§ The Chairman
The first Amendment which is in order is that in the name of the hon. Member for Edmonton (Mr. Albu), in page 11, to leave out lines 4 and 5. It may be for the convenience of the Committee if, with that Amendment, we discussed three others, which are as follows: that in the name of the hon. Member for Islington, East (Mr. Fletcher) 1267 in page 12, to leave out lines 13 to 17; that in the name of the hon. Member for Bristol, North-East (Mr. Coldrick), in page 13, to leave out lines 1 to 3; and that in the name of the same hon. Member, in page 13, line 25, to leave out from "effect" to the end of line 26.
§ Mr. Eric Fletcher (Islington, East)
On a point of order. May I ask your guidance, Sir Charles, on what you have just said? Do I understand that you are not proposing to call any of the Amendments in pages 627 or 628 or in the first half of page 629 of the Notice Paper? If that were to be so, it would mean that no Amendments were being called deding with Part I of the First Schedule.
I am sure that you appreciate that there is on the Notice Paper a series of most important Amendments designed to enable us to consider the new rates of tax now being imposed for the first time on goods which used to be below the D-level, including articles of furniture, textiles and clothing. I cannot think that it was intended that we should be deprived of the opportunity of putting forward reasonable suggestions, or of suggesting that the new rates of tax should either be reduced or removed in respect of a wide variety of goods now being subjected to Purchase Tax for the first time. I hope, therefore that you may reconsider what you have said, and, at any rate, call some of the Amendments in pages 627 or 628 of the Notice Paper.
§ The Chairman
I think the hon. Gentleman is giving me more power than I have. It is not that I have not selected them; it is that they are out of order, because they are not covered by the Financial Resolution. I cannot call them because they are out of order. It has nothing to do with me at all.
§ Mr. Harold Wilson (Huyton)
On a further point of order. While I am sure that no one in any part of the Committee would wish to question the Ruling which you have just given that these Amendments are out of order, and that the reason for that is that they are excluded by the Financial Resolution which has already been passed by the House, surely, Sir Charles, it will be seen by the Committee that a very serious state of affairs has arisen in consequence of the Financial Resolution.
1268 For the first time for very many years, at any rate, we are faced with a situation in which the Government have introduced a sweeping range of new taxes over the whole field of textiles and clothing, and indeed much more widely than that. As a result, the House of Commons is not able to discuss in detail any one of these taxes, and is not even able to propose that these additional taxes should not be imposed. The only way in which we are able to raise the question—and I seek your guidance on this—would be, presumably, by voting against the Question, "That the Schedule be the First Schedule to the Bill," but it might conceivably be the case, in this Bill or any other, that there was something in the First Schedule which the Committee would want to see enshrined in legislation. Yet the effect of the procedure followed by the Government, which certainly reeks of sharp practice, is that it is quite impossible for the Committee to debate this new additional tax in detail.
§ 3.45 p.m.
§ The Chairman
As far as that point of order is concerned, I am the servant of the Committee, and have to carry out the rules of order. Under the Financial Resolution, as passed by the House, I have really no power in the matter. I am in no way responsible for the drafting of the Financial Resolution. I only carry it out, and if it is drafted in such a way that all these Amendments are out of order, there is nothing in the world that I can do to put them into order.
§ Mr. Wilson
I hope I made it clear that our reason for raising this matter is not meant in any way as a reflection on your Ruling, and that it would appear to be the case that we are entirely conditioned by the Financial Resolution already passed by the House. Since this important matter has been raised, I want to ask whether the Government will now explain their conduct on this matter, because it would seem that, in this second Finance Bill in a year on which there has been no opportunity to move new Clauses, we now face a situation in which a whole range of new taxes may be imposed without an opportunity of detailed debate or voting. Some of my hon. Friends are thinking that the Boston Tea Party was just procedural amendment compared with this monstrous behaviour by the Government.
§ The Chairman
There is nothing before the Committee yet. We are dealing only with points of order. I do not know how this can be discussed at the moment in an orderly way.
§ Mr. A. Blenkinsop (Newcastle-upon-Tyne, East)
Could we not ask the Chancellor of the Exchequer, as he is here, to give us his view on this matter, since he did give a specific promise to the Committee that it would be possible to discuss detailed Amendments when we came to this stage of our proceedings? The right hon. Gentleman must himself have known then that, because of the wording of the Financial Resolution, that would not be practicable? Is it not therefore the case that the Chancellor was making a statement which, at the time, he knew had no value?
§ The Chairman
I cannot, of course, answer that. The questions which have been raised are not ones for me. I am always quite willing to accept my own responsibilities, but this has nothing to do with me at all. I am entirely governed by the Financial Resolution.
§ Mr. Elwyn Jones (West Ham, South)
Although we on this side of the Committee agree that this in no way involves a criticism of your Ruling, Sir Charles, surely it is an important point, on which the Committee is entitled to an explanation from the Chancellor of the Exchequer. One has heard statements frequently made from this side of the Chamber, when hon. and right hon. Gentlemen in the party opposite were over here, declaring the principle of no taxation without representation, and we must at least demand that there should be no taxation without debate. The proposal as it now stands means that a vast range of articles will now be rendered subject to Purchase Tax for the first time, and the Committee is now, by reason of the stringently drafted Financial Resolution, to be deprived of the opportunity of debate. Surely the Chancellor owes it to the Committee to give some explanation of this disgraceful behaviour.
§ The Chairman
That, of course, is the case, but, on the other hand, the Financial Resolution has been passed in Committee and agreed to by the House. It is really the House that we are criticising now, because they have agreed to it.
§ Mr. H. Wilson
While recognising that there is no Motion before the House enabling us to debate the monstrous conduct of the Government on this matter, may I, through you, Sir Charles, ask the Chancellor of the Exchequer whether, in order to make some partial recompense to the Committee for having deprived it of its rights, he would at any rate give an assurance—in so far as any assurance of his is binding on the Patronage Secretary —that he will not, nor will his colleagues, interfere with a fair debate on the Question, "That the Schedule be the First Schedule to the Bill," which would enable us to debate the general principle and to put forward our proposals about these items of taxation. If he could do that, he would partially, though not wholly, meet our wishes.
§ The Chancellor of the Exchequer (Mr. R. A. Butler)
I think that the hon. Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop) was a little unfair in saying that I had given a specific promise in the early hours of Thursday morning. I think that the Committee was then perhaps somewhat unfair to me, as will be seen from column 354 of the OFFICIAL REPORT for 15th November, in which I described the variety of opportunities for discussing Purchase Tax which would arise.
Later in the debate—for which, of course, I bear nobody any malice or grudge—it was presumed that I had said it would be only on the Question, "That the Clause stand part of the Bill"—that is, Clause 1. That is not so. From column 354 of the OFFICIAL REPORT it will be seen that in my first intervention I said that there would be a variety of opportunities, and the right hon. Gentleman who preceded me in office acknowledged that he thought that my statement was reasonable.
I should like to say, at the outset of our proceedings today, that I can give no undertaking such as that for which the right hon. Member for Huyton (Mr. H. Wilson) asks. I can, however, say that it is the wish of the Government that we should so far as possible get the business in the remainder of the Finance Bill—which is likely, I agree, to be long and complicated—by agreement so far as we possibly can. It will only be if we cannot get it by agreement, and if we observe that hon. Members are determined that 1271 we shall not get our business, that we shall have to resort to other methods. We are desirous, if possible, of getting the business by agreement, as we have done with success over the last four years, because that is not only in the interests of the Government but is in the interests of smooth working and the reasonable sitting of hon. Members. It is in that spirit that I hope we will start our discussions today.
I wish to be fair to the Committee on the point about the drafting of the Purchase Tax Resolutions. I have, of course, followed a good deal of precedent in this, precedent set not only by Sir Stafford Cripps but set also in the time of office of the right hon. Member for Leeds, South (Mr. Gaitskell). It is always difficult to provide for adequate debate on the Purchase Tax and it is always impossible not to draft the Financial Resolutions with certain limitations. In this case, however, as I drew to the attention of the right hon. Member for Leeds, South—he knows I drew his attention to this—it was possible for the Opposition to put down particular Amendments to deal with furs and furniture. I did that on purpose and we drew the Resolution purposely so that they would be discussed. But some of the very Resolutions which you, Sir Charles—I cannot dispute your Ruling—have ruled out of order on the first part of the First Schedule relate to that very question of furs, on which we had a debate.
Apart from that, I do not want to make any further general statements, because I might then be accused of having given assurances which I did not carry out. I assure the Committee that I deeply regret —and, indeed, apologise for—any wrong impression I may have given regarding the adequacy of debate. Actually, we had twelve hours' debate between 3.30 on Wednesday and 3 o'clock the next morning on Purchase Tax and I thought that that was a reasonable opportunity of debate. I therefore anticipated that we were reasonably carrying out what I had thought to be my undertaking. I apologise, however, if any words of mine gave any false impression on this occasion. I shall, therefore, be extremely cautious, because I wish to keep faith with the Committee.
I can only say that there must be a Question, "That the Schedule be the 1272 First Schedule to the Bill." What the Committee will be allowed to debate on that Question is entirely a matter for the Chair, but on that Question, presumably, there will be an opportunity for debate. Subject to that, and subject to what the Chair decides, I understand that we are to have eight or nine debates now on Purchase Tax following upon the 12 hours at our last sitting and following upon the hours that we had at our earlier sitting. For anyone to say that there has not been an opportunity to discuss Purchase Tax is, therefore, quite unreasonable.
I have endeavoured to explain to the Committee that I had never intended to mislead hon. Members in any way. I do not intend to usurp the functions of the Chair in deciding what we debate on the Question, "That the Schedule be the First Schedule to the Bill," and I have given the best interpretation I can of the Resolutions we drew.
§ Several Hon. Members rose—
§ The Chairman
Perhaps I might answer what the right hon. Gentleman has just said, as one little bit of it did refer to me. The Chancellor of the Exchequer said that I had ruled out Resolutions. It is only Amendments that I have ruled out. The Resolutions are nothing to do with me.
§ Mr. H. Wilson
I know that the Chancellor of the Exchequer is trying to be as helpful as he is allowed to be, but some of the things that he said were really to draw a series of red herrings across the trail. I will not pursue too many of them or I shall become out of order. When the right hon. Gentleman said that his assurance to the Committee—
§ The Chairman
Apparently we are having a debate. If the right hon. Gentleman would move to report Progress, I will accept the Motion and we can then discuss this matter.
§ Mr. Wilson
I beg to move, "That the Chairman do report Progress, and ask leave to sit again."
In support of this Motion, may I draw attention to the statement which has been made by the Chancellor of the Exchequer? In the first place, he was dealing with the assurance which he gave, not once, but two or three times in the course of our proceedings last Tuesday evening. 1273 When he gave that assurance, it was specifically during the debate on one particular Purchase Tax Amendment: namely, the Amendment which sought to prevent the Government raising the rate of tax from 25 to 30 per cent. on a particular range of articles. I remember that my hon. Friend the Member for Liverpool, Exchange (Mrs. Braddock) in particular, and very many other of my hon. Friends, wanted to make important points on the question of the 25 to 30 per cent, change.
The Chancellor gave an assurance that this matter could be further debated. He certainly indicated that there were two or three types of opportunity on which it could be raised. I suggest to him, however, that it is not possible either on any detailed Amendment to the First Schedule or on the Question, "That the Schedule be the First Schedule to the Bill," to debate those issues which arose on the Amendment that we were discussing late the other evening. It related only to the 25 to 30 per cent. change.
Therefore, although my hon. Friend the Member for Liverpool, Exchange was able to catch your eye, Sir Charles, in the course of the general debate on Clause 1 and made a speech which, we all felt, was one of the finest we had heard in the House of Commons for a long time and one of the best speeches we have heard on this Bill, others of my hon. Friends and hon. Members opposite, who wanted to raise, perhaps, constituency points or general points on this change of taxation from 25 to 30 per cent., were unable to do so because of the Closure moved by the Patronage Secretary. That is my first point and I do not think that the Chancellor, in his reference to the assurance that he gave, has dealt with that point at all.
The second point relates to the decision of the Government to introduce the Financial Resolution, which, as you said, Sir Charles, bound you and the Committee so that we cannot move Amendments which would have the effect of deleting the proposed new tax on textiles, clothing, footwear and the rest. Of course, the Chancellor was quite right and fair when he said that the Resolution was drawn in such a way that we were able to put down specific Amendments relating to furs, rabbit skins and furniture —and we did, in fact, debate furs, rabbit skins and furniture; but I am sure the 1274 right hon. Gentleman will realise that if the Resolution precluded any discussion whatever on the vast range of industries and commodities covered by textiles, clothing and footwear, he was ruling out from consideration by the Committee a very important section of the Bill.
That means that those hon. Members, on both sides of the Committee, who are concerned with the fortunes and welfare of the textile and clothing and other industries which have been mentioned, have no opportunity to move the rejection of each of these specific taxes. Secondly, it means that any hon. Member, in any part of the Committee, who is concerned with the effect upon the cost of living of increases in the cost of these items of textiles, clothing, and so on, also is precluded from moving an Amendment to remit or to refuse to impose these particular items of taxation.
Therefore, I suggest that what was said by my hon. and learned Friend the Member for West Ham, South (Mr. Elwyn Jones) was thoroughly justified and that the Committee is being asked to vote in a general sort of way on these particular items without being able—I should have thought this would have been a time-honoured right of the House of Commons —to reject particular proposals that the Chancellor puts before it.
In extenuation—the Chancellor did not really try to defend himself very much on this general point—he said that the Committee had had the chance of debating Purchase Tax for 12 hours. That may be true, but the Committee had no opportunity of debating these items of taxation for even half an hour, let alone 12 hours. We had no opportunity of debating the Amendments concerned with the tax on textiles and clothing. One or two of my hon. Friends succeeded in taking part in the general debate on the Clause and they made a brief reference to textiles, but it was extremely brief. Indeed, it was almost confined to a reference my hon. Friend the Member for Oldham, West (Mr. Hale) made to his trousers, which, of course, may be a wide subject, but—
§ Mr. Leslie Hale (Oldham, West)
My right hon. Friend, I hope, will forgive me if I point out that I did have an opportunity of dealing at length very seriously with the very real and grave difficulties of my constituents—perhaps it was during 1275 one of my right hon. Friend's temporary absences—and that the Closure was moved when my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman), whose constituency is one of those most affected by the Government's proposals, was on his feet.
§ Mr. Wilson
I heard the speech of my hon. Friend on that occasion, and, in addition to discussing his own acute personal problems, he referred to the difficulties of the textile industry in Oldham, but that was not a substitute for the debate which the Committee needed to have—for example, on the matters raised by my hon. Friend, to whom the Government gave no answer. Of course, there was, as my hon. Friend has just said, an opportunity for my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) and others—there were others—who wanted to raise very general matters.
So I would say to the Chancellor that his assurance the other night was not honoured, and that the matter of the Amendment we were then debating was susceptible to further debate only on the question that the Clause stand part, and that although we spent 12 hours debating the Purchase Tax the debate did not include debate on the items particularised in the Amendments which you, Sir Charles, have just ruled are out of order. The Chancellor has not explained, or tried to explain, to the Committee why it was that the Government, by means of the Resolution, prevented the Committee from debating these questions, and I think the right hon. Gentleman was a little less than fair when he said he had been following precedents set by Sir Stafford Cripps and my right hon. Friend the Member for Leeds, South (Mr. Gaitskell).
I admit that because of difficulties which arose in 1949 a new procedure was agreed on informally to prevent what I think was called a "Dutch auction" on the Purchase Tax. By that procedure we were allowed to debate the general rates of the tax, and hon. Members were free, within limits, to debate its effects on industries or commodities about which they were most concerned, and to say in what respects they thought the tax should be lowered.
On this occasion, however, we are dealing with something entirely different. The 1276 Chancellor has introduced a new tax, as far as I am aware, previously unknown in the fiscal history of the country. He has introduced a general sales tax on textiles, clothing, and certain other industries, and although we have had a chance of debating the tax on furniture, rabbit skins and furs, we have not had an opportunity of debating in detail the impositions made by the Chancellor by means of the wide range of this new tax. I hope that the Chancellor will reply to this complaint that he has failed the Committee, and will weigh these important considerations.
§ Mr, Ian Mikardo (Reading)
I am sure that there must be many other Members of the Committee, and on both sides of it, who were as puzzled as I was at the Chancellor's suggestion that we had had an opportunity to debate Purchase Tax for 12 hours one day last week, following some four hours' debate on the previous day. Only a very small part of that time was spent in debating the Purchase Tax. The overwhelmingly greater part of the debate was on the application of the Purchase Tax to certain products. Purchase Tax is not a disembodied thing which exists in vacuo. It starts to exist only as soon as it is applied to certain products and—
§ The Chairman
On this Motion to report Progress we are not able to go into the details of Purchase Tax.
§ Mr. Mikardo
What I was seeking to argue, Sir Charles, was that we had not had the facilities which the Chancellor said we had had to debate the many matters which are brought before us in the Bill. As I understood, my right hon. Friend the Member for Huyton (Mr. H. Wilson) precisely on that ground moved the Motion. The argument I was adducing was in direct support of that of my right hon. Friend, and, therefore, in direct support of the basis on which he moved the Motion. I think that, if you will permit me to go on, that will become evident as I proceed. It is a question which the Committee has to consider before deciding upon the Motion, whether the Chancellor's attitude to our future debates is based upon an interpretation of our past debates which is accurate.
We were not, in those debates last week, debating the general question of 1277 Purchase Tax, whether it is a good instrument of government or a bad instrument of government. What we were debating for very much the greater part of the time was the application of Purchase Tax to furs, rabbit skins and furniture, all of which are important and of considerable interest to our constituents. Now we are deprived, as my right hon. Friend has pointed out, of the opportunity of dealing in a similar way with commodities such as textiles, clothing and footwear, which, because they represent a higher proportion of the expenditure of the ordinary family than those commodities we were debating last week, are of even greater interest than the matters which absorbed us on those two days last week. Hence it seems that the proceedings on the Bill are not quite as they should be.
If the Resolutions are drawn in such a way that we are allowed to debate the detailed application of Purchase Tax to commodities which form a small part of people's expenditure, and so are important, but are not allowed to debate its application to commodities which are more important because people spend more on them, it seems to me that the proceedings on the Bill are not as they ought to be. In saying so I am not in any way seeking to complain of your Ruling, Sir Charles, that some of these Amendments are out of order. The fault is the Government's, and not the fault of the Chair
I do not yet know whether or not one of the commodities to be affected by the Purchase Tax proposals can be discussed or not. That will become clearer later, doubtless. However, there is a taxed commodity which will be transferred to a food product, so that a food product will be bearing Purchase Tax, and, to the best of my knowledge and belief, bearing Purchase Tax for the first time since Purchase Tax was first levied. I am sure the Committee will appreciate that if my argument about this is right—I hope I may have an opportunity of debating this matter further, but I do not know whether under the rules of order I shall be allowed to or not—this represents a serious and new departure in the Purchase Tax, to which the precedents, which the Chancellor said were supplied by Sir Stafford Cripps and other Chancellors in past years, cannot be held to apply.
It seems to me that it is quite wrong to say that we talked in general terms 1278 about Purchase Tax for 12 hours, and the Chancellor should not talk in that way. We talked about particular applications of the tax. It seems to me to be an unfortunate thing, and something which will be resented by very large numbers of our constituents all over the country who are directly affected, if we cannot give the same amount of attention to the Purchase Tax on textiles, clothing, footwear, items of food and other items as we were able to give to the Purchase Tax on furs, rabbit skins and furniture.
I hope, therefore, that the Chancellor will see to it that any loss of opportunity we may have suffered in the debate will be made up. It is in the interest of the Government, as much as that of anybody else, that these matters should be clarified by giving facilities for further discussion when we debate other Motions, such as the Question, "That the Schedule be the First Schedule to the Bill."
The right hon. Gentleman said that it was not for him but for you, Sir Charles, to decide what subjects will be discussed. In making these decisions in the past, we have had on occasion the dubious advantage of the assistance of the Patronage Secretary. It is that assistance which we could well do without when we come to the general debate on the Schedule. I express that hope because it is possible, even though it may not be likely, that the Chancellor will have seen the point and that, in the interests of clarifying the whole of this complex problem for the benefit of the country as a whole, he will see to it that the Patronage Secretary is a little more restrained at forthcoming sittings of the Committee than he was at our previous one.
§ Mr. Ede (South Shields)
This is a topic which arises from time to time during Committee stages of important Bills. The Chancellor and the Leader of the House will recall that before the war such a state of feeling was reached between the then Opposition and the Government that the Prime Minister of the day, Mr. Neville Chamberlain, undertook that Financial Resolutions should be drawn sufficiently wide not to thwart Committees in the legitimate discharge of their duties.
I speak as one who has sat on the other side of the Committee and, for a short 1279 time, even had the honour of being Leader of the House. I know the insistent temptation that comes to people who sit opposite so to draw Financial Resolutions as to limit the scope of debate. I would urge on the Leader of the House, rather than on the Chancellor of the Exchequer, that it would be well for the general situation on this matter to be examined again, as Mr. Neville Chamberlain examined it with considerable advantage to the progress of the business of the House, in an atmosphere of reasonable good will.
Once the Committee begins to get frustrated, as it felt the other night, the more the Government may apply the Closure and do all sorts of things in an effort to restrict debate, the sooner does the spirit of the Committee break through. The Government lose time, instead of gaining it, as a result of resort to methods which lead to a feeling of frustration in the Committee. Particularly is that so when, as on this matter, feeling against the action of the Government is expressed on both sides of the Committee.
I hope, therefore, that, in the rather better atmosphere that prevails now than prevailed in the early hours of Thursday morning, the Leader of the House will feel that generally this question of the drawing of Financial Resolutions is a matter that again demands some serious attention from him in consultation with Ministers and the draftsmen who draw the Resolutions, so that reasonable discussion can take place and any feeling of frustration can be avoided. It does the House of Commons no credit, it does not enhance the standing of the Government with the House of Commons, when the feelings that found strong expression in the Committee in the early hours of Thursday morning are ventilated with a sense of justification in the minds of those who express them.
§ 4.15 p.m.
§ Mr. Hale
I have not the slightest desire to trespass on the time of the Committee beyond that required to put a brief point. This is a House of Commons point and there is a back benchers' view in the matter which is not always the same as the view of those who have the privilege to be called upon first to be heard. I rose the other night to deal with the subject of brushes, which 1280 probably was very largely irrelevant to the point that was then being discussed. It just came in at that point and I was quite confident that I should have a further opportunity to deal with brushes on an Amendment which is not now to be called.
The Chancellor of the Exchequer happened to be out of the Chamber at the time. I have never suggested that a matter of being out of the Chamber for two or three minutes is one for criticism at all, but the right hon. Gentleman shortly returned and pleaded with the Committee to come to the end of the discussion. He said that we had an opportunity of discussing the matter, as I understood, on a later Amendment. I am not suggesting that the right hon. Gentleman misled anybody. It would be reasonable, I think, to suggest that we were all capable of many inaccuracies when we had been discussing complicated Amendments for so long.
This is a dilemma in which back benchers are being placed and, with respect, rather more constantly placed now in these matters. Every one of us receives letters from constituents. Some of them raise issues which may not seem of great importance to a Committee of the House of Commons, but are of real importance to the people concerned. We can deal with them by letters, and the Treasury tries to help so far as it can by letter, but this is in many ways a back benchers' job. The direct representation of everyone in his constituency is as much a part of the job of a back bencher as any other duty which he has to do.
Then we find that because of the drafting of the Financial Resolution, or because of the rules of the House of Commons, we meet with difficulty. The rules are altered from time to time, and I think not always for the better, when we try to find solutions for difficult problems. I am not always sure that we have found them. Back benchers find that individual matters cannot be discussed and that the best that can be hoped for is a limited general debate on a Clause or a Schedule —a time when the overwhelming majority of hon. Members want to raise such broad questions as whether Purchase Tax should be continued at all, whether it should be increased, its relevance to inflation, and so on.
1281 I am not saying this in any partisan sense, but the dilemma in which we find ourselves is that the Chair has been invested recently with new powers of saying that a matter has been already adequately discussed. That will not arise in this case because the Closure was accepted last week in circumstances which, in my recollection, had never occurred before. It used to be the rule of Mr. Speaker Clifton Brown that the Closure would never be accepted unless speeches had ceased from one side of the Chamber. That certainly was the rule which was invariably adopted from 1945 to 1950.
§ Mr. Hale
No new powers were introduced. It is a matter which is entirely in the discretion of the Chair. I am not for a moment trying to criticise the Chair. I have for you, Sir Charles, a profound and personal respect, and I have a profound respect for your office. When, after long discussion, the Patronage Secretary moves the Closure it is a matter which the Chair has to decide forthwith under the rules, without discussion or representations. The result is that hon. Members are left in the position that we sit day after day in the Chamber and have important constituency questions to raise and the procedure secures that those who wish to raise them are deprived of the opportunity of doing so. This is not criticism. I am talking now about the entire procedure of Finance Bills on a Motion to report Progress.
§ The Chairman
I appreciate that, but, of course, a Motion to report Progress and an alteration to Standing Orders are two different things, are they not?
§ The Chairman
It is quite narrow. It is whether I should report Progress and ask leave to sit again.
§ Mr. Hale
No, I do not want to delay the Committee.
The Chancellor of the Exchequer addressed the Committee on a point of order for 10 minutes, going very wide, and I think the Committee understands that I am trying to put a point which ought to be put in these circumstances. That point is the difficulty which arises on the drafting of the Financial Resolution, which is the matter we are discussing. After all, the Financial Resolution is drafted in the light of what are the rules of the House.
I am not suggesting an amendment of the rules of the House. I am merely suggesting that when the Chancellor of the Exchequer and the Leader of the House, and whoever else does it on the opposite side of the House, draft the Financial Resolution they should have regard to past experience and say that it is a matter of democratic right and duty that we should try to give, within the limits of the Financial Resolution, as ample an opportunity for discussion of the changes that are being made, or of proposed changes which are likely to be made, as can be done within the ambit of that arrangement.
In conclusion, I say seriously and advisedly that I feel that while many of us might plead guilty to having from time to time indulged in verbosity which, on mature reflection, might have been considered needless or unnecessary—[An HON. MEMBER: "Many?"] Well, one of us—there is, nevertheless, growing up a serious grievance in the limitations which gradually seem to be being forged by the action of the Government in conjunction with the amendment of the rules and which are more and more depriving hon. Members of the House of doing what has always been said to be their primary duty, watching the spending of the public purse, and acting as housewives of the nation.
Mr. R. Williams
My point, Sir Charles, can be disposed of in two minutes and I give you my personal undertaking that this will be done. My point rests upon an answer which I hope you will feel that you can give me, and no question on my part will arise out of your answer whichever way that answer 1283 may go. It is, shortly, this. In page 632 of the Notice Paper there is the following Amendment: Schedule 1, page 12, leave out lines 10 to 12. Is that within the scope of the discussion proposed or is it outside?
§ Mr. H. Wilson
This brief debate has been well worth while and I hope the Chancellor will agree that we on this side of the Committee have restrained ourselves considerably. There were points raised which could have taken up a considerable time but I want to assure you, Sir Charles, because it was you yourself who suggested that I should move to report Progress, that we have no desire of using this Motion to prevent the Committee starting work on the Finance Bill. As far as I am concerned, I shall be glad to ask leave to withdraw the Motion.
§ The Chairman
I am sorry to interrupt the right hon. Gentleman, but was the hon. Member for Wigan (Mr. R. Williams) referring to the Amendment to Schedule 1, page 12, to leave out lines 10 to 12?
I gave you an undertaking, Sir Charles, that I would confine my observations to two minutes and I think I won that race by at least 40 seconds. I did that only because I did not want to explain why or what were the nature of the arguments.
§ The Chairman
I thought that perhaps I had mistaken the Amendment because the name of the hon. Gentleman was not on it.
§ Mr. H. Wilson
Before I ask leave to withdraw the Motion, Sir Charles, I should draw the attention of the Committee to the fact that, so far, all speeches have been made from this side of the Committee and that we have not had a reply from the Government to the points raised when the Motion was moved. The reason I sought to intervene a few minutes ago, following which, Sir Charles, you advised me to move to report Progress, was a rather lengthy statement by the Chancellor of the Exchequer.
1284 That led to the initiation of this debate, and having heard the extremely serious points that have been raised, I hope that the Chancellor or the Leader of the House will give a reply so that as quickly as possible we can bring this debate to an end and then proceed to discuss the Bill. It would be intolerable if we had no reply from the Government to the points which have been raised.
§ Mr. Harold Davies (Leek)
Could my right hon. Friend extract some information for me before he sits down? Some of us are specially interested in these Amendments—for instance, the one on scarves. I do not want to delay the work of the Committee, but I am particularly interested in it and, although the Clause has been passed, I want to know whether, when we come to the Schedule, we shall be able to refer to this matter if we catch the eye of the Chair.
§ Mr. Wilson
My hon. Friend has put that question to me, but it is really one for you, Sir Charles. However, perhaps I may say to my hon. Friend that earlier I drew attention to the fact that apparently our only opportunity of discussing these individual items on which new taxes are to be levied for the first time would be on the Question, "That the Schedule be the First Schedule to the Bill." I gave reasons to the Committee why I suggested that was an inadequate means of raising those questions in debate.
Perhaps I might also clear up another small point of confusion if I refer to that raised by my hon. Friend the Member for Oldham, West (Mr. Hale), when he mentioned an Amendment to delete paragraph (j) from the Schedule, dealing with brushes. It is, of course, entirely a matter for you, Sir Charles, to rule but, as I understand, the only Amendments which have been declared out of order because of the Financial Resolution are those where a new sales tax of 5 per cent. or 10 per cent. has been imposed and where we have sought to reduce that to nil. But with the other items, household items, and so on, which have been put in the Purchase Tax Schedule at 30 per cent., Amendments to delete those are in order. Whether they are called by you, Sir Charles, is a matter within the discretion of the Chair but, as I understand it, the Amendment relating to brushes would be in order and is not ruled out by the procedure of which I have complained.
§ The Chairman
The last Amendment in page 629 of the Order Paper, Schedule 1, page 11, line 9, leave out "(j)"?
§ Mr. John Rankin (Glasgow, Govan)
May I put a point on similar lines? I should like you, Sir Charles, to look at the last Amendment but one in page 628 —Schedule 1, page 9, line 37, leave out "5 per cent." and insert "exempt"—to which my name is attached and which deals with an important subject, babies' cots. I will not go into the matter because that would be out of order, but I would like to know if that Amendment will be in order?
§ Mr. Rankin
Then might I ask a question on a further point which also deals with an important issue? We are seeking to deal with what we think is an error on the part of the Chancellor. We feel that it is something which the Chancellor himself would like to rectify.
§ 4.30 p.m.
§ The Chairman
That is very likely, but it is not mine. The point is that the Amendment is out of order, and to use the method of reporting Progress to discuss an Amendment that is out of order is "not on."
§ Mr. Rankin
I did not mean to make any attempt to get round the Chair or the Motion before us, Sir Charles. I should like to ask by what method can we raise this matter in order that an obvious error may be corrected by the Chancellor. We are seeking to help him, and I am 1286 certain that he will be thankful for our help. What method is open to the Committee to bring this obvious mistake before the Committee and the Chancellor?
§ The Chairman
The Committee can discuss anything on the Question, "That the Schedule be the First Schedule to the Bill," but that is as far as it can go.
§ Mr. R. A. Butler
I only rise in response to the intervention of the right hon. Gentleman the Member for Huyton (Mr. H. Wilson). In response to the right hon. Gentleman the Member for South Shields (Mr. Ede), may I say that there are two forms of Money Resolution. One is the general Money Resolution attached to the Bill, and the other is the Financial Resolutions which, as the Committee knows, are handed around at the end of the Budget speech. They are both, in fact, Financial Resolutions. I have had a word with the Leader of the House, and he says that we are following, in general, in respect of Money Resolutions, the procedure laid down by the late Mr. Neville Chamberlain. In the case of the Financial Resolutions attached to the Budget, we are following, so far as we can, precedents created and left to us by our predecessors.
I can honestly say to the Committee that in the case of Purchase Tax every Chancellor is faced with a very difficult situation. It distracted the supreme intelligence of Sir Stafford Cripps and, indeed, worried him more than any other subject. It very much disturbed and distracted the intelligence of the late Oliver Stanley, who found our debates on Purchase Tax almost impossible to bring within the bounds of ordinary Parliamentary order. It has been a source of considerable distraction to my immediate predecessor, and a source of considerable worry to myself. On this occasion, we were trying to make it possible to debate each of the rates.
Then we tried to make it possible—a fact to which I drew the attention of the right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell)—to debate, in particular, furs and furniture. We also anticipated that at least on two occasions, namely, on the general debate on Clause 1 and, I believe, on the Schedule, it is possible to discuss in general the question of the D Scheme and the cotton trade. Therefore, we anticipated that all these 1287 debates, coupled with the myriad of detailed debates which are now still to take place and the ones which we have already had, did give an almost unprecedented opportunity of discussing Purchase Tax. We thought that, subject to precedents which we had examined, we had so drawn the Resolutions that they were as fair as possible.
All that I can do, therefore, in answer to the right hon. Gentleman, the Member for South Shields, is to undertake that in further drafting of Financial Resolutions attached to the Budget, care will be taken to pay attention to what he has said, and to what hon. Members have said about back bench opinion. In respect of the Money Resolutions, I must leave that to the Leader of the House, because I believe that the practice there is being followed on the lines of the late Mr. Neville Chamberlain's ideas.
In respect of the details, you, Sir Charles, have already answered them, but I was going on to say that I am sure that brooms and brushes would be in order, just as a great many other things here, such as tableware, silverware, portable baths, and pot scourers appears to me to be in order, subject to the Chair calling them. And there appears to me to be a series of debates on which I think that it would be wise for us now to become engaged, otherwise we may be kept here until a very late hour.
Taking all this into consideration, taking the Schedule into consideration, and taking the later stages of the Bill into consideration, I do not think that many hon. Members will feel at the end that there has not been adequate opportunity for debate; although, if there has been inadequate opportunity, I sincerely apologise for it.
§ Mr. H. Wilson
I think that the assurance which we have had from the Chancellor, so far as it goes, and the words in which he concluded his intervention in the debate, and the apology which he has just given, in so far as the conditions which he referred to arise, have shown that this debate has been worth while, and has raised some important issues.
I want to ask the Chancellor one question before I ask leave to withdraw the Motion. He has given an assurance that in any future drafting of Financial 1288 Resolutions the points raised this afternoon, particularly the two points raised by my right hon. Friend the Member for South Shields (Mr. Ede), and my hon. Friend the Member for Oldham, West (Mr. Hale), will be borne in mind. May I draw attention to this point once again? Although there are opportunities for a considerable number of debates, as he has said, on Purchase Tax, it is still a fact that—I think that he will take this point when he examines it at leisure—there are some new taxes being proposed which we cannot individually move to delete.
The Chancellor will recall that in 1949 the first real trouble arose on the form of debate of Purchase Tax. Sir Stafford Cripps gave an assurance that he would consider that, I think in consultation with the other side of the House, and that led to the procedure followed a year later, which, I think, met the convenience of both sides. I wonder whether the Chancellor would agree to direct his mind specifically to the problem which has been raised about the imposition of what is a new tax and the inability of the Committee to move the rejection of an individual new tax. If he would say that between now and his next Finance Bill—I do not know whether it will be in the spring or whether we are to have another one between now and then—he would give his attention to the matter and, if possible, enter into consultation with all parts of the Committee, I should be very happy to ask leave to withdraw the Motion.
§ Mr. R. A. Butler
I went so far as to draw the attention of the right hon. Member for Leeds, South (Mr. Gaitskell) to the actual words of paragraph (b) of the Resolution on Purchase Tax in so far as it relates to fur skins, furniture and various other aspects. I did so purposely. It was not a form of consultation, but it was, I hope, a form of decency. If the right hon. Gentleman would like to see it extended into a form of consultation, I see no damage in that, because we are all trying to serve the Committee. Perhaps, under the circumstances, the right hon. Gentleman would be kind enough to withdraw his Motion.
§ Motion, by leave, withdrawn.1289
§ Mr. Austen Albu (Edmonton)
I beg to move, in page 11, to leave out lines 4 and 5.
It is such a long time, Sir Charles, since you tried to call me in the early hours of the morning last week that I have almost lost the thread of the argument connected with Purchase Tax with which we were then dealing. I am sure that the subsequent discussion which we had on procedure or points of order has helped me very much. I hope, therefore, Sir Charles, that you will fully understand it and excuse me if in discussing this group of Amendments, which by a strange chance we are able to discuss, although they deal with quite small items of the Purchase Tax, I go rather wide and have to recapitulate to some extent the general argument about the reasons for applying Purchase Tax at all.
This group of Amendments deals with a list of reductions in tax, a very selective list of reductions in tax, on expensive products. We have to apply our minds to the attitude of the Government towards these products and the reasons which have caused them, while raising money for taxes, to reduce these. I may say right away that my own attitude at the end of the debate towards the Government's proposals, and even towards the Amendments which my hon. Friends and myself are moving, will be very largely determined by whether or not we get from the Government an intelligible explanation of why they are doing these things in comparison with some of the other things they are doing at the same time.
We must examine first of all the general background of the reasons which the Government have so far given during our debate on the Budget and the Bill for Purchase Tax changes at all, so that we can obtain a conception of what they consider to be the main reasons for having Purchase Tax, apart from those of revenue-raising. The first explanation was that given by the Chancellor in the Budget debate. In dealing in particular with the articles which we are now discussing, he said:The other adjustments of Purchase Tax which I propose to make—these are important adjustments—will give some help to the silverware and cut glass industries, by reducing the amount of tax paid on most of these craft products. The results of all these alterations in Purchase Tax will be a simplification which will give much more freedom to the designer 1290 and much more opportunity to the exporter."—[OFFICIAL REPORT, 26th October, 1955; Vol. 545, c. 222–3.]The second reference to which I wish to draw attention was the explanation given by the Financial Secretary on Second Reading. He said:The Budget changes in the tax are all directed to helping the country out of its economic difficulties.That is distinguishing clearly from the revenue-raising functions of the tax. The Financial Secretary also said:It is, of course, the expensive goods which will feel the increase most and that is as it should be.That is the exact opposite to the class of goods we are now discussing. The right hon. Gentleman also said:In so far as there is less spent, Or less to spend, there will be more goods released from the home market and available for export, and more incentive to make a fresh drive to sell them for export."—[OFFICIAL REPORT, 8th November, 1955; Vol. 545, c. 1674.]That is in direct contradiction to the Government's proposals in the paragraphs of the Schedule which we are now discussing.
Finally, I come to the Economic Secretary. In the Committee stage he said:I should like to say a word about our balance of payments and to point out to hon. Members that one must not only think in terms of exports when considering that balance. Not only will the curtailment of consumer demand help our exports—and that is obvious —but it will also mean that our imports bill will not be so great; and let us remember that the imports bill is one of the most important parts of our economy at present. We prefer the method which we are adopting to the imposition of physical import controls."—[OFFICIAL REPORT, 15th November, 1955; Vol. 546, c. 352]I should like whoever is to reply to state whether or not he thinks that the reduction of tax on gold and silver ware with the avowed object of increasing the home market, with the help that we shall get from an export market, is likely to raise or lower the import of gold and silver required for manufacture.
I should like to make one more reference to the Economic Secretary. During Committee stage on 16th November, he was referring to durable consumer goods, and he said:It is our belief that the increase in tax on these goods will help our exports, and I should like to develop this point."—[OFFICIAL REPORT. 16th November, 1955; Vol. 546, c. 453.]1291 Then the hon. Gentleman went on to talk about the rapid increase in the demand for these goods and the consequent demand for imported raw materials.
It is clear that, although no doubt there are reasons, there is a considerable conflict of principle about the changes in the taxes that we are discussing. At one time, following the speech of the President of the Board of Trade, to which my hon. Friend the Member for Stechford (Mr. Roy Jenkins) referred, and following some indications, if not actual words, from the Economic Secretary, we were led to believe that the taxes were being used to lower the general level of home demand rather than with any specification implications in respect of certain products. I see the Economic Secretary nodding his head again as he did on the previous occasion.
Nevertheless, after the speeches which have been made during the Committee stage, I am led to the conclusion that the object of the taxes is as much for planning purposes as for the reduction of the general level of consumer demand. All the arguments used during the Committee stage, particularly during the discussion of durable goods when we were moving to reduce the tax from 60 per cent. to 50 per cent., were directed towards the reduction of home demand and the reduction of the use of steel and other materials, and in favour of exports. Equally, the arguments used for the reduction of the taxes in this case, although they have exactly the opposite effect, are also used in aid of increasing the exports of the goods in question.
Therefore, we see that Purchase Tax is being used by the Government for two purposes. It is being used to make it more difficult to buy things at home, and it is also being used to make it easier to buy things at home. We shall have to examine whether, in relation to the goods we are now discussing, the argument that they should be made easier to buy at home is right. Incidentally, we have to compare it with the argument about making it more difficult to buy other goods at home.
The extraordinary thing is that even in the class of goods we are discussing, goods of the traditional hand craftsman type, we have two diametrically opposed 1292 policies. We are discussing a reduction in Purchase Tax on cut glass and gold and silver ware. On the other hand, the Purchase Tax is being increased on jewellery, where we have been able to build up a substantial export in exactly the same way as with gold and silver ware, which is a hand craft. It is a little difficult to follow the arguments. Cut glass is now becoming chargeable on the same basis as other glass ware. It means that most of the articles will bear about 30 per cent. tax. Vases are being reduced to 30 per cent. Gold and silver wares are also being reduced; they vary, but most are about 30 per cent. There are some peculiar ones at 60 per cent. Jewellery and imitation jewellery will be put up to 60 per cent. So we have an example of goods going up. While vases are coming down, many other forms of pottery, to which some of my hon. Friends will be referring later, and which include a fair proportion of hand craft work, are going up. This is all very peculiar.
There are some types of leather ware which are generally considered to be examples of British craftsmanship, and here the Purchase Tax is going up. I believe, from 50 per cent. to 60 per cent. If craftsmen's products in cut glass and gold and silver ware and vases are to come down, why should leather ware go up?
It is important that we should pay some attention to the actual value of this concession and see whether or not it is going to make a very great deal of difference. We may for a moment have a look at the exports of these products last year. The categories are extremely difficult to distinguish, but as far as I can make out the exports of domestic and fancy glassware—and by no means all of it was cut glass—amounted to £l¾ million. The exports of gold and silverware amounted to £270,000, and the exports of jewellery to £350,000. Exports of leather goods, travel goods and handbags, which form only a proportion of the craftsmanship in the sense I have used, were £2¼ million. There is nothing in those figures, nor in the figures of the changes that have taken place in the export of these goods over the last two or three years, or in the first ten months of this year, which would indicate the reason for the differences in their treatment.
They offer no real explanation of why those goods are treated differently from 1293 the goods produced by the mass-production industries, but I will turn to those in a minute. The total exports, then, of all those classes of goods which are the work of hand craftsmen—and there are not many more than those classes—amount to under £5 million, and, as I have already explained, the categories in the Trade and Navigation Accounts and the Board of Trade figures are such that it cannot be said that they cover only handicraft goods. I suspect that less than half of this total is made up of goods of the real handicraft type. It is therefore probably true to say that less than half this figure of £5 million worth of exports is the true craftsmen type of goods, and that means less than 0.1 per cent. of the total exports last year of £2,675 million.
I therefore suggest to the Committee that to look for salvation of our economic problems, the problems of our balance of payments and export trade, in the sales of craft goods of this type is the most complete and absolute nonsense. They have no possibility of ever contributing more than a tiny fraction, one part in a thousand or a little more, to the total of our exports. The truth of the matter is that for at least a century Britain has not been a country known for its craftsmanship in that sense at all. It is only the extraordinarily old-worldliness of some hon. Gentlemen opposite, whose knowledge of industry seems to be entirely derived from tiny businesses that play a useful part in the economy, but nothing at all in our exports, that allows this illusion to continue.
The name of British craftsmanship in the last 150 years has been built on the products of the Industrial Revolution, the machines and the products made on the machines during the last century and the early part of this. What gave these goods their fine reputation was, of course, that to them were applied the fine traditions of the hand craftsmen of a previous age. But for many years the hand craft goods have not played a serious part, however sad we may think that is, in our country's economy.
No doubt it is very sad and we all mourn the fact that most of us can no longer afford to buy—maybe they are not so available—those classes of goods. We must bear in mind that they were 1294 goods very largely produced for a very different sort of market, for a leisured class market which is not the sort of market which exists in this country and in other parts of the world to any extent today. Today it is not often that that type of craftsmanship is the main support of modern industries, but generally science and technology and those are much more important than craftsmanship.
Let me refer again to these products of the hand craftsman, the cut glass, leather goods and the gold and silversmiths' ware on which the taxes are being raised. Is it likely that a larger, or substantially larger, export market will be stimulated by increasing the home demand? Normally the argument about home demand is that there must be a good home base to carry overheads, capital charges and so forth, design and any research that may be done, if one is to export in any large quantity.
The policy of exporting in this way is given all sorts of names, polite and economic ones like "marginal exports" by economists, and "dumping" by countries with whom one is in competition. Nevertheless, no one can doubt that with large classes of goods one must have a large home market to ensure that general capital costs are covered. But, of course, this class of goods, by its very definition, is one in which there are no heavy capital charges and in which most of the work is in fact done by hand with simple tools and by traditional methods. Therefore, it cannot be the case that, in order to cut their costs down, it is necessary for these industries to have a large home market. Exactly the reverse is the case.
It is extremely difficult to understand how this argument can be used in regard to cut glass and gold and silversmiths' ware and articles of that sort, when the argument is not used, for instance, about durable consumer goods which are the very type of goods to which it can and ought to be applied, the sort of goods which require very high capital charges before the goods can be manufactured at all, the mass production industries, motor cars and the domestic equipment, electrical, radio and other equipment and so on.
Time and again we have heard that we can never hope to succeed in these types of exports until we have a large home market. Attention has been drawn to the enormous home market of the United 1295 States which makes it possible for the United States to compete so much more successfully, and, of course, the advocates of the European Payments Union always call for such a home market for the same purpose. The motor car industry was able to effect a 20 per cent. reduction of real costs in the last five years by a 50 per cent. increase in output, and last year its exports were valued, not in terms of one or two million pounds, but about £240 million. If one turns for comparison to the other domestic durable exports, vacuum cleaner exports were £2 million; washing machines, £3 million; refrigerators, £8 million; radio and television sets, £2½ million. Of course, all these domestic durable consumer goods are made by mass-production methods.
The exports of the mass production industries, on which taxes are being universally raised in this Finance Bill, make the exports and the potential exports of the so-called craftsmen industries a mere bagatelle. As long as the Government continue to fix attention on the export of this bagatelle range of industries, the less attention they will give to the much more important exports of the industries on which this country must depend in the future.
It is almost an escape Clause to continue talking about the craftsmen industries and making changes in Purchase Tax which any examination will show can make no real difference. If the Financial Secretary can give the Committee any real information of what he expects to happen as a result of these changes, how our exports have moved in the past and what these industries are up against in their exports and how they are likely to increase them—and if there is one case for the gold and silverware and the cut-glass industries, the same case does not apply in the leatherware industries; or in watches and clocks—then, of course, I should be prepared to consider the matter. But my own view is that this policy is based on the "old world" atmosphere in which the Government and their supporters very largely live. It is not based on any clear research survey, or analysis of what the possible exports really are. I hope therefore that we shall get a clear explanation from the Financial Secretary of the principles on which all these Purchase Tax changes are made.
1296 5.0 p.m.
We cannot consider a reduction in the one case and the increases in the other, all in the same classes of goods, without relating them to each other, and without relating the whole of this series of changes in the craftmanship goods to the changes in the Purchase Tax on the mass-produced articles. I hope that we shall have some real indication of the principles on which the Government are working. By the terms of the Financial Resolution we are prevented from having a thorough discussion of the details of each type of article, but I have no doubt that some of my points will be expanded by my hon. Friends, if not now, then on the Schedule. Before I and my hon. Friends can accept these changes, we must be satisfied that there is some principle behind what the Government are doing.
§ Mr. Ronald Bell (Buckinghamshire, South)
I was sorry that the hon. Member for Edmonton (Mr. Albu) was apparently so critical of the contribution to be made by hand craftsmanship to our exports. It cannot hope to rival the production of the manufacturing industries, but that is no reason why we should not welcome the contribution which it can make and at the same time recognise that that contribution is made up of a number of small individual contributions from a great many sources. In any case, the two lines in the Schedule which the hon. Member desires to leave out do not apply only to hand craftsmanship. They apply to the cut-glass and silver-ware industries which include a considerable handicraft element but which are also, in general, luxury industries many of whose products are made by machines. I do not think the incompatibility to which the hon. Member referred will bear a moment's examination.
There is no reason why we should not raise Purchase Tax on goods of which we wish to discourage consumption at home, while at the same time lowering the Purchase Tax in special cases where we wish to preserve or slightly enlarge the home market as a base for export trade. The hon. Gentleman thought this a ridiculous and a reactionary thing to do and part of the "old world" atmosphere in which hon. Members on this side of the Committee are supposed to live. It is interesting to remember that in 1950 the then Chancellor of the Exchequer, a 1297 Member of the party opposite, Sir Stafford Cripps, in a Budget in which he was raising indirect taxation, thought fit to introduce just one of these exceptions not for just this reason, but for another purpose. I have before me the words he used in so doing. He said:There is another small proposal … that is to reduce the rate for higher priced private cars from 66⅔ to 33⅓ per cent. This is not done to increase their sales markedly in the home market, but in order to keep alive one of our high-quality engineering industries which has a valuable contribution to make to exports, especially to the dollar area.Business has in fact fallen below the point necessary to enable these cars "—which the hon. Member will remember were primarily Rolls Royces and Bentleys—
§ Mr. Bell
It may be—I am glad that there is another category—to be manufactured at a price attractive to the export markets and it is desired to reestablish a home market sufficient for this purpose."—[OFFICIAL. REPORT, 18th April, 1950; Vol. 474, c. 74.]The hon. Member will bear in mind that these motor cars were not mass-production models and that in the same Budget Sir Stafford Cripps was imposing a 33⅓ per cent. Purchase Tax on mass-produced commercial vehicles. So there we have exactly, side by side, the very two things which the hon. Member has been ridiculing in his speech.
§ Mr. Albu
I wonder if the hon. Member would compare the prices and capital charges in the economy of motor cars, including the research work done by Jaguars, which has been of such great help to the rest of the motor car industry, with the capital charges in the cut glass and gold and silversmiths' work?
§ Mr. Bell
It is impossible for me to try to evaluate the capital charges. Everyone knows that silverware and cut glass is now frequently made by mechanical methods; and in addition to the capital charges for plant there is the considerable burden, which might be called a capital charge, of apprenticeship and training and the building up, establishing and maintaining of a skilled body of work people. It is necessary that all these industries should have a reasonable home-based market if they are to make their contribution, whatever it may be in bulk, to the export trade of this country.
1298 I congratulate my right hon. Friend on giving this help to these industries which sometimes were carrying Purchase Tax of 100 per cent. which made it extremely difficult for them to remain alive at all. A tremendously distorting influence is imposed on the purchaser who is faced with a 100 per cent. tax on one category of articles when he can buy something performing the same function which bears a very much lower amount of tax. The hon. Member must realise that when we have this differential tax levied on articles because of the substance of which they are made, we are in fact bringing powerful influences to bear on the consumer not to buy them, which costs the manufacturer business.
I do not think it can be argued that we can keep up our exports to the United States—and there is a demand for cut glass and silverware in the United States and in many other markets also—in a sufficient variety of pattern and a sufficient diversity of goods unless we have a reasonable supplementation of demand from the home market. It is most unlike the hon. Member for Edmonton, who usually speaks to us with such skill and knowledge of these economic matters, to try to put before the Committee that it is illogical, absurd and reactionary to bring forward in one Budget an increase in Purchase Tax on one category and give a decrease in a selected category.
§ Mr. Victor Yates (Birmingham, Ladywood)
Does not the hon. Gentleman recognise that jewellery is closely allied to the silver trade, and does not he think that the arguments he is advancing should apply to jewellery?
§ Mr. Bell
My impression is that my right hon. Friend made some valuable concessions to the jewellery industry last year. In any case, if the hon. Member cares to put down an Amendment asking for further aid for the jewellery industry, I promise that at any rate I will not oppose it, but whether I should support it is another matter.
If I may resume my thread of thought, this was done in the 1950 Budget and the interesting thing is that it was done for identical reasons. In defending these two lines in the Schedule, I cannot better the phrase of Sir Stafford Cripps, and I hope that hon. Members opposite, in loyalty to what is obviously a Socialist 1299 theme—or at any rate, one which is bipartisan, which is perhaps a better way of putting it—that we should defend our craft industries, will not press this Amendment and will think again about the unjust things, if I may say so with respect, which were said about the contribution which our handicraft industries can make to our export trade.
§ Mr. J. Grimond (Orkney and Shetland)
I am glad that we are having an opportunity of discussing these industries. They may make a small contribution to the total export trade, or to home consumption, but they are, as has been said, of considerable importance in this country; partly as setting a standard, partly for their prestige value throughout the world and partly because they give useful employment to many people in certain areas—one of which I represent—who have taken great trouble to learn the craft and who do not always find it easy to secure other sorts of employment.
I quite agree that there are very wide variations in the general class of crafts-man-made goods, ranging from the really hand-made articles through such things as handwoven tweed, made on fairly simple looms, to cut glass, made with considerable mechanical aid. The thought behind this concession should be that, in general, a clear distinction is to be made between the goods with which we are here concerned and mass-made articles. I cannot believe that the Government are anxious to withdraw purchasing power from the workers engaged in these craft industries, or that they wish to try to redistribute our real resources by putting a heavy Purchase Tax upon hand-made goods.
If one studies the history of the matter one finds that hand-made crafts were almost unintentionally caught by Purchase Tax. Reference has been made to Sir Stafford Cripps. He was very concerned about the effect of Purchase Tax upon a great variety of these crafts, and he went out of his way to set up the craft centre and to giving it a block grant. That grant has been very valuable for certain crafts, but it assists only certain ones, and there has been a certain difficulty in apportioning it. It shows, however, that in his view it was unfortunate that Purchase Tax should have hit those small industries in the way it did.
1300 No one can doubt that these small industries have been very hard-hit. Potters have written to The Times, and many representations have been made to hon. Members upon the subject. Without exaggeration, the situation can be said to be very serious for many of these crafts. As a general opponent of increases in Purchase Tax, I have no scruples in welcoming the very small concession which is being made by the Government to some of these crafts. I would merely seek to impress upon them the fact that this concession does not go nearly far enough. Even if the Government's present suggestions are passed, many of these crafts will still be in a very serious position, especially as new craftsmen are not coming forward.I have a suggestion to make.
The 1940 Finance Bill provided that the minimum limit, below which Purchase Tax did not apply, should be £2,000. In 1941 that was altered, by a Treasury order, to £500, where it has stood ever since. Costs have very much increased since then. I suggest that the Government should look at this minimum again, and see if a limit nearer £2,000 in respect of real hand crafts would not be more in keeping with present-day values.
The Government have received a hammering from their own back benches on the Purchase Tax in general which they have withstood with rock-like solidity so far, and I hope that they will not give way in this case. This concession is one small wavering gleam of light in the whole of this murky and unhappy Bill. I hope that the Government will not only persist in this, but will go further and see whether they cannot do something more to maintain these crafts, which have a small but important part to play in the scheme of general employment and in economy of this country.
§ 5.15 p.m.
§ Mr. Peter Roberts (Sheffield, Heeley)
I should not like to allow this stage of the Bill to pass without congratulating the Government upon this concession to the silverware industry. As the Secretary of State knows, Sheffield is particularly interested in silverware. We have sent a number of deputations to the Treasury asking for some concession of this kind, not only in respect of silverware but of cutlery, and I hope that at some future 1301 date, if they cannot do it now, the Government will apply to cutlery the same treatment that they are giving to silverware.
Sheffield has a great craftsman tradition. It is something which—although, apparently, the hon. Member for Edmonton (Mr. Albu) does not mind seeing it die—hon. Members on both sides of the Committee representing Sheffield constituencies wish to keep alive.
§ Mr. Roberts
In the second part of the hon. Member's speech, he said he thought that the "bagatelle" of the craftsman's trade was not very much help in the export market. That is the point which I had in my mind. It is a very unfortunate statement to put before the Committee, because there is a strong desire on both sides of industry in Sheffield to see this craftsmanship kept alive. I would remind the Committee that in times of emergency or war it may be used in other ways. The meticulous art of the engraver, for instance, can be used in the making of the finest precision instruments.
I feel that this is a move in the right direction, and on behalf of those whom I represent in Sheffield I should like to thank the Government for the action they have taken, merely reminding them that in regard to cutlery—knives, forks and spoons—this problem still exists.
§ Mr. V. Yates
At the end of this discussion I am sure that my hon. Friend the Member for Edmonton (Mr. Albu) will realise that a case has been made out for reclaiming the great art of craftsmanship which has been threatened in the past few years. I hope to convert him by quoting words used by the Economic Secretary, who two years ago was successful in moving a Motion to which hon. Members on this side of the House gave support. He came before the House in the mantle of Joseph Chamberlain—as the saviour of the jewellery industry of Birmingham—and everybody turned to him.
Today, I represent the constituency in which the largest section of the jewellery 1302 industry is contained. On the occasion which I have mentioned, I gave the hon. Member strong support for the action he took. My only grievance against him today is that, just as he was then asking us to reverse the evil tendency, so he himself is now going in the opposite direction. In that respect, Birmingham must surely feel grievance at the part he is playing in this matter. I want to quote to the Committee parts of the speech which the Economic Secretary made on 20th March, 1953. I should like the Committee to appreciate the very serious position in which both the silverware and the jewellery industry are placed.
The hon. Member moved:That this House notes with concern the declining prosperity of the British jewellery, silverware and ancillary industries "—he did not confine his Resolution merely to silverware—which have contributed materially to the level of trade and employment in the City of Birmingham; and this House asks Her Majesty's Government to give urgent attention to thos3 causes which are preventing these industries from maintaining that level of high-quality craftsmanship on which their prospects, both at home and overseas, depend.He went on then to give his reasons. I should like to quote from them, because they were very forcefully put for immediate action. The hon. Gentleman said:One thing is certain, that the present position of these industries is extremely serious and, in the case of the silverware industry, absolutely critical.He quoted a letter which had appeared in The Times on 17th February that year from the Birmingham Assay Master to the effect thatone of the oldest and most famous craft industries, that of the silversmith, is fast sinking to extinction.That was the situation. I agree that the industry was faced with a high Purchase Tax, and so on.
The hon. Gentleman went further than to confine his remarks to the silverware industry. He said:At the same time it would be unwise to underrate the seriousness of the position in the fashion jewellery trade, where manufacturers are finding themselves forced to concentrate largely on traditional lines and are hesitating to produce new ones. In this branch of the trade there is a seriously diminishing number of trained designers and of new tool makers. Here, too, therefore, the industry is in a serious and declining state.1303 The Committee should know what the hon. Gentleman's reasons were, because they exist today. The hon. Gentleman not only gave the reasons for the serious state of affairs, but suggested what could be done to alleviate it. He went on to say:Now I come to the reasons for this sorry state of affairs and what can be done to alleviate it.… All those to whom I have spoken about this industry are convinced that the principal cause is the cumulative effect of a penal rate of Purchase Tax.That was reason No. 1. The hon. Gentleman gave reason No. 2 when he said:Quite certainly, Purchase Tax today is a tax on quality and on craftsmanship, because it means that cheapness becomes the aim of the producer at the cost of design and finish.He further went on:In the past the home market was the natural testing ground for new designs and enabled the overseas buyer to order from a wide range of designs at an economic price.Then he said:It is a very serious matter when the rate of taxation is so high that the black market is really heavily subsidised."—[OFFICIAL REPORT, 20th March, 1953; Vol. 513, c. 351–64.]The hon. Gentleman made his case very clearly for immediate action, and action was taken for which all who had anything to do with the industry were grateful. They appreciated the importance of it. The only point I am now raising is that whereas the situation, which was properly explained by the Economic Secretary at that time, was so very serious that the whole silverware industry could accept only complete abolition of Purchase Tax as of any assistance to the industry—
§ The Economic Secretary to the Treasury (Sir Edward Boyle)
May I interrupt the hon. Gentleman, as he was kind enough to quote me? I said in that debate:I do suggest to my hon. Friend as a first priority that he should pass on to the Treasury the suggestion that the tax on hall-marked sterling silverware should be reduced to the same level as the existing tax on electro-plated silverware."—[OFFICIAL REPORT, 20th March, 1953; Vol. 513, c. 364.]That is exactly what is being done in the Finance Bill.
§ Mr. Yates
I want to speak not only about silverware but about jewellery, which is equally affected. The hon. Gentleman was doing his best to save the 1304 jewellery industry of Birmingham and not only the silverware industry. The whole range of jewellery was similarly affected. The third of the reasons he gave, and which is equally forceful today, was stated in this way:It is worth pointing out that the Germans not only have no Purchase Tax on fashion jewellery, but are actually heavily subsidising it. It will be quite impossible for our fashion jewellers to compete with the German trade so long as ours bears such a heavy rate of tax and German jewellery is heavily subsidised."—[OFFICIAL REPORT, 20th March, 1953; Vol. 513, c. 364.]At that time I was very much concerned about the situation in the industry. I called attention to the decline in the number of its craftsmen. My hon. Friend the Member for Edmonton (Mr. Albu) will realise that it was not only important that a concession should be made, but that greater concessions should now be made to silverware. That applies with equal force to fashion jewellery.
§ Mr. P. Roberts
On a point of order. Let us get this matter straight. The hon. Member is now arguing that jewellery should be included in the Schedule. Is that in order? If it is, I should like to suggest matters that should be included.
§ The Temporary Chairman (Sir L. Ropner)
If that is the point of the remarks being made by the hon. Member for Ladywood (Mr. V. Yates), they are out of order.
§ The Temporary Chairman
Four Amendments are being discussed. One has been moved by the hon. Member for Edmonton (Mr. Albu). The others are the next but one from the bottom of page 632 and the first and third Amendments at the top of page 633 of the Amendment paper. If the hon. Gentleman is arguing that the Schedule should be extended, his remarks are out of order. He is not correct in dealing with the subject of jewellery.
§ The Temporary Chairman
if the hon. Gentleman would resume his seat, I can tell him that his remarks will be out of order in following the point he was making just now in relation to jewellery.
§ 5.30 p.m.
§ Mr. Yates
The point I was seeking to make was first about the silverware industry, when I was calling attention to remarks made in the debate which can be read in Volume 513 of the OFFICIAL REPORT, and in which I made reference to the Director of the British Jewellers' Association. I then called attention to a letter which Mr. Southam had sent to The Times saying that the volume of trade was not nearly sufficient now to absorb young people from the art colleges and technical schools whose ambition was to be craftsmen. He said that it took ten years to train a craftsman and that, in the absence of newcomers, the average age of those employed was as high as 60. I talked with the director of the British Jewellers' Association this morning and I was amazed when he gave, as an example of the present situation, the case of seven silversmiths in London where the average age of those employed is now over 70 years. That demonstrates that, whatever measures the Government took then or now, the present situation is very serious.
From silverware, I should like to turn to the jewellery position—
§ The Temporary Chairman
If the hon. Gentleman were to extend his remarks to cover jewellery he would be out of order.
§ Mr. Albu
Perhaps I may draw attention to the fact that Group 27 includesBuckles, clasps and slides for apparel, belts, hair slides, hair grips, hair combs, hairpins, hat pins, badges, buttons, studs, tie pins, tie clips, cuff links and other personal articles.I should have thought that that included jewellery.
§ The Temporary Chairman
I am quite prepared to allow the hon. Member to 1306 continue for some time to try to distinguish between jewellery and the list of articles just read out by the hon. Member.
§ Mr. P. Roberts
If I may say so, Groups 27 and 28 deal with jewellery but not the group we are discussing.
§ The Temporary Chairman
The hon. Member would be out of order in referring to any article in Group 26.
§ The Temporary Chairman
I think that the hon. Member misheard me. I said that he would be out of order if he referred to Group 26.
§ Mr. Anthony Greenwood (Rossendale)
In fairness to my hon. Friend, the Committee should bear in mind that in the list issued by the Commissioners of Customs and Excise there is confusion due to the fact that many of these goods come into various groups, and that some of the articles in Group 26—