan, J. K.
Hope, Lord John	Morrison, John (Salisbury)	Vosper, D. F.
Horobin, Sir Ian	Mott-Radclyffe, C. E.	Wakefield, Edward (Derbyshire, w.)
Horsbrugh, Rt. Hon. Dame Florenoc	Nabarro, G. D. N.	Walker-Smith, D. C.
Howard, Hon. Greville (St. Ives)	Nairn, D. L. S.	Wall, Major Patrick
Howard, John (Test)	Neave, Airey	Ward, Hon. George (Worcester)
Hudson, Sir Austin (Lewisham, N.)	Nicholson, Godfrey (Farnham)	Ward, Dame Irene (Tynemouth)
Hudson, W. R. A. (Hull, N.)	Nicolson, N. (B'n'm'th, E. & Chr'ch)	Waterhouse, Capt. Rt. Hon. C.
Hughes Hallett, Vice-Admiral J.	Nield, Basil (Chester)	Watkinson, H. A.
Hughes-Young, M. H. C.	Noble, Comdr. A. H. P.	Whitelaw, W.S.I. (Penrith & Border)
Hulbert, Sir Norman	Nugent, G. R. H.	Williams, Gerald (Tonbridge)
Hurd, A. R.	O'Neill, Hn. Phelim (Co. Antrim, N.)	Williams, Paul (Sunderland, S.)
Hutchison, Sir Ian Clark (E'b'gh, w.)	Orr, Capt. L. P.S.	Williams, R. Dudley (Exeter)
Hutchison, James (Scotstoun)	Orr-Ewing, Charles Ian (Hendon, N.)	Wills, G. (Bridgwater)
Hyde, Montgomery	Page, R.O.	Wilson, Geoffrey (Truro)
Hylton-Foster, Sir H. B. H.	Pannell, N. A. (Kirkdale)	Wood, Hon. R.
Iremonger, T. L.	Partridge, E.	Woollam, John Victor
Irvine, Bryant Godman (Rye)	Peake, Rt. Hon. O.	Yates, William (The Wrekin)
Jenkins, Robert (Dulwich)	Peyton, J. W. W.
Jennings, J. C. (Burton)	Pickthorn, K. W. M.	TELLERS FOR THE AYES:
Johnson, Dr. Donald (Carlisle)	Pilkington, Capt. R. A.	Mr. Studholme and Mr. Oaksbott.
NOES
Alnsley, J. w.	Bellenger, Rt. Hon. F. J.	Bottomley, Rt. Hon. A. G.
Albu, A. H.	Bence, C. R. (Dunbartonshire, E.)	Bowden, H. W. (Leicester, s. W.)
Allaun, Frank (Salford, E.)	Benn, Hn. Wedgwood (Bristol, S. E.)	Bowen, E. R. (Cardigan)
Allen, Scholefield (Crewe)	Benson, G.	Bowles, F. G.
Attlee, Rt. Hon. C. R.	Beswick, F.	Boyd, T. C.
Awbery, S. S.	Blackburn, F.	Braddock, Mrs. Elizabeth
Bacon, Miss Alice	Blenkinsop, A.	Brockway, A. F.
Baird, J.	Blyton, W. R.	Broughton, Dr. A. D. D.
Balfour, A.	Boardman, H.	Brown, Rt. Hon. George (Belper)

Brown, Thomas (Ince)	Holt, A. F.	Price, Philips (Gloucestershire, W.)
Burke, W. A.	Houghton, Douglas	Probert, A. R.
Burton, Miss F. E.	Howell, Denis (All Saints)	Prootor, W. T.
Butler, Herbert (Hackney, C.)	Hoy, J. H.	Pryde, D. J.
Butler, Mrs. Joyce (Wood Green)	Hubbard, T. F.	Pursey, Cmdr. H.
Callaghan, L. J.	Hughes, Cledwyn (Anglesey)	Rankin, John
Carmichael, J.	Hughes, Emrys (S. Ayrshire)	Reeves, J.
Champion, A. J.	Hunter, A. E.	Reid, William
Chapman, W. D.	Hynd, H. (Accrington)	Rhodes, H.
Chetwynd, G. R.	Irvine, A. J. (Edge Hill)	Robens, Rt. Hon. A.
Clunie, J.	Irving, S. (Dartford)	Roberts, Albert (Normanton)
Coldrick, W.	Isaacs, Rt. Hon. G. A.	Roberts, Goronwy (Caernarvon)
Collick, P. H. (Birkenhead)	Janner, B.	Robinson, Kenneth (St. Pancras, N.)
Collins, V. J. (Shoreditch & Finsbury)	Jeger, George (Goole)	Ross, William
Corbet, Mrs. Freda	Jeger, Mrs.Lena(Holbn & St. Pncs, S.)	Short, E. W.
Cove, W. G.	Jenkins, Roy (Stechford)	Silverman, Julius (Aston)
Craddock, George (Bradford, S.)	Johnson, James (Rugby)	Silverman, Sydney (Nelson)
Cronin, J. D.	Jones, David (The Hartlepools)	Simmons, C. J. (Brierley Hill)
Crossman, R. H. S.	Jones, Elwyn (W. Ham, S.)	Skeffington, A. M.
Cullen, Mrs. A.	Jones, Jack (Rotherham)	Slater, Mrs. H. (Stoke, N.)
Daines, P.	Jones, J. Idwal (Wrexham)	Slater, J. (Sedgefield)
Davies, Ernest (Enfield, E.)	Jones, T. W. (Merioneth)	Smith, Ellis (Stoke, S.)
Davies, Harold (Leek)	Kenyon, C.	Sorensen, R. W.
Davies, Stephen (Merthyr)	Key, Rt. Hon. C. W.	Sparks, J. A.
Deer, G.	King, Dr. H. M.	Steele, T.
de Freitas, Geoffrey	Lawson, G. M.	Stewart, Michael (Fulham)
Delargy, H. J.	Ledger, R. J.	Sones, W. (Consett)
Dodds, N. N.	Lee, Frederick (Newton)	Strachey, Rt. Hon. J.
Donnelly, D. L.	Lever, Harold (Cheetham)	Strauss, Rt. Hon. George (Vauxhall)
Dugdale, Rt. Hn. John (W. Brmwch)	Lever, Leslie (Ardwiok)	Stross, Dr. Barnett(Stoke-on-Trent,C.)
Dye, S.	Lewis, Arthur	Summerskill, Rt. Hon. E.
Ede, Rt. Hon. J. C.	Logan, D. G.	Swingler, S. T.
Edelman, M.	MacColl, J. E.	Sylvester, G. O.
Edwards, Rt. Hon. John (Brighouse)	McGovern, J.	Taylor, Bernard (Mansfield)
Edwards, Rt. Hon. Ness (Caerphilly)	McKay, John (Wallsend)	Taylor, John (West Lothian)
Edwards, Robert (Bilston)	McLeavy, Frank	Thomas, George (Cardiff)
Edwards, W. J. (Stepney)	Mahon, S.	Thomas, Iorwerth (Rhondda, W.)
Evans, Albert (Islington, S.W.)	Mallalieu, E. L. (Brigg)	Thomson, George (Dundee, E.)
Evans, Edward (Lowestoft)	Mallalieu, J. P. w. (Huddersfd, E.)	Thornton, E.
Evans, Stanley (Wednesbury)	Mann, Mrs. Jean	Tomney, F.
Ferny hough, E.	Marquand, Rt. Hon. H. A.	Turner-Samuels, M.
Flenburgh, W.	Mason, Roy	Ungoed-Thomas, Sir Lynn
Fletcher, Eric	Mayhew, C. P.	Usborne, H. C-
Forman, J. C.	Mikardo, Ian	Viant, S. P.
Fraser, Thomas (Hamilton)	Mitchison, G. R.	Warbey, W. N.
Freeman, Peter	Monslow, W.	Watkins, T. E.
Gaitskell, Rt. Hon. H. T. N.	Moody, A. S.	Weitzman, D.
Gibson, C. W.	Morris, Percy (Swansea, W.)	Wells, William (Walsall, N.)
Gooch, E. G.	Morrison, Rt. Hn. Herbert (Lewis'm, S.)	West, D. G.
Gordon Walker, Rt. Hon. P. C.	Mort, D. L.	Wheeldon, W. E.
Greenwood, Anthony	Moss, R.	White, Mrs. Eirene (E. Flint)
Grey, C. F.	Moyle, A.	White, Henry (Derbyshire, N.E.)
Griffiths, David (Rother Valley)	Mulley, F. w.	Wilcock, Group Capt. C. A. B.
Griffiths, Rt. Hon. James (Llanelly)	Neal, Harold (Bolsover)	Willey, Frederick
Griffiths, William (Exchange)	Noel-Baker, Francis (Swindon)	Williams, David (Neath)
Grimond, J.	Oram, A. E.	Williams, Ronald (Wigan)
Hale, Leslie	Oswald, T.	Williams, Rt. Hon. T. (Don Valley)
Hall, Rt. Hn. Glenvil (Colne Valley)	Padley, W. E.	Williams, W. R. (Openshaw)
Hamilton, W. W.	Paling, Will T. (Dewsbury)	Willis, Eustace (Edinburgh, E.)
Hannan, W.	Palmer, A. M. F.	Wilson, Rt. Hon. Harold (Huyton)
Harrison, J. (Nottingham, N.)	Pannell, Charles (Leeds, W.)	Winterbottom, Richard
Hastings, S.	Pargiter, G. A.	Woodburn, Rt. Hon. A.
Hayman, F. H.	Parkin, B. T.	Yates, v. (Ladywood)
Healey, Denis	Paton, J.	Younger, Rt. Hon. K.
Henderson, Rt. Hn. A. (Rwly Regis)	Pearson, A.	Zilliacus, K.
Herbison, Miss M.	Peart, T. F.
Hobson, C. R.	Plummer, Sir Leslie	TELLERS FOR THE NOES:
Holman, P.	Popplewell, E.	Mr. A. Allen and Mr. Wilkins.
Holmes, Horace	Price, J. T. (Westhoughton)

Mr. Gaitskell

I beg to move, "That the Chairman do report Progress and ask leave to sit again."

We have had a long and, I think everybody will agree, a useful debate on pottery—useful in the sense that many good speeches were made; not so useful so far as getting any concessions from the Government are concerned. I move the Motion in order to ascertain what the Chancellor's intentions are. It is now after half-past ten. We have had a very good day and I was hoping that perhaps we could now adjourn.

Mr. R. A. Butler

My intentions are honourable. I would suggest that, as we have had a good day in discussing a very important industry and the question of silverware and glassware, we should confine ourselves to taking one more Amendment. After that the Government would not wish to make further progress, or to keep the Committee up late. That still leaves us, I am afraid, with a lot of work to do tomorrow. I think that what I have suggested is reasonable. If hon. Members would accept it in the spirit in Which it is made, we would then proceed to the next Amendment and call it a day.

Mr. Gaitskell

In the circumstances, I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.

Mr. Victor Collins (Shoreditch and Finsbury)

I beg to move, in page 11, line 9, to leave out "(j)."

I am very glad to hear the Chancellor say that his intentions are honourable, because this Amendment is designed to restore to certain brushes, brooms and mops the immunity from Purchase Tax which they have always enjoyed hitherto. Ever since the inception of Purchase Tax, Chancellors, no doubt mindful that cleanliness is next to godliness, have resolutely refused to tax brushes. Doubtless they have been impressed by the universality of the use of brushes. This tax is a totally new and extremely unhappy departure which has unfortunately afflicted other industries, two of which we have been discussing this afternoon.

The Chancellor has made it clear that these taxes are designed to cut expenditure on the goods which are taxed. The idea is to lessen demand for them and presumably to create less employment and, as we on this side of the Committee think, to create unemployment in the industries concerned.

Mrs. Jean Mann (Coatbridge and Airdrie)

On a point of order. We cannot hear my hon. Friend on this most important Amendment, because of a lot of gossiping old men.

The Temporary Chairman (Mr. Malcolm MacPherson)

Order. There is always a certain amount of movement and gossip by hon. Members, but I think that hon. Members might co-operate in allowing the hon. Member to be heard.

Mr. Collins

I am most grateful to you, Mr. MacPherson, and to my hon. Friend who, I am sure, will take part in the debate later and explain the views of the housewife on this pernicious new tax.

I was saying that if the Chancellor is aware of the consequences of this tax on brushes and mops and is determined to impose it, then he is fully entitled to do so and to face the consequences. Some of the consequences are, of course, already apparent. We heard mention earlier today of the collective punishment of the housewives. This imposition of tax on brushes and mops is a new addition to that collective punishment. It is indeed remarkable how in the last four years the formerly vociferous members of the British Housewives' League have been standing up to the punishment which they have received. However, there are now signs that they are no longer prepared, as they were in the past, to keep a stiff upper lip. Like the cups about which we have been hearing today, the stiff upper lip is getting a bit cracked, and I have no doubt that the Chancellor will be hearing a very great deal about these items from housewives.

It is extraordinary that to mop up inflation the Chancellor has selected two of the major instruments, the dustbin and the mop. I believe that they will prove as inadequate as the mop which Dame Partington used after the great storm of 1790 with which to push back the Atlantic. I also believe that, just as that great tide proved too great for a mop, the tide of anger and frustration which is rising as a result of the various provisions of this Budget, particularly the Purchase Tax changes and the types of Purchase Tax increases which we are now considering, will prove a very serious matter indeed for both the Chancellor and the Government.

I wish to devote most of my remarks this evening to the special position of the industry and to the men and women who will lose their livelihood because of the step which is now being taken. In one case, the Chancellor has taken the step of encouraging a craft industry. But in regard to this industry, the right hon. Gentleman is doing his utmost not merely to discourage it, but to see that it is crippled. The industry employs about 17,000 workers whose products are essential to every other industry and to every housewife. It is a very painful business when matters of such importance to thousands of men and women whose livelihoods depend upon it are being discussed, to note that some hon. Members opposite find it a matter for amusement.

I know that a sober consideration of the ridiculous anomalies which obtain in the matter of Purchase Tax are amusing, but they are not amusing to the people in the industry. They are not amusing to those who have to suffer because of them and who have to try to unravel them. When reading or listening to our discussions in this House, those people sometimes think that we are absolutely crazy to pass the legislation that we do when it results in such unwarranted suffering by those whom we are intended to govern.

As I have said, this industry, which is essential to every other industry in the country, employs some 17,000 men and women. It is not a big industry and is composed of about 350 firms scattered all over the country—no big concentration—each employing about 50 workpeople. Of course, some employ more and others fewer. About 40 or 50 of these firms have brush workshops for the blind and disabled which employ about 1,000 people.

10.45 p.m.

It is an important element of the industry—not of overwhelming importance in the sense of being a major occupation as it is in basket making, which we will deal with later—but it is of supreme importance to those blind and handicapped workers that they are not mobile, they are not transferable to other employment, so that if their employment in the brush industry is lost they will have no employment.

This applies not only to workshops for the blind and disabled, such as Remploy. The brush industry is peculiarly suited to the employment of handicapped people, who can sit down at the automatic machine, and who do not need legs for this work but only arms and hands. In ordinary commercial workshops also there is a higher proportion of disabled, so that as far as employment is concerned we have a picture of 17,000 workers, not in big firms, with a high proportion of disabled.

It is to this craft industry, which is struggling to retain its manpower in days when it is difficult to persuade young people to undergo a long apprenticeship, that the Chancellor has dealt this severe blow. Earlier today the Financial Secretary, in supporting the reduction of Purchase Tax on cut glass, told us about the difficulties of attracting young people. He told us how important it was to have a flourishing home trade to support an export market. All those points, with which we on this side of the Committee agree, apply with equal force to the industry which we are now considering.

The majority of manufacturers in the industry, many of whom have yearly brush sales of only a few thousand pounds a year, have never previously been troubled by Purchase Tax and, until 28th October, they were completely ignorant of its administrative details. I do not know how many hon. Members are familiar with the working of this tax, have lived with it for perhaps ten years and have got used to it. For those who have done so it is possible to understand it, but if one's industry has never previously been taxed, suddenly to be launched into all the rules and regulations of Purchase Tax is a problem. In a single day after the Budget statement these people were called upon to seek registration, to master all the details, and to start charging Purchase Tax on their invoices. Most of them have no staff or equipment to cope with these entirely new problems, with the result that their production must suffer for a long time to come, quite apart from the enormous cost to the industry of the additional equipment, the heavy additional labour costs and, indeed, manpower that will be absorbed by administering this completely inexplicable and indefensible whim of the Chancellor.

Another special difficulty in the brush industry arising from this tax is that there is no universally adopted system of distribution. In many industries the system of distribution is plain and simple, but some brush makers sell to factories, others to wholesalers, many of them deal direct with retailers, while quite a few sell their own products in door to door sales to housewives. The problems of uplift arising from that type of set-up can be well imagined. Uplift is the amount which has to be put on the price before any calculation of Purchase Tax and it means, irrespective of any other consideration, that different levels and different amounts of tax will be charged in different areas by different traders.

It is difficult to imagine any industry where the application of Purchase Tax is more inappropriate, both from the point of view of its collection and the high cost in manpower. What is completely unpardonable about the Chancellor's action—and it shows a reckless disregard of the interests both of the workers and manufacturers—is the fact that he has clamped a tax upon household brushes without making the slightest attempt to define a household brush. If the Financial Secretary disputes that and wants any evidence on the matter, I can assure him that the officers of Customs and Excise—who have vast experience in Purchase Tax matters and would know, if anybody did—did not know what was a household brush.

As recently as 11th November, when they met the officers of the British Brush Manufacturers' Association, the officers of Customs and Excise issued a circular giving temporary interpretations, with the object of assisting the brush trade during the period whilst a more comprehensive settlement is being sought. No further and more comprehensive settlement has been reached during the last fortnight. Here is an industry which has already gone four weeks since the Budget with scarcely anybody knowing which brushes, out of hundreds of different types, should rightly bear Purchase Tax.

Mr. J. T. Price (Westhoughton)

Would it not be fair to ask the Treasury Bench to say what statutory backing there is for a provision of that kind?

Mr. Collins

I am very grateful to my hon. Friend. I am quite willing to give way if the Financial Secretary wishes to contradict anything I have said. I gave him a similar opportunity the other day, when we were discussing furniture, but he did not avail himself of that opportunity. He will know that I usually have a fairly good reason for any statement I make, and that I do not make statements lightly.

The blunt truth is that there is not—and there never was—such a thing as a purely household brush. Scores of different types of brush are used in industry and in the home, but there is no type of which it is possible to say, by definition, that it is exclusively a household brush. If hon. Members opposite like to look at the Bill they will see that what the Chancellor has told people he intends to tax is something which does not exist, by definition.

If one sweeps a railway station platform one uses a brush which is a little wider than that which a housewife uses to sweep her home; if one sweeps the streets one uses a stiff broom which is a little wider than that which is used to sweep up the garden—but there is no essential difference. Since the Chancellor made his Budget statement, no definition has been given in this matter, and since no one—not even the Chancellor—knew what was meant, all brushes have been made subject to tax. I do not believe for one moment that that is what the Chancellor intended. I am merely stating the facts. In other words, a trade employing 17,000 workers was completely and absolutely at a standstill. It could do no business at all; it did not know where it was.

On 2nd November, after a few frantic telephone calls to officers of Customs and Excise, asking if they could give a definition, officers of the British Brush Manufacturers' Association met officers of Customs and Excise, who gave what was their then opinion on the vital point of definition, but they decided that it was not necessarily the last word. All that emerged from the meeting of officers on both sides who were trying to find out what the Chancellor meant was that all brooms and brushes, except painting brushes, and platform brooms over 15 inches wide, had to be regarded as household articles, subject to tax. Brushes used by local authorities, if they were delivered, had to bear 30 per cent. tax. In most cases they were not delivered; people just did not order them or do anything so fantastic. The only definition was one of dimensions about the platform brooms.

On 8th November, in the Second Reading debate, I pointed out these anomalies. Street scavenging brooms were taxable. The mill bannister brush, a small brush with a very narrow head, used in textile mills for cleaning the machines, was subject to tax, when handled. We understand the dilemma of the Customs officials. This article is very much like a hearth brush—

Mr. Hale

A curiosity of the situation is that the bannister brush comes into tax merely because it was exempt and because exemptions were removed. They would never have come into tax unless the Customs and Excise had thought they were worth mentioning, because the brushes were exempted.

Mr. Collins

I hasten to relieve the mind of my hon. Friend. After I made the speech and pointed out the absurdity, the matter was put right. Officers of the Brush Association again met officers of the Customs and Excise, and that particular brush, the mill bannister brush, is no longer taxable, provided that the head is more than 1⅛ inches wide. Cannot we imagine the Customs officers running around with the tape and seeing that the brush is bigger than that?

Women who use these brushes in the mills know that they are good and want to use them in the home as hearth brushes. Many household brushes are like their industrial counterparts. Apart from the street scavenging brooms, all brushes more than 12¼ inches wide were to be sold to housewives free of tax. They would not make them larger. I do not know whether it was because of what was said here, but there was a meeting on 11th November, and these particular things were put right. The officials had had second thoughts and said that stiff brooms of 12 inches wide and over could be regarded as industrial and as tax-free. If they had a saddle back they could be as small as we liked and still be tax free. I do not know whether there was a sentimental reason connected with pigs.

There is a whole field of manufacture facing this sort of differentiation and fantastic difficulty in which the Chancellor's lack of consideration has got the trade and his officers. It will be a purely arbitrary matter whether firms have work or not. The cost of retooling their machines is very great. If firms have concentrated on large-size brushes they will do business. If they have not, they will not. It is as simple as that. The decision is not fair, or even a credit squeeze. It is not putting a tax on everybody's product but is picking out by a blind, arbitrary decision, certain people who have done no harm at all. The Government is saying to them, "By a blind decree of the Chancellor, you will be out of work; your wife and children will suffer, and for no other reason than this."

11.0 p.m.

I agree that it may well be that in some cases firms may even become busier; because if the housewife discovers that the 12-inch soft broom is tax free and also cheaper than the 10-inch one, she will, it is surely reasonable to suggest, buy the cheaper; and the people fortunate enough to have the machines for the cheaper brooms will get the orders. When the housewife finds that the mill bannister brush is tax free she will buy that; and the people who make the normal product will get no orders.

The Economic Secretary to the Treasury assured one of my hon. Friends in the debate on pottery that he need not worry about ships' stores. Is that so in this case? Will deck scrubbing brushes be free? Unless everything for exporting purposes is free of Purchase Tax, then they will not. I think that anything except painters' brushes bought in ships' chandlers will be subject to the tax. What about butchers, and all the tradesmen who buy special industrial brushes for scrubbing? They will have to pay tax; and, as I have said, whether firms are in or out of work will depend entirely on chance.

I do not want to weary the Committee with details of lists, but I should like to get this point home. There are scores and scores of differing types of brushes used in industry; bottle brushes of special shapes, and so on, and I believe that it is impossible, by definition, to separate these from the similar types of brush used by the housewife. Although a brush is intended for industrial use, if it is impossible to define it then it will be taxed. May I ask how the Chancellor proposes to separate a domestic flue brush from one put up an industrial pipe for cleaning purposes? It simply cannot be done, and I submit that these things must be separately studied. If the Chancellor agrees eventually with my conclusions, namely, that one cannot, by definition, separate household brushes from other kinds, then I say that he must accept this Amendment. He must end Purchase Tax on brushes because he cannot ruin industry simply because he is too obstinate to say that he has been wrong.

The anomalies are fantastic. I have given the Committee details to show how utterly illogical and unworkable is this rash imposition; a decision made, I submit, without adequate thought or inquiry, to tax household brushes which, in effect, do not exist. The position would indeed be comic if it were not so tragic; and, if allowed to continue, it will unquestionably affect employment.

To what purpose? Judging from the Board of Trade returns, the maximum possible return which the Chancellor would get, over the whole brush industry, would be £1¼million. With various exclusions from tax taken into consideration, I suggest that the final result would be a figure much below £¼ million. I suggest, also, that when this begins to work and we really know—after a lot of argument—which brushes are taxed and which are not, demand will be restricted, because people will buy those which are untaxed in substitution for those which they previously bought.

I hope that the Chancellor will be big enough to realise that he is in a ridiculous and untenable position. It surely has to be all or nothing. He cannot mess about with this utterly stupid position. I ask him also to consider the heavy burden, and the cost of that burden, on the Customs and Excise Department in policing and maintaining these imaginary distinctions; and the enormous cost to industry in setting up machinery to deal with the tax. I believe that hon. Members opposite will agree that it would be too big a price to pay for a very hollow political victory.

The industry is in serious trouble. It is almost at a standstill. I should like to read two short letters which I have received, one from the employers and the other from the trade union. The British Brush Manufacturers' Association wrote to me on 11th November to say that on 28th October … we sent to the Chancellor … setting out in a broad way where we stand. Since we wrote that letter we have become more and more appalled by the problems of demarcation to which it but briefly refers. Some of us have been at Customs and Excise headquarters all this afternoon in a sincere effort to help the officials there to administer the tax, but both they and we had to admit in the end a complete inability to find either a general or an item-by-item solution of the problem of differentiating between a domestic and an industrial brush. We negotiated with them a few interim interpretations, which no one will regard as satisfactory, in the hope that they would enable a few of the affected parts of the industry to restart. In other words, a fortnight after the Chancellor announced his Budget this industry is still hoping to make some arrangements to restart after being brought to a standstill. The letter adds: It is literally true that a large number of our members have been at a standstill since Budget day, their plight having been worsened by the rumours in the press that the Government might rebut on non-metal household items. The trade union of the industry wrote an unsolicited letter to me, also on 11th November—it happens to have its headquarters in my constituency. Its General Secretary wrote: I am again writing you as the position in our industry has rapidly worsened. Orders have been cancelled, no new orders are being received, and the industry is at a standstill. This not only applies to commercial firms but to the many brush factories employing hundreds of blind persons and to brush factories employing disabled persons. As I stated in my previous letter, this is due to the impossibility, and I write with long experience in our industry, of defining the difference between domestic and industrial brushes and brooms. This letter is a last desperate S.O.S. to you, and through you to the Chancellor, to rescue our industry, and the workers employed in it, from the chaos it is in as a consequence of the Purchase Tax. I notice that the Chancellor has just re-entered the Chamber. I know that he has received representations from the brush manufacturers, and I would like to inform him that the letter I have just read is from the industry's trade union.

I had a letter from the Secretary of the National League of the Blind, with which I will not trouble the Committee, but I believe that the Chancellor must agree that when that term "household brushes" was put in the Finance Bill it was without adequate thought. No one had taken the trouble to find out whether that was something recognisable, or something definable. I have tried to indicate in my speech—and I believe it is unchallengeable—that it is not definable, despite the best efforts of the officers of the Customs and Excise and the best efforts of members of the trade who want to get the thing restarted again, difficult as it may be.

I say to the Chancellor that if he hoped to get £1¼ million out of this tax originally, I very much doubt, whatever he tries to do now, whether he will get even as much as a third of that. I also say, however, that whatever he gets it will be at the cost of great and perhaps irreparable damage to this industry. I say, too, that that damage the Chancellor will do will be far greater than anything he intended, if years mean anything, when the Finance Bill was framed. The effect so far goes immeasurably beyond what anyone would conceive to be the meaning of "brushes, brooms and mops used for the home." It covers, at the moment, the greater part of the industry.

I do not think the best efforts of the officers concerned can narrow that field very much, and I therefore ask the Chancellor not to do this damage to this industry, not to cause the serious unemployment which I am sure will be inevitable—unemployment which will affect a number of handicapped workers, blind as well as others, who cannot be employed elsewhere. I ask the Chancellor to admit that a mistake has been made, and that it is not too late to put right the damage if he will accept the Amendment.

Mr. Frederick Willey (Sunderland, North)

I intend to intervene only very briefly to plead with the Chancellor to accept this Amendment and to abandon this stupid tax. Few things could be more obnoxious to the housewife, and few could be more irrelevant to our economic difficulties, but I do not want to emphasise those arguments which have been made throughout our Finance Bill debates. I wish to confine my remarks to one important aspect of the innovation which has been mentioned by my hon. Friend the Member for Shoreditch and Finsbury (Mr. Collins).

I have the honour to be associated with the Royal Institution for the Blind, in my own constituency. This tax does not cover the substantial field of the work done by the blind, but covers a sufficient amount of the work as to prejudice it severely. It affects not only the blind but all handicapped workers, and a type of work peculiarly suitable to handicapped and blind workers.

I have said many harsh things about the Chancellor, but I would not suggest that he would be deaf to an argument of that sort. I have heard from the Institution that they are experiencing very trying times, and that there has been a decided fall in sales. Certainly, in Sunderland blind people are working short-time. This is just the sort of thing that will make their difficulties much greater. They have expended a lot of effort in the last few months on improving their sales organisation, and this sort of thing will discourage and dishearten them.

I do not know what the Chancellor will say about this, but I would have thought that it is administratively impossible to distinguish the work of the blind and handicapped from other work. It would be better to abandon this tax. It will not be worth the financial advantages which he is seeking from it. I hope that the Chancellor will allow the Financial Secretary to have the pleasant task of saying that he will not insist on this tax. There are problems, but this is an opportunity to give encouragement to blind and handicapped workers at a time when they are facing severe difficulties.

11.15 p.m.

The Temporary Chairman

Before calling the next hon. Member I must apologise to the Committee for calling upon two hon. Members on the same side of the Committee, and not seeing that there were hon. Members standing on the Government side. I will call one hon. Member on the Government side now, and if my turn in the Chair finishes before I call a second one, I will recommend my successor to call another hon. Member on that side.

Mrs. Patricia McLaughlin (Belfast, West)

The Chancellor gave us several reasons for applying Purchase Tax. The first was to reduce spending; the second to increase exports; the third to conserve steel; and the fourth to conserve manpower. With regard to the first reason, a survey was taken some years ago of the condition of brushes in use in households and industry. It showed that 80 per cent. of them were in need of replacement before they actually were replaced. Therefore, it does not look as though we can very much reduce spending on these articles.

The Chancellor's second reason was to increase exports. Household brushes are not really an exportable item as, in relation to value they are bulky, and thus expensive. They incur extra freight charges in going overseas. The capacity of the trade is more than equal to the demands of the export trade. The real exports of the brush trade are the paint and distemper brushes, which are not taxed.

The Chancellor's third reason was the conservation of steel, but the amount of steel in a brush is infinitesimal.

The fourth reason was the conservation of manpower. In Britain, with her full employment, that is a different matter from the position in Northern Ireland, where we have brush industries manned by able people and workshops for the blind. In our part of the United Kingdom, redundancy of labour, however small, is serious. I know of one firm employing 200 people which feels that it will be badly hit. In Northern Ireland we are not very happy about this brush tax. We have heard about housewives taking it on the chin, but I hope that the Chancellor can review this proposal. Perhaps he could tell us how much would be involved in accepting the Amendment. I ask him earnestly whether the loss is not too high to accept it. Housewives would then give him a tremendous cheer, and would scrub the harder in their homes. This is a new tax, and new ones are especially unpopular.

It takes time to train people in this industry, which is one which helps people who are not physically able, and others who would not find other employment. Acceptance of the Amendment would be extremely popular because it would help the housewife to cope with all her other difficulties and taxes.

Mr. Nigel Fisher (Surbiton)

I feel a little embarrassed, Mr. MacPherson, as perhaps my hon. Friend did, by your gracious act in calling two Government hon. Members in succession. I feel a little embarrassed because it may appear, during my remarks, that my speech, like that of my hon. Friend, is an Opposition speech rather than a Government speech.

We are told that this tax will impose an extra 4d. or 5d. a week on the British housewife. I do not know what proportion of that can be attributed to brushes and brooms, but it cannot be a very serious burden, so I do not complain of this tax on those grounds—although I should say that to those living on fixed incomes, of whom there are many in my constituency, any increase in the cost of the necessities of life is not a light matter. Nevertheless, in the vast majority of homes this tax will probable impose no real hardship. Therefore, I do not complain of the burden; nor do I complain that the tax is unpopular.

I believe that in the climate of opinion created before the Autumn Budget, the Chancellor could have been much more severe than in fact he has been; but, of course, it was for him to assess the degree of severity necessary in the national interest, not for us. I do not criticise him—naturally I would not presume to do so—for being either too severe or too lenient; but I do ask him one perfectly straight question: What does this tax purport to achieve? We are told it will produce about £15 million. But the Chancellor himself has told us that it is not the object of this Budget to produce cash. That was not the purpose of the Budget, and it is presumably not the purpose of this particular tax.

I of course would not suggest for a second that I am in any way an expert on economic matters, and I very seldom intervene in economic or financial debates, but as I understand it, the object of this Budget was to reduce consumer demand at home, and so achieve increased exports, so that is the standard by which we must judge this tax, and the question is: Will it do that? Well, I must say I very much doubt whether it will. I do not believe anybody buys more brushes, brooms and mops than they really need. I think that even the Economic Secretary, who spoke the other day on this, really rather doubts it in his own mind. He said, as I understood it, that there would be no direct diminution of home consumption of these articles as a result of this tax, but he thought there would be fewer purchases of other less essential things. I wonder if that is really so. It seems to me that those upon whom this tax falls harshly are those who have very little money to spare for the inessential things of life. On the other hand, to those of us who may be fortunate enough to be better off, I do not believe an extra 4d. a week will be a deterrent to purchasing other less essential articles.

I think it is arguable that an increase in Purchase Tax may in fact produce a deterrent effect so far as luxury goods are concerned. I myself would be deterred from buying an expensive article which was not necessary if I realised that it would cost double the intrinsic value because of Purchase Tax. But these goods do not fall within that category by any stretch of the imagination; people must have them; they do not go out and buy these things in triplicate just for the fun of the thing; there is no question of keeping up with the Joneses; people do not go round boasting that they have got 25 brushes and brooms if they need only two. The thing has only to be stated to appear at once to be totally ridiculous. These things are bought because they are genuinely needed, and, as far as I know, for no other possible reason, so people will go on buying them and there will be no possible reduction in home demand. If that is a reasonable argument, this tax can at once be seen to be economically irrelevant, at any rate in the context of the Autumn Budget, which is not a cash-seeking Budget.

Psychologically, I think this tax is worse than irrelevant. I think it is definitely bad, because it provides ammunition for arguments in favour of higher wages. It makes it perhaps—and here I speak with diffidence, because I do not know about these things—just that much more difficult for responsible trade union leaders, who may be trying to curb excessive demands from their own rank and file; it makes it that much more difficult for them in the job they are trying to do. I do not think that an added burden of 4d. per week, or whatever it is, can possibly justify higher wage demands, but I think that it assists them. To grant those demands would be to yield to the most inflationary influence of all.

Therefore, I consider that this tax is not a remedy for inflation; it is an irritant. I do not believe it cures; I believe it provokes. It might have been a great deal more imaginative and perhaps wiser in the long run to do exactly the opposite, to reduce instead of increase the rates of Purchase Tax, except on luxury goods. That would have meant a reduction instead of an increase in the cost of living and it would perhaps have made wage increase claims less likely and certainly less defensible.

I fear I have spoken rather strongly. I assure hon. Members that I take no pleasure in opposing my right hon. Friend the Chancellor in this matter. I have never done so before. I am very conscious of the immense services which I believe he has done to the country in his previous Budgets and throughout the whole course of his distinguished Chancellorship. I should very much like to support him on this occasion, as I have done on others, but I should also like him to explain why he has devised this tax.

I have waited hopefully throughout the whole course of the Budget Statement, the Second Reading of the Bill and through the whole of the night last week, for a satisfactory explanation of this matter. So far I am bound to say I have waited in vain and, with great humility and no inconsiderable embarrassment, I must tell my right hon. Friend that if he cannot give me an explanation for this tax I regret that I cannot give him a vote for it in the Lobby.

Mr. Jack Jones (Rotherham)

I want to be brief, so I do not intend to ask the hon. Member for Surbiton (Mr. Fisher) what he means by "keeping up with the Jones's." I should imagine that what has just happened is without precedent in this Committee. Two Conservative back benchers have followed each other, both have opposed reasonably violently the proposal made by the Chancellor in respect of brushes.

There are in my constituency two brush-making firms. One is a firm established in 1836 and the other is Remploy, where many first-class men, including disabled miners, steelworkers and others, are employed. They are men who have given of their best throughout the whole of their working lives. Three weeks ago I had the proud privilege of presenting to Henshaw's Blind School, at Trafford Park, near where I live, a cheque for £160. The money had been collected by anglers in that area. They collected it because this blind school finds it difficult, even when things are at their best, to give service to the blind.

Here we have the Chancellor making conditions for those afflicted people even worse still. Many hard things have been said about the Chancellor and his assistants—especially one of them. I believe that they proposed this anomaly, because it is an anomaly, without being in full possession of the facts. Now they have a chance to redeem themselves. I have watched the workers in the factories sitting on stools, dipping the bristles into the tar and putting them into position; trying to compete with fit men. As was said by my hon. Friend the Member for Shore-ditch and Finsbury (Mr. Collins), in a rather long speech, this trade will suffer.

The housewives are up in arms about the whole business. They are, if I may say so, bristling with indignation. In my time, I have never asked the Chancellor for much, but I am now asking him and the Government Front Bench to be decent about this thing. I am told that the cost of collecting the tax will be almost as much as the tax itself.

I ask the Chancellor on behalf of the afflicted, on behalf of Remploy and on behalf of the housewives, not to persist in this tax because, if he does, there will be two brushes in evidence at the next election, the one which will scrub this tax from the Statute Book and the other which will sweep the party opposite out of existence.

11.30 p.m.

Mr. H. Brooke

A number of questions have been put, and I think it timely for me to answer them. My hon. Friend—I hope I can still call him that—the Member for Surbiton (Mr. Fisher) asked what this particular tax achieved, and as hon. Members may consider that the most difficult of all the questions put to me, I want to go straight in and answer it.

This tax is not expected substantially to reduce the sales of brushes and brooms. The hon. Member for Shoreditch and Finsbury (Mr. Collins) painted a picture of 17,000 men and women being thrown out of work. He must have known—

Mr. Collins

I did not say anything of the kind. I said that some 17,000 men and women were employed in the industry of whom, approximately, 1,000 were blind and disabled. The words I used, which will be recorded in the OFFICIAL REPORT, were that the employment of these people will be seriously affected, that some of them will be unemployed, many underemployed and that the unemployed among the blind workers will be hidden.

Mr. Brooke

Naturally, I do not want to misrepresent the hon. Gentleman in the slightest, but the impression he gave me was that this tax would cause very serious unemployment and underemployment. That is certainly not the Government's view. We are much more inclined to side with those who think that most of this buying, though not all, is essential, and that it will continue. A tax of something like £1¼ million or £1½ million a year, not £15 million as was mentioned by another speaker, will be collected. That amount of purchasing power will be drawn off.

At the moment, this country is suffering from an excess of purchasing power, an excess of demand over supply. That is the crux of our economic problem, and though I do not for a moment believe that large numbers of people will be deterred from buying brushes and brooms, they will, in fact, find that they will not have quite so much money to spend on other non-essential things. This Budget has been very carefully planned to reduce or slow down the purchases of non-essentials.

Mr. Hale

I announced that I would speak, but I have sat down and not said a word in deference to the Committee. However, I put a whole series of points about the difficulties of the industry. Does the right hon. Gentleman think that he can get a conviction if he prosecutes anyone for not paying Purchase Tax on brushes? A conviction under this could not be carried through successfully even if the tax is imposed.

Mr. Brooke

If the hon. Gentleman will be patient, I will deal with the whole of the case put. In his Budget speech, my right hon. Friend explained that it would be anomalous to increase the tax on those goods which happened at present to be bearing Purchase Tax and yet to take no action about what was an arbitrary range of goods which were outside the tax field.

On Second Reading, I followed that up and said that it was necessary to restrain demand not only over a limited field, but over a broad field. I know that these goods have not been subject to tax hitherto. They are unique in that respect, and that is why it is entirely proper that there should be an Amendment down about them so that the Committee may have an opportunity of discussing them. Nevertheless, there is no doubt that brooms and brushes fall within the general range of household goods. It would be strange to omit them from the Purchase Tax if it is decided that household goods as a whole should be now brought within its range.

The fact that in the past household brooms and brushes were exempt did not mean that there were no anomalies in this respect. Indeed, I myself received a latter from the British Brush Manufacturers' Association some time before the Budget—that is the Association to which reference has been made—drawing attention to the gross anomalies that there were before this Budget, and asking that the Chancellor of the Exchequer should clear them up. They said that the main anomaly remained, that which arbitrarily divided the industry into tax-bearing and tax-free sections.

This Budget is not creating an anomaly of that kind. The anomaly existed before. In the past shoe brushes were free and clothes brushes were taxed. In the past scrubbing brushes were free but nail brushes were taxed. On the other hand, if anyone wished to buy a tax-free nail brush there was a trick: he went to a shop which sold plain nail brushes as vegetable brushes and under that name it was possible to buy them tax free. These anomalies will be eliminated by the extension of the tax to all household goods.

The hon. Member for Shoreditch and Finsbury quite rightly called attention to the difficulties about definition that arose immediately after the Budget. It is correct to say—and I hope the hon. Gentleman will confirm me in this from his industrial experience—that this is precisely the sort of difficulty which arises whenever a tax is imposed for the first time on an article not previously taxed. Obviously it is impossible—indeed, it would be improper—for the Treasury or the Customs to have private negotiations with an industry before a new tax was announced to the House, and therefore those negotiations have to take place immediately after the announcement and not before.

Those discussions have proceeded and, as the hon. Gentleman said, a list of agreed decisions has been sent out. It has been agreed between the Customs and Excise on the one part and the British Brush Manufacturers Association on the other. This is an interim measure. I understand that the discussions are continuing and I hope that they will reach a satisfactory result. I must take issue with the hon. Gentleman when he suggested that the Customs have agreed that it is impossible to settle dividing lines. All over the rest of the Purchase Tax similar questions arise because it falls on the household article and not on the industrial article.

Mr. Collins

What I did was to quote a letter from the British Brush Manufacturers Association and also one from the trade union. Both were from people of vast experience, saying that it is impossible to define many of these brushes. And the Minister has not told us that any more have been defined since 11th November.

Mr. Brooke

When the hon. Gentleman sees on the record what he said he will find that he said that the Customs agreed that it was impossible to define the dividing lines. What he is saying now is that the British Brush Manufacturers Association contend that it is impossible to define them. All I can say is that in every similar case it has been found possible to establish agreed dividing lines, and I trust that it will be so in this case also.

Mr. Percy Holman (Bethnal Green)

May I inform the Financial Secretary that, in the case of Purchase Tax which has been in operation for the last fourteen years, he wrote to me a few months ago stating that a certain semi-stationery article was subject to Purchase Tax, since when I have made further investigation and have found that one large firm was able recently to reclaim Purchase Tax paid on an exactly similar article over the last five years?

Mr. Brooke

I will willingly go into that question with the hon. Member upon another occasion, but I think I should be out of order to discuss Purchase Tax upon stationery now—and I should probably also be acting out of keeping with the wishes of hon. Members on both sides of the Committee.

The Government are very sorry if Purchase Tax in this or any other field affects disabled or blind workers. We find those people in all industries, and we wish them all good fortune, but it is well realised—indeed, the hon. Member himself admitted it—that we cannot change or withdraw a tax in order to make a special exception for a special group of workers in an industry. In this case they do not constitute a large proportion of the whole. 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.

Mr. Gaitskell

The reply of the Financial Secretary has been even more miserably unconvincing than usual—and that is saying quite a lot. I have no doubt that we must return to this subject during the discussion on the Question, "That the Schedule be the First Schedule to the Bill," and also during the Report stage, if our Amendments are selected. If we do not prolong the discussion tonight, it is only because the Chancellor has made an announcement and hon. Members are expecting to go home. I suggest, therefore, that we defer further discussion and now divide against the Government and in favour of our Amendment.

Question put, That "(j)" stand part of the Schedule:—

The Committee divided: Ayes 229, Noes 187.

Division No. 58.]	AYES	[11.42 p.m.
Agnew, Cmdr. P. G.	Cunningham, Knox	Hill, Rt. Hon. Charles (Luton)
Aitken, W. T.	Currie, G. B. H.	Hill, John (S. Norfolk)
Allan, R. A. (Paddington, S.)	Dance, J. C. G.	Hirst, Geoffrey
Alport, C. J. M.	Davidson, Viscountess	Holland-Martin, C. J.
Amery, Julian (Preston, N.)	D'Avigdor-Goldsmid, Sir Henry	Hope, Lord John
Amory, Rt. Hn. Heathcoat (Tiverton)	Digby, Simon Wingfield	Horobin, Sir Ian
Arbuthnot, John	Dodds-Parker, A. D.	Howard, John (Test)
Armstrong, c. W.	Donaldson, Cmdr. C. E. McA.	Hudson, Sir Austin (Lewisham, N.)
Ashton, H.	Doughty, C. J. A.	Hudson, W. R. A. (Hull, N.)
Atkins, H. E.	Drayson, G. B.	Hughes Hallett, Vice-Admiral J.
Baldock, Lt.-Cmdr. J. M.	Eccles, Rt. Hon. Sir David	Hughes-Young, M. H. C.
Baldwin, A. E.	Errington, Sir Eric	Hulbert, Sir Norman
Balniel, Lord	Farey-Jones, F. W.	Hurd, A. R.
Barber, Anthony	Fell, A.	Hutchison, Sir Ian Clark (E'b'gh, W).
Barlow, Sir John	Finlay, Graeme	Hutchison, James (Scotstoun)
Barter, John	Ftleetwood-Hesketh, R. F.	Hyde, Montgomery
Bevins, J. R. (Toxteth)	Fletcher-Cooke, C.	Hylton-Foster, Sir H. B. H.
Bidgood, J. C.	Fort, R.	Iremonger, T. L.
Biggs-Davison, J. A.	Fraser, Sir Ian (M'ombe & Lonsd'le)	Irvine, Bryant Godman (Rye)
Birch, Rt. Hon. Nigel	Freeth, D. K.	Jenkins, Robert (Dulwich)
Bishop, F. P.	Galbraith, Hon. T. G. D.	Jennings, J. C. (Burton)
Black, C. W.	Garner-Evans, E. H.	Johnson, Dr. Donald (Carlisle)
Body, R. F.	George, J. C. (Pollok)	Johnson, Eric (Blackley)
Bossom, Sir A. C.	Glover, D.	Joynson-Hicks, Hon. L. W.
Boyd-Carpenter, Rt. Hon. J. A.	Godber, J, B.	Kaberry, D.
Boyle, Sir Edward	Gomme-Duncan, Col. A.	Keegan, D.
Braine, B. R.	Gough, C. F. H.	Kerby, Capt. H. B.
Brooke, Rt. Hon. Henry	Gower, H. R.	Kerr, H. W.
Brooman-White, R. c.	Graham, Sir Fergus	Kershaw, J. A.
Buchan-Hepburn, Rt. Hon. P. G. T.	Grant-Ferris, Wg Cdr. R.(Nantwich)	Kirk, P. M.
Butcher, Sir Herbert	Green, A.	Lagden, G. W.
Butler, Rt. Hn. R. A. (Saffron Walden)	Gresham Cooke, R.	Lambert, Hon. G.
Carr, Robert	Grimston, Hon. John (St. Albans)	Langford-Holt, J. A.
Channon, H.	Grimston, Sir Robert (Westbury)	Leavey, J. A.
Chichester-Clark, R.	Gurden, Harold	Leburn, W. G.
Cole, Norman	Harris, Frederic (Croydon, N. W.)	Legh, Hon. peter (Petersfield)
Cooper-Key, E. M.	Harrison, A. B. C. (Maldon)	Lennox-Boyd, Rt. Hon. A. T.
Cordeaux, Lt.-Col. J. K.	Harrison, Col. J. H. (Eye)	Lindsay, Hon. James (Devon, N.)
Corfield, Capt. F. V.	Harvey, Air Cdre. A. V. (Macclsfd)	Lindsay, Martin (Solihull)
Craddock, Beresford (Spelthorne)	Harvey, Ian (Harrow, E.)	Linstead, Sir H. N.
Crookshank, Capt. Rt. Hn. H. F. C.	Harvey, John (Walthamstow, E.)	Lloyd, Rt. Hon. Selwyn (Wirral)
Crosthwalte-Eyre, Col. O. E.	Head, Rt. Hon. A. H.	Lloyd-George, Maj. Rt. Hon. G.
Crouch, R. F.	Heald, Rt. Hon. Sir Lionel	Longden, Gilbert
Crowder, Petre (Ruislip—Northwood)	Heath, Edward	Lucas-Tooth, Sir Hugh
Mackie, J. H. (Galloway)	Peyton, J. W. W.	Sumner, W. D. M. (Orpington)
Maclay, Rt. Hon. John	Pilkington, Capt. R. A.	Taylor, Sir Charles (Eastbourne)
Maclean, Fitzroy (Lancaster)	Pitman, I. J.	Thomas, Leslie (Canterbury)
Macleod, Rt. Hn. Iain (Enfield, W.)	Pitt, Miss E. M.	Thomas, P. J. M. (Conway)
MacLeod, John (Ross & Cromarty)	Pott, H. P.	Thompson, Kenneth (Walton)
Macpherson, Niall (Dumfries)	Powell, J. Enoch	Thompson, Lt.-Cdr. R.(Croydon, S.)
Maddan, Martin	Price, David (Eastleigh)	Thorneycroft, Rt. Hon. P.
Maitland, Cdr. J. F. W.(Horncastle)	Price, Henry (Lewisham, W.)	Thornton-Kemsley, C. N.
Maitland, Hon. Patrick (Lanark)	Prior-Palmer, Brig. O. L.	Tiley, A. (Bradford, W.)
Manningham-Buller, Rt. Hn. Sir R.	Profumo, J. D.	Tilney, John (Wavertree)
Marlowe, A. A. H.	Raikes, Sir Victor	Turton, Rt. Hon. R. H.
Marples, A. E.	Ramsden, J. E.
Marshall, Douglas	Redmayne, M.	Tweedsmuir, Lady
Mathew, R.	Rees-Davies, W. R.	Vaughan-Morgan, J. K.
Maude, Angus	Ronton, D. L. M.	Vickers, Miss J. H.
Maudling, Rt. Hon. R.	Ridsdale, J. E.	Vosper, D. F.
Mawby, R. L.	Robinson, Sir Roland (Blackpool, S.)	Wakefield, Edward (Derbyshire, W.)
Maydon, Lt.-Comdr, S. L. C.	Roper, Sir Harold	Walker-Smith, D. C.
Medlicott, Sir Frank	Russell, R. S.	Wall, Major Patrick
Milligan, Rt. Hon, W. R.	Sandys, Rt. Hon. D.	Ward, Hon. George (Worcester)
Morrison, John (Salisbury)	Schofield, Lt.-Col. W.	Ward, Dame Irene (Tynemouth)
Nabarro, G. D. N.	Scott-Miller, Cmdr. R.	Waterhouse, Capt. Rt. Hon. C.
Nairn, D. L. S.	Sharples, Maj. R. C.	Whitelaw, W. S. l. (Penrith & Border)
Neave, Airey	Shepherd, William	Williams, Gerald (Tonbridge)
Nicolson, N. (B'n'm'th, E. & Chr'ch)	Simon, J. E. S. (Middlesbrough, W.)	Williams, Paul (Sunderland, S.)
Nield, Basil (Chester)	Smithers, Peter (Winchester)	Williams, R. Dudley (Exeter)
Noble, Comdr. A. H. P.	Spearman, A. C. M.	Wilson, Geoffrey (Truro)
Nugent, G. R. H.	Stevens, Geoffrey	Wood, Hon. R.
Oakshott, H. D.	Steward, Harold (Stockport, S.)	Woollam, John Victor
O'Neill, Hn. Phelim (Co. Antrim, N.)	Stewart, Henderson (Fife, E.)	Yates, William (The Wrekin)
Orr, Capt. L. P. S.	Stoddart-Scott, Col. M.
Orr-Ewing, Charles Ian (Hendon, N.)	Storey, S.	TELLERS FOR THE AYES:
Page, R. G.	Stuart, Rt. Hon. James (Moray)	Mr. Studholme and Mr. Gerald Wills.
Pannell, N. A. (Kirkdale)	Summers, G. S. (Aylesbury)
NOES
Ainsley, J. W.	Donnelly, D. L.	Jones, Elwyn (W. Ham, S.)
Albu, A. H.	Dye, S.	Jones, Jack (Rotherham)
Allaun, Frank (Salford, E.)	Edelman, M.	Jones, J. Idwal (Wrexham)
Allen, Arthur (Bosworth)	Edwards, Rt. Hon. John (Brighouse)	Jones, T. W. (Merioneth)
Allen, Scholefield (Crewe)	Edwards, Rt. Hon. Ness (Caerphilly)	Kenyon, C.
Awbery, S. S.	Edwards, Robert (Bilston)	King, Dr. H. M.
Baird, J.	Edwards, W. J. (Stepney)	Lawson, G. M.
Balfour, A.	Evans, Stanley (Wednesbury)	Ledger, R. J.
Benee, C. R. (Dunbartonshire, E.)	Fernyhough, E.	Lever, Harold (Cheetham)
Benn, Hn. Wedgwood (Bristol, S. E.)	Fletcher, Eric	Lever, Leslie (Ardwick)
Benson, G.	Forman, J. C.	Lewis, Arthur
Beswick, F.	Fraser, Thomas (Hamilton)	Logan, D. G.
Blackburn, F.	Gaitskell, Rt. Hon. H. T. N.	MacColl, J. E.
Blenkinsop, A.	Gibson, C. W.	McGovern, J.
Blyton, W. R.	Gordon Walker, Rt. Hon. P. C.	McKay, John (Wallsend)
Boardman, H.	Greenwood. Anthony	Mahon, S.
Bottomley, Rt. Hon. A. G.	Grey, C. F.	Mallalieu, E. L. (Brigg)
Bowden, H. W. (Leicester, S. W.)	Griffiths, William (Exchange)	Mallalieu, J. P. W. (Huddersfd, E.)
Bowen, E. R. (Cardigan)	Grimond, J.	Mann, Mrs. Jean
Bowles, F. G.	Hale, Leslie	Marquand, Rt. Hon. H. A.
Boyd, T. C.	Hall, Rt. Hn. Glenvil (Colne Valley)	Mayhew, C. P.
Braddock, Mrs. Elizabeth	Hamilton, W. W.	Mikardo, Ian
Brockway, A. F.	Hannan, W.	Mitchison, G. R.
Broughton, Dr. A. D. D.	Hayman, F. H.	Monslow, W.
Brown, Rt. Hon. George (Belper)	Healey, Denis	Moody, A. S.
Brown, Thomas (Ince)	Henderson, Rt. Hn. A. (Rwly Regis)	Morris, Percy (Swansea, W.)
Burke, W. A.	Herbison, Miss M.	Moss, R.
Burton, Miss F. E.	Hewitson, Capt. M.	Moyle, A.
Butler, Herbert (Hackney, C.)	Hobson, C. R.	Mulley, F. W.
Butler, Mrs. Joyce (Wood Green)	Holman, p.	Neal, Harold (Bolsover)
Carmichael, J.	Holt, A. F.	Noel-Baker, Francis (Swindon)
Champion, A. J.	Houghton, Douglas	Oswald, T.
Chapman, W. D.	Howell, Denis (All Saints)	Paling, Will T. (Dewsbury)
Coldrick, W.	Hoy, J. H.	Palmer, A. M. F.
Collick, P. H. (Birkenhead)	Hughes, Cledwyn (Anglesey)	Pannell, Charles (Leeds, W.)
Collins, V. J. (Shoreditch & Finsbury)	Hughes, Emrys (S. Ayrshire)	Pargiter, G. A.
Corbet, Mrs. Freda	Hunter, A. E.	Parker, J.
Craddock, George (Bradford, S.)	Hynd, H. (Accrington)	Parkin, B. T.
Cronin, J. D.	Irvine, A. J. (Edge Hill)	Pearson, A.
Grossman, R. H. S.	Irving, S. (Dartford)	Peart, T. F.
Cullen, Mrs. A.	Janner, B.	Plummer, Sir Leslie
Davies, Ernest (Enfield, E.)	Jeger, George (Goole)	Popplewell, E.
Deer, G.	Jeger, Mrs. Lena (Holbn & St. Pnos, S).	Price, Philips (Gloucestershire, W.)
de Freltas, Geoffrey	Jenkins, Roy (Stechford)	Probert, A. R.
Delargy, H, J.	Johnson, James (Rugby)	Prootor, W. T.
Dodds, N. N.	Jones, David (The Hartlepools)	Pryde, D. J.

Rhodes, H.	Strachey, Rt. Hon. J.	White, Mrs. Eirene (E. Flint)
Robens, Rt. Hon. A.	Strauss, Rt. Hon. George (Vauxhall)	Wilcock, Group Capt C. A. B.
Roberts, Albert (Normanton)	Summerskill, Rt. Hon. E.	Wilkins, W. A.
Roberts, Goronwy (Caernarvon)	Swingler, S. T.	Willey, Frederick
Robinson, Kenneth (St. Pancras, N.)	Sylvester, G. O.	Williams, David (Neath)
Ross, William	Taylor, Bernard (Mansfield)	Williams, W. R. (Openshaw)
Short, E. W.	Thomas, George (Cardiff)	Willis, Eustace (Edinburgh, E.)
Silverman, Julius (Aston)	Thomas, Iorwerth (Rhondda, W.)	Wilson, Rt. Hon. Harold (Huyton)
Silverman, Sydney (Nelson)	Thomson, George (Dundee, E.)	Winterbottom, Richard
Simmons, C. J. (Brierley Hill)	Thornton, E.	Woodburn, Rt. Hon. A.
Skeffington, A. M.	Ungoed-Thomas, Sir Lynn	Yates, V. (Ladywood)
Slater, Mrs. H. (Stoke, N.)	Usborne, H. C.	Younger, Rt. Hon. K.
Slater, J. (Sedgefield)	Warbey, W. N.	Zilliacus, K.
Smith, Ellis (Stoke S.)	Watkins, T. E.
Sorensen, R. W.	Weitzman, D.	TELLERS FOR THE NOES:
Steele, T.	Wells, William, (Walsall, N.)	Mr. Horace Holmes and
Stewart, Michael (Fulham)	West, D. G.	Mr. J. T. Price.
Stones, W. (Consett)	Wheeldon, W. E.

Question put and agreed to.

To report Progress and ask leave to sit again.—[Mr. Oakshott.]

Committee report Progress; to sit again Tomorrow.