HC Deb 28 November 1955 vol 546 cc1939-2078

3.48 p.m.

The Chairman

The first Amendment in order is the second one in page 700 of the Notice Paper in the name of the hon. Member for Flint, East (Mrs. White). It might be convenient to discuss, at the same time, the next Amendment in the name of the hon. and gallant Member for Hull, West (Captain Hewitson), in page 11, line 20, to leave out "by electricity or gas)" and insert: from gas mains or by electricity".

Mrs. Eirene White (Flint, East)

I beg to move, in page 11, to leave out lines 16 to 20.

The effect of the Amendment would be to restore to their present tax position appliances which use not the ordinary mains supply of electricity or gas but electricity generated by a private installation or the types of gas such as Calor gas, Bottogas, and so on. I am sure that the Committee will be surprised to learn that, by the Bill, Purchase Tax of 60 per cent. is to be imposed whereas before it was nil. That is a very big increase. In fact, there are hardly any goods which have been so severely dealt with by the Chancellor as these domestic appliances.

It is a very harsh proposal that they should suffer such a sudden increase in tax. Had the Chancellor decided that the time had come when, in fairness to the users of other types of appliances, the imposition of some tax was necessary, at least they might have been put in one of the lower categories. Then perhaps one would not have argued quite so strongly. I should be very much interested to know why, up to now, it should have been considered necessary to exempt these articles, and that suddenly a tax of 60 per cent. should be imposed. This seems to be yet another example of what we have already noticed in the Bill. The Chancellor has taken some care, so one supposes, particularly to penalise those who live in rural areas.

Mr. Gerald Nabarro (Kidderminster)

On a point of order, Sir Charles. At the time of your statement about which Amendment was to be discussed, the majority of hon. Members on this side of the Chamber could not hear which Amendment you were selecting. In view of the noise made by hon. Members leaving the Chamber at that time, would it be possible for that to be repeated?

The Chairman

I am sorry that I was not heard. The Amendment which is being moved by the hon. Lady is that in page 11, to leave out lines 16 to 20. It is being discussed together with the next Amendment on the Notice Paper in the name of the hon. and gallant Member for Hull, West (Captain Hewitson).

Mr. Nabarro

I am obliged, Sir Charles.

Mrs. White

This seems to be another example of the way in which the Chancellor is penalising people who live in rural areas. We had some minor examples of this in our discussions last week, when we pointed out that the only persons likely to be using certain household equipment for washing, and so on, were those who were unable to enjoy modern facilities. A person who has an opportunity of having his premises connected to the gas main, advantage of it, and the only reason people use these appliances is that they cannot afford the cost of being connected to the main supply, or they are in so remote a part of the country that they are not within reach of a main supply, either of gas or electricity. It would, therefore, seem that once more those are to be taxed who are already put to great inconvenience in their domestic lives.

I have used Calor gas and there are other kinds, including Bottogas. We all know the system on which it works, that one has a container delivered to the door every so often which has to be connected to an appliance. I realise that this tax does not apply to cookers, but it does apply to space heaters and water heaters and any other kind of domestic equipment with which is used this type of fuel. No one chooses to generate electricity, with all the trouble and expense so incurred, just for fun. It seems to me that people who are already in a disadvantageous position are to have things made more difficult for them by having to meet this very steep tax. There must have been good reasons for these articles having hitherto been exempt from tax. I believe that the main reasons were because people using them were already in an unfavourable position and it was felt that they should not be taxed so heavily as people able to take advantage of the public services.

There is a point concerning the gas apparatus. Some hon. Members will have observed a letter in The Times a week or two ago in which it was pointed out that this type of gas is largely derived as a by-product from the oil refineries in this country, and, therefore, represents a positive saving of coal or coal gas. At a time when we are finding it difficult to keep up our coal supplies, it seems to me that we should not seek to penalise in this fashion the use of apparatus which consumes a type of gas which may be obtained as a by-product from the oil refineries which, thanks to the foresight of a Labour Government, have very much increased their output over the last few years. I should have thought it in the interests of the Chancellor to encourage its use.

In addition to the social and domestic reasons, there would appear a very sound economic reason why these articles should be either exempt from tax, or at least placed in a lower category, rather than be subject to this sudden increase to 60 per cent. I do not wish to labour this matter, I know that other hon. Members wish to speak, but I have here a price list covering space and water heaters, refrigerators and various other appliances. Space heaters and water heaters have hitherto been entirely exempt and now they will have to carry a very considerable rate of tax. For example—

Mr. Nabarro

We are not unsympathetic to what the hon. Lady is saying, 1 wish to assure her about that. But I am very confused in this matter. I quite understand the case in regard to gas appliances connected to cylinders of Calor gas as widely used in rural areas, but 1 cannot understand the other part of the Amendment. Is the hon. Lady implying that there are certain electrical appliances which are now to be subject to Purchase Tax and which were not formerly?

Mrs. White

If, as I understand the Schedule, these appliances are connected to a private installation and not to the main electricity supply, they will be taxed, whereas previously, if they were connected to a private supply, they were not liable to tax.

Mr. Nabarro

Surely, since Purchase Tax was introduced, apparatus—for example, electric fires or water heaters—may be attached to a mains supply or a privately generated supply, but the Purchase Tax has always been the same. For that reason, I cannot understand why electrical apparatus has been included in the Amendment.

Mrs. White

The quarrel of the hon. Member is not so much with me as the person who drafted the Bill. If the hon. Member will look at line 18 he will see the words … suitable for operation from electric or gas mains … for which there shall be substituted the words designed for operation by electricity or gas. I think, therefore, that the case is a logically sound one—although the practical effect is much more important—for the appliances used with Calor gas, and it is primarily for the users of those appliances that I am making this plea.

I have lived in the country and used this form of gas. Although it is very efficient, it is not a cheap method of heating, and persons who are obliged to use it would, I am sure, for the most part be glad to obtain a mains supply. It is a very good substitute for such people as caravan dwellers who are not in a position to obtain a mains supply.

Before I was interrupted by the hon. Member for Kidderminster, I was about to give as an example of the very considerable increase in price, a multi-point water heater, a most useful item of domestic equipment. That costs about £28, and the tax is £12, a considerable addition to a domestic budget. There are other examples which I could give. I wish to know from the Financial Secretary why this tax should go up so sharply from nothing to 60 per cent. and why it should go on appliances which, if used, would save coal? One would have thought that where there was any sort of balance of choice it would be in the interests of the Treasury to encourage the use of that kind of equipment rather than to discourage it.

Captain M. Hewitson (Hull, West)

At first glance, and wishing to be generous to the Chancellor, one would say that this is an anomaly which has crept in among the great mass of new taxes being placed on ordinary commodities. Personally, I hope that that is so, and that whoever replies from the Treasury Bench will say that this is an anomaly and that the Government are prepared to take back this provision and have another look at it before the Report stage of the Bill.

4.0 p.m.

Of all the new taxation which has been levied, this particular tax seems to be—I will not say the most wicked—the most harsh, because of its effect on the lives and general background of a section of our community which is the Cinderella of industry and the lowest paid. This tax will affect the countryside in such a way as to make many households become cockpits of contention, in which the women will demand that the men should find jobs in an urban area, so that they can move from the countryside to a town, in which they can enjoy all the amenities which town life offers.

In the last year, 25,000 people have left the land to go into urban areas and urban employment. What does that mean? It means that the supply of labour in the countryside will become scarcer and scarcer. We have already reached the stage when there are 200,000 more machines in the countryside than there are men and women to operate them. I am not going to suggest that those 200,000 machines are standing idle; they are not. We have all heard of men and women on the farms working one or two machines as they are needed. Nevertheless, on straight manning, there are 200,000 machines and not the men and women to operate them continuously.

Mr. Anthony Hurd (Newbury)

Would the hon. and gallant Gentleman tell us what kind of machines?

Captain Hewitson

All kinds of machines that are used on the farms, such as the tractor, driller, and so on. Of course they are, and this statement is backed by the National Farmers' Union.

Mr. Hurd

The hon. And gallant Gentleman is not correct with his facts.

Captain Hewitson

All I would ask the hon. Member to do is to make inquiries from the expert sources—the National Farmers' Union and the National Union of Agricultural Workers—or to read regularly the farmers' periodicals. He will find that there is a paucity of labour for machines in the countryside. It is no use protesting against that fact; it is there, and it has been published every week in the farming periodicals. I would suggest to the hon. Gentleman that he should read some of them.

We are told that since 1939 our produce from the countryside has increased by 50 per cent., and that in the last five years it has risen by 25 per cent., but we are reaching a stage when the law of diminishing returns will operate. Instead of having a saving, as we have now, of £400 million per annum on imported foodstuffs, due to the hard work and good husbandry of the people on our countryside, that law of diminishing returns will operate, and the figures of the percentage increase will begin to decline.

We are told by the Chancellor and other Ministers that a satisfactory balance of payments position is essential to our existence. Here is an opportunity by means of which the Minister can give some social benefit to the countryside. From time to time, we politicians have shouted from the housetops for the provision of piped gas supplies, mains electricity and piped water supplies for country cottages and for our agricultural industry. So far so good. We all wish to see these things come about, but they are likely to be a long time coming. One of the makeshifts —and it is just a makeshift—in the country areas is the use of liquid gas in agricultural cottages and farm houses which are not linked up with main supplies. That liquid gas has been used for all sorts of things. Appliances operated by liquid gas have taken the place of the paraffin cooker, the paraffin lamp and the candle, and, indeed, in many cases, even heating by coal fires in the cottages. A container of liquid gas is placed outside the cottage, and the necessary equipment is built inside to supply the cooker, the lighting and heating arrangements and the hot water tank.

Under the Finance Bill, 1947, all these appliances used in connection with liquid gas in the country cottage were exempt from taxation. From then until now, it has been increasingly the practice in the countryside for people to link up their cottages with a liquid gas supply and install these appliances, because they give them the opportunity of enjoying some of the amenities which are obtainable in an urban area.

Personally, I do not think that it was in the mind of the Chancellor to deny the countryside these amenities, but one has to live in the country and in one of these cottages to appreciate the situation fully. The cottage in which I live was not connected to mains electricity until 1942, had no main gas supply until 1945 and was not connected to a sewerage system until within the last year. That cottage is situated in a village which has known the benefits of liquid gas during the time before the main supplies came through. If this is an anomaly, let the Chancellor say so, and let him say that he is prepared to take back this proposal and examine it again between now and Report stage with a view to reducing the tax. To place upon the agricultural worker this extra burden of taxation when his wages are the lowest in industry is something quite iniquitous and not in accordance with our way of life in this country.

Hon. and right hon. Gentlemen opposite often make speeches in the country, and the Minister of Fuel and Power made one last week in Manchester, when he said that the target for next winter was the saving of 2 million tons of coal. He said that the cost of our imported coal this year would be £80 million, and that half of it came from America. I will now quote the Minister's own words. He said: Every ton of coal saved means £7 on the credit side of the balance of payments. If that is the case, if that is what is really meant by right hon. Gentlemen on the Front Bench, how in the name of common sense can the Chancellor or the Treasury impose this wicked taxation upon the countryside, when the extent of this increase will make it impossible for some people to use these appliances?

Let me give one example—that of an ordinary, small, one-gallon water heater which is heated by liquid gas. It should be understood that liquid gas is not as cheap as either a mains gas supply, in which the gas is used through a meter and one pays so much per therm for it, or as mains electricity, for which one pays so much per unit according to the amount registered through the meter. In the case of liquid gas, people are put to expense in putting in the necessary equipment in order to be able to use it, and since the time of the 1947 Finance Act this equipment has been free of tax.

No one would deny the right of anyone living in a country cottage to a small one-gallon water heater over the sink. The alternative would be to boil pans and kettles in order to get hot water. High taxation will probably result in solid fuel being burned once again. The ordinary one-gallon sink heater costs approximately £11, but under the new proposal an extra £4 16s. 6d. would be added to the cost. On top of that there is the cost of fitting, and all the rest of it, which would again carry the extra tax. This is something which should be given serious attention.

At present, agricultural workers are going forward for another wage increase. Personally, I say good luck to them. They should receive at least the wages paid to industrial workers. However, that is another argument for another place and in another atmosphere. The men and women working in the countryside do not leave the land from choice. For generations their roots have been in the countryside. My grandfather and his great-grandfather lived in the same village, and in the churchyard there are headstones bearing the names of my forebears for the last two or three hundred years.

The lineage of those in the countryside is equally strong as the lineage and the pride of those in another place. As I say, their roots are in the countryside, but they can be driven away from it through the lack of transport and social amenities, and, above all, by the womenfolk preferring the amenities of the towns and urban areas to the hardships of the countryside.

The Chancellor has now the opportunity to say that he is honest in his concern about the balance of payments. The balance of payments cannot possibly be affected by the small relief for which we are asking. If the Government are prepared to drop this proposal, which would bring in only a few million pounds, they will demonstrate their good faith and their understanding of what these people have to put up with in the countryside. If this is an anomaly, let the Minister say so. If it is not, let him say that he is prepared to re-examine this proposal so that we can have another look at it on the Report stage.

Mr. Nabarro

I rise to ask whether, when he replies to the speeches made on this Amendment, my hon. Friend will clarify in a good deal more detail what is written in the Schedule on the subject of electricity and gas mains—I fully understand that there are appliances which may be linked to a cylinder of gas, such as a cylinder of Calor gas, for rural use—and whether these designs differ in character from the standard gas appliances for piped supplies from gas mains.

There is a difference in design between many of these gas appliances, but what I cannot understand is the reference in the Schedule to electricity, because, so far as I am aware, all the electrical appliances that have hitherto been subject to Purchase Tax could be connected equally to a mains supply of electricity or to a privately generated supply.

For instance, if one buys an electric fire, an electric water heater or an electric iron, one can connect that appliance to a mains supply in a house or, with equal facility, to a private self-contained house unit for the supply of electricity which is generated, perhaps, by an engine, as it is called in rural areas, or by a privately owned apparatus of that character. For that reason, I cannot quite understand why electricity is referred to in the Bill, and I hope that my hon. Friend will clear up that point.

4.15 p.m.

There is an important matter of principle here, and I wish to say a few words about it at this juncture and then to return to the matter in much greater detail in our forthcoming main debate on the Schedule. It is that the present Conservative Government and the previous Conservative Government have always taken the view that there should be free and unfettered competition between various forms of fuel and power, that gas, electricity and solid fuels should freely be in competition with one another. If that is to be the policy of the Government, it would, in my view, be wrong to accept this Amendment because it would be discriminating in favour of a certain class of appliance that has a specialised application in rural areas.

I will say no more about it at this stage, because I fear that, if I did, I might stray out of order. The principle should surely be that if Purchase Tax is to be fettered on all forms of fuel and power appliances, there should not be a discriminatory rate in favour of one class of appliance or of one type of fuel or power. They should all be taxed on the same basis. Gas water heaters and gas fires should be taxed on the same basis as their electrical equivalents, and the same should apply in the solid fuel appliance field.

Mr. Sidney Dye (Norfolk, South-West)

Will the hon. Gentleman also say whether he wants paraffin lamps and stoves to be subject to Purchase Tax at the 60 per cent. rate so as to bring them all in line with a view to eliminating them as soon as possible?

Mr. Nabarro

That is a separate and specialised issue, and it does not arise on this Amendment, because paraffin—

Mrs. White

Solid fuel does arise on this Amendment. Is the hon. Gentleman asking that the solid fuel appliances, which, I understand, are still exempt from tax, should now be brought within the range of appliances bearing the 60 per cent. tax?

Mr. Nabarro

I do not intend to anticipate the speech which I shall make in the main debate on the Schedule if I am fortunate enough to catch the eye of the Chair. I promise the hon. Lady and the hon. Gentleman opposite to deal with their points at that stage.

The fact of the matter is that under this Amendment a plea is being made for discriminatory treatment of one class of gas appliance. I do not believe that any electrical appliance can fall within the reference to electricity in this Schedule. I cannot think of one such electrical appliance, but there are many gas appliances in this field.

The second and more fundamental point that I wish to make is simply that it has always been the policy of this Government and of the previous Government to encourage free and unfettered competition between every form of fuel and power. If that he so, then there must be an equal imposition of Purchase Tax on appliances within the same category, whether they be gas, electricity or solid fuel appliances.

Captain Hewitson

The hon. Gentleman referred to the previous Government, but in 1947 the previous Government removed these appliances out of the Purchase Tax range altogether.

Mr. Nabarro

The hon. and gallant Gentleman is very slow off the mark. The previous Government were, of course, the Conservative Administration of 1951–55. He has evidently forgotten the results of the General Election on 26th May last.

I will return to this fascinating subject in the main debate on the Schedule, but, for the time being, I want an assurance that there will be equitable treatment between all forms of fuel and power appliances and no discrimination in favour of one class of appliance.

Mr. Arthur Palmer (Cleveland)

I wish to support the plea made by my hon. Friend the Member for Flint, East (Mrs. White) to the Financial Secretary. At an earlier stage of our debate, I declared my dislike, which I imagine I share with other hon. Members, of Purchase Tax in principle. Therefore, it seems to me that the substantial objection to this provision is not only that it adds in some respects to the burden of Purchase Tax, but that, whether the hon. Member for Kidderminster (Mr. Nabarro) be right or wrong on his electricity point, it adds to the scope of the tax. Members of the Committee who dislike Purchase Tax should resist strongly this particular extension.

My hon. Friend the Member for Flint, East spoke very reasonably of the apparent bias of the Government against the rural dweller. I also detect on the part of the Government—and previous Governments have not been entirely exempt from this failing—not only a bias against the dweller in rural districts, but a more general bias against all those appliances that add to the comfort, cleanliness and convenience of life. It is extremely noticeable.

Let me say this to the Financial Secretary and to the hon. Member for Kidderminster, who talked of equality of treatment as between fuel and power appliances. They know very well what has been the tendency with a heating appliance. If the principle of its operation is electricity, the bias is always very pronounced.

Mr. Nabarro

For or against?

Mr. Palmer


Mr. Nabarro

The culprit is the right hon. Member for Battersea, North (Mr. Jay). When he was at the Treasury, he took violently discriminatory action against the electric fire and put on 100 per cent. Purchase Tax.

Mr. Palmer

I am quite sure that my right hon. Friend can speak for himself when his turn comes. The hon. Member for Kidderminster should have listened more carefully to what I was saying. I admitted that previous Governments had not been entirely exempt from this bias against appliances and devices which add to the cleanliness and comfort of life.

When the principle is electricity, the bias is very pronounced. Should the principle be gas, it is probably a little less pronounced, and should it be solid fuel there is perhaps little bias at all. It almost amounts to a nostalgia for the archaic on the part of the Treasury.

I would now draw the Committee's attention to two points which so far have not been advanced. I regret that the hon. Member for Kidderminster has now left us—

Mr. Nabarro

No, I am here.

Mr. Palmer

I am glad that the hon. Member is still present, because I am anxious to obtain his support in this argument at least.

The Committee will perhaps remember that the House recently discussed the Clean Air Bill, which is based largely on the recommendations of the now quite well-known Report by the Committee on Air Pollution. It is interesting to note that in page 22 of that Report, paragraph 72 uses these words: We anticipate an increasing contribution from the continued expansion in the use of gas and electricity, especially for cooking purposes. We consider"— the Committee is talking of appliances— that their use in place of house coal should be encouraged by the removal of the present Purchase Tax of 50 per cent. on gas and electric room and water heaters. In other words, the Beaver Committee, which has been spoken of with so much approval by members of the Government, and with qualified approval by the hon. Member for Kidderminster, was against Purchase Tax altogether on electric and gas heaters, whereas the present Schedule advances the rate of Purchase Tax and certainly extends its scope. It would be interesting to know from the Financial Secretary to the Treasury whether his right hon. Friend the Chancellor of the Exchequer has consulted the Minister of Housing and Local Government and also, perhaps, the Minister of Fuel and Power.

My second point is that one aspect of the Chancellor's general financial and economic policy—his retrogressive financial policy—will be undoubtedly to limit the scope and extension of rural electricity and for that matter, possibly, the extension of gas supplies to rural districts. Capital expenditure is to be cut down and we can take it for granted that one of the first sufferers will be the rural dweller who lives in a country district, who will not now perhaps be so likely as formerly to obtain a supply in the ordinary way from the extension of the public service mains.

In those circumstances, it certainly seems a little unfair that if the Chancellor of the Exchequer is attacking the rural dweller in one direction by limiting expenditure on public rural electricity and gas, the rural dweller should be attacked again from the other direction by making it more expensive for him to provide for himself, by private enterprise—which the Government, when it suits them, say they believe in very strongly—his own supply of gas through the Calor principle.

It is unfair that that should be done in this way. The very fact that the Chancellor has decided—wrongly, I think—to restrict rural electrification for the time being, and to limit the extension of gas mains in rural districts—for there is plenty of evidence to show that the gas and electricity boards are now drastically cutting down in their development in country districts—should provide a case, not for increasing Purchase Tax in the way that is proposed in this part of the Schedule, but for reducing it and for doing away with it wherever possible altogether.

I hope that the Financial Secretary will deal with my point about the recommendation of the Beaver Committee and that he will deal also with the undesirability of taking this present action at a time when capital expenditure on rural gas and electricity development is to be limited.

Mr. J. Grimond (Orkney and Shetland)

I support the Amendments very strongly. I very much hope that the Government will withdraw their proposal to place this very heavy tax on certain appliances, particularly heaters which run on bottled gas. My constituency represents the extreme case, but conditions there are not unique. We may be more affected by the Government's proposal than most places, but all the rural areas in Scotland, and in England and Wales, will be adversely affected by this tax.

In the outlying islands of, say, Orkney or Shetland, there is no question of various methods of heating and lighting entering into competition. There is no question of people choosing whether they plug in to the gas or the electricity mains. Roughly speaking, they must burn either paraffin, solid fuel, or bottled gas.

When the Hydro-Electric Board was set up, a great deal was said of its function of bringing amenities, as they are called, to the outlying areas. It was said that the Board would help to stop the depopulation of the Highlands and Islands. The Board has, naturally, found it very difficult to bring electricity to the most remote areas and, in particular, to the outlying islands. It has, therefore, in co-operation with the Calor Gas Company and the shipping companies, lately embarked on a scheme for encouraging the use of Calor gas as a temporary stopgap in places which it cannot serve at the moment. With those other companies it has made Calor gas available more or less free of freight charges. It will be most unfortunate if, in a matter of months after this scheme has been launched, in the islands of Scotland, the Government come along and deliberately clap a 60 per cent. tax on some Calor gas appliances.

4.30 p.m.

It is not only that many very poor people will find it very difficult to pay this tax, but it will be taken throughout the islands as another indication that all the talk about the necessity of keeping up the population of the Highlands and Islands and of keeping fishermen and crofters in the islands in so much baloney, and the Government have really made up their minds that the Highlands and Islands must get along as best they can, and, if some of their measures lead directly to depopulation, so much the worse for the people who live there.

Coal, by the time it has reached the outlying areas of Orkney and Shetland, has become so expensive that it is really extremely difficult for crofters and fishermen to buy it. This scheme for Calor gas gave some hope that that fuel would become slightly less expensive. It is true that some of the islands have peat but not, by any means, all of them, and in many cases peat is not an ideal fuel. There are fishing boats and other boats which find Calor gas a very useful method of cooking and heating.

What are the arguments which the Government will advance in favour of this tax? I suppose that they may say that the appliances run from bottled gas cannot be distinguished from those that are run from ordinary gas, but I am told that in a great many cases they can be distinguished. The Government may also tell us—I do not know if they will—that they want to increase the export of appliances using bottled gas, but from my inquiries—I speak open to correction—I cannot find that there is any substantial export trade in appliances using bottled gas.

The Government may say that it is part of their policy to raise prices generally because they want to mop up purchasing power. I ask them to bear in mind that, in the main, the people who use bottled gas are crofters and fishermen and very small farmers; and, certainly, speaking of my constituency, these people are very poor. They are a great deal poorer today than many well-paid workers in industry. They are, I believe, the poorest people in the United Kingdom.

In the country districts it is, on the whole, the big farmers who are now joined up to the electricity mains. It is the poorer farmers and the poorer people who are using this alternative fuel. I ask the Government to think again whether they need mop up much purchasing power from people like this? At times there has peeped through these debates the doctrine of the equality of misery; that if one has to suffer, we must all suffer. It is a doctrine which I have always opposed. I never saw any reason why, if you had to beat one of our children, you need beat them all. It is a very surprising doctrine coming from the Government, when one looks back on the speeches made by Conservatives about Sir Stafford Cripps, who, after all, operated at a much more difficult time and who created a certain amount of misery under continuous fire from Conservative Front Benchers.

I am an opponent of the whole policy of the Government in relation to Purchase Tax, but I think that in this case, in particular, it is indefensible to go out of one's way to raise and impose a tax on appliances which are used by a very poor section of the community and which, in fact, in most areas do not compete with other methods of heating, except in the case of solid fuel, which is not taxed, and which can, I think, slightly perhaps but none the less definitely, increase the tendency of people who live in the countryside to leave the occupations of agriculture and fishing, the very occupations in which the Government are anxious, they tell us, to keep up the supply of workers. I add my voice to those who have already spoken that the Government should look at this proposal again, and reconsider this very important part of the Finance Bill.

Mr. E. G. Gooch (Norfolk, North)

I should like to join with my hon. Friends who have spoken for those who live in the rural areas. I am a countryman, and I speak from a fairly extensive knowledge of the conditions that obtain in the countryside. I know that at present the people working on the farms are in the midst of wage negotiations, and I also recall the many speeches which have been made from time to time, from the benches opposite in particular, that it is not so much the wage that is the important thing today as the amenities which are available in the villages. I do not say that I agree with them. The workers in the countryside are entitled to a wage comparable with that of the men who work in industry in the towns and cities, but I say that the men who work in agriculture and who live in the countryside are entitled to as many of the amenities of civilisation as are their counterparts in the industrial areas.

I was astonished when I discovered the real intention of the Chancellor of the Exchequer. He lives in the country. He knows country people and conditions in the countryside. I am amazed that the Chancellor should seek to impose a tax which will bear heavily upon many cottage homes.

One of the greatest amenities which we have been urging for a long time for the countryside is the further extension of electricity. Members of the Committee will be well aware of the fact that, while there are certain wealthy farmers who can afford to have electricity installed, there are many dozens of cottages in the countryside today, off the main roads, on farms where there is not the remotest chance of electricity reaching them for many years, if at all. Thus they are thrown back on their own resources and have to install some form of lighting and heating, apart from electricity.

I find that in many of these remote homes people have installed their own plant, and are enjoying for the first time light and heat which they had never been able to enjoy in previous years. This tax will have the effect of damaging their prospects of acquiring for themselves amenities which they value very highly today.

My hon. and gallant Friend the Member for Hull, West (Capt. Hewitson) made the point that many farm workers are leaving the land. His figure was quite correct, but I think that the position can be put in more forceful terms when I remind the Committee that in the last six years over 100,000 men and women have left the farms. I know that many have left because of low wages. I also know that many have done so because their wives will not stay any longer in some of the cottages in which they have to live, without any amenities at all.

I am not blaming all the owners of farm cottages for not respecting the wishes and desires which have been expressed to improve conditions in these cottages, and I know that a good many owners have installed the very appliances which the Chancellor is now seeking to attack, and we are very grateful to them for having done so. I hope, however, that the Chancellor will have another look at this proposal because he knows in his heart that, in bringing forward a proposal of this kind, he is doing something which will not merely cause annoyance to many of his neighbours, but which will, at the same time, be an injustice to many good people who live in the countryside.

Mr. Dye

I have taken part in debates on the Finance Bill for long enough to know that it is utterly useless to address an appeal about Purchase Tax to the Treasury Bench on behalf of people who are living in unsatisfactory conditions in rural England. We now know that the reason why the Tory Party, at the last General Election, went all out to gain control of rural constituencies was that they could squeeze out of the rural housewife every bit that they could by way of Purchase Tax.

We know that, because the representatives of the Conservative Party from rural England choose to be absent while these debates are going on and they hope—

Mr. Nabarro indicated dissent.

Mr. Dye

The hon. Member does not count in these matters. He has agreed that he does not understand the Schedule that we are discussing and now, with his feet on the top of the bench in front of him, he does not look in a fit state to interrupt anybody.

In spite of the hardness of heart displayed by occupants of the Treasury Bench, I will state the case on behalf of those living in rural parts of the country. These people are denied the advantages of a mains electricity supply for light and heat. There is no question of competition coming in and forcing the Government to distribute increases of Purchase Tax all the way round. In that case there would have been vested interests getting some advantage, and we know how the Conservative Party hate vested interests to get any advantage out of taxation.

4.45 p.m.

Farmers' wives, farm workers and other rural workers are living in the conditions of the 19th century. An effort is being made to modernise the conditions in every home in the land. Even the Government have agreed that lump sum subsidies should be given for the reconditioning of houses, but they do not give the same sort of lump sum subsidy elsewhere than in rural England. They recognise that there is a case to be made out for differentiating between the rural dweller and the town dweller because the latter has modern amenities. The former have to be dependent upon Calor gas, to supplement the paraffin oil lamp and to give them better light and more heat without so much work and trouble in the home.

When these improvements come along, the Treasury Bench discovers them and says, "Here is a source of income to the Exchequer that will help the country to overcome its balance of trade problems." The whole thing is utterly ridiculous. No sound argument can be advanced for extending Purchase Tax in this manner, while there are some very sound arguments against it.

I am very glad that the Chancellor of the Exchequer has now come into the Chamber because he will be able to hear the closing speeches in the debate. Electricity is being spread over the country for the advantage of the rural community, yet there are certain parts of the country that cannot possibly get electricity for a number of years. I have had more letters relating to electricity than to any other subject in recent weeks. It is a grievance among many people that they have not an electricity supply. When it is a matter of their getting a supply of Calor gas or fixing up their own generating plant for electricity supply, whether from an engine or from little wind-blown machines, the Government, at one fell swoop, put on this iniquitous tax, which discriminates against people who are living in most primitive conditions.

This matter is causing trouble in the countryside. The farmers who will be most affected by this tax are the very ones who cannot get their men to remain. Figures have been given of the number of people that are leaving agriculture. People do not leave farms that have tax will have the effect of damaging their modern amenities, but farms without them, where the farmers have far more difficulty about labour than have the others. Her Majesty's Government ought to bring in a measure to subsidise rather than to tax the installation of Calor gas, wind-driven apparatus for the generation of electricity, small machines and things like that, so that modern lighting and heating, especially in the long winter months, might come more easily to the countryside.

There are sound reasons why this tax should be opposed. One cannot imagine how any occupant of the Front Bench could think of such a tax at this time, or could rummage round to find how to raise a few thousand pounds more a year by putting a tax on simple types of apparatus. These machines help to confer modern amenities among all the subjects of Her Majesty, including those who toil in the more distant parts and who need to have more light and heat generated with the least amount of human effort.

There does not seem any possibility of getting the Conservative Party, which relies on the rural vote for its support, to see the harm it is inflicting upon the rural housewife by this tax. Our agricultural industry is reaching a crisis, because we cannot get people to stay in the remoter parts of the country. District councils are giving less attention to the far-away cottage of the shepherd and the other people who are doing the things that really matter in agriculture. All these things, the comforts of all these people, should have every consideration instead of being taxed.

I hope that the Government get what they deserve from the people who have so loyally supported them for so long, and that those people who voted them into office will vote them out again at the earliest opportunity.

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

Hon. Members on both sides of the Committee would agree with the hon. Member for Norfolk, North (Mr. Gooch) when he said that people living in country areas should be able to enjoy the counterparts of urban amenities. This Amendment, which was so ably and concisely moved by the hon. Lady the Member for Flint, East (Mrs. White), deals, as everyone will agree, with an important point. It is also a very narrow point—rather narrower than some hon. Members have appreciated.

There is, of course, no question whatever of taxing bottled gas, or the cylinders in which it is contained. Nor is there any question of taxing the cookers which are used in country places. The issue has nothing to do with cooking or lighting, though in fact, cooking and lighting are the principal reasons why anybody might consider installing Calor gas or similar apparatus. This Amendment concerns space heaters and water heaters exclusively. When it is suggested that the only people who will be hit by an extra tax are those with very little money and living in cottages, I am inclined to think that some of the more expensive apparatus that may be referred to in the Amendment is at least as likely to be used by people occupying relatively expensive caravans—who are by no means the ordinary cottage dwellers—as by the cottage people for whom the plea has been made.

The hon. Lady suggested that this exemption in favour of heaters not suitable for operation from electric or gas mains had been made, particularly and intentionally, for the benefit of people living in remote places. That is not historically the fact. The history of this matter is. I think, interesting. All these heaters were treated exactly alike when Purchase Tax was introduced, and for the duration of the war. As the Committee will remember, in 1945, when the war was over, the Labour Government removed the tax entirely from all these electric and gas cookers and heaters. From 1945 to 1947 they were free of tax.

The curious anomaly which we are today debating arises from I think, the Finance Act, 1947, when, following the fuel crisis of that year, the Labour Government imposed a 66 2–3rd per cent. tax on all those space heaters and water heaters which were suitable for operation from electric or gas mains. When the hon. Lady and other hon. Members opposite say that the Government are acting very harshly in now imposing a tax of 60 per cent., I should like to remind the Committee that it is a less increase, and over a much less wide field than was affected by the Finance Act, 1947, which imposed the tax on heaters generally.

Mr. Leslie Hale (Oldham, West)

I do not think that the Financial Secretary was in the House at the time, or he would know that the reason for that was a complete shortage of gas and electricity, due entirely to pre-war failure by the Tory Government to provide sufficient supplies. The position was that the factories in Oldham could not run, as they had not enough electricity. We had to say to domestic users, "We are very sorry, but we shall have to stop you using domestic electricity until we have built all the generators"—which the Labour Government then went on to build.

Mr. Brooke

I am not prepared to enter into a controversial discussion with the hon. Member about the causes of the fuel crisis of 1947. All that we need to be concerned with is what happened afterwards.

What happened afterwards was that, in their 1947 Budget the Labour Government decided, for planning purposes, to impose tax at the high rate of 66 2–3rd per cent. on all space and water heaters which drew supplies from main electricity or gas. An exception was made at that time in favour of the other heaters—particularly those that worked on bottled gas —only because additional tax was not justified by the reason for the Labour Government's imposition of tax at that time. The tax was brought in solely to try to restrain the demand for these appliances which was further overloading the available electricity and gas supplies.

Mr. Nabarro

Would my right hon. Friend add as a footnote—because he has spoken of 1947—that in the following year, to make matters more emphatic, the tax was raised in a discriminatory fashion from 66⅔ per cent. to 100 per cent. on electric fires?

Mr. Brooke

As I thought the Committee did not wish for a lengthy speech from the Government, I was trying to keep my remarks short.

That was how the exemption arose, and that is how these words which have been criticised appear in this Bill. They have to appear because the Bill repeals what was in a previous Act of Parliament, and one cannot repeal an Act without quoting the words. This strange difference which we are discussing today stems, therefore, not from any special consideration for people living in remote places, but entirely from the change made in Purchase Tax in 1947 for so-called planning purposes. Only in last week's debate on this Finance Bill criticism was being expressed by hon. Members opposite of Purchase Tax changes made purely for planning purposes.

This difference—and I submit that it is an unjustified difference—has continued for the last eight years, although non-mains heaters are practically identical with their counterparts supplied from the mains; the gas heaters, I grant, are distinguishable. I have no information of any electrical appliances for which this exemption could now be—or ever could have been—claimed.

Mr. Nabarro

Hear, hear. That is the point.

Mr. Brooke

In fact, the issue is even narrower than I indicated. We are really talking about bottled gas appliances only. It is really impossible to argue that, on ordinary tax grounds, there should be a radical difference in tax treatment between these two types of appliance; that the one should be taxed at 60 per cent. and the other at nil. Both make equal demands on scarce metal supplies; both fulfil absolutely identical purposes.

Meanwhile, one has the curious situation that between the two direct competition exists over a certain range with an artificial tax discrimination. In a country area where electricity supplies are coming from the generating stations for the first time, people have to consider whether or not to use them. At present, they enjoy a special tax advantage if they keep to bottled gas heaters and do not change over. If they do decide to change over they will lose the artificial tax advantage. I do not think that such a situation is defensible.

My hon. Friend the Member for Kidderminster (Mr. Nabarro) asked for equitable treatment and no discrimination. The hon. Member for Cleveland (Mr. Palmer) quoted the Beaver Report, and appealed for an all-round removal of tax on all these appliances. We have settled the rate of tax on both gas and electric mains heaters under Clause 1, so I cannot go back and discuss that now. All we are now discussing is whether a special and artificial exemption should be still retained for this very narrow group of heaters. I submit that it is indefensible on tax grounds, that it came into existence simply and solely because of the fuel crisis of 1947 and the action taken thereafter in the Finance Bill of 1947 and that, now the rate of tax is being raised on the other heaters from 50 per cent. to 60 per cent., it would not be justifiable to continue to leave the bottled gas heaters free.

5.0 p.m.

Mr. Douglas Jay (Battersea, North)

I find myself quite unconvinced by the very tortuous defence of this tax which has been made by the Financial Secretary to the Treasury. The right hon. Gentleman said that the issue is a very narrow one, but it seems to me that an injustice is just as unjust if it is narrow or wide. In any case, if it is so narrow, why bother to impose a tax at all on what apparently the right hon. Gentleman regards as a triviality?

I am not convinced that the issue is so narrow. The right hon. Gentleman admitted that it affects space heaters and water heaters. He said it will affect people other than those in the rural areas, but he does not deny that it will affect a great number of people in the rural areas. If it will affect others outside those areas as well, it is all the less narrow for that reason. The right hon. Gentleman cannot deny that the Government, at this stage, are imposing a new tax at 60 per cent. on an ordinary household necessity which is certainly used on a large scale by poor people from the rural areas.

The right hon. Gentleman cannot deny, either, that the Government are doing that at a time when the extension of rural electrification is being cut down and are thereby damaging the same people who are being hit by this new tax. Nor is there any pretence that there is any fuel-saving argument for imposing this new tax. The hon. Member for Kidderminster (Mr. Nabarro) must know that although we imposed a tax in 1947 and 1948, just because of the measures taken since then by the Labour Government to increase generating capacity on a big scale it was necessary then but is not necessary now.

If all the Financial Secretary wants to do is to get rid of what he calls an anomaly between one type of plant and another he can do so by abolishing the tax all round just as easily as by imposing an extra tax on this type of plant. In addition, it is just as contrary to all the statements we have had from Conservative leaders before they came into office about reducing and abolishing Purchase Tax that now taxes are being put on necessities in this Budget.

I wish to call the attention of the Chancellor to a statement about Purchase Tax made by the present Minister of Pensions and National Insurance. I believe that he is now in the Cabinet and I suppose the Chancellor would consult him about the Budget. The Minister said on 8th May, 1950, pointing to the Government benches: had we sat on the benches opposite during the last five years, the Purchase Tax would long since have been completely abolished, except, possibly, for a tax upon a few articles in the extreme luxury class."—[OFFICIAL REPORT, 8th May, 1950; Vol. 475, c. 95.] According to that right hon. Gentleman, who is now in the Cabinet, I suppose that heating appliances in rural cottages are things of extreme luxury.

What is the reason for rushing in and imposing this new tax? I can only suppose that it is the new theory imported by the Financial Secretary into these debates, which I have read with interest, which he calls "the yawning gap". When he sees anything which is not taxed he rushes into the breach and sees that it is taxed. No doubt he says to the Treasury: Once more unto the breach, dear friends, once more. I suppose there are still a few things such as books and newspapers which are not taxed, but if the Financial Secretary remains in office until April, I presume we may have the tax extended to those things.

It is just possible, however, for this to be due to the Economic Secretary to the Treasury. He has been making important contributions to the debate. His theory is quite a different justification for extending tax on these articles. He wants people to be taxed more on some articles in order that they shall spend less on other things. If that is the reason, crofters in the north of Scotland, fishermen and rural workers in Norfolk and all over the country are to pay so much for necessary equipment for their homes that they cannot buy so many cigarettes,

so much beer, or whatever the Government think they should not buy. I submit that that is an extraordinary and absolutely indefensible economic policy.

If that is the view of the Economic Secretary, I say to him—and particularly to the Chancellor—that I think they have fallen into a state of general mental confusion. I do the Chancellor the credit of thinking that this muddle is perfectly sincere. I agree with the Economic Secretary that if a tax is put on the things which the Minister of Pensions and National Insurance thinks are extreme luxuries, people buy fewer of them and spend less on other things. That may be a good policy in balance of payments difficulties, but there is a fundamental distinction between an increase of Purchase Tax on that type of goods—which, I agree, might be disinflationary—and an increase on goods which are necessities for the ordinary wage earners.

In the case of the latter goods—this is what the Economic Secretary left out of account—the tax on these appliances will be used as an argument for higher wages. Therefore, it is quite inevitable that if the increase is extended to all household necessities the wage level will be raised and costs throughout industry will be raised. What an extraordinary policy to cure the balance of payments difficulty— to increase the cost of producing food in the rural areas and to give another impetus to the rise in industrial costs throughout the whole of industry and commerce.

For those reasons, and in view of the reply of the Financial Secretary, I hope that my hon. Friends will press the matter to a Division.

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

The Committee divided: Ayes 241, Noes 199.

Division No. 62.] AYES [5.9 p.m.
Agnew, Cmdr. P. G. Barber, Anthony Braithwaite, Sir Albert(Harrow, W.)
Aitken, W. T. Barter, John Brooke, Rt. Hon. Henry
Allan, R. A. (Paddington, S.) Baxter, Sir Beverley Brooman-White, R. C.
Amery, Julian (Preston, N.) Bell, Ronald (Bucks, S.) Buchan-Hepburn, Rt. Hon. P. G. T.
Amory, Rt. Hn. Heathcoat (Tiverton) Bevins, J. R. (Toxteth) Burden, F. F. A.
Anstruther-Gray, Major W. J. Bidgood, J. C. Butcher, Sir Herbert
Arbuthnot, John Biggs-Davison, J. A. Butler, Rt. Hn. R. A.(Saffron Walden)
Armstrong, C. W. Birch, Rt. Hon. Nigel Campbell, Sir David
Ashton, H. Black, C. W. Carr, Robert
Atkins, H. E. Boothby, Sir Robert Cary, Sir Robert
Baldock, Lt.-Cmdr. J. M. Bossom, Sir A. C. Channon, H.
Baldwin, A. E. Boyle, Sir Edward Cole, Norman
Balniel, Lord Braine, B. R. Conant, Maj. Sir Roger
Cooper, Sqn. Ldr. Albert Jenkins, Robert (Dulwich) Partridge, E.
Cooper-Key, E. M. Jennings, J. C. (Burton) Peake, Rt. Hon. O.
Corfield, Capt. F. V. Johnson, Dr. Donald (Carlisle) Peyton, J. W. W.
Craddock, Beresford (Spelthorne) Johnson, Eric (Blackley) Pickthorn, K. W. M.
Crookshank, Capt. Rt. Hn. H. F. C. Jones, A. (Hall Green) Pitman, I. J.
Crosthwaite-Eyre, Col. O. E. Keegan, D. Pitt, Miss E. M.
Crowder, Sir John (Finchley) Kerby, Capt. H. B. Pott, H. P.
Dance, J. C. G. Kerr, H. W. Price, David (Eastleigh)
Davidson, Viscountess Kirk, P. M. Price, Henry (Lewisham, W.)
D'Avigdor-Goldsmid, Sir Henry Lagden, G. W. Prior-Palmer, Brig. O. L.
Deedes, W. F. Lambert, Hon. G. Profumo, J. D.
Dodds-Parker, A. D. Lancaster, Col. C. G. Raikes, Sir Victor
Donaldson, Cmdr. C. E. McA. Langford-Holt, J. A. Ramsden, J. E.
Doughty, C. J. A. Leather, E. H. C. Rawlinson, P. A. G.
Duncan, Capt. J. A. L. Leavey, J. A. Redmayne, M.
Emmet, Hon. Mrs. Evelyn Leburn, W. G. Rees-Davies, W. R.
Errington, Sir Eric Legh, Hon. Peter (Petersfield) Remnant, Hon. P.
Erroll, F. J. Lennox-Boyd, Rt. Hon. A. T. Ridsdale, J. E.
Farey-Jones, F. W. Lindsay, Hon. James (Devon, N.) Rippon, A. G. F.
Fell, A. Lindsay, Martin (Solihull) Robinson, Sir Roland (Blackpool, S.)
Finlay, Graeme Linstead, Sir H. N. Rodgers, John (Sevenoaks)
Fisher, Nigel Lloyd, Maj. Sir Guy (Renfrew, E.) Roper, Sir Harold
Fleetwood-Hesketh, R. F. Lloyd, Rt. Hon. Selwyn (Wirral) Ropner, Col. Sir Leonard
Fletcher-Cooke, C. Lloyd-George Maj. Rt. Hon. G. Russell, R. S.
Foster, John Longden, Gilbert Sandys, Rt. Hon. D.
Fraser, Hon. Hugh (Stone) Low, Rt. Hon, A. R. W. Schofield, Lt.-Col. W.
Freeth, D. K. Lucas, Sir Jocelyn (Portsmouth, S.) Sharples, Maj. R. C.
Galbraith, Hon. T. G. D. Lucas-Tooth, Sir Hugh Smithers, Peter (Winchester)
Gammans, L. D. McAdden S. J. Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)
Garner-Evans, E. H. Macdonald, Sir Peter Stanley, Capt. Hon. Richard
George, J. C. (Pollok) McKibbin, A. J. Stevens, Geoffrey
Godber, J. B. Mackie, J. H. (Galloway) Steward, Sir William (Woolwich. W.)
Gough, C. F. H. McLaughlin, Mrs. P. Stewart, Henderson (Fife, E.)
Gower, H. R. Maclay, Rt. Hon. John Stoddart-Scott, Col. M.
Grant, W. (Woodside) Maclean, Fitzroy (Lancaster) Storey, S.
Grant-Ferris, Wg. Cdr. R. (Nantwich) McLean, Neil (Inverness) Studholme, H. G.
Green, A. Macleod, Rt. Hn. Iain (Enfield, W.) Sumner, W. D. M. (Orpington)
Gresham Cooke, R. Macmillan, Maurice (Halifax) Taylor, Sir Charles (Eastbourne)
Grimston, Hon. John (St. Albans) Macpherson, Niall (Dumfries) Thomas, Leslie (Canterbury)
Grimston, Sir Robert (Westbury) Maddan, Martin Thomas, Rt. Hn. J. P. L. (Hereford)
Grosvenor, Lt.-Col. R. G. Maitland, Cdr. J. F. W. (Horncastle) Thompson, Kenneth (Walton)
Gurden, Harold Maitland, Hon. Patrick (Lanark) Thompson, Lt.-Cdr. R. (Croydon, S.)
Harris, Frederic (Croydon, N.W.) Marlowe, A. A. H. Thorneycroft, Rt. Hon. P.
Harrison, A. B. C. (Maldon) Marples, A. E. Tiley, A. (Bradford, W.)
Harvey, Air Cdre. A. V. (Macclesfd) Marshall, Douglas Tilney, John (Wavertree)
Harvey, Ian (Harrow, E.) Mathew, R. Tweedsmuir, Lady
Harvey, John (Walthamstow, E.) Maude, Angus Vaughan-Morgan, J. K.
Harvie-Watt, Sir George Maudling, Rt. Hon. R. Vickers, Miss J. H.
Hay, John Mawby, R. L. Vosper, D. F.
Heath, Edward Maydon, Lt.-Comdr. S. L. C. Wakefield, Edward (Derbyshire, W.)
Henderson, John (Cathcart) Medlicott, Sir Frank Walker-Smith, D. C.
Hicks-Beach, Maj. W. W. Milligan, Rt. Hon. W. R. Wall, Major Patrick
Hill, Rt. Hon. Charles (Luton) Molson, A. H. E. Ward, Hon. George (Worcester)
Hill, Mrs. E. (Wythenshawe) Monekton, Rt. Hon. Sir Walter Ward, Dame Irene (Tynemouth)
Hill, John (S. Norfolk) Moore, Sir Thomas Waterhouse, Capt. Rt. Hon. C.
Hirst, Geoffrey Mott-Radclyffe, C. E. Watkinson, H. A.
Holland-Martin, C. J. Nabarro, G. D. N. Webbe, Sir H.
Hope, Lord John Nairn, D. L. S. Whitelaw, W.S.I.(Penrith & Border)
Hornsby-Smith, Miss M, P. Neave, Airey Williams, Paul (Sunderland, S.)
Horsbrugh, Rt. Hon. Dame Florence Nicholls, Harmar Williams, R. Dudley (Exeter)
Howard, John (Test) Nicholson, Godfrey (Farnham) Wilson, Geoffrey (Truro)
Hughes Hallett, Vice-Admiral J. Nicolson, N. (B'n'm'th, E. & Chr'ch) Wood, Hon. R.
Hughes-Young, M. H. C. Nugent, G. R. H. Woollam, John Victor
Hulbert, Sir Norman Oakshott, H. D. Yates, William (The Wrekin)
Hurd, A. R. O'Neill, Hn. Phelim (Co. Antrim, N.)
Hutchison, Sir Ian Clark (E'b'gh, W.) Orr, Capt. L. P. S. TELLERS FOR THE AYES:
Hutchison, James (Scotstoun) Orr-Ewing, Charles Ian (Hendon, N.) Mr. Wills and
Hyde, Montgomery Page, R. G. Colonel J. H. Harrison.
Irvine, Bryant Godman (Rye) Pannell, N. A. (Kirkdale)
Ainsley, J. W. Beswick, F, Brown, Thomas (Ince)
Albu, A. H. Blackburn, F. Burke, W. A.
Allaun, F. (Salford, E.) Blyton, W. R. Burton, Miss F. E.
Allen, Arthur (Bosworth) Bottomley, Rt. Hon. A. G. Butler, Herbert (Hackney, C.)
Allen, Scholefield (Crewe) Bowden, H. W. (Leicester, S.W.) Butler, Mrs. Joyce (Wood Green)
Attlee, Rt. Hon. C. R. Bowles, F. G. Callaghan, L. J.
Awbery, S. S. Boyd, T. C. Carmichael, J.
Bacon, Miss Alice Braddock, Mrs. Elizabeth Castle, Mrs. B. A.
Balfour, A. Brockway, A. F. Champion, A. J.
Bellenger, Rt. Hon. F. J. Broughton, Dr. A. D. D. Chapman, W. D.
Benson, G. Brown, Rt. Hon. George (Belper) Chetwynd, G. R.
Clunie, J. Hunter, A. E. Rankin, John
Coldrick, W. Hynd, H. (Accrington) Reeves, J.
Collick, P. H. (Birkenhead) Irving, S. (Dartford) Reid, William
Collins, V. J. (Shoreditch & Finsbury) Isaacs, Rt. Hon. G. A. Rhodes, H.
Corbet, Mrs. Freda Jay, Rt. Hon. D. P. T. Robens, Rt. Hon. A.
Cove, W. G. Jeger, George (Goole) Roberts, Albert (Normanton)
Craddock, George (Bradford, S.) Jeger, Mrs. Lena(Holbn & St.Pncs, S.) Robinson, Kenneth (St. Pancras, N.)
Cronin, J. D. Jenkins, Roy (Stechford) Royle, C.
Crossman, R. H. S. Johnson, James (Rugby) Shinwell, Rt. Hon. E.
Cullen, Mrs. A. Jones, Rt. Hon. A. Creech(Wakefield) Shurmer, P. L. E.
Daines, P. Jones, David (The Hartlepools) Silverman, Julius (Aston)
Davies, Ernest (Enfield, E.) Jones, Elwyn (W. Ham, S.) Silverman, Sydney (Nelson)
Deer, G. Jones, J. Idwal (Wrexham) Simmons, C. J. (Brierley Hill)
de Freitas, Geoffrey Jones, T. W. (Merioneth) Skeffington, A. M.
Delargy, H. J. Key, Rt. Hon. C. W. Slater, Mrs. H. (Stoke, N.)
Dodds, N. N. Lawson, G. M. Slater, J. (Sedgefield)
Dugdale, Rt. Hn. John (W.Brmwch) Ledger, R. J. Smith, Ellis (Stoke, S.)
Dye, S. Lee, Frederick (Newton) Sorensen, R. W.
Ede, Rt. Hon. J. C. Lever, Leslie (Ardwick) Sparks, J. A.
Edwards, Rt. Hon. John (Brighouse) Lipton, Lt.Col. M. Steele, T.
Edwards, Rt. Hon. Ness (Caerphilly) Logan, D. G. Stewart, Michael (Fulham)
Edwards, Robert (Bilston) MacColl, J. E. Stones, w. (Consett)
Edwards, W. J. (Stepney) McKay, John (Wallsend) Strachey, Rt. Hon. J.
Evans, Albert (Islington, S.W.) McLeavy, Frank Strauss, Rt. Hon. George (Vauxhall)
Evans, Edward (Lowestoft) Mainwaring, W. H. Stross, Dr. Barnett(Stoke-on-Trent, C.)
Evans, Stanley (Wednesbury) Mallalieu, E. L. (Brigg) Summerskill, Rt. Hon. E.
Fletcher, Eric Mann, Mrs. Jean Sylvester, G. O.
Forman, J. C. Marquand, Rt. Hon. H. A. Taylor, Bernard (Mansfield)
Fraser, Thomas (Hamilton) Mason, Roy Thomson, George (Dundee, E.)
Gaitskell, Rt. Hon. H. T. N. Mayhew, C. P. Thornton, E.
Gibson, C. W. Messer, Sir F. Tomney, F.
Gooch, E. G. Mitchison, G. R. Turner-Samuels, M.
Gordon Walker, Rt. Hon. P. C. Monslow, W. Ungoed-Thomas, Sir Lynn
Greenwood, Anthony Moody, A. S. Viant, S. P.
Grenfell, Rt. Hon. D. R. Moss, R. Wade, D. W.
Grey, C. F. Moyle, A. Warbey, W. N.
Griffiths, David (Rother Valley) Mulley, F. W. Wells, Percy (Faversham)
Griffiths, William (Exchange) Neal, Harold (Bolsover) West, D. G.
Grimond, J. Oram, A. E. Wheeldon, W. E.
Hale, Leslie Orbach, M. White, Mrs. Eirene (E. Flint)
Hall, Rt. Hn. Glenvil (Colne Valley) Owen, W. J. White, Henry (Derbyshire, N.E.)
Hamilton, W. W. Padley, W. J. Wilkins, W. A.
Hannan, W. Paget, R. T. Willey, Frederick
Harrison, J. (Nottingham, N.) Palmer, A. M. F. Williams, David (Neath)
Hastings, S. Pannell, Charles (Leeds, W.) Williams, Ronald (Wigan)
Hayman, F. H. Pargiter, G. A. Williams, Rt. Hon. T. (Don Valley)
Henderson, Rt. Hn. A. (Rwly Regis) Parker, J. Williams, W. R. (Openshaw)
Herbison, Miss M. Parkin, B. T. Willis, E. G. (Edinburgh E.)
Hewitson, Capt. M. Paton, J. Wilson, Rt. Hon. Harold (Huyton)
Hobson, C. R. Pearson, A. Yates, V. (Ladywood)
Holmes, Horace Peart, T. F. Younger, Rt. Hon. K.
Houghton, Douglas Plummer, Sir Leslie Zilliacus, K.
Howell, Charles (Perry Barr) Popplewell, E.
Howell, Denis (All Saints) Price, J. T. (Westhoughton) TELLERS FOR THE NOES:
Hoy, J. H. Probert, A. R. Mr. John Taylor and
Hughes, Emrys (S. Ayrshire) Proctor, W. T. Mr. Rogers.
Hughes, Hector (Aberdeen, N.) Pryde, D. J.
The Temporary Chairman (Mr. Malcolm MacPherson)

I think that it would be for the convenience of the Committee if the next four Amendments, to leave out "(g)", "(h)", "(i)", and "(j)", respectively, were taken together.

Mr. Coldrick (Bristol, North-East)

I beg to move, in page 11, line 32, to leave out "(g)".

The purpose of this group of Amendments is to retain the existing exemption from Purchase Tax of a number of articles which we deem to be essential to every household. Among the articles will be found electric kettles, smoothing irons, interval timers, kitchen scales, wringers, and mangles. So that hon. Members can appreciate what is involved, I would point out that, according to my information, the effect of the imposition of the tax will be that electric kettles which now cost £5 will cost £6 5s.; smoothing irons will go up in price from £2 to £2 9s.; kitchen scales from £1 3s. 9d. to £1 8s. 4d.; wringers from £8 3s. 9d. to £10; and mangles from £12 17s. 9d. to £15 10s. 7d.

During the course of these debates at least two arguments have been adduced. The Chancellor, the Financial Secretary and the Economic Secretary have argued that the tax could not be justified if it applied to any one of these articles singly. The tax has been justified by the argument that its imposition on each article separately is part of a pattern, and that the amount to be raised will be sufficient to help bring about disinflation. That is one argument which has been used throughout our debates. The other has been that the metals used in the production of these things could be more beneficially used for the production of things that can go to the export markets.

It seems to me curious, if not anomalous, that in these days, when we are striving to the best of our ability to build houses equipped with electricity so that amenities may be provided for the housewives, we should seek to deny the housewives the benefits of those amenities by increasing the tax upon them and so making their price prohibitive. The Chancellor should realise that the problems confronting him are confronted in millions of homes every week in the ordinary way. Millions of housewives are discovering that their income is insufficient to meet their expenditure.

When confronted with that situation, they do one of two things, or both. They either cut down expenditure on nonessentials, or, as many do at present, they seek to increase their income by going to work in industry. In any case, they exercise intelligence in attempting to deal with the problem, and I seriously suggest to the Chancellor that, instead of considering merely the advice given him by theoreticians, he should bear in mind the policy pursued by the women of the country and so find a more intelligent and practical solution to the problem than that of increasing Purchase Tax.

Let the Chancellor consider how so many millions of people at work want, on coming home, to make a cup of tea. Is he seriously suggesting, even from the point of view of economics, that they should be driven to light a fire and boil an old-fashioned kettle on it? I am sure that the consequent consumption of fuel would be far more detrimental to the national economy than any expenditure involved in the making and using of electric kettles.

Mr. M. Turner-Samuels (Gloucester)

It is not only a question of increasing Purchase Tax, but of putting Purchase Tax on what has not been subject to tax before.

Mr. Coldrick

Yes. I thank my hon. and learned Friend. I thought I made that clear in my opening statement. I realise that if the Bill goes through un-amended there will be a heavy tax on things which have been exempt from tax up to the present.

I turn from the electric kettle to the smoothing iron. I heard my hon. Friend the Member for Ince (Mr. T. Brown), with his great eloquence, make a passionate appeal for the exemption of the iron holder. As he pointed out, the smoothing iron is referred to in ordinary working-class homes as a flat iron. Seeing that, after his passionate pleading, his request was refused, I thought that either the Chancellor felt that the concession on holders was not worth while and that he ought to make the concession on the flat iron itself, or that he was so adamant that he would not make any concession whatsoever. I shall not argue at any great length the case for the exemption of the flat iron. Suffice it to say that I should think that one of the consequences of the Bill will be that the smoothing iron will be required by far more people in future to smooth out some of the difficulties the Chancellor is creating by his imposition of this additional tax.

We turn to the interval timer. At first, I thought that this was an egg timer, but I am given to understand that this is the name for a collection of ingenious articles which make it possible for a person coming home at the end of a day's strenuous labour to go to bed confident in the knowledge that at an appointed time the next morning the alarm will ring, the kettle will be boiling, and the pot of tea will be ready. I should have thought the Chancellor would have encouraged such ingenuity. The person who invented a contrivance of this character is a great benefactor to humanity in general. Considering that we are solemnly assured from the benches opposite that in British industry we want initiative, enterprise and ingenuity, it seems a little churlish to clamp a tax on this article which exemplifies all those qualities which, we are told, are prized in private enterprise. Therefore, I would appeal to the Chancellor at least to exempt that article, in the hope that people who are awakened by it, having also been refreshed, will be able to perform their arduous labours to increase the exports of the country.

We come to the amazing imposition of tax on kitchen scales. This makes me think that many of us in the Committee are becoming entirely divorced from the ordinary experience of the people keeping our households going. It may be true that in days gone by our mothers and grandmothers used an old rule of thumb method in their cooking, took a fistful of this and a pinch of that, and so on; but, thanks largely to the efforts of Chancellors of the Exchequer in days gone by, with the assistance of many other members of the Committee, we have built colleges for the teaching of domestic science, and the result is that most of the young women today are quite dissatisfied with the old-fashioned methods of cooking. They have acquired the culinary art to a degree unknown to their mothers and fathers, and no one will suggest that kitchen scales are not indispensable to them for the work they are endeavouring to do. Although we pour out public money to train young women to do this work more effectively, we seek to discourage the use of the implements essential to their job; we do so by imposing a tax which is very severe for many people.

I come now—and last—to the wringers and mangles. I can only hope that we shall be able to wring some concession from the Chancellor for these two things at least. I do not know whether the Chancellor's conception of a woman is that she is the incarnation of a glorified scrubbing brush. We are constantly pleading that labour-saving machinery should be introduced in industry; and, as I have said before, millions of mothers are contributing greatly to the nation's industrial labour force. Yet if we pursue this Purchase Tax policy, we deny to them in the home the very things which we are seeking to provide in industry.

Surely no one will suggest that while we want electricity, atomic energy and so on, to improve industry, we should be so cruel as to compel our women, after washing over a taxed washtub, to resort entirely to muscular energy to do the wringing and mangling? Yet, if the price is to increase to the extent that I have indicated, it will obviously act as a great deterrent to those who would like to take advantage of these labour-saving devices but who find that the price is practically prohibitive.

5.30 p.m.

This is a terribly bad psychological approach to the whole problem. It might be all right in the case of wealthy families, who can acquire many of these devices without effort, but to many millions of workers the greatest incentive of all is the ability to earn sufficient money to buy the things which they think their wives will appreciate in the home. People strive at work in order to acquire labour-saving equipment like mangles and wringers; yet, after having made the effort, they find that they have to pay, not only the normal price, but now another price imposed on top of it.

I submit that this makes a large number of workers feel the effort is not worth while. Consequently, instead of being an incentive, the Chancellor's proposals are a deterrent. Therefore, from the point of view of the national effort, I plead with the Chancellor to recognise that if labour-saving devices are good in industry they are not less necessary in our homes.

Mr. Turner-Samuels

The more one looks at what the Chancellor seeks do in these cases the more one is amazed at his proposals. We all appreciate that the Chancellor has been very good in his attendance in Committee during our debates on many Amendments to the Schedule. I believe that he attends so assiduously because he is really anxious to find out whether anyone will make a contribution to the debate showing that he is justified in what he is doing.

When one thinks of the massive scale of the finances with which the Chancellor has to deal, it is ludicrous and almost shameful to think that the right hon. Gentleman could occupy his time in this pettifogging, interfering way in trying to scrounge out of the kitchen not only a contribution to the Exchequer but a solution to the serious financial problems which are supposed to have caused this unusual introduction of an autumn Budget.

Surely the Chancellor will not try to make us believe that provisions of this kind can make any profoundly significant impact on the Exchequer. Either there is a real crisis about which something substantial should be done or the Chancellor is now trying, through these impositions, to get back the sum total of the amount which he gave away when he took 6d. off the Income Tax, and to recover it, not from the people from whom he ought to regain it, but from housewives and people who are least able to support the burden.

Let us examine the spectacular catalogue of articles upon which these taxes are being imposed. It is useless to pause in an attempt to establish any principle or to discover some system upon which these provisions are based. In the context of any serious attempt on the part of the Treasury to do this thing, let us examine the items in this picturesque catalogue which are now to stand the concussion of the introduction of Purchase Tax for the first time. These items have been mentioned before but the more they are mentioned the more pettifogging and unjustified the introduction of these measures becomes.

Among the items in the list are, Electric kettles and other cooking utensils incorporating heating elements. I suppose that that description would include implements required for pressure cooking and things of that kind. I ask the Chancellor who normally is a very logical and reasonable person, whether he seriously thinks it proper and reasonable, in connection with the fiscal arrangements of the country, to seize upon culinary articles of this kind which have not only been exempt from taxation but are recognised by everybody as properly exempt because it would be absolutely ludicrous to make them taxable.

The Chancellor seems to have introduced an entirely new doctrine into our principles of taxation. I always understood that it was acknowledged as right not to tax necessities. One had to tax luxuries and income because the Exchequer has to have funds with which to carry on the government of the country. That taxation is necessary because it not only brings in money but brings in the large sum required by the Exchequer; now, however, we are dealing with necessaries of the kitchen, elementary, primary necessities of life associated with food. Indeed, some of these articles are the vehicles which enable food to be made ready for the eating.

Here the Chancellor, in a miserable, curmudgeonish performance, rises from the Treasury Bench, and with all the gravity attaching to his high and distinguished office says, for the first time in history, and at a time when, as we are told so often now, because of a Tory Government we are supposed to have the greatest prosperity we have ever experienced, "We must march, with the banners of prosperity flying aloft, into the scullery and the kitchen to seize there articles of daily necessity to the housewife and impose these mean taxes upon them." The Chancellor of the Exchequer is apparently anxious in this curious way to go down in history; and, no doubt, this may remain for ever, in a Punch and Judy way, a monument to his memory.

The next item is smoothing irons and pressing irons. I do not know whether the Chancellor got hold of this item through some accession of affection, whether he thought it was a pet, and whether he was attracted by the "smoothing." But just imagine the Chancellor of the Exchequer of this great country of ours, having to stoop to get coppers for fiscal needs from smoothing irons and pressing irons. He must really be in a most pressing condition.

Next there is the item of interval timers incorporating an "alarum mechanism." Just imagine the Chancellor, who wants to be sure that industry is working all out— that it can be relied upon to keep good hours in order to get production—having to tax the tocsin of the good timekeeper. That is truly alarming at this time of the day. I ask the right hon. Gentleman to shake himself a little and to ask whether this is a serious, dignified performance to present to the nation.

Then come kitchen scales and weights. Certainly, I can think of some other scales in which the right hon. Gentleman will be weighed and found wanting over these things, eventually. Imagine seizing on weighing machines, hand-operated wringers and mangles for this process of taxation. Here indeed is an important catalogue of exigible articles. The picture of all these items subjected to taxation is surely not only comical but ludicrous. I ask the Chancellor, even at this late hour, when he has almost lost all hope of ever extricating himself from the indignity and comicality of this situation, to pause in his jet-like fiscal race amongst the utensils of the kitchen and the scullery, think again, and relieve the poor housewife from this unwarranted attack upon her domestic bits and pieces and pots and pans.

Mr. Donald Chapman (Birmingham, Northfield)

When the Economic Secretary replies, I suppose he will say, as he has done in replying to similar Amendments, that one reason for the increase in taxation of these goods is their consumption of metal and the fact that he wants, if possible, to divert the metal—and, indeed, the products themselves, as far as possible—to export.

Initially I have a good deal of sympathy with that argument. At the beginning of the Bulletin for Industry issued by the Treasury this month there is an interesting article about the metal industries, listing the articles we are discussing, such as electric kettles, electric toasters and electric irons. It states: Exports generally in this group have changed very little and exports of some items have fallen. The home market has thus taken the major share of the increased output, indeed has in some instances taken more supplies while export markets have taken less. It continues: In the first nine months imports of steel and steel-making materials were £59 million or 48 per cent. higher than a year earlier while non-ferrous metals were up £43 million or 34 per cent. That is the background to the argument of the Economic Secretary, and when one reads an article such as this, the case is a formidable one. Indeed the article ends: In these circumstances the need is for industry to secure a bigger export business, thus paying for the extra imports needed to sustain a high level of production and helping to build up a sufficient surplus. 5.45 p.m.

That is common ground between the two sides of the Committee, but there are some questions that remain to be asked. First, how did the Treasury come to choose this list of items? The Bulletin for Industry states that some, such as electric toasters, have an excellent record of increased exports. I am assuming that electric toasters are included in this list—cooking apparatus with heating elements —but if they are not, they are allied and the argument is similar. The Bulletin states that the export of electric toasters, in the first seven months of this year, was up by about 75 per cent. according to the diagram, whereas home consumption had increased less than 10 per cent.

The export of electric irons appears to have increased by 20 per cent., whereas home consumption has barely increased, being up by only two or three per cent. On the other hand, while those particular goods have a good exporting record, in the case of electric kettles there has been an increase of between 25 per cent. and 30 per cent. in home consumption but no increase in exports. There are one or two other similar items with a bad record.

So the first question we ought to ask the Economic Secretary is why this list of goods has been drawn up in that way. If it is so linked to the export drive, why penalise those industries which have been doing a good job, as his own chart shows? The second question concerns the main issue which divides us in this Committee, namely, how we ought to consider achieving the desired and desirable increase in exports. We on this side of the Committee want to know what has been said to these industries about their export record. The article I have quoted highlights some which have a bad social record, so we want to know what has been said to them.

This issue has divided us on earlier parts of the Bill, particularly in respect of motor cars. I am sure that the Government should go to these industries and say, "We do not want to impose controls but you must help the country by exporting a greater quota of your production." In the time when Sir Stafford Cripps was Chancellor, the Labour Government aproached industries in this way and obtained a substantial increase in exports. Admittedly, the Government do not want direct controls, but why cannot they tell the industries that the national interest requires a greater production of goods of this sort for export? That does not in any sense mean that the Government have to swallow their own words about physical controls; this would be an exhortation and not a control. It cannot be beyond the power or duty of a Conservative Government to approach industries in this fashion.

The Economic Secretary ought to tell us what attempts are being made to enlist the co-operation of industries in order to achieve greater exports. It seems to me quite wrong that an industry such as, for example, that manufacturing electric kettles should increase its home sales by 30 per cent. while making no attempt at all to increase its exports. Some people may say that our prices are uncompetitive—perhaps the Economic Secretary will tell us whether or not that is so— but I am sure that what applies to the electric kettle industry applies, for example, to the radio industry, and that is that it will not put itself out to make the models needed in overseas markets.

I do not want to get out of order, but I should like to give one illustration. There is at the moment a well-known make of German radio—I forget the name—coming into this country, and every set is snapped up because it is a very fine radio at a very economical price. There is a lesson to be learned from that by the makers of the articles covered by our Amendment. If we followed Germany's example and set out to break into the export market, and if the Government told the industries that they had a social duty to adapt their products for that purpose, I am sure that we should be in a better position in respect of each article.

I hope that the Economic Secretary will take the opportunity afforded by what I think will be a limited debate to give us a little more information about the Government's attitude. The Government ought not just to stick their heads into the sand, apply a tax and hope that something will happen. I hope that the hon. Gentleman will tell us how far the Government are willing to go to achieve the desired object of a reduction in metal imports and an increase in exports of metal articles.

Major H. Legge-Bourke (Isle of Ely)

The references by the hon. Member for Northfield (Mr. Chapman) to the metal-using industries have brought me to my feet if only to voice one aspect of the problem which is particularly important under paragraph (i). It relates to timers. I ought to declare a slight interest in that I am a director of a company which sells these articles as accessories to the equipment which it produces, which is photographic.

There is a world of difference between industries of the type to which the hon. Gentleman was referring, which produce, in the main, such goods as electric kettles and other items which go into the home and those producing equipment for which the primary use is industrial but for which there may be an application in the household.

I understand that, as a result of the alteration affecting second timers, the industry producing that type of equipment is in very great difficulty. Timers for use with industrial equipment are exempt, but the mechanism which goes into them also goes into household alarm clocks, with the result that the industry does not now know where it stands.

I gather that if the mechanism is in a second timer for industrial use it does not bear Purchase Tax, but if it is in an alarm clock, it does. It is difficult for any industry, in a situation like that, to know exactly where it stands and where its duty lies. Is it to give up altogether the making of alarm clocks, to refuse delivery of mechanisms for alarm clocks, to continue making the mechanisms so that they can continue to be used for industrial purposes, or not?

The point that this illustrates is that no Government Department is ever qualified, and least of all the Treasury—I do not blame the Treasury for it; I merely wish it would not assume that it is—to adjudicate on these matters. Surely it ought to be for those in industry and those buying the products to decide these matters for themselves.

This is merely another illustration of how impossible Purchase Tax as a whole must always be if we are seeking equity, and if we are also seeking—I should have thought we all were—to do what is in the best interests of the country. It really comes down to the old adage, repeated so often from these benches during the ten or eleven years that I have been a Member of Parliament, that the law of supply and demand is probably the best guide in the end.

I know that the Economic Secretary will not give me the assurance that I should really like, that there will be no increase in Purchase Tax, but I hope that he will at all events be able to assure me that the industries which find themselves in the situation which I have described will be consulted to ensure that they are absolutely clear about where they stand. I hope he will assure us that the Treasury will give the industries concerned every possible assistance in clarifying the position.

Mr. James Carmichael (Glasgow, Bridgeton)

In our debates there has been no enthusiasm in any part of the Committee or the House for the proposals introduced by the Chancellor with the object of halting inflation. The Chancellor thought that could be done by reducing home consumption and increasing exports. So far as I can gather, the Purchase Tax on the goods which we are debating will do no such thing.

I want to deal with only one aspect of the matter, and that relates to the industry making iron hand-wringers. I should be surprised if the Economic Secretary or the Treasury knew what a hand wringer was. If the Government are anxious to increase the exports of this industry, they are going the wrong way about it. The industry is already at a halt as a result of the imposition of the 30 per cent. increase in tax. I will not argue about the restriction on hire purchase—there must have been some justification for it—but it is obvious that the industry has been halted. The tax has had a considerable effect in increasing on-costs.

I do not know why the Government wish to halt the sales of this industry in the home market. This is a most essential article for the ordinary housewife. Thousands of householders are unable to afford electrical appliances to do their laundry, and they find the hand wringer an essential instrument. The result of the Chancellor's action is that the poorest people in the country are penalised.

6.0 p.m.

Before the Budget was introduced, a hand wringer cost £6 6s. That price has now been increased to £7 14s. With Purchase Tax increased on other items, the ordinary working woman cannot afford a hand wringer. That is the position on the internal and domestic side. On the export side, as a result of the curtailing of the home market, costs have been increased and exports will decrease. This industry has been capturing the market from Germany and Holland. But clearly the increase in costs will make the price of hand wringers sold abroad much dearer.

Before the Budget, hand wringers were free of tax. If the Economic Secretary cannot make a complete concession, can he reduce the tax to 5 per cent.? The Government have always contended that they believe in full employment. I have examined this problem in detail with the directors of a firm in my own area. I went into the problem with a completely open mind. If the home market continues to slump, as it is now slumping, there will, with the costs in the export market increasing, be unemployment in the industry. Does the Economic Secretary know what a hand wringer is?

The Economic Secretary to the Treasury (Sir Edward Boyle) indicated assent.

Mr. Ellis Smith (Stoke-on-Trent, South)

Explain it.

Mr. Carmichael

As a matter of fact, I have used a hand wringer many times.

Sir E. Boyle

I understand hand wringers better than I always understand Scots.

Mr. Carmichael

You know something about hand wringers? Well you are using your economic talents badly. You have been trained at a great college—

The Deputy-Chairman (Sir Rhys Hopkin Morris)

The hon. Gentleman Must not refer to my economic talents.

Mr. Carmichael

The Economic Secretary has understood the hand wringer.

If this is his way of approaching the stability of the economy of this country, he is making a sad mess of things. I plead with him to persuade the Chancellor, who is a very likeable fellow, to re-examine this matter. If he can make only the concession that I have suggested, I should be moderately satisfied.

Mr. B. T. Parkin (Paddington, North)

I am very glad that the hon and gallant Member for the Isle of Ely (Major Legge-Bourke) joined in speaking on a specific item tonight. He will have observed the curious trend of the debate: day after day and night after night Members on this side of the Committee have presented well-informed, careful and patient pleas on behalf of one section or another of the community for the examination of one anomaly after another in these proposals. From the other side of the Committee and from the Treasury Bench there has come only one general reply each time. I have regularly attended in the hope that the Economic Secretary would let himself go on one particular item sooner or later.

Unfortunately he reminds me at this stage of a Press officer to a migration of lemmings. At each stopping place, where there are serious questions to answer, he says that he has listened very carefully to the questions and that it is true that what he is doing seems a little unreasonable, but he has taken the leadership of his right hon. Friend, who tells him where he is going, and he is happy to believe him. That general reply seems to repeat itself.

For a moment we had a flash of illumination when the Economic Secretary was stung into giving us a little of his autobiography. When we were discussing baths, he told us that he had been brought up in a country village and knew all about the difficulties of getting a little bath water to the boil. I cannot wait for the next chapter when he tells us how even greater difficulties were overcome of getting a little Boyle to the bath water. Perhaps he will give us that tonight. From time to time the Economic Secretary has, of course, been fortified by the activities of the Patronage Secretary.

The Deputy-Chairman

I think we might come to the Amendment.

Mr. Parkin

I am joining in the plea for the exemption of the hand wringer. I was about to say that it would be a mistake for hon. Members on this side of the Committee to think that the only activities behind the scenes on the other side of the Committee were connected with bringing the debate to a close. Two hon. Members opposite have supported the Economic Secretary in his general case when we have been discussing subjects of this kind. It is not our fault that the arguments opposite are always of a general nature.

We have successively put up arguments for one case after another and from the other side of the Committee a Member stands up with a sort of glazed look and we are told that it is due to something which the Chancellor promised at Istanbul. The general line has been that the housewife must suffer. I know that we have altered the character of Istanbul and declared it to be in the North Atlantic—

The Deputy-Chairman

The hon. Member must direct his mind to the specific Amendment.

Mr. Parkin

I am trying to make a plea that the housewife might be left alone, at least on this point. We have been told that she must make sacrifices to operate the social standard demanded by events at Istanbul, which is still, as far as I am concerned, in the Eastern Mediterranean. The housewife has been asked to make sacrifices on a number of things and the hon. Member for Kidderminster (Mr. Nabarro) has explained what is being done with the metal which is being saved. There is a lot of metal to be saved in the items listed in this section. Indeed, they are heavier than some of those which have been mentioned.

With all the technical confidence of a sergeant instructor selling a Smith gun to the Home Guard, the hon. Member for Kidderminster told us that we must save steel on clothes posts. We have heard of the drive to concentrate all these economies, from hand wringers and such like, into the export drive in motor cars. We have heard about a "secret" motor car. We know that Sir Miles Thomas, a great public servant, has been seconded to help with its product. Now we know that it consists of dustbins, clothes posts and chamber pots, with or without lids, but it should not include hand wringers, because the wheels are still amply provided for by redundant potters' wheels.

The Economic Secretary is in a position to make an appeal that we should all go into battle. The housewife can now make a sacrifice together with all the other sections of the community. She can say, with Henry V, "Let the export gap be filled with our English dead." All can make a contribution now—the sick, the old, the children. It is not now a question of a limited age group rushing in dulce et decorum est pro patriâ mori in loco parentis.

Perhaps the Economic Secretary, if he has been satisfied by all the sacrifices that have been exacted stage by stage in accordance with the demands made from the back benches in relation to the general policy initiated by the Chancellor, will tell us, now that the secret is out, he has got enough now and can spare the hand wringer.

Mr. Stan Awbery (Bristol, Central)

I do not wish to make a speech, but I should like to ask two or three questions of the hon. Gentleman the Economic Secretary. Perhaps he does not understand what a wringer is. It is a machine that squeezes the clothes until all the water is out. This part of the Bill is a wringer. It is wringing out of the housewife something that we should not take from her. It represents a general attack upon the housewife.

I ask the Economic Secretary to give serious consideration to the matter. There are two reasons why the tax should be imposed. First, we are told that it is a tax to stop inflation. To stop inflation the Chancellor is to stop sales. I ask the Economic Secretary to tell us what he estimates will be the reduction in sales of irons, mangles, wringers and weighing machines when the new tax is in force. If it is not designed to reduce sales the tax must be to increase revenue. If so, will the Economic Secretary tell us what he expects in increased revenue? It cannot be very much and I assure him that the amount will not compensate for the inconvenience and annoyance caused in the kitchens of the working classes.

Sir E. Boyle

I thank the hon. Member for Bristol, Central (Mr. Awbery) for his agreeable speech and for explaining to me how a hand wringer works. I was reminded of a rhyme which was written in reply to a question about how a pump works by someone at an examination— Let A be the handle, and B be the spout; If A be pressed down, then the water comes out. He did not get very many marks.

Before I reply to the debate, I would say how pleased we all are to see the right hon. Gentleman the Member for Battersea, North (Mr. Jay) back in his place. I thought that I detected in an earlier discussion today what may have been the main line of his Second Reading speech, and I am very glad that the Committee had a chance to hear it.

6.15 p.m.

I confess that on listening to the hon. Member for Paddington, North (Mr. Parkin) I had the feeling I have had for some time, that the Committee might think it a good idea, at a time not too infinitely remote, to pass on to debate the Schedule and that perhaps we might leave Sir Miles Thomas, the social standards of Istanbul and quotations from Horace to look after themselves.

We had a very reasonable speech from the hon. Member for Bristol, North-East (Mr. Coldrick) at the start of the debate. It was a speech which I enjoyed fully as much as any I have heard during these debates. I assure him that I do not myself look on a woman as an incarnation of a glorified scrubbing brush. I can also assure the hon. and learned Member for Gloucester (Mr. Turner-Samuels) that the Chancellor was very shocked to learn that he was "stooping to smoothing irons," which was one phrase from the hon. and learned Gentleman's speech. There was one point when he got so indignant that one could not help feeling that he must have been addressing a jury on a capital punishment charge; he was using words saying that we should make the food ready in order that it might be eaten.

I cannot say very much new in reply to this debate. I know, Sir Rhys, that you would rule me out of order if I were to attempt any long statement about the general economic policy of the Government. I can therefore only say this, and I hope that the Committee will not think me discourteous if I reply rather shortly. My right hon. Friend the Chancellor said on 23rd November—

Mr. Harold Wilson (Huyton)

On a point of order. While we can understand, if the Economic Secretary has no more fresh arguments to use, that he may want to debate the matter shortly, is not he going a little far in suggesting that you, Sir Rhys, would rule him out of order if he were to give some of the broader economic reasons why it is essential to have this tax? We recall your Ruling the other night, and I think that you will agree that I responded to it 100 per cent., that one should not use the same economic argument in one Amendment after another until it became a little tedious; but I think you ruled that it would have been in order to do so.

The Deputy-Chairman

I will not repeat what I said the other night. I think I made it quite clear then. The validity or the length of the argument is not a matter for me to determine.

Mr. Chapman

Surely it is in order to reply to questions which have been asked? I asked how we were to get exports in these industries and whether the Government had any other ideas as an alternative to Purchase Tax. Surely it is in order to reply?

Sir E. Boyle

I was hoping that you would allow me very briefly—and it will be very briefly—to state the general economic point. I assure the hon. Member for Northfield (Mr. Chapman) that I have a note of his speech and intended to reply. I will quote what my right hon. Friend the Chancellor said the other night. I would rather quote him than a speech of my own. My right hon. Friend said: The object of these measures—a point which one has to repeat in every one of these Amendments—is that there is too much purchasing power about, and it is this general excess of purchasing power which is holding back our exports and at the same time sucking in a large volume of imports."—[OFFICIAL REPORT, 23rd November, 1955; Vol. 546, c. 1519.] The hon. Member for Northfield asked about exports. I should very much like to join with him in paying tribute to the export achievements during the first nine months of this year of the industries manufacturing electric irons, toasters and percolators. As the hon. Gentleman knows, they have had certain difficulties. Certain import restrictions have now been imposed, and in any event this is something of a seasonal trade the export achievement of which is likely to be not so good during the last three months of the year. I join with the hon. Gentleman in congratulating the industry.

In view of the fact that we have taken the line that in order to get our economy back on an even keel we must have some general curtailment of consumer demand, it would be illogical to leave out, or to grant a special exemption to, those articles we are now discussing, since they use metal and therefore compete for the same resources as those used by our industries producing investment goods and also our most important export industries. In view of the general policy of the Government, it would not be inconsistent to grant a special exemption on this particular range of goods. It is for that reason that I invite the Committee to reject the Amendment.

Mr. Chapman

Would the Economic Secretary say a word about what has been said to these industries about their export record? For example, the Chancellor took up a theme from the Committee and talked to the motor car industry about its export record. Is anything being done to tell these industries their social duty in this matter?

Sir E. Boyle

It is not a matter of their social duty. They face certain difficulties in respect of import restrictions, and it is not intended to press those industries to operate some kind of voluntary allocation scheme on the home market.

Mr. Chapman


Mr. Carmichael

The Economic Secretary did not mention a single article to meet the point he made about metal. There is only 5 per cent. on the motor cars but 30 per cent. on hand wringers. Is it proposed to give any concession at all?

Sir E. Boyle

I think the hon. Member would agree that the 60 per cent. tax on motor cars is a high rate. At any rate, his hon. Friends thought so when we discussed the tax a week or two ago.

Mr. Anthony Greenwood (Rossendale)

In the course of a most spirited speech, my hon. and learned Friend the Member for Gloucester (Mr. Turner-Samuels) congratulated the Chancellor on being so assiduous in his attendances at our discussions and I think that all of us would welcome that tribute and endorse it; and also do what we have done before, say how sorry we are that we so seldom have the benefit of the advice of the Board of Trade on these occasions.

It has become clear from what my hon. Friend the Member for Northfield (Mr. Chapman) has said that this is a question affecting the export trade, and it seems to me a matter for some regret that the Board of Trade should continue to treat the Committee with this lack of interest. We congratulate the Chancellor on his assiduous attendance, and also the way in which he has the support of his right hon. and hon. colleagues at the Treasury, although he has not had much support from hon. Members on the Government back benches.

We have listened with growing appreciation to the completely unembarrassed way in which the Financial Secretary and the Economic Secretary have continued to switch on whichever record they happened to think appropriate to the point before the Committee. There is one thing common to all the records which they have switched on, they always end up with a firm, monosyllabic, "No." I think it a matter for some regret that the Chancellor has not seen fit to make rather more concessions during our discussion. We are delighted at the determination of the right hon. Gentleman to ensure that after the next General Election the Conservative Party take over the duties of Her Majesty's Opposition. But we are a little sorry that he seems to have weakened his own chances of becoming the Leader of the Opposition after the Election. We hope that before the Finance Bill leaves us the right hon. Gentleman will have re-established himself with his followers.

My hon. Friend the Member for Bristol, North-East (Mr. Coldrick) drew attention to the folly of equipping houses with electrical power—as we are doing nowadays to a great extent—and then making it more difficult for the tenants to buy electrical equipment. And it is not always only electrical equipment which is affected. My hon. Friend gave a number of examples. One of the ironical things about this is that, so far as I can tell, all the items covered by these Amendments were exempted from Purchase Tax by my right hon. Friends on this side of the Committee. Kettles, which are going up from £5 to £6 5s., were exempted by my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) in 1947. Smoothing irons, which are going up from £2 to £2 9s., were exempted at the same time. Kitchen scales, which are going up from £1 3s. 9d. to £1 8s. 4d. were exempted in 1951; and the mangle, which is going up from £12 17s. 9d. to £15 10s. 7d., was exempted by my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) how sorry we are that we so seldom have the benefit of the advice of the Board of Trade on these occasions. in the Budget of 1951.

I should have liked to have an authoritative explanation from the Economic Secretary about the difference between wringers and mangles because I confess, in spite of the help that we have had from hon. Members on this side of the Committee, that the point is still not clear to me. I think we can all agree that the Committee has probably not heard nearly so much about wringers and wringing since Walpole made his famous statement, "They now ring the bells, but they will soon wring their hands." No doubt that will be true of the Government at the next General Election.

It is a matter for real regret that, at a time when we are trying to get women into industry and increase the production of the country, we should be making it increasingly difficult for them to purchase labour-saving devices for their own houses; especially in areas like Lancashire where, in spite of the efforts of the President of the Board of Trade, there are still a large number of women occupied in the textile industry. I think it most desirable that they should have just that kind of help in the home to which my hon. Friends have referred, so that when they have to get up early in the morning to go to work they will have an electric kettle with which to prepare their early morning cup of tea, and other labour-saving devices to help them when they come home in the evening. If they are not fortunate enough to have interval timers, which my right hon. Friend exempted in 1951, it seems a pity that they should be deprived of the advantage of them by the fact that they are being made more expensive under this Finance Bill.

In an area like Lancashire, or the West Riding of Yorkshire, where we have appalling housing accommodation—back-to-back houses and a smoky atmosphere—these are just the sort of things which are most appreciated by working-class housewives. Anyone who knows the houses occupied by the working classes in those sort of areas will be struck by the growing extent to which women have been tending to buy electrical devices in order to make life more tolerable than otherwise would be the case. Not only are we putting up the tax on washing machines from 50 per cent. to 60 per cent, but we are taxing their kettle, mangle, wringer, and all the rest of it.

I was not convinced by the Economic Secretary's reason for singling out these things for taxation. We are told that in some cases it is to save metal, and that in others it is to discourage the purchase of luxury goods—to prevent an orgy of mangle buying or any other wicked escapade of that kind—or to save money, or confine the spending on other things to help the export market. But right hon. and hon. Members on this side of the Committee are more than ever convinced that the real trouble behind this Finance Bill is that someone at the Treasury has an excessively tidy mind; that there is a constant urge to clear up the Finance Bill and the schedule of goods subject to Purchase Tax, because a clever fellow at the Treasury has managed to find something which, so far, has been left out. It is this yawning gap, about which we have heard so much, which is really at the root of all the problems we are facing regarding Purchase Tax.

We have not been impressed by the arguments put forward by the Economic Secretary. I wish that we had had the benefit of the advice of the Chancellor of the Exchequer, because I would warn the right hon. Gentleman that the sands are running out. We are nearly at an end of this list of Amendments to the

Finance Bill, and we should like to give him the opportunity of appearing in the genial and generous Father Christmas guise which he sometimes puts on, and making a concession. Failing that, and I say this with a heavy heart, we shall find it necessary, once again, to ask the Committee to proceed to a Division.

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

The Committee divided: Ayes 244, Noes 207.

Division No. 63.] AYES [6.29 p.m.
Agnew, Cmdr. P. G. Fraser, Hon. Hugh (Stone) Lindsay, Hon. James (Devon, N.)
Aitken, W. T. Freeth, D. K. Lindsay, Martin (Solihull)
Allan, R. A. (Paddington, S.) Galbraith, Hon. T. G. D. Linstead, Sir H. N.
Amery, Julian (Preston, N.) Gammans, L. D. Lloyd, Maj. Sir Guy (Renfrew, E.)
Amory, Rt. Hn. Heathcoat (Tiverton) Garner-Evans, E. H. Lloyd, Rt. Hon. Selwyn (Wirral)
Anstruther-Gray, Major W. J. George, J. C. (Pollok) Lloyd-George, Maj. Rt. Hon. G.
Arbuthnot, John Glover, D. Longden, Gilbert
Armstrong, C. W. Godber, J. B. Low, Rt. Hon. A. R. W.
Ashton, H. Gough, C. F. H. Lucas-Tooth, Sir Hugh
Atkins, H. E. Gower, H. R. McAdden, S. J.
Baldock, Lt.-Cmdr. J. M. Grant, W. (Woodside) Macdonald, Sir Peter
Baldwin, A. E. Grant-Ferris, Wg Cdr. R. (Nantwich) Mackeson, Brig. Sir Harry
Balniel, Lord Green, A. McKibbin, A. J.
Barter, John Gresham Cooke, R. Mackie, J. H. (Galloway)
Baxter, Sir Beverley Grimston, Hon. John (St. Albans) McLaughlin, Mrs. P.
Bell, Ronald (Bucks, S.) Grimston, Sir Robert (Westbury) Maclay, Rt. Hon. John
Bennett, Dr. Reginald Grosvenor, Lt.-Col. R. G. Maclean, Fitzroy (Lancaster)
Bevins, J. R. (Toxteth) Gurden, Harold Macleod, Rt. Hn. Iain (Enfield, W.)
Bidgood, J. C. Harris, Frederic (Croydon, N.W.) Macmillan, Maurice (Halifax)
Biggs-Davison, J. A. Harrison, A. B. C. (Maldon) Macpherson, Niall (Dumfries)
Birch, Rt. Hon. Nigel Harrison, Col. J. H. (Eye) Maddan, Martin
Bishop, F. P. Harvey, Ian (Harrow, E.)
Black, C. w. Harvey, John (Waithamstow, E.) Maitland, Cdr. J. F. W. (Horncastle)
Body, R. F. Harvie-Watt, Sir George Maitland, Hon. Patrick (Lanark)
Boothby, Sir Robert Hay, John Manningham-Buller, Rt. Hn. Sir R.
Boyle, Sir Edward Head, Rt. Hon. A. H. Marlowe, A. A. H.
Braithwaite, Sir Albert(Harrow, W.) Heald, Rt. Hon. Sir Lionel Marples, A. E.
Bromley-Davenport, Lt.-Col. W. H. Heath, Edward Marshall, Douglas
Brooke, Rt. Hon. Henry Hicks-Beach, Maj. W. W. Mathew, R.
Brooman-White, R. C. Hill, Mrs. E. (Wythenshawe) Maude, Angus
Buchan-Hepburn, Rt. Hon, P. G. T. Hill, John (S. Norfolk) Maudling, Rt. Hon. R.
Burden, F. F. A. Hirst, Geoffrey Mawby, R. L.
Butcher, Sir Herbert Holland-Martin, C. J. Maydon, Lt.-Comdr. S. L. C.
Butler, Rt. Hn. R. A.(Saffron Walden) Hornsby-Smith, Miss M. P. Medlicott, Sir Frank
Campbell, Sir David Horobin, Sir Ian Milligan, Rt. Hon. W. R.
Carr, Robert Horsbrugh Rt. Hon. Dame Florence Molson, A. H. E.
Cary, Sir Robert Howard, Gerald (Cambridgeshire) Monckton, Rt. Hon. Sir Walter
Channon, H. Howard, John (Test) Moore, Sir Thomas
Cole, Norman Hudson, Sir Austin (Lewisham, N.) Mott-Radclyffe, C. E.
Conant, Maj. Sir Roger Hughes, Hallett, Vice-Admiral J. Nabarro, G. D. N.
Corfield, Capt. F. V. Hughes-Young, M. H. C. Nairn, D. L. S.
Craddock, Beresford (Spelthorne) Hulbert, Sir Norman Neave, Airey
Crookshank, Capt. Rt. Hn. H. F. C. Hurd, A. R. Nicholls, Harmar
Crowder, Sir John (Finchley) Hutchison, Sir Ian Clark (E'b'gh.W.) Nicholson, Godfrey (Farnham)
Crowder, Petre (Ruislip—Northwood) Hutchison, James (Scotstoun) Nicolson, N. (B'n'm'th, E. & Chr'ch)
Currie, G. B. H. Hyde, Montgomery Nugent, G. R. H.
Dance, J. C. G. Hylton-Foster, Sir H. B. H. Oakshott, H. D.
Davidson, Viscountess Irvine, Bryant Godman (Rye) O'Neill, Hn. Phelim (Co. Antrim, N.)
D'Avigdor-Goldsmid, Sir Henry Jenkins, Robert (Dulwich) Orr, Capt. L. P. S.
Deedes, W. F. Jennings, J. C. (Burton) Orr-Ewing, Charles Ian (Hendon, N.)
Dodds-Parker, A. D. Johnson, Dr. Donald (Carlisle) Page, R. G.
Donaldson, Cmdr. C. E. McA. Johnson, Eric (Blackley) Pannell, N. A. (Kirkdale)
Doughty, C. J. A. Jones, A. (Hall Green) Partridge, E.
Duncan, Capt. J. A. L. Keegan, D. Peake, Rt. Hon. O.
Emmet, Hon. Mrs. Evelyn Kerby, Capt. H. B. Peyton, J. W. W.
Errington, Sir Eric Kerr, H. W. Pickthorn, K. W. M.
Erroll, F. J. Kirk, P. M. Pitman, I. J.
Farey-Jones, F. W. Lagden, G. W. Pitt, Miss E. M.
Fell, A. Lambert, Hon. G. Pott, H. P.
Finlay, Graeme Lancaster, Col. C. G. Powell, J. Enoch
Fisher, Nigel Langford-Holt, J. A. Price, David (Eastleigh)
Fleetwood-Hesketh, R. F. Leavey, J. A. Price, Henry (Lewisham, W.)
Fletcher-Cooke, C. Leburn, W. G. Prior-Palmer, Brig. O. L.
Foster, John Legh, Hon. Peter (Petersfield) Profumo, J. D.
Raikes, Sir Victor Spens, Rt. Hn. Sir P. (Kens'gt'n, S.) Walker-Smith, D. C.
Ramsden, J. E. Stanley, Capt. Hon. Richard Wall, Major Patrick
Rawlinson, P. A. G. Stevens, Geoffrey Ward, Hon. George (Worcester)
Redmayne, M. Steward, Sir William (Woolwich, W.) Ward, Dame Irene (Tynemouth)
Rees-Davies, W. R. Stewart, Henderson (Fife, E.) Waterhouse, Capt. Rt. Hon. C.
Remnant, Hon. P. Stoddart-Scott, Col. M. Watkinson, H. A.
Renton, D. L. M. Storey, S. Webbe, Sir H.
Ridsdale, J. E. Studholme, H. G. Whitelaw, W.S.I.(Penrith & Border)
Rippon, A. G. F. Sumner, W. D. M. (Orpington) Williams, Paul (Sunderland, S.)
Robinson, Sir Roland (Blackpool, S.) Taylor, Sir Charles (Eastbourne) Williams, R. Dudley (Exeter)
Robson-Brown, W. Thomas, Leslie (Canterbury) Wills, G. (Bridgwater)
Rodgers, John (Sevenoaks) Thompson, Kenneth (Walton) Wilson, Geoffrey (Truro)
Roper, Sir Harold Thorneycroft, Rt. Hon. P. Wood, Hon. R.
Ropner, Col. Sir Leonard Tiley, A. (Bradford, W.) Woollam, John Victor
Russell, R. S. Tilney, John (Wavertree) Yates, William (The Wrekin)
Schofield, Lt.-Col. W. Tweedsmuir, Lady
Sharples, Maj. R. C. Vaughan-Morgan, J. K. TELLERS FOR THE AYES:
Simon, J. E. S. (Middlesbrough, W.) Vosper, D. F. Mr. Richard Thompson and
Smithers, Peter (Winchester) Wakefield, Edward (Derbyshire, W.) Mr. Barber.
Ainsley, J. W. Greenwood, Anthony Moss, R.
Albu, A. H. Grenfell, Rt. Hon. D. R. Moyle, A.
Allaun, F. (Salford, E.) Grey, C. F. Mulley, F. W.
Allen, Scholefield (Crewe) Griffiths, David (Rother Valley) Neal, Harold (Bolsover)
Attlee, Rt. Hon. C. R. Griffiths, Rt. Hon. James (Llanelly) Oram, A. E.
Awbery, S. S. Griffiths, William (Exchange) Orbach, M.
Bacon, Miss Alice Grimond, J. Owen, W. J.
Balfour, A. Hale, Leslie Padley, W. E.
Bellenger, Rt. Hon. F. J. Hall. Rt. Hn. Glenvil (Colne Valley) Paget, R. T.
Benson, G. Hamilton, W. W. Palmer, A. M. F.
Beswick, F. Hannan, W. Pannell, Charles (Leeds, W.)
Bevan, Rt. Hon. A. (Ebbw Vale) Harrison, J. (Nottingham, N.) Pargiter, G. A.
Blackburn, F. Hastings, S. Parker, J.
Blyton, W. R. Hayman, F. H. Parkin, B. T.
Boardman, H. Henderson, Rt. Hn. A. (Rwly Regis) Paton, J.
Bottomley, Rt. Hon. A. G. Herbison, Miss M. Pearson, A.
Bowden, H. W. (Leicester, S.W.) Hobson, C. R. Peart, T. F.
Braddock, Mrs. Elizabeth Holman, P. Plummer, Sir Leslie
Brockway, A. F. Holmes, Horace Popplewell, E.
Broughton, Dr. A. D. D. Houghton, Douglas Price, J. T. (Westhoughton)
Brown, Rt. Hon. George (Belper) Howell, Charles (Perry Barr) Probert, A. R.
Brown, Thomas (Ince) Howell, Denis (All Saints) Proctor, W. T.
Burke, W. A. Hoy, J. H. Pryde, D. J.
Butler, Herbert (Hackney, C.) Hughes, Emrys (S, Ayrshire) Pursey, Cmdr. H.
Butler, Mrs. Joyce (Wood Green) Hughes, Hector (Aberdeen, N.) Rankin, John
Callaghan, L. J. Hunter, A. E. Reeves, J.
Carmichael, J. Hynd, J. B. (Attercliffe) Reid, William
Castle, Mrs. B. A. Irvine, A. J. (Edge Hill) Rhodes, H.
Champion, A. J. Irving, S. (Dartford) Robens, Rt. Hon. A.
Chapman, W. D. Isaacs, Rt. Hon. G. A. Roberts, Albert (Normanton)
Clunie, J. Jay, Rt. Hon. D. P. T. Robinson, Kenneth (St. Pancras, N.)
Coldrick, W. Jeger, George (Goole) Rogers, George (Kensington, N.)
Collick, P. H. (Birkenhead) Jeger, Mrs. Lena (Holbn & St. Pncs, S.) Royle, C.
Collins, V. J. (Shoreditch & Finsbury) Jenkins, Roy (Stechford) Shawcross, Rt. Hon. Sir Hartley
Corbet, Mrs. Freda Johnson, James (Rugby) Shinwell, Rt. Hon. E.
Cove, W. G. Jones, Rt. Hon. A. Creech (Wakefield) Shurmer, P. L. E.
Craddock, George (Bradford, S.) Jones, David (The Hartlepools) Silverman, Julius (Aston)
Cronin, J. D. Jones, Elwyn (W. Ham, S.) Silverman, Sydney (Nelson)
Crossman, R. H. S. Jones, Jack (Rotherham) Simmons, C. J. (Brierley Hill)
Cullen, Mrs. A. Jones, J. Idwal (Wrexham) Skeffington, A. M.
Daines, P. Jones, T. W. (Merioneth) Slater, Mrs. H. (Stoke, N.)
Davies, Ernest (Enfield, E.) Key, Rt. Hon. C. W. Slater, J. (Sedgefield)
Deer, G. Lawson, G. M. Smith, Ellis (Stoke, S.)
de Freitas, Geoffrey Ledger, R. J. Snow, J. W.
Delargy, H. J. Lee, Frederick (Newton) Sorensen, R. W.
Dodds, N. N. Lee, Miss Jennie (Cannock) Sparks, J. A.
Dugdale, Rt. Hn. John (W. Brmwch) Lever, Leslie (Ardwick) Steele, T.
Dye, S. Lipton, Lt.-Col. M. Stewart, Michael (Fulham)
Ede, Rt. Hon. J. C. Logan, D. G. Stones, W. (Consett)
Edwards, Rt. Hon. John (Brighouse) MacColl, J. E. Strachey, Rt. Hon. J.
Edwards, Rt. Hon. Ness (Caerphilly) McKay, John (Wallsend) Strauss, Rt. Hon. George (Vauxhall)
Edwards, Robert (Bilston) McLeavy, Frank Stross,Dr.Barnett (Stoke-on-Trent, C.)
Evans, Albert (Islington, S.W.) Mann, Mrs. Jean Summerskill, Rt. Hon. E.
Evans, Edward (Lowestoft) Marquand, Rt. Hon. H. A. Swingler, S. T.
Evans, Stanley (Wednesbury) Mason, Roy Sylvester, G. O.
Fletcher, Eric Mayhew, C. P. Taylor, Bernard (Mansfield)
Forman, J. C. Messer, Sir F. Taylor, John (West Lothian)
Fraser, Thomas (Hamilton) Mitchison, G. R. Thomas, George (Cardiff)
Gaitskell, Rt. Hon. H. T. N. Monslow, W. Thomson, George (Dundee, E.)
Gibson, C. W. Moody, A. S. Thornton, E.
Gooch, E. G. Morris, Percy (Swansea, W.) Turner-Samuels, M.
Cordon Walker, Rt. Hon. P. C. Mort, D. L. Ungoed-Thomas, Sir Lynn
Viant, S. P. White, Mrs. Eirene (E. Flint) Willis, E. G. (Edinburgh, E.)
Wade, D. W. White, Henry (Derbyshire, N.E.) Wilson, Rt. Hon. Harold (Huyton)
Warbey, W. N. Wilkins, W. A. Yates, V. (Ladywood)
Weitzman, D. Willey, Frederick Younger, Rt. Hon. K.
Wells, Percy (Faversham) Williams, David (Neath) Zilliacus, K.
Wells, William (Walsall, N.) Williams, Ronald (Wigan)
West, D. G. Williams, Rt. Hon. T. (Don Valley) TELLERS FOR THE NOES:
Wheeldon, W. E. Williams, W. R. (Openshaw) Mr. Arthur Allen and Mr. Short.
The Chancellor of the Exchequer (Mr. R. A. Butler)

I beg to move, in page 12, line 10, at the beginning to insert: As respects the period ending with the twenty-eighth day of November, nineteen hundred and fifty-five, I must apologise to the hon. and learned Member for Kettering (Mr. Mitchison) and other hon. Members who have their names to an Amendment on the Order Paper to deal with this matter, but as I had something to say on the subject of baskets, I have no alternative but to move this Amendment; otherwise I should have to wait till a later stage to make the statement which I now have to make.

Before coming to the details of this question of shopping bags and baskets, I should like to say that it remains the Government's wish to obtain the First Schedule on the Purchase Tax tonight, and for the convenience of hon. Members to adhere to the—I will not say the understanding—conversation which we had, namely, that we should not proceed to the revenue Clauses tonight. That may be for the convenience of the Committee so that hon. Members may know how far the Government wish to go this evening. That means that we shall have the discussion on the shopping bags and baskets now and then the main debate on the Schedule in which, I understand, some hon. Members wish to have the liberty to state their case in a general way. Having made—

Mr. Victor Collins (Shoreditch and Finsbury)

As there was some noise when the right hon. Gentleman actually read out the terms of the manuscript Amendment, will he kindly repeat them?

Mr. Butler

I will come back to it. This Amendment dealing with shopping bags and baskets means that at the beginning of the words in line 10 on page 12 I propose to insert the following words: As respects the period ending with the twenty-eighth day of November, nineteen hundred and fifty-five. The effect of the Amendment is to exempt shopping bags and baskets from the tax as from midnight tonight. I am making that statement so that the necessary arrangements can be made through the Customs and Excise and so that the exemption can operate as from tonight. My reasons are as follows.

I have reviewed very carefully the various tax changes in the Budget in the light of all the representations made to me, and, in the case of shopping baskets, I have been particularly impressed by the extent to which the manufacture of these goods provide employment for blind and disabled persons. I was working on this over the weekend, and it has now become quite clear that some 40 per cent. of those employed in the industry generally, and, we believe, 40 per cent. in the area covered by this tax, are blind or disabled. We therefore think that, in view of that situation, the baskets and the bags should be exempted from the tax.

It would clearly be most unfortunate and not in consonance with the general economic purpose which we had in mind if there were any such remarkable contraction in the demands for these baskets and that it would then fall solely on the employment of blind and disabled people who could not, perhaps, find employment elsewhere because their skills are attuned to these baskets. It would be impossible for them to move from one employment to another as has happened on previous occasions in other industries.

The question is whether to exempt shopping bags at the same time as baskets. I am informed that, in the past, shopping bags have always been treated for tax purposes on the same level as shopping baskets with which they are directly competitive. I therefore decided, although my reasons were as stated, for the baskets in particular, to exempt both bags and baskets as it is thought impossible to administer the tax in any other way. As I say, the change will take effect as from midnight tonight.

I may well be asked why I cannot introduce procedure, however complicated, to make the exemption retrospective to the date of the Budget. I think that I should freely acknowledge—indeed I have said so in as many words—that I am not doing so. The reason is that the complications of administration would be too great in a trade of this sort, even if we were to consider any procedure by way of Resolution or otherwise, to be quite sure that we were being absolutely fair in recouping those who had sold goods and in dealing with those who had bought goods.

6.45 p.m.

Therefore, while there may be complaints from hon. Members, which I do not wish to elicit, I wish to state my case plainly at the start, namely, that there will have been this period during which the tax has been levied. But perhaps a small mercy is better than nothing, and the fact that the tax is being taken off tonight will, I hope, show to the blind people that we have had regard to their case.

Mr. J. T. Price (Westhoughton)

While the Committee will naturally be grateful to the right hon. Gentleman for the statement he has made, is not his attitude, in not considering the interim period, equivalent to the case of a man who has been wrongly convicted by a court and sentenced and whose sentence on appeal is quashed, but who still has had to serve some part of that sentence?

Mr. Butler

Fortunately, the sentence in this case has been a comparatively light one. On examination, we have found that there has been a certain hold-up in the trade, which I must acknowledge. The hon. Member for Shoreditch and Finsbury (Mr. Collins) knows this perfectly well, but I do not think that there are any serious cases. In any case, I have been into great detail in trying to meet the position of someone who bought a basket and found it impossible to go into the shop again; but that is such an impossible course that I think it best to exempt the baskets as from tonight.

I take the responsibility for that, and I am afraid that I cannot devise a better system than that of exempting the bags and baskets. I have therefore moved this Amendment, and I express my regret of the apparent bad manners in coming into the debate before the Amendment of the hon. and learned Member for Kettering has been moved. However, I hope that my statement will shorten the discussion on this matter.

Mr. Collins

On behalf of my right hon. and hon. Friends on this side of the Committee, I very warmly welcome the Amendment which the Chancellor has just moved, and particularly the reasons which have prompted him to come to this decision. As the right hon. Gentleman has said, there is this difficulty about a period of rather more than four weeks, but I very much regret that he thought fit to impose a tax on shopping baskets at all.

The imposition of the tax has brought the trade in shopping baskets to a standstill and has inflicted some hardship on those blind and disabled workers whom the right hon. Gentleman now wishes to help. But because the trade has stood still, there have not been very many taxable baskets sold in the interim, and, much as I regret that the step was ever taken, I have to accept the fact that it would be extremely difficult now to recover any tax which has been paid.

In view of what the Chancellor has said, I feel that this tax was imposed without any real regard for the consequences on those blind and handicapped workers. The Chancellor has now discovered, somewhat late, that more than half the workers in the basket industry are blind or severely disabled and that they concentrate their efforts on the lighter types of baskets, of which shopping baskets are one of the most popular types. As the Chancellor has said, it would quite definitely mean unemployment, and certainly severe under-employment, were this tax persisted in. The amount that would have had to be paid by local authorities in augmentation of wages would have been far more than the sum received through the imposition of the tax. I hope that what has been said and what has happened with regard to this brave little industry will be borne in mind when any considerations of this kind arise in future.

As the Committee is well aware, I have an interest to declare. I am president of the Basket Makers' Employers Federation, but my interest goes far beyond any material one. I have worked with these people all my working life. I am a member of a joint industrial council in which of the seven employer members, five are managers of blind workshops. Two of the employee members are totally blind men. For the last six months I have been chairman of a sub-committee which has been dealing with the new national wages list of hundreds of items. The only other employer member is manager of a blind workshop, and of the three men one is totally blind. He sits with his Braille block before him, taking notes. Believe it or not, he can and does correct us, who have eyes, for mistakes that we might have made in decisions arrived at weeks previously.

It is impossible to work with these people and not be deeply concerned for their future welfare, particularly when one knows that they put up this gallant pretence of having no handicap. They talk of seeing when they have no eyes. But it is a pretence, and it is idle to imagine that they can work in the basket industry, or, indeed, in almost any other industry, on really equal terms with sighted workers.

I am very glad that despite the fact that I did not have to move my Amendment, the Chancellor has seen in time the real need and rights of these people and that from tonight they will have the chance to go on doing the work for which they have been trained.

Mr. Raymond Gower (Barry)

As one who has pleaded for this exemption, I too am delighted that my right hon. Friend the Chancellor of the Exchequer has found it possible. I am glad he has found it possible to include shopping bags with the baskets.

My right hon. Friend has stated a very good and humane reason for the exemption of baskets. Apparently, the inclusion of shopping bags is a matter of administrative convenience, but it does not appear that the inclusion of shopping bags with the baskets will in any way cut across the main purpose of the Bill, for shopping bags do not use metal. Indeed, they use materials—plastics and textiles—which are in over-production. In South Wales and in the trading estate areas, they also employ people who are partially disabled. For these reasons, I thank my right hon. Friend.

Mr. Ronald Williams (Wigan)

As the Chancellor well knows, the Schedule has an important significance for my constituency because there is in the area a concentration of this kind of work. I came this afternoon prepared to make a speech directed to satisfying the Chancellor that it would be wrong that an industry which was in difficulties should, in a few weeks' time, be faced with complete catastrophe.

That was my position when I entered the Chamber. Therefore, I think it right that I should say wholeheartedly to the Chancellor how delighted I am that he has brought in this manuscript Amendment. It does the right thing and it does it, in present circumstances, in the right way. I hope that my hon. and right hon. Friends will give full support to the Chancellor in this most important and useful Amendment.

Mr. J. T. Price

Since I am also interested on behalf of a very worthy group of my constituents in this matter, it would be churlish on my part if I did not express my personal thanks for the concession that has now been made, even though it is somewhat tardy. Nevertheless, we are grateful for the sin of repentance, even at the eleventh hour, at the Dispatch Box.

This very ancient industry is one of the most ancient crafts in the world and dates back to Biblical times. Long before it was a chief source of employment to blind people, it was a source of amusement to Delilah, who is on record as having bound Samson with nine green withes, or willows, as the word was in ancient days, to restrain his supernatural strength. Nevertheless, we have not been in the happy position today of being able to bind the Chancellor with anything very material. In this small measure he has given way and, I think, wisely made this concession.

Quite apart from the effect of this concession on the unsighted citizens who rely on it as a means of livelihood in many towns, particularly in my native Lancashire, where the industry has been rooted for hundreds of years, there is a declining population of craftsmen, who are dwindling in number all the time. Their number is now only two in ten of what it was a few years ago.

I hope that the younger men will be encouraged to take up this ancient craft, which is something of which the nation is proud, for it has the finest basket-making industry in the world. The alternative is to import a lot of foreign goods of inferior manufacture. We on these benches are delighted to know that the handicap is to be removed by the Chancellor in the Amendment which he has put forward, which we on this side support.

Mr. Jay

We are all delighted that the Chancellor of the Exchequer has made this concession. I do not think anybody in the Committee would wish to vote against the Amendment. None the less, I was left wondering why the right hon. Gentleman had not thought of this before. It is fairly common knowledge that baskets and such things are made on a large scale by the blind. One wonders, therefore, why we had to wait a month for this Amendment.

Did the right hon. Gentleman know, when he introduced the Budget and imposed this tax, that it would have this effect on blind people? Did he do it none the less, or did he not know? I prefer to think that he did not understand what he was doing, that he had not analysed the effects of these tax changes and that this is yet one further piece of evidence of the hasty, ill-considered and ill-conceived fashion in which the Budget was introduced. This is not the only case where the Chancellor had a whole schedule of tax changes put before him, approved of them in a casual, blithe manner and did not really understand what the effect in detail would be. That is the only possible explanation of his conduct in this case.

There is one other moral of this change. It shows how easily the Chancellor can make a concession when he wants to do so. This example will create new anomalies and other "yawning gaps"—of course it will; yet in spite of that the Chancellor, when he thinks the case is strong enough, is perfectly willing to do so all the same.

This is not the only case in which these new taxes are imposing hardship. It would have been a particularly cruel form of hardship, but it is by no means the only one which is being imposed all along the line by these increases in tax. In this case the Chancellor has decided—rightly, we think—that the disadvantage of creating that hardship exceeds the disadvantage of having another anomaly in the tax. If he can come to that conclusion in this case, he can just as well come to it in a number of other cases. I hope he will bear that in mind presently when we discuss the remainder of the Schedule.

Amendment agreed to.

Motion made, and Question proposed, That this Schedule, as amended, be the First Schedule to the Bill.

Mr. Hugh Gaitskell (Leeds, South)

We now come to the stage when we may discuss the Schedule as a whole with the Amendment—unfortunately, the solitary Amendment—which the Chancellor has just announced. The Committee will be aware that the Schedule falls into two parts. The first part deals with the items which were previously covered by the D Scheme and which are now to be subject to a flat rate of tax of 5 or 10 per cent. as the case may be. The second part deals, of course, with a very large number of essential household articles which are now to be subject to a tax of 30 per cent. and which were not subject to tax before. There are one or two other smaller items, particularly the reductions on cut glass and silverware.

7.0 p.m.

I propose to say a little to start with about Part I of the Schedule. I have no doubt that many of my hon. Friends will wish to speak on this, because, unfortunately, owing to the way in which the Ways and Means Resolution is drawn, a whole page or one and a half pages of our Amendments to Part I of the Schedule were found to be out of order, and we were not in a position, therefore, to discuss individual items at all.

It is well-known that this question of an imposition of a tax on many articles which were previously free from tax, particularly in the textile field and the field of furniture, as well in furs, has caused a great deal of dismay and confusion, in some cases, in the various trades affected. Our objection to the Chancellor's proposals here to replace the D Scheme with a flat rate tax of 5 per cent. or 10 per cent. does not spring from any particularly passionate regard for the D Scheme itself.

Indeed, when the D Scheme was introduced by the Chancellor, many of my hon. Friends, particularly those sitting for Lancashire constituencies, did, if I recall rightly, express their anxiety, and made a number of criticisms. We were, of course, concerned to have the D-level fixed as high as we possibly could, so that as few articles as possible would actually bear that tax. What we feel is this. If experience has shown that the D Scheme had disadvantages, as well may be the case in the field of textiles, the right thing to have done would have been to get rid of the tax altogether.

What we oppose most strongly is the imposition of a tax on the cheapest articles which were hitherto free from tax, and the abandonment thereby, if we are to have taxation on these articles at all, of a principle of fiscal discrimination in favour of cheaper articles. We make no apology for saying that we have always favoured a system of that kind. We were not in any way apologetic that when the utility schemes were in existence it was a considerable advantage that utility goods were free from tax, and correspondingly cheaper.

Mr. John Peyton (Yeovil)

Was it not intended to meet a problem which arises in a case of an industry, such as the glove industry, which is competing with cheap and enormous imports from overseas?

Mr. Gaitskell

That is, as I am sure the hon. Member will appreciate, an entirely different point, a specific point which I realise may be of great importance to his constituents. I would say, on that, what I have just said, that we think that if the D Scheme had to be abandoned—and it may be that there are arguments against it there—it would have been better to leave the article concerned untaxed. Whether that would have been sufficient to deal with the problem of imported gloves, of which I know a little myself, is another matter, and to deal with it would he going far beyond the Schedule which we are now discussing. I repeat that what we really object to is that articles which previously were free from tax—and it was a fairly high proportion of the trade in a number of these cases—should now be paying a tax, even a tax of 5 per cent.

Having said that generally, I want to refer to one or two specific cases. The field of textiles I shall leave with only this comment. One cannot, I think, have a clearer illustration of what is involved in this than by simply taking a few articles and showing where the effect of the tax change is balanced either way, so that there is no change in the price. In the case of wool coats, every wool coat which retails at less than £12 will pay increased taxation. Every wool coat that retails at above £12 will pay reduced taxation. If we take blankets, for instance, every pair of double blankets which retails at a price above £7 will enjoy reduced taxation, and every pair of blankets which retail at a price below £7 will bear increased taxation.

If we take woollen cloth, every piece of woollen cloth which is priced at £2 a yard and over, a fairly expensive price, will enjoy reduced taxation. Every piece of woollen cloth which sells at less than £2 a yard will pay increased taxation. There can be no possible doubt that in all these cases what the Chancellor is doing is to convert a tax, which was intended so far as possible to be in principle a luxury tax, into a tax on necessities and into what we call technically a regressive tax, a tax which will fall heavily in proportion on the income of poorer people.

The case for fur coats has been argued as a luxury tax, and it still remains a particularly bad one. There, we have a situation where there is no reduction in tax at all, and where the additional tax imposed, where no tax was imposed before, is as much as 50 per cent. on the wholesale prices. This means—the Chancellor really has made, if I may say so to him, no serious attempt to answer this —the elimination of what we used to call the utility fur coat, a reasonably cheap but, I think, quite good fur coat, which sold at a price which ordinary people could afford to pay.

The effect may now be, even if the retailer takes no additional revenue by imposing his margin on the tax itself, that people will have to pay another £6 per article on a coat which competes with woollen coats which are, in fact, being reduced in price, and the tax change is going to make things virtually impossible for this section of the fur industry. Such articles, I am told, will probably go out of production altogether.

I turn for a moment to the other major article which is involved here, and where the D scheme has been abandoned, and that is furniture. It is true that in the case of textiles, as I have said, there was undoubtedly a good deal of criticism in the trade, and the argument was often put forward that the imposition of a tax on the more expensive articles under the D Scheme was making it more difficult for the trade to develop its export market. I do not propose to argue that at the moment. I am prepared to accept that in the case of textiles that may possibly have been the effect, but I have never heard serious arguments to that effect put forward in the case of furniture. The entire case is that it must be a neat and tidy Finance Bill, and that if we abandon the D Scheme and have a 5 per cent. tax for textiles, we must add the same for furniture.

Seventy-five per cent. of the furniture sold in this country, hitherto tax free, must now carry a 5 per cent. tax. We have the same picture of a tax system which was hitherto largely a luxury tax being made into a regressive tax. No argument has been put forward which puts up any serious defence. No one will suggest that the export of furniture is a particularly important item. No one will suggest that the result of all this will be a serious change in the export trade. It may be said that we want to discourage the sale of furniture in order to save timber, but the Chancellor has not put forward that argument at all, and I think he would agree if he was seriously concerned, as he may well have been in the last few months about the import of dollar timber, that he would have to take very much stronger action to deal with it than a 5 per cent. tax. This is simply, as it seems to us, a deliberate attempt to impose a regressive tax for the sake of tidiness.

I turn to the other part of the Schedule, on which we have spent a good deal of time already. Our charge against the Government is essentially the same as it was on Part I. What do we find? Before this Finance Bill came before us there was deliberate discrimination in Purchase Tax, because essential articles were left out altogether. It has taken some years to get to that position, as many of my hon. and right hon. Friends have pointed out. A series of different Budgets has exempted different articles from time to time. I shall always be glad that, even in 1951, with all the difficulties and with the necessity which I had—I make no apology for it—of increasing Purchase Tax on articles such as motor cars and television sets, which competed directly with the defence programme, I nevertheless found it possible to exempt a large range of goods from taxation.

Yet the Chancellor brings all these articles back and many others as well. He even brings back into Purchase Tax brooms, mops and brushes, which never carried tax at all before. It is interesting to notice that these items were originally included in Sir Kingsley Wood's Budget in the autumn—"mid-summer" would be more appropriate—of 1940.

Mr. Jay

Was it not Sir John Simon's?

Mr. Gaitskell

No, it was Sir Kingsley Wood's. Sir John Simon's Budget originally included a very different sort of Purchase Tax. That was withdrawn.

Sir Kingsley Wood, when he became Chancellor of the Exchequer, introduced a new Budget in July, 1940. It was discussed in August. It included at a low rate of tax brooms and brushes. They were to pay the 16⅔ per cent. rate. An Amendment was moved by Mr. Alfred Barnes, whom we all remember, on 13th August, in the middle of the Battle of Britain, to exempt the brushes and brooms. Sir Kingsley Wood got up before Mr. Barnes had had time to say more than a few sentences, and simply said: I propose to accept this Amendment"—[OFFICIAL REPORT, 13th August, 1940; Vol. 364, c. 720.] The whole thing was over in two minutes, at the worst moment of the war; yet the Chancellor of the Exchequer is not now prepared to follow Sir Kingsley Wood's example at a time which, we are always being told, is one of the most prosperous that we have ever enjoyed. What Sir Kingsley Wood did in the darkest days of 1940 the present Chancellor will not and cannot do today. It is an extraordinary situation.

I do not understand, though I welcome it, why the Chancellor of the Exchequer has been prepared only to limit his concessions to baskets and bags. We are all glad of that concession, but, as my right hon. Friend the Member for Battersea, North (Mr. Jay) said, we feel that it might well have been made somewhat earlier. I would point out that a lot of brushes are made by blind people—if we are to have that argument brought in. Though it is an important argument we do not regard it as the only one.

As a result of the Budget, the housewife is now condemned to pay Purchase Tax on almost every article she uses in her kitchen. If she gets up in the morning and starts to clean the house she pays it on the mop, brooms and brushes. If she then proceeds to do the washing she pays it on the washing bath and then on the wringer and on the clothes pegs with which she hangs out the clothes. At a later stage she pays it on the iron and on the ironing board that she uses. When she has done the washing and decides to do some cooking, she has to pay it on the pots, the pastry board, the rolling pin and the other things that she uses. Even when the meal is over, and she—or her husband—gets to the washing up, he or she has to pay it on the pot scourers and the steel wool.

It is a most extraordinary business, and we find it very difficult to understand the arguments in favour of it. The Chancellor has been utterly unconvincing in his suggestion that this tax of 30 per cent. imposed on these essential articles will promote our export trade. I do not think the right hon. Gentleman would attempt to press that argument and I have not seen any real attempt to suggest that we shall save a vast amount of imported materials, of either metal or timber.

We have been regaled most of the time with the excuse not that the less bought at home the more is exported and, therefore, fewer materials are imported, but that purchasing power will be mopped up. That amounts, in plain language, to saying that people will have to pay extra tax on these essential articles and will have less money to spend on the other articles, and that, correspondingly, those other articles, not specified, will not be bought and so there will be less inflationary pressure.

7.15 p.m.

I do not deny that there is something in that argument, as far as it goes, but I would make two comments on it. It is all very well to say that putting Purchase Tax on essential articles mops up purchasing power; so it does, if we take no account of possible repercussions on wages. No Chancellor of the Exchequer can ignore the repercussions in that field. I have been attacked because I referred in my Budget speech to these consequences. I want to make it quite plain to the Committee that nobody on this side or on the Government side of the Committee will influence or affect what the trade unions do in this field. It is their affair and if we started trying to tell them what to do they would undoubtedly tell us to mind our own business.

What we are entitled to do, and, indeed, it is our duty to do, is to point out the consequences of what the Government are doing in this situation. I intend to continue doing that. Some hon. Members on the Government side of the Committee have joined us during the course of our proceedings because they obviously feel, as we do, that although there is some validity in the argument about the mopping up of purchasing power it is destroyed as soon as we remember the repercussions on wages.

Why was it so necessary, if the Chancellor wished to introduce a disinflationary measure and wanted to mop up and take away purchasing power, to take away the purchasing power of the poorest people in the country? We have never been told why the Chancellor gave away £150 million in Income Tax concessions in April and made no effort to take any of it back. I think I am right in saying that the total amount to be drawn in revenue from bringing these essential articles into taxation is £15 million, and that another £8 million will result from the abolition of the D Scheme and the introduction of the 5 per cent. and 10 per cent. tax, or £23 million in all.

It so happens that in April those with incomes of £2,000 a year and over, namely, about 350,000, and paying Surtax, received about £25 million from that Budget. If the Chancellor had been prepared to take away the concessions he made to the £40 per week people, none of these Purchase Taxes need to have been put on. I hope that he will tell us how he defends such shockingly regressive action and reactionary policy.

We have heard that it was necessary to tidy everything up in the Finance Bill. In the famous words of the Financial Secretary to the Treasury, there would be a yawning gap if we did not have a tax on woollen textiles and the brushes, brooms, pots and pans brought into the 30 per cent. rate. I have no doubt that here the Chancellor and the Financial Secretary have succumbed to arguments presented to them by those who have to administer this tax and who wish to see it neat and tidy and less difficult than it is. If it is believed, as we on this side do believe, that Purchase Tax should as far as possible be a tax on luxuries, and that there should be discrimination between one article and another, I concede immediately that there must be difficulties and some anomalies. In my opinion, however, the anomalies and difficulties are abundantly to be preferred to the regressive tax with which we are now confronted.

The truth is that the Government have completely disregarded that aspect, and seem to be content so long as everything can be included. We used to be accused, very unjustly, of desiring to introduce equality of misery. We have almost had that phrase used as an argument by the Financial Secretary. Everything should be brought in because if anything was left out it would be unfair. For all those reasons we view this Schedule, even amended, with the most profound displeasure and we shall, in due course, certainly divide against it.

Mr. Geoffrey Wilson (Truro)

I shall not enter into any prolonged debate with the right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell) about the Schedule. On that, I am prepared to accept my right hon. Friend the Chancellor's argument, though I would add that I should have thought, with regard to the argument of the right hon. Gentleman the Member for Leeds, South, that only the poorest pay, that the Income Tax payer would be paying more Purchase Tax than others because he would be paying increased tax perhaps on motor cars and the like as well as on pots and pans.

Be that as it may, all I wish to do at this stage is to refer again, as I did on 22nd November last—in column 1358 of the OFFICIAL REPORT—to the small hand-thrown pottery industry in Cornwall. I only mention it because I have received a further letter from the firm to which I then specifically referred. It is the only surviving maker of the Cornish pottery, a unique article which I described. It also makes other hand-thrown pottery such as breakfast ware. The letter I have received reads: We await further proceedings with anxiety. Buyers for stores and craft shops are not even considering buying until after the next Budget, which may be what the Chancellor desires, but, in the meantime, the rural potteries will have ceased to function. Not many of us can continue to build up stocks and pay wages for six months on the off chance that the Purchase Tax may be eased and buyers come back. Most will have left their workshops to seek other employment within the next two months. Pottery is a craft which has a seven-year apprenticeship, and we are deeply concerned that this craft will now cease to be. We are faced with a problem which is quite new to us. Shall we risk everything in keeping on our staff, or shall we give up the struggle and close down? One of our men who has been with us for 30 years will find difficulty in getting other suitable work. The younger staff will not find it so difficult, but all will be unable to use their skill. No doubt, except in the case of that one man, the others would find other work not within the pottery industry, but it seems a pity if this ancient Cornish industry should come to an end because of increased taxation on what is really a craft product—a product which, as I have said before, is of value to the tourist trade and has a value beyond its actual saleable value as a product. I hope that even now, at this late stage, some means may be devised of distinguishing hand-thrown pottery from other types so that it does not have to pay the full rate of tax, and thus be saved from extinction.

Mr. Victor Yates (Birmingham, Lady-wood)

I am very disappointed that the Chancellor has not made more concessions. One would have thought that where it was proved that the effect upon an industry was detrimental, by taking away its skilled workers and so on, the Chancellor would have listened more carefully.

I want again to mention the jewellery industry. Although the Chancellor has made a concession to the silverware industry, that advantage is entirely offset by the disadvantage of increasing the tax on various types of jewellery, much of which is capable of development into a very considerable export trade. I mention jewellery in particular, but I do not under-estimate the effect of the tax upon the vast series of industries in Birmingham. In my constituency, where there are hundreds of factories of various kinds, manufacturers of kitchenware have told me of their difficulties resulting from the tax.

In an earlier debate on the Bill, I asked the Chancellor to examine the jewellery industry's special difficulties. I was then in a rather difficult position, and although the Financial Secretary tried to get me in order by suggesting that I could speak about jewellery under the heading of silverware, he was unable to answer me without himself being out of order. This evening I want to refer to those articles which have been subjected to an increase in tax from 75 per cent. to 90 per cent.

The Economic Secretary himself made out a strong case two years ago for a reduction of the tax. I am informed that the section of the industry making such items as powder compacts and powder bowls—now to be subjected to a 90 per cent. tax—is fast declining, and that it is quite impossible for the manufacturers to compete with Germany, Paris and Japan. They are in a serious position. Factories in Germany have been built very largely with dollar aid; they are being financed by the United States. They are being subsidised. I am told that we could not compete in the export markets with the wonderful creations in this section of the trade now appearing in Paris.

That is just one section. In other sections, such as that making jewellery capable of being worn on the person, a more serious situation arises. We have had no answer at all from the Government to any of the questions that we have put about items of this kind.

7.30 p.m.

Major H. Legge-Bourke (Isle of Ely)

On a point of order. I do not wish to prevent the hon. Member from saying what he wishes to say, but are we in order in discussing all the various groups of articles which are subject to Purchase Tax as we were on the Question, "That the Clause stand part of the Bill," or are we entitled to speak only of what is in the Schedule? The items which the hon. Member mentioned are not in the Schedule.

The Chairman

The Committee is allowed to discuss anything that is in the Schedule, and I understood that that was what the hon. Member for Ladywood (Mr. V. Yates) was doing.

Mr. Yates

I hope that I shall not be in the difficulty that I was in on the previous occasion when we debated these matters. I am concerned about all the articles in the Schedule tax on which is being increased from 50 per cent. to 60 per cent. and from 75 per cent. to 90 per cent.

Mr. Hale

We have been talking about these matters for eight hours and the hon. and gallant Member for the Isle of Ely (Major Legge-Bourke) ought to know.

Mr. Nabarro

Where in the Schedule is there any reference to an increase from 75 per cent. to 90 per cent.? There is a reference to an increase from 50 per cent. to 60 per cent., but there is no reference to the tax on silver compacts being increased from 75 per cent. to 90 per cent.

Mr. Ellis Smith

What is a silver compact?

Mr. Hale

A toilet article.

The Chairman

I take it that the hon. Member for Ladywood is referring to Part II (13, 2b)— Articles of personal adornment and other articles of a kind worn on the person, being articles made wholly or partly of gold, silver or other precious metal.… That is in order.

Mr. Yates

As far as I know, the Schedule is concerned with items of jewellery ware on which tax has been increased. However, I will pass from the question of the 75 per cent. to 90 per cent. increase. I was thinking of jewellery which you, Sir Charles, have referred to in your quotation from the Bill. There are articles like cuff links and tie pins for which we have an export demand. While the Government decided some time ago to reduce the Purchase Tax on all these items, they now reverse the process although they have recognised the serious position of the industry.

Group 26 includes, Miniatures or reproductions of the insignia of orders, decorations or medals granted by the Sovereign… among the articles which are to be exempt from tax. As I have said before, the Mace is exempt but a Lord Mayor's chain is taxed at 60 per cent., which is quite ridiculous. The Government ought to tell us what they propose to do about this anomaly.

These provisions seem very mean. Many societies and sports clubs award medals for something or other. Medals made of precious metal are to bear a tax of 60 per cent., but any old tin, brass or copper medal is to be tax free. That is very mean.

I should like the Financial Secretary to appreciate the background of difficulties against which the jewellery industry has to work. For example, every cigarette lighter produced by the jewellery industry is subject to an Excise Duty of 6s. 6d., and I am informed that a lighter produced in this country sells for 25s. compared with 5s. 6d. paid in South America for a similar lighter made in Japan. If the jewellery industry is to be asked to make its contribution to the export trade, the Government must realise that Purchase Tax is added to all the other difficulties which the industry has to face.

I received today a letter from Birmingham, and I understand the Economic Secretary to the Treasury has received a similar letter. I am sorry he is not in his place. The jewellery industry has been discussing with the Board of Trade the enormous difficulties which it faces in international competition. Mr. P. Burns Farquhar, Midland Regional Secretary of the British Joint Association of Goldsmiths, Silversmiths, Horological and Kindred Trades, has written informing me of the sense of frustration which the industry is feeling as a result of its difficulties. Mr. Farquhar has been putting before the Board of Trade difficulties which it would not be in order for me to mention now, but one has a direct relevance to the subject we are discussing.

I am trying to show to the Committee that the situation of the silversmithing and jewellery industry is precisely the same today as it was two years ago when the Economic Secretary to the Treasury said it was running down a dangerous slope. According to a Memorandum from the British Jewellers' Association, Austrian stones are 15 per cent. dearer to the United Kingdom manufacturer than to the home producer… The jewellery industry has to mount these stones. The Committee can imagine the effect upon the cost of this 15 per cent., plus Purchase Tax.

The Memorandum states that, in addition, Austrian manufacturers enjoy a Government rebate of 15 per cent. on exports. It adds: Raw cameos imported from Italy cost the U.K. manufacturers as much as imported Italian cameos mounted in rolled gold, which suggests some subsidy or preferential prices to the Italian manufacturer. The Memorandum also mentions wages. My right hon. Friend the Member for Leeds, South (Mr. Gaitskell) has mentioned the repercussion of Purchase Tax on wage demands. The British Jewellers' Association put the facts to the Board of Trade. The Association mentioned the considerable difference between the wages paid in Germany and Austria and those paid in this country and, quoting some comparative prices added, These U.K. prices are at today's rates. The industry has received a claim from the trade union for a 12½ per cent. increase in the basic minimum rate and a 6d. per hour all round increase for adult skilled male workers with proportionate increases for other grades and women. The cost of living, so much accentuated by the Budget, is having that effect.

How are manufacturers to compete in world markets if they have to add to present costs the burden of high Purchase Tax? The Memorandum from the British Jewellers' Association adds, Australia, which traditionally was the best overseas market for U.K. manufacturers, is now importing mainly from Germany"— I hope that my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith) will note that Australia was a big importer of pottery which is also affected by the provisions of the Bill— because under the Australian 'quota' importers want to obtain the maximum number of pieces for a given sum of money. This is evidence of the fact that German pieces are lower than U.K. One Birmingham firm of imitation jewellery manufacturers states that his Australian exports fell by 50 per cent. this year. If the Government want this great craft industry of Birmingham to make its contribution to the export trade and the settling of the balance of payments, they must take note of these facts.

I want to make a point now about the fashioning of valuable stones with gold. As far back as 1949 the Jewellery and Silverware Council issued this warning about Purchase Tax: …the tax has had an effect perhaps unexpected but always feared by the industry itself, namely that of diverting supply and demand to irregular channels, such that while no tax is paid prices are yet higher than their proper level, while the Revenue loses even tax on the incomes of the operators concerned. Statistics it is impossible to verify, but it has been stated publicly by the President of the largest association in the industry that a very considerable proportion of the total output of the industry for the home market passes through irregular channels and pays no tax of any kind. In 1953 the Economic Secretary came to us and made a similar statement. Appealing for Purchase Tax to be taken off, he said: …the present rate of Purchase Tax does unquestionably very greatly encourage the black market and tax evasion. I can give two examples of what I mean. It means that manpower is drawn off to what the trade euphemistically calls 'irregular channels'."—[OFFICIAL REPORT, 20th March, 1953; Vol. 513, c. 363.] So that the Economic Secretary realised that the jewellery industry was in the throes of a black market, and a very serious one.

Has the position changed? I am informed that today the black market is rampant. The increase of Purchase Tax upon these items will not only affect our ability to export, but will mean an extension of black market activities. I am informed by the trade unions concerned, both in London and Birmingham, that they are seriously concerned about the number of skilled workers who, having completed their apprenticeship, are today leaving the industry to set up on their own. And they can do it. They can manufacture in back rooms. I am not saying that all engage in black market activities but this is a serious consideration which should be faced.

7.45 p.m.

The Government are making it still easier for this type of trade. It does not involve the importation of gold because it is old gold that is being melted down. The stones are much more valuable than the gold. But so long as they are loose, diamonds, sapphires, rubies and so on can be bought tax free. It is only when they are mounted in gold that the tax is added, so that a diamond worth £100 has £60 added to the price as soon as it is mounted in gold. How are we to compete in those circumstances? I am told that it is easy now for people to buy diamonds and then take them to be mounted, and that many are being dealt with in this way. That is why the trade says that a considerable amount of work is being done on which no tax is paid.

A few days ago an official of the Society of Goldsmiths, Jewellers and Kindred Trades in London said to me that the best handmade craftsmanship is being driven out, and that the demand for creative design is nil because the cost of experimenting is too dear. Then he added that jewellery for working people thus becomes valueless. Illusion setting—that is, making a small stone look four or five times bigger than it is—is for the working classes, while all kinds of backalley cheapjacks are producing so-called imitation jewellery by the bin-full. As the old craftsmen die, so the bulk of their skill dies with them. Apprenticeships with good firms are most difficult to obtain because these are so few in number.

I am appealing to the Committee and the Government not because I have any special interest in the jewellery industry. Indeed, I have not the slightest doubt that the majority in the industry would be opposed to me politically. I do so because it is an important and valuable old craft industry in the city of Birmingham. I am disappointed that the Chancellor cannot see the importance of relieving it so as to enable the industry to compete in the markets of the world and so assist in balancing our trade. I hope, therefore, that we shall get an answer from the Chancellor tonight telling us what he is prepared to do to deal with the problem, if not now, between now and the next Budget.

I was told that only a few days ago two men left a jewellery firm in Birmingham to which they had been apprenticed. They had done their National Service and had returned, after which they decided to leave in order to manufacture gold rings on their own account. Others are leaving to take up more remunerative employment in the city. These facts ought to be noted and the Chancellor should not impose on this industry, as on others, a burden which it cannot bear and which will prevent it from making its valuable contribution to our export trade.

Mr. John Peyton (Yeovil)

I very much hope that the hon. Member for Ladywood (Mr. V. Yates) will send a copy of his speech to his right hon. Friend the Member for Leeds, South (Mr. Gaitskell). A little earlier his right hon. Friend made it clear that he was in favour of Purchase Tax being applied to luxury goods. The hon. Member has made a very good case for craft industries receiving special treatment. It appeared very much that the right hon. Member for Leeds, South was disregarding the craftsmanship angle of an old industry and those working in it, as well as taking no account of the export angle, which is very important.

Mr. Hale

My right hon. Friend the Member for Leeds, South (Mr. Gaitskell) certainly made the point, which is always made in Purchase Tax debates, that Purchase Tax might well apply to luxury goods rather than to the goods of the poor, but there was no suggestion that he approved of an increase at this moment on luxury goods, or wanted to see the tax on jewellery rise from 75 per cent. to 90 per cent., or anything of the sort.

Mr. Peyton

I did not say that. I said that the right hon. Gentleman made it clear that he thought Purchase Tax should be a tax applicable to luxury goods, and, so far as possible, only to luxury goods. All I am saying is that in putting forward that view he appeared to disregard the important element of the craftsmanship side of old industries, and also the question of export markets, which is one which no hon. Member on either side of the Committee should disregard.

I propose to confine my remarks to the gloving industry. I have raised the case of this industry many times previously. I want to draw to the attention of the Financial Secretary, and I hope he will bring it to the notice of the Chancellor, the crux of its problem, the very steep rise in imports. I do not believe that any other industry in the country has suffered anything like such a steep increase in competition from cheap imported goods.

I have here some figures given me by my right hon. Friend the Minister of State, Board of Trade, in reply to a Question the other day. To take the case of fabric gloves, in the nine months from January to September, 1952, 19,000 dozen fabric gloves were imported. Four years later the quantity had increased to 654,000 dozen. In the nine months in 1952 to which I referred, the total imports were 249,000 dozen, and this year the import has reached 1,384,000 dozen, which is well in excess of the total home production.

I have put this matter to the Government again and again. I recognise what a difficult problem it is, at any rate when it is faced from the point of view of possible protective measures, but when an old industry is confronted with that sort of problem it ought to receive very special treatment in relation to Purchase Tax.

For that reason, I wholeheartedly welcome the abolition of the D Scheme. While the scheme was in force we had the fantastic and anomalous situation of an increasing flood of cheap imports which did not attract a penny in Purchase Tax, whereas almost all our own manufactured goods, because of the ill-advised low figure of the D-level, attracted the tax. Although the abolition of the D Scheme has materially improved the position of the gloving industry, I still think we are justified in asking for Purchase Tax to be removed altogether.

Mr. Collins

Is it not the case that, in addition to the point which the hon. Member is making, many people in the gloving industry are home workers and the wages paid are very low when compared with other industries, so that the competition which the industry has to meet from abroad must be based on sweated labour and low wages?

Mr. Peyton

I prefer not to go into that matter now. Obviously, the wages paid in Hong Kong are measured against a very different standard from that which prevails in this country, and it is clear that the costs in Hong Kong are very much lower than those in this country.

I want to refer the Financial Secretary particularly to children's gloves and industrial gloves. We have heard a great deal about the mopping up of purchasing power. I am not certain whether in applying tax to children's gloves for the first time it was the Chancellor's intention to mop up part of the family allowances, but it does seem rather odd to bring these articles within the sphere of Purchase Tax.

It is even more odd, and rather more unjustifiable, to bring industrial gloves within the sphere of the tax for the first time. That cannot possibly be a disinflationary measure; it must be inflationary to add something, even though it is a small amount, to the level of industrial costs. I realise that this is a comparatively small point, but I hope very much that before Report the Government will look at it and also the point about children's gloves.

Finally, I implore my right hon. Friend to remember that all the arguments which I have heard him use with great eloquence in favour of craft industries during our debates can be applied to the gloving industry. At the moment the industry is in great difficulties. There is particular difficulty about apprentices. For the reasons which I have briefly expressed, I urge my right hon. Friend to look carefully into the position of the industry, which I ask him to accept is an increasingly difficult one.

Mr. John Rankin (Glasgow, Govan)

I wish to direct the attention of the Chancellor to one or two points which, I sincerely hope, have escaped his observation. I shall refer, in particular, to Groups 2 and 5.

In his Budget the Chancellor has exempted children's cots from tax. The cot is of little use without the accessories, but we find that in Group 5 the mattress, sheet, pillow, blanket and quilt, all of which are absolutely essential to the use of the cot, are to be taxed at the rate of 5 per cent. I urge the Chancellor to reconsider the matter, because I feel it was not his intention to exempt a cot from direct taxation and then impose what, in effect, is an indirect tax upon it. One simply cannot use a cot without the accessories.

We are told that cot fittings have also been exempted. Cot fitments are regarded as being part of the cot, but a man may decide, as do some who are handy about the house, to make a cot for his own child. He then finds that every single one of the accessories and the materials that are required in that cot are taxed. Many cots have "domes of silence." In some cases people do not like "domes of silence," because the cot has often to be shifted into another part of the house. Those people prefer to put the cot on small castors.

8.0 p.m.

Here, again, a strange anomaly emerges. If a castor is less than 1⅛ inches in length it is taxed, but if the castor is a big one, then it is exempt from taxation. That is a complete anomaly. It places the person who wants to replace the "domes of silence" on his child's cot with castors in the position that because the castors are small he has to pay tax. But to the user of big castors, however, there is no tax at all.

That is the sort of anomaly which the Chancellor will not want to continue. As far as I can follow the intentions of the Chancellor, I think it has been generally intended that nursery furniture should be exempt. If that is the case, the accessories that go with that nursery furniture should be exempt, too, because in many case so-called nursery furniture is quite useless unless one has the additional fitments that go with it. I fail to see why a man who wants to make a cot for his child should be taxed on every single fitment which he buys for the cot.

In Group 2 we are told that all babies' head gear is free of tax. But once more a strange anomaly presents itself. Christening hats, such as the one I have in my hand, which are babies' head gear, are not exempt from tax.

Captain Henry Kerby (Arundel and Shoreham)

Put it on.

Mr. Rankin

I shall not make the suggestion that the hon. and gallant Member should put it on, although it would cover a part of his body that would be warmer if it were covered.

This hat is subject to a tax of 10 per cent., despite the fact that Group 2 exempts babies head gear from taxation. I know that it is a form of head gear which is not much used in England except on special occasions—

Mr. Hale

And except to use during a point of order after a Division has been called.

Mr. Rankin

A tax of 10 per cent. is being charged on this little hat, and I know that that is occasioning a great deal of complaint among the women who buy them for special occasions. The hon. and gallant Member suggested that I should put it on. It would look very well on the Chancellor. I do not propose to offer any prizes for the name which we on this side of the Committee would bestow on him, if we were given the chance of christening him while he was wearing it. I hope that the Financial Secretary will agree that this tax represents the sort of anomaly which ought to be rectified before we come to the Report stage.

There is another anomaly to which I must call attention, and that is the fact that soap used on babies is subject to a 30 per cent. tax. It is obvious that these taxes on the small child will cause a very considerable increase in the cost of living. As I have already said they are occasioning a great deal of protest among women shoppers. We have reached the stage when the Chancellor tells us that a child's cot is free of taxation, but, as the same time, the mattress, the quilt, the sheet, and the fitments that go with the cot are all subject to tax at a rate which is bound to have some effect on the cost of living in the homes where small children are brought up.

When a christening ceremony comes along, parents have to pay a tax on the little hat that the child wears. All the time the child is being reared, the parents are paying tax on the soap which is so essential, particularly where there are small children, for a variety of reasons. When we can impose taxation on small children on such a wide scale, I wonder whether we shall reach the stage when we will tax the dimple on the baby's knee, or the place where the dimple ought to be. I hope that before we come to the Report stage of the Bill the Chancellor will give further consideration to these inflictions, which particularly affect working-class homes, and will add to the small concessions which he has already made in this much maligned Budget.

Mr. Nabarro

The hon. Member for Govan (Mr. Rankin) has related an interesting anomaly which, it would not be an exaggeration to say, is somewhat restricted in character and applies only to those parents who are blessed with newborn babies. I seek to draw the attention of the Chancellor to a matter of importance to every home in the country, and therefore much wider in scope than the matters to which the hon. Member has just alluded, namely, the question of heating rooms and heating water in our homes. In Part II of the Schedule there are references to space and water heating appliances. Perhaps I might summarise the position at the outset by saying that there are four methods by which a householder may heat his rooms and water. The first is by solid fuel, and in that group I include coal and processed fuels, such as Phurnacite, Anthracite, Coalite or Rexco. The second is by electricity, the third is by gas and the fourth is by oil.

It has always been the purpose and policy of the Government, and of the previous Conservative Administration, to encourage free competition between these various forms of fuel or power for domestic purposes, but it seems to me that free competition between the four methods of heating that I have mentioned, should connote equal treatment for tax purposes. Surely it cannot be argued that an oil heater, for example, ought to be taxed on a different basis from an electrical heater, or that a gas heater should be taxed on a different basis from an electrical heater.

Mr. Chapman

Why not?

Mr. Nabarro

That was not the policy followed by the hon. Gentleman's Government.

Mr. Chapman

Yes, it was.

Mr. Nabarro

It was not. Perhaps I ought to get on with my speech. I will deal with all these points in a moment.

There are four alternative methods of domestic space and water heating, and in my view there should be equal treatment for tax purposes and free competition between the four methods. This Finance Bill perpetuates the extraordinary anomaly that solid fuel appliances and oil appliances for heating rooms or water are free from Purchase Tax, but gas and electrical appliances are now subject to Purchase Tax at a rate now increased from 50 per cent. to 60 per cent.

I could possibly argue—and I have no doubt that many other hon. Members could—that any one of these appliances ought to be subject to either a higher rate of tax or a lower rate of tax in relation to the appliances in the other three alternative groups. There are technical reasons why one might advocate, for the sake of example, that gas or electricity is best for a certain purpose, but I do not think that hon. Gentlemen opposite would quarrel with the fact that within these four groups of fuel we have to provide the means of heating all the rooms and all the water in our homes. There are no other methods by which we may heat rooms or water in our homes.

Surely there should be equitable treatment. It might be argued that, in pursuit of a policy of clean air, we should get rid of the burning of raw bituminous coal and substitute gas or electricity. That is a valid argument. It might be argued equally well that oil is preferable to a solid fuel, but surely none can argue that whatever method is adopted it is indispensable that one or other of these systems should be used; and the consumer, according to the Government, is to be the arbiter and to have the free choice as to which is to be employed.

At the time these Schedules were drawn up—Group 12 is the pertinent group—it was not usual to use oil, anyway. Petrol and fuel oil were restricted in supply and rationed. There was hardly such a thing as an oil radiator on the market. They had virtually disappeared during the period between 1939 and 1951 or 1952. Then the oil position became sufficiently free to enable domestic appliances of that kind to be marketed again. Today there is intense competition between oil, gas and electricity and solid fuel, and it is the source of very grave concern that the two industries that rely on nationalised processes, namely the gas industry and the electricity industry, are both heavily subject to Purchase Tax in the appliances that convert the primary source of fuel into the services in the home, whereas the oil industry is subject to no Purchase Tax on its appliances. Solid fuel appliances, also, are not taxed at all.

8.15 p.m.

I was very much in doubt about this position when it was again brought to my attention ten days ago. The appropriate provisions of the Finance Bill were referred to me by a man in the south of England—not a constituent—and he emphasised the provisions in the Schedule. I wrote to him saying that I should like much more proof of the incidence of Purchase Tax, as revised by the Finance Bill, and asked him to take as an example different types of domestic boilers referred to in the Schedule for water heating purposes. I said, "Do not take a large one; take one of the size habitually employed in hundreds of thousands of homes, including the 300,000 new houses—which is the approximate number—being built each year."

He took, as a basic figure to work on, a rating of 45,000 British thermal units per hour, which is approximately the average size of the usual domestic boiler. This is what we found. I commend the figures to my right hon. Friend, because I cannot fathom any reason for this discrimination. In the case of a solid domestic fuel boiler with a rating of 46,000 British thermal units per hours, a well known make, Sentry No. 5, it was found that the price, excluding Purchase Tax, was £35 5s. 9d. No Purchase Tax was payable. With an oil-fired boiler the make taken was a Perkins Domestic "Minor" with a forced draught and a rating of 45,000 British thermal units per hour. The price was £65 and no Purchase Tax payable. With exactly the equivalent gas-fired domestic boiler—Thomas De La Rue Potter—ton "Diplomat" model—of 45,000 British thermal units per hours, the price was £47 5s., and in addition there was Purchase Tax, of £23 7s. 10d. A similar electrical appliance, within the ratings I have mentioned and for normal domestic use, also carries Purchase Tax of more than £20.

Why? Surely, this cannot be equitable treatment as between the domestic fuel and power services that it is the policy of the Government to encourage to compete with one another? I am the strongest possible supporter of what the gas industry advertises about its product, "Gas makes the best use of the nation's coal." There cannot be any reasonable doubt about that. It was stressed in the Ridley Report of 1952, very graphically I thought, to the effect that the coal conversion efficiency of carbonisation, including the coke by-product, was about 48 per cent. compared with solid fuel at 20 per cent. and oil at a good deal lower figure than gas. Even if it were on fuel efficiency grounds alone, gas should be given equitable treatment with other domestic boilers, with electricity, oil and solid fuel which are the competing services.

My final point is this. The Government are about to embark on quite heavy expenditure under the Clean Air Bill, when it reaches the Statute Book, by subsidising local authorities as to 70 per cent. of the cost when replacing old-fashioned smoke producing domestic fires by smokeless units. Those units, attracting the 70 per cent. grant will include gas and electrical units. Therefore, the Treasury will pay 70 per cent. of the cost of this Purchase Tax on gas and electrical space and water heaters.

Mr. Hale

Not on all of them.

Mr. Nabarro

Not on everything. That is a stupid statement, and just as irrelevant as most of the hon. Gentleman's interventions.

There is to be a heavy charge on the Government for the replacement of solid fuel appliances that produce smoke notably in the black areas, by gas and electrical appliances. It seems to me in extraordinary contradistinction to the policy, supported from both sides of the Committee, that we should pursue abatement of atmospheric pollution and then tax inequitably the very appliances that make a maximum contribution towards a policy of smokeless air.

I shall not repeat what was said earlier by the hon. Member for Cleveland (Mr. Palmer) in this connection on the Amendment moved by the hon. Member for Flint, East (Mrs. White). I think it pertinent that I should quote two lines in the Report of the Beaver Committee. It is recommendation (9) on page 34, and, incidentally, this Report was published only twelve months ago. The present purchase tax of 50 per cent. on gas and electrical room and water heaters should be removed. It advances most of the reasons which I have advanced in my speech. I apologise to the hon. Member for Flint, East for not being able to support her Amendment. I do not think it right that there should be inequitable treatment as between appliance and appliance for water heating and space heating purposes. There should be uniformity of treatment. I should prefer no Purchase Tax at all, but if there is to be Purchase Tax then it must surely be reasonable to say that the four media of heating our homes and heating water in our homes, namely, by solid fuel appliances, by oil appliances, by gas appliances and by electrical appliances, should be given equal treatment within our taxation law.

Mrs. E. M. Braddock (Liverpool, Exchange)

I was not in the Chamber when he announced it, but I was very pleased to learn that the Chancellor has agreed to take off the suggested tax on baskets. In my constituency there are the Liverpool Workshops for the Blind, and one establishment employing Catholic blind workers engaged in basket making. They were concerned about this matter and I can assure the Chancellor that their minds will be eased because they will not be faced with mass unemployment.

While I was in my constituency my attention was drawn to the question of dustbins. My own local authority has no special scheme. Recently, the Health Committee of the Liverpool Corporation was supplied with a list of three different classes of people who have to supply dustbins where they are necessary. In one case it is the tenant, in another the landlord or owner of the property, and in the third the local authority. When notices are served that a dustbin must be provided, the local authority takes court action if the bin is not provided within 21 days.

This appears to me to be obtaining Purchase Tax through court action. The Liverpool Corporation cannot be the only authority in this position. It has caused a great amount of resentment among property owners and tenants in my constituency who, if they find they cannot afford the extra 7s. 6d. or 9s.—because that is the increase which this Purchase Tax imposition will mean; the figures have been given me by wholesalers in my constituency—will be taken to court. It is a dreadful thing to think that a person should be summoned because he is not able to find the money to buy something which is considered an absolute necessity for public health, and I hope that the Chancellor will look at this matter again.

The long list of people called upon to supply dustbins will be confirmed by the Liverpool City Council next week, and if the bins are not supplied within 21 days summonses will be taken out. That seems to me a very bad way of obtaining Purchase Tax. This is the only instance where legal action can be taken and will be taken if persons find themselves unable to raise the additional money. For working-class people 10s. is a large sum to find. Where local authorities have no scheme for supplying dustbins I think that the Chancellor should examine this matter to see whether it is possible to grant a concession.

I felt that I must make reference to this matter. I have said what I felt about other matters, on which it appears that very little is to be conceded. There is keen resentment about the method used to raise Purchase Tax on the ordinary household commodities that people are obliged to buy.

Major Legge-Bourke

As hon. Members who have heard me speak in earlier debates will know, I have not been in favour of any increase in Purchase Tax. I am glad that the Chancellor is in the Chamber, because I wish to make clear to him that, although I think the method he is using is not the best to do what is necessary to restore our economy to the state in which it should be, nevertheless I heartily agree with him in his refusal to make concessions after some of the heartrending stories told to him about the need for them. I believe that if we are to use Purchase Tax at all to combat inflation, it is necessary that it should be placed upon essential as well as non-essential articles. That is not the method I would use, but if one accepts the fact that that is the method to be used, then I think the Chancellor is absolutely right to resist the many passionate appeals that have been made to him to make concessions, particularly on essential goods.

8.30 p.m.

I would congratulate my right hon. Friend and his two hon. Friends on the way in which they have stuck to this particular method, which they believe to be the right one, and I only hope that in what I said in our earlier debates, in which I think I expressed a view which is fairly widely shared, I made it clear that my right hon. Friend will be expected in future to try to find a better way of doing this than by means of the Purchase Tax. He has made it quite clear throughout these debates that the scandalous charge made against him by the right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell), in reply to his Budget statement, has been absolutely unwarranted. My right hon. Friend made it quite clear that what he has done he honestly believes to be the right thing to do for the country, and we respect him for it. I would only add that I am sorry that I have not been able to support this particular method, but, listening to the debate on this Schedule dealing with the Purchase Tax, it has been very tempting to get up and play the demagogue and say that this, that or other constituent will suffer unduly because of what is being done.

There is, however, one thing that has not been said but which ought to be said. I think it is rather rash for hon. Members opposite to assume that some of these people whom they have been trying to champion throughout these debates are not sometimes rather pleased to be able to make some contribution towards trying to put the country's economy on a sound footing. [Laughter.] Hon. Members may laugh, but I am in favour of the tax being applied generally to everybody; what I am not in favour of is stirring up sectional irritation without paying regard to the fact that some of these people, who are said to be in this state of irritation, may in fact be very proud of the feeling that they are playing a part in helping the country's economy.

Mr. Turner-Samuels

Does the hon. and gallant Gentleman suggest that my hon. Friends, by defending the rights of certain sections of the community, are setting up sectional irritation?

Major Legge-Bourke

Of course I am not saying that, but I have listened to a good many speeches from hon. Members opposite, and I know very well that some of the heat has been rather falsely engendered. I do not believe that all the heat registered by hon. Members on the other side of the Committee is felt to quite the same extent in the country as a whole.

There is one particular point to which I referred earlier, when the Economic Secretary was not able to answer at the time. I should be most grateful to have an answer from him in his reply to this debate. It concerns those industries which face a situation in which what they are manufacturing is largely for industrial use, and therefore exempt from the tax, but which can also be used to a limited extent in the domestic field, and when so used becomes liable to the Purchase Tax. This is a muddling position for anyone manufacturing articles of that kind, and I should be very grateful to have an assurance that the Treasury will cooperate to the full with the firms concerned to ensure that their position is fully understood. I know for a fact that some manufacturers are in a state of confusion on this issue.

Mr. R. A. Butler

Can my hon. and gallant Friend say what articles he has in mind?

Major Legge-Bourke

I think the Economic Secretary to the Treasury was here when I spoke earlier. I quite appreciate that the Chancellor cannot hear every speech in the debate, but this is an important matter, and I think the example which I then gave may not be the only one.

Mr. Butler

I heard that one.

Major Legge-Bourke

May I reiterate the reasons why I think the Purchase Tax is a bad tax? Firstly, I do not believe that all industries which have their home consumption curtailed would automatically be able to export more; in fact, they might be priced out of the market as the result of having their home consumption dried up by the operation of the Purchase Tax. The second reason is that I think the Purchase Tax affects the industrial output of people to some extent, but I will not cite examples for the reasons I have given in criticising hon. Members opposite a few moments ago.

Thirdly, I think that every tax which tends to make the price paid for an article in the shops more than its real price must be and always will be inflationary. I am with my right hon. Friend the Chancellor 100 per cent. in his desire to curb inflation and to improve exports, although I believe that I can think of better ways of doing that. I appreciate that my right hon. Friend has had something of an emergency to cope with, and I hope that what he is doing will achieve the results that he desires. We all want those results to be achieved, but I hope that in future he will find a better way of doing that.

Mr. Hale

I hope that the Chancellor is encouraged by the warm defence of his policy as expressed by the hon. and gallant Member for the Isle of Ely (Major Legge-Bourke). I do not want to misrepresent the hon. and gallant Gentleman, who often speaks with courage and sincerity in our debates, but I think I am in the recollection of the Committee in saying that while condemning the Chancellor for introducing the Budget, the hon. and gallant Gentleman applauds his obstinacy in refusing to amend it.

We have had two speeches from the benches opposite in the course of this debate. One hon. Member spoke about gloves, and left the Committee within ten seconds of concluding his speech. Whether he was afraid of some reprisals because of his criticism or was seeking some refreshment, I do not know, but it is a little discourteous to go out without waiting for a reply of any kind. Indeed, I agreed with much of what he said.

The hon. Member for Kidderminster (Mr. Nabarro) gave us a dissertation on gas, on which he is an expert. He speaks with a profound empirical knowledge, but I respectfully venture to suggest to him—and I think I would have the support of many who have listened to his speeches in this Chamber—that the use of the adjective "stupid" by the hon. Gentleman in relation to another hon. Member is, in the circumstances, unwise.

I hope that the Chancellor will forgive me putting in a personal word, but for years I have been saying that the Chancellor is not really a Tory. He has had his progressive moments. He has talked about the middle of the road. Many hon. Members have raised interesting arguments about the absolute futility of occupying the middle of the road in an economic fog. I have continued to support the right hon. Gentleman, so this is not one of the stern unbending stories at all—not even stern.

One suggestion of the way in which the right hon. Gentleman got into the Tory Party—I put this forward with some hesitation—is that Mr. Duncan Webb rang him up and asked him to join one of his parties, but forgot to tell him that it was the Conservative Party.

It cannot be denied that this Budget is a Tory Budget. I do not want at this late stage, after we have got over some little bitterness and dissent, to introduce any note of controversy now, at least not a loud note of controversy. But at times it has been a painful scene. We are all familiar with the fact that on Purchase Tax people from time to time raise constituency points. That is quite understandable. For instance, the brush industry of Oldham is keenly anxious about this matter. It points out the difficulties and I put them to the Chancellor. It tells us that the tax cannot be enforced because no one knows what a household brush is.

I do not believe that one could prosecute in any court under this part of the Bill as the rules are at present, because there is no explanation and no one knows what is a household brush or what is a factory brush. If the law is to be administered, it must be clear, understood and respected. Therefore, in this connection, I sincerely put forward that difficulty.

We have listened to a series of speeches from the opposite side attacking not a single tax, but the whole Budget. The noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) made a speech attacking the Budget and in the middle of it the Chancellor made what was intended to be a sardonic interjection; he said, "Cut down on capital investment." "Yes," said the noble Lord, turning round, "now I agree with the Chancellor." The only point upon which they could establish contact was the point upon which one tried to be rude to the other.

The hon. Lady the Member for Belfast, West (Mrs. McLaughlin), in a most cogently reasoned speech, dealt with the Chancellor's four points for the specific tax, demolished them all and then proceeded to knock the whole Budget for six, right over the Border, in a series of well-reasoned arguments that everyone who heard her speech must have respected.

The hon. Member for Oxford (Mr. Turner) had not a favourable word to say. I cannot remember all the speeches, there were so many of them. I listened to it all with pain and I say sincerely that when the hon. Member for Scarborough and Whitby (Mr. Spearman) made a speech defending the Budget even the ranks of Tuscany Could scarce forbear to cheer because they felt that the time had come when somebody ought to say a good word for the wretched infant, even if it was not very impressive.

The hon. Member for Basingstoke (Mr. Freeth) prefaced his observations by thanking you, Sir Charles, because he had been called upon, as it were, somewhat by accident, to speak on an Amendment on which he found it just possible to support the Chancellor instead of catching the eye of the Chair upon an Amendment on which he intended to denounce his right hon. Friend. And so it has gone on all the time, a really painful story.

At one stage it looked as though the Chancellor was being asked to throw over the Bill altogether and to have it resuscitated in another form by the Leader of the House. One has heard it with some pain. It has not been pleasant throughout. When I saw in Reynold's News a week last Sunday a headline "Lynched in Palace Yard," my heart stopped for a moment and I thought that Nemesis had overtaken the Chancellor. But whatever the Chancellor may have felt in listening to the attacks on his Budget must have been overshadowed when listening to the defence of his Budget put forward by the Financial Secretary.

The Temporary Chairman (Mr. Malcolm MacPherson)

I am sorry to stop or in any way impede the flow of very interesting eloquence, but I hope that the hon. Member can bring his speech a little closer to the First Schedule.

Mr. Hale

I am much obliged. Mr. MacPherson. Of course, I should have said "Purchase Tax" and not "Budget." I was being moved by the plea of the hon. and gallant Member for the Isle of Ely against sectional discussions and I was collectivising a series of subjects.

Of course, I am talking about Purchase Tax. What is more remarkable, in view of the arguments which have been put forward, is that the Financial Secretary was talking about Purchase Tax. That is difficult to understand, for every one of his arguments has had to be repudiated by the Chancellor, who always behaves like a gentleman and tries to make it clear that he is not repudiating his right hon. Friend.

We had the fantastic argument about "yawning gaps." Apparently, if we tax the clothes first, we must tax the clothes line, which so far is not taxed. Then, the Chancellor gets up, makes a welcome concession and takes baskets out of the range of the tax. The whole country will be left imagining that the Financial Secretary thinks that the baskets are a "yawning gap" and that all the Chancellor's efforts in the future will be to get baskets taxed and so satisfy a mind that likes to be essentially tidy and see all these things covered.

I recall—and I suggest that this is what the Chancellor must have felt—a serious criminal charge in which the prisoner overthrew his counsel and said that he would much rather plead guilty to the serious crimes imputed to him by the prosecution than sit back quietly and accept the follies attributed to him by his own defender. The Chancellor must have felt like that.

The other explanation by the Financial Secretary was that people rather like high prices and that the higher that people are charged, the more they think of something. Apparently, he would suggest 100 per cent. Purchase Tax on wreaths in order to give more consolation to the relatives of those who die.

The picture of the Chancellor, which has been largely self-drawn, fighting the dragon of inflation, is not wholly convincing, and has to be subjected to certain limitations. Da mihi castitaten et continentiam, said the great St. Augustine: "Oh. Lord, give me chastity and give me continence."

Sir E. Boyle

I think that the hon. Gentleman has left out the most important part of the quotation: "But not yet," he added.

8.45 p.m.

Mr. Hale

I am very glad that the Economic Secretary has seen the point. Then it was that St. Augustine, glancing apparently surreptitiously at the curvilinear figure of a contemporary Thais in the current Daily Mirror added, in words which I rather put like this: "But do not be in too much of a hurry about it."

"Oh, give me strength to fight the dragon of inflation," said the Chancellor and then, contemplatively, added, "but not until after the General Election." The tragedy is that the moment is past. Inflation has been overtaking us all the time. It is no use the Chancellor saying that he is fighting the dragon of inflation. It has been an internal battle. It has been a battle between the right hon. Gentleman the Chancellor of the Exchequer and the right hon. Gentleman the Member for Saffron Walden (Mr. R. A. Butler), a battle in which both sides have lost because inflation has gone on all the time.

Tory freedom works in metal prices, and metal, which is the raw material of every industry we are discussing, has gone up enormously in price. Now we are getting claims for wages, justified claims from policemen, teachers, cotton workers, transport workers and miners. More than any of them, the old-age pensioner needs more. All these claims have to be faced in the months to come. The Chancellor knows, and will be the first to say, that in these years of difficulty he has had a good deal of forbearance from trade union leaders, and has had to place a good deal of reliance on his right hon. and learned Friend the Minister of Labour, who has the respect of both sides of the Committee on three main grounds, that he is a man of ability, a man of honour, and is not a Tory. But how far the Chancellor can continue to place that burden upon one whom the Committee has seen has been by no means well in the years gone by, and is facing a heavy burden, is something to be considered.

The hon. Member for Nelson and Colne (Mr. S. Silverman) dealt with this point in one of the ablest speeches of this debate. This tax is a tax on wages. It is nothing else. It may not be intended like that, but that is precisely how it works. The Chancellor of the Exchequer and the Minister of Labour negotiate with the trade unions and say, "We agree to a small increase in wages." They boast about it. They say that that is Tory freedom working, and then come to the Committee and say, "We have to reduce their wages; they have too much to spend. We have to limit their spending and to impose taxation. This is a matter of £6 per year on all the families in the country." That is really saying, "We are going to take back what we have given you."

I put this seriously to the Chancellor. No one doubts that this is a very difficult situation. No one on either side of the Committee wants to stop measures being taken to deal with it. I can remember, when in 1947 we went through similar trouble, raising the very vexed and difficult question of compulsory savings. I remember saying then that it was necessary to curb expenditure. I do not like the word "compulsion," but if it has to be done and there is no other way, there is the remedy of compulsory savings and of saying that so much money has to go into National Savings certificates.

That, whether we like it or not, is preferable to "pinching" the money from people. We are taking money which we do not need to swell an already inflated Budget. We are doing that at a time when we are saying to the world that we cannot afford more for colonial development and other measures which would help our industry, help to deal with many of our export problems, and give us the moral leadership of the world.

Major Legge-Bourke

I take it that the hon. Gentleman is overlooking the fact that there was a substantial deficit below the line in the Budget.

Mr. Hale

I am not overlooking the fact that in this connection it is an important point. I do not deny it, but the same deficit of £150 million was there when the Chancellor introduced his Budget earlier this year. It is hardly an argument that is available now.

Another question, which is quite serious, is what is to happen if the Chancellor introduces another Budget? It cannot be denied that there is now a lack of confidence in the country in the Chancellor of the Exchequer, because no one knows what is to be attacked next. It cannot be denied that the Purchase Tax has always been an object of Tory attack and that no Tory, so far as I know, has ever said, "This is a good thing. We want to improve it and increase it." It has never been said.

What will happen if the Chancellor introduces another Budget? It was said of the great French poet, Guillaume Apollinaire—

The Temporary Chairman

The hon. Gentleman must not talk quite so freely of the Budget as a whole. We are on the First Schedule.

Mr. Hale

I appreciate that, Mr. MacPherson, and as an antidote to the rest of my remarks may I say that if I do by chance refer to the Budget I shall mean the Purchase Tax. I am not intending to talk about anything but the increase in the Purchase Tax, which is part of the Budget. I intend my remarks to be understood in that way. I referred to a great French poet who, when the Mona Lisa was stolen, was arrested by the French police, not because he had a bad record or was a suspicious character or because there was any evidence against nim. He was arrested because he was exactly the sort of chap who might "pinch" the Mona Lisa, and he was detained on that ground.

What is the Chancellor's record going to be in the City and elsewhere when he introduces another Budget, which might include proposals for filling the yawning gap? In the olden days, before the advance of the raiders, people used to hide their lares and penates, the reckless taking them to the banks and the prudent hiding them under the ground in the back garden. If the Chancellor remains in office until next April we might see people bringing household goods into Threadneedle Street and hiding their household brooms, brushes, chamber pots, etc., by taking them to the safe deposits.

I remember sitting in the Members' Gallery some months ago, listening to a debate, which had nothing to do with the subject of our present discussion, although the observations made then were strictly relevant to it. At the conclusion of the debate the Prime Minister was replying and was being heckled about his defence policy by my right hon. Friend the Member for Easington (Mr. Shinwell), a former Minister of Defence. Every one of us who has seen the Prime Minister admires the equability of his temper, but on this occasion the Prime Minister seemed to show irritation. There was a slight shade of pink on his cheeks and his voice rose to a falsetto. Even the crease in his trousers seemed on the point of disintegration.

He rose and said, "Do you suggest that we are the sort of people who would say one thing before a General Election and do something else afterwards?" [HON. MEMBERS: "Hear, hear."] The occasion is within the memory of my hon. Friends. The right hon. Gentleman repeated the observations time after time. We were shocked by his ebullition of temper. For the Chancellor, that question will be answered now. The answer that will be given unanimously from these benches and from the country is "Yes. We do."

Mr. John Hynd (Sheffield, Attercliffe)

The Chancellor by now should be impressed by the fact that the opposition to the various items contained in the Schedule is not based on party. Most, if not all, hon. Members speaking from the opposite benches have been as critical of one or another part of the Schedule as have been my hon. and right hon. Friends. From that I except the curious speech of the hon. and gallant Member for the Isle of Ely (Major Legge-Bourke), who spoke of our daring to raise these matters, called them local irritations and called my hon. Friends demagogues. He finished his speech, after complimenting the Chancellor on standing firm, by being himself a demagogue and arguing against the very Schedule he had praised his right hon. Friend for defending.

Many items have been criticised from both sides. One hon. Member demonstrated the inequitability and lack of sociological appreciation behind these provisions when he referred to children's gloves. We have been told by the Chancellor and others that the purpose of the provisions is to try to mop up purchasing power—to prevent people spending. If the tax on children's gloves is imposed to that end, it can only mean that the Chancellor of the Exchequer is trying to dissuade parents from buying gloves for their children.

The tax on dustbins has also been attacked. The right hon. Gentleman must admit that different considerations there arise. The individual is not at liberty to buy or not to buy a dustbin. By increased Purchase Tax he can be dissuaded from buying every other item in the Schedule, but he is required by the Public Health Acts to maintain a dustbin in a reasonable condition. Local authorities are required to enforce those Acts and to prosecute contraventions. The difficulty that some local authorities have in prosecuting has been mentioned. In many cases it is extremely difficult to place the responsibility on the tenant, landlord or owner of the property. Indeed, the Sheffield Corporation has so long had to face that sort of difficulty that it has decided it is easier and cheaper to provide a free dustbin. That is not the case with all local authorities. The individual is responsible for buying this article, and if it is not in a reasonable condition he can be forced to get another. The Chancellor's purpose cannot be to prevent people spending, because the dustbin, which, by law, people must have, is by this Bill increased in price.

9.0 p.m.

What, then, is the right hon. Gentleman's other argument? The Budget is intended to have two effects. One is to discourage people from spending in order to reduce inflationary pressure, the other to reduce the consumption of raw materials such as steel which can then be made available for export. If it is not a matter of preventing people from buying dustbins, which it cannot be because of the legal position, but is a matter of reducing the use of steel, how can the Chancellor reduce the consumption of steel in the production of dustbins when he still forces people to buy them?

If this provision is to achieve either objective—reducing spending or reducing consumption of steel—it can only do so if people break the law, ignoring the Public Health Acts and the effects of defective dustbins on the condition of streets and on the health of the people. It can only do so if people do not buy dustbins and do not accept their obligations under the Public Health Acts, thus forcing the local authorities to prosecute them if they are found out.

Whatever the Chancellor's purpose may be in relation to brooms, brushes and children's gloves, is it his purpose in this case to encourage people to break the law? Before the Chancellor finally allows the Schedule to go through the Committee, if that is still his intention, he should explain to the Committee which of these purposes he has in mind. Is the purpose to prevent people spending or is it to reduce the consumption of steel? If the purpose is either of these, how would it be accomplished without people breaking the law, since the Public Health Acts require that they buy as many dustbins as before and therefore consume as much steel as before? These provisions, therefore, can have no effect on inflation unless they force people to break the law.

Sheffield City Council and other local authorities of whom we have heard in the debate have been put in the position, because of legal requirements, of deciding that they had better provide the dustbins free of charge. In the case of dustbins used in Sheffield the tax amounts not to 8s. 6d. or 10s. 3d, as has been suggested, but I Is. 6d. per dustbin. That represents to Sheffield City Council no less than £9,000 a year to enable it to maintain the present consumption of steel which the law requires, or £9,000 extra to meet the purposes of a Budget which it is claimed is designed to reduce expenditure. The council is being called upon to contribute this £9,000—an additional burden on the local authority—whilst one of the other declared objects of the Budget is to try to reduce spending by local authorities.

How does the Chancellor suggest that this tax on dustbins will assist local authorities? It will increase their spending. As I have said, it will add £9,000 to expenditure in Sheffield. It will possibly add much more in many other cases because at the same time the Chancellor is forcing local authorities to borrow from sources to which they will have to pay a higher interest than they have paid in the past. They, therefore, will still further increase their expenditure.

Sheffield City Council and the Health Committee in particular are extremely worried about this situation in which the Budget threatens to place them. They, like every hon. Member, feel that the objective of Parliamentary legislation should be to encourage the maintenance of standards of public health and recognition of the need for local hygiene, the cleanliness of streets and the safeguarding of people's health, and not, as this Budget provision does, to deliberately discourage those things.

On all these counts, whether it be on the count of reducing individual spending or of reducing the expenditure of local authorities or of reducing the consumption of steel, this provision makes no contribution, but increases the responsibilities of the local authorities, increases their expenditure, and therefore increases inflationary pressure throughout the country.

I am prepared to accept that the Chancellor overlooked these facts which I and other hon. Members have put forward. Indeed, the Economic Secretary admitted last week, after a strong plea by my hon. Friend the Member for Barons Court (Mr. W. T. Williams), that he had not been aware of the considerations relating to the special type of dustbin to which my hon. Friend was referring. The Economic Secretary also said that they would look at this question, but so far we have not heard that the Chancellor is prepared to make any concessions.

This Budget will affect all the people, not just unimportant sections. I am sorry that the hon. Member for Kidderminster (Mr. Nabarro) is not here, but most hon. Members present heard him refer in a most cavalier fashion to the protestations made by one of my hon. Friends about the tax on children's christening caps. The hon. Gentleman said that this would affect only an inconsiderable section of the people, those with new-born babies, but, after all, at one time or another that affects most of us.

When there are so many criticisms of this Schedule the Chancellor must realise that there is some justification for them and he should be prepared to look at some of the points. He has made one concession about baskets, but is that all he is going to make? There is the special case of dustbins, which the Economic Secretary admitted had not been considered when the Schedule was drawn up. As regards these, the Budget is doing nothing but harm. Surely, therefore, before we dismiss or adopt this Schedule the Chancellor will consider that point, if he is not prepared to withdraw the Schedule, and will give thorough consideration to all the arguments put forward from both sides of the Committee.

Mr. Raymond Gower (Barry)

I think it will be agreed on both sides of the Committee that throughout this rather long debate practically all the speeches have admitted certain problems faced by the Chancellor and by the country. We have all been impressed by the fact that no speaker has disputed that there is at this moment a degree of inflation and no speaker has disputed that too large a proportion of our raw materials is being used for home production.

In this part of the Finance Bill my right hon. Friend has put before us some unpopular remedies. Some of my hon. Friends on this side of the Committee have objected to some of those remedies; hon. Gentlemen opposite have objected to most of them. I do not cavil at that. It is perhaps a good thing that most of us here feel far more comfortable when we are advocating and supporting causes which are agreeable to individuals. That is one of the glories of Parliament. However, it is unfortunately true that what is desirable for the economy at large must often necessarily be disagreeable for individuals.

We have heard pleas against the imposition of taxes upon individual items, and I have a great deal of sympathy with what has been said, but in only one case have we heard a concrete suggestion for an alternative. There have been certain vague suggestions about controls. I would remind hon. Gentlemen that controls, as such, for many years completely failed to stop inflation or to avert any of the crises between 1945 and 1951. Disagreeable as these things are to hon. Members who have to defend them in their constituencies, and difficult as they are to explain to constituents, it seems to me that nothing else has been suggested on either side of the Committee—

The Temporary Chairman

A debate about alternatives is not relevant to the Question, "That this Schedule be the First Schedule to the Bill," and the hon. Gentleman should not pursue that matter.

Mr. Gower

Remarks have been made in the debate, Mr. MacPherson, advocating some of the alternatives, and I was saying that they were far too vague. The hon. Member for Northfield (Mr. Chapman) suggested that a certain appeal might be made to the industries concerned with the items covered by the Schedule.

Mr. Chapman

That was in a debate on an Amendment, not on the Question, "That this Schedule be the First Schedule to the Bill."

Mr. Gower

Certainly, but the arguments which the hon. Gentleman adduced suggested that, if industries accepted the appeal, these increases would not be necessary. That is the most practical suggestion which has been made, but the Economic Secretary rightly explained that such an appeal alone would not be adequate and that to allocate to industry portions of the export and import trade was not a feasible proposition. These increases are unpleasant remedies. I hope they are short-term remedies.

Mr. Ellis Smith


Mr. Gower

I will call them short-term medicine, if that expression is preferable. [An HON. MEMBER: "They are bitter medicine."] Most medicine is bitter. Medicine which tastes pleasant is usually most ineffective.

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

Nonsense. I do not know whether this comes within the scope of the Question, but it is untrue to say that because a thing is palatable it is no use and one does not do any good.

The Temporary Chairman

The hon. Member for Barry (Mr. Gower) is finding some of his illustrations a little unfortunate. He would find it easier if he confined himself to the main thread of his argument.

Mr. Gower

I do not propose to develop the theme of medicine, Mr. MacPherson.

I sincerely hope that the proposals which we are debating are designed to meet a short-term need of our economy and that they will be temporary. We are not the only country facing this problem. Even the United States, which does not depend upon exports to the extent that we do, is facing an almost identical situation. The United States has inflation, and its remedy is to raise the Bank Rate to a very high level. Would hon. Gentlemen opposite like the alternative of putting up the Bank Rate two or three points more?

Mr. H. Wilson

Is the hon. Member aware that prices in the United States have not risen anything like as much as in this country, that the Bank Rate in the United States is considerably lower than in this country; and, apart from that, has he any accurate facts to put before the Committee?

9.15 p.m.

Mr. Gower

Anyhow, would hon. Gentlemen opposite like to see the Bank Rate raised? I say that they would not. It would cause more hardship.

Another alternative—allowing inflation to continue unchecked—would bring greater hardship to all the people affected by the increases in the Schedule. The very people we aim to protect by increasing these items would be most affected if we allowed inflation to continue unchecked. While to many of us it is an unpleasant and disagreeable duty, the Chancellor has sound reasons—which none of us can doubt and nobody opposite has attempted to deny. While hon. Members opposite can legitimately attack and have attacked the increases on these items, I hope that they will not make such political play as was described by my hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke) and which must result in distorting in the minds of people the effect of these taxes. That will produce results which hon. Gentlemen opposite do not desire.

Mrs. Alice Cullen (Glasgow, Gorbals)

I am sure that we are all agreed that the articles taxed in the Schedule have been fully debated. I am sorry that the Chancellor has left his place. I wanted to ask him why he always chooses to tax people who can least bear the burden. The housewives are up in arms against these taxes on kitchen equipment. The kitchen is the place where a woman spends most of her time and where she uses most articles.

There is another tax which affects mothers. At this time of the year, innocent children who still believe in Santa Claus usually send him a letter asking for a present. They will have a reply from Santa Claus to say that he is very sorry that they cannot have that present this year, because the Chancellor has raised the tax on children's toys by 5 per cent., making it 30 per cent. Again, that will hit hardest the ordinary working people who have to strive to give their children small presents at Christmas.

The Chancellor of the Exchequer would not like it to be thought that the children of ordinary working people will be deprived of their Christmas presents, while they were going around Christmas trees watching children who do not have to worry about getting the best of presents, expensive presents costing £20 to £40. The working-class children want something costing only 5s. 11d., or 6s. 11d. I do not think that the Chancellor would be pleased if he knew that what he has done will stop many children of working-class homes from getting a present this Christmas. I wonder whether hon. Gentlemen opposite know how ordinary working people have to balance their budgets. I plead with the Chancellor of the Exchequer to try to put himself into the other fellow's place and to have more heart at this time of the year when we are all looking for good will.

Mr. Douglas Houghton (Sowerby)

The hon. Member for Barry (Mr. Gower) is quite mistaken if he thinks that we on the Socialist benches are opposing the Schedule because it is unpopular. We had to do unpopular things when we had the responsibility of Government, and we did not shrink from doing them when we believed them to be necessary and were confident that they would be effective. Our objection to the Schedule is not that it is unpopular but that it will be ineffective. We believe that it may be more; it may be dangerous and it may defeat the very object which the Chancellor believes that it will fulfil.

The argument whether the increase in Purchase Tax will reduce consumption may go on for some time yet. The Chancellor may say, "The proof of the pudding will be in the eating, and we will see what happens." Experience has shown, however, that people are very unwilling to reduce their standard of life and that they will adopt all measures they can to avoid it. We have seen that especially among the better off who have found the high level of taxation threatening to reduce their standards unless they found some alternative. The alternative they found was to live on capital or to try to make capital gains, and other devices of tax avoidance, and so on, to save them from making that painful decision. I believe that the movement against the increased taxes proposed in the Schedule will take one of two forms, or a combination of both: either a drive towards higher wages or a withdrawal of savings, or a combination of both. There are already signs that a drain on saving has begun.

Another point is that the variety of personal taste in domestic life is so great that it is most difficult to be dogmatic about what is a necessity and what is a luxury. Much depends on the desires of families and individuals for the amenities of life as they see them. For instance, I regard a television set as a luxury, so I have not got one. Some people regard a television set as meat and drink and essential to a reasonable standard of enjoyment of domestic life. They regard a television set as an essential part of their domestic equipment. I do not quarrel with that at all. Each man to his taste, and each family to its desire.

That is why Purchase Tax is such a wretchedly bad tax. It means that bureaucracy, or Ministers, or this Committee has to decide which are luxuries and which therefore should go in one class; which are not such luxuries and therefore should go in another; and which are necessities and should therefore be exempt. All these decisions are arbitrary and they make for anomalies and a sense of injustice. This is a thoroughly bad tax. All indirect taxes are bad.

Mr. Hale

All taxes are bad.

Mr. Houghton

My hon. Friend says that all taxes are bad, but some are worse than others. Certainly the Purchase Tax would never have survived had it not been for the fact that the cold war overtook the Labour Government. When the Second World War ended and the Labour Government embarked on an ambitious programme of social change, they did not reckon with the cold war and the phenomenal rise in defence expenditure which has taken place since. Otherwise, this tax would have been banished by now and we should have been able to rely more heavily upon direct taxation. I am just stating my opinion with which some of my hon. Friends may disagree. I hope that it is still the policy of the Labour Party to reduce the level of indirect taxation and to use the weapon of direct taxation more courageously than the present Government have done.

Mr. Chapman

Is my hon. Friend aware that the total of indirect taxation is about equal to that of direct taxation, and how is he proposing to get enough by direct taxation to pay all the bills?

The Temporary Chairman

That seems to me to be going wide of the Question. I hope that the hon. Gentleman will confine himself to the Schedule.

Mr. Houghton

I ought to be obliged to you, Mr. MacPherson, for getting me out of a corner. I should like to reply to that, but I should not be in order in so doing. I will say that we have to look at these Purchase Tax increases from the point of view of the purpose which the Chancellor hopes that they will serve. We know that the right hon. Gentleman is not seeking additional revenue. Had the Chancellor said, "I am getting hard up, the Exchequer is in a poor shape, I must have more revenue and this is one way of getting it," the Committee and the country would have listened with attention to his plight and awaited his explanation of his reason for wanting the money.

Had the country heard him say, "I want more money to pay Higher National Assistance benefits; I want more money to increase retirement pensions; I want more money to strengthen and enlarge the facilities of the Health Service and I must have more Purchase Tax for this purpose," the country would have listened with attention and sympathy But the Chancellor gave no such message. He said, "I want to stop you buying things, therefore I shall make them dearer, and the way I shall do it is to put taxes on the things you buy."

One of the extraordinary things about this Government is that ever since they came to office they have been trying to reduce the cost of living by putting it up. That is what the Chancellor is now saying to us. He says, "If I put up the tax on these goods the pressure on our resources will slacken, the inflation will drain out of the system and eventually prices will come down." Yet he warns us not to expect any early relief from the additional Purchase Taxes that are included in this Schedule. I think that we are entitled to ask, certainly the trade unions are entitled to ask, "Where do we go from here? Is this Conservative prosperity to be accompanied by increased taxes? Are we to have the extraordinary economic contradiction that the more prosperous we become, the higher taxes will go and the less we shall be able to buy?"

My hon. Friend the Member for Oldham, West (Mr. Hale), with whose economics I do not entirly agree, asked what will the Chancellor do in his next Budget. My hon. Friend got into difficulties with the Chair, and so I shall not ask that question in quite such open terms. But I think that we are entitled to ask whether higher Purchase Taxes are now to be used permanently as a weapon against inflation. Are we to have Purchase Tax used in this way every time the right hon Gentleman finds it necessary to "tug on the reins," as he once put it, of increased demand?

9.30 p.m.

There is another aspect of the matter. If the workers are to be encouraged to work harder and produce more, and utilise all the up-to-date methods for greater efficiency and productivity, if, after they are encouraged to do that and they have put their backs into the task, the Chancellor comes along and says, "Now, all this extra production that you have been making, all the extra earnings that you have been getting and all the extra spending which you have been doing out of your earnings must be cut down," the workers will be discouraged. After all, one of the main inspirations behind hard work is the desire to improve domestic conditions and lighten the burden of the wife and mother at home by giving her a new washing machine or equipping the kitchen with more modern amenities and better appliances. That is the main inspiration as well as the desire of the worker for higher earnings. If the worker finds that every time he moves forward in this direction the Chancellor puts additional taxes on the things he wants to buy, it is bound to cause some discouragement. The worker will not approach his job with anything like the same enthusiasm.

I think we are bound to condemn the proposal in this Schedule for increased Purchase Tax. I am not unduly concerned with many of the anomalies which have been raised in the debate, though there is no doubt that many of the constituency interests of considerable importance which have been raised, are entitled to full ventilation in this Committee because of their local importance. The only inquiry that I would make about dustbins is what has happened to the lids. I think that is an incidental point worth making. Are dustbins to be taxed while the lids go free?

I do not press these anomalies, because I think that wherever we go in this Purchase Tax range, making arbitrary distinctions between one thing and another and between different rates of tax, we are bound to run into these difficulties, and that is why the tax as a whole is one which the British public do not wish to endure any longer than they can help. That is why we must ask the Chancellor to look ahead and tell us whether this Schedule is the foundation for his future budgetary policy, and what hope he can offer of reducing the cost of living by the simple method of reducing taxes on a wide range of commodities, now placed under the Purchase Tax for the first time, which are an essential part of the cost of living, even though they do not come within the cost-of-living index figures.

Finally, I think the Chancellor has to send some message to the workers of Britain, who are looking to this Budget with some dismay and wondering where the higher standard of living which the Chancellor has said is within our capacity and, indeed, within our grasp, is to come from if we are to have an economy which seems to be based on fits and starts. We go forward and we are pulled back. We go forward again, and there is another "tug at the reins." We wonder whether there is to be a stable basis for our economy under these conditions. How shall we know from one year to another whether prices will remain steady, whether additional taxes will be levied on the things we buy, whether additional wages can be translated into a higher standard of living, and whether, indeed, we have any confidence in the future, so long as this unsteady hand is on the economic affairs of our country.

Sir E. Boyle

May I answer the hon. Gentleman's many questions in one short sentence? Surely, the higher standard of living must depend to a large degree on a rising investment programme, and it is precisely to accommodate that investment that a cut in consumer demand has been adopted.

Mr. R. Moss (Meriden)

I propose to begin my speech by making a point of which I have given the Chancellor private notice. I have received from the Secretary of the Kingsbury Dexter Miners' Lodge a complaint that the miner's safety boot known as the "Commando" is now subject to Purchase Tax. Coal mining is a dangerous occupation, and the industry is suffering from a shortage of manpower. The danger of the occupation is to be seen not only in men killed and seriously injured, but in men who suffer minor injuries which take them away from work. That means that miners at the coal face have to be de-graded in order to take on the jobs of those away from work through minor injuries.

The "Commando" boot has been recommended for the safety of the industry by the National Coal Board. I understand that it already costs 10s. more than the traditional miner's safety boot which is tax-free. But this "Commando" boot, which has been commended by the Board because it is non-skid and which may save the miner from injury, is now to be subject to 5 per cent. tax.

Is it not possible for the Chancellor to consider this serious situation, because the miners in the Warwickshire coal field are very seriously alarmed that the Chancellor should tax safety in the mines? They want to know why he is doing this, whether he is trying to save steel at the expense of coal, whether he is trying to mop up purchasing power among miners at the expense of their safety, or whether it is impossible, because of some administrative reason, to exempt the "Commando" boot from Purchase Tax.

If the Chancellor wants the miners to feel comfortable in their job, and if he wants men to be attracted to the coal industry in order to counteract the fall in manpower, he ought to consider what he can do about the tax now being levied on the "Commando" boot.

It seems to me that the objects of these Purchase Tax proposals are three in number. First, the Chancellor hopes to stabilise prices at home and to check domestic inflation by hardening the home market. Secondly, he hopes to promote exports and to close the gap in our balance of payments. Thirdly, he hopes to save metal. All these problems are sufficiently serious, and I concede that something must be done about them.

Turning to the question of inflation, to which these Purchase Tax proposals are directed, I will not detain the Committee by repeating the obvious facts, except to say that inflation has continued in Britain while it has abated in other countries. The cost of living has risen by about 20 per cent. since 1951 and by about 10 per cent. since 1952. As the Prime Minister said in his broadcast in 1951, it is useless and unnecessary to quote statistics because people know whether or not they are suffering from inflation. I suggest that the best test is to watch how a family can live on under £10 a week with prices as high as they are at present.

It is certainly true that there is an inflationary situation about which the right hon. Gentleman must do something, and should have done something a long time ago, particularly before the General Election. It is true that our balance of payments situation is serious. To this end, also, the Purchase Tax proposals were directed. It is sufficient to say about this that the average monthly gap over the first ten months of this year, including October, is nearly half as wide again as it was over the first ten months of last year.

The Deputy-Chairman (Sir Rhys Hopkin Morris)

The hon. Member seems to be making what would be more appropriately a Second Reading speech than one directed to the Schedule.

Mr. Moss

I am merely stating, Sir Rhys, the economic situation to which these Purchase Tax proposals are directed. To make my argument logical, I have briefly stated the economic situation. I now propose to show that the Purchase Tax proposals will not meet this economic situation, which is, after all, their sole justification. If that is out of order, Sir Rhys, I am quite willing not to proceed along those lines.

The Deputy-Chairman

The second part of the hon. Gentleman's remarks would appear to be in order.

Mr. Moss

Thank you, Sir Rhys. I have finished with the first part of my remarks and will now proceed to the second.

I hope that the Chancellor of the Exchequer succeeds in halting inflation and in closing the gap without creating unemployment. I have no wish to see the people in economic distress, but the Chancellor is in a dilemma. If his policy fails, harsh measures will have to be taken next year in addition to the present Purchase Tax proposals. Even if the right hon. Gentleman succeeds, unemployment may result. In fact, he seems to be in the position of the average Englishman, to quote Sir John Russell, with his invaluable capacity for holding simultaneously two or more sets of mutually inconsistent opinions. I should like to tell the Committee why I think these Purchase Tax impositions are not likely to bring success. First, the Chancellor is risking further inflation at home by increasing the cost of living through indirect taxation. That is one of the objections of my hon. Friends to these proposals. These taxes are ubiquitous and regressive. People are alarmed by indiscriminate taxes on the common necessities of life. By these proposals, "Polly Flinders," as she stands among the cinders, is treated the same as Lady Docker.

Secondly, no attempt has been made to demonstrate to the people that a national problem has arisen which should be solved on the basis of equality of sacrifice. No attempt has been made to cushion the blow to pensioners or large families or to avoid imposts on commodities that are necessary to health and safety. The increased tax on distributed profits has done nothing to gild this bitter pill.

The hon. and gallant Member for Portsmouth, West (Brigadier Clarke) said in his interesting speech last Wednesday: The Chancellor was very courageous indeed, but this taxation brings in a very small amount of money and hits all the people who should least be hit."—[OFFICIAL REPORT, 23rd November, 1955; Vol. 546, c. 1555.] It seems to me elementary common sense that in proposing remedies of this kind, involving Purchase Tax, for a situation which is inflationary and for a gap which is still wide, the Chancellor should have attempted to show to the people that all sections of the community were bearing their fair share of the burden. The application of remedies should at least convey the impression that the Government have some concern for the welfare of the old, the disabled and large families.

9.45 p.m.

These Purchase Tax proposals do not convey that impression. Because this has not been done, the law of social dynamics will operate and workers will seek increased wages. If their claims are refused, the number of days lost through industrial unrest will be greater in 1956 than in 1955, when already they exceed the 3 million mark. I noticed this morning in the News Chronicle that Oscar Hobson, City Editor, writes as follows: Some sort of crisis in the next few months seems to me inescapable. Inflation will continue. An hon. Member has made the interesting point that Purchase Tax is deflationary in the short run but inflationary in the long run

Christmas is approaching. One hon. Member has suggested that people will draw upon their savings, when they have them. There are signs that that has been done already. Ultimately, the workers will seek to recover their losses by means of increased wages. Further inflation would ruin any chance we have of economic viability for this country.

If inflation continues and unemployment comes, the country will never forgive the Government which brought back this ancient curse. I lived in it and I grew up in it. It is the worst thing that a Government can do to a community.

Mr. Ellis Smith

Hear, hear. Tell them where you lived.

Mr. Moss

Although full employment may bring its difficulties, it is far preferable to the mass unemployment which existed during my youth in the mining village where I was born. We ought not to risk the return of unemployment, yet that is precisely the risk that we are taking. If only the Government would announce, even now, steps to protect the poorer section of the community from the impact of these Purchase Tax proposals, it would not be too late to win the nation to the support of the battle to restore economic prosperity and independence to this great country.

Mr. F. H. Hayman (Falmouth and Camborne)

Purchase Tax is one of the most iniquitous taxes that any Chancellor could impose. It ought never to be imposed unless there is real necessity to do so. It hits the poorer people in the community. Although it hits everyone, those who are best off can absorb a slight percentage increase whereas poorer people cannot.

It savours of class warfare in this Budget. Inherent in the Conservative Party is jealousy of the working classes, whenever there is a rise in the standard of living. When baths were first introduced into council houses the lie was told, and was kept up, that they would only be used for storing coal. Today one hears that every council house has television, which is just a stupid lie. Everyone can verify this by looking at chimneypots of council houses. Nevertheless, that is the impression that seems to have animated the Government, and particularly the Chancellor, in regard to the tax. This tax hits the housewife and the young people in particular. I saw it mentioned a few days ago that to furnish a kitchen now will cost a young couple at least £30 more. That is a considerable sum to young people of the black-coated classes and to manual workers when they are equipping a home for the first time or having to buy replacements.

The Western Morning News, a Conservative paper, today referred to body blows delivered by the Chancellor against some of the policies advocated by the Conservative Party. I would suggest that here is a body blow against the ordinary people, and also against a very important industry in Cornwall, particularly in my constituency.

The hotel and tourist industry is one of our most important industries, and I should like to quote some figures which were given to an all-party committee of this House a week or two ago. They show that the new tax represents a 10 per cent. to 12 per cent. increase on replacements. There is also a new tax of 30 per cent. on china. Everyone who knows anything about hotel keeping or the running of restaurants will realise how great are the breakages of china in those establishments.

There is no doubt that the Purchase Tax, as the British Hotels and Restaurants Association points out, puts a brake on the maintenance of hotels and restaurants. In addition, one has to consider not only the hotels and restaurants as a tourist industry, but the ancillary industry of farming and horticulture, because in Cornwall and counties where tourism is an important part of the community's life the holiday season provides a very great market for horticultural and agricultural products, including milk, and affects also the fishing industry.

Some hon. Members opposite have been concerned about the glove industry in the west of England, and we are constantly hearing about the difficulties of that industry. Why the people in those counties continue to return Conservative Members of Parliament just beats me.

The Deputy-Chairman

The hon. Gentleman is now certainly delivering a Second Reading speech.

Mr. Hayman

I can say that 1 supported hon. Members who were seeking to ask for gloves to be taken off the list of Purchase Tax articles. I propose to vote against this Schedule because I believe that it is bad and that it is a very strange commentary on the Conservative claim that they have restored peace and prosperity to Britain.

Mr. Ellis Smith

We were very satisfied with the discussion which we had on our Amendment, and therefore I shall not detain the Committee for very long at this stage. Last Friday I was talking about these matters to a large number of people of all grades engaged in the pottery industry, and as a result of those conversations I felt that I should make a last plea to the Chancellor to reconsider his proposals before the Report stage. Our concern has been increased by further information that has come to our notice since last week when we spoke on the Amendment.

In my own division, for example, it is said that there are 300 people on short time as the result of the uncertainty which has been created. A pottery manufacturer said that they were not greatly concerned about that. It was not a great number, having regard to the total number engaged in the industry. If, however, that is symptomatic of what will occur in the future it is bound to give us cause for further concern, and that is why I am making this last-minute plea to the Chancellor before we part with our right to make a contribution at this stage of the proceedings.

A report in a local newspaper increases our uneasiness. It says that the pottery industry is contemplating with increased annoyance the growing importation of pottery and china into the United Kingdom, and then provides further information about the seriousness of that importation. In addition, the industry has lost, for the time being, its markets in a number of colonial countries and is now further embarrassed by the imposition of this tax. My hon. Friend the Member for Stoke-on-Trent, North (Mrs. Slater) has been warning me for some time about the large amounts of imported pottery she has seen in shops in the London area, and the article in the local newspaper completely confirms that. We all hope that the Chancellor will make a concession between now and the Report stage.

As we have been accused of acquiesing in the imposition of Purchase Tax, I want to put it on record that the Labour Party has always been against it. We voted against it when it was first imposed, and I voted against it in the Parliamentary Labour Party. We only agreed to acquiesce in it as the result of the plea of one of our right hon. Friends who came straight from a Cabinet Meeting, and then only on the basis that it was part of a policy of restriction during the war.

Mr. William Warbey (Ashfield)

A remarkable feature of the debate has been that although we have been discussing Purchase Tax for some hours we have not yet heard from the Government, cogently and clearly, why they have found it necessary to impose it over a wide range of household necessities and domestic articles. Nor have we heard why the scales should be on a higher level than before. It is true that we have had attempted explanations from the three Ministers who share the burden of the attacks that have come from all sides, but they were all very much in character and hardly contradictory.

At times, when dealing with specific articles, we have been told that the purpose of the imposition is to stop people from buying goods, which can thus be made available for export. On other occasions, the explanation in respect of certain metal articles has been that the purpose is to free the metal for metal-consuming exports. None of those arguments has applied to such things as gloves, brooms and brushes. They certainly cannot apply to dustbins, to which my hon. Friend the Member for Attercliffe (Mr. J. Hynd) has referred, because, clearly, the Government cannot be quite so foolish as to intend to restrict the consumption of those articles. We have had to fall back for an explanation upon the repetition, usually by the Economic Secretary, of the general statement that the purpose of the tax is to mop up surplus purchasing power.

In giving us this rather tediously repeated explanation, the Economic Secretary has shown that he has not learned very much from the modern philosophers whom he has been reading so diligently. Instead of dealing effectively with the "complexus of inter-related problems" which are raised by these Purchase Tax proposals, the hon. Gentleman attempted to simplify them in one unitary explanatoin, but that unitary explanation I and most of my hon. Friends find exceedingly unsatisfactory.

10.0 p.m.

I may be disagreeing with some of my hon. Friends when I say that I do not consider that personal consumption in this country in general and in the aggregate is excessive in relation to our national needs and resources, and that I believe the excessive pressure of home demand, which certainly exists, comes mainly from the inessential capital expenditure on items which have been referred to by my right hon. Friend the Member for Huyton (Mr. H. Wilson) and others, such as petrol stations and advertising, and also from excessive expenditure on defence.

The Deputy-Chairman

Discussion of defence cannot be in order on this Question.

Mr. Warbey

I appreciate that, Sir Rhys, but I was merely dealing with whether these Purchase Tax proposals deal with the economic problems which face the country, and I am suggesting that they do not.

Even on the Government's own assumption that there is excessive personal consumption and that it is necessary to mop up excessive purchasing power, we still have not been told by the Government why it is necessary to use this method of mopping up that purchasing power. I should like the Chancellor to give the Committee a clear and firm reply to the questions which we have been trying to put to him on a number of occasions, and to which we have not yet had an answer. Will the right hon. Gentleman tell the Committee what are the advantages of this method of mopping up excessive purchasing power which are superior to those of restoring the 6d. on the Income Tax which he took off last April? That question has not been answered and I think that the Committee is entitled to an answer.

In the absence of an answer, it is fairly easy to see the disadvantages of the method which the Chancellor is seeking to impose. The obvious disadvantage, first, is that this highly regressive form of poll tax creates greater inequality. My hon. Friend the Member for the Gorbals (Mrs. Cullen) and many others of my hon. Friends, by reference to the effect upon their constituents, have pointed out how the tax will operate most unfairly on the working members and poorer sections of the community.

I think that the whole thing was summed up most clearly and simply by the hon. and gallant Member for Worthing (Brigadier Prior-Palmer). I am glad to see that the hon. and gallant Member has just come into the Chamber. I think that I would be quoting him correctly if I said that he criticised this Purchase Tax, in this form, because, as he said, it would hit the poor more than it would hit the rich.

Brigadier O. L. Prior-Palmer (Worthing) indicated dissent.

Mr. Warbey

I understood the hon. and gallant Member to use words very similar to those. It is very unfortunate if I am mistaken, because I was going on to praise the hon. and gallant Member for being the one exception to the general rule on that side of the Committee, which was to welcome the increase in inequality which this regressive tax will bring about.

Brigadier Prior-Palmer

What I said was that it would hit those people living on fixed incomes, that it would hit the people living on £8 a week. I did not say anything about it hitting the poor more than the rich. That is entire misrepresentation.

Mr. Warbey

I presume that people who are earning £8 a week or less are the poorer sections of the community. The richer sections will certainly be less hard hit by this tax and, in fact, will find no difficulty in meeting the proposed additional charges out of their ample incomes which have been very much expanded by the concessions made by the Chancellor in his April Budget.

I am sorry that the hon. and gallant Gentleman has disavowed what I thought was his rather courageous attack on the Chancellor. I now have to make a much more categorical and sweeping attack on hon. Gentlemen opposite by saying that it appears to be their general view that a tax which increases inequality is desirable. That, of course, is in accord with the philosophy of the party they represent. It is now an admitted part of Conservative philosophy that an increasing degree of inequality is desirable, and that wealth and property are entitled to greater privileges and a greater share in the product of the community than they have been receiving in the past. That appears to us to be one disadvantage of this tax.

The other disadvantage of this tax which has been referred to by several of my hon. Friends, including my hon. Friend the Member for Sowerby (Mr. Houghton), is that under present conditions a direct tax which has the effect of raising prices must in itself be inflationary. Hon. Members have already referred to the reaction of the trade unions to this threatened tax increase. It is no use the Chancellor saying, "This will only increase the cost of living by one point," because this has to be seen against a background of a constantly increasing price level which has increased in the last ten months by no less than seven points, in other words 5 per cent.

The additions made by the tax changes proposed in this Schedule can be regarded against that background as one additional irritant which certainly will result in a demand for wage increases that will wipe out any advantage the tax might have in reducing inflation. The Chancellor knows this. He knows very well that he is trying to do a number of things at the same time which are incompatible. He is trying to maintain full employment, price stability, a free market economy and a condition of imperfect competition—

The Deputy-Chairman

This is widening the debate beyond the Schedule.

Mr. Warbey

I was trying to point out that an increase in Purchase Tax under these conditions will not reduce inflation but will increase it. The Government have no proposals available for maintaining full employment and, at the same time, preventing inflation. What they are coming forward with now is a form of irrelevant eyewash which has nothing to do with the economic problems which are facing the country.

Mr. R. A. Butler

We have now been debating the Schedule as a whole for just over three hours, and I am sure that that fulfils the general sense of what hon. Members expected, that they could represent their own point of view and their constituency point of view in a general way.

If I do not launch into a repetition of the speech which I made some ten days ago in defence of the Budget as a whole, in answer to the right hon. Member for Leeds, South (Mr. Gaitskell), it will be because I have already referred to the economic developments over the course of this year, I think to the satisfaction of, at any rate, some hon. Members, in a convincing manner, and I must bring my remarks to bear upon this Schedule, which relates to Purchase Tax. Therefore, if I leave some of the general arguments, it will simply be that I am relating my remarks to the First Schedule.

The first thing that I want to say about Purchase Tax is that it is a very difficult subject. I have received a letter from a little girl, who must be anonymous, or she may get into trouble. She writes: Please could you put the Purchase Tax on bicycles down because my daddy said I could have one when it went down. You need only put it down for a week while he buys it. If all our Purchase Tax problems were as simple as that, I do not think we should have had such long debates.

I want to deal with some of the points raised by hon. Members. The hon. Member for Govan (Mr. Rankin), for example, raised the question of christening hats. Christening hats are exempt if they are babies' head gear, but I am informed by Her Majesty's Customs and Excise that one must be a baby to qualify.

My hon. Friend the Member for Kidderminster (Mr. Nabarro) raised some difficult points about the discrepancy between gas, electricity, oil and solid fuel. I will certainly examine the serious and lengthy arguments which he advanced.

The hon. Member for Attercliffe (Mr. J. Hynd) raised the question of the "Paladdin" dustbins, about which we promised an answer in a previous debate. The answer is that this dustbin—this should appeal to hon. Members representing local authorities—will be exempt from tax.

Mr. J. Hynd

Can the right hon. Gentleman tell us how they arc exempt from tax, since dustbins are brought within the tax provisions in the Schedule?

Mr. Butler

The Economic Secretary has just written to the hon. Gentleman explaining the position. The letter has been sent off today. If the hon. Member is not satisfied, he will be able to refer to this at a later date. I am informed that the dustbins are not covered by the Schedule as drafted and are exempt.

The hon. Member for Meriden (Mr. Moss) raised the question of the "Commando" safety boot. If this boot is a miner's safety boot, a matter that we are examining—we had noticed the point before the hon. Member spoke—it will be exempt. Until we have completed our examination, I cannot give him a final answer. We were all impressed by the gravity and seriousness of the hon. Member's remarks and his evident wish that we should conquer inflation and do it by the best possible means. The fact that he does not happen to agree with the means I use, I do not at all hold against him.

I feel very much as the hon. Member does on the subject of unemployment. In a previous incarnation, like Buddha, I was Parliamentary Secretary to the Ministry of Labour, and I remember going round the South Wales employment exchanges, in perhaps one of the worst years, and seeing what unemployment meant. In reply to the hon. Member for Oldham, West (Mr. Hale), who said it was a mistake that I entered the Conservative Party, I would only say that perhaps that has very much influenced my own political philosophy, and perhaps it has made me as keen as are my right hon. and hon. Friends to stop the terrible scourge of unemployment from ruling our destinies in future, and to prevent financial policy from being the master of the people and making them unemployed.

I consider this to be one of the main objectives. If, indeed, there be a weakness in our financial policy, it is that, instead of running on the Gold Standard, we are now running on a full employment standard, with all the complications that this means. It means more restraint and great difficulty in conducting our economy. Let us for long remain on this standard, but let us remember the restraints it involves.

10.15 p.m.

My hon. Friend the Member for Yeovil (Mr. Peyton) raised the question of gloves, as he has done on previous occasions. I am glad to see that he acknowledges that gloves have benefited from the abolition of the D Scheme. I think that that will make a considerable difference to the competition to which he referred. The question of tax on children's gloves is a difficult one. Babies' gloves are exempt. The reason why children's gloves are not exempt is that it becomes impossible in the gradations of gloves in size to differentiate between a glove for a small man or a small woman and the glove of a child. Therefore, we had to stop the exemption at babies' gloves.

My hon. Friend also raised the question of industrial gloves, which are taxed at 5 per cent. Although he considers that this tax is unreasonable, I fear that it must stand.

The hon. Member for Sowerby (Mr. Houghton) raised some general points on the Schedule to which I shall refer. The hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) raised the question of pottery, to which at present I have nothing to add—nor to my hon. Friend the Member for Truro (Mr. G. Wilson) in his plea for the Cornish hand-craft pottery industry. He referred to the difficult time the pottery trade is having, in particular a small number of expert potters, in relation to Purchase Tax, and we are examining the position. I cannot at this stage say any more about the results of that examintion.

The hon. Member for Ladywood (Mr. V. Yates) referred to jewellery. He has referred to it in previous speeches and has described many of the difficulties of Birmingham and of his constituency in particular. The main thing I can say about that is that the tax was 100 per cent. when we assumed power at the beginning of the last Government and it has now been very considerably reduced. To that extent, there is an improvement. There is, of course, a 90 per cent. tax on compacts and similar objects, related to the general rate applying to cosmetics, and so forth.

In general, we have been able to give a concession to silverware and glassware, because we are now taxing them as articles and not as material, but, unfortunately, that cannot apply to some other forms of jewellery, especially imitation jewellery. In fact, however ingenious we have tried to be, we have been unable to devise for jewellery a relief in the form which the hon. Member wants.

I think that that answers many of the detailed points raised by hon. Members and I now come to the speech of the right hon. Member for Leeds, South, who has, with great courtesy, informed me that he cannot be present to hear my reply. He raised the whole question of the D Scheme and I must say that I had anticipated that that subject would be raised in the debate. He said that the tax of 5 per cent. was regressive. I enjoyed the speech of the hon. Member for Oldham, West, but I did not hear very much about the cotton industry. Most of his speech was about the Chancellor of the Exchequer. I was, therefore, very gratified to feel that I could be bracketted in the hon. Member's thoughts with his other beloved, the cotton industry.

The abolition of the D Scheme has been universally welcomed. For example, one of the most recent and polite letters which I have received from the Cotton Board reads as follows: I am sure there need be no doubt whatever that the competitiveness of our productions will be greatly stimulated by this new liberty. I have also heard from the Silk and Rayon Users' Association. The Council of the Association considers that it has achieved …as great a degree of freedom from Purchase Tax as we could reasonably expect, short of total abolition. Similarly, I can quote letters from the furniture trade periodicals and the furniture trade indicating that, while there is obvious regret that there is any Purchase Tax at all, the position has to some extent been radically improved by the abolition of the D Scheme, and that because of the abolition of the D Scheme designers and planners can move into quality, which is much more likely to improve the exports of Lancashire and of the rayon and silk industries than if we adapted the D Scheme as it was. We passed from the Utility Scheme to the D Scheme. We have now passed from the D Scheme to this 5 per cent. tax, with 10 per cent. on head gear and 10 per cent. on wool cloths.

The right hon. Member for Leeds, South was wrong in saying that blankets had a certain tax on them. I must remind him that opportunity has been taken to remove blankets and other woollen household textiles from the scope of the tax. Therefore, while the wool trade still has a grievance in relation to cotton, because there is still a 10 per cent, tax on wool cloth and a 5 per cent. tax on wool made- up goods, that is because we cannot find a method of administering the Purchase Tax in relation to the numerous retail traders in the wool industry. Therefore, we have been obliged to retain this differentiation as between cotton and wool.

Now I come to a subject raised in an earlier speech by the hon. Member for Oldham West, by the right hon. Gentleman the Member for Leeds, South and by the hon. Lady the Member for Belfast, West (Mrs. McLaughlin). I refer to brooms and brushes. This question is a very difficult one indeed. It is difficult because it has some similarity to the problem of shopping baskets and bags upon which I made a concession earlier; but the proportion of blind and disabled people in the brush and broom industry compared with the proportion in the shopping basket and bag industry is very much smaller.

Mr. Collins

Although it is true that the number of blind workers and disabled people employed in the brush industry is very different from that employed in the basket industry, nevertheless there are about 1,000 blind and disabled workers employed in the production of brushes and brooms compared with 1,500 employed on baskets. Therefore, the difference in actual numbers is not very great. Many in the brush industry will be unemployed.

Mr. Butler

I am obliged to the hon. Member. There are, in fact, large numbers, but the proportion is much less. I should be grateful if the hon. Gentleman would give me any further information on the subject that he has in his possession. All I can say on brooms and brushes, in continuation of the speech of the Financial Secretary, is that I would be very ready to examine the facts put to me by the hon. Member, and any other similar facts, before the next stage of our debates.

Not only have we great difficulty over this aspect of the broom and brush industry, but I must also acknowledge that the difficulty of definition still remains although the trade has done its best to resolve it with us. I am not giving any undertaking. I am simply saying that the broom and brush question is among the most complex and difficult which we have today and that, whatever the proportion of blind and disabled is compared with those employed in the basket industry, there is a large number engaged. I cannot go further than that. Should I find that the situation warranted it, of course I should have to look at the matter again.

The next question that arises is, I think, the main question raised in the debate by the right hon. Gentleman the Member for Leeds, South and all other hon. Members. The hon. Member for Ashfield (Mr. War-bey) asked me to state, simply, why we have had to introduce the First Schedule. A certain amount of criticism has been levelled at my right hon. Friend the Financial Secretary, because he talked about what is called the "yawning gap." I should like to leap to the defence of my right hon. Friend, who is fulfilling the role of Financial Secretary in an admirable manner. He is quite right to be avaricious for taxes. I will deal in a minute or two with the hon. Member's point about whether the poor or the rich are suffering most from this tax, but I must say, as Chancellor of the Exchequer, that it is the duty of the Chancellor of the day to strengthen any particular tax that needs strengthening.

Quite apart from the argument about inflation, there will certainly be increased strength in this tax if it is broadened in the way that has been suggested. I make bold to suggest that tax critics and tax experts in the future will not be ungrateful to me for the singularly disagreeable task I have undertaken in broadening the scope of this tax. The Committee must remember that the result of broadening the scope of this tax under the First Schedule, and in other ways, will be to raise a tax levy of over £400 million. That may seem a colossal amount. We must remember that we have chosen this method, authough unpopular, but right hon. and hon. Gentlemen opposite chose methods equally unpopular. They increased the tax on cigarettes to about double what it was before. They increased the tax on matches to a remarkable extent, and these things were just as unpopular and just as difficult as the ones we are doing. We have a right to be supported in the unpopular measures we are taking to broaden the basis of taxes and to deal with inflation.

As I see it, the position about Purchase Tax is that our national burdens are continually growing. They are growing, not necessarily uncontrolled, because we are watching—as the hon. Member for Ashfield asked us to do—the defence programme closely. But they are growing in the social services day by day. We have just heard an announcement by my right hon. Friend the Minister of Pensions and National Insurance on the subject of National Assistance scales, which no doubt will be welcomed by every hon. Member of the Committee. But all these things cost money. There is the rise in the cost of the Health Service. There is a distinct rise in that of the education service, and unless we can buttress and support the taxation system of this country and make it broad and all-embracing, I do not think that we can carry the burdens which lie before us. Therefore, in this particular aspect which has been raised, I certainly defend the words used by the Financial Secretary and regard it as the duty of any Chancellor of the Exchequer to make taxation as sensible as he possibly can.

Mr. J. T. Price

Does the right hon. Gentleman recollect that one of his illustrious predecessors a few generations ago used precisely the same argument in putting forward the iniquitous Window Tax?

Mr. Butler

Well, that is a very happy precedent, because after a certain time the Window Tax was taken off. Perhaps one of my successors may be able to relieve the odious taxes which I have had to put on, and on seeing any relief from these odious taxes I should be the first to be satisfied, because after all I have done a certain amount myself to relieve taxation on the lines I thought right for the purpose of encouraging incentive; and I am not ashamed of a single step I have taken in the national interest and in the interests of production or the economy.

The other reason for putting on this unpleasant Schedule is that there is undoubtedly a state of upward pressure on costs and prices—call it inflation or not as you will. And when there is too much purchasing power, Purchase Tax is the obvious weapon. The idea of the right hon. Member for Leeds, South that everyone who pays Purchase Tax is poor is simply nonsense. As was pointed out by the Financial Secretary in our debates a short time ago in answer to the right hon. Gentleman, the higher tax classes now produce more than half the total yield from Purchase Tax, and will continue to do so. When the right hon. Gentleman opposite was Chancellor, the two top classes produced less than half of the total Purchase Tax yield, so that now the tax is less regressive than under a Socialist Government.

This argument that people who buy motor cars and pay money for these and other expensive things which will have increased Purchase Tax on them are poor is just nonsense, as much nonsense as saying that my last Budget was an Electioneering Budget when right hon. and hon. Members opposite attacked it as a rich man's Budget. But that is the sort of contradiction in their arguments to which we are becoming accustomed. I bear no resentment against right hon. and hon. Gentlemen opposite for their variety of attacks. I have tried to do my duty at each time of the year when I have to meet this problem, and in this case, in the autumn, I have found it my duty to introduce a Budget, parts of which, in the Purchase Tax, we are examining today, which I calculated would be unpopular, and which have turned out to be extremely unpopular. Tomorrow we shall be considering the other aspect of it, Profits Tax, which in other sections of the Committee will be equally unpopular. I think that we had better go back to the views of the hon. Member for Meriden who made a singularly sincere and excellent speech this evening, and hoped that these measures put forward in all sincerity will be successful. I do not believe that they will cause the suffering which hon. Members opposite claim.

I believe, judging from results—and we must be very careful about this, because the economy is a very difficult thing to predict—that things have been firmer and stronger, both in relation to the trade gap and sterling, since we showed evidence of the action we intended to take, and since we have taken action. There is still a long way to go. We counted early in this year on the use of the "credit squeeze" beginning to work. This Schedule is part of a whole variety of measures to conquer inflation, and I trust that we shall now, while remaining in order, be able to pass this Schedule as part of a whole picture which is designed to achieve what the hon. Member for Meriden so ardently desires—a state of full employment, with certain curbs, certain restrictions, certain impositions of taxes designed to curb inflation, and keep us on an even keel.

10.30 p.m.

Mr. Harold Wilson (Huyton)

In the last few minutes the Chancellor of the Exchequer has certainly gone a great deal wider than most of the speeches which were regarded as being in order in the debate on this Schedule. I do not propose to follow him into all the realms into which he has just taken us, but I should like to comment on one reference he made to my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) who, as he said, could not be here to hear the Chancellor's reply.

He said my right hon. Friend had given the impression that it is only the poor who paid Purchase Tax. I am sure that my right hon. Friend has given no such impression to anyone who heard him. What he said, and what we have said, is that all people who are poor do pay Purchase Tax, and our complaint against the Chancellor—and it was he who referred to his pre-Election Budget, not hon. Members on this side of the Committee—is that in his pre-Election Budget he gave concessions to most of the people at the top end of the scale, and with this Budget, as has been pointed out to him, he is now inflicting taxation on every household in the country, including some who were not bearing this particular form of tax before.

Then the right hon. Gentleman complained about an increase of the duty on cigarettes during the lifetime of the Labour Government. I know I should be out of order if I were to follow him at length on this, and I do not propose to follow him at any greater length than he himself devoted to the subject. We all remember how much political capital hon. Members opposite made of that issue before the 1950 Election. But the Chancellor has been in charge of the nation's finances for four years and he has not reduced it. If it was such a wrong thing for us to do, why has the Chancellor, pledged as he was to sweeping reductions in national expenditure, not been conducting the nation's affairs in such a way that he could have reduced this duty on cigarettes, matches, and all those others of which he was complaining?

In the speech to which we have just listened, the Chancellor introduced for the first time what was, to me at any rate, a new argument in these debates on Purchase Tax. He was proud of the fact that he has broadened the tax base of the country—the precise opposite of everything he was claiming in May, when he wanted to go down to history as the man on whose tombstone was written that he had reduced every tax that he found when he came into office except that on beer. Now he is proud that he has widened the tax base, and he says that future Chancellors and tax experts will be grateful to him for what he has done. I want to say quite plainly, so far as this side of the Committee is concerned, that we believe that to widen the tax base to the extent of introducing a tax on a large number of items that have not borne tax for very many years is a retrograde step.

This debate, taking with it the debate on Clause 1, has now continued for five days and one night—though we did not make very much progress on Purchase Tax during that particular period. I think the Chancellor will be the first to admit that, from this side, we have put forward very many helpful and constructive proposals. The only unfortunate thing is that he has not accepted any of them—I am sorry, he has accepted two. Had he accepted all of our proposals, the Schedule which we are now debating would be more acceptable and welcome in fact, it would be almost non-existent.

It has been very interesting to watch the gradual diminution in the size of the Tory majority. I do not think that it has ever been more than 42 or 43, and it has been falling today to as low as 37. We have debated many separate items in the Schedule, and I do not now propose to go into the details of the pot scourers, and the coal and coke cinder sifters and sieves, and the electric kettles, and the clothes pegs, and the clothes-line posts, and the dustbins, and all the rest.

I think, however, that I ought to remind the right hon. Gentleman of the very strong plea made to him by my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith) to look again at the tax on pottery. I am sure that when we come to the next stage of the Bill, the whole House will be most anxious to follow up the points just made by the Chancellor in reply to my hon. Friend the Member for Shoreditch and Finsbury (Mr. Collins), who dealt with brushes and brooms. There is a very special case for a concession on those articles comparable to that given to the basket industry this evening. We shall certainly seek to follow up that question.

As I say, I do not propose to go into all the detailed points which have been raised. [HON. MEMBERS: "Hear, hear."] Hon. Members opposite say "Hear, hear," but I would remind them of the very scanty attendance there has been on the benches opposite. At times, we have had to call attention to the fact that there were no Conservative Members present, save on the Front Bench. We had to have a count to save the Bill for them. I would also remind them that this Committee has a very serious duty in relation to taxation. Here we have taxation imposed on a very wide range of goods—on some for the first time—and we should certainly be in order in having a detailed debate on the various items, many of which we have not been allowed to debate case by case as we went through the Schedule.

I want, for a few minutes, to deal with just two main points raised by the Schedule. The first is the abolition of the D Scheme, to which the right hon. Gentleman referred, and its substitution by the 5 per cent. and 10 per cent. tax on textiles, clothing, footwear and furniture. The second is the addition of items to the tax range, some of which have not been in the list before.

Last week I protested, on behalf of my right and and hon. Friends, against our inability to debate the separate items involved in the abolition of the D Scheme. When the Chancellor looks at this again. I am sure that he will find that there is no precedent for the situation in which the Committee has been placed, in which a new tax has been imposed on a whole range of goods without the Committee being able to debate it or to vote against a particular increase.

That raises a difficult point, and the right hon. Gentleman was good enough last week, when I raised it, to undertake to look into it. I suggest to him that there should be consultations among all parts of the Committee to ensure that in any future Finance Bill there shall not be Financial Resolutions of a kind which prevent the Committee from undertaking one of its principal Parliamentary duties.

Quite apart from the constitutional point, there is the question of the desirability or otherwise of the taxes that have been imposed. The Committee is familiar with what has happened. There was the replacement of the Utility Scheme by the D Scheme, in 1952. Until that time, of course, practically all Utility clothes were free of tax and under the D Scheme, roughly speaking, the lower half—in terms of price—of most commodities was free of Purchase Tax and the upper half was taxed.

The Financial Secretary gave the House some information in a Written Answer to my hon. Friend the Member for Bermondsey (Mr. Mellish), when he was asked about the proportion of the total volume of clothing, footwear and furniture which was wholly exempted from Purchase Tax by the operation of the D Scheme at the time of its abolition. It is worth bringing it to the notice of the Committee. The Financial Secretary said: It is estimated that about five-sixths of the footwear (other than young children's footwear) and about three-quarters of the furniture sold before the Budget, was free of tax by reason of the D Scheme."—[OFFICIAL REPORT, 15th November, 1955; Vol. 546, c. 22.] The right hon. Gentleman then gave a long list of men and women's wear and the proportion estimated to have been free of tax.

A proportion of between half and three-quarters was free of tax in the case of men's jackets, waistcoats, cardigans and pullovers, overcoats, woollen shirts, vests and pants, and more than three-quarters of trousers, overalls, socks, and woollen pyjamas. Similar figures applied in relation to certain classes of women's wear. That means that for the first time many items which have always been free of tax are now subject to tax, and we know that the cheaper clothes will cost more and many of the dearer ones will cost less.

It was during the Budget debate that I quoted from an excited statement in the Evening Standard which said that as a result of the Chancellor's benefactions a fully-embroidered ball gown costing £260 before the Budget could now be bought for £230. That is the sort of relief to long-suffering sections of the community the right hon. Gentleman has given in the Budget. Suits that cost £43 and £44 can now be bought for £37, £38, and £39, whereas everything on the cheaper end of the scale, bought by people with the least money, is costing more.

I do not propose to follow the Chancellor's argument about the export trade. We have told the right hon. Gentleman time and again that the D Scheme was inhibiting exports. We have questioned him about two-fold poplins, and at this late stage, after all that Lancashire has suffered, the right hon. Gentleman has made a concession but, of course, it does not solve the problem. We have made it clear that if the right hon. Gentleman removed Purchase Tax altogether it would make more of a contribution in the case of textiles, but the 5 per cent. tax makes the position of Lancashire more difficult in relation to the imported commodity.

The other point that has been raised is the addition of many items to the tax range. As my right hon. Friend the Member for Leeds, South pointed out today, household brushes, brooms and mops have never had to carry tax before. They were included to the first list in the Budget which was introduced by the late Lord Simon, then Sir John Simon, and it was on 13th August, 1940, that the late Sir Kingsley Wood accepted very readily a Labour Amendment to take brooms, brushes and mops out of the list of articles subject to Purchase Tax.

The war memoirs of the right hon. Member for Woodford (Sir W. Churchill) give an account of what the nation was up against at that time, and of the memorandum circulated to the then War Cabinet to say that we had almost no rifles, almost no tanks, almost no arms of any kind on the eve of the Battle of Britain. Yet the Chancellor at that time refused to put a tax on brooms, brushes and mops. Now the Chancellor, after four years of Tory freedom and the highest prosperity the country has ever known, imposes a tax. Our prosperity is so great, so vulnerable that we have to tax brooms, brushes and mops, a tax which was not thought appropriate even in 1940.

There are other items in the list. Electric kettles, smoothing irons and pressing irons were taken out of the list by my right hon. Friend the Member for Bishop Auckland (Mr. Dalton). As we have had cause to remind the Committee, in that Budget of 1951 which increased taxation by £170 million, which was very tough in many of its consequences, which increased Income Tax to 9s. 6d., the highest figure we have ever known in peacetime, my right hon. Friend removed a whole range of goods from Purchase Tax, goods which the Chancellor has now put back in the Schedule in the sacred name of broadening the basis of taxation.

10.45 p.m.

We have been trying to find out the real reasons for this. I pointed out the other evening the difficulty we were experiencing in that we got different answers in support of the same tax from different Ministers, depending on which member of the Treasury Bench happened to be replying to the debate. For example, the Chancellor did not use the argument just now, but he did use it the other evening, that a tax on clothes pegs is necessary to maintain the value of the £. Apparently, in the mind of the Chancellor it all goes back to Istanbul. On that occasion he made a speech loud enough to impress the foreign speculators who were still selling sterling short, and who, it seems, had not heard the right hon. Gentleman when he said precisely the same things in the House in July. I think the Chancellor will agree that he added nothing at Istanbul to his House of Commons statement?

It seems that all these sinister gentlemen were sipping their Pernods in Continental bourses and watching the Chancellor at Istanbul to see whether he really meant it. Any weakening of the Chancellor and pop goes the £. So along comes the Iron Chancellor to this Committee and says, no, he will stand firm. He will maintain the tax on clothes pegs. He will maintain his rigid grip on the pot scourer situation. No relaxation can possibly be made on coal and cinder sieves and sifters. No dissipation will be permitted to wringers and mangles. And the £ is saved. That is the argument of the Chancellor.

Mr. R. A. Butler

That is the argument of the right hon. Gentleman.

Mr. Wilson

I think the Chancellor will find, if he looks through his speeches in different stages of the debate on the Schedule, that everything I have said underlines the arguments we have heard from him. Not so the Financial Secretary. He does not understand all this international finance. With the Financial Secretary it is all a question of anomalies, of yawning gaps. He is probably getting tired of that phrase. His hon. and gallant Friend the Member for Portsmouth, West (Brigadier Clarke) described him as the gremlin of the Treasury—though, of course, we were only too ready to accept, on his own admission, that he is a courteous and patient gremlin. Every now and again this gremlin comes out of his hole in a dark corner of the Treasury and turns a jaundiced eye on the tax schedule and finds that something is not taxed. He then runs along to the Chancellor and demands that we have a special supplementary autumn Budget in order that things which were not taxed before can be taxed now.

I have never seen such an expression of pleasure cross the face of any Treasury Minister as when my hon. Friend the Member for Westhoughton (Mr. J. T. Price) referred, most misguidedly, to the Window tax. Quite obviously, the Financial Secretary realised that this was a tax he had missed. No doubt in due course that anomaly will be removed and we shall be hearing from the Chancellor and the Financial Secretary how important a window tax is in order to save the £.

Finally, we have the Economic Secretary. From him we have had some of the most stimulating contributions in the series of debates on the Schedule; contributions which, unfortunately, have been getting shorter and shorter as the debates proceeded. We used to learn in physics lessons about Boyle's Law. Some of us have forgotten perhaps what Boyle's Law was. I had to ask my right hon. Friend the Member for South Shields (Mr. Ede), a distinguished scientist, and he had forgotten, too. Urgent inquiries were made and we were informed that apparently Boyle's Law says that the volume of gas varies inversely with the pressure. I believe that I am right in saying that this law was originally introduced by a kinsman of the hon. Gentleman. [AN HON. MEMBER: "No."] Well, another branch of the family, perhaps. While I would be the last person to associate gas with the Economic Secretary's oratory, there is no doubt that that oratory has diminished in volume as our discussions have proceeded.

In sorting out the hon. Gentleman's speeches, what has been the argument? Has it been that the Chancellor's policy will lead to the exporting of more of these goods? We on this side of the Committee waited with bated breath to see whether the hon. Gentleman would tell us that all this new range of taxation was designed to discourage home consumption on coal hods, coal scuttles, wringers and mangles, urinals, commodes, and lids for the same in order that we could send a lot more of these items for sale abroad in the dollar area. We should have understood had that been the argument, but it is not the case and neither, apparently, is the Chancellor gambling on this.

We thought that perhaps it was to release manpower and metals and factory space for goods which could be sold abroad; and that was the argument by the hon. Member for Kidderminster (Mr. Nabarro). The hon. Gentleman made an impassioned speech to which we paid particular attention, because it was about the only serious contribution which we have heard from that side of the Committee. He said that if the Chancellor had a tax on metal clothes posts, that would encourage the saving of metal, because everybody would start using timber posts; but he forgot that the Bill puts a tax on timber posts as well as metal ones.

That argument might have been all right when we were discussing an Amendment to Clause 1, and the luxury goods at high rates, because it was then the Economic Secretary's idea that a high rate of tax might divert goods into the export market. But, even there, the higher rates were not on metal goods at all, but on Christmas cards and face creams. The Economic Secretary says that it is quite inappropriate to use the argument of the hon. Member for Kidderminster when talking of essential goods because he does not want to reduce consumption of essential goods. He wants to maintain that consumption and says that these items in the Schedule are essentials; that people must have them and his argument seemed to be that if they bear a tax, people will have less money to spend on other things and, consequently, inflation will disappear.

That seems to us to be the new Boyle's Law; that a tax on essentials of every household in the country will mean that people will have less money to spend on other things, that inflation will disappear, arid the £ revive. That argument is based on a fundamental economic fallacy. It assumes that everything else will remain the same, as in the economic textbooks which the Economic Secretary used to quote to us. But other things do not remain equal. His ceteris do not remain paribus. It assumes no change in the level of incomes, but higher prices mean higher wage demands.

Here, we must press the Chancellor. My hon. Friend the Member for Sowerby (Mr. Houghton) made a most important contribution on this subject, and we must ask the Chancellor frankly whether he feels, or does not feel, that wage claims will be justified as a result of this Budget. [An HON. MEMBER: "No."] An hon. Gentleman behind him says that he does not think they are, but even although the right hon. Gentleman might produce logical arguments to suggest that the actual increase in the cost of living is so small, he has entirely forgotten to take into account the psychological effect of increasing the cost of living by aggravating a situation which is almost out of control.

The Chancellor is convinced—this is the other reason why there is a fallacy in his argument—that there is too much money about. He refuses to take back the money that he recklessly gave away on the eve of the General Election. If there is too much money about, what we say to the Chancellor is that his error—his economic error, his political error, and, in our view, his moral error—is that he takes the money away from those with the lowest standard of living, those who have gained least and suffered most from four years of Tory freedom.

My hon. Friend the Member for Liverpool, Exchange (Mrs. Braddock) asked the other evening why, if the right hon. Gentleman wants to stop dissipation and prevent spending on people's standard of living, he did not deal with some of the people in the West End. She referred to parties in the West End which some of the most notorious crooks in the country were attending. The Chancellor knows perfectly well that the party referred to by my hon. Friend was probably paid for by the Exchequer as to about 50 per cent. because it was almost certainly paid for out of business expenses which were allowed for Income Tax purposes.

So a fiscal attack on inflation which the Chancellor commends to the Committee may be necessary. If it is necessary, it is necessary because the Chancellor himself refuses to deal with the basic causes of inflation. His doctrinaire refusal to reintroduce even the most obviously necessary physical controls forces him to use these tax weapons against housewives.

In a debate on the pottery part of the Schedule, the Chancellor himself actually paid tribute to the controls maintained by the Labour Government under which we were able to maintain a better record of pottery exports up to 1951 than the Government have achieved in 1955. He paid tribute to those physical controls. Yet he refuses, or fails, to tackle the problem of car exports, and above all, of course, he forces this Budget on us because he will not face up to the problem of inessential building.

A wide range of household essentials in the Schedule, we are told, is being taxed to yield £250,000, or at most £500,000, in Revenue, and the purpose is to reduce the call on the physical resources of the community. Yet in the very middle of a debate in which the Chancellor refuses to deal with the inessential use of resources the Conservative Party announces the building of a new Tory Central Office in Smith Square. [An HON. MEMBER: "What about Transport House?"] Transport House remains in Smith Square; it was built many years ago.

It is because the Chancellor fails to deal with these inessential calls on the national resources of the country that he comes along with this Schedule. We condemn it on economic and on social grounds and we shall vote against tonight.

Question put.

The Committee divided: Ayes 242, Noes 200.

Division No. 64.] AYES [10.59 p.m.
Agnew, Cmdr. P. G. Harris, Reader (Heston) Morrison, John (Salisbury)
Aitken, W. T. Harrison, A. B. C. (Maldon) Mott-Radclyffe, C. E.
Allan, R. A. (Paddington, S.) Harrison, Col. J. H. (Eye) Nabarro, G. D. N.
Alport, C. J. M. Harvey, John (Walthamstow, E.) Nairn, D. L. S.
Amery, Julian (Preston, N.) Harvie-Watt, Sir George Neave, Airey
Amory, Rt. Hn. Heathcoat (Tiverton) Hay, John Nicholls, Harmar
Anstruther-Gray, Major W. J. Head, Rt. Hon. A. H. Nicholson, Godfrey (Farnham)
Arbuthnot, John Heald, Rt. Hon. Sir Lionel Nicolson, N. (B'n'm'th, E, & Chr'ch)
Armstrong, C. W. Heath, Edward Nugent, G. R. H.
Ashton, H. Hill, Mrs. E. (Wythenshawe) O'Neill, Hn. Phelim (Co. Antrim, N.)
Atkins, H. E. Hill, John (S. Norfolk) Orr, Capt. L. P. S.
Baldock, Lt.-Cmdr. J. M. Holland-Martin, C. J. Orr-Ewing, Charles Ian (Hendon, N.)
Baldwin, A. E. Hope, Lord John Page, R. G.
Balniel, Lord Hornsby-Smith, Miss M. P. Pannell, N. A. (Kirkdale)
Barber, Anthony Horobin, Sir Ian Partridge, E.
Barlow, Sir John Howard, Gerald (Cambridgeshire) Peyton, J. W. W.
Barter, John Howard, John (Test) Pickthorn, K. W. M.
Baxter, Sir Beverley Hudson, Sir Austin (Lewisham, N.) Pilkington, Capt. R. A.
Bennett, Dr. Reginald Hudson, W. R. A. (Hull, N.) Pitman, I. J.
Bevins, J. R. (Toxteth) Hughes Hallett, Vice-Admiral J. Pitt, Miss E. M.
Bidgood, J. C. Hughes-Young, M. H. C. Pott, H. P.
Biggs-Davison, J. A. Hulbert, Sir Norman Powell, J. Enoch
Birch, Rt. Hon. Nigel Hurd, A. R. Price, David (Eastleigh)
Bishop, F. P. Hutchison, Sir Ian Clark (E'b'gh, W.) Price, Henry (Lewisham, w.)
Body, R. F. Hutchison, James (Scotstoun) Prior-Palmer, Brig. O. L.
Boothby, Sir Robert Hyde, Montgomery Raikes, Sir Victor
Boyle, Sir Edward Hylton-Foster, Sir H. B. H. Ramsden, J. E.
Braithwaite, Sir Albert (Harrow, W.) Irvine, Bryant Godman (Rye) Rawlinson, P. A. G.
Bromley-Davenport, Lt.-Col. W. H. Jenkins, Robert (Dulwich) Redmayne, M.
Brooke, Rt. Hon. Henry Jennings, J. C. (Burton) Rees-Davies, W. R.
Buchan-Hepburn, Rt. Hon. P. G. T. Johnson, Dr. Donald (Carlisle) Renton, D. L. M.
Burden, F. F. A. Johnson, Eric (Blackley) Ridsdale, J. E.
Butcher, Sir Herbert Jones, A. (Hall Green) Rippon, A. G. F.
Butler, Rt. Hn. R. A. (Saffron Walden) Kaberry, D. Robinson, Sir Roland (Blackpool, S.)
Campbell, Sir David Keegan, D. Robson-Brown, W.
Carr, Robert Kerby, Capt. H. B. Rodgers, John (Sevenoaks)
Channon, H. Kerr, H. W. Roper, Sir Harold
Cole, Norman Kershaw, J. A. Ropner, Col. Sir Leonard
Conant, Maj, Sir Roger Kirk, P. M. Russeli, R. S.
Cooper-Key, E. M. Lagden, G. W. Schofield, Lt.-Col. W.
Cordeaux, Lt.-Col. J. K. Lambert, Hon. G. Sharples, Maj. R. C.
Corfield, Capt. F. V. Lancaster, Col. C. G. Shepherd, William
Craddock, Beresford (Spelthorne) Langford-Holt, J. A. Simon, J. E. S. (Middlesbrough, W.)
Crookshank, Capt. Rt. Hon. H. F. C. Leather, E. H. C. Smithers, Peter (Winchester)
Crosthwaite-Eyre, Col. O. E. Leavey, J. A. Smyth, Brig. J. G. (Norwood)
Crowder, Sir John (Finchley) Leburn, w. G. Stanley, Capt. Hon. Richard
Crowder, Petre (Ruislip—Northwood) Legh, Hon. Peter (Petersfield) Stevens, Geoffrey
Currie, G. B. H. Lindsay, Hon. James (Devon, N.) Steward, Sir William (Woolwich, W.)
Dance, J. C. G. Lindsay, Martin (Solihull) Stewart, Henderson (Fife, E.)
Davidson, Viscountess Linstead, Sir H. N. Storey, S.
Deedes, W. F. Lloyd, Maj. Sir Guy (Renfrew, E.) Sumner, W. D. M. (Orpington)
Dodds-Parker, A. D. Lloyd, Rt. Hon. Selwyn (Wirral) Taylor, Sir Charles (Eastbourne)
Donaldson, Cmdr. C. E. McA. Lloyd-George, Maj. Rt. Hon. G. Thomas, Rt. Hn. J. P. L. (Hereford)
Doughty, C. J. A. Longden, Gilbert Thomas, Leslie (Canterbury)
Duncan, Capt. J. A. L. Low, Rt. Hon. A. R. W. Thompson, Kenneth (Walton)
Emmet, Hon. Mrs. Evelyn Lucas-Tooth, Sir Hugh Thompson, Lt.-Cdr. R. (Croydon, S.)
Errington, Sir Eric Macdonald, Sir Peter Thorneycroft, Rt. Hon. P.
Erroll, F. J. Mackeson, Brig. Sir Harry Thornton-Kemsley, C. N.
Farey-Jones, F. W. McKibbin, A. J. Tiley, A. (Bradford, W.)
Fell, A. Mackie, J. H. (Galloway) Tilney, John (Wavertree)
Finlay, Graeme McLaughlin, Mrs. P. Tweedsmuir, Lady
Fisher, Nigel Maclay, Rt. Hon. John Vaughan-Morgan, J. K.
Fleetwood-Hesketh, R. F. Maclean, Fitzroy (Lancaster) Vickers, Miss J. H.
Fletcher-Cooke, C. Macleod, Rt. Hn. Iain (Enfield, W.) Vosper, D. F.
Foster, John Macmillan, Maurice (Halifax) Wakefield, Edward (Derbyshire, W.)
Fraser, Hon. Hugh (Stone) Macpherson, Niall (Dumfries) Walker-Smith, D. C.
Maddan, Martin Wall, Major Patrick
Freeth, D. K. Maitland, Cdr. J. F. W. (Horncastle) Ward, Hon. George (Worcester)
Galbraith, Hon. T. G. D. Maitland, Hon. Patrick (Lanark) Ward, Dame Irene (Tynemouth)
Garner-Evans, E. H. Manningham-Buller, Rt. Hn. Sir R. Waterhouse, Capt. Rt. Hon. C.
George, J. C. (Pollok) Marlowe, A. A. H. Watkinson, H. A.
Glover, D. Marples, A. E. Whitelaw, W. S. I. (Penrith & Border)
Godber, J. B. Marshall, Douglas Williams, Paul (Sunderland, S.)
Gough, C. F. H. Mathew, R. Williams, R. Dudley (Exeter)
Gower, H. R. Maude, Angus Wills, G. (Bridgwater)
Green, A. Mawby, R. L. Wilson, Geoffrey (Truro)
Gresham Cooke, R. Maydon, Lt.-Comdr. S. L. C. Wood, Hon. R.
Grimston, Hon. John (St. Albans) Medlicott, Sir Frank Woollam, John Victor
Grimston, Sir Robert (Westbury) Milligan, Rt. Hon. W. R. Yates, William (The Wrekin)
Grosvenor, Lt.-Col. R. G. Molson, A. H. E.
Gurden, Harold Monckton, Rt. Hon. Sir Walter TELLERS FOR THE AYES:
Harris, Frederic (Croydon, N. W.) Moore, Sir Thomas Mr. Studholme and
Mr. Oakshott.
Ainsley, J. W. Hale, Leslie Parker, J.
Albu, A. H. Hall, Rt. Hn. Glenvil (Colne Valley) Parkin, B. T.
Allaun, Frank (Salford, E.) Hamilton, W. W. Pearson, A.
Allen, Arthur (Bosworth) Hannan, W. Peart, T. F.
Allen, Scholefield (Crewe) Harrison, J. (Nottingham, N.) Plummer, Sir Leslie
Awbery, S. S. Hastings, S. Popplewell, E.
Bacon, Miss Alice Hayman, F. H. Price, Philips (Gloucestershire, W.)
Baird, J. Henderson, Rt. Hn. A. (Rwly Regis) Probert, A. R.
Balfour, A. Herbison, Miss M. Proctor, W. T.
Benson, G. Hobson, C. R. Pryde, D. J.
Bevan, Rt. Hon. A. (Ebbw Vale) Holman, P. Pursey, Cmdr. H.
Blackburn, F. Holmes, Horace Rankin, John
Blyton, W. R. Houghton, Douglas Reeves, J.
Boardman, H. Howell, Charles (Perry Barr) Reid, William
Bottomley, Rt. Hon. A. G. Howell, Denis (All Saints) Rhodes, H.
Bowden, H. W. (Leicester, S. W.) Hoy, J. H. Robens, Rt. Hon. A.
Bowles, F. G. Hughes, Emrys (S. Ayrshire) Robinson, Kenneth (St. Pancras, N.)
Boyd, T. C. Hughes, Hector (Aberdeen, N.) Rogers, George (Kensington, N.)
Braddock, Mrs. Elizabeth Hunter, A. E. Royle, C.
Brockway, A. F. Hynd, J. B. (Attercliffe) Shawcross, Rt. Hon. Sir Hartley
Broughton, Dr. A. D. D. Irvine, A. J. (Edge Hill) Short, E. W.
Brown, Thomas (Ince) Irving, S. (Dartford) Silverman, Julius (Aston)
Burke, W. A. Janner, B. Silverman, Sydney (Nelson)
Burton, Miss F. E. Jay, Rt. Hon. D. P. T. Simmons, C. J. (Brierley Hill)
Butler, Herbert (Hackney, C.) Jeger, George (Goole) Skeffington, A. M.
Butler, Mrs. Joyce (Wood Green) Jeger, Mrs. Lena (Holbn & St. Pncs, S.) Slater, Mrs. H. (Stoke, N.)
Callaghan, L. J. Jenkins, Roy (Stechford) Slater, J. (Sedgefield)
Carmichael, J. Johnson, James (Rugby) smith, Ellis (Stoke, S.)
Castle, Mrs. B. A. Jones, Rt. Hon. A. Creech (Wakefield) Snow, J. W.
Champion, A. J. Jones, David (The Hartlepools) Sorensen, R. W.
Clunie, J. Jones, Elwyn (W. Ham, S.) Sparks, J. A.
Coldrick, W. Jones, Jack (Rotherham) Steele, T.
Collick, P. H. (Birkenhead) Jones, J. Idwal (Wrexham) Stewart, Michael (Fulham)
Collins, V. J. (Shoreditch & Finsbury) Jones, T. W. (Merioneth) Stones, W. (Consett)
Corbet, Mrs. Freda Kenyon, C. Strachey, Rt. Hon. J.
Craddock, George (Bradford, S.) King, Dr. H. M. Strauss, Rt. Hon. George (Vauxhall)
Cronin, J. D. Lawson, G. M. Stross, Dr. Barnett (Stoke-on-Trent, C.)
Cullen, Mrs. A. Ledger, R. J. Summerskill, Rt. Hon. E.
Davies, Ernest (Enfield, E.) Lee, Frederick (Newton) Swingler, S. T.
Deer, G. Lee, Miss Jennie (Cannock) Sylvester, G. O.
de Freitas, Geoffrey Lever, Harold (Cheetham) Taylor, Bernard (Mansfield)
Delargy, H. J. Lever, Leslie (Ardwick) Taylor, John (West Lothian)
Dodds, N. N. Logan, D. G. Thomas, George (Cardiff)
Donnelly, D. L. MacColl, J. E. Thomson, George (Dundee, E.)
Dugdale, Rt. Hn. John (W. Brmwch) McKay, John (Wallsend) Thornton, E.
Dye, S. McLeavy, Frank Tomney, F.
Ede, Rt. Hon. J. C. Mahon, S. Turner-Samuels, M.
Edwards, Rt. Hon. John (Brighouse) Mann, Mrs. Jean Ungoed-Thomas, Sir Lynn
Edwards, Rt. Hon. Ness (Caerphilly) Marquand, Rt. Hon. H. A. Warbey, W. N.
Edwards, Robert (Bilston) Mason, Roy Weitzman, D.
Edwards, W. J. (Stepney) Mayhew, C. P. Wells Percy (Faversham)
Evans, Albert (Islington, S. W.) Mitchison, G. R. Wells, William (Walsall, N.)
Evans, Edward (Lowestoft) Monslow, W. West, D, G.
Evans, Stanley (Wednesbury) Moody, A. S. Wheeldon, W. E.
Fletcher, Eric Morris, Percy (Swansea, W.) White, Mrs. Eirene (E. Flint)
Forman, J. C. Mort, D. L. White, Henry (Derbyshire, N. E.)
Fraser, Thomas (Hamilton) Moss, R. Willey, Frederick
Freeman, Peter Moyle, A. Williams, David (Neath)
Gibson, C. W. Mulley, F. W. Williams, Ronald (Wigan)
Gooch, E. G. Neal, Harold (Bolsover) Williams, W. R. (Openshaw)
Gordon Walker, Rt. Hon. P. C. Oram, A. E. Willis, Eustace (Edinburgh, E.)
Greenwood, Anthony Orbach, M. Wilson, Rt. Hon. Harold (Huyton)
Grenfell, Rt. Hon. D. R. Owen, W. J. Yates, V. (Ladywood)
Grey, C. F. Padley, W. E. Zilliacus, K.
Griffiths, David (Rother Valley) Paget, R. T.
Griffiths, Rt. Hon. James (Llanelly) Paling, Will T. (Dewsbury) TELLERS FOR THE NOES:
Griffiths, William (Exchange) Palmer, A. M. F. Mr. J. T. Price and
Grimond, J. Pargiter, G. A. Mr. Wilkins.
To report Progress and ask leave to sit again.—[Mr. R. Thompson.]
Committee report Progress; to sit again Tomorrow.