CIVIC TABLE SERVICE, DUDLEY (PURCHASE TAX) (Hansard, 25 April 1956)

§ Mr. George Wigg (Dudley)
During the mayoralty of Alderman Norton, the County Borough of Dudley raised a sum of money to purchase a civic banqueting service. Although the sum was large the money was found, and on 15th April, 1955, the Worcester Royal Porcelain Company of Worcester were authorised to go ahead and to make this service.
Later, samples were submitted to his worship the mayor, and, these being approved, instructions were given for the arms of the City Borough of Dudley to be incised on the banqueting service.
These instructions were carried out and all was well until the autumn Budget. When the autumn Budget was introduced, the Chancellor of the Exchequer, with the approval of the House, authorised the increase in Purchase Tax and, as a result, the mayor's fund, which had been raised on the basis of the cost of the service plus the tax at the time, was placed in a very difficult position. Subsequently, a demand was made for Purchase Tax to the value of £166 15s. 5d. It was unfortunate that no money was available at the time, but of course that is a matter for the County Borough of Dudley and I am not trying to get a subscription out of the Financial Secretary to the Treasury; my complaint to him is of a much more serious character.
1936 In correspondence with the Customs and Excise it has been alleged that the rate of tax levied upon this banqueting service has been raised correctly. This view is difficult to understand. I am not a lawyer, but it seems to me beyond dispute that once the manufacture of the banqueting service had been authorised, it could be argued that if the County Borough of Dudley could not take possession of it because the price was increased or the Purchase Tax went up, it could be made available to some other purchaser; but once the arms of the County Borough of Dudley had been incised on the banqueting service, it is my submission that the mayor had in fact taken possession of it and it was of no possible use to anybody but the citizens of Dudley.
In short, I think it is a legal perversion to argue that the Purchase Tax should be assessed at the time the goods are removed from the manufacturer. That ruling can apply in ordinary cases, but in this case there were two separate transactions. There was the ordering of the goods, the submission of a sample and the approval of the banqueting service, and then there was the authority given to the Worcester Porcelain Company to incise the arms of the County Borough of Dudley.
I ask the Financial Secretary to give the most careful consideration to this case, not only because it affects the constituency which I have the honour to represent in this House, but because it must affect other authorities. It is a good thing that the citizens of a borough should club together and enrich their civic life with possessions of this kind. It adds dignity to the affairs of local government, and from every point of view is an action to be commended.
When a fund is raised by public subscription, however, anything but encouragement is given when, through no fault of their own, the mayor and the burgesses are caught in this way. They are caught, if they are really caught, not because of any commonsense reading of the law, but by the perversion of the law. The law ought to be respected, but it also should be framed in such a way that it can be honoured and understood by ordinary people.
I suggest to the Financial Secretary that the ruling which the Customs and 1937 Excise has given—a ruling which, I regret to say, he has upheld—is the negation of common sense. Perhaps this is the fifty-ninth minute of the eleventh hour—it is certainly getting towards midnight and I have no wish to detain the House for a moment longer than is necessary; but I earnestly plead with the Financial Secretary, not to make a special case, because special cases make bad law, but to acknowledge that justice itself demands that the citizens of Dudley should not be treated in the way they have been treated and that the citizens of other boroughs who might be encouraged to take a similar step should not be dissuaded by the unfortunate experience of the mayor and the citizens of Dudley in the efforts they have made to establish a banqueting service, not only for their own use but for the use of generations to come.

§ The Financial Secretary to the Treasury (Mr. Henry Brooke)
I appreciate the moderate manner in which the hon. Member for Dudley (Mr. Wigg) has brought forward this question, which I realise is of great importance in his constituency. The hon. Member has been moderate, but he has been nonetheless persuasive for that. There is no question of enmity between him and me. The fact is, as I shall seek to show, that he and I and everyone else are bound by the law. He may think that the law is unsatisfactory, but neither he nor I can can put forward propositions for amending the law on the Adjournment. The best he can do on the Adjournment is to convince the House that a Minister of the Crown has been administering the law or carrying out his duties improperly, and my task is to show to the House that what has been done, however distasteful it may be to my feelings or his or anybody else's, is in accordance with the law. Indeed, in my judgment we could do no other.
As he rightly told the House, this fine civic table service was ordered on behalf of the mayor and corporation of Dudley in April, 1955, from the Worcester Royal Porcelain Company. I agree with him that once the pieces had been manufactured they would be of no value except as curiosities to anybody except the borough itself. At the time when the order was placed goods such as these were free of Purchase Tax. As the result 1938 of the autumn Budget they became chargeable at 30 per cent. with effect from 27th October. The service was not ready for delivery until 9th November. It was in those circumstances that the manufacturers asked—I must say, properly asked—for payment of the tax at 30 per cent., amounting, as the hon. Gentleman rightly said, to £166 15s. 5d., as an addition to the contract price, because under the law they would have to account for tax to the Crown.
The hon. Gentleman's argument, as I understand it, is that the law has in this case produced a situation which is unacceptable, and he wants to see whether there is any way of getting round it. He wrote to me. He had a talk with me. I wrote to him. Now, entirely within his rights, he is raising the question on the Adjournment of the House. I am bound to put to him that whenever Purchase Tax is raised numbers of people who have already placed orders may be caught thereby. I recognise that this case has special significance in the life of his borough and his constituency, but, of course, there are many cases which could be argued similarly, where, for example, an individual has placed an order for a car or something of that kind and then, through a rise in the rate of Purchase Tax, he finds that the cost of his order to him is considerably larger than he bargained for.

§ Mr. Wigg
Surely the right hon. Gentleman will agree that there is a world of difference between ordering a car, which, if the person ordering it does not take delivery of it, can be used by some other person, and goods of this kind, a banqueting service bearing the arms of a county borough? In my submission that establishes the ownership of the service. Moreover, a deposit had been paid.

§ Mr. Brooke
I do not think that point is material. I have to have regard to the law, and what it is my duty to do is to explain to the House that the Customs, having taken legal advice, have here interpreted the law according to that advice. While I can well see that various arguments may be adduced, yet I fear that they do not make any difference to the meaning of the law on the subject. I am sure he will agree—I think he made it clear in his speech—that the question whether or not further funds were available 1939 is not really material in this case. I think he is resting his argument largely on the particular characterisation that was put on the pieces of this table service. That, I fear I must tell him, does not seem to us to be material to the legal position.
As I said, the Customs did not seek just locally to decide this matter finally, and off their own bat. It has been up to the highest level in London. The Customs in London took the advice of their solicitor on the matter and the solicitor's advice was to the effect that, the contract of sale having been made in April last year, the goods were "future goods by description" within the meaning of the Sale of Goods Act, 1893, and the property in the goods could not have passed from the manufacturers to the mayor and corporation at any date earlier than 9th November, for it was on the vendors' own showing that the goods were not until then "in a deliverable state."
If the hon. Member looks at the correspondence, I think he will find that that was stated in one of the letters, a copy of which he sent to me, and it is certainly stated in a letter, of which I have a copy, written by the Worcester Royal Porcelain Company to the Customs and Excise Department on 20th December. In that letter it is specifically stated that that main order was not available for delivery until 9th November. That being so, the advice that the Customs have from their solicitors is that there is no ground either of law or of fact which can make the tax point earlier than the date of delivery. That is the law as we are advised that it is.
Naturally, neither the Customs nor I can be the final interpreter of the law. 1940 That could only be done in the court, and I think I am bound to say to the hon. Member that if he wishes a final determination, that would have to be in a court of law. I do not want to discourage him from doing that. I appreciate that in a case like this neither he nor the Dudley Corporation might wish to go to the additional expense of taking it that far. I only say that because I do not want to arrogate to myself any special claims for being able here at this Box to lay down the law. All that I can tell him is that this is the advice that I have received.
I am sure that he will grant me this, that I have not let go my old links with local government. I can understand perfectly how members of the local authority must feel when something like this happens to them. I should certainly feel it if it were to happen to my own borough council. But as a Minister I must abide by the provisions of the law, as I am advised that they stand.
The hon. Member has carried this matter forward, if I may say so, with entire propriety and great persuasiveness to the Floor of the House. In my respectful judgment, he has done everything within his power to press the case for the corporation, short of having the matter carried to a court of law. If I have to give him an adverse answer, it is not because I want to do anything in any way harmful to the cause of those who raised this money. It is simply that, as I said, the law is supreme and neither I nor anyone else have any power, or would wish to have any power, to alter it in individual cases.