FINANCE BILL

HC Deb 11 June 1958 vol 589 cc223-357

Considered in Committee [Progress 21st May].

[Sir CHARLES MACANDREW in the Chair]

Schedule 1.—(SUBSTANTIVE CHANGES IN PURCHASE TAX RATES, ETC.)

3.55 p.m.

Amendment proposed: In page 30, line 37, leave out sub-paragraph (2).—[Mr. Isaacs.]

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

The Committee divided: Ayes 229, Noes 204.

Division No. 144.]	AYES	[3.55 p.m.
Agnew, Sir Peter	Eden, J. B. (Bournemouth, West)	Johnson, Dr. Donald (Carlisle)
Allan, R. A. (Paddington, S.)	Elliott, R. W. (Ne'castle upon Tyne, N.)	Johnson, Eric (Blackley)
Amory, Rt. Hn. Heathcoat (Tiverton)	Emmet, Hon. Mrs. Evelyn	Joseph, Sir Keith
Arbuthnot, John	Errington, Sir Eric	Keegan, D.
Armstrong, C. W.	Farey-Jones, F. W.	Kerby, Capt. H. B.
Ashton, H.	Fell, A.	Kerr, Sir Hamilton
Astor, Hon. J. J.	Finlay, Graeme	Kershaw, J. A.
Baldock, Lt.-Cmdr. J. M.	Fisher, Nigel	Langford-Holt, J. A.
Baldwin, A. E.	Fletcher-Cooke, C.	Leavey, J. A.
Balniel, Lord	Foster, John	Leburn, W. G.
Barber, Anthony	Fraser, Hon. Hugh (Stone)	Legge-Bourke, Maj. E. A. H.
Barlow, Sir John	Fraser, Sir Ian (M'cmbe & Lonsdale)	Legh, Hon. Peter (Petersfield)
Beamish, Col. Tufton	Freeth, Denzil	Lindsay, Hon. James (Devon, N.)
Bell, Philip (Bolton, E.)	Gammans, Lady	Lindsay, Martin (Solihull)
Bell, Ronald (Bucks, S.)	Garner-Evans, E. H.	Linstead, Sir H. N.
Bennett, F. M. (Torquay)	George, J. C. (Pollok)	Llewellyn, D. T.
Bidgood, J. C.	Gibson-Watt, D.	Lloyd, Maj. Sir Guy (Renfrew, E.)
Biggs-Davison, J. A.	Glover, D.	Lloyd, Rt. Hon. Selwyn (Wirral)
Birch, Rt. Hon. Nigel	Godber, J. B.	Lucas, Sir Jocelyn (Portsmouth, S.)
Black, C. W.	Gower, H. R.	Lucas-Tooth, Sir Hugh
Body, R. F.	Graham, Sir Fergus	McAdden, S. J.
Bossom, Sir Alfred	Grant, W. (Woodside)	Macdonald, Sir Peter
Boyd-Carpenter, Rt. Hon. J. A.	Green, A.	Mackeson, Brig. Sir Harry
Boyle, Sir Edward	Gresham Cooke, R.	McKibbin, Alan
Braine, B. R.	Grimston, Hon. John (St. Albans)	Mackie, J. H. (Galloway)
Braithwaite, Sir Albert (Harrow, W.)	Grimston, Sir Robert (Westbury)	McLaughlin, Mrs. P.
Bromley-Davenport, Lt.-Col. W. H.	Grosvenor, Lt.-Col. R. G.	Maclay, Rt. Hon. John
Brooke, Rt. Hon. Henry	Gurden, Harold	McLean, Neil (Inverness)
Brooman-White, R. C.	Hall, John (Wycombe)	Macleod, Rt. Hn. Iain (Enfield, W.)
Bryan, P.	Hare, Rt. Hon. J. H.	Macmillan, Maurice (Halifax)
Burden, F. F. A.	Harris, Frederic (Croydon, N. W.)	Maitland, Cdr. J. F. W. (Horncastle)
Butcher, Sir Herbert	Harris, Reader (Heston)	Maitland, Hon. Patrick (Lanark)
Butler, Rt. Hn. R. A. (Saffron Walden)	Head, Rt. Hon. A. H.	Manningham-Buller, Rt. Hn. Sir R.
Campbell, Sir David	Heald, Rt. Hon. Sir Lionel	Markham, Major Sir Frank
Cary, Sir Robert	Heath, Rt. Hon. E. R. G.	Marlowe, A. A. H.
Clarke, Brig. Terence (Portsmth, W.)	Henderson, John (Cathcart)	Mathew, R.
Cole, Norman	Henderson-Stewart, Sir James	Maudling, Rt. Hon. R.
Conant, Maj. Sir Roger	Hesketh, R. F.	Mawby, R. L.
Cooper, A. E.	Hill, Rt. Hon. Charles (Luton)	Medlicott, Sir Frank
Cooper-Key, E. M.	Hinchingbrooke, Viscount	Milligan, Rt. Hon. W. R.
Cordeaux, Lt.-Col. J. K.	Hirst, Geoffrey	Morrison, John (Salisbury)
Corfield, Capt. F. V.	Holland-Martin, C. J.	Nabarro, G. D. N.
Craddock, Beresford (Spelthorne)	Hope, Lord John	Nairn, D. L. S.
Crosthwaite-Eyre, Col. O. E.	Horobin, Sir Ian	Neave, Airey
Crowder, Sir John (Finchley)	Howard, Gerald (Cambridgeshire)	Nicholls, Harmar
Cunningham, Knox	Howard, John (Test)	Nicholson, Sir Godfrey (Farnham)
Currie, G. B. H.	Hudson, W. R. A. (Hull, N.)	Nicolson, N. (B'n'm'th, E. & Chr'ch)
Dance, J. C. G.	Hughes Hallett, Vice-Admiral J.	Noble, Comdr. Rt. Hon. Allan
Davidson, Viscountess	Hughes-Young, M. H. C.	Oakshott, H. D.
D'Avigdor-Goldsmid, Sir Henry	Hurd, A. R.	Ormsby-Gore, Rt. Hon. W. D.
Digby, Simon Wingfield	Hutchison, Michael Clark (E'b'gh, S.)	Orr, Capt. L. P. S.
Dodds-Parker, A. D.	Hyde, Montgomery	Orr-Ewing, Charles Ian (Hendon, N.)
Donaldson, Cmdr. C. E. McA.	Hylton-Foster, Rt. Hon. Sir Harry	Osborne, C.
Doughty, C. J. A.	Iremonger, T. L.	Page, R. G.
Drayson, G. B.	Irvine, Bryant Godman (Rye)	Pannell, N. A. (Kirkdale)
du Cann, E. D. L.	Jenkins, Robert (Dulwich)	Partridge, E.
Dugdale, Rt. Hn. Sir T. (Richmond)	Jennings, J. C. (Burton)	Peel, W. J.
Duncan, Sir James	Jennings, Sir Roland (Hallam)	Peyton, J. W. W.

Pickthorn, K. W. M.	Smithers, Peter (Winchester)	Vaughan-Morgan, J. K.
Pilkington, Capt. R. A.	Smyth, Brig. Sir John (Norwood)	Vickers, Miss Joan
Pitt, Miss E. M.	Speir, R. M.	Vosper, Rt Hon. D. F.
Pott, H. P.	Stanley, Capt. Hon. Richard	Wakefield, Edward (Derbyshire, W.)
Price, David (Eastleigh)	Stevens, Geoffrey	Wakefield, Sir Wavell (St. M'lebone)
Price, Henry (Lewisham, W.)	Steward, Harold (Stookport, S.)	Wall, Patrick
Prior-Palmer, Brig. O. L.	Storey, S.	Ward, Dame Irene (Tynemouth)
Profumo, J. D>	Studholme, Sir Henry	Watkinson, Rt. Hon. Harold
Ramsden, J. E.	Summers, Sir Spencer	Whitelaw, W. S. I.
Rawlinson, Peter	Taylor, William (Bradford, N.)	Williams, Paul (Sunderland, S.)
Redmayne, M.	Teeling, W.	Williams, R. Dudley (Exeter)
Remnant, Hon. P.	Temple, John M.	Wills, G. (Bridgwater)
Renton, D. L. M.	Thomas, Leslie (Canterbury)	Wilson, Geoffrey (Truro).
Roberts, Sir Peter (Heeley)	Thomas, P. J. M. (Conway)	Wood, Hon. R.
Rodgers, John (Sevenoaks)	Thompson, Kenneth (Walton)	Yates, William (The Wrekin)
Roper, Sir Harold	Thompson, R. (Croydon, S.)
Russell, R. S.	Thorneycroft, Rt. Hon. P.	TELLERS FOR THE AYES:
Sharples, R. C.	Tilney, John (Wavertree)	Colonel J. H. Harrison and
Shepherd, William	Turton, Rt. Hon. R. H.	Mr. Chichester-Clark.
Simon, J. E. S. (Middlesbrough, W.)	Vane, W. M. F.

NOES
Ainsley, J. W.	Griffiths, Rt. Hon. James (Llanelly)	Monslow, W.
Allaun, Frank (Salford, E.)	Griffiths, William (Exchange)	Moody, A. S.
Allen, Arthur (Bosworth)	Grimond, J.	Morris, Percy (Swansea, W.)
Allen, Scholefield (Crewe)	Hall, Rt. Hn. Glenvil (Colne Valley)	Morrison, Rt. Hn. Herbert (Lewis'm, S.)
Awbery, S. S.	Hamilton, W. W.	Mort, D. L.
Bacon, Miss Alice	Hannan, W.	Moss, R.
Balfour, A.	Harrison, J. (Nottingham, N.)	Moyle, A.
Bellenger, Rt. Hon. F. J.	Hastings, S.	Mulley, F. W.
Bence, C. R. (Dunbartonshire, E.)	Hayman, F. H.	Neal, Harold (Bolsover)
Benn, Hn. Wedgwood (Bristol, S. E.)	Healey, Denis	Noel-Baker, Francis (Swindon)
Beswick, Frank	Henderson, Rt. Hn. A. (Rwly Regis)	Noel-Baker, Rt. Hon. P. (Derby, S.)
Blackburn, F.	Herbison, Miss M.	Oliver, G. H.
Blenkinsop, A.	Hobson, C. R. (Keighley)	Oram, A. E.
Blyton, W. R.	Holman, P.	Oswald, T.
Bonham Carter, Mark	Holmes, Horace	Owen, W. J.
Bottomley, Rt. Hon. A. G.	Houghton, Douglas	Paget, R. T.
Bowden, H. W. (Leicester, S. W.)	Hoy, J. H.	Palmer, A. M. F.
Bowles, F. G.	Hubbard, T. F.	Pannell, Charles (Leeds, W.)
Boyd, T. C.	Hughes, Emrys (S. Ayrshire)	Parker, J.
Braddock, Mrs. Elizabeth	Hughes, Hector (Aberdeen, N.)	Parkin, B. T.
Brockway, A. F.	Hunter, A. E.	Paton, John
Broughton, Dr. A. D. D.	Hynd, H. (Accrington)	Pearson, A.
Brown, Thomas (Ince)	Hynd, J. B. (Attercliffe)	Peart, T. F.
Burke, W. A.	Irvine, A. J. (Edge Hill)	Pentland, N.
Burton, Miss F. E.	Irving, Sydney (Dartford)	Plummer, Sir Leslie
Butler, Herbert (Hackney, C.)	Isaacs, Rt. Hon. G. A.	Popplewell, E.
Callaghan, L. J.	Janner, B.	Prentice, R. E.
Carmichael, J.	Jay, Rt. Hon. D. P. T.	Price, J. T. (Westhoughton)
Castle, Mrs. B. A.	Jeger, George (Goole)	Probert, A. R.
Champion, A. J.	Jeger, Mrs. Lena (Holbn & St. Pncs, S.)	Proctor, W. T.
Clunie, J.	Jenkins, Roy (Stechford)	Randall, H. E.
Coldrick, W.	Johnson, James (Rugby)	Rankin, John
Collins, V. J. (Shoreditch & Finsbury)	Johnston, Douglas (Paisley)	Redhead, E. C.
Cove, W. G.	Jones, David (The Hartlepools)	Reid, William
Craddock, George (Bradford, S.)	Jones, Jack (Rotherham)	Robens, Rt. Hon. A.
Cullen, Mrs A.	Jones, J. Idwal (Wrexham)	Roberts, Goronwy (Caernarvon)
Darling, George (Hillsborough)	Jones, T. W. (Merioneth)	Robinson, Kenneth (St. Pancras, N.)
Davies, Stephen (Merthyr)	Kertyon, C.	Rogers, George (Kensington, N.)
Deer, G.	Key, Rt. Hon. C. W.	Ross, William
de Freitas, Geoffrey	King, Dr. H. M.	Royle, C.
Delargy, H. J.	Lawson, G. M.	Shinwell, Rt. Hon. E.
Diamond, John	Lee, Frederick (Newton)	Short, E. W.
Dodds, N. N.	Lindgren, G. S.	Silverman, Sydney (Nelson)
Donnelly, D. L.	Lipton, Marcus	Skeffington, A. M.
Dugdale, Rt. Hn. John (W. Brmwch)	Logan, D. G.	Slater, Mrs. H. (Stoke, N)
Edelman, M.	Mabon, Dr. J. Dickson	Slater, J. (Sedgefield)
Edwards, Rt. Hon. Ness (Caerphilly)	McAlister, Mrs. Mary	Smith, Ellis (Stoke, S.)
Edwards, W. J. (Stepney)	McCann, J.	Soskice, Rt. Hon. Sir Frank
Evans, Albert (Islington, S. W.)	MacColl, J. E.	Sparks, J. A.
Evans, Edward (Lowestoft)	McGhee, H. G.	Stewart, Michael (Fulham)
Fernyhough, E.	McGovern, J.	Stonehouse, John
Finch, H. J.	McInnes, J.	Stones, W. (Consett)
Fletcher, Eric	McLeavy, Frank	Strachey, Rt. Hon. J.
Foot, D. M.	MacMillan, M. K. (Western Isles)	Stross, Dr. Barnett (Stoke-on-Trent, C.)
George, Lady Megan Lloyd (Car'then)	Mallalieu, E. L. (Brigg)	Summerskill, Rt. Hon. E.
Gibson, C. W.	Marquand, Rt. Hon. H. A.	Sylvester, G. O.
Gordon Walker, Rt. Hon. P. C.	Mason, Roy	Taylor, Bernard (Mansfield)
Greenwood, Anthony	Mellish, R. J.	Taylor, John (West Lothian)
Grenfell, Rt. Hon. D. R.	Messer, Sir F.	Thomas, George (Cardiff)
Grey, C. F.	Mikardo, Ian	Thomas, Iorwerth (Rhondda, W.)
Griffiths, David (Rother Valley)	Mitchison, G. R.	Thomson, George (Dundee, E.)

Thornton, E.	Wells, William (Walsall, N.)	Wilson, Rt. Hon. Harold (Huyton)
Tomney, F.	Wheeldon, W. E.	Winterbottom, Richard
Usborne, H. C.	White, Mrs. Eirene (E. Flint)	Woof, R. E.
Wade, D. W.	Willey, Frederick	Younger, Rt. Hon. K.
Warbey, W. N.	Williams, David (Neath)	Zilliacus, K.
Watkins, T. E.	Williams, Rev. Llywelyn (Ab'tillery)
Weitzman, D.	Williams, Rt. Hon. T. (Don Valley)	TELLERS FOR THE NOES:
Wells, Percy (Faversham	Willis, Eustace (Edinburgh, E.)	Mr. Wilkins and Mr. Simmons.

The Chairman

The next Amendment is that in page 30, line 49, with which it might be for the convenience of the Committee to take the Amendment in page 31, line 1, leave out "30"and insert"5".

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

I beg to move, in page 30, line 49, at the end to insert: (4) Sewing machines previously chargeable at 30 per cent. in paragraph (m) of the Group shall be chargeable at 5 per cent. When we have discussed Finance Bills over the last few years we have generally found that the womenfolk have been most hard-hit by them. We had the "pots and pans" Budget, and the present Budget continues, to some extent, the attempts to hit the housewife that were then made. I was very fortunate in having a mother who believed literally in the proverb that a stitch in time saves nine, and when I was quite a young girl she taught my sister and me not only how to sew by hand, but how to use the sewing machine to the best possible advantage. I remember quite well, as a small child, being persuaded—almost "kidded", if I can use a slang word—into doing sewing work which I might not have wanted to do. Our mother wanted us to learn how to use the machine. Sewing was considered to be a most valuable part of the training both of myself and my sister.

When I got married, one of the first things that I bought was a sewing machine, because I realised that not only would it make it possible for me to save money by being able to make things quite quickly, but would also save very valuable time. As I entered politics and became a local councillor, I found that every minute that the sewing machine saved me was a very valuable part of the time I needed to spend in the house.

We know that today it is very easy to buy ready-made clothes. Many of them are very attractively produced, but it is still true that a young girl can buy two yards of very gay material and make herself quite an attractive skirt for summer or holiday wear, and, in that way, save shillings. Again, the fact that a mother can make her children's clothes is a very valuable thing. There are still large numbers of working-class families where the mother has to cut down father's trousers and mother's coat to make clothes for the children.

A housewife's use of a sewing machine and its attachments, with which she can darn the sheets and do lots of other mending very quickly—even do small things like sewing tapes on the teacloths, so that her husband hangs them up instead of throwing them down—is an advantage if she has a large family. It is, therefore, a great pity that, at this stage, we should not only still have a tax of 30 per cent. on what is a very useful piece of furniture and a necessity in the home—and especially the home of the working-class family—but that, as a further stab at the housewife, we should now propose to put a tax on the cabinet that holds the machine.

The tidy housewife does not like to see a machine standing open and without a cover. She likes a machine which can be covered up and thereby kept clean. This saves time in that she has not to get out the fluff and dirt and perhaps make repairs. If she can afford it, she also likes to have a sewing machine which will fold up in an inner cabinet and looks like a table. It then becomes an attractive piece of furniture in the house. So, in addition to the tax on the actual sewing machine, we now say that if she wants one with a cabinet so that it will keep clean and be a piece of furniture in the house, she has to pay 20 per cent. Purchase Tax upon the cabinet. I look upon that as a further stab at the housewife, and particularly the housewife who likes to manage her home in as good and economical way as possible.

One other aspect of this is that we spend quite a lot of money on our schools in training children how to use a sewing machine. When I was a teacher, one of the main things that I did when teaching sewing was to have a small piece of calico which I could use to teach the children to hem, seam and make buttonholes. They made specimen pieces. Today, in nearly all our schools, and in the secondary modern schools in particular, girls learn to make their own clothes and household equipment. If the Financial Secretary doubts the value of this as a very desirable part of education, I invite him to come to Stoke, where some of the secondary modern schools are arranging, next term, to have a mannequin parade, to show off the things that the girls have made. There he will see how they can make their own clothes—their dressing gowns, beach wear and their evening and party frocks.

We are also spending a lot of money training our children how to use the sewing machine to the best advantage, how to save money and how to look attractive by making their own clothes in a smart way. When they grow up they tell their mother that they want a sewing machine. Mother is faced with the fact that in addition to the price of a machine, which is not a very easy payment, she has to pay Purchase Tax as well. Again, in our educational system, particularly for our womenfolk, we have the development of evening classes, growing to an almost uncomfortable degree because some authorities have not buildings of the size for them, where women go to learn dressmaking, embroidery, soft furnishings and things of that kind.

There is the do-it-yourself campaign, which is being advertised to a great extent, and there is growing up the great joy of craft work. It is essential that young people should learn to do things with their hands as well as with machines, yet in the Finance Bill we are continuing a tax of 30 per cent. on sewing machines and also a tax on the cabinet, cover and table on which the machine stands.

I ask the Financial Secretary to try to look at this from the point of view of the housewife who is a proud and good manager and good mother. From the husband's point of view, the more money that she saves in that way the better she can feed him and the more she can do with her housekeeping money generally. Also, from the point of view of the educational facilities we are offering and the encouragement which is given to young people, we should not make it more difficult for them to continue their training.

4.15 p.m.

Mr. Cyril Bence (Dunbartonshire, East)

In supporting the Amendment which has been so ably put forward by my hon. Friend the Member for Stoke-on-Trent, North (Mrs. Slater), I want to put this to the Committee. From time to time we hear expositions from members of the Government and, indeed, from members of all parties that the people themselves could do a great deal to help stabilise the cost of living. I myself believe that. I believe that the discriminating housewife and good home manager—the same applies to a man—can do a great deal to stabilise the family cost of living.

I could mention lots of things in the home which help to do this. I would point out, if I may without being out of order, that we found in our own household that during the week fresh fruit and vegetables and meat were invariably a little cheaper than they were on Fridays and Saturdays. So we got a refrigerator and we bought our fresh fruit and vegetables during the week when they were cheaper and kept them fresh in the refrigerator. For instance, we could buy tomatoes during the week 3d. a lb. cheaper than we could on Friday night, which was pay night. The same thing applies today.

As my hon. Friend said, the housewife with a sewing machine in the home can save a great deal of money by using that machine to mend clothes and make her children's and her own clothes. Probably the cheapest way for Mrs. Jones to keep up with Mrs. Smith, if she has not a lot of money, is to get a sewing machine. There is no doubt about it. I could tell a story about a man with a bicycle in North Wales, but to do so would be out of order and probably indiscreet. There is no doubt that a young woman entering into marriage and raising a family can dress herself and the children much more cheaply and at a very good standard if she knows how to use a sewing machine and is discriminating in buying materials in the shops.

I am convinced that if every young woman were trained, as my hon. Friend said, to use a sewing machine and perform these domestic functions at home the management of the marriage on the part of the man would be much easier. I have no doubt that a sewing machine in the house is a great attraction to young women and to more elderly women too to stay at home and utilise it. The sewing machine is an evolving machine. There is change in its design and style from year to year. Believe me, the competition in this field today is becoming very intense, and it is not price competition. In my constituency, the best sewing machine in the world is made by the biggest manufacturers of sewing machines in the world, with the best service behind them. [An HON. MEMBER: "Singers."] I did not mention the firm. I am not talking of the Singer motor car, but the Singer sewing machine. My grandmother used one, and my wife and daughter use one now.

Mrs. Patricia McLaughlin (Belfast, West)

The hon. Gentleman has referred to his grandmother having had a sewing machine and his wife and daughter having one, but in many cases sewing machines have almost an hereditary title, if one may use that phrase. In my family, the sewing machine comes down from generation to generation and I suggest that a sewing machine is not something which is invested in by every generation. I appreciate the hon. Gentleman's contention, but, at the same time, that is surely not an argument for a reduction in Purchase Tax.

Mr. Bence

I was coming to that very point. I happened to come into the possession, through the death of a member of my family, of a sewing machine made by the Singer Company in Glasgow in 1892.

Mr. E. C. Redhead (Walthamstow, West)

That was before Purchase Tax.

Mr. Bence

Yes. It was a work of art. It had iron legs, a big lid on top and looked like an old-fashioned phonograph. So this thing came to me. My sisters did not want it. They said that mother had been using it for years; father would not buy her a new one, and they were not going to use that old thing. That is the ladies all over. They want something new. They want a change.

Mrs. McLaughlin

No.

Mr. Bence

Yes, that is so; they like a change in their machines. The tradition of handing the pram down from grandmother to grand-daughter has gone. They want a new pram for the new baby. The average young woman likes a change when she sees a new design. It is this element in the intense competition facing the industry which is compelling all manufacturers, not only sewing machine manufacturers, continually to be pressing forward with the improvement of machines and their design. The Singer Sewing Machine Company is engaged now in redesigning its products and will soon be bringing on to the market a whole range of newly designed machines.

Anyone engaged in light industry knows that efficient and economic production and development capacity enabling people to compete on price and design in the world markets depends upon having as large a market as can possibly be obtained. It depends upon the maximum home market. I have said this year after year. A mass production unit simply cannot be treated as a unit which can depend for its existence solely on the export market. It must have, with that, a good home market. If it does not have it, it will not accomplish as much as it might in the foreign market.

I will not mention names, but there are three machines I know of which are available on the world market. My hon. Friend the Member for Stoke-on-Trent, North referred to the cabinet and accessories of sewing machines. Some of these foreign machines are selling very well indeed. The German one is selling because, with the machine itself, there is a complete range of accessories. The cabinet is one of them. I know of one machine with a beautiful cabinet and a lovely set of accessories, all of which are included with the machine. We can make these things in this country, but, since they are treated as extras to the sewing machine, they are subject to this heavy Purchase Tax and the total effect of the tax on them, as it were, is battened on to the sewing machine.

The company about which I have been speaking is finding competition very severe, not only in the foreign markets but in our own market as well. One must remember, too, that if the British Government take action in this country which is liable to make production, especially of light engineering products, difficult here, the things can always be produced in some other country. The Singer Sewing Machine Company has factories all over the world. In the interests not only of the housewife but of the general light engineering industry, I beg the hon. and learned Gentleman to remember that there are some industries—the sewing machine industry is one and the bicycle industry is another—in which a large home market is essential to successful export trading.

I want to revert to the point I made earlier about encouraging the individual to exercise discrimination and initiative in his own affairs, to do something himself and exercise some personal responsibility about the inflationary pressure. The individual can reduce his demands on production generally, and, after all, that is what we mean when we talk about trying to curb inflationary pressure. The sewing machine in every home is an instrument which the housewife can use, with her ability as a seamstress, to make her children's clothes and things for herself. She can even make things for her husband. Some of the shirts turned out on sewing machines are really beautiful. A good wife can do brilliant work with her sewing machine for herself, her husband and her children, making a considerable saving for her husband's pocket. When one is born and brought up in a working-class family, one appreciates just what a wife can do with a sewing machine.

If housewives with sewing machines had them taken from them and they were forced to go to the finished goods market for clothes, there might well be a small rise in price. Some people in the wholesale trade, perhaps, who have an interest in the selling of gowns, frocks, and children's clothes, quite naturally, I suppose, may look upon the sewing machine as a nuisance which they would much rather did not exist. However, I do not imagine that the Financial Secretary would take that view. I am sure that he would not support any interests which wanted to discourage the use of the sewing machine because it was detrimental to the sale of machine-manufactured goods.

I ask the hon. and learned Gentleman to look at the matter again and consider whether it is possible to remove some of the Purchase Tax from the accessories, if not from the machines themselves. These accessories go to make the machines an attractive proposition in face of competition from foreign machines which are coming in, machines which are, I assure the hon. and learned Gentleman, very attractive because of the accessories supplied with them.

I ask the hon. and learned Gentleman to give this help to British industry. I speak with particular interest because one company is in my constituency, a good company with a good employment record. This company finds that the tax on all the accessories which are extras to the machine acts as a very serious hamper to it in competition with foreign manufacturers.

Mr. Victor Collins (Shoreditch and Finsbury)

I shall not attempt to follow my hon. Friend the Member for Dunbartonshire, East (Mr. Bence) in the detailed knowledge he has shown of the use of sewing machines and of sewing machines as heirlooms, nor can I possibly add to the case put by my hon. Friend the Member for Stoke-on-Trent, North (Mrs. Slater). I intervene because I have, on two previous occasions, moved an Amendment similar to the one now before us, and I want to show the Financial Secretary just how completely illogical, unfair and discriminatory this particular tax is.

The Chancellor has made considerable strides in the Finance Bill towards wiping out a good deal of the discrimination which has occurred in other respects, but, in this particular case, he appears deliberately to have continued what I can only describe as the vendetta which the Treasury has waged against the sewing machine. It is completely inexplicable. Perhaps the Chancellor, as a bachelor, may be able to succeed where his predecessors, married men, have failed. I hope that, whatever else he says when he replies, the Minister will try to deal adequately with these points and explain them.

First, the cabinets, covers, and tables for sewing machines are furniture. They are domestic furniture which, in all other respects, is taxed at 5 per cent. It is absolutely indefensible that the Chancellor, seeing matters as they were before the Finance Bill, should suddenly take it into his head to tax those things at 30 per cent. He will probably say that he is wiping out an anomaly since sewing machines are taxed at 30 per cent. and, of course, the table one puts a sewing machine on and the cover one puts upon it should be taxed at 30 per cent., too.

The Chancellor may try to assert that these articles are no longer domestic furniture but are accessories of the sewing machine. But one can go to a shop and buy a small table upon which to put a sewing machine, and that table will be taxed at 5 per cent. If one goes to a sewing machine shop and buys a stand or table for a sewing machine, solely because it is sold by a sewing machine company it must be a sewing machine table and, so it is argued, one must pay a 30 per cent. tax.

I am not trying to make a joke. I am simply putting the position as it is, without any exaggeration whatever. This is not something which the Chancellor discovered to be wrong and tried to put right. It is something that the Chancellor discovered was right and is trying to put wrong. We are giving him the chance to put it right again this afternoon.

4.30 p.m.

I said that the shifting of these cabinets for sewing machines from 5 per cent. to 30 per cent. is an extension of the vendetta which the Treasury has waged against sewing machines for the past several years. Last year all of the articles in this particular sub-group which were then at 30 per cent. the Chancellor's predecessor reduced to 15 per cent., with the sole exception of sewing machines. It is fair to say that this animus has continued. I should like to hear the Financial Secretary justify, first, why the tax on sewing machines was allowed to stay at 30 per cent. when everything else was reduced to 15 per cent. What is the industrial, ethical, domestic and moral justification? Secondly, will he tell us the justification for charging 5 per cent. on an ordinary table, but, when it is called a sewing machine table, charging a tax of 30 per cent.?

I remind the Chancellor that for nearly three years the manufacturers have had to contend with difficulties such as a 50 per cent. initial deposit on hire purchase on hand-operated and treadle sewing machines. A high proportion of these machines is sold to poor people on hire purchase. It was one of the first things ever to be sold in this way. During the war, when conditions were more difficult than they are now, manufacturers were still permitted to sell 10 per cent. of their output on hire purchase on the home market. The 50 per cent. initial deposit almost put an end to this type of business. In at least one of the leading companies, which has been mentioned this afternoon, there has been considerable redundancy.

The Chancellor, having gone out of his way to maintain this 30 per cent. on sewing machines and to increase the 5 per cent. on the accessories to 30 per cent., is making things worse. He cannot argue that he has left sewing machines at the same level as vacuum cleaners and washing machines because they are electrically operated. This tax applies to hand-operated machines. Electrically-operated sewing machines are tax-free, anyway, as has been pointed out. The home sewing machine is now a luxury in the consumer goods line. As the hon. Lady the Member for Belfast, West (Mrs. McLaughlin) has said, it is domestic capital which lasts sometimes for a century, for several generations, but that is no reason for imposing Purchase Tax upon it. There is no reason why one generation should escape tax altogether and the present generation should be mulcted in this way.

These machines are responsible for saving money in the home and labour in the factories. They have been featured at times of crisis in "make-do-and-mend campaigns" and, certainly, working mothers with young children cannot make do without sewing machines. The company that has been mentioned, which has its headquarters and brain centre in my division, has alone during the last few years trained a quarter of a million customer-students in the art of home dressmaking. What possible justification can there be for deliberately adding further burdens to the purchase of these humble, essential machines and their accessories?

As has been mentioned, this high rate of tax will definitely affect exports through the home market. We know that the biggest companies are in a very strong position because they are exporting a high proportion of their total output. The other companies are not so well placed. One of them was exporting up to 45 per cent. of its output. It is now exporting only 20 per cent. because of the home market drop. This company has had to abandon expansion schemes because the home market did not enable it to carry the expansion.

Last year, when the tax stayed at 30 per cent., the sales dropped 10 per cent. There will surely be a further drop now that this further increase on the accessories has been imposed. Some of these firms have already had to discharge highly skilled workers, who take years, to obtain their skill. I do not think that there is any doubt that there will be a further decline in sales. No one can argue that these machines are luxury articles, and there is no valid reason for this tax, particularly at this now almost penal rate of 30 per cent. From every point of view it is a bad, unfair and unjustifiable tax, and I hope, for the sake of the hard-working women who use them, and the men who make them, that the Chancellor will accept the Amendment.

Mrs. Eirene White (Flint, East)

We have all listened with great interest to my hon. Friend the Member for Stoke-on-Trent, North (Mrs. Slater), because she spoke from long experience and with most sincere feelings. After all, sewing machines and the appliances which go with them are part of the domestic capital equipment of the housewife. If these were industrial machines they would be free of tax, but because they are equipment for the housewife in the home they become liable to a 30 per cent. tax. I think that my hon. Friend the Member for Shored itch and Finsbury (Mr. Collins) was in error in suggesting that electrically-operated machines are free of tax. They are all subject to the same tax of 30 per cent., whether they are electrically or hand-operated.

The Chancellor now wishes to raise the tax on the stands, covers, and so forth, which according to a commonsense point of view, but evidently not according to the point of view of the Treasury, one would suppose to be articles of furniture and not machines. It is surely quite wrong of the hon. Lady the Member for Belfast, West (Mrs. McLaughlin) to suggest that one can continue with outmoded machines in the home. I am sure that she would not support that in the industrial sphere. After all, sewing machines of ancient vintage may still have a good deal of wear in them, but they are not anything like as easy to use as the modern types of machine, particularly the electrical types.

Mrs. McLaughlin

I speak with a certain amount of experience in these matters, and I know of three sewing machines of the same type. One is forty years old, the second, which is in my own possession, is nearly twenty years old, and the third one is almost two years old.

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

That is in Northern Ireland.

Mrs. McLaughlin

There is one precise difference between the machine which is twenty-one years old and the new machine. They are the same make and the same operation of electric sewing machine. The new one sews backwards, although not very well, otherwise it is exactly the same as the 21-year-old machine, which is just as efficient.

Mrs. White

The hon. Lady may suppose so, but as my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith) has suggested, that is an example of the antediluvian equipment common in Northern Ireland, whether domestic or industrial. Having been born in Belfast, though having escaped from it at the age of eighteen months, I can perfectly understand the outlook of the hon. Lady. The truth, of course, is that a young housewife today naturally wishes to have the most up-to-date machine, which not only sews backwards when required—which can sometimes be very useful—but which can also take all the modern types of attachment and equipment that enable one to do the most complex sewing operations which would be well beyond most of us these days to do by hand.

We feel that this is a discriminatory tax against capital equipment. The Chancellor has been forthcoming in some directions. He has reduced the tax on some types of domestic capital equipment, such as refrigerators, for which we are grateful. However, we cannot understand why this article, which encourages economy in the home, should be penalised. My hon. Friend the Member for Shore-ditch and Finsbury suggested that there is a vendetta in the Treasury against sewing machines. I think I am correct in saying that there was a period immediately after the war when there was a sharp dispute between the Treasury and the sewing machine company which has been mentioned today, but that is now past history. I cannot think that even the long memory of the Treasury would use that as a justification for the present rate of tax.

We need not labour the point beyond saying that we regard the sewing machine as an investment. It is something which women purchase usually no more than once in a lifetime. It is something which they should be encouraged to purchase. We find it particularly difficult to swallow the change in this Finance Bill which taxes the stands and the covers—we object to that very strongly. It seems to us an unnecessary way of dealing with this matter and it introduces another anomaly rather than cures the one which it purports to cure. On all these grounds, unless we obtain some satisfaction in the reply which we are about to receive, we must express our dissent with the Chancellor's proposals.

The Financial Secretary to the Treasury (Mr. J. E. S. Simon)

This is, I think, the first time that the hon. Lady the Member for Stoke-on-Trent, North (Mrs. Slater) has moved an official Amendment from the other side of the Committee. Therefore, as well as because of its intrinsic merits, I should like to associate this side of the Committee with what the hon. Lady the Member for Flint, East (Mrs. White) has just said about the speech of her hon. Friend in introducing the Amendment.

I assure the hon. Lady the Member for Flint, East and the hon. Member for Shoreditch and Finsbury (Mr. Collins) that there is no sort of vendetta or animus against the sewing machine. On the contrary, I remember an hon. Member who was held in great affection throughout the House of Commons—Sir Will Darling—saying on one occasion in a speech here that he thought the sewing machine and the bicycle had conferred more benefit on the under-developed parts of the world—and I do not think he would have limited the benefits merely to those areas—than all the schemes of international organisation. Anybody who remembers the "Song of the Shirt" will immediately see the great benefits that the sewing machine has conferred on mankind.

The hon. Member for Shoreditch and Finsbury asked me to give the ethical, domestic, economic and moral justification for this tax. When one looks into it in that way, the changes that have been made this time and the preservation of the 30 per cent. rate become apparent. The first thing is that the Purchase Tax is to raise revenue. The cost of the Amendment would be £500,000 a year. That, however, would not be a conclusive argument if the Amendment improved the general logical structure of the tax. That is my second point.

During our previous discussions, the whole of the Committee has shown itself anxious that the Purchase Tax should have a logical structure. For that reason, there can be no question that sewing machines fit in with the domestic appliances which are taxed either at 30 per cent. if they are electrically operated or at 15 per cent. if they are not, and not at 5 per cent., which is the rate suggested in the Amendment. That is the second reason.

Mr. Collins

We are complaining that sewing machines not designed for operation by electricity are taxed at 30 per cent., whereas the hon. and learned Gentleman has just said that domestic electrical apparatus is taxed at 15 per cent. While he is dealing with that point, will the hon. and learned Gentleman confirm, in view of what my hon. Friend the Member for Flint, East (Mrs. White) said, that industrial sewing machines, whether electrically operated or not, are certainly free of tax?

Mr. Simon

The first of those points was the next one to which I intended to address myself. I understand that machines for use in a factory would be free of tax, but I do not think that that was what the hon. Lady the Member for Flint, East was referring to. She was emphasising that electrical machines and the electrical component of the machine are taxable at the same rate as the rest of the machine even if sold separately, as to which the hon. Lady was quite right. I come to the point that the hon. Member has just put to me. As I have said, we want to raise revenue. We want to have a logical structure. In other words, we do not want to treat a domestic appliance here separately from other domestic appliances.

4.45 p.m.

The third thing, however, that the Committee has shown itself anxious to achieve is that we should minimise tax avoidance. It is for that reason that both the hand-operated machine and the electrically-operated machine are taxed at 30 per cent. and not at the lower rate of 15 per cent. The reason for it is this. The sewing machine head is common both to the hand and to the electric machine. Therefore, if the hand machine were taxed at a lower rate, there would be an incentive—indeed, there is reason to apprehend this—to buy the hand machine and to fit the electrical component into it. That is something which has had to be watched in a great many aspects of the Purchase Tax.

One of the ways in which Purchase Tax is evaded is the making up of conversion kits. That drives a coach and horses through the logical structure of the tax. It causes intense resentment to the more legitimate traders, if I may put it that way, and brings the tax into disrepute.

That brings me to the question of the furniture.

Mr. Arthur Moyle (Oldbury and Halesowen)

In view of the fact that the bulk of the machines that the hon. and learned Gentleman is talking about are in domestic use and the working-class housewife is the purchaser, why go to this extremity to prevent tax avoidance on the assumption that working-class housewives are more dishonest than certain other sections of the community?

Mr. Simon

I do not know whether the hon. Member was present during the whole of my speech.

Mr. Moyle

I was.

Mr. Simon

Had the hon. Member listened, he could not possibly have got that impression from what I have just said. On the contrary, I was dealing with the trader. If it is permissible to sell a conversion kit, there is nothing in any way reprehensible in buying one. What would be wrong is to allow the tax to be evaded and avoided by leaving a loophole by which it is open to a manufacturer to sell a conversion kit.

Mr. Moyle

Why not make it a flat rate?

Mr. Simon

I then come to the point of the second Amendment concerning the charging of accessories at the rate of the main article. That, again, is completely bound up with the question of avoidance and conversion. The hon. Member for Dunbartonshire, East (Mr. Bence) will appreciate what I am about to say. The major manufacturers and the manufacturers of some of our best machines make up the complete article with cover and stand. That has to pay the full rate on the whole of the article so made up. It merely gives the other machine makers a fortuitous advantage if they can sell the cover, the stand and all the other accessories separately at a lower rate of tax.

Therefore, once again we have tried to apply in this field the principle that, I know, the whole of the Committee has very much in mind in this tax as in other taxes—that we should not leave a loophole for evasion and that we should not penalise one trader to the advantage of another who uses less legitimate methods of avoiding the tax—and have made the appliances taxable at the same rate.

There is a logical reason for the new rate of tax on the accessories, and the rate of 30 per cent. on the machines themselves does not represent any animus, as the hon. Gentleman put it, against sewing machines. On the contrary, we recognise that they are valuable domestic appliances and that they should fit into the domestic appliance head of the Purchase Tax Schedule. I hope that for the reasons I have given the Committee will be satisfied that it is necessary to tax them at the rate of the electrical domestic appliances.

Question put, That those words be there inserted:—

The Committee divided: Ayes 210, Noes 246.

5.0 p.m.

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

I beg to move, in page 31, line 2, at the end to insert: 5. Garments, headgear, footwear or gloves designed to give protection against injury from accidents at work or road traffic accidents shall be exempt from tax. I think the Committee will agree that this is an Amendment of a substantial nature which is of very real importance. It would be very difficult to exaggerate the value of such protection as can be offered to men and women in different branches of industry. I say at once that I accept the dictum that the fence must be on the machine and not on the worker, but it is because we cannot always fence the process that an attempt must be made by way of protective clothing to safeguard the workers.

A number of my hon. Friends have points which they will wish to make on the detailed aspects of industrial processes and the protection required, and therefore I will limit myself to the general issue. A multiplicity of garments and appliances is needed and used for this purpose. There is protection of the body, protection of the hands and wrists, specific protection for the feet and ankles and special protection of the head. If I may briefly make reference to the types of coverings for the body which are involved in the Purchase Tax, we have aprons, which may be made of leather, asbestos or rubber. Leather is an excellent insulator against heat and sparks and, therefore, is very popular. Asbestos affords protection against flame or fire, and rubber against corrosives or splashes from acids. In addition to these, oilskins are used, particularly where grease, oil or water are involved, in order to prevent eczema of the skin, and the most modern types that one finds are very beautiful, popular and cheap plastic garments.

Overalls are commonly used and are made of different materials. Some are required to be flameproof; namely, that they should smoulder when exposed to excessive heat, fire or sparks, but should not burst into flames. Wool is quite an extensive method of protection, and it is used in overalls because it is rather more resistant and does not disintegrate when in contact with fire. That is the advantage of wool. Impervious overalls have to be used by those in contact with explosives and corrosives, and very thick wool is now used in storage plants. These garments have an interesting name in that they are called "Fearnoughts".

The hands and wrists are very frequently damaged and every care has to be taken, but despite the care that is taken throughout industry, one of the most common causes of industrial disease or injury is some type of injury or affection of the hands or wrists. Here the aim is to protect the workers against heat or flame. In the multiplicity of new industrial processes, use is being made of many new types of solvents. Obviously, acids are also involved. The hands cannot be completely protected in some processes, and therefore mittens are used in cases where the fingers must be naked for handling the materials.

In the case of the protection of the feet and ankles, we have an exception made up to a point, inasmuch as miners, moulders and quarrymen are able to buy protective boots free of Purchase Tax. I think I am right in saying that. These, however, are not the only workers who should be wearing protective boots. In addition to boots, leggings are often worn in many industries in which the workers are in contact with heat, chemicals, molten metals or extremes of temperature.

There is a special type of shoe called the magazine shoe, which is subject to Purchase Tax. I think the only exemption is in the case of the special shoe which miners, foundry workers and quarry workers wear. There may also be special shoes to prevent any risk of explosion. I think that in these cases copper instead of iron or steel is used for nails. As my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith) reminds me, they are called safety shoes, and my plea is that, being safety shoes, it seems wrong that they should be subject to the tax.

The whole purpose of what I am saying, however inadequately, is to suggest that it is a good principle to give every possible incentive either to the worker or the industrialist who employs him to make certain that all these materials should be made available for the protection of the worker. It is the most economical thing to do, and we should encourage it in every possible way. If we add to the price and make these things more costly, that will be a disincentive to their use and replacement. Rubber boots are a type of safety wear, whether they be ankle or knee length or reach to the thigh, and whether used for cleaning drains, swilling out floors or any other work of that description.

If I may now make reference to the protection of the head, I will only say that on the subject of road accidents we have often raised in this House the problem of helmets for cyclists, and it has been discussed again and again. What is true of industrial workers is equally true of motor-cyclists. They must purchase these things, which are not necessarily purchased for them by the employer. All the more reason, therefore, that they should receive every encouragement to protect themselves. One does not have to urge on this Committee what is so very obvious—that unprotected motor-cyclists or ordinary cyclists when involved in accidents tend to receive fractures of the skull and head injuries generally much more easily than those of us who sit in cars. People in motor cars may be subject to cuts and scratches, but not so easily to fractures. I will leave this point, because I know that other hon. Members may care to take it up and urge upon the Government the desirability of forgoing the tax on crash helmets.

I recognise that miners and quarrymen do not have to pay any tax for the protective helmets which they wear, for they are now free, but these are not the only type of headgear which workers wear. There are simple coverings such as the sou'wester for men who have to work in the open. That is a protective covering which is an absolute essential for them, and it falls, therefore, into the same class as any other type of head covering considered to be protective.

I could say a word or two about the very special types of headgear, gear which covers the head and the neck and contains plus pressures of fresh air, for those working in poisonous atmospheres, but there are so few of them and so limited is their application that I can leave the matter, having mentioned it en passant.

It is an anomalous situation that Purchase Tax is involved if the employee purchases for herself headgear to ensure that her hair does not get caught in moving machinery, which may cause scalping. That is a very serious matter when a woman is working among moving machinery. I have seen a number of such cases, and they are not pleasant. Such injuries can be avoided in three ways. One is to make certain about the fencing of the machine so that an accident is impossible, but sometimes that cannot be absolutely guaranteed. The second is to make certain that the hair is worn in such a way or covered by an article of clothing so that it cannot come into contact with machinery so easily. The third method is the education of the worker. Here is the anomaly. If after being scalped the woman requires a wig, no Purchase Tax has to be paid. If in order to prevent such an injury occurring she buys a simple and cheap head covering, that is subject to Purchase Tax. I offer that as an example of a rather foolish anomaly.

None of us can believe that any of these articles are luxuries. They are essential necessities. It is true that extra cost may be a disincentive to renewal. I have seen many cases of electroplating disease which were caused not by not wearing gloves but by the use of gloves which were faulty. If I am to believe the evidence given to me by the workers whom I was examining, they had asked for replacements but replacements were not available, or they had been told to carry on because it was all right to do so. Every hon. Member here knows it is true that when one is working with a corrosive a faulty glove is worse than no glove at all, for if there be cracks in the rubber material corrosive gets in but cannot get out. Consequently, there is less protection than none if faulty gloves are used. I am compelled to believe that it is possible—I must not put it higher than that—that extra cost is a disincentive to renewal on the part of the employer, and if that be the case we ought to realise that we are not performing a service to our workers, to the community as a whole or to industry generally by loading tax upon these essential matters.

In an ever more complex world where modern techniques and science bring about a multiplicity of processes, not all of which we understand fully in the first place, nor know how to control when they are first presented to us, it is desirable that the greatest care should always be taken to protect the human material. I know, for example, that a number of people died of cadmium poisoning before the disease was scheduled; I am sure that if we had known years ago what we know today some lives would have been saved. In making this type of plea for a reduction of Purchase Tax on protective clothing—

Sir Ian Fraser (Morecambe and Lonsdale)

Before the hon. Gentleman finishes, would he not include the bowler hat which is worn by the builder's foreman—and also, for that matter, by the ex-officer who gets the sack; it protects him against the coldness and difficulties of civil life?

Dr. Stross

That was an interesting interjection which I think I should not answer. I am normally of a most equable temperament, but I have been rather disgusted to hear it. We are discussing a serious subject. We are not discussing the bowler hat of the Guardsman, nor the bowler hat of the foreman builder. We are discussing what happens to more than 20 million men and women who work in industry. We are trying sincerely and honestly to make a plea, without having to use our imagination very strongly, that excessive cost of the material used to protect them may not be a good thing. I do not think I pitched my plea very high. Consequently, I was astonished at the interjection. I sincerely hope that the Government Front Bench will not face the problem in the way the interjector did.

5.15 p.m.

Mr. Gerald Nabarro (Kidderminster)

I hope that if any further relief of Purchase Tax is given next year the first priority will be given to the entire removal from the Purchase Tax schedules of industrial protective clothing. I do not propose to dilate upon this subject, but I claim, with due modesty, to have a great deal more experience of industrial machine shops and workshops than the majority of hon. Members and I am keenly aware of the fact that promotion of the use of industrial protective equipment in every type of industry in this country where it is necessary, is an essential adjunct to the expansion of industrial production.

I believe that this year the Chancellor has given the maximum relief in Purchase Tax that the Revenue will stand, and therefore, I could not support the Amendment in its present form. I content myself with saying to my right hon. Friend that next year, when undoubtedly further Purchase Tax reliefs will become possible, I hope first priority may be given to the total removal of Purchase Tax from industrial protective clothing.

But there is one essential feature of industrial and protective clothing to which I should like the Paymaster-General to apply himself this year. Several of my Parliamentary Questions on Purchase Tax matters before the Budget were devoted to the extraordinary position in regard to helmets, namely, that a miner's helmet or a quarryman's helmet was free of Purchase Tax but a fireman's helmet or a motor cyclist's helmet or "skid-lid" attracted Purchase Tax, then at the rate of 10 per cent. Since the Budget, the rate of Purchase Tax on the fireman's helmet and the motor cyclist's helmet has been reduced from 10 per cent. to 5 per cent. The Chancellor originally in his Budget proposals, in order to give uniformity and in an endeavour to relieve an anomaly, applied a 5 per cent. rate of Purchase Tax to the miner's or quarryman's helmet. As the result of pressures brought to bear on him from all parts of the House, the 5 per cent. rate of Purchase Tax on miners' and quarrymen's helmets was subsequently removed. So, today, we have the extraordinary anomaly remaining that a fireman's helmet bears Purchase Tax at 5 per cent. a motor cyclist's helmet or skid-lid bears Purchase Tax at 5 per cent., a miner's helmet bears no Purchase Tax and a quarryman's helmet bears no Purchase Tax.

I believe that the Chancellor of the Exchequer might be persuaded in the later stages of the Bill, notably on Report, to put this matter into equity and good order. I suggest that the Revenue he would lose by removing altogether from Purchase Tax firemen's helmets and motor cyclists' helmets would be small. There is an adidtional point, particularly in connection with firemen's helmets. The Treasury has no figures available—I have asked for them—and none of the trade associations or local authorities has any figures available, but I believe it is the fact that 95 per cent. of all firemen's helmets provided in this country are paid for from public funds. The other 5 per cent. represent firemen's helmets which are bought by private industrial firms for their fire prevention units generally in large factory establishments.

Therefore, the Purchase Tax paid on 95 per cent. of these firemen's helmets represents a circular transaction of the kind which I described on an earlier Amendment in connection with Purchase Tax on drugs and medicines provided within the National Health Service. I urge my right hon. Friend, in his Budget proposals for next year, to remove Purchase Tax from all protective clothing for industry and, secondly, on Report stage of this Bill, to endeavour to take out of the industrial protective clothing Schedules generally, the four classes of helmets to which I have referred and put right the evident anomaly, by reducing to a nil rate the tax on firemen's helmets and motor cyclists' helmets or skid-lids.

Mr. John Dugdale (West Bromwich)

My hon. Friend the Member for Stoke-on-Trent, Central (Dr. Stross) moved the Amendment in a reasonable and lucid manner and, indeed, in the knowledgeable manner which we expect of him. I want to refer to only one class of protective clothing, that for foundry workers, of whom there are many in my constituency.

I have some figures, which admittedly are rather old and which show that in 1955, for example, 1,282 people were injured in foundries by molten metal or other hot or corrosive substances, while 718 had eye injuries of some form. It is not possible to prevent all those accidents, but something could be done towards their prevention.

The Government have recognised in their regulations for dealing with foundries the importance of protective clothing. The Iron and Steel Foundries Regulations, 1953, state: The occupier shall provide and maintain suitable protective equipment of the types and for the processes or works respectively hereinafter in this Regulation specified.… In other words, it is stated that there should be definite forms of protective clothing provided for foundry workers. Why should that clothing be taxed? Why should employers or workers have to pay tax on the equipment which they are enjoined by the Government to have? That seems to be entirely wrong.

Certain equipment is provided free by the employers, protective equipment such as goggles and masks. It is essential that such equipment should be provided in those foundries where there is not ade- quate dust extracting equipment. In foundries where such equipment is installed, protective equipment may not be necessary, but hon. Members with experience of foundries know the appalling risks of dust pollution. I need not mention the appalling risk from pneumoconiosis alone. The figures for pneumoconiosis cases are still very serious in spite of all that has been done to reduce them—and much has been done. It is as well to do everything possible, even a small thing such as reducing Purchase Tax on safety equipment, to increase safety precautions.

Another danger to which foundry workers are exposed and for which they need protective equipment is that of injury to foot, leg or hand from contact with molten metal. That is a very serious danger. The Government have seen fit to do something about the tax on boots, but what of the tax on asbestos leggings? I believe that that tax remains, and that, too, should be reduced.

It is quite wrong that the Government should enjoin workers and employers to use protective equipment and themselves to realise the need and then to put any obstacle whatever in the way of the purchase of that equipment. I hope that the Amendment will result in the removal of at least one small obstacle.

Mr. Tom Brown (Ince)

I hope the Committee will deal with the Amendment with the seriousness it deserves. It has as its object the protection of the human body. I fully appreciate the doggedness of the hon. Member for Kidderminster (Mr. Nabarro), who has pursued the subject of Purchase Tax with great vigour during the last few months and has met with some success, but I cannot understand why he should now advocate that the Chancellor should wait twelve months before removing Purchase Tax from safety gear. This procrastination might lead to a very great loss of manpower and man-hours.

Mr. Nabarro

Surely it is an exaggeration of the position to say, as the hon. Member is now saying, that the existence of Purchase Tax is a cause of industrial accidents. Is the hon. Member not aware that the great difficulty is to get people to wear the protective equipment provided for them in the factories where they work? Purchase Tax does not prevent the provision of that equipment.

Mr. Brown

I agree, but it is easier for the worker to purchase it if he does not have to pay tax on it. The easier it is made for workers to buy safety and protective clothing, the better it is for all concerned.

When I last spoke in this Committee before the Recess I was somewhat severe upon the Chancellor—and he deserved it. He thought that I was describing him as a monster. Since then I have changed my mind. Speaking as an ex-miner, I want to say how very much miners appreciate his concession in withdrawing his proposal to impose Purchase Tax on safety helmets and safety boots. We are grateful to him for doing that. He was inundated with questions because of the dissatisfaction in the mining industry.

My hon. Friend the Member for Stoke-on-Trent, Central (Dr. Stross), who has high medical qualifications, spoke from considerable experience, and I can speak about safety gear from great experience as a practical miner. For many years I was a workman's inspector under the regulations of 1911. My duty included visiting the scenes of accidents. I was amazed to find the number of injuries which could have been prevented if protective clothing and protective gear had been provided.

5.30 p.m.

From that day to this I have been interested in the safety of the industrial worker. Whatever political philosophy we may have as Members of this Committee, the one thing that stands out in our minds is the importance of the safety of the human body. It is impossible for us to measure the number of man-hours lost as a result of accidents. We can give statistics showing to what extent an accident has had certain effects, but we cannot give exact figures of the number of man-hours lost. We have it on record, however, in the Report of the Chief Inspector of Mines, that three, if not four, out of every five cases of non-fatal accidents could be avoided if protective clothing were provided.

Again, I am inspired by the Report of the Chief Inspector of Factories for 1956. It would be as well if the Treasury Bench and the permanent officials of the Treasury took the trouble to read the first paragraph of that Report before suggesting that the Chancellor should impose Purchase Tax upon Safety and Protective Clothing. It says: Accident prevention is gaining momentum. Public opinion is playing a part, and industrial safety is now seen to be making an essential contribution towards preventing the deplorable waste of life, limb and working potential which occurs through accidents in all walks of life. As a result, more will now be expected of industrial accident prevention organisation. We must all—firms, groups, national level committees, trade unions, and most important, humble individuals—set our sights a good deal higher. Each will have to do more hard thinking and spend more time, and some will have to spend more money, if we are all to play our part according to the measure of our responsibilities. One organisation which the Chief Inspector left out—I do not say that he did so intentionally—is the Government. He should have said to the Government, "Protective gear for industrial workers should not carry Purchase Tax."

My right hon. Friend the Member for West Bromwich (Mr. Dugdale) referred to the foundry industry. I have been thinking of the high accident rate in foundries; it comes next to mining in this respect. Happily, we have been bringing down the incidence of accidents in the mines, very largely because protective gear has been provided for the workers. At one time the accident rate was tremendous. Now, slowly but surely, by advocating and agitating for the use of protective clothing we have introduced it to the miner and the accident rate has been brought down.

Let us for a moment look at the foundry industry. In the foundry industry in 1951 there were 11,055 nonfatal accidents and 22 fatal ones amongst the 145,000 workers employed in our 2,000 foundries. During the last few years the figures have been going down, although there was a slight increase last year. The concession which has been made to the mining fraternity as a result of our agitation, Questions on the Order Paper and a sane and sympathetic consideration being given to our plea, should be extended to cover all industrial workers. Why should we differentiate between the miner and the foundry worker? Why should a line of demarcation be drawn between classes of workers who are entitled to concessions which will make their lives and bodies safer than at present?

I do not intend to detain the Committee, but I want to give a few figures. I know that statistics are hard to swallow, but I have been making a very close examination of the effect of the application of safety gear in the mines and I want to show how much the industry has gained in man-hours through the introduction of safety helmets. In 1951 no less than 6,100 men received head injuries, but since the introduction of safety helmets the figure has fallen to 5,700—a reduction of 400. That may not appear to be very many, but there has been an improvement. In 1951 there were 47,400 injuries to the upper limbs and in 1955 there were only 44,500—a reduction of 2,900. The figures in respect of injuries to the lower limbs were 41,100 and 38,700, respectively—a reduction of 2,400. That indicates the importance of safety appliances and protective clothing.

It is crazy that the Treasury should have become possessed with the idea of making it more difficult for the industrial worker to protect himself from accidents. That is what the Treasury is doing by imposing this tax. Why does it not consider the suggestion made by the Chief Inspector of Factories? Why do not the Treasury officials, as they sit in their offices meditating upon these things and saying to themselves, "We had better put a tax on this and on that, and on that", act honestly? If they desire to help the industrial worker generally they should see that he does not have to pay Purchase Tax upon any appliance or article which protects the human body from injury.

I strongly support the Amendment. Although the debate has had its jocular note, I hope that serious consideration will be given to the matter and that the Chancellor will make a concession in respect of all workers who are compelled by the nature of their jobs to wear safety and protective clothing.

Mr. John Eden (Bournemouth, West)

I wish to underline, if that should prove necessary, what was said by my hon. Friend the Member for Kidderminster (Mr. Nabarro). The point to which he drew attention is a basic one. Most of the articles of protective clothing which have been mentioned are those provided by particular industries for the individuals in their employment. The one which is removed from that category is that particular helmet or, as my hon. Friend called it, "skid lid", which the individual buys for himself.

If my right hon. Friend the Paymaster-General could see his way to do something in this respect on Report by putting this category of helmet alongside the other two categories which have been freed from Purchase Tax, he would perform a great service and take a great step at very small cost towards helping those who are trying to help themselves to keep safety on the roads.

Mr. John Rankin (Glasgow, Govan)

No doubt it will be noted that all hon. Members who have participated in the debate so far have supported the Amendment. The only difference is that two hon. Members on the Government benches want to wait until next year while we on this side feel that action should be taken now.

I am particularly interested in the Amendment because the industries in my division are principally shipbuilding, engineering and dockwork. The men and women employed in them are subjected to many dangers which might be avoided by adequate protection. At any moment a worker in a shipyard may get an angle iron falling upon his head. I think we all agree that we cannot wait for a year before doing something for them by way of protection. It should have been done long ago. At the moment, many of my constituents are subject to injury. I am therefore asking that the helmet, which is essential in the shipyards, should be free of tax. The same arguments apply to engineering. There are many hazards in that industry.

I must go into a little more detail about the position of dockyard workers. Theirs is a peculiar case which the union has been fighting for a great many years without much success. Those who are employed in docks are liable to dermatitis, a disease of which there are two forms, one of which is scheduled and the other which is not. There is no difference between them, in the sense that they are equally incapacitating and troublesome and may lay a worker off for many weeks. Dockers who handle cereals, oils, grains or chemicals are liable to contract the dermatitis which is scheduled and, therefore, are to some extent protected. When a dockworker handles beef, paint or timber he may contract the dermatitis which is not scheduled, and therefore he is not protected by insurance.

5.45 p.m.

Here is an injustice. If the worker has to provide himself with protective gloves, boots and so on, it is wrong that those articles should be taxed. The dockworker may have to handle butter, cheese, fruits and foodstuffs; also perishable cargoes which have gone foul or those which are salvaged. When he is doing these different jobs he wears the same clothes instead of special types, whether he is handling clean cargoes or foul cargoes.

Special garments should be issued when unloading bad cargoes as a matter of public hygiene. I understand that the union has asked for this provision but without any success. All we are doing tonight is to ask the Chancellor of the Exchequer not to tax the type of clothing which dockers and other workers in my division must buy at their own expense. Surely that is not an excessive demand to make upon the public Exchequer in a matter which concerns public health.

In addition to the dockers, there are the scalers and trimmers. They work largely over long weekends and are engaged in operations which are very sore on their clothes as well as being very dirty. The attend to bilges, boilers, tubes and oil tanks in the vessels. They require protective clothing like the docker. Because of the lack of such clothing in Glasgow Docks, on the average throughout the year 250 men are laid off out of a labour force of 2,800 through diseases acquired in handling the cargoes I have enumerated. That is a very high casualty rate indeed.

As my hon. Friend the Member for Ince (Mr. T. Brown) said, there is the question of the protection of the worker. But there is also the efficient use of the labour force. If protective clothing of all forms were provided it would meet those two demands. People have said to me that today the workman, particularly in the docks, is getting wages sufficiently high to enable him to provide these things which are essential for the prosecution of his job out of his wages. I think that is completely wrong. One could ridicule it out of court, but I am sure the right hon. Gentleman when he replies will not put any stress on an argument of that nature. It is a public duty to provide this clothing because public health is involved.

Whilst I agree that in this debate we cannot put forward a claim for a special allowance to the workmen because of these industrial hazards, we can at least ask the Government to consider the advisability of relieving them of the payment of tax when they buy protective clothing which is necessary for personal safety and for the efficient carrying out of the job. That is not a great deal to expect. I hope that when the right hon. Gentleman replies he will agree with both sides of the Committee, but will accept our view that he should give the relief, now in this Finance Bill.

Mr. Moyle

I wish to make one or two observations in support of the general contention on this Amendment which has come from both sides of the Committee, including the hon. Member for Kidderminster (Mr. Nabarro). I am grateful to the Chancellor for having got rid of the tax on safety boots for miners, quarrymen, moulders and foundry workers, but I find it difficult in equity and logic to understand why he should stop there.

For the purposes of the argument for this relief from tax, I do not think one need worry unduly as to whether the employer or the workman pays it. I think it very wrong to assume in the case of the foundry worker that the employer provides the protective clothing. I wish that were true. When a factory inspector decides that certain protection is necessary, whether it is headgear, footwear, gloves or garments generally, it should be made an oncost on the product and not an impost on the wage packet. That is a generally accepted principle which, I think, the Committee would accept without reservation. I do not think it enters into this argument. The principle is whether it is reasonable, having regard to the desire to promote every kind of safety measure, that we should impose a tax on those who seek to give effect to such measures. Any reasonable Government would make it almost a condition that protective clothing should be exempt from any taxation, provided, of course, the inspector officially declared that such protection was essential.

At this time of the year, from the end of March until later in the summer, gangs of men are employed in tar spraying on the roads. This aspect of their work is scheduled because of the liability of such workers to what is commonly known as "tar cancer." Safety boots are essential and they wear protective clothing and goggles. Protective clothing for those engaged on tarmac spraying is usually provided by the local authority. The clothing is essential and should be exempt from taxation. I agree with the urgent appeal made by the hon. Member for Bournemouth, West (Mr. J. Eden) for the provision of crash helmets tax free. It seems absurd to impose a tax on such essential means to safety. I hope the Chancellor will look again at the concession he has made and see if he can extend it to other types of protective clothing.

Mrs. White

This subject is of extreme interest to all of us who have had any experience of industry. My experience of industry is not extensive, but during the war I was in the Ministry of Labour and it was part of my duties to go with factory inspectors to many factories in South Wales which were engaged on war production. Although I was not inspecting from the social angle, I learned a great deal about the matter by accompanying the factory inspectors.

One of the difficulties mentioned by the hon. Member for Kidderminster (Mr. Nabarro) is that it is not always easy to persuade the employer, and sometimes the workman, to adopt the kind of protective clothing which would be for his benefit. Therefore, anything we can do to persuade employers and workers to use protective clothing should be encouraged. For the worker it is not only a matter of price, but also partly a question of design. The clothing as far as possible has to be comfortable and attractive. A great deal has been done in recent years to improve the design of industrial clothing and to make it more attractive.

I suggest to the Chancellor, who is now sitting on the Treasury Bench, that this is a tremendous opportunity, at relatively little cost, to make a great industrial gesture. Far from making a sad blunder of first suggesting that the tax should be imposed on a group of protective garments hitherto exempt, he should have used his imagination and realised that this was a chance of a lifetime for him. He could have made a handsome gesture towards industry by saying, "I am the Chancellor who cares about industrial safety. I will exempt not merely what was formerly exempt—protective boots and helmets used by miners, quarrymen or moulders—but also the protective clothing of all industrial workers in all processes where it is required. They will be able to obtain it without paying tax." He could have extended the exemption to motor cyclists, who are often young and sometimes rash, and to others who are peculiarly susceptible to road accidents. He could have gained enormously in prestige and popularity; and I do not believe that he is entirely indifferent to such considerations.

6.0 p.m.

The right hon. Gentleman could have done this, I am sure, at relatively little cost. He might even have had a net financial gain, because if we look at the cost to the community of the accidents which occur and put that on one side of the balance sheet, and if we put the Purchase Tax on protective clothing, such as it is, on the other side of the balance sheet, I am certain, although I have no figures to prove it, that the cost of treating the accidents, together with the loss of production through the absence of the workers from their jobs, will outbalance anything which may be collected in Purchase Tax on articles of protective clothing.

I understand that in the various groups of industry about 720,000 workers each year receive injuries which bring them to the notice of the Ministry of Pensions and National Insurance. Unfortunately, there are more than 2,000 fatal accidents. There are 720,000 other accidents, and by far the largest number occur in mining and quarrying, although we are happy to know that under the vigorous policy pursued by the National Coal Board the incidence of accidents in coal mining is diminishing. Nevertheless, in spite of the Board's great efforts, there are still about 250,000 accidents a year in mining and quarrying. That is the largest group of accidents.

There are other large groups of industries in which there are many accidents. For example, in the engineering and shipbuilding industries there are more than 50,000 industrial accidents a year. In building and contracting there are 56,000 accidents a year which involve some insurance payment. In the distributive trades, which one might not have considered as perhaps being amongst the most prone to accidents, there are more than 33,000 industrial accidents of this type. When one thinks about it one realises that this is natural, because in those trades the workers handle heavy cases and packages and there is apt to be a high incidence of fractures.

In many of these occupations these accidents, which cost so much to the community and the individual, could be avoided if the workers were supplied with adequate protecting clothing. I have no doubt that many hon. Members read the letter in The Times, which appeared when the controversy on miners' helmets was at its height, written by Mr. Denton, who is himself probably a manufacturer of protective footwear. He wrote from a Northamptonshire address, and he pointed out that there are many industries other than mining which are prone to foot accidents and in which protection can be secured not necessarily by wearing boots, which are the only footwear covered under the present arrangements, but by wearing properly constructed shoes.

I think I am right in saying that fracture of the great toe is the accident which causes much more absence from work than any other single type of accident in this country, and in the processes where this is likely to occur, if one sees that the worker equips himself with properly constructed shoes, or provides them for him, a large majority of these accidents can be avoided and a great deal of loss of time can be saved.

I have here, for example, a quotation from the April number of Man and Metal, which is the magazine circulated to the steel workers. It contains a reference to an experience in Sheffield and it states that great efforts are now being made to persuade steel workers to use protective footwear. A case is mentioned in which a steel casting weighing 76 lbs. fell on the foot of a workman recently. The workman was wearing safety boots and he escaped injury. Although the toe-cap crumbled under the weight, he was able to remove the boot without difficulty.

One can multiply such examples endlessly. In these works to which reference is made, the employees were expected to buy their own footwear; the firm made arrangements to collect payments from them but the men themselves had to pay. The hon. Member for Kidderminster was, therefore, wrong when he suggested that the employer always supplied this footwear. There are many cases in which the man or woman has to buy the protective clothing.

This is a matter which the Committee ought to consider with good sense and imagination. I grant that there are some difficulties of definition and that there are some articles about which it is not easy to say categorically that they will be used only for industrial protection, because they might conceivably be used in ordinary day-to-day work. Nevertheless, there is a wide range of articles for which there could be no possible use other than industrial protection or protection on the roads.

Why has it been considered necessary to persist with this very narrow restriction? If one looks at Group 2 and the definition which is now employed in deciding which articles of industrial footwear are exempt, one finds that exemption is given to footwear which complies with British Standards Institution Specification 1870, sections 1 and 3. Footwear which is in conformity with section 2 of that definition is not exempt. I believe that one of the difficulties is that one is boots and the other is shoes, but the distinction is illogical if the shoe does its job adequately.

I contend that there are many articles, even if we started only with helmets, boots and shoes, which could be covered at once without any trouble of definition, leaving, if necessary, some of the other articles, if there is no B.S.I. definition which would apply to them and if it might be difficult to obtain such a definition between now and Report. If we confined it only to those articles for which adequate standards are available, and which could easily be defined, we could still take a great step forward.

Perhaps I might remind the Chancellor that the present policies of Her Majesty's Administration are such that in many heavy industries there is, if not redundancy, at any rate much less overtime being worked than previously and, therefore, less to spare for extras. The task of the safety officer is thus made more difficult in trying to persuade workers to buy this protective clothing. Surely this is a suitable time to make a gesture that would really help forward safety in industry.

I repeat, the cost to the community of dealing with these injured workmen and workwomen is so fantastically high that the Chancellor, looking at what goes out of his pocket in other directions, should regard this as a good investment. It is suggested that the average cost of a foot injury might be £30. As there are about 50,000 of these foot injuries annually it means that £1½ million is spent on the treatment of injuries that might, in many cases, be prevented if we were able to persuade more people to wear protctive footwear.

I believe that our case has been amply made out. I am sorry that the Chancellor did not himself realise that this was an opportunity that he should have grasped, but he still has a chance to repair the omission. By the suggestions contained in these Amendments we are giving him a chance to make a gesture to the industrial workers of the country which I hope he will take.

The Paymaster-General (Mr. Reginald Maudling)

This is a very important subject, and we have had some interesting and very well-informed speeches from both sides of the Committee. We have had the expert medical point of view of the hon. Member for Stoke-on-Trent. Central (Dr. Stross), and we have had the views of other hon. Members who have industrial knowledge and experience.

I would not in any way disagree with anything that has been said about the great importance of preventing industrial injury and of mitigating the suffering caused by accidents if they occur. I think that the hon. Member for Stoke-on-Trent, Central was right in saying that we should fence the machinery rather than the worker, but it is equally true that we must do all we can to encourage people to protect themselves against the possible hazards of their occupations.

I think, however, that in making their case for abolishing Purchase Tax in this way, hon. Members opposite have left a little gap in their arguments. We must not exaggerate what Purchase Tax means in this case. At present, it is 5 per cent. on the wholesale value. That is, roughly, 8d. in the £ on the articles concerned, and I do not think that, for practical purposes, 8d. in the £ should be a serious disincentive to the purchase of these protective articles either by the employer or the employee.

The hon. Member for Ince (Mr. T. Brown) quoted some figures of the numbers of accidents in which injury had been caused because of the absence of protective clothing, but the point is: in how many cases was the absence of the protective clothing due to the existence of the Purchase Tax? I do not really believe that there are any cases at all—

Mr. Rankin

While the Purchase Tax is 5 per cent. on headgear and boots, is it not 50 per cent. on clothing?

Mr. Maudling

No. Clothing, and so on, is subject to tax at 5 per cent., and the tax on headgear, of course, comes down from 10 per cent. to 5 per cent. under this Bill. The tax is only about 8d. in the £, which is not really a very large matter.

There is also the point made by my hon. Friend the Member for Kidderminster (Mr. Nabarro) that in a number of industries the protective clothing is provided by the employer and, indeed, in many cases, there is a statutory duty to provide it—

Dr. Stross

Can the right hon. Gentleman say whether the cost of administration in this particular field may not also be as much as 8d. in the £? If that is the cost, should not the tax be withdrawn on that account?

Mr. Maudling

My point is that the price of the article in the shop is affected only by about 8d. in the £. For instance, a garment which, free of tax, would cost £1, would cost £1 0s. 8d. with tax. That is not a very great disincentive.

The main point is not the money involved but, as the hon. Lady the Member for Flint, East (Mrs. White) has recognised, and as successive Governments have recognised, the difficulty of definition. However, before coming to that, perhaps I may be allowed to suggest that it is unwise for us to exaggerate the effect of Purchase Tax in these matters, because it should not be used as an excuse, either by employers or workpeople, for failing to get or provide protective clothing when that is desirable. That is not an adequate excuse for anyone, but, when we exaggerate it, it may be used for that purpose.

The real difficulty here is one of definition. How can we, for the purposes of law, quite clearly define what is protective clothing and therefore free of tax, and what is not protective clothing, and therefore liable to tax? In these matters we must have a clear definition, so that traders may know just what to do, and know whether or not the tax is properly leviable.

6.15 p.m.

We can define the article only by its nature, and not by its purpose. That is one rule of Purchase Tax that has always been observed, and it is one from which we cannot depart, because a shopkeeper selling the article does not know what the purchaser intends to do with it. The question of miners' boots, incidentally, brings me to the point raised by the hon. Lady: that although the exemption is for miners' boots in fact, for administrative purposes, we have to define the type of boot in terms of the British Standard to which she referred. The result of this is that the same kind of boot may be bought by other people for other purposes, although I imagine that they are not much bought except for use in mines or for similar purposes. As I say, we have to define the article by its nature and not by its use.

The second principle in Purchase Tax matters is that one must always seek to see that similar treatment is applied to similar articles—

Mrs. White

While the right hon. Gentleman is dealing with that, can he explain how there is any differentiation between the kind of protective helmet of moulded bakelite, or similar moulded plastic, specially fitted internally to absorb shocks, which are exempt for miners, though the exemption cannot, apparently, be applied to crash helmets?

Mr. Maudling

I shall come to crash helmets later. However, I think that the hon. Lady will agree that definition must be by means of the nature of the article and not the purpose for which it is used.

As I was saying, the second principle is to try to treat similar articles on a similar basis, and if we are to exempt some protective or safety devices we must accept the principle of exempting them all. It is when one tries to define them that the real difficulty arises, and I think that the speech of the hon. Member for Stoke-on-Trent, Central, really brings out the difficulty we have here.

The hon. Gentleman referred to the multiplicity of garments that are of the nature of protective clothing. Rubber boots are an example. All rubber boots would have to be free of Purchase Tax. He referred to sou'-westers—all sou'-westers would have to be free of Purchase Tax. And if that applies to sou'-westers to keep one's head dry, it must apply to mackintoshes to keep one's body dry, so all mackintoshes would have to be free of Purchase Tax. That, too, applies to rubber aprons and rubber gloves.

The difficulty is to find a definition, and no Government has yet found one. Not even my right hon. Friend, with his ingenuity, has yet found a definition of protective clothing that meets the point but does not open the gates to an immense range of clothing—

Mr. Dugdale

Protective asbestos coats cannot be used for anything except protection. They cannot be used for walking in the rain.

Mr. Maudling

One has to try to treat things of a similar nature on a similar basis. If one tries to exempt part and not all of the range of protective clothing one gets into tremendous difficulties.

Another example given was head scarves, used to prevent hair from being caught in machinery. It is very difficult to define when a head scarf is to be used for that purpose and when it is to be used, for example, for a sporting event. The difficulty that has always been found by succeeding Governments—and I think that it is a difficulty that cannot be resolved—is to find a definition of protection clothing in this way. It really is quite impossible.

Helmets are rather a special case. It is true that there is already a special case in miners' helmets, but they are by no means the only form of protective headgear. My hon. Friend the Member for Morecambe and Lonsdale (Sir I. Fraser) mentioned the bowler hat. It is perfectly true, so far as I know from a friend of mine in a dockyard, that it has been the custom of dockyard managers to wear bowler hats to protect them from things dropping accidentally on their heads as they pass by. I think also that headgear worn by paid servants of a hunt is something that they wear to protect themselves in the course of activities for which they are paid. I have given these examples and I agree that they are of a small kind, but I think that they illustrate the principle that when one starts saying that a thing is protective, where does one finally stop?

There have been strong arguments from both sides of the Committee on the question of the crash helmet. I feel that the crash helmet is of rather a special character and rather different from overalls, gloves, gauntlets, boots and headscarves, about which we have been hearing. But once one says that one thing is of a special character one gets an immense number of other things brought up as being of a special character, so, again, where does one finish up?

I should like to take the opportunity, between now and the Report stage to discuss the question of crash helmets with my right hon. Friend the Chancellor of the Exchequer. He has told me that he will be glad to think about it, and I shall be glad to put to him the arguments advanced on this particular matter from both sides of the Committee today. It is a matter of considerable importance.

So far as the generality of the Amendment is concerned—

Mr. Nabarro

Before my right hon. Friend leaves the question of helmets, will he recall that I put to him the consideration that there are four categories of helmets? He has mentioned only the motor-cyclist's helmet. He has scrupulously avoided reference to the fireman's helmet. I made the point that 95 per cent. of all firemen's helmets are paid for out of public funds anyway, so it seems rather silly to levy Purchase Tax on them. The four categories of helmets which I mentioned were: miners', quarrymen's, firemen's and motor-cyclists' helmets, or "skid lids", all of which we want to be free from Purchase Tax.

Mr. Maudling

I do not think that my hon. Friend need be in any danger of thinking that I shall forget the arguments which he has made so very often in my hearing on that point. I assure him that they will not be forgotten. I will discuss with my right hon. Friend the question of helmets.

Dr. Stross

We have heard, and we are very grateful for the fact, that the right hon. Gentleman and his right hon. Friend the Chancellor of the Exchequer will consider one aspect of this, namely, crash helmets. Would he give consideration to another point as well? That is the type of heavy rubber gloves used in the plating industry, which come up to the elbow and which can be used only in industries of that type, or perhaps by doctors in carrying out post-mortems, and cannot fall into the category of housewives' gloves.

Mr. Maudling

That is just the danger of considering one article. One gets pressed far beyond the point where one must stop. The only thing that I can undertake to discuss with my right hon. Friend is the question of helmets. That brings me back to the general question of definition and, for reasons which this and preceding Governments have regarded as conclusive, I must ask the Committee to reject the Amendment.

Mrs. White

Can the right hon. Gentleman extend his promised consideration not only to the four categories of helmet, but also to all boots and shoes covered by the British Standards Institution's Specification 1870?

Mr. Maudling

We have been looking into the question of shoes. The trouble is that the protective shoe is nearly indistinguishable from the ordinary shoe and can be worn as an ordinary shoe. Clearly, a protective boot would not be worn for all purposes. That is the reason for the clear distinction made between boots and shoes. We have already considered it and we feel that we cannot do it.

Question put, That those words be there inserted:—

The Committee divided: Ayes 207, Noes 245.

Division No. 146.]	AYES	[6.25 p.m.
Ainsley, J. W.	Hayman, F. H.	Palmer, A. M. F.
Allaun, Frank (Salford, E.)	Henderson, Rt. Hn. A. (Rwly Regis)	Pannell, Charles (Leeds, W.)
Allen, Arthur (Bosworth)	Herbison, Miss M.	Parker, J.
Allen, Scholefield (Crewe)	Hobson, C. R. (Keighley)	Parkin, B. T.
Awbery, S. S.	Holman, P.	Paton, John
Bacon, Miss Alice	Holmes, Horace	Pearson, A.
Balfour, A.	Houghton, Douglas	Peart, T. F.
Bellenger, Rt. Hon. F. J.	Howell, Charles (Perry Barr)	Pentland, N.
Bence, C. R. (Dunbartonshire, E.)	Hoy, J. H.	Plummer, Sir Leslie
Benson, Sir George	Hubbard, T. E.	Popplewell, E.
Beswick, Frank	Hughes, Emrys (S. Ayrshire)	Prentice, R. E.
Blackburn, F.	Hughes, Hector (Aberdeen, N.)	Price, J. T. (Westhoughton)
Blenkinsop, A.	Hunter, A. E.	Probert, A. R.
Blyton, W. R.	Hynd, H. (Accrington)	Proctor, W. T.
Boardman, H.	Hynd, J. B. (Attercliffe)	Pursey, Cmdr. H.
Bonham Carter, Mark	Irvine, A. J. (Edge Hill)	Randall, H. E.
Bottomley, Rt. Hon. A. G.	Irving, Sydney (Dartford)	Rankin, John
Bowden, H. W. (Leicester, S. W.)	Isaacs, Rt. Hon. G. A.	Redhead, E. C.
Bowen, E R. (Cardigan)	Janner, B.	Reeves, J.
Bowles, F. G.	Jay, Rt. Hon. D. P. T.	Reid, William
Braddock, Mrs. Elizabeth	Jenkins, Roy (Stechford)	Roberts, Rt. Hon. A.
Brockway, A. F.	Johnson, James (Rugby)	Roberts, Goronwy (Caernarvon)
Broughton, Dr. A. D. D.	Johnston, Douglas (Paisley)	Robinson, Kenneth (St. Pancras, N.)
Brown, Thomas (Ince)	Jones, David (The Hartlepools)	Rogers, George (Kensington, N.)
Burke, W. A.	Jones, Jack (Rotherham)	Ross, William
Burton, Miss F. E.	Jones, J. Idwal (Wrexham)	Royle, C.
Butler, Herbert (Hackney, C.)	Jones, T. W. (Merioneth)	Shinwell, Rt. Hon. E
Carmichael, J.	Kenyon, C.	Silverman, Julius (Aston)
Castle, Mrs. B. A.	Key, Rt. Hon. C. W.	Silverman, Sydney (Nelson)
Champion, A. J.	King, Dr H. M.	Simmons, C. J. (Brierley Hill)
Clunie, J.	Lawson, G. M.	Skeffington, A. M.
Coldrick, W.	Lee, Frederick (Newton)	Slater, Mrs. H. (Stoke, N.)
Collins, V. J. (Shoreditch & Finsbury)	Lee, Miss Jennie (Cannock)	Slater, J. (Sedgefield)
Corbet, Mrs. Freda	Lever, Leslie (Ardwick)	Smith, Ellis (Stoke, S.)
Cove, W. G.	Lewis, Arthur	Sorensen, R. W.
Craddock, George (Bradford, S.)	Lindgren, G. S.	Soskice, Rt. Hon. Sir Frank
Cullen, Mrs. A.	Lipton, Marcus	Sparks, J. A.
Dalton, Rt. Hon. H.	Logan, D. G.	Stewart, Michael (Fulham)
Darling, George (Hillsborough)	Mabon, Dr. J. Dickson	Stones, W. (Consett)
Davies, Stephen (Merthyr)	McAlister, Mrs. Mary	Strachey, Rt. Hon. J.
de Freitas, Geoffrey	McCann, J.
Delargy, H. J.	MacColl, J. E.	Stross, Dr. Barnett (Stoke-on-Trent, C.)
Diamond, John	McGhee, H. G.	Summerskill, Rt. Hon. E.
Dodds, N. N.	McGovern, J.	Sylvester, G. O.
Donnelly, D. L.	McInnes, J.	Taylor, Bernard (Mansfield)
Dugdale, Rt. Hn. John (W. Brmwch)	McLeavy, Frank	Taylor, John (West Lothian)
Ede, Rt. Hon. J. C.	MacMillan, M. K. (Western Isles)	Thomas, Iorwerth (Rhondda, W.)
Edwards, Rt. Hon. Ness (Caerphilly)	Mahon, Simon	Thomson, George (Dundee, E.)
Edwards, W. J. (Stepney)	Mallalieu, E. L. (Brigg)	Thornton, E.
Evans, Albert (Islington, S. W.)	Marquand, Rt. Hon. H. A.	Tomney, F.
Fernyhough, E.	Mason, Roy	Ungoed-Thomas, Sir Lynn
Finch, H. J.	Mellish, R. J.	Wade, D. W.
Fletcher, Eric	Messer, Sir F.	Warbey, W. N.
Foot, D. M.	Mitchison, G. R.	Watkins, T. E.
Forman, J. C.	Monslow, W.	Weitzman, D.
George, Lady Megan Lloyd (Car'then)	Moody, A. S.	Wells, Percy (Faversham)
Gibson, C. W.	Morris, Percy (Swansea, W.)	Wheeldon, W. E.
Gordon Walker, Rt. Hon. P. C.	Morrison, Rt. Hn. Herbert (Lewism, S.)	White, Mrs. Eirene (E. Flint)
Greenwood, Anthony	Mort, D. L.	Wilkins, W. A.
Grenfell, Rt. Hon. D. R.	Moss, R.	Willey, Frederick
Grey, C. F.	Moyle, A.	Williams, David (Neath)
Griffiths, David (Rother Valley)	Mulley, F. W.	Williams, Rev. Llywelyn (Ab'tillery)
Griffiths, Rt. Hon. James (Llanelly)	Neal, Harold (Bolsover)	Willis, Eustace (Edinburgh, E.)
Grimond, J.	Noel-Baker, Francis (Swindon)	Wilson, Rt. Hon. Harold (Huyton)
Hale, Leslie	Noel-Baker, Rt. Hon. P. (Derby, S.)	Winterbottom, Richard
Hall, Rt. Hn. Glenvil (Colne Valley)	Oliver, G. H.	Woof, R. E.
Hamilton, W. W.	Orem, A. E.	Yates, V. (Ladywood)
Hannan, W.	Oswald, T.	Zilliacus, K.
Harrison, J. (Nottingham, N.)	Owen, W. J.
Hastings, S.	Paget, R. T.	TELLERS FOR THE AYES:
		Mr. Short and Mr. Deer.

NOES
Agnew, Sir Peter	Baldock, Lt.-Cmdr. J. M.	Bennett, F. M. (Torquay)
Aitken, W. T.	Baldwin, A. E.	Bennett, Dr. Reginald
Allan, R. A. (Paddington, S.)	Barber, Anthony	Biggs-Davison, J. A.
Amory, Rt. Hn. Heathcoat (Tiverton)	Barlow, Sir John	Birch, Rt. Hon. Nigel
Arbuthnot, John	Barter, John	Bishop, F. P.
Armstrong, C. W.	Beamish, Col. Tufton	Black, C. W.
Ashton, H.	Bell, Philip (Bolton, E.)	Body, R. F.
Atkins, H. E.	Bell, Ronald (Bucks, S.)	Boothby, Sir Robert

Bossom, Sir Alfred	Heath, Rt. Hon. E. R. G.	Neave, Airey
Boyd-Carpenter, Rt. Hon. J. A.	Henderson, John (Cathcart)	Nicholls, Harmer
Boyle, Sir Edward	Henderson-Stewart, Sir James	Nicholson, Sir Godfrey (Farnham)
Brain, B. R.	Hesketh, R. F.	Nicholson, N. (B'n'm'th, E. & Chr'ch)
Braithwaite, Sir Albert (Harrow, W.)	Hill, Rt. Hon. Charles (Luton)	Noble, Cmdr. Rt. Hon. Allan
Bromley-Davenport, Lt.-Col. W. H.	Hill, Mrs. E. (Wythenshawe)	Oakshott, H. D.
Bryan, P.	Hinohingbrooke, Viscount	Orr, Capt. L. P. S.
Bullus, Wing Commander E. E.	Hirst, Geoffrey	Orr-Ewing, Charles Ian (Hendon, N.)
Burden, F. F. A.	Holland-Martin, C. J.	Osborne, C.
Butcher, Sir Herbert	Hope, Lord John	Page, R. G.
Campbell, Sir David	Hornby, R. P.	Pannell, N. A. (Kirkdale)
Carr, Robert	Horobin, Sir Ian	Partridge, E.
Cary, Sir Robert	Horsbrugh, Rt. Hon. Dame Florence	Peel, W. J.
Chichester-Clark, R.	Howard, Gerald (Cambridgeshire)	Pickthorn, K. W. M.
Cole, Norman	Howard, John (Test)	Pilkington, Capt. R. A.
Conant, Maj. Sir Roger	Hudson, W. R. A. (Hull, N.)	Pitman, I. J.
Cooke, Robert	Hughes-Young, M. H. C.	Pitt, Miss E. M.
Cooper, A. E.	Hurd, A. R.	Price, David (Eastleigh)
Cooper-Key, E. M.	Hutchison, Michael Clark (E'b'gh, S.)	Price, Henry (Lewisham, W.)
Cordeaux, Lt.-Col. J. K	Hyde, Montgomery	Prior-Palmer, Brig. O. L.
Corfield, Capt, F. V.	Hylton-Foster, Rt. Hon. Sir Harry	Profumo, J. D.
Craddock, Beresford (Spelthorne)	Iremonger, T. L.	Ramsden, J. E.
Crosthwaite-Eyre, Col. O. E.	Irvine, Bryant Godman (Rye)	Redmayne, M.
Crowder, Sir John (Finchley)	Jenkins, Robert (Dulwich)	Remnant, Hon. P.
Crowder, Petre (Ruislip—Northwood)	Jennings, J. C. (Burton)	Renton, D. L. M.
Cunningham, Knox	Jennings, Sir Roland (Hallam)	Roberts, Sir Peter (Heeley)
Currie, G. B. H.	Johnson, Dr. Donald (Carlisle)	Robertson, Sir David
Dance, J. C. C.	Johnson, Eric (Blackley)	Robinson, Sir Roland (Blackpool, S.)
Davidson, Viscountess	Joynson-Hicks, Hon. Sir Lancelot	Rodgers, John (Sevenoaks)
D'Avigdor-Goldsmid, Sir Henry	Keegan, D.	Roper, Sir Harold
Deedes, W. F.	Kerby, Capt. H. B.	Russell, R. S.
Digby, Simon Wingfield	Kerr, Sir Hamilton	Sharples, R. C.
Dodds-Parker, A. D.	Kershaw, J. A.	Shepherd, William
Donaldson, Cmdr. C. E. McA.	Lambton, Viscount	Simon, J. E. S. (Middlesbrough, W.)
Doughty, C. J. A.	Langford-Holt, J. A.	Smithers, Peter (Winchester)
du Cann, E. D. L.	Leather, E. H. C.	Smyth, Brig. Sir John (Norwood)
Dugdale, Rt. Hn. Sir T. (Richmond)	Leavey, J. A.
Duncan, Sir James	Leburn, W. G.	Speir, R. M.
Eden, J. B. (Bournemouth, West)	Legge-Bourke, Maj. E. A. H.	Spence, H. R. (Aberdeen, W.)
Elliott, R. W. (Ne'castle upon Tyne, N.)	Lindsay, Hon. James (Devon, N.)	Stevens, Geoffrey
Emmet, Hon. Mrs. Evelyn	Linstead, Sir H. N.	Steward, Harold (Stockport, S.)
Errington, Sir Eric	Llewellyn, D. T.	Storey, S.
Farey-Jones, F. W.	Lloyd, Maj. Sir Guy (Renfrew, E.)	Stuart, Rt. Hon. James (Moray)
Fell, A.	Lloyd, Rt. Hon. Selwyn (Wirral)	Studholme, Sir Henry
Finlay, Graeme	Low, Rt. Hon. Sir Toby	Summers, Sir Spencer
Fisher, Nigel	Lucas, Sir Jocelyn (Portsmouth, S.)	Taylor, Sir Charles (Eastbourne)
Fletcher-Cooke, C.	Lucas, P. B. (Brentford & Chiswick)	Teeling, W.
Foster, John	Lucas-Tooth, Sir Hugh	Temple, John M.
Fraser, Sir Ian (M'cmbe & Lonsdale)	McAdden, S. J.	Thomas, Leslie (Canterbury)
Freeth, Denzil	Macdonald, Sir Peter	Thomas, P. J. M. (Conway)
Gammans, Lady	Macheson, Brig. Sir Harry	Thompson, Kenneth (Walton)
Garner-Evans, E. H.	McKibbin, Alan	Thompson, R. (Croydon, S.)
George, J. C. (Pollok)	Mackie, J. H. (Galloway)	Thorneycroft, Rt. Hon. P.
Gibson-Watt, D.	McLaughlin, Mrs. P.	Thornton-Kemsley, Sir Colin
Glover, D.	Maclay, Rt. Hon. John	Tilney, John (Wavertree)
Godber, J. B.	McLean, Neil (Inverness)	Turton, Rt. Hon. R. H.
Goodhart, Philip	Macleod, Rt. Hn. Iain (Enfield, W.)	Vane, W. M. F.
Gower, H. R.	MacLeod, John (Ross & Cromarty)	Vaughan-Morgan, J. K.
Graham, Sir Fergus	Maddan, Martin	Vickers, Miss Joan
Grant, W. (Woodside)	Maitland, Cdr. J. F. W. (Horncastle)	Vosper, Rt Hon. D. F.
Grant-Ferris, Wg Cdr. R. (Nantwich)	Maitland, Hon. Patrick (Lanark)	Wakefield, Edward (Derbyshire, W.)
Green, A.	Manningham-Buller, Rt. Hn. Sir R.	Wakefield, Sir Wavell (St. M'lebone)
Gresham Cooke, R.	Markham, Major Sir Frank	Wall, Patrick
Grimston, Hon. John (St. Albans)	Marlowe, A. A. H.	Ward, Dame Irene (Tynemouth)
Grimston, Sir Robert (Westbury)	Marples, Rt. Hon. A. E.	Watkinson, Rt. Hon. Harold
Grosvenor, Lt.-Col. R. G.	Marshall, Douglas	Whitelaw, W. S. I.
Gurden, Harold	Mathew, R	Williams, Paul (Sunderland, S.)
Hall, John (Wycombe)	Maudling, Rt. Hon. R.	Wills, G. (Bridgwater)
Hare, Rt. Hon. J. H.	Mawby, R. L.	Wilson, Geoffrey (Truro)
Harris, Reader (Heston)	Maydon, Lt.-Comdr, S. L. C.	Wood, Hon. R.
Harrison, A. B. C. (Maldon)	Medlicott, Sir Frank	Woollam, John Victor
Harrison, Col. J. H. (Eye)	Milligan, Rt. Hon. W. R.	Yates, William (The Wrekin)
Harvey, John (Walthamstow, E.)	Morrison, John (Salisbury)
Hay, John	Nabarro, G. D. N.	TELLERS FOR THE NOES:
Heald, Rt. Hon. Sir Lionel	Nairn, D. L. S.	Mr. Legh and Mr. Brooman-White.

Dr. Horace King (Southampton, Itchen)

I beg to move, in page 31, line 2, at the end to insert: 5. Articles comprised in Group 9 (floor coverings), Group 11 (furniture, etc.), Group 12 (appliances and apparatus), Group 13 (cutlery), Group 14 (lighting fittings, etc.), or Group 34 (stationery, etc.), being articles designed for use in schools, shall be exempt from tax.

The Temporary Chairman (Sir Norman Hulbert)

I think that it would be for the convenience of the Committee if we were to discuss with this Amendment the Amendment in page 31, line 38, at the end to add: 7. In the case of any articles chargeable to purchase tax in Groups 6, 7, 9, 10, 11, 12, 13, 14, 16 all such articles shall be exempt from tax if it is proved to the satisfaction of the Customs and Excise authorities that they are to be used solely for hotel or restaurant purposes. which stands in the name of the hon. Member for Hastings (Mr. Cooper-Key) and other hon. Members.

Dr. King

The Amendment I have moved seeks to exempt from Purchase Tax a number of articles when purchased for use in schools. It is a quite serious Amendment which involves a fairly substantial amount of money. Floor coverings are at present taxed at 15 per cent. Furniture, at any rate up to the time of this new Finance Bill, has been taxed at 15 per cent. As regards furniture, the Chancellor has, in previous Finance Bills, already made a concession for school desks and lockers, and about that I shall, have a word or two to say later. Cupboards bear a tax of 5 per cent. Chairs are taxed at 5 per cent. Appliances, apparatus and cutlery bear a tax of 15 per cent. Lighting fittings used in schools are taxed at 30 per cent. Perhaps most important and most substantial of all, stationery is taxed at 30 per cent. There is a very heavy Purchase Tax on pencils, pens, crayons, duplicating paper, exercise books and the rest. Every schoolboy's father pays Purchase Tax on his son's terminal exam paper and on the exercise books and writing paper he uses.

When this matter was referred to briefly when on Clause 1 we debated the Motion, "That the Clause stand part of the Bill," before the Whitsun Recess, the Chancellor said that he wanted to help education all he could. We know the Chancellor to be sincere, and I suggest to him that he has an opportunity really to help education by accepting this Amendment. He will agree, I think, that if we can remove any tax burden from education, we ought to do so. Education costs are rising and must continue to rise. Nobody can defend unnecessary expenditure. Indeed, unnecessary expenditure on education makes it much harder for us to justify to taxpayer and ratepayer necessary expenditure on education. I believe that this Purchase Tax swells unnecessarily the education budget of every local authority.

I mentioned in a previous debate the curious fact that, of the Purchase Tax levied by the Government on the items to which I referred, 60 per cent. is finally met by the Government under the percentage grant. The position is even more ridiculous in the case of items like floor coverings, cutlery and chairs used in school kitchens and dining rooms because, in this case, the Government meets 100 per cent. of the cost. I am not an economist. I should like to think that, if the Government impose a tax and then meet 100 per cent. of the cost thereof, that is merely a bookkeeping entry. But I cannot help feeling—I know that some hon. Members opposite share this view—that such a tax itself makes a tiny contribution to inflation. I am sure that it serves no useful purpose whatever when the grant which the Government make to local authorities to meet it is 100 per cent.

I noted with pleasure that the Chancellor of the Exchequer and I share a love of Shakespeare and that he quoted Shakespeare in the last debate. I suggest to him that Shakespeare referred to this matter, as he referred somewhere to almost everything, when he said that Wisdom wishes to appear most bright, When it doth tax itself. Purchase Tax levied and then met entirely by the Chancellor who levies it is, indeed, taxing oneself.

I do not think that we need argue today the need to abolish Purchase Tax on education or the inflationary effect of the tax, especially on stationery. I will merely quote to the Committee the words of the present Parliamentary Secretary to the Board of Trade when he spoke on 14th February, 1951: I think all of us, including the Chancellor, are agreed that the taxation of business stationery is inflationary. It is a direct cost to industry. … Some £23,000,000 a year is added to the total cost of making industry function."—[OFFICIAL REPORT, 14th February, 1951; Vol. 484, c. 558.] If the Committee will read the word "education" for the word "industry" that is the case I seek to put this evening.

In the same debate, that distinguished and much loved Member of the House, the then Mr. Ralph Assheton, said: Since the war … we on this side of the House"— that is to say, the Conservative side— have consistently urged the removal of Purchase Tax on commercial and educational stationery."—[OFFICIAL REPORT, 14th February, 1951; Vol. 484, c. 575.] In an earlier debate I gave a figure of about £ 14,000 as the Purchase Tax paid in one year by one local authority that I know very well. That was paid on ordinary school equipment. At least as much Purchase Tax again goes into items which are put into new school buildings as they are built and in the modernising and lighting of old schools, in the furnishing of new schools and refurnishing of old schools. I estimate that the local education authorities are paying between £2 million and £4 million in Purchase Tax for education items. I do not think anybody can justify this purely inflationary imposition on local authorities.

Therefore, the problem boils down to the practical one of how to do what I should think every hon. Member would wish to do, I pay tribute here to the intellectual supremacy of the Treasury. No mediaeval schoolman could approach the subtlety of the Treasury in the arguments it advances from time to time when either imposing peculiar taxes or resisting concessions like this one. I think I state the Treasury's case fairly when I say that it objects to the Amendment because instead of taxing a thing we are seeking to tax its use. We seek to exempt from tax a certain number of taxable articles when they are used for a special purpose. The Treasury believes in what Carlyle in his Germanic moments—and most of his moments were Germanic—would call "the thing itself" and feels that there is something wrong about separating an article from its use.

But even the Treasury is not quite consistent in that regard. For example, I note that in the bible of Purchase Tax, the document which lists the various rates and exemptions, it says that exemption is granted for cutlery if it is designed for use solely in the course of any trade, profession … and unsuitable for use for other purposes. Here, I suppose the Treasury would argue that the sting is in the tail, that the butcher's knife is exempt only if it cannot be used for any other purpose but butchering, and that the school desk has been relieved of Purchase Tax because nobody can conceive of any human being who was not compelled to do so sitting in the contraption known as a school desk. If that is so, I think it ought to be possible similarly to isolate at least school stationery. Exercise books are specially designed. The use of exercise books and lined school paper outside schools must be extremely limited. Both are distinct and quite distinctive. If the Chancellor is worried about it he can ensure that school stationery carries some imprint which would make it impossible for anyone to use it outside school without a sense of shame.

However, I have always thought that the problem of excluding the supply of school materials from effective Purchase Tax was much simpler than that. Most local authorities obtain their school supplies from firms which do nothing but supply local authorities with educational equipment. In my opinion, it ought to be easy to grant Purchase Tax exemption to firms which are school suppliers, if necessary leaving the tax where it is for any casual purchase for a school if the local authority went outside the recognised educational suppliers.

We have a most ingenious Treasury. If the Committee agrees that we ought not to tax these educational articles and still wants to retain a tax on the article not used for educaion, the Treasury ought to be capable of devising a method by which that can be put into effect. If the Chancellor says that he wishes to exempt educational articles from Purchase Tax, I am certain that his backroom boys will provide him with an efficient and effective way of doing it. On the other hand, he could at any rate save half or perhaps more than half of the burden of Purchase Tax which is borne by local authorities if he would remove stationery entirely from Purchase Tax.

6.45 p.m.

If it is technically impossible to achieve the aim of the Amendment in the way suggested, the Chancellor could certainly do much good to education without causing harm to business by following the advise of the present Parliamentary Secretary to the Board of Trade and the former Mr. Ralph Assheton by removing the Purchase Tax on stationery.

Whatever way the Chancellor adopts, I urge him to take the Amendment as a very serious attempt to relieve local education authorities, not of the burden of education, which is grievous and will become more grievous, but of an entirely unnecessary fiscal element in that burden. I am certain that if he accepts the Amendment local authorities will be very grateful to him.

Mr. E. M. Cooper-Key (Hastings)

There is on the Order Paper an Amendment in the name of my hon. Friends and myself which seeks to exempt from Purchase Tax all of the most important articles used in hotel and catering establishments. I understand by your Ruling, Sir Norman, that we can discuss this matter fairly fully.

At this stage I ought to declare an interest, because the main business in my constituency is the hotel and holiday trade. On the other hand, I hope to show that the issue is wider than a question of a few holiday resorts or even of the tourist industry, and could have a bearing on the national economy as a whole. Taking the narrower viewpoint first, the Committee will be familiar, after many years, with the case of hotels and restaurants in seeking a remission of Purchase Tax on furnishings and equipment, which are known as the tools of the trade. The tourist industry looks at the engineering industry. The engineering industry, presumably because it sells goods abroad, receives concessions because its machine tools are free of tax. The Treasury, however, seems to accept some justification in similar circumstances, because relief is given in Purchase Tax on furnishings used in equipping ocean liners. But the Treasury has always been stubborn in resisting the case of the domestic hotel for like treatment, in spite of the fact that this industry is a much larger earner of foreign money.

In the past objection has always been raised on the ground of the inability to control this kind of purchase. There must certainly be methods of solving this problem if the desire can be awakened in the Treasury. One way might be to establish with the local authority a register of all catering establishments. However, the real issue is whether the Government are sympathetic towards the industry. There are encouraging signs that this is so. A few weeks ago the Board of Trade held a conference on tourism. The conference was addressed by four Ministers, all of whom paid tribute to the earning capacity of the tourist industry which today brings in about £43 million a year in dollars and it is estimated that by about 1965 it could reach £100 million a year. But these estimates can and will fall short if our equipment and standards fall below those of our European competitors. Many of these enjoy considerable assistance from their Governments through remission of rates and other forms of taxation.

This afternoon I merely wish to emphasise the fact that here at our feet lie large potentialities in the tourist trade, but these will bear fruit only if our hotels are maintained at a competitive standard. The imposition of Purchase Tax on equipment and furnishings will, if persisted in, lower the standard of service of these establishments, to the advantage of our European competitors. So far as I know, only one hotel has been built in London since the war. The present cost of building hotels is at the rate of about £5,000 to £6,000 a bedroom. Only one has been built in the provinces, the Hotel Leofric, in Coventry, and the amount of Purchase Tax paid in respect of furnishings and equipment for that building alone amounted to £30,000 which, at 5 per cent., is equivalent to an annual surcharge of £1,500 a year.

Year after year many of us on both sides of the House have urged the Chancellor of the Exchequer to meet us in this matter. I hope that when my right hon. Friend replies to the debate we shall get some indication of more substantial help than lip service in view of the case for exemption from Purchase Tax of the tools of the trade of the hotel industry.

Mrs. Slater

The hon. Member for Hastings (Mr. Cooper-Key) will not expect me to follow him in what he said, because I am sure he has a number of friends ready to speak on the same lines.

I want to speak on two points in the Amendment moved by my hon. Friend the Member for Itchen (Dr. King). The first deals with floor coverings. In the same Finance Bill we are proposing to reduce the tax upon fur rugs from 50 per cent. to 30 per cent. and at the same time we are leaving at 15 per cent. the tax on all over floor coverings. The number of people who will buy fur rugs is limited so that the reduction in tax will apply only to those with sufficient money to buy that type of fur covering.

In this list of floor coverings is included linoleum as well as carpets. I am glad to find that when one goes into working-class homes today one sees the great change which has taken place. Many of them now have carpets rather than cold, bare linoleum. The fact remains, however, that in many working-class homes, especially those where there are young, growing children, linoleum is still used to a large extent, and in any case linoleum is the main type of covering used in bathrooms.

I suggest that the tax of 15 per cent. on linoleum could easily have been abolished in the Finance Bill. I know all the arguments the Chancellor will advance against exemption, but this small amount could quite well have been handed to that section of the people who have to use linoleum on their floors by the very nature of their incomes and the fact that they have growing families. If it is possible to make a concession of 20 per cent. to the class of people who buy fur rugs, it could easily have been possible to make a concession to the poorer class of people who are compelled to buy linoleum.

The other section of this Amendment has been spoken to by my hon. Friend, namely, the tax on furniture, stationery and equipment used in schools. I have in my possession a letter sent to me by the headmaster of one of the schools in Stoke-on-Trent. It is not big, but it is an important junior school which serves a very large area. He writes that he has just completed his requisition for writing materials, etc., for the next term. These include exercise books, writing paper of various kinds, ink, pens and other similar equipment. He says that the cost for this next term will be £78 6s. and of that amount £17 6s. is Purchase Tax. He goes on to point out that on these commodities under the present percentage grant system the Government give with one hand a grant of £46 19s. to the local authority but with the other hand they take back £17 6s. of the grant in Purchase Tax. If we think of all the schools in our local authorities, we can see that the cost of school equipment, ink, pens and art materials, amounts to a large sum. This method of taxation on such articles is penalising those local authorities which are prepared to ensure that the necessary equipment is available for the children.

I have said before in the House of Commons that I remember teaching at a time when needles were literally counted, when pen nibs were counted, and when local authorities were reluctant to supply large quantities of exercise books. Not so long ago I was speaking in a constituency, not my own, where a complaint was made that the local authority was insisting that the children must buy their own exercise books after the first one has been used. I disagree with that completely, but if local authorities are faced with the necessity of saving on education, it may well be that if the burden increases, plus the other attack made recently upon them, considerable economies may be necessary. [An HON. MEMBER: "We might return to slates and pencils."] Heaven forbid that we shall ever go back to the day when children used slates and pencils and had to spit on rags in order to wipe their slates clean. It was not only unhygienic but it was not conducive to good writing.

The Chancellor of the Exchequer (Mr. Derick Heathcoat Amory)

The hon. Lady will admit that the squeak was the worst thing of all.

Mrs. Slater

I do not agree with the right hon. Gentleman. I think that spitting on the rag was the worst.

As my hon. Friend has pointed out, a method could easily be devised to exempt such educational equipment from Purchase Tax because the suppliers of educational materials are in the main two or three large firms which specialise in this equipment. After all, difficulties are made to be overcome, and I see no particular difficulty in exempting materials used for school and educational purposes. I therefore ask the Chancellor to give serious consideration to these two points.

Mr. J. Eden

I must confess that I was wondering, Sir Norman, when you ruled that these two Amendments might be taken together, what exactly was the connection between the two. It must be what I would describe as "the tools of the trade". Certainly, from the point of view of the hotel industry, that is a good description, although it may not be so apposite in the case of the Amendment dealing with schools.

May I address my two remarks to the hotel industry, bearing in mind that since floor coverings, furniture, cutlery, and so on, can be regarded as the tools of the trade of the hotel industry they could, as the coupling of these two Amendments shows, be regarded as the tools of the trade of the schools as well.

The hotel industry is perhaps the only industry in the country today which is taxed on the tools of its trade and on the equipment which it uses. It is, as everyone has been only too ready to admit from one day to the next, one of the most important export industries. It has always been slightly baffling to me that we have not endeavoured, during the latter post-war years, to do something slightly more demonstrative to assist this important export industry.

7.0 p.m.

The tools of trade of this industry are the furnishings, floor coverings, cutlery, linen and crockery. This concession is a contribution which could be made to assist an industry vital to our export trade, an industry which the right hon. Gentleman's colleagues have consistently been only too ready to praise and to say how important it is for the welfare of our economy as a whole that we should maintain a thriving hotel industry. The industry found it very difficult in these post-war years to build new hotels.

So far as schools are concerned, a certain number of new ones have been provided in the post-war years, but not so with hotels, and, as my hon. Friend the Member for Hastings (Mr. Cooper-Key) has said, only one new hotel of any size or notability has been built. The reason for this is largely, if not wholly, the extremely high cost, which would make it absolutely prohibitive to try to run such an hotel subsequently as an economic proposition.

So we fall back, if we wish to keep a thriving hotel industry, on how we can best make improvements to our hotels and add to the existing hotels new wings, new restaurants, and so on, and how to modernise the interiors of existing hotel structures. All this means new equipment, and new equipment for this industry means paying Purchase Tax. If we wish to encourage this industry to go on earning more dollars and attracting more and more people from dollar and other countries to take their holidays in Great Britain, to travel around and see our holiday towns and others parts of the British Isles, we must try to assist it in some way. Most of its budgets today are just balancing out, and there is very little left which can be used in making the very necessary improvements which we are all agreed should be made.

I urge my right hon. Friend as strongly as I can to give very serious consideration to the claims of this industry, of which he himself has spoken. In speaking of it, I hope that he will recognise that, like other industries, it has its tools of trade. I urge him to find some way of freeing these tools of trade from Purchase Tax.

Mr. W. T. Proctor (Eccles)

I wish to support the Amendment moved by my hon. Friend the Member for Southampton, Itchen (Dr. King) and to deal with only one aspect of this matter. It is that the collection of this tax is a complete waste of public money and that no public benefit whatever is gained from it.

The local authority borrows the money to purchase the goods and has to pay interest on the amount borrowed and also interest on the amount of the Purchase Tax. Therefore, the only people who gain are the people who lend the money for the payment of the Purchase Tax. I have in my division a firm which has met with very considerable financial difficulty as a result of the operation of this tax. The local authority buys furniture from this firm on credit and also has credit for the Purchase Tax.

The Treasury demands that the firm must pay the Purchase Tax even before, in many cases, the firm is paid by the local authority. This went on very easily before the credit squeeze, because the firm was able to borrow the money from the bank with which to pay the Purchase Tax, but when the credit squeeze came, they were unable to get credit from the bank and were in grave financial difficulty. I had to intervene with the Treasury to make some special arrangements for them to prevent a much graver financial position developing.

I see no sense in imposing this tax, in collecting it and in costing the community money to collect it, in paying financiers the interest on loans in respect of it and finding out, in the end, that we are worse off. I am sure that if the Chancellor looks at it in an impartial manner, he will see that it is a waste of public money, and that it could be administered in such a way that it would not involve all this work and all this expenditure which the nation has to face. Surely, it is a ridiculous position when the Government impose a tax and the nation has to pay out in the costs of administering the tax more than it receives from it.

Sir Peter Macdonald (Isle of Wight)

The Amendment to which I shall address myself is the one standing in the name of my hon. Friend the Member for Hastings (Mr. Cooper-Key), to which my own name is also attached. It is an Amendment which deals with something which some of us have been raising for a great many years, but we are very hopeful that on this occasion we shall get some favourable response from my right hon. Friend the Chancellor of the Exchequer.

It is recognised on all sides that the catering industry is a very important export industry. The Government must recognise that because of the fact that they subsidise the British Travel and Holiday Association to the extent of about £800,000 per year in order to encourage people to come to this country and to encourage tourism generally. I think that that organisation is doing a very good job. It is bringing people to this country, and the amount of tourism has increased, I understand, in the last ten years by 190 per cent. The amount of foreign currency brought into the country amounted to £190 million last year. It is recognised that the tourist industry is the largest dollar earner we have. That being the case, it seems to me to be highly ridiculous for the Government to spend this large sum of money annually to encourage people to come to this country unless they give some encouragement to the catering industry to look after them when they get here.

I have said that the British Travel and Holiday Association is doing a very good job, but the association claims that when it has brought people over here in very large numbers they find that we lack sufficient hotel accommodation for them. The Board of Trade is well aware of the fact, because it is brought home to it by the British Hotels and Restaurants Association, as well as by the British Travel and Holiday Association, and yet it seems to ignore the claims of this industry to have the tools of its trade tax-free.

I know that the catering and hotel industry is very anxious to meet the demands of the tourists. The problem is, as has been pointed out by my colleague, the very high cost of building new hotels today. The cost is so high that there is very little prospect of getting a return on the very heavy capital expenditure required in any reasonable time, and therefore the industry is handicapped. Only one large hotel has been built in this country since the war. The hotels and the industry as a whole are very anxious to meet the wishes of the Government about extending their present accommodation, and much could be done by extending and improving their present premises, but even there they are handicapped by the amount of tax which they have to pay on the equipment of such extensions. I think it is perfectly reasonable that they should be given some allowance and reasonable encouragement by the removal of this heavy Purchase Tax on the equipment required for hotel extensions, furnishings and equipment.

I urge the Chancellor on this occasion to give some encouragement to the industry so that it may meet the wishes of the Government, who are anxious to increase the tourist industry, and he can do that by giving relief from this tax. The Ministry of Transport and Civil Aviation says that it expects air travel to increase by about 400 per cent. in the next few years. It is no use bringing people to this country by air or any other means if there is no accommodation for them when they arrive. Consequently, I strongly urge the Chancellor to accept the Amendment and give some relief to this very heavily burdened industry, now.

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

I support both Amendments. I speak for Cornwall, and, in particular, my constituency, Falmouth and Camborne, where we have no large hotels of the kind about which hon. Gentlemen have been speaking. Nevertheless, the smaller hotels in the remoter areas are just as important as the very large hotels in London, Eastbourne, or Bournemouth. I have been approached by hoteliers in my constituency to ask the Chancellor to grant the concession.

The Chancellor himself comes from the neighbouring county, Devon, and he knows just how much this matter affects his own constituency. I am not sure that his constituency does not include Dawlish. The small hotels in the West Country face a far more difficult proposition than the larger hotels in Eastbourne, Bournemouth, Blackpool and elsewhere, because their season is so much shorter and a very much riskier affair than it is in places nearer the great centres of population.

The type of provision which has to be made for the increased number of visitors each year is changing considerably. Caravan camps are springing up here and there, and they cater for a certain class of visitor. The small hotelier finds it a speculation as to what he shall spend. If ever there was a case where the tools of the trade ought to be exempted from tax, it is in places like those in the West Country that I have mentioned.

I support the Amendment moved by my hon. Friend the Member for Southampton, Itchen (Dr. King). I, too, have been concerned with the administrative side of education, and, having had to prepare estimates for a county education authority, I have some knowledge of just how Purchase Tax impinges on items embraced by what we used to call the school supplies allowance. In pre-war days, at any rate, one of the greatest handicaps in rural areas was the small amount of the school supplies allowance. Today, most local authorities are far more generous. Even so, they find it impossible to grant all the requisites which come within the school supplies allowance, not only exercise books, but text books, readers, and so on.

It is ridiculous that the ratepayers should have to dip deeply into their pockets to pay Purchase Tax to the Chancellor. I believe that the Chancellor was once a leading figure on the Devonshire Education Committee, so he will recall from his experience just how much this kind of expenditure bears on ratepayers and local authorities. I hope that the right hon. Gentleman will grant these concessions and enhance his reputation by doing so.

7.15 p.m.

Mr. William Teeling (Brighton, Pavilion)

In dealing with these Amendments together, I feel a little like people in my constituency do when they are organising flag days. There are so many people who want their charity to be included that we always have to have two or three quite different charities each Saturday. The Chancellor must feel that he is in this position. I know that he wants to put his 1s. in the box for charity but wonders which one to help on this occasion. There is no reason, however, why he should not put in 2s. and so help both.

So far, taking the tourist and hotel side, we seem to have been stressing the foreign tourists coming here. My mind goes back to the days just after the war when those of us who represented seaside resorts were faced with the problem of how to get hotels and lodging houses ready not so much for the foreigner, but for our own workpeople. The situation has not altered so very much. I remember Mr. Ernest Bevin saying that the British people badly needed holidays, for they had gone through the war, and that he would do everything he could to make it possible for them to take their holidays in comfortable surroundings. At the time a little was done, but perhaps not enough.

Since then far more of our people have found themselves able to take holidays, but I am afraid that there is a tendency now for them to go abroad instead of going to the hotels and small lodging houses in this country because they feel that they get more comforts in foreign hotels for their money. This is largely due to the fact that no Government in the last few years has been able to help with the provision of the necessities about which hon. Members have just been speaking.

No one can put a finger on any reasonably sized hotel group and say that it is making a big profit. One certainly could not say that about the smaller lodging house keepers either, or the small restaurant keepers; they are just able to make a profit, and they cannot find enough to put by to improve conditions. The Catering (Wages) Act, 1943, has made it very difficult for hoteliers to keep down prices. One way to counteract that would be for them to use every possible modern labour-saving device. That can only be done if we get some help from the Government. The very small profits that are being made are not sufficient to put in these new improvements.

In my constituency we have to look in the immediate future not only to the tourists coming from abroad but to the development of, for example, Gatwick Airport, from which we expect to get a considerable number of people passing through Brighton and spending just one night at a hotel, and the development of the new Sussex University, which will mean an immense number of people using lodging houses and restaurants.

We must also do our best to improve conditions for ordinary tourists. Our bigger hotels have very ancient kitchens which it is almost impossible at present completely to modernise. The rooms in many of the hotels are far too large and too high, and it would need an immense amount of money to put them right. At the same time, the Board of Trade and others have been pointing out the tremendous advantage which is coming to the United Kingdom through the increase in the numbers of foreign tourists coming here. We are ahead of every other country in Europe at present and that is largely due to the go-ahead methods of the organisation run by Sir Arthur Morse, which has done everything possible to try to improve the situation.

We are told the number of new tourists coming to this country, but how many of those tourists return for a second visit? There is a feeling in the tourist industry that many of them will not come back because they have not found the comforts which they required. I hope that the Chancellor of the Exchequer will bear in mind not only what we have been saying tonight, but what has been said for many years, and that he will try to do something to make the position easier for us and will not say that the concession we seek is impossible from a Customs point of view. I am perfectly certain that in this case, where there is a will, a way can certainly be found.

Mr. Amory

I very much wish that I were in a position to accept both Amend ments, because I am in sympathy with the arguments which have been used for both. Unfortunately, I am afraid that I must say straight away that I do not feel able to accept them, for the most practical reasons.

The hon. Member for Southampton, Itchen (Dr. King) began his speech in a very cunning way by paying tribute to the intellectual supremacy of the Treasury. I accept that on behalf of my advisers and, I trust, my colleagues, because I am sure that the hon. Member meant to include Ministers within the term "Treasury". The hon. Member for Falmouth and Camborne (Mr. Hayman) referred to my constituency which gives me the opportunity of saying what a very pleasant place it is. We receive a great many visitors and I am amazed that any visitors go anywhere else.

The hon. Member mentioned that I served on the Education Committee of the Devon County Council and that I must have been conscious of this burden. I did serve on that committee, but I was not conscious of this burden, because I served in the good old days when there was no such thing as Purchase Tax.

I want first to deal with the Amendment which is concerned with schools. I remind the Committee that the principle of Purchase Tax is that liability should be determined by reference to the character of the article and not to the status of the user. That is for very practical reasons. I remind hon. Members that in cases where an article is specially designed for schools and as a result is of a character which is not suitable for purely domestic use, we try as far as possible to exempt it from charge.

The other day I mentioned school desks in that category. The hon. Member for Southampton, Itchen referred to them today, and there are other things such as blackboards, laboratory furniture and equipment and lockers which are specially designed for school use, art room requisites and things like graph paper and tracing paper. Without running serious risk of abuse, we try as far as possible to exempt articles which are especially designed for school use.

However, with things like lamps, floor coverings, chairs and tables—

Mr. Nabarro

Carpets.

Mr. Amory

—carpets are floor coverings—cutlery and stationery, it becomes impossible to differentiate satisfactorily.

The hon. Member for Southampton, Itchen referred to firms specialising in school supplies and suggested that we might be able to organise exemption by exempting such firms. However, that is not possible in the case of stationery. It is true that a substantial proportion of stationery goes to schools from such firms, but a very substantial proportion does not go from firms dealing exclusively with schools. We have considered it, but I am afraid that it would be impossible to control exemption in that way.

I agree with what was said about the collection of the tax becoming meaningless and even distorting the picture when the Government gives a high percentage grant. When the grant is 100 per cent., the transaction is a mere book entry. However, if there were a practical way of giving exemption, we should follow it, but although we have considered the matter sympathetically, we have been unable to find such a way.

I now turn to the Amendment dealing with hotels which was supported by my hon. Friend the Member for Hastings (Mr. Cooper-Key), my hon. Friend the Member for the Isle of Wight (Sir P. Macdonald), my hon. Friend the Member for Brighton, Pavilion (Mr. Teeling), and my hon. Friend the Member for Bournemouth, West (Mr. J. Eden). Here again, I am completely in sympathy with their object. I join with the tribute which several of my colleagues have paid to the importance of the hotel industry and I assure hon. Members that this is not just lip-service. We regard it for what it is, a very important earner of foreign currency. Tourism in this country is going extremely well. The figures are most encouraging. I also pay tribute to the British Travel and Holidays Association for the work which it has done. As a result of the joint efforts of the industry and the association, the figures are steadily improving.

I agree that the bottleneck in many cases has been the provision of modern and well-equipped hotel accommodation. We are anxious to do what we can to encourage that important industry. However, I must again remind hon. Members of the principle of the tax, because with a tax like this one must stick as closely as possible to certain basic principles. The principle is that the tax should be charged on the nature of the article rather than on the status of the user. To attempt to control it by the eventual end-use is to get into the most formidable difficulties and to begin to flounder in a morass.

Hotels are not the only industry whose tools of trade are subject to Purchase Tax. Stationery is a tool of the trade of a number of industries and it is taxed. A very much smaller business, car hire, has its vehicles taxed, and they are the tools of that trade.

Again, where there is an appliance which a hotel uses for an industrial purpose and which can be clearly distinguished from the domestic article we try to give it the benefit of the doubt and to exempt it. I am thinking of things like large water storage heaters, large refrigerators and large food mixers, articles similar to the domestic articles, but capable of being clearly distinguished by virtue of their size. In those cases we try whenever possible to exempt the article from Purchase Tax.

Sir Charles Taylor (Eastbourne)

My right hon. Friend will be aware that certain Purchase Tax concessions to the hotel industry were made shortly after the war.

Mr. Amory

I am not sure to what my hon. Friend is referring, but it may be that I will come to that in a moment.

These are difficulties of principle, but we should also be led into very great practical difficulties with administration. It would be impossible to decide the point at which tax should be levied—which is in the wholesale trade—on articles like cutlery, glassware and crockery, where it would be difficult to say exactly what would be the use to which those articles would be solely applied. It would be possible to obtain only an intention at that stage, and it would be wide open to evasion and abuse.

7.30 p.m.

Another difficulty is the practical one of defining the limits of the hotel and restaurant trade and deciding where to draw the line. I will not go into the question in detail, but if hon. Members begin to think about the matter they will see the difficulty of drawing a line between a hotel and a small boarding house which took in only one or two people and which had a family as the basis of the household. It would be appallingly difficult to do this.

I believe it was in 1950 that a scheme was designed—the right hon. Member for Battersea, North (Mr. Jay) may remember it—to try to get round this difficulty and to help the hotel trade. Under the scheme grants were made to hotels which were substantial dollar earners. I believe that the grant was based upon the proportion of the number of visitors from North America which, it was estimated might come to the hotels concerned, and also upon the Purchase Tax element in the expenditure of those hotels. As a result of the experience of the working of the scheme, I am told it was found that the incidence of Purchase Tax at that time was not so heavy as had been thought. The scheme proved very difficult to work and after a year it was discontinued.

We have not forgotten the hotel trade. That is why I want to return to what I said earlier, that this is not only a question of paying lip-service to the importance of the trade. When my right hon. Friend the Home Secretary was Chancellor of the Exchequer he gave a great many exemptions in respect of soft furnishings, which are of importance to the trade. In this Budget the reductions that I have proposed to the Committee in respect of household appliances and some kinds of furniture will again be of value to the trade.

In the case of capital allowances we have tried to stretch the provisions as far as possible in order to help in the provision of the tools of this industry. I am thinking of the allowance which is equivalent to the machinery and plant allowance—an initial allowance of 20 per cent. which I am proposing to increase this year. That capital allowance has been extended in the case of hotels to cover not only things like lifts, baths and hot water systems but carpets, linoleums and curtains, and that is going a very great way.

I conclude by saying that, in principle, the arguments for both Amendments are good. I wish it were possible to meet them, but I am absolutely sure that on practical grounds it is not possible to do what I have been asked to do by the hon. Members concerned. I am sorry that that should be so, because the arguments are perfectly sound in both cases.

Mr. Douglas Jay (Battersea, North)

Although, as usual, the Chancellor has tried to sound friendly, he has in substance given an extremely weak, negative and dusty answer to some eloquent pleas of a remarkable array of hon. Members. It seems that his pleasant memories of the hotels and schools of Devon have been entirely overwhelmed by what has been in this case lightly called the intellectual supremacy of the Treasury. He tells us that we cannot do anything for schools or hotels because it is impossible to discriminate, for the purpose of Purchase Tax, in terms of the end use of the product.

There may be some plausibility in that argument if it is used by itself, but I do not think that it can be used by itself. In the case of schools I would say that the very difficulty to which he has referred shows the awkward position that we get into when we insist upon levying Purchase Tax upon necessities such as furniture and floor coverings, which ought not to bear tax at all. It is because these articles are necessities to the trade that they are, as several hon. Members have rightly said, the tools of the trade in the case of hotels, and the tools of the profession in the case of the schools.

Mr. Nabarro

Surely there is a good deal of hypocrisy and humbug in the right hon. Gentleman's argument. Is he aware that in the instance of floor coverings—which are mostly carpets—the rate of Purchase Tax when his party was in office between 1945 and 1951 was never less than 33⅓ per cent.? At least my right hon. Friend and the former Chancellor had the good sense to reduce the tax to 15 per cent. What shocking hypocrisy the right hon. Gentleman is guilty of.

Mr. Jay

Has the hon. Member forgotten, as he usually does—being so often weak in his facts—that the great majority of items of furniture were entirely free of tax under the Labour Government, whereas they are now all subject to Purchase Tax? This is a fair example of the sort of difficulties that we get into when we place a tax on necessities of that kind.

Secondly, those who have spoken for the educational world in the debate have proved, by reason of the fact that, quite apart from the Purchase Tax arguments, there is a sense of grievance in that world, that on all these financial counts education seems to be made a victim by the present Government. We are told that nothing can be done about Purchase Tax in the case of schools, although in the case of ocean liners it has been found possible to make some sort of concession. Again, when there is a question of making economies, education always seems to be the first victim. It is because this sense of grievance exists that people are not very convinced by the arguments advanced by the Chancellor.

No doubt there is some difficulty about the end-use of the products in the hotel industry, as the Chancellor has said, but I would ask the hon. Member for Kidderminster (Mr. Nabarro) to note that the Labour Government succeeded in overcoming the difficulty. In a slightly casual fashion the Chancellor mentioned that a scheme was introduced in 1950 and abolished in 1951 or 1952. In fact, it was introduced by the Labour Government to help the hotel industry, and it was characteristically abolished by the present Government.

Mr. Amory

Like a certain number of other Measures introduced by the right hon. Gentleman's Government, it proved to be not a great success.

Mr. Jay

We have only the present Chancellor's word that it proved unworkable. I do not think that that is the view of the hotel industry, which would like to see the scheme continued. I think that the Chancellor will agree that it got over the difficulty of discriminating in connection with the end-use in this way:

Division No. 147.]	AYES	[7.40 p.m.
Ainsley, J. W.	Butler, Herbert (Hackney, C.)	Edwards, W. J. (Stepney)
Allaun, Frank (Salford, E.)	Carmichael, J.	Evans, Albert (Islington, S. W.)
Allen, Arthur (Bosworth)	Castle, Mrs. B. A.	Fernyhough, E.
Allen, Scholefield (Crewe)	Champion, A. J.	Finch, H. J.
Awbery, S. S.	Clunie, J.	Fletcher, Eric
Bacon, Miss Alice	Coldrick, W.	Foot, D. M.
Balfour, A.	Collins, V. J. (Shoreditch & Finsbury)	Forman, J. C.
Bence, C. R. (Dunbartonshire, E.)	Cove, W. G.	George, Lady Megan Lloyd (Car'then)
Beswick, Frank	Craddock, George (Bradford, S.)	Gibson, C. W.
Blackburn, F.	Cullen, Mrs. A.	Gordon Walker, Rt. Hon. P. C.
Blenkinsop, A.	Dalton, Rt. Hon. H.	Grenfell, Rt. Hon. D. R.
Blyton, W. R.	Darling, George (Hillsborough)	Grey, C. F.
Boardman, H.	Davies, Ernest (Enfield, E.)	Griffiths, David (Rother Valley)
Bottomley, Rt. Hon. A. G.	Davies, Stephen (Merthyr)	Hale, Leslie
Bowden, H. W. (Leicester, S. W.)	Deer, G.	Hall, Rt. Hn. Glenvil (Colne Valley)
Bowen, E. R. (Cardigan)	Delargy, H. J.	Hamilton, W. W.
Bowles, F. G.	Diamond, John	Harrison, W.
Braddock, Mrs. Elizabeth	Dodds, N. N.	Harrison, J. (Nottingham, N.)
Brookway, A. F.	Donnelly, D. L.	Hastings, S.
Broughton, Dr. A. D. D.	Dugdale, Rt. Hon. John (W. Brmwch)	Hayman, F. H.
Brown, Thomas (Ince)	Ede, Rt. Hon. J. C.	Healey, Denis
Burke, W. A.	Edwards, Rt. Hon. Ness (Caerphilly)	Henderson, Rt. Hn. A. (Rwly Regis)
Burton, Miss F. E.	Edwards, Robert (Bilston)	Herbison, Miss M.

certain individual schemes for re-equipping hotels were approved by the Customs and Excise and the Board of Trade, and in those cases the Purchase Tax paid on the equipment—or a certain proportion of it—was returned to the hotels in question. At least this was a practical attempt to give some help and to recognise the benefit to this country of the tourist industry.

No doubt it was difficult to administer, but it was an attempt to overcome the difficulties of the industry, and it would have been far better if, instead of simply giving up because some difficulties were involved, the Government had made some attempt along the same or similar lines to overcome the troubles which have arisen, thereby giving some practical help to the industry.

The Chancellor said that one of the difficulties discovered was that the Purchase Tax was found not to be so heavy a burden as has been expected. The main item mentioned was furniture; the truth is that at that time furniture was exempt and it now bears Purchase Tax. That argument must therefore have very much less weight than the Chancellor appears to think. Would it not be much better if he tried to replace this scheme with one which is more workable—if he thinks that the present scheme is not workable—rather than give up the whole matter and give no hope to the hotel industry?

Question put, That those words be there inserted:—

The Committee divided: Ayes 198, Noes 229.

Holman, P.	Mitchison, G. R.	Skeffington, A. M.
Houghton, Douglas	Monslow, W.	Slater, Mrs. H. (Stoke, N.)
Howell, Charles (Perry Barr)	Moody, A. S.	Slater, J. (Sedgefield)
Hoy, J. H.	Morris, Percy (Swansea, W.)	Smith, Ellis (Stoke, S.)
Hubbard, T. F.	Morrison, Rt. Hn. Herbert (Lewis'm, S.)	Sorensen, R. W.
Hughes, Emrys (S. Ayrshire)	Mort, D. L.	Soskice, Rt. Hon. Sir Frank
Hughes, Hector (Aberdeen, N.)	Moss, R.	Sparks, J. A.
Hunter, A. E.	Moyle, A.	Stewart, Michael (Fulham)
Hynd, H. (Accrington)	Mulley, F. W.	Stones, W. (Consett)
Hynd, J. B. (Attercliffe)	Neal, Harold (Bolsover)	Strachey, Rt. Hon. J.
Irvine, A. J. (Edge Hill)	Noel-Baker, Rt. Hon. P. (Derby, S.)	Stross, Dr. Barnett (Stoke-on-Trent, C.)
Irving, Sydney (Dartford)	Oliver, G. H.	Summerskill, Rt. Hon. E.
Janner, B.	Oram, A. E.	Sylvester, G. O.
Jay, Rt. Hon. D. P. T.	Oswald, T.	Taylor, Bernard (Mansfield)
Johnson, James (Rugby)	Owen, W. J.	Taylor, John (West Lothian)
Johnston, Douglas (Paisley)	Paget, R. T.	Thomas, Iorwerth (Rhondda, W.)
Jones, David (The Hartlepools)	Paling, Rt. Hon. W. (Dearne Valley)	Thomson, George (Dundee, E.)
Jones, Jack (Rotherham)	Palmer, A. M. F.	Thornton, E.
Jones, J. Idwal (Wrexham)	Pannell, Charles (Leeds, W.)	Tomney, F.
Jones, T. W. (Merioneth)	Parker, J.	Ungoed-Thomas, Sir Lynn
Kenyon, C.	Parkin, B. T.	Usborne, H. C.
Key, Rt. Hon. C. W.	Paton, John	Wade, D. W.
King, Dr. H. M.	Pearson, A.	Warbey, W. N.
Lawson, G. M.	Peart, T. F.	Watkins, T. E.
Lee, Frederick (Newton)	Pentland, N.	Weitzman, D.
	Plummer, Sir Leslie	Wells, Percy (Faversham)
Lee, Miss Jennie (Cannock)	Popplewell, E.	West, D. G.
Lever, Leslie (Ardwick)	Prentice, R. E.	Wheeldon, W. E.
Lewis, Arthur	Price, J. T. (Westhoughton)
Lindgren, G. S.	Probert, A. R.	White, Mrs. Eirene (E. Flint)
Logan, D. G.	Proctor, W. T.	Wilkins, W. A.
Mabon, Dr. J. Dickson	Pursey, Cmdr. H.	Willey, Frederick
McAlister, Mrs. Mary	Randall, H. E.	Williams, David (Neath)
McCann, J.	Rankin, John	Williams, Rev. Llywelyn (Ab'tillery)
MacColl, J. E.	Redhead, E. C.	Williams, Rt. Hon. T. (Don Valley)
McGhee, H. G.	Reid, William	Willis, Eustace (Edinburgh, E.)
McGovern, J.	Robens, Rt. Hon. A.	Wilson, Rt. Hon. Harold (Huyton)
McInnes, J.	Roberts, Goronwy (Caernarvon)	Winterbottom, Richard
McLeavy, Frank	Robinson, Kenneth (St. Pancras, N.)	Woof, R. E.
MacMillan, M. K. (Western Isles)	Rogers, George (Kensington, N.)	Yates, V. (Ladywood)
Mahon, Simon	Ross, William	Zilliacus, K.
Mallalieu, E. L. (Brigg)	Royle, C.
Mallalieu, J. P. W. (Huddersfd, E.)	Silverman, Julius (Aston)	TELLERS FOR THE AYES:
Marquand, Rt. Hon. H. A.	Silverman, Sydney (Nelson)	Mr. Holmes and Mr. Short.
Mason, Roy	Simmons, C. J. (Brierley Hill)

NOES
Agnew, Sir Peter	Cooper, A. E.	Goodhart, Philip
Aitken, W. T.	Cooper-Key, E. M.	Gower, H. R.
Allan, R. A. (Paddington, S.)	Cordeaux, Lt.-Col. J. K.	Graham, Sir Fergus
Amory, Rt. Hn. Heathcoat (Tiverton)	Corfield, Capt. F. V.	Grant, W. (Woodside)
Arbuthnot, John	Craddock, Beresford (Spelthorne)	Grant-Ferris, Wg Cdr. R. (Nantwich)
Armstrong, C. W.	Crosthwaite-Eyre, Col. O. E.	Green, A.
Ashton, H.	Crowder, Sir John (Finchley)	Gresham Cooke, R.
Atkins, H. E.	Crowder, Petre (Ruislip—Northwood)	Grimston, Hon. John (St. Albans)
Baldock, Lt.-Cmdr. J. M.	Cunningham, Knox	Grosvenor, Lt.-Col. R. G.
Baldwin, A. E.	Currie, G. B. H.	Gurden, Harold
Barber, Anthony	Dance, J. C. G.	Hall, John (Wycombe)
Barlow, Sir John	Davidson, Viscountess	Harrison, A. B. C. (Maldon)
Barter, John	D'Avigdor-Goldsmid, Sir Henry	Harrison, Col. J. H. (Eye)
Beamish, Col. Tufton	Deedes, W. F.	Harvey, John (Walthamstow, E.)
Bell, Philip (Bolton, E.)	Digby, Simon Wingfield	Hay, John
Bell, Ronald (Bucks, S.)	Donaldson, Cmdr. C. E. McA.	Heald, Rt. Hon. Sir Lionel
Bennett, F. M. (Torquay)	Doughty, C. J. A.	Heath, Rt. Hon. E. R. G.
Bennett, Dr. Reginald	du Cann, E. D. L.	Henderson, John (Cathcart)
Biggs-Davison, J. A.	Dugdale, Rt. Hn. Sir T. (Richmond)	Henderson-Stewart, Sir James
Bishop, F. P.	Duncan, Sir James	Hesketh, R. F.
Black, C. W.	Eden, J. B. (Bournemouth, West)	Hill, Mrs. E. (Wythenshawe)
Body, R. F.	Elliot, R. W. (Ne'castle upon Tyne, N.)	Hirst, Geoffrey
Bossom, Sir Alfred	Emmet, Hon. Mrs. Evelyn	Holland-Martin, C. J.
Boyle, Sir Edward	Errington, Sir Eric	Hope, Lord John
Braithwaite, Sir Albert (Harrow, W.)	Farey-Jones, F. W.	Hornby, R. P.
Bromley-Davenport, Lt.-Col. W. H.	Fell, A.	Horobin, Sir Ian
Bryan, P.	Finlay, Graeme	Horsbrugh, Rt. Hon. Dame Florence
Bullus, Wing Commander E. E.	Fisher, Nigel	Howard, Gerald (Cambridgeshire)
Burden, F. F. A.	Fletcher-Cooke, C.	Hudson, W. R. A. (Hull, N.)
Butcher, Sir Herbert	Foster, John	Hughes Hallett, Vice-Admiral J.
Butler, Rt. Hn. R. A. (Saffron Walden)	Fraser, Sir Ian (M'cmbe & Lonsdale)	Hughes-Young, M. H. C.
Campbell, Sir David	Gammans, Lady	Hurd, A. R.
Carr, Robert	Garner-Evans, E. H.	Hutchison, Michael Clark (E'b'gh, S.)
Chichester-Clark, R.	George, J. C. (Pollok)	Hyde, Montgomery
Cole, Norman	Glover, D.	Hylton-Foster, Rt. Hon. Sir Harry
Conant, Major, Sir Roger	Glyn, Col. Richard H.	Iremonger, T. L.
Cooke, Robert	Godber, J. B.	Irvine, Bryant Godman (Rye)

Jenkins, Robert (Dulwich)	Maudling, Rt. Hon. R.	Russell, R. S.
Jennings, J. C. (Burton)	Mawby, R. L.	Scott-Miller, Cmdr. R.
Jennings, Sir Roland (Hallam)	Maydon, Lt.-Comdr. S. L. C.	Sharples, R. C.
Johnson, Dr. Donald (Carlisle)	Medlicott, Sir Frank	Shepherd, William
Johnson, Eric (Blackley)	Milligan, Rt. Hon. W. R.	Simon, J. E. S. (Middlesbrough, W.)
Joynson-Hicks, Hon. Sir Lancelot	Molson, Rt. Hon. Hugh	Speir, R. M.
Keegan, D.	Morrison, John (Salisbury)	Spence, H. R. (Aberdeen, W.)
Kerby, Capt. H. B.	Nabarro, G. D. N.	Steward, Harold (Stockport, S.)
Kerr, Sir Hamilton	Nairn, D. L. S.	Storey, S.
Kershaw, J. A.	Neave, Airey	Stuart, Rt. Hon. James (Moray)
	Nicholls, Harmar
Lambton, Viscount	Nicholson, Sir Godfrey (Farnham)	Studholme, Sir Henry
Langford-Holt, J. A.	Nicolson, N. (B'n'm'th, E. & Chr'ch)	Summers, Sir Spencer
Leather, E. H. C.	Noble, Comdr. Rt. Hon. Allan	Taylor, Sir Charles (Eastbourne)
Leavey, J. A.	Nugent, G. R. H.	Teeling, W.
Leburn, W. G.	Oakshott, H. D.	Temple, John M.
Legge-Bourke, Maj. E. A. H.	Orr, Capt. L. P. S.	Thomas, Leslie (Canterbury)
Legh, Hon. Peter (Petersfield)	Orr-Ewing, Charles Ian (Hendon, N.)	Thomas, P. J. M. (Conway)
Lindsay, Hon. James (Devon, N.)	Osborne, C.	Thompson, Kenneth (Walton)
Linstead, Sir H. N.	Page, R. G.	Thompson, R. (Croydon, S.)
Llewellyn, D. T.	Pannell, N. A. (Kirkdale)	Thorneycroft, Rt. Hon. P.
Lloyd, Maj. Sir Guy (Renfrew, E.)	Partridge, E.	Tilney, John (Wavertree)
Low, Rt. Hon. Sir Toby	Peel, W. J.	Turton, Rt. Hon. R. H.
Lucas, Sir Jocelyn (Portsmouth, S.)	Pickthorn, K. W. M.	Vane, W. M. F.
Lucas, P. B. (Brentford & Chiswick)	Pilkington, Capt. R. A.	Vaughan-Morgan, J. K.
Lucas-Tooth, Sir Hugh	Pitman, I. J.	Vickers, Miss Joan
Macdonald, Sir Peter	Pitt, Miss E. M.	Vosper, Rt. Hon. D. F.
Mackeson, Brig. Sir Harry	Powell, J. Enoch	Wakefield, Edward (Derbyshire, W.)
McKibbin, Alan	Price, David (Eastleigh)	Wakefield, Sir Wavell (St. M'lebone)
Mackie, J. H. (Galloway)	Price, Henry (Lewlsham, W.)	Wall, Patrick
Maclay, Rt. Hon. John	Prior-Palmer, Brig. O. L.	Ward, Dame Irene (Tynemouth)
McLean, Neil (Inverness)	Profumo, J. D.	Watkinson, Rt. Hon. Harold
Macleod, Rt. Hn. Iain (Enfield, W.)	Ramsden, J. E.	Whitelaw, W. S. I.
MacLeod, John (Ross & Cromarty)	Redmayne, M.	Williams, Paul (Sunderland, S.)
Maddan, Martin	Remnant, Hon. P.	Wills, G. (Bridgwater)
Maitland, Cdr. J. F. W. (Horncastle)	Renton, D. L. M.	Wilson, Geoffrey (Truro)
Maitland, Hon. Patrick (Lanark)	Roberts, Sir Peter (Heeley)	Woollam, John Victor
Manningham-Buller, Rt. Hn. Sir R.	Robertson, Sir David	Yates, William (The Wrekin)
Markham, Major Sir Frank	Robinson, Sir Roland (Blackpool, S.)
Marshall, Douglas	Rodgers, John (Sevenoaks)	TELLERS FOR THE NOES:
Mathew, R.	Roper, Sir Harold	Mr. Brooman-White and
		Mr. Gibson-Watt.

Mr. Coldrick (Bristol, North-East)

I beg to move, in page 31, line 2, at the end to insert: 5. Floor coverings, tiles, strips and blocks, previously chargeable under Group 9 at 15 per cent. shall be chargeable at 5 per cent. This Amendment would have the effect of reducing Purchase Tax on the items mentioned from 15 per cent. to 5 per cent. I find it extremely difficult to discover upon what principle the Chancellor proceeds to operate when applying the tax to these items. One thing is certain, that he does not operate on the principle of the greatest good to the greatest number. I rather suspect that what he does is to look round, find things which are sold in the smallest quantities which would represent the least concession and, having made that concession, to come forward with a great gesture.

In all other forms of taxation, particularly in Income Tax, we have a graduated system which makes it possible for people with very small incomes either to be exempt or to pay very small contributions. One would have thought that the same principle would operate in the case of Purchase Tax. When we had a Labour Government we were constantly pressing for and receiving concessions giving exemption for those things which were indispensable in the home. I recognise that some concessions have been made in relation to carpets and I welcome those concessions. I welcome all concessions on Purchase Tax, but if the Chancellor cannot give complete concessions or grant complete exemptions one would expect him to take into consideration cases of greatest hardship.

No one would imagine that people would buy linoleum if they could afford to buy carpets. People buy linoleum and the cheaper forms of floor covering because they cannot afford the more costly forms. I should have imagined that the Chancellor would recognise that as floor covering is indispensable he would encourage the poorest housewife to purchase these things without the penalty of any Purchase Tax on them. That would represent a comparatively small concession. There are a number of other items listed in this Amendment and I have no doubt that others who know more about those things than I do will probably speak about them.

I appeal to the Chancellor at least to make a concession in respect of linoleum and the cheaper forms of floor covering if he cannot find it possible to make concessions covering the wider range of items.

Mr. Nabarro

I must at once disagree with the hon. Member for Bristol, North-East (Mr. Coldrick), who suggested that there should be a differential in Purchase Tax rates between various forms of floor covering. It has always been the policy of Conservative Administrations, and was formerly the policy of Socialist Administrations, that the incidence of Purchase Tax should be equal on all competitive forms of floor covering, carpets, linoleum, felt and various other groups of floor covering material under the Purchase Tax Schedules. It would be greatly inequitable if preference were given to particular forms of floor covering on the grounds of cost or for other considerations.

My right hon. Friend the Member for Monmouth (Mr. P. Thorneycroft), when Chancellor, in 1957 unilaterally relieved floor coverings for Purchase Tax purposes by reducing the rates from 30 per cent. to 15 per cent. The Labour Party left the rate at 33⅓ per cent. when it left office in 1951. Therefore, today the rate is less than one-half what it was when the Labour Party relinquished office. Speaking principally on behalf of the carpet industry, for the greatest part of the carpet manufacturing industry is centred in Kidderminster, I must say at once that the industry was very grateful to the Chancellor of the Exchequer for the relief he gave to it. It was immediately reflected in last year's sales of carpets. In 1957, as compared with 1956, the total square yardage of carpet, manufactured principally in Kidderminster, rose by no less than 11 per cent. in the year and the value of carpets manufactured rose, to the nearest £1 million, from £59 million to £66 million in a single year.

Those figures are published by the Federation of British Carpet Manufacturers in its Annual Report for 1957. I commend it to my hon. and learned Friend the Financial Secretary because I think it demonstrates what I have been endeavouring to put to him on so many earlier Amendments in connection with Purchase Tax, that when the rate is lowered there is sufficient stimulus to manufacture and sales as to make good to the Treasury and the Revenue any apparent loss resulting from the lower rate. In the Annual Report of the Federation it is stated: Both in square yards and by value, sales in 1957 were 11 per cent. greater than in the previous year. The principal reason given is the reduction in Purchase Tax.

When I saw this Amendment I immediately approached the Federation of British Carpet Manufacturers to inquire whether it had made any representations to my right hon. Friend the Chancellor in the course of the last few months for a further reduction in Purchase Tax, and the answer I received was in the negative. I am authorised to quote from a letter sent to me by the secretary of the Federation. I think this is the complete answer to the Opposition Amendment, and it will not be necessary for my hon. and learned Friend to reply to it. The letter stated: … the Federation realises that in the last Finance Act the burden of Purchase Tax with regard to floor covering was substantially alleviated, being reduced by one-half from 30 per cent. to 15 per cent. and it has been thought that in view of this recent reduction it would be entirely unrealistic to make further representations to the Chancellor of the Exchequer; consequently this has not been done. 8.0 p.m.

Domestic furniture is now subject to Purchase Tax at 5 per cent., while furnishing fabrics attract a rate of Purchase Tax of only 2 per cent. to 3 per cent. It is equitable that carpets should be considered in the same group for all purposes as domestic furniture and domestic furnishing fabrics. There is no reason in principle why carpets, linoleum, domestic furniture, domestic furnishing fabrics should not all be treated as part of the same general group and made subject to Purchase Tax at the same rate.

In present circumstances, with domestic furniture at 5 per cent., furnishing fabrics at 2 per cent. to 3 per cent. and carpets at 15 per cent., it is clear that carpets are bearing an unduly heavy burden. I do not press upon my right hon. Friend any suggestion that this state of affairs should be remedied this year, but I commend it to him for the future and I hope that between the consideration of this Finance Bill and next year's Budget he will give further consideration to what is obviously an inequitable state of affairs in the matter of domestic furnishings generally.

Mr. Coldrick

I hope that the hon. Member is not seeking to give the impression that I was opposing any further reduction in the Purchase Tax upon carpets. If the Chancellor is unable to grant concessions on all these floor coverings, would the hon. Member maintain that it is better to keep the tax on linoleum at the same rate as that on carpets rather than to make the concession to the poorer part of the community?

Mr. Nabarro

I said at the beginning of my speech that I could in no circumstances support a differential system of Purchase Tax for different forms of floor covering. With great respect, the hon. Member does not sit for a constituency which is primarily concerned with the manufacture of floor coverings. If he did, he would know that there is the fiercest competition between, for example, carpets manufactured in Kidderminster and linoleum manufactured in Lancaster. They are alternative forms of floor covering a person may cover the bathroom floor either with a carpet or with linoleum. It is not fair or equitable to suggest that different rates of Purchase Tax should be applied, one rate to linoleum and the other to carpets. There must be one rate for all floor coverings.

I hope that my right hon. Friend resists the Amendment, because I believe that the Government behaved, unilaterally, with the greatest generosity in reducing the rate of Purchase Tax on floor coverings from 30 per cent. to 15 per cent. in the Finance Act, 1957.

Mrs. White

I wonder whether we are to hear anything from the Government after the speech of the hon. Member for Kidderminster (Mr. Nabarro).

Mr. Nabarro

It is not necessary, I assure the hon. Lady.

Mrs. White

It is surprising that the hon. Member for Kidderminster has so far failed to persuade the Prime Minister that his correct place is not below the Gangway but on the Front Bench. Until he has been so translated I assume that, in spite of what he claims in the way of omniscience, we shall receive some reply from one of Her Majesty's Ministers.

I will not go in great length into the arguments which have been put very clearly and persuasively by my hon. Friend the Member for Bristol, North-East (Mr. Coldrick). The point of the Amendment is that we consider that floor coverings are just as essential to the furnishing of a house as are chairs, bedsteads and any other article that one may need for a house. We feel that it is an unwarrantable burden on a family that floor coverings should remain extremely expensive. It is true that the rate has been somewhat reduced recently, and of course the Chancellor has made a great gesture even in this Budget—not in this part of Group 9 but in another part of it—by reducing the rate of tax on tiger skins, leopard skins and bear skins from 50 per cent. to 30 per cent. Unfortunately, most of our constituents do not commonly furnish their rooms with tiger skins, leopard skins or bear skins. Although this is an imaginative gesture of Commonwealth unity, it is of no great moment to most of our constituents.

The problem of ordinary floor coverings, of carpets and linoleum in particular, is extremely important. Anyone who has had to furnish a house, particularly a house which has not parquet flooring, which can have a rug placed here and there artistically upon it, but a house which needs a considerable acreage of floor covering, knows that it is a staggering item. I can speak from my own fairly recent experience, having lived previously in a flat and having moved last year to a house. I had to purchase stair carpet for the first time in my life. To obtain an adequate quality of stair carpet for a small house, but a house with several storeys, cost about £100, which is a substantial outlay. If it is substantial for a Member of Parliament, it is even more substantial for many other members of the community.

It is useless to buy an inferior quality carpet for stairs or rooms where the carpet is subject to hard wear. The high tax on floor covering is one of the most irritating of all taxes to people who are faced with the expense of furnishing. There are some articles of furniture which one can reasonably buy secondhand and which it may be possible to improve a little with craftsmanship, but that does not apply to carpets. One has to buy a carpet of reasonable quality if one is to have any wear out of it. It is false economy not to do so. The burden and the cost of obtaining floor coverings is therefore very considerable and our argument is primarily that expenditure on these items should logically be on the same basis as that on other articles of furniture.

The hon. Member for Kidderminster tried to have it both ways. He tried to appear to support his constituency industry and to support the Government at the same time. This is not the first Amendment to the Bill on which he has taken that attitude.

Mr. Nabarro

That is not accurate.

Mrs. White

It is a perfectly accurate description of the hon. Member's behaviour throughout the Bill. He does not support or vote for his own Amendments and yet he tries to obtain as much credit as he can. We feel that it is a matter of principle that these articles should be considered to be in the same category as furnishings and we therefore feel that the Amendment should be pressed.

Mr. Simon

If I rise to reply to the debate it is not because—

Mr. David Weitzman (Stoke Newington and Hackney, North)

Is the hon. and learned Gentleman doing so with permission of the hon. Member for Kidderminster (Mr. Nabarro)?

Mr. Simon

If I rise to reply to the debate it is not because I doubt for a moment that my hon. Friend the Member for Kidderminster (Mr. Nabarro) is right when he says that his answers to the points made by the hon. Member for Bristol, North-East (Mr. Coldrick) were conclusive. I think that anybody who

Division No. 148.]	AYES	[8.12 p.m.
Ainsley, J. W.	Bottomley, Rt. Hon. A. G.	Castle, Mrs. B. A.
Allaun, Frank (Salford, E.)	Bowden, H. W. (Leicester, S. W.)	Clunie, J.
Allen, Arthur (Bosworth)	Bowen, E. R. (Cardigan)	Coldrick, W.
Allen, Scholefield (Crewe)	Bowles, F. G.	Collins, V. J. (Shoreditch & Finsbury)
Awbery, S. S.	Braddock, Mrs. Elizabeth	Cove, W. G.
Bacon, Miss Alice	Brockway, A. F.	Craddock, George (Bradford, S.)
Balfour, A.	Broughton, Dr. A. D. D.	Cullen, Mrs. A.
Bence, C. R. (Dunbartonshire, E.)	Brown, Thomas (Ince)	Dalton, Rt. Hon. H.
Blackburn, F.	Burke, W. A.	Darling, George (Hillsborough)
Blenkinsop, A.	Burton, Miss F. E.	Davies, Rt. Hon. Clement (Montgomery)
Blyton, W. R.	Butler, Herbert (Hackney, C.)	Davies, Stephen (Merthyr)
Boardman, H.	Carmichael, J.	Deer, G.

views the debate dispassionately will agree with that. It is because I find it impossible to resist any personal appeal, as opposed to political appeals, from the hon. Lady the Member for Flint, East (Mrs. White).

The hon. Member for Bristol, North-East mentioned the greatest good of the greatest number. That is a good Benthamite principle, but I am afraid that in tax matters it can apply only when it comes to spending the proceeds of the tax. When one considers the raising of money by taxation one must consider the amount of the revenue which is involved.

When I tell the Committee that this Amendment would cost the Exchequer £14 million a year, I think the Committee will see that that is out of all proportion to the general shape of this year's Budget, even compared with the very considerable concessions that have been made in Purchase Tax by my right hon. Friend. In addition to that, as my hon. Friend the Member for Kidderminster quite rightly pointed out, the tax stood considerably higher in 1951. It was halved in last year's Budget from 30 per cent. to 15 per cent., and at 15 per cent. it falls properly in the very wide range of other household requisites and utensils such as wallpaper, tableware and cutlery, and the less important items of furniture.

Since there seems to be little doubt that at any rate the carpet trade has flourished as a result of last year's remission in taxation, since it would not fit in with the general shape of the tax which, I think, has commended itself to the whole of the Committee, and because of the cost that would be involved, I cannot advise the Committee to vote for this Amendment.

Question put, That those words be there inserted:—

The Committee divided: Ayes 194, Noes 223.

Delargy, H. J.	Lawson, G. M.	Rankin, John
Diamond, John	Lee, Frederick (Newton)	Redhead, E. C.
Dodds, N. N.	Lee, Miss Jennie (Cannock)	Reid, William
Donnelly, D. L.	Lever, Harold (Cheetham)	Roberts, Rt. Hon. A.
Dugdale, Rt. Hn. John (W. Brmwch)	Lever, Leslie (Ardwick)	Roberts, Goronwy (Caernarvon)
Ede, Rt. Hon. J. C.	Lewis, Arthur	Robinson, Kenneth (St. Pancras, N.)
Edwards, Rt. Hon. Ness (Caerphilly)	Lindgren, G. S.	Ross, William
Edwards, Robert (Bilston)	Logan, D. G.	Royle, C.
Edwards, W. J. (Stepney)	Mabon, Dr. J. Dickson	Short, E. W.
Evans, Albert (Islington, S. W.)	McAlister, Mrs. Mary	Silverman, Julius (Aston)
Fernyhough, E.	McCann, J.	Silverman, Sydney (Nelson)
Finch, H. J.	MacColl, J. E.	Simmons, C. J. (Brierley Hill)
Fletcher, Eric	McGhee, H. G.	Skeffington, A. M.
Foot, D. M.	McGovern, J.	Slater, Mrs. H. (Stoke, N.)
Forman, J. C.	McInnes, J.	Slater, J. (Sedgefield)
George, Lady Megan Lloyd (Car'then)	McLeavy, Frank	Smith, Ellis (Stoke, S.)
Gibson, C. W.	MacMillan, M. K. (Western Isles)	Soskice, Rt. Hon. Sir Frank
Gordon Walker, Rt. Hon. P. C.	Mahon, Simon	Sparks, J. A.
Grenfell, Rt. Hon. D. R.	Mallalieu, E. L. (Brigg)	Stewart, Michael (Fulham)
Grey, C. F.	Mallalieu, J. P. W. (Huddersfd, E.)	Stenes, W. (Consett)
Griffiths, David (Rother Valley)	Marquand, Rt. Hon. H. A.	Stross, Dr. Barnett (Stoke-on-Trent, C.)
Hale, Leslie	Mason, Roy	Summerskill, Rt. Hon. E.
Hall, Rt. Hn. Glenvil (Colne Valley)	Mitchison, G. R.	Sylvester, G. O.
Hamilton, W. W.	Moody, A. S.	Taylor, Bernard (Mansfield)
Hannan, W.	Morris, Percy (Swansea, W.)	Taylor, John (West Lothian)
Harrison, J. (Nottingham, N.)	Morrison, Rt. Hn. Herbert (Lewis'm, S.)	Thomas, Iorwerth (Rhondda, W.)
Hastings, S.	Mort, D. L.	Thornton, E.
Hayman, F. H.	Moss, R.	Tomney, F.
Healey, Denis	Moyle, A.	Ungoed-Thomas, Sir Lynn
Herbison, Miss M.	Mulley, F. W.	Usborne, H. C.
Hobson, C. R. (Keighley)	Neal, Harold (Bolsover)	Wade, D. W.
Holman, P.	Noel-Baker, Rt. Hon. P. (Derby, S.)	Warbey, W. N.
Houghton, Douglas	Oliver, G. H.	Watkins, T. E.
Howell, Charles (Perry Barr)	Oram, A. E.	Weitzman, D.
Hoy, J. H.	Oswald, T.	Wells, Percy (Faversham)
Hubbard, T. F.	Owen, W. J.	Wells, William (Walsall, N.)
Hughes, Emrys (S. Ayrshire)	Paget, R. T.	West, D. G.
Hughes, Hector (Aberdeen, N.)	Paling, Rt. Hon. W. (Dearne Valley)	Wheeldon, W. E.
Hunter, A. E.	Palmer, A. M. F.	White, Mrs. Eirene (E. Flint)
Hynd, H. (Accrington)	Pannell, Charles (Leeds, W.)	Wilkins, W. A.
Hynd, J. B. (Attercliffe)	Parker, J.	Willey, Frederick
Irvine, A. J. (Edge Hill)	Parkin, B. T.	Williams, David (Neath)
Irving, Sydney (Dartford)	Paton, John	Williams, Rev. Llywelyn (Ab'tillery)
Janner, B.	Pearson, A.	Williams, Rt. Hon. T. (Don Valley)
Jay, Rt. Hon. D. P. T.	Peart, T. F.	Willis, Eustace (Edinburgh, E.)
Johnson, James (Rugby)	Pentland, N.	Wilson, Rt. Hon. Harold (Huyton)
Johnston, Douglas (Paisley)	Plummer, Sir Leslie	Winterbottom, Richard
Jones, David (The Hartlepools)	Popplewell, E.	Woof, R. E.
Jones, Jack (Rotherham)	Prentice, R. E.	Yates, V. (Ladywood)
Jones, J. Idwal (Wrexham)	Price, J. T. (Westhoughton)	Zilliacus, K.
Jones, T. W. (Merioneth)	Probert, A. R.
Kenyon, C.	Proctor, W. T.	TELLERS FOR THE AYES:
Key, Rt. Hon. C. W.	Pursey, Cmdr. H.	Mr. Holmes and Mr. Rogers
King, Dr. H. M.	Randall, H. E.

NOES
Agnew, Sir Peter	Brooman-White, R. C.	Dugdale, Rt. Hn. Sir T. (Richmond)
Aitken, W. T.	Bryan, P.	Duncan, Sir James
Allan, R. A. (Paddington, S.)	Bullus, Wing Commander E. E.	Eden, J. B. (Bournemouth, West)
Amory, Rt. Hn. Heathcoat (Tiverton)	Burden, F. F. A.	Elliott, R. W. (Ne'castleupon Tyne, N.)
Arbuthnot, John	Butcher, Sir Herbert	Emmet, Hon. Mrs. Evelyn
Armstrong, C. W.	Butler, Rt. Hn. R. A. (Saffron Walden)	Farey-Jones, F. W.
Ashton, H.	Campbell, Sir David	Finlay, Graeme
Atkins, H. E.	Carr, Robert	Fisher, Nigel
Baldock, Lt.-Cmdr. J. M.	Cole, Norman	Fletcher-Cooke, C.
Baldwin, A. E.	Cooke, Robert	Fraser, Sir Ian (M'cmbe & Lonsdale)
Barber, Anthony	Cooper-Key, E. M.	Gammans, Lady
Barlow, Sir John	Cordeaux, Lt.-Col. J. K.	Garner-Evans, E. H.
Barter, John	Corfield, Capt. F. V.	George, J. C. (Pollok)
Beamish, Col. Tufton	Craddock, Beresford (Spelthorne)	Glover, D.
Bell, Philip (Bolton, E.)	Crosthwaite-Eyre, Col. O. E.	Glyn, Col. Richard H.
Bell, Ronald (Bucks, S.)	Crowder, Sir John (Finchley)	Goodhart, Philip
Bennett, F. M. (Torquay)	Crowder, Petre (Ruislip—Northwood)	Gower, H. R.
Bennett, Dr. Reginald	Cunningham, Knox	Graham, Sir Fergus
Birch, Rt. Hon. Nigel	Currie, G. B. H.	Grant, W. (Woodside)
Bishop, F. P.	Dance, J. C. G.	Grant-Ferris, Wg Cdr. R. (Nantwich)
Black, C. W.	Davidson, Viscountess	Green, A.
Body, R. F.	D'Avigdor-Goldsmid, Sir Henry	Gresham Cooke, R.
Bossom, Sir Alfred	Deedes, W. F.	Grimston, Hon. John (St. Albans)
Boyle, Sir Edward	Digby, Simon Wingfield	Grimston, Sir Robert (Westbury)
Braine, B. R.	Donaldson, Cmdr. C. E. McA.	Grosvenor, Lt.-Col. R. G.
Braithwaite, Sir Albert (Harrow, W.)	Doughty, C. J. A.	Gurden, Harold
Bromley-Davenport, Lt.-Col. W. H.	du Cann, E. D. L.	Hall, John (Wycombe)

Harrison, A. B. C. (Maldon)	Lucas-Tooth, Sir Hugh	Ramsden, J. E.
Harrison, Col. J. H. (Eye)	Macdonald, Sir Peter	Redmayne, M.
Harvey, John (Walthamstow, E.)	Mackeson, Brig. Sir Harry	Renton, D. L. M.
Hay, John	Mckibbin, Alan	Roberts, Sir Peter (Heeley)
Heald, Rt. Hon. Sir Lionel	Mackie, J. H. (Galloway)	Robertson, Sir David
Heath, Rt. Hon. E. R. G.	Maclay, Rt. Hon. John	Robinson, Sir Roland (Blackpool, S.)
Henderson, John (Cathcart)	McLean, Neil (Inverness)	Rodgers, John (Sevenoaks)
Henderson-Stewart, Sir James	Macleod, Rt. Hn. Iain (Enfield, W.)	Roper, Sir Harold
Hesketh, R. F.	MacLeod, John (Ross & Cromarty)	Russell, R. S.
Hill, Mrs. E. (Wythenshawe)	Maddan, Martin	Scott-Miller, Cmdr. R.
Hirst, Geoffrey	Maitland, Cdr. J. F. W. (Horncastle)	Sharples, R. C.
Holland-Martin, C. J.	Maitland, Hon. Patrick (Lanark)	Shepherd, William
Hornby, R. P.	Manningham-Buller, Rt. Hn. Sir R.	Simon, J. E. S. (Middlesbrough, W.)
Horobin, Sir Ian	Markham, Major Sir Frank	Speir, R. M.
Horsbrugh, Rt. Hon. Dame Florence	Marlowe, A. A. H.	Spence, H. R. (Aberdeen, W.)
Howard, Gerald (Cambridgeshire)	Marshall, Douglas	Steward, Harold (Stockport, S.)
Hudson, W. R. A. (Hull, N.)	Mathew, R.	Storey, S.
Hughes Hallett, Vice-Admiral J.	Maudling, Rt. Hon. R.	Stuart, Rt. Hon. James (Moray)
Hughes-Young, M. H. C.	Mawby, R. L.	Studholme, Sir Henry
Hurd, A. R.	Maydon, Lt.-Comdr. S. L. C.	Summers, Sir Spencer
Hutchison, Michael Clark (E'b'gh, S.)	Medlicott, Sir Frank	Taylor, Sir Charles (Eastbourne)
Hyde, Montgomery	Milligan, Rt. Hon. W. R.	Teeling, W.
Hylton-Foster, Rt. Hon. Sir Harry	Monslow, W.	Temple, John M.
Iremonger, T. L.	Morrison, John (Salisbury)	Thomas, Leslie (Canterbury)
Irvine, Bryant Godman (Rye)	Nabarro, G. D. N.	Thomas, P. J. M. (Conway)
Jenkins, Robert (Dulwich)	Nairn, D. L. S.	Thompson, Kenneth (Walton)
Jennings, J. C. (Burton)	Neave, Airey	Thompson, R. (Croydon, S.)
Jennings, Sir Roland (Hallam)	Nicholls, Harmar	Thorneycroft, Rt. Hon. P.
Johnson, Dr. Donald (Carlisle)	Nicholson, Sir Godfrey (Farnham)	Tilney, John (Wavertree)
Johnson, Eric (Blackley)	Nicolson, N. (B'n'm'th, E. & Chr'ch)	Turton, Rt. Hon. R. H.
Joynson-Hicks, Hon. Sir Lancelot	Noble, Comdr. Rt. Hon. Allan	Vane, W. M. F.
Keegan, D.	Nugent, G. R. H.	Vaughan-Morgan, J. K.
Kerby, Capt. H. B.	Oakshott, H. D.	Vickers, Miss Joan
Kerr, Sir Hamilton	Orr, Capt. L. P. S.	Vosper, Rt. Hon. D. F.
Kershaw, J. A.	Orr-Ewing, Charles Ian (Hendon, N.)	Wakefield, Edward (Derbyshire, W.)
Lambton, Viscount	Osborne, C.	Wakefield, Sir Wavell (St. M'lebone)
Langford-Holt, J. A.	Page, R. G.	Wall, Patrick
Leather, E. H. C.	Pannell, N. A. (Kirkdale)	Ward, Rt. Hon. G. R. (Worcester)
Leavey, J. A.	Partridge, E.	Ward, Dame Irene (Tynemouth)
Leburn, W. G.	Peel, W. J.	Whitelaw, W. S. I.
Legge-Bourke, Maj. E. A. H.	Pickthorn, K. W. M.	Williams, Paul (Sunderland, S.)
Legh, Hon. Peter (Petersfield)	Pilkington, Capt. R. A.	Wills, G. (Bridgwater)
Lindsay, Hon. James (Devon, N.)	Pitman, I. J.	Wilson, Geoffrey (Truro)
Linstead, Sir H. N.	Pitt, Miss E. M.	Woollam, John Victor
Llewellyn, D. T.	Powell, J. Enoch	Yates, William (The Wrekin)
Lloyd, Maj. Sir Guy (Renfrew, E.)	Price, David (Eastleigh)
Low, Rt. Hon. Sir Toby	Price, Henry (Lewisham, W.)	TELLERS FOR THE NOES:
Lucas, Sir Jocelyn (Portsmouth, S.)	Prior-Palmer, Brig. O. L.	Mr. Gibson-Watt and
Lucas, P. B. (Brentford & Chiswick)	Profumo, J. D.	Mr. Chichester-Clark.

Mr. Frederick Mulley (Sheffield, Park)

I beg to move, in page 31, line 2, at the end to insert: 5. Cutlery previously chargeable under Group 13 at 15 per cent. shall be exempt from tax. I make no apology for raising again in this Committee the question of Purchase Tax on cutlery ware. Members of the Committee will recall that it is almost an annual occasion for us to debate the Sheffield cutlery industry and to plead for some remission of tax. I think that I am correct in saying—no doubt the Paymaster-General will correct me if I am wrong—that cutlery in the form of knives, forks and spoons are, the only basic, essential, domestic articles that have never been exempt from tax in the whole history of the Purchase Tax scheme. Since Purchase Tax was first introduced during the war there has never been a D scheme or Utility scheme by which any person could buy a knife, fork or spoon of whatever quality and no matter how cheap without paying some Purchase Tax.

Cutlery in the ordinary common or garden meaning of the word means knives, forks or spoons, whereas in the Sheffield technical sense cutlery is anything that cuts, and forks and spoons are generally referred to as flatware. I take it that in this debate we are referring to cutlery in the ordinary sense.

I contend that knives, forks and spoons are very necessary articles when one is living in an even moderately civilised society. I base my argument again tonight, as I have done in the past, on the fact that when I was a guest of the German Government for five years during the war their provision of amenities was by no means lavish, but they did at least provide us with knives, forks and spoons. I must say that it was a very long time before I had any occasion to use a fork because the basic diet could be coped with by the use of a knife and spoon, but the fact is that the lower one's standard of living the more necessary these articles are.

I would point out to the Paymaster-General that if he had to cut a loaf of bread into five pieces and each piece represented a person's diet for the day he would need a very sharp knife to do so without causing a good deal of argument and confusion. In fact, the system adopted in my particular camp was that four people drew lots as to the order in which they took their piece. The person who actually executed the job was left with the last, or fifth piece. It was an admirable system for providing accuracy in the division of the loaf into five pieces. I am sorry to labour this point, but I say that at the lowest standard of life these articles are absolutely necessary, and they are articles that have never been free from Purchase Tax.

The hon. Member for Sheffield, Heeley (Sir P. Roberts) will no doubt ask why the Labour Government did not relieve cutlery of Purchase Tax when they were in power. There is some force in that argument, but we have to relate the tax position to the general economic situation of the country at the time. We did not go round telling people "You have never had it so good." In 1950–51, when a concession might have been possible, we were having to conserve metal because of the great demands made on the metal-using industries for rearmament purposes. There is now no shortage of nickel, copper and the like. There are no special reasons for conserving metal. Indeed, many of the metal-using industries are on lower production, so that argument does not apply.

As well as the obvious consumer interest, there is the trade interest. I was interested in the reply which the Financial Secretary gave to the previous Amendment when he said that, as a result of a reduction in the Purchase Tax on carpets, the carpet industry in Kidderminster was now flourishing. We in Sheffield would like to see the same incentive applied to the cutlery industry, and then it might also flourish. If this argument has worked in regard to Kidderminster, I see no reason why it should not work in Sheffield because, in actual fact, the cutlery industry in Sheffield is in quite a serious position. As a result of the restriction on imports, particularly to Australia and New Zealand, trade is very difficult and a great many people are leaving the industry. Skilled workers are being lost and will never come back, and this is an industry which depends very largely on skill.

I make no secret of the fact that the cutlery industry is not one of the country's most important industries. In purely financial terms, it is not a large industry in the City of Sheffield itself, but I claim that there is a special case for cutlery because of its prestige value. There is great prestige attached to the phrase "Sheffield made". The prestige attached to those words in any class of manufacture or engineering product is very largely due to the great reputation which the city got in its early days from the cutlery industry.

When Sheffield cutlery is sold abroad it is something which is put on the table and shown. It has a prestige and advertising advantage quite out of proportion to its percentage of this country's trade and exports. Some of the firms are making efforts radically to alter their designs in order to equip themselves better to compete in the export market, and this trade is making very great efforts despite the whole pressure of economic events being against it. On this ground, as well as on the unanswerable ground that the knife, fork and spoon are essential articles for everyone, and therefore ought to be free from tax, I commend the Amendment to the Committee.

Sir Roland Jennings (Sheffield, Hallam)

I make no apology for intervening, because I have, on many occasions during the past few years, delivered much the same kind of speech as that just made by the hon. Member for Sheffield, Park (Mr. Mulley). What concerned me in years gone by, when his own Government were in power—I shall give him what he expected—was that nothing whatever was done then. The hon. Gentleman said that I should argue that his Government did nothing, but, in my opinion, he gave the wrong reasons. He said that there was a shortage of materials because steel was wanted for other purposes. I say, however, that Sheffield's industry needed then, and needs now, some greater encouragement. We have here the way to encourage it.

Cutlery of the highest quality is produced in Sheffield. I should be very sorry indeed to see the industry become more depressed. I agree entirely with the hon. Gentleman that this is a serious matter from the point of view of Sheffield's cutlery industry. I know the difficulty that my right hon. Friend the Chancellor has in finding the money for this, that and the other, but I make no apology for supporting the Amendment. Here is an industry which needs encouragement and support. I beg the Chancellor, if he makes no change in this Finance Bill, to look at the matter seriously.

I have collected a great deal of information from the Sheffield cutlery industry. There is no question but that the industry needs some help in this respect. I speak not only for the workers but also for those who are trying, under great difficulties, to run a very renowned industry. I support the hon. Member's Amendment, but I will tell him now that, if he divides the Committee, he will not find me in the Lobby with him, because he should have been in the Lobby with me years ago.

8.30 p.m.

Mr. John Hynd (Sheffield, Attercliffe)

I support the Amendment, but I must say that I rather deplore the speech made by the hon. Member for Sheffield, Hallam (Sir R. Jennings). There is, of course, no point in saying what might have been just after the war any more than there is in saying what might have been during the war. To bring the party issue into this is rather unfortunate. The fact is, as everybody knows, that there was a shortage of steel during and immediately after the war. The most deplorable part of the hon. Member's speech, however, was his invitation to the Chancellor, by implication, not to bother this year but to do something, perhaps, at some other time. That is a remarkable thing for any Member for a Sheffield constituency to say.

My hon. Friend the Member for Sheffield, Park (Mr. Mulley) and I, together with other Sheffield Members, I am sure, press the Government very seriously to make a further concession on this occasion. I will put the argument on another ground. My hon. Friend referred particularly to the importance of cutlery as a basic necessity in every home. One could develop the argument about the importance of cutlery, particularly Sheffield cutlery. One could take it along the line, as I once heard in a less serious discussion in Sheffield, of suggesting that many more historical decisions have been made and disputes settled by a few inches of Sheffield steel than by any other means. That would be hardly relevant to this debate.

I am mainly concerned about conditions developing in the quality section of the Sheffield cutlery industry, in which the highly skilled craftsmen, many of whom inherited their craftsmanship over the ages, are drifting from the industry because it cannot develop the necessary home and foreign market, largely as a result of competition from mass production in America, Pakistan, Japan and elsewhere. Though faced with this competition, the Sheffield quality cutlery industry, which makes a product of which this country is proud and which stands high in esteem throughout the world, is penalised by the imposition of this tax. I should not object to it so strongly if the tax were really achieving anything, but the Minister will agree, I am sure, that the actual revenue from what remains of the cutlery Purchase Tax is relatively small and not worth the price we are paying in the competitive conditions of today.

I have raised over and over again, in the Press and elsewhere, the terrible problem created by the sale of "phoney" Sheffield cutlery in America, the sale of cutlery part only of which is made in Sheffield—perhaps only the handle—but which is stamped "Made in Sheffield". The blade is probably stamped underneath "Japan", but the part where the stamp is is shoved into the haft where nobody can see it, thus meeting the requirements of the American equivalent of the Board of Trade. The stamp is on the article though nobody can see it.

We are penalising the quality manufacturers of Sheffield by maintaining this tax which the Minister will surely admit is not of great importance from the revenue point of view. It is really very regrettable. With very little financial justification, it is having an effect not of creating widespread unemployment in Sheffield but of destroying a highly technical industry, an industry which is very important in national prestige.

I should like to refer to one particular branch of the industry, namely, that producing silver cutlery, nickel silver cutlery and the various alloys of silver and nickel which are used for decorative cutlery. One of the difficulties about the silverware industry is that it is not taxed as an industry; it is taxed according to the category of articles that it produces. The silver knife and fork or the nickel knife and fork are taxed on the same basis as other cutlery. A silver bowl is taxed as a presentation bowl whether it is silver, wood or anything else.

These two branches of the industry are very much mixed up. Both types of goods are being produced at the same factories. The Minister would be shocked if he went to some of the outstanding and long-established Sheffield factories in the silverware branch of the industry which have names that resound throughout the world. He would find long rows of empty benches, with idle machinery and idle equipment and one or two people working part-time and the rest either unemployed or on short time and gradually drifting away altogether. This is the position in some of the most important, outstanding and well-known firms in Sheffield.

I ask the Minister to consider what this means. The whole of the silverware industry is threatened because of the effect of Purchase Tax on the industry to the extent that the great name that Sheffield silverware has established throughout the world might become just another part of history. I concede this to the Government. They have made Purchase Tax concessions on cutlery in the past. Hon. Members opposite as well as my hon. Friends have joined in deputations, and we have eventually convinced the Minister that some concessions were desirable, and those concessions have been made. But the fact that these concessions were made is in itself a recognition of the importance of trying to maintain this industry and not to penalise it unnecessarily for a small revenue.

I ask the Minister whether there is any real purpose in continuing even a token tax on cutlery if the purposes of the previous reductions have not been achieved. We heard in the debate on the previous Amendment about the reductions in the tax on carpets which have led to a boom in the industry. The reductions in the case of cutlery have not led to a boom in the cutlery industry, and this small margin still remains. It is only 15 per cent. now, but that is still an imposition which restricts and restrains the development of the industry. Because the concessions previously made have not yet achieved the objective that both the Government and back bench Members want, I make this further appeal to the Minister to consider whether a further reduction or a complete abolition of the tax could be made at this stage without any great sacrifice to the Government.

Sir Peter Roberts (Sheffield, Heeley)

It was unfortunate that the hon. Member for Sheffield, Attercliffe (Mr. J. Hynd) started his speech by attacking my hon. Friend the Member for Sheffield, Hallam (Sir R. Jennings), because this is not a political issue. But if we are to make it a political issue it is no good the hon. Members for Attercliffe and Sheffield, Park (Mr. Mulley) coming here in white sheets trying to explain why the Labour Party did not do anything about Purchase Tax when it was in power and bringing lame excuses about shortages of nickel. The answer is that the Conservative Government have been far more sympathetic to the cutlery industry in Sheffield than the Labour Government ever has been. Hon. Members opposite should recognise that fact.

Mr. Mulley

I am sorry that the hon. Gentleman has not yet recognised that his party has been in power for nearly eight years and that anything he complains about now must be the responsibility of his hon. Friends.

Sir P. Roberts

I was saying that the Conservative Government have reduced this tax in stages from over 50 per cent. to 15 per cent., and for that I am certain the people in Sheffield are grateful.

Now I come to the second point. I am sorry in a way that the Government consider the cutlery industry in Sheffield less important than, for instance, the film industry. I am sorry that we in Sheffield could not produce a lot of film stars to come along to the Chancellor to ask him for a reduction in tax.

Mr. Rankin

There is the hon. Member for Kidderminster (Mr. Nabarro).

Sir P. Roberts

I said film stars. We have in the past produced workers, employers and representatives of the industry who have made their case better than any film star could do, and I am only sorry that this last step has not been taken by the Government so far. We are hopeful that this evening the reasonable arguments which have been put forward by both sides will be considered by my right hon. Friend.

There is one other small point. I think it will be agreed on both sides of the Committee that there is no reason why safety razor blades should not be considered as cutlery. I do not want to go too far on this, but there is a good argument that safety razor blades really started in the cutlery industry, and I hope my right hon. Friend will bear this in mind in considering tax in the future, even though it might possibly be out of order on this Amendment.

I hope the arguments he has heard from both sides of the Committee this evening will strengthen my right hon. Friend in his endeavour to take this final step for an industry which affects Sheffield so greatly.

Mr. Jay

I rather deprecate the introduction of all these party politics into this argument. I only wish to say a word about cutlery. We have had forceful pleas advanced by the experts and, may I say, by the enthusiasts from Sheffield, but there are people interested in cutlery in other parts of the country and this is a matter which also affects the consumer. I would like to make a plea to the Paymaster-General on the grounds of making some contribution towards keeping down the cost of living. This is a case where the Government might do what they have signally failed to do of recent years, to use the Purchase Tax, amongst other things, as a weapon for stabilising the cost of living.

It was the Paymaster-General himself a few years ago who very sensibly divided the products of industry into necessities, amenities and luxuries. I know that some people say we cannot define a luxury, but nevertheless when one is confronted in practice with a necessity, there is not much difficulty in saying that it is a necessity. My hon. Friend the Member for Sheffield, Park (Mr. Mulley) recounted how even in prisoner-of-war camps cutlery is considered to be essential. I would be the last person to argue that anything not found in a prisoner-of-war camp is a luxury. Nevertheless, one can say that anything found in a prisoner-of-war camp must be a necessity, and it seems that it would be possible to make some contribution to lowering the cost of living by giving us further relief from this tax.

When considering Government policy generally it is rather remarkable at the present time to find that, in spite of all the deflation and stagnation, and the check to the rise in production in the last year or two in this country, the cost of living has continued to rise. I think the Paymaster-General will confirm that it has actually risen by 5 per cent. in the last twelve months in spite of the much higher level of unemployment.

Mr. Arthur Lewis (West Ham, North)

And 1s. a ton on coal.

Mr. Jay

Though that might be out of order, it will contribute further to the rise. What I am saying is that there is an opportunity here, in this Purchase Tax on an absolute and complete and undoubted household necessity, for Government action which would give us some assistance. I make this point to the right hon. Gentleman as a serious economic argument which does not apply purely to cutlery. It is never appreciated that if a tax is imposed on some article of ordinary household use, where the rise in its price is likely to be taken into account in wage negotiations, then any increase in the Purchase Tax is definitely inflationary in the country generally. If we put the same tax on something which is inessential, the increased price of which would never be advanced as an argument in wages negotiations, then an increased tax is just the opposite and is almost certainly disinflationary. A tax on cutlery is most certainly an inflationary tax, and I would just add this argument to the eloquent ones we have heard from hon. Members from Sheffield in the hope that the Paymaster-General may seriously consider this important Amendment.

8.45 p.m.

Finally, I think there is force in the argument advanced by my hon. Friend—I hope the experts from Sheffield will confirm this—that this is the first moment, by and large, for nearly twenty years in this country in which there has been surplus capacity for the production of steel. I think that establishes a stronger priority for making this concession than perhaps existed even in previous years. I hope the Paymaster-General will seriously consider all these arguments.

Mr. Maudling

We have had a very wide-ranging debate, bringing in silverware, razor blades and even the price of coal, which came in by a side door. We even had the beginnings of an economic dissertation on inflation which might have been of a rather complicated character if it had been pursued much further.

If the right hon. Gentleman the Member for Battersea, North (Mr. Jay) excluded from taxation all the items appearing in the cost of living index, he would be removing from taxation pretty well the whole of the articles now subject to the Purchase Tax. The idea that we could levy indirect taxation solely on luxuries is in fact a fallacy which ought now to be abandoned.

Mr. Jay

May I make this interjection? I was not making the basis of my criterion all the items in the cost-of-living index, but those items where a rise in price was likely to be taken into account in wage negotiations.

Mr. Maudling

Surely, that is a complete fallacy, because what is quoted in wages negotiations is the cost-of-living index. Included in that index are many things which could not possibly be described as necessities. However, we may get a little more out of order than we are at the moment if we pursue that, and I think you, Mr. Macpherson, have been very generous in allowing us to go so far.

Returning to the strict matter of the Amendment, as the hon. Member pointed out, it deals with what is commonly known as cutlery—ordinary knives, forks and spoons, but not articles that are used for trade purposes, such as butchers' knives and surgical scissors, which I believe are already exempt from taxation. There were two general arguments advanced by the representatives of Sheffield constituencies on both sides of the Committee. One is that cutlery in this sense is a necessity and not a luxury, and the other is that the cutlery trade deserves support and encouragement.

On the first point, everyone in this country will agree that cutlery is a necessity, but I am afraid that I cannot accept the corollary of the hon. Gentleman's argument that because it is a necessity it must therefore be exempt from Purchase Tax. As has been argued on many occasions already in the discussions on the Finance Bill, it is the opinion of the Government that the Purchase Tax should be a broadly-based tax, and we do not think that it is possible in modern conditions to get the amount of revenue which we must get from indirect taxation without levying it over a very wide range of things. That is why there are in the Bill a number of items—clothing, furniture and all sorts of things—which, equally with cutlery, could be regarded as necessities.

The tax of 15 per cent. which is borne by cutlery is the rate which my right hon. Friend the Chancellor described in his original Budget proposals as that which he considers suitable for normal articles of essential domestic use. The standard rate, or what we now describe as the standard rate, is 30 per cent., and the 15 per cent. rate borne by cutlery is the reduced rate for articles of essential domestic use, things like floor coverings, which we have just been discussing, hardware, kitchen ware of all kinds, and domestic appliances not operated by gas or electricity. I think it would be wrong to single out cutlery, which, clearly, I would argue, falls properly in this general category of household necessities, and which is taxed at 15 per cent.

The second argument was that based upon the condition of the industry. The figures that I have been given show a rather more encouraging picture of the present state of the cutlery trade than one might gather from some of the remarks made by hon. Members. The figures which I have of the sales for the industry show that, after a decline in 1955 and 1956, there was a substantial increase in total sales in 1957. The export trade, which had been falling, seemed to steady up, and there was a big increase in home sales in 1957, a rise from just over £5 million to just under £6 million. I imagine that must have been partly connected with last year's Budget, because as my hon. Friends have pointed out, in that Budget the rate was reduced from 30 per cent. to 15 per cent. In addition, in October, 1955, the higher charge on silver cutlery, to which the hon. Member for Sheffield, Attercliffe (Mr. J. Hynd) referred, was abolished.

Consequently, I think that, by and large, we have done a good deal already to assist the cutlery trade. I will not go into the argument as to which party has done more for the cutlery industry, because it is obvious that the answer is as expressed by my hon. Friends. Though the cutlery industry is undoubtedly having difficulty, particularly with the export trade, I do not think the figures of sales for 1957, which probably reflect to some extent the concessions in last year's Budget, present a conclusive case for making a further concession at this stage.

Division No. 149.]	AYES	[8.53 p.m.
Ainsley, J. W.	Grey, C. F.	Mallalieu, J. P. W. (Huddersfd, E.)
Allaun, Frank (Salford, E.)	Griffiths, David (Rother Valley)	Marquand, Rt. Hon. H. A.
Allen, Arthur (Bosworth)	Hale, Leslie	Mason, Roy
Allen, Scholefield (Crewe)	Hall, Rt. Hn. Glenvil (Colne Valley)	Mitchison, G. R.
Awbery, S. S.	Hamilton, W. W.	Monslow, W.
Bacon, Miss Alice	Hannan, W.	Moody, A. S.
Balfour, A.	Harrison, J. (Nottingham, N.)	Morris, Percy (Swansea, W.)
Bellenger, Rt. Hon. F. J.	Hastings, S.	Morrison, Rt. Hn. Herbert (Lewis'm, S.)
Bence, C. R. (Dunbartonshire, E.)	Hayman, F. H.	Mort, D. L.
Blackburn, F.	Healey, Denis	Moss, R.
Blenkinsop, A.	Herbison, Miss M.	Moyle, A.
Blyton, W. R.	Hobson, C. R. (Keighley)	Mulley, F. W.
Boardman, H.	Holman, P.	Neal, Harold (Bolsover)
Bottomley, Rt. Hon. A. G.	Holmes, Horace	Noel-Baker, Rt. Hon. P. (Derby. S.)
Bowden, H. W. (Leicester, S. W.)	Houghton, Douglas	Oliver, G. H.
Bowen, E. R. (Cardigan)	Howell, Charles (Perry Barr)	Oram, A. E.
Bowles, F. G.	Hoy, J. H.	Oswald, T.
Braddock, Mrs. Elizabeth	Hubbard, T. F.	Owen, W. J.
Brockway, A. F.	Hughes, Emrys (S. Ayrshire)	Paget, R. T.
Broughton, Dr. A. D. D.	Hughes, Hector (Aberdeen, N.)	Paling, Rt. Hon. W. (Dearne Valley)
Brown, Thomas (Ince)	Hunter, A. E.	Palmer, A. M. F.
Burke, W. A.	Hynd, H. (Accrington)	Pannell, Charles (Leeds, W.)
Burton, Miss F. E.	Hynd, J. B. (Attercliffe)	Parker, J.
Butler, Herbert (Hackney, C.)	Irvine, A. J. (Edge Hill)	Parkin, B. T.
Carmichael, J.	Irving, Sydney (Dartford)	Paton, John
Castle, Mrs. B. A.	Janner, B.	Peart, T. F.
Clunie, J.	Jay, Rt. Hon. D. P. T.	Pentland, N.
Coldrick, W.	Johnson, James (Rugby)	Plummer, Sir Leslie
Collins, V. J. (Shoreditch & Finsbury)	Johnston, Douglas (Paisley)	Popplewell, E.
Cove, W. G.	Jones, David (The Hartlepools)	Prentice, R. E.
Craddock, George (Bradford, S.)	Jones, Jack (Rotherham)	Price, J. T. (Westhoughton)
Cullen, Mrs. A.	Jones, J. Idwal (Wrexham)	Probert, A. R.
Dalton, Rt. Hon. H.	Jones, T. W. (Merioneth)	Proctor, W. T.
Davies, Rt. Hn. Clement (Montgomery)	Kenyon, C.	Pursey, Cmdr. H.
Davies, Stephen (Merthyr)	Key, Rt. Hon. C. W.	Randall, H. E.
Deer, G.	King, Dr. H. M.	Rankin, John
Delargy, H. J.	Lawson, G. M.	Redhead, E. C.
Diamond, John	Lee, Frederick (Newton)	Reid, William
Dodds, N. N.	Lee, Miss Jennie (Cannock)	Robens, Rt. Hon. A.
Donnelly, D. L.	Lever, Harold (Cheetham)	Robinson, Kenneth (St. Pancras, N.)
Dugdale, Rt. Hn. John (W. Brmwch)		Rogers, George (Kensington, N.)
Ede, Rt. Hon. J. C.	Lever, Leslie (Ardwick)	Ross, William
Edwards, Rt. Hon. Ness (Caerphilly)	Lewis, Arthur	Royle, C.
Edwards, Robert (Bilston)	Lindgren, G. S.	Short, E. W.
Edwards, W. J. (Stepney)	Mabon, Dr. J. Dickson	Silverman, Julius (Aston)
Evans, Albert (Islington, S. W.)	McAlister, Mrs. Mary	Silverman, Sydney (Nelson)
Fernyhough, E.	McCann, J.	Skeffington, A. M.
Finch, H. J.	MacColl, J. E.	Slater, Mrs. H. (Stoke, N.)
Fletcher, Eric	McGhee, H. G.	Slater, J. (Sedgefield)
Foot, D. M.	McGovern, J.	Smith, Ellis (Stoke, S.)
Forman, J. C.	Molnnes, J.	Soskice, Rt. Hon. Sir Frank
George, Lady Megan Lloyd (Car'then)	McLeavy, Frank	Sparks, J. A.
Gibson, C. W.	MacMillan, M. K. (Western Isles)	Stewart, Michael (Fulham)
Gordon Walker, Rt. Hon. P. C.	Mahon, Simon	Stones, W. (Consett)
Grenfell, Rt. Hon. D. R.	Malialieu, E. L. (Brigg)	Strachey, Rt. Hon. J.

The cost of the concession would be £2¼ million. I would tell the hon. Member for Attercliffe that my right hon. Friend could not regard that as an unconsidered trifle; it is a rather substantial amount. Perhaps the hon. Member did not realise that it would be as much as that. Because of the size of the loss of revenue involved and because it would mean taking cutlery out of the generality of household essentials, my right hon. Friend feels that he cannot accept the Amendment.

Question put, That those words be there inserted:—

The Committee divided: Ayes 196, Noes 221.

Stross, Dr. Barnett (Stoke-on-Trent, C.)	Warbey, W. N.	Williams, Rev. Llywelyn (Ab'tillery)
Summerskill, Rt. Hon. E.	Watkins, T. E.	Williams, Rt. Hon. T. (Don Valley)
Sylvester, G. O.	Weitzman, D.	Willis, Eustace (Edinburgh, E.)
Taylor, Bernard (Mansfield)	Wells, Percy (Faversham)	Wilson, Rt. Hon. Harold (Huyton)
Taylor, John (West Lothian)	Wells, William (Walsall, N.)	Winterbottom, Richard
Thomas, Iorwerth (Rhondda, W.)	West, D. G.	Woof, R. E.
Thomson, George (Dundee, E.)	Wheeldon, W. E.	Yates, V. (Ladywood)
Thornton, E.	White, Mrs. Eirene (E. Flint)	Zilliacus, K.
Tomney, F.	Wilcock, Group Capt. C. A. B.
Ungoed-Thomas, Sir Lynn	Wilkins, W. A.	TELLERS FOR THE AYES:
Usborne, H. C.	Willey, Frederick	Mr. Pearson and Mr. Simmons.
Wade, D. W.	Williams, David (Neath)

NOES
Agnew, Sir Peter	Gower, H. R.	Manningham-Buller, Rt. Hn. Sir R.
Aitken, W. T.	Graham, Sir Fergus	Markham, Major Sir Frank
Allan, R. A. (Paddington, S.)	Grant, W. (Woodside)	Marlowe, A. A. H.
Amory, Rt. Hn. Heathcoat (Tiverton)	Grant-Ferris, Wg. Cdr. R. (Nantwich)	Marshall, Douglas
Arbuthnot, John	Green, A.	Mathew, R.
Armstrong, C. W.	Gresham Cooke, R.	Maudling, Rt. Hon. R.
Ashton, H.	Grimston, Hon. John (St. Albans)	Mawby, R. L.
Atkins, H. E.	Grimston, Sir Robert (Westbury)	Maydon, Lt.-Comdr. S. L. C.
Baldock, Lt.-Cmdr. J. M.	Grosvenor, Lt.-Col. R. G.	Medlicott, Sir Frank
Baldwin, A. E.	Gurden, Harold	Milligan, Rt. Hon. W. R.
Barber, Anthony	Hall, John (Wycombe)	Molson, Rt. Hon. Hugh
Barlow, Sir John	Harrison, A. B. C. (Maldon)	Morrison, John (Salisbury)
Barter, John	Harvey, John (Walthamstow, E.)	Nabarro, G. D. N.
Beamish, Col. Tufton	Heald, Rt. Hon. Sir Lionel	Nairn, D. L. S.
Bell, Philip (Bolton, E.)	Heath, Rt. Hon. E. R. G.	Neave, Airey
Bell, Ronald (Bucks, S.)	Henderson, John (Cathcart)	Nicholls, Harmar
Bennett, F. M. (Torquay)	Henderson-Stewart, Sir James	Nicholson, Sir Godfrey (Farnham)
Bennett, Dr. Reginald	Hesketh, R. F.	Nicolson, N. (B'n'm'th, E. & Chr'ch)
Birch, Rt. Hon. Nigel	Hill, Mrs. E. (Wythenshawe)	Noble, Comdr. Rt. Hon. Allan
Bishop, F. P.	Hirst, Geoffrey	Nugent, G. R. H.
Black, C. W.	Holland-Martin, C. J.	Oakshott, H. D.
Body, R. F.	Hope, Lord John	Orr, Capt. L. P. S.
Bossom, Sir Alfred	Hornby, R. P.	Orr-Ewing, Charles Ian (Hendon, N.)
Boyle, Sir Edward	Horobin, Sir Ian	Osborne, C.
Braine, B. R.	Horsbrugh, Rt. Hon. Dame Florence	Page, R. G.
Braithwaite, Sir Albert (Harrow, W.)	Howard, Gerald (Cambridgeshire)	Pannell, N. A. (Kirkdale)
Bromley-Davenport, Lt.-Col. W. H.	Hudson, W. R. A. (Hull, N.)	Partridge, E.
Brooman-White, R. C.	Hughes Hallett, Vice-Admiral J.	Peel, W. J.
Bryan, P.	Hughes-Young, M. H. C.	Peyton, J. W. W.
Bullus, Wing Commander E. E.	Hurd, A. R.	Pickthorn, K. W. M.
Burden, F. F. A.	Hutchison, Michael Clark (E'b'gh, S.)	Pilkington, Capt. R. A.
Butcher, Sir Herbert	Hyde, Montgomery	Pitman, I. J.
Butler, Rt. Hn. R. A. (Saffron Walden)	Hylton-Foster, Rt. Hon. Sir Harry	Pitt, Miss E. M.
Campbell, Sir David	Iremonger, T. L.	Powell, J. Enoch
Carr, Robert	Irvine, Bryant Godman (Rye)	Price, David (Eastleigh)
Chichester-Clark, R.	Jenkins, Robert (Dulwich)	Price, Henry (Lewisham, W.)
Cooke, Robert	Jennings, J. C. (Burton)	Prior-Palmer, Brig. O. L.
Cooper-Key, E. M.	Johnson, Dr. Donald (Carlisle)	Profumo, J. D.
Cordeaux, Lt.-Col. J. K.	Johnson, Eric (Blackley)	Ramsden, J. E.
Corfield, Capt. F. V.	Jovnson-Hicks, Hon. Sir Lancelot	Redmayne, M.
Craddock, Beresford (Spelthorne)	Keegan, D.	Renton, D. L. M.
Crosthwaite-Eyre, Col. O. E.	Kerby, Capt. H. B.	Robertson, Sir David
Crowder, Sir John (Finchley)	Kerr, Sir Hamilton	Robinson, Sir Roland (Blackpool, S.)
Crowder, Petre (Ruislip—Northwood)	Kershaw, J. A.	Rodgers, John (Sevenoaks)
Cunningham, Knox	Lambton, Viscount	Roper, Sir Harold
Currie, G. B. H.	Langford-Holt, J. A.	Russell, R. S.
Dance, J. C. G.	Leavey, J. A.	Scott-Miller, Cmdr. R.
Davidson, Viscountess	Leburn, W. G.	Sharples, R. C.
D'Avigdor-Goldsmid, Sir Henry	Legge-Bourke, Maj. E. A. H.	Shepherd, William
Deedes, W. F.	Legh, Hon. Peter (Petersfield)	Simon, J. E. S. (Middlesbrough, W.)
Digby, Simon Wingfield	Lirdsay, Hon. James (Devon, N.)	Smithers, Peter (Winchester)
Donaldson, Cmdr. C. E. McA.	Linstead, Sir H. N.	Speir, R. M.
Doughty, C. J. A.	Llowellyn, D. T.	Spence, H. R. (Aberdeen, W.)
du Cann, E. D. L.	Lloyd, Maj. Sir Guy (Renfrew, E.)	Steward, Harold (Stockport, S.)
Dugdale, Rt. Hon. Sir T. (Richmond)
Duncan, Sir James	Low, Rt. Hon. Sir Toby	Storey, S.
Eden, J. B. (Bournemouth, West)	Lucas, Sir Jocelyn (Portsmouth, S.)	Stuart, Rt. Hon. James (Moray)
Elliott, R. W. (Ne'castle upon Tyne, N.)	Lucas, P. B. (Brentford & Chiswick)	Studholme, Sir Henry
Emmet, Hon. Mrs. Evelyn	Lucas-Tooth, Sir Hugh	Summers, Sir Spencer
Farey-Jones, F. W.	Macdonald, Sir Peter	Taylor, Sir Charles (Eastbourne)
Finlay, Graeme	Mackeson, Brig. Sir Harry	Teeling, W.
Fisher, Nigel	McKibbin, Alan	Temple, John M.
Fletcher-Cooke, C.	Mackie, J. H. (Galloway)	Thomas, Leslie (Canterbury)
Fraser, Sir Ian (M'cmbe & Lonsdale)	Maclay, Rt. Hon. John	Thomas, P. J. M. (Conway)
Gammans, Lady	McLean, Neil (Inverness)	Thompson, Kenneth (Walton)
Garner-Evans, E. H.	Macleod, Rt. Hn. Iain (Enfield, W.)	Thompson, R. (Croydon, S.)
George, J. C. (Pollok)	MacLeod, John (Ross & Cromarty)	Tilney, John (Wavertree)
Glover, D.	Maddan, Martin	Turton, Rt. Hon. R. H.
Glyn, Col. Richard H.	Maitland, Cdr. J. F. W. (Horncastle)	Vane, W. M. F.
Goodhart, Philip	Maitland, Hon. Patrick (Lanark)	Vaughan-Morgan, J. K.

Vickers, Miss Joan	Ward, Dame Irene (Tynemouth)	Yates, William (The Wrekin)
Vosper, Rt. Hon. D. F.	Whitelaw, W. S. I.
Wakefield, Edward (Derbyshire, W.)	Williams, Paul (Sunderland, S.)	TELLERS FOR THE NOES:
Wakefield, Sir Wavell (St. M'lebone)	Wills, G. (Bridgwater)	Colonel J. H. Harrison and
Wall, Patrick	Wilson, Geoffrey (Truro)	Mr. Gibson-Watt.
Ward, Rt. Hon. G. R. (Worcester)	Woollam, John Victor

9.0 p.m.

Mr. Moyle

I beg to move, in page 31, to leave out lines 3 to 15.

I should like to refer to the debate that we had on buttons on 19th May. I do not want to repeat all the arguments that I used on that occasion, but it might be a good thing if I mentioned that when the Financial Secretary replied to our contention that buttons should be relieved of tax he said that the whole debate had been carried on under a misconception on the part of hon. Members on this side of the Committee. He said: Let me clear up the misconception, which has run through the whole of this debate, that button manufacturers are at a grave disadvantage when selling to the clothing manufacturers compared with the manufacturers of snap fasteners, press studs and so on."—[OFFICIAL REPORT, 19th May, 1958; Vol. 588, c. 1021.] At that time, in view of our ignorance of the subject, the Financial Secretary's argument was somewhat devastating. But he did not tell the whole story; that which was not advantageous to him he did not disclose.

I went into this matter with the manufacturers and discovered not only that buttons supplied by the trade to the registered traders directly are tax-free, but that the products of their competitors enjoy the same freedom. In short, there is no distinction between the zip fastener, the press stud and buttons: they all enjoy exemption from tax, provided that the transaction concerned is within the trade. Therefore, the whole of the argument for the retention of this tax on the button, while relieving its competitors by 25 per cent., was not only iniquitous but also inequitable; and, therefore, our argument still stands.

The other argument to which the Financial Secretary addressed himself concerned the amount of button production that went into cheap jewellery or imitation jewellery and the amount sold over the counter. I have gone into this matter with the trade, and I am advised that the amount of button production that goes into cheap or imitation jewellery is fragmentary and that the amount sold over the retail trade counter is about 25 per cent. I understand that the Treasury accept that percentage. In terms of money it is about million a year, taking that part of the trade which is taxable at 30 per cent.

With regard to the fragmentary part of the trade, the product described by the Treasury as "buttons" in Group 26 for Purchase Tax purposes, the amount that is covered by that group is relatively small. The main source from which this trade comes is Czechoslovakia. I understand that the bulk of the trade in the conversion of buttons into imitation jewellery has been taken by the Czechs to much greater length than by our people. The fact that we continue to charge tax on this button imitation jewellery puts the local trade at a disadvantage compared with the importer.

Those are the facts which have been supplied to me by the trade. There is a great deal of feeling in the trade about the action of the Chancellor and his colleagues. The trade cannot understand why a category should suddenly be broken up, leaving the button, in splendid isolation, to bear the whole impost of 30 per cent. in respect of retail trade, parting company for the first time from its competitors, which I have described as clothes fasteners, things like press studs and zip fasteners. This action has put the competitors into a very disadvantageous position.

The fact is that the circumstances are precisely the same now commercially as they were twelve months ago, and that there is no advantage earned by the button as the result of what the Financial Secretary argued, namely, that the button is tax-free internally, but something else was not. We now discover that they are all tax-free.

Mr. Simon

The hon. Member for Oldbury and Halesowen (Mr. Moyle) is always perfectly fair to me and he would not wish to misrepresent me. I never suggested and I never intended to suggest that the zip fastener, or any other competitor of the button, paid tax when it went to the manufacturers.

Mr. Moyle

I accept that statement. The inference is that the hon. and learned Gentleman knew, judging by the very clever presentation of his Clause, that the button was still peculiarly in the position of being tax-free when sold direct while its competitors were not.

In equity, the button manufacturers have an overwhelmingly strong case. The Financial Secretary says that we have to maintain a logical structure of Purchase Tax. The Chancellor has no case here in logic or equity. If we want logic and equity to return to their former glory, this matter should be put right in the sense I have indicated.

I do not know whether I am knocking at an open door. There is nothing worse for an advocate than to argue' a case when someone knows that he is knocking at an open door. I have an idea that the Chancellor has been somewhat influenced by arguments which have come from both sides of the Committee on this issue. In our last debate, the right hon. Member for Thirsk and Malton (Mr. Turton) spoke strongly in support of the contention I am once again advancing. I do not want to prolong the debate on this issue and will end my speech in faith and hope and with, I trust, a certain amount of charity from the Chancellor. That may bring him somewhere near us and help button manufacturers to feel that they have received justice at his hands, which they certainly did not have over the Whitsun Recess.

Mr. R. H. Turton (Thirsk and Malton)

I wish to support the arguments used by the hon. Member for Oldbury and Halesowen (Mr. Moyle). In the last debate, I think that for once the Financial Secretary was a little unfair, because he started by espying what he regarded as artificial jewellery on the dress on the hon. Lady the Member for Flint. East (Mrs. White). That made us all rather regard these ordinary domestic articles as something of adornment and embellishment. My hon. and learned Friend will agree that if a button is imitation or even real jewellery it does not come under Group 5 at all but under Group 26. Equally, under the proposals of my right hon. Friend if a button is imitation or real jewellery it will not come under Group 4 but under Group 5 and be classified as jewellery rather than as a button.

I am not pleading for an article of great adornment, but for the ordinary utility button. It seems anomalous that the ordinary plastic, linen, wooden or bone button should be treated differently from other dress fasteners. The Financial Secretary made the further point that a great part of the buttons when sold to registered manufacturers did not pay duty and only a very small proportion went to the retail trade. The hon. Member for Oldbury and Halesowen said that in his view 25 per cent. of the trade of button manufacturers is in the retail trade. I feel sure he has evidence for that.

In many button factories the proportion is a great deal higher. Buttons which go to local dressmakers are usually sold on cards, whereas those sold to registered manufacturers are usually sold loose. It is true that some manufacturers put them on cards and sell them to retailers, but for the purpose of the argument we can say that those sold on cards are certainly going to retailers and the majority, sold loose, are going to manufacturers. I have asked the factory near my constituency to give me particulars, and I find that 40 per cent. of their sales are on cards and 60 per cent. loose. In their view, therefore, at least 40 per cent. of their trade goes to the retailer.

In view of these facts, I hope that my right hon. Friend will find some way to remedy the anomaly. I think such a way is already possible in the Schedule. I hope that he will be able to distinguish the button which is adornment or jewellery from the button which is purely utility and that he will keep the tax on the utility button at 5 per cent. I hope that, having registered the arguments which have been put from both sides of the Committee, he will give some concession on what I believe is an anomaly in the Schedule.

9.15 p.m.

Mr. Victor Yates (Birmingham, Ladywood)

I fully support the views expressed by the right hon. Member for Thirsk and Malton (Mr. Turton). As one who has often tried to obtain a tax reduction on jewellery, I have never had representations made to me, nor, as far as I know, have any representations been made, for special concessions for the jewellery type of button.

By placing the ordinary button in a less favourable position than other forms of fastener the Chancellor will add considerably to the difficulties of the button manufacturers. My hon. Friend the Member for Oldbury and Halesowen (Mr. Moyle) referred to what the Financial Secretary said on this matter on 19th May. The hon. and learned Gentleman said I can say, however, that by far the greater proportion of the buttons that are produced are sold to the trade and are tax free and, therefore, compete equally with tax-free zips—which are more expensive—."—[OFFICIAL REPORT, 19th May, 1958; Vol. 588, c. 1022.] I have here a letter addressed to the Treasury by the chairman of the Button Manufacturers' Association, in which he refutes this statement and says: During our discussion the point was suggested that the bulk of our manufactured buttons were sold to clothing contractors or manufacturers. Therefore the matter of Purchase Tax was of no great consequence. We strongly refute this. Our Association calculates that at wholesale selling prices, on which Purchase Tax is assessed, the annual sale of buttons to the retail exceed £l½ million.

Mr. Simon

It is still true that the greater proportion is sold to the manufacturer.

Mr. Yates

I do not know what the hon. and learned Member means by that. He must have some information and some figures. It is not good enough merely to say that the bulk goes to the manufacturer. This is a very important figure for him to dismiss—£1½ million of retail purchases. The letter continues: Most of these buttons are purchased for the home making of clothes such is knitwear. … A very large number of housewives who assist in fostering fashion trends will in their home making of various garments receive decided encouragement to buy zip fasteners instead of buttons. I cannot see why the Treasury should have distinguished between the two.

I believe that there are, at present, three types of button—the jewellery type, the ordinary type, and another button that is tax-free. There has never been any difficulty in their differentiation, but if hooks and eyes, press studs and zip fasteners are now to be put into a much lower category it will have a serious effect on the button industry.

Although I have many firms in the jewellery industry in my constituency, I also have button manufacturers, who inform me that they are extremely perturbed at this sort of discrimination, a discrimination that will add considerably to the anomalies. The Financial Secretary knows that by Question in this House I have put to him the anomaly between one sort of tiepin and one sort of tie clip that is exempt while others, though similar, are taxed. These things all form part of an individual's dress accessories, and this differentiation is causing the utmost confusion.

For example, a firm in my constituency tells me that advertising badges, and badges for organisations and bona fide clubs, are normally free of tax, but that because of the recent Budget alterations badges with a stick-in pin fastening are regarded as tiepins. A stick-in pin for the National Union of General and Municipal Workers is subject to tax at the rate of 30 per cent., though if some other fastening or contraption is used there is no tax at all. I understand, too, that badges for the Brownies—an organisation that does such very useful work—are now to be taxed at 30 per cent.

I therefore hope that the Chancellor will seriously consider this matter, otherwise this discrimination will have a very serious effect upon the button industry. It is true, as my hon. Friend the Member for Oldbury and Halesowen says, that the proportion of the jewellery type of button is very small—the button manufacturers say that it is less than 50 per cent.—but there is a retail trade worth £1½ million annually. I do not think that there should be this discrimination, and I hope that we shall have a hopeful statement about it.

Mr. S. O. Davies (Merthyr Tydvil)

A remark made by the right hon. Gentleman the Member for Thirsk and Malton (Mr. Turton) brings me to my feet. When we discussed this matter before, I admitted that I had a constituency interest, because in that area there is a very fine button factory more than 50 per cent. of whose production goes to the retail trade. They are forced to do that, I am told, because of the Purchase Tax on buttons and the efforts of manufacturers to cut down overheads to the absolute minimum.

I do not blame the Financial Secretary for his very interesting argument, apparently in its favour, when he remarked on the ornamental trimming or button that my hon. Friend the Member for Flint, East (Mrs. White) was wearing on that occasion. I do not think that was very fair, because the hon. Lady, as the Financial Secretary knows only too well, is invariably charmingly and attractively, if not impressively, attired for this Front Bench. At any rate, this is one part of the Committee which lends a little colour in the otherwise somewhat drab collection we represent.

One point which has been referred to by the hon. Member for Oldbury and Halesowen (Mr. Moyle) is with regard to the ornamental button, but are we not correct in saying that the greater portion of ornamental buttons is imported and does not amount to more than 5 per cent. of all the buttons manufactured and sold in this country? I hope the Financial Secretary is now most anxious to get to his feet to allay our misgivings and to give us a very happy piece of information.

Mr. Redhead

I prolong this discussion very briefly for the purpose of drawing the attention of the Committee to the fact that this Amendment has rather more involved in it than the subject which has formed the concentration of the argument, namely, buttons. There is a real expectancy that the Chancellor of the Exchequer will make some concession on this point, but I want to draw attention to the fact that it will not really meet the purpose of this Amendment, or the case that lies behind it, if a concession is made on buttons alone.

I appeal to the Chancellor by reference to his own expressed purpose in his Purchase Tax proposals in the Bill. He has told us that he is very anxious to avoid anomalies and to simplify and streamline the tax. I suggest that in this case he is doing precisely the opposite; he is not simplifying but, in fact, confusing. The Amendment is concerned not only with buttons, but with such things as beads, sequins and similar articles; buttons, including shapes and moulds there for, cuff links and studs, hatpins; tiepins, tie-retainers, scarf rings, scarf holders and similar articles; hairpins, hair grips, hair curlers, dress combs, hair slides and similar articles.

The point to which I wish to draw attention is the fact that all these articles have hitherto been charged at a common rate with a whole range of other accessories of attire and minor articles of apparel. Those other items, hitherto embraced in the articles with which we are concerned in this Amendment under the general heading of haberdashery, have been reduced in the tax charge to 5 per cent. under the Bill. But these particular articles are singled out to be maintained at a charge of 30 per cent.

If the Chancellor is really concerned with simplification and streamlining, I suggest that to apply to a whole range of articles which had hitherto enjoyed a common rate of tax no less than three different rates of tax, as will now be done in the Bill—5 per cent., 15 per cent. and 30 per cent.—is not simplification, but is adding unnecessarily to the confusion.

The argument has been—I think that the Financial Secretary adduced it—that beads, sequins and buttons are often decorative articles and almost indistinguishable from imitation jewellery or articles in the jewellery classification. But this has been implicit in the whole category from its inception. To the best of my knowledge it has never been beyond the capacity of Customs and Excise to deal with that situation and to charge under the appropriate classification those articles which could rightly be regarded as jewellery or imitation jewellery. I see no reason why this complication should need to be introduced by separating these particular articles from the main stream of haberdashery.

Moreover, these proposals include a provision that hatpins and tiepins of base metal, which hitherto have been exempt from tax, will henceforth be charged at 30 per cent. These items and others such as cuff links, studs, hairpins and hair curlers, though they be of common metal and by no stretch of the imagination can be described as decorative, are to be charged at 30 per cent. just as if they were articles of gold or silver or studded with precious stones.

9.30 p.m.

I suggest that it would serve the Chancellor's purpose to meet the Amendment in its entirety and not confine any concession he might be disposed to make purely to buttons. I entirely agree with the argument about buttons. There is an enormous range of buttons which can hardly be described as decorative. I would even go so far as to suggest that the humble trouser button, of which there must be millions, is itself an article not only of utility but, strictly speaking, an article of necessity which might almost be embraced within the terms of our earlier discussion on the subject of protective clothing.

I should like to remind the hon. and learned Gentleman of a point I made at an earlier stage, about the added absurdity of charging this range of articles at 30 per cent. as separate articles, whereas, if a purchaser buys a complete garment which may be smothered with beads, sequins or buttons with no other purpose, perhaps, than decoration, the whole garment, including the value of the added decorations, is chargeable at 5 per cent. If the purchaser thereafter, however, seeks to replace those things and buys them separately as replacements, he must pay 30 per cent. Surely, this creates a fresh anomaly in the process of the Chancellor's attempt to remove anomalies. I hope, therefore, that he will address himself to the Amendment in its entirety.

Mrs. White

We had a fairly long discussion at an earlier stage of our proceedings which dealt with most of the articles included once more in this Amendment. My hon. Friend the Member for Walthamstow, West (Mr. Redhead) is quite right to draw attention to the fact that, although the most important part of the argument, perhaps, was directed to buttons, there was a number of other items included in the Amendment.

At the time of our earlier discussion, the Financial Secretary suggested that most of the articles concerned could be confused in some way with, or might be indistinguishable from, artificial jewellery. If the hon. and learned Gentleman looks at page 31, he will surely not suggest that the first three, at least, hairpins, hairgrips and hair curlers, could in any circumstances be regarded as indistinguishable from jewellery. Indeed, I have always considered hair curlers to be one of the less romantic or attractive appurtenances of female attire.

The hair grip, too, as my hon. Friend the Member for Lanarkshire, North (Miss Herbison) pointed out on the last occasion, is not usually a decorative item. Nor is a hairpin. I grant that a dress comb or hair slide may have some ornamentation upon it which would make it classifiable, perhaps, with jewellery, but that really does not excuse the Chancellor for having put in these very necessary but not particularly beautiful objects, namely, hairpins, hair grips and hair curlers, with the other items we are discussing.

I hope that, between now and the Report stage, he will reconsider at least this particular group. There is no justification in logic for what he proposes. As my hon. Friend the Member for Walthamstow, West pointed out, it brings in merely yet another anomaly. I should have thought that the Chancellor might very reasonably, without appreciable loss of revenue, modify that particular group.

Our main argument has been concerned with the competitive position of the button. We have had very eloquent and informative speeches from my hon. Friends the Members for Oldbury and Halesowen (Mr. Moyle), Merthyr Tydvil (Mr. S. 0. Davies) and Birmingham, Ladywood (Mr. V. Yates), and, of course, the right hon. Member for Thirsk and Malton (Mr. Turton) has, I believe, a constituency interest and considerable information on the subject. I think it was made clear in the Committee on the last occasion that theirs was a very strong argument indeed. If I may be permitted to refer to my own remarks on that occasion, I said that the Chancellor had given way at very great expense on dividend stripping, at much less expense on miners' helmets, and I strongly suspected that he would find it politic to give way on buttons. He now has an opportunity to fulfil my prophecy.

If the Chancellor finds that it is not possible to give the complete measure for which we are asking, we shall be interested to know whether he has at least some proposals to make, because the Financial Secretary last time made the point that some buttons, as well as these other articles, might be considered to be indistinguishable from artificial jewellery. He even made some complimentary references to the garment that I was then wearing. I took the precaution of coming most soberly arrayed today so that he could not have the benefit of that argument on this occasion. However, I believe that there are three types of button, one of which might be considered to be akin to jewellery. There is also the uniform button which is worn by various Services, and so on. Then there is the normal button used in the tailoring trades and garment trades for which we could find no reason for the present rate of tax.

Therefore, we should be very happy to learn from the Chancellor whether he has had second thoughts on this matter in view of the most persuasive, well-informed and lucid arguments which have been put forward from both sides. If he is now prepared to give the Committee the results of his cogitation, we shall be very happy to hear what he has to say.

Mr. Amory

I have no doubt whatever about the importance of buttons. Since coming into the House today I have had the misfortune to lose a button, and all I can say is that it creates an uncomfortable feeling of uncertainty in one's mind.

Mr. Harold Wilson (Huyton)

Is the Chancellor aware that the phrase coined by the former Financial Secretary for such a circumstance is "a yawning gap"?

Mr. Amory

In view of the absolute necessity of replacing this button, I am not sure whether I ought not to say that I have an interest to declare.

My hon. and learned Friend the Financial Secretary said on this subject at an earlier stage of our deliberations that he would report the discussion to me and ask me to consider the arguments that had been brought forward during the debate. I did read the arguments. As the hon. Lady the Member for Flint, East (Mrs. White) said, there are different types of button, and one of our difficulties is to differentiate between the normal plain functional button and the ornamental variety, of which she herself produced such an agreeable sample on the last occasion, although, as she said, she has played cautious and a plainer type of button is her selected mode of adornment today.

I was impressed with some of the arguments produced by hon. Members on the last occasion, and I realise that there are arguments for saying that the majority of buttons, certainly plain buttons, fall into the category of "clothes" more neatly than perhaps any other category. So, on further consideration, I think it would not be inappropriate that the plain ordinary buttons should come into the category which is chargeable at the rate of 5 per cent. Ornamental and fancy buttons would fall to be considered under the other group which deals with imitation jewellery. That will afford the authorities considerable difficulty in differentiating, but it is the kind of problem we always do our best to deal with, and we will certainly do our best on this occasion to draw the line at the right and fair place.

My difficulty is that the Amendment moved by the hon. Member for Oldbury and Halesowen (Mr. Moyle) goes a great deal wider than the proposal I now have to make, so I could not accept his Amendment although I can accept its principle as far as that refers to the ordinary, plain, conventional button which I have mentioned. The two Amendments on the Order Paper in the name of my right hon. Friend the Member for Thirsk and Malton (Mr. Turton), the one consequential to the other, are narrower and, as I understand it, cover buttons only—

Mr. Turton

indicated assent.

Mr. Amory

Those Amendments together will not do the trick entirely and we require one more Amendment to meet this case. I would like to ask you, Sir Gordon, whether you would find it possible to accept a manuscript Amendment additional to the two Amendments in the name of my right hon. Friend the Member for Thirsk and Malton? If so I would be glad to move a manuscript Amendment to Schedule 1, page 31, line 38, when the time comes.

The Deputy-Chairman (Sir Gordon Touche)

The Chairman of Ways and Means has agreed to accept the manuscript Amendment.

Mr. Amory

I am much obliged, Sir Gordon. I am also wondering whether the hon. Member for Oldbury and Halesowen, in view of what I have said about my intention to propose to the Committee that we meet the principle and, in fact, his exact proposal as far as it relates to plain buttons, would feel inclined to withdraw his Amendment?

Mr. H. Wilson

Before my hon. Friend rises in response to the Chancellor—and I am sure that in the light of what has been said he will feel disposed to ask the leave of the Committee to withdraw his Amendment—perhaps I should say that obviously we are gratified that the Chancellor has responded to the eloquence of my hon. Friends and of right hon. and hon. Gentlemen opposite. I think this is a proof that, however small an item is in question, debates in this Committee sometimes have an effect on the bureaucracy and even on the usually stony-hearted denizens of No. 11.

I think my hon. Friend, who has pursued this matter at earlier stages, will feel very glad that the Chancellor has decided to do what he has done tonight. It was my hon. Friend the Member for Flint, East (Mrs. White) who, before Whitsun and again tonight, asked the Chancellor to give way on buttons. It has become clear that the Chancellor's button had to give way on him before he felt disposed to accept the proposals that were urged upon him.

It will not have been outside the knowledge of hon. Gentlemen opposite that feverish activity has been going on for the past few minutes on this side of the Committee and that a most unusual thing has occurred, if I may disclose it, Sir Gordon. We have had the position of the Chancellor of the Exchequer actually asking the Opposition side to carry on talking. I was a little afraid that suspicious-minded people might think that we were trying to cover up the right hon. Gentleman in some way because he felt it impossible to rise until he had dealt with the problem of the missing button. I can assure the Committee however that the reasons were quite other than those stated by the Chancellor of the Exchequer.

Mr. Amory

I would like to thank the right hon. Gentleman for helping us with a little additional oratory from his side on this occasion, and I would like to express the hope that that additional oratory should be deducted from the future oratory we may expect.

9.45 p.m.

Mr. Wilson

The Chancellor has always found us extremely co-operative and helpful throughout the discussions on this Bill, and I am sure that he will continue to find us helpful. With regard to the proposal for a manuscript Amendment, it is always unusual, and if we were in a less charitable mood we might have wondered why the Chancellor did not put it on the Order Paper before. Since he was clearly going to give way on it, he might have put it on the Order Paper yesterday.

Nevertheless, I think he was right to ask for the manuscript Amendment to be permitted, because it is quite clear that my hon. Friend's Amendment is not quite in the form which the Chancellor requires, and the Amendment of the right hon. Member for Thirsk and Malton (Mr. Turton) would not quite do the trick. If the Chancellor were to wait until Report stage, it would obviously cause great uncertainty in the trade. It would not be possible to produce an Amendment on Report stage which would be retrospective, because that would cause hysterics on the part of some Members opposite. Therefore, we shall not object to the proposal for a manuscript Amendment, but it lies in the hands of my hon. Friend the Member for Oldbury and Halesowen whether he is willing to withdraw his Amendment.

Mr. Moyle

I had a feeling when I was speaking earlier that I was pushing at an open door—a kind of Celtic intuition, I suppose. I am very glad that my intuition proved to be right. As I understand it, the Chancellor's proposal is that the group of buttons which was originally chargeable at 60 per cent. is the group which he has in mind, but the functional buttons will come into the category of tax levied at 5 per cent. In view of that, may I assure him that I shall not have the slightest hesitation in acceding to his request?

As I understand it, his proposal is to place the functional buttons on the same terms as other competitors and that meets the major desire of the trade and also their sense of equity in the matter. I therefore beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Turton

I beg to move, in page 31, line 9, to leave out, "buttons, including shapes and moulds therefor."

May I say how grateful I am to the Chancellor for the suggestion he has made, which I am sure meets my point and the points of all those who have addressed themselves to this subject and will also give great satisfaction to the button manufacturing industry.

Amendment agreed to.

The Deputy-Chairman

The next Amendment selected is that in the name of the hon. Member for Orkney and Shetland (Mr. Grimond), in page 31, to leave out line 22. I think it would be convenient to discuss with it the following Amendment in the name of the hon. Lady the Member for Blackburn (Mrs. Castle), in page 31, to leave out lines 23 to 26, and also the Amendment in the name of the hon. Member for Orkney and Shetland, in page 31, to leave out line 33.

Mr. Donald Wade (Huddersfield, West)

I beg to move, in page 31, to leave out line 22.

0The object of this Amendment is to restore the total exemption for clogs and other wooden-soled footwear. There has already been one reference this evening to faith and hope, and I am moving this Amendment in hopeful anticipation that it may be accepted. When I first raised the subject of clogs, I was asked whether they were worn at all in these modern days. The answer is "Yes", although there is a decreasing demand for them. According to the latest information that I have, which is as accurate as I could obtain, the output in 1957 was a quarter of a million pairs of clogs, which is just over one-half of the output of ten years ago.

In considering the claim for exemption, fortunately there is no substantial sum of revenue involved. In reply to a Question put by myself and answered by the Financial Secretary on Thursday, 24th April of this year, the hon. and learned Gentleman said that his right hon. Friend did not propose to withdraw this exemption for revenue reasons, as the estimated yield would be small, and this was not a material factor.

Therefore, I do not need to argue the case on the basis of the revenue involved. It is simply a question whether it would be more anomalous to impose this tax than to remove it, and I think that there are adequate reasons for granting total exemption. First, there are many small firms whose turnover is less than £500 per annum, and, therefore, no tax will be charged, and were the Amendment not accepted we should have the position that some clogs were subject to tax and some not.

Secondly, a proportion of the clogs being manufactured today are known as safety clogs, and their use should be encouraged. The position has been fairly summed up in the following extract from a letter from a constituent of mine: The new tax will force up the price of safety clogs as these are naturally dearer to start with in view of the extra steel toe-caps, etc., needed in their manufacture, Buyers may tend to purchase the cheaper non-safety clogs to keep costs down and neglect the safety of their workpeople who have been forced to be safety-minded' at considerable expense over the past few years. In effect, this tax is unfair to the progressive businesses who try to avoid accidents in industry … That brings me to a third reason. I think it would be unreasonable for the Chancellor to exempt safety boots but not safety clogs. In response to a considerable amount of persuasive argument, he has already agreed to exempt safety boots, and I think it is only right and proper that the same attitude should be shown towards safety clogs. To include safety boots and safety clogs and later remove them represents a welcome change of mind, one might say a consistency in the Chancellor's change of mind, but I think it would be very difficult to justify the imposition of tax on both these items, and then the removal of the tax from safety boots and the retention of it on safety clogs. For all these reasons, I think that there is an overwhelming case for granting total exemption. Already, the trade has found considerable difficulties arising in the collection of the tax, and I am sure that the removal of it will be welcomed.

The object of the other Amendment in my name and the names of my hon. Friends is to grant total exemption in the case of shopping baskets and shopping bags. We discussed that subject before Whitsun, and I do not propose to repeat the arguments I am particularly concerned about those who are engaged in the making of shopping baskets, those who are incapacitated in various ways, particularly the blind, for I think we ought to do everything possible to assist them, and they are, as the Chancellor knows, somewhat worried about their future. The Chancellor showed sympathy before Whitsun, and I hope that sympathy will be put to practical effect tonight.

My last comment is that in choosing the subjects of footwear and shopping baskets my hon. Friends and I are not unaware of the many other anomalies to which Purchase Tax gives rise, but we hope that in picking out these subjects we have chosen winners in the contest for Purchase Tax relief.

Mr. Amory

I find it quite possible to accept the Amendment which the hon. Member for Huddersfield, West (Mr. Wade) has moved. The change will be made from today and will require a further Amendment to deal with it, an Amendment which is on the Notice Paper in the name of my hon. Friend the Member for Dover (Mr. Arbuthnot). That is the Amendment in page 31, line 38, at the end to add: 7. As respects the period ending with the eleventh day of June, nineteen hundred and fifty-eight, tax shall be chargeable at 5 per cent. in respect of any such clogs and wooden-soled footwear as are comprised in Group 2 (c). Perhaps, Sir Gordon, you will call that at the appropriate moment.

Any question of unsold stocks will be sympathetically considered to see whether we can deal with it administratively. I have nothing more to say, except that in the circumstances there is no objection to the continued exemption of clogs.

Mr. H. Wilson

On a point of order. As we are discussing a double-barrelled pair of Amendments, it would appear that what the Chancellor has said relates to clogs and to shopping baskets. Is that correct?

Mr. Amory

No. I understand that the other Amendment which we are considering refers to laces and insoles which have not been mentioned and which you, Sir Gordon, said could be considered at the same time. I could not accept that Amendment.

Mr. Wade

For the enlightenment of the Committee, at the appropriate time I propose to thank the Chancellor for what he has said and, in due course, to beg leave to withdraw the Amendment relating to clogs and other wooden-soled footwear, but I do not want to prevent discussion on the other Amendments which, I understand, may be discussed with the one which I moved.

Mr. Collins

On a point of order. Can we be clear on this point? There are two Amendments in the name of the Chancellor himself and I have not heard that they were moved and nor have they been explained. I hope that we are not discussing those at the moment.

The Deputy-Chairman

We have not yet reached them.

Mrs. White

Are we discussing the Amendment in page 31, leave out line 33?

The Deputy-Chairman

That Amendment is included.

Mrs. White

As well as the Amendment in page 31, to leave out line 22? I thought that the hon. Member for Huddersfield, West (Mr. Wade) was putting forward both Amendments.

Mr. Wade

I understood, Sir Gordon, that your Ruling was that I was moving the first Amendment, but that the others could be debated.

The Deputy-Chairman

That is correct.

Mr. John Arbuthnot (Dover)

In view of what my right hon. Friend has said, would it be convenient if my Amendment were considered now?

The Deputy-Chairman

That would not be convenient. We had better wait until we come to that.

Mr. H. Wilson

What are we talking about? Is it clogs. There seems to be a general impression that the hon. Member for Huddersfield, West (Mr. Wade) has moved an Amendment dealing with clogs and that it has been suggested that with that Amendment we should discuss a number of others, including that of the hon. Member for Dover (Mr. Arbuthnot) to which the Chancellor referred and which, in due course, will be moved formally. We are also trying to understand what it is that the Chancellor has accepted. Is it the Amendment relating to clogs?

Mr. Amory

I was under the impression that one of the Amendments which we were discussing was that in the name of the hon. Member for Orkney and Shetland (Mr. Grimond), in page 31, to leave out line 22. That refers to clogs and other wooden-soled shoes only. That is the Amendment which I propose to accept.

Mr. Wade

In view of the welcome announcement of the Chancellor, which I know will be very gratifying to those in the trade, I beg to ask leave to withdraw the Amendment.

The Deputy-Chairman

There is no need to withdraw, since that. Amendment has not been moved.

10.0 p.m.

Mr. H. Wilson

On a point of order. It is important that the Committee should not be excessively confused about this matter. If, in fact, the hon. Member for Huddersfield, West (Mr. Wade) was not able to withdraw his Amendment, on the ground that it had not been moved, can you explain, Sir Gordon, what we are debating? Something must have been moved.

The Deputy-Chairman

The Amendment to leave out line 22 was moved, and the Amendment to leave out line 33 was taken with it. I did not put the Question on the first Amendment, and the other Amendment has not been moved, so that it does not need to be withdrawn.

Mr. Wilson

That was my impression, but I do not think that it was the impression of the hon. Member for Huddersfield, West. I think that he thought that he was withdrawing an Amendment which the Committee had already agreed to.

Amendment agreed to.

Mr. Simon

I beg to move, in page 31, line 33, after "shopping-baskets", to insert: other than baskets of cane or wicker, It will probably be convenient to the Committee to discuss, at the same time, the Amendment in line 38, at the end to add: 7. As respects the period ending with the eleventh day of June, nineteen hundred and fifty-eight, tax shall be chargeable in respect of shopping baskets comprised in Group 23 (not being baskets fitted with lids or any other means of closing them) at 15 per cent. in the case of baskets which, except for external fitments, and except for bottoms of wood or other vegetable substance, are made wholly of cane or wicker, and at 30 per cent. in the case of other baskets of cane or wicker.; and in page 41, line 30, at the beginning to insert:

1. (1) Shopping baskets of cane or wicker, not being baskets fitted with lids or any other means of closing them.
2. (2)

These Amendments relate to shopping baskets. The Committee will remember that when the question of shopping bags and baskets was discussed at an earlier stage in these proceedings considerable apprehension was expressed by hon. Members on both sides of the Committee as to whether the changes which had been made by my right hon. Friend might not inure to the disadvantage of the disabled, who are particularly concerned with the making of baskets in cane and wicker. My right hon. Friend then said that he did not believe that any changes that we were proposing would work to the detriment of the blind or disabled, but he said: If I were convinced that, in fact, they would, I should certainly not wish to make those changes."—[OFFICIAL REPORT, 19th May, 1958; Vol. 588, c. 1043.] He promised to look into the matter further.

The Committee will remember that the changes made by the Budget and Finance Bill had the effect of making baskets and bags without lids—open baskets and bags—taxable at the same rates as closed baskets and bags, whereas previously there had been an anomaly, in that open baskets were exempt. In other words, there was an encouragement to use open baskets. The second effect of the Budget was to reduce the tax which had previously been payable on closed cane and wicker baskets and bags from 30 per cent. to 15 per cent., and from 60 per cent. to 30 per cent. in the case of baskets and bags made from other materials.

The first matter which caused hon. Members some concern was the one that I have mentioned—the possible effect it might have on the blind and disabled, although there was still a marginal preference preserved for cane and wicker baskets if they were closed and a new one being introduced for open ones.

The second apprehension, which was mentioned by the hon. Member for Shoreditch and Finsbury (Mr. Collins)—who had put a forceful case on the first apprehension as well—was that baskets which were predominantly cane and wicker, but might have some decoration or plastic strip, would have to bear the higher rate of 30 per cent., although they were essentially cane and wicker. My hon. Friend promised to consider both matters.

My right hon. Friend has had discussions with the trade associations and with those concerned in the care of the blind and disabled. The hon. Member for Shoreditch and Finsbury was concerned in both categories of discussion, and I should like to say how grateful we are for the help given to us by him and the others we consulted. We found that a genuine apprehension existed that even though we had introduced a new margin of preference, in favour of a certain type of cane and wicker basket which had previously been untaxed, the changes that we had made might, nevertheless, operate to the disadvantage of the blind and disabled. In those circumstances, my right hon. Friend decided that it would be right to respond to the pleas made earlier to him and to exempt entirely from tax the articles in this category when made of cane and wicker, on the ground that those are the materials which are predominantly used by the disabled.

On the other point, the small element of some other material, we still came up against the difficulty which my right hon. Friend mentioned of the definition of "a small element of some other material". In agreement with the trade association concerned, it was felt that this point could best be dealt with primarily by administrative action. Previously, to be exempt or to have a reduced rate of tax, a cane or wicker basket had to be wholly of cane or wicker. If the word "wholly" were omitted and the matter were then left to the Customs and Excise officials themselves to decide if articles were essentially of cane or wicker, we think that would meet the case.

The Amendments which have been tabled by my right hon. Friend are to fulfil that purpose. If hon. Members will look at the Amendment in page 41, line 30, at the beginning to insert: (1) Shopping baskets of cane or wicker, not being baskets fitted with lids or any other means of closing them. which makes an Amendment to the Second Schedule, they will see that it puts the matter in a form in which it will appear finally in the new Tax Schedule. They will see that it exempts shopping baskets of cane or wicker, not being baskets that are fitted with lids. They will also notice the omission of the word "wholly". In other words, these articles are now exempted from tax, whether they are closed or open.

The next Amendment, in page 31, line 33, after "shopping baskets", to insert: other than baskets of cane or wicker, is an Amendment to the First Schedule.

Mr. Collins

I am not sure whether I have this right, but I think that the Financial Secretary said that these articles would be exempt from tax whether closed or open. Surely the position is that they will be exempt from tax only if they are open baskets.

Mr. Simon

I am grateful to the hon. Member. I think he is quite right. I did say, by a slip of the tongue, that the exemption applied also to the closed basket. The difficulty was in relation to the open basket, the shopping basket.

I pass on to the last Amendment, that which restores the previous exemption of shopping baskets of cane or wicker. That left to be dealt with the interim position, between the date of the introduction of the Budget and today. It is dealt with by the Amendment in page 31, line 38, at the end to add: 7. As respects the period ending with the eleventh day of June, nineteen hundred and fifty-eight, tax shall be chargeable in respect of shopping backets comprised in Group 23 (not being baskets fitted with lids or any other means of closing them) at 15 per cent. in the case of baskets which, except for external fitments, and except for bottoms of wood or other vegetable substance, are made wholly of cane or wicker, and at 30 per cent. in the case of other baskets of cane or wicker. The effect of that Amendment is that there are three classes to be dealt with. The first is of shopping baskets of material other than cane or wicker, which are to pay tax at 30 per cent. The second class is of shopping baskets wholly of cane or wicker, which pay tax at 15 per cent. The third class is of shopping baskets partly of cane or wicker and partly of other materials, and they pay tax at 30 per cent., although in future they will be exempt from tax administratively.

I hope that the Committee will feel that my right hon. Friend has met the arguments that were put forward, and has taken action which will allay the apprehensions of those who are very much concerned about work being provided for the blind or disabled.

Mr. Collins

I am sure that the announcement the Financial Secretary has just made will be warmly welcomed by the whole Committee and, far more important, will be received with considerable relief and thankfulness by many hundreds of blind, crippled and otherwise disabled people whose employment had been put in jeopardy. It will be equally welcomed by those whose task it is—often a very difficult task—to find means of employment for such people. Unfortunately, some of the disabled people have already been sacked from their jobs. We can only hope that they will be able to get their jobs back without very long unemployment.

I know it is a very complicated matter, but I hope the Financial Secretary will not mind if for the record I briefly put my interpretation of the three Amendments he has explained. The effect of this decision will be that all cane and wicker shopping baskets without lids will be exempt from the tax and both the description and the exemption cover baskets in which a very small quantity of plastic, raffia and various other materials of that kind are introduced for decorative purposes.

As the hon. and learned Gentleman said, I made it perfectly clear prior to Whitsun during the Committee stage and since in discussion that this was the chief concern because it is the one type of goods made by disabled people. This method of amending the Bill achieves this object, and when the Amendment has been accepted the relative position of the disabled will be better than it was before the introduction of the Budget. I think it only fair that that should be acknowledged. I am sure they and the Committee will be very grateful for that fact.

Without being churlish or ungracious, it is fair to ask why this tax was ever reintroduced. We and the disabled went through all this in 1955. The arguments were then fully deployed and they have not altered. I submit to the Committee that it is very wrong that these people whom we are all concerned about should have had to suffer two months of acute anxiety. On Budget day I told the Chancellor, quite informally, that a mistake had been made. I do not expect any Chancellor to take much notice of anything anybody tells him on Budget day soon after he has introduced his Budget, but my right hon. Friend the Member for Huyton (Mr. H. Wilson) took an early opportunity the next day, and my hon. Friends did so on the day after, of asking the Chancellor if a mistake had not been made.

I hope the Chancellor will take advantage of the opportunity which has come to him to make an announcement similar to that in connection with protective clothing. I was unable to catch the Chairman's eye in the Budget debate or Mr. Speaker's eye on the Second Reading of the Bill. The first opportunity I had of raising this matter was in the Committee stage when I moved an Amendment.

Meanwhile, because I had confidence in the case that was to be put and in the Chancellor's reception of it, I had to take the rather heavy responsibility of advising manufacturers who knew they could not otherwise sell their goods to retain their workers and not to sack them because I felt sure it would be righted eventually. I am very glad that the confidence I reposed in the case and in the Chancellor has not been misplaced. When the question was raised in Committee he immediately showed his sympathy and his knowledge of the circumstances, because he mentioned that when he was Minister of Pensions he became fully aware of the therapeutic value of this kind of work for disabled people.

The right hon. Gentleman is putting the matter right very fully and satisfactorily now, but I hope he will not forget the anxiety and misery which has been caused by the original decision. All hon. Members, particularly those in high office, ought to think twice and then think again before taking any action which in its effects will bring hardship on those whom it is our duty to protect.

10.15 p.m.

Mr. H. Wilson

I do not think that we can let this matter rest where it is. We are, of course, glad that after all the time that has been spent in debate the Chancellor has given way, but the Committee is entitled to an explanation of how these things happened.

The Chancellor keeps appealing to this side of the Committee to restrain themselves in the debate. We could have saved many hours of debate in Committee if this obvious error had not been made. It will be recalled—indeed, my hon. Friend the Member for Shoreditch and Finsbury (Mr. Collins) has just reminded us—that in the original debate in April I reminded the Committee, in the first speech made from this side of the House following the Budget, that a mistake had been made and asked the Chancellor to look at it again. The reason I said that was that the same thing had happened—I am not sure whether it was a mistake on that occasion—in the autumn Budget of 1955, when the Chancellor had been forced to withdraw, again after creating a great deal of uncertainty in the trade.

I asked in the Second Reading debate whether there was some gremlin in the Board of Customs and Excise which, when the Chancellor has made a reasonably sensible decision, comes along late at night and interpolates in the Chancellor's speech or in the Money Resolution these quite odd and indefensible additions to text. I am sure it must have been clear to the Chancellor that this involved the blind workshops. If it were not, it must have been clear to his advisers that this problem would arise and that hon. Members on both sides of the House would press the Chancellor to change the decision.

Yet this uncertainty in the trade has been created and this difficult responsibility has been placed on the shoulders of my hon. Friend the Member for Shoreditch and Finsbury. I am sure that it is a responsibility which no other hon. Member would like to have had to bear. The manufacturers went to my hon. Friend and said, "Here is the tax. I cannot sell my goods and there is uncertainty about the position. Shall I produce the goods and maintain my workers on the job in the hope that the Chancellor will give way?" He had to take a gamble on it and to make a guess whether the Chancellor would give way. I am glad that he guessed right and that he felt not only that the case was so strong but that the Chancellor would be able to understand that it was strong and would give way. He therefore gave that advice to the manufacturers. But suppose he had given the wrong advice, had involved them in a heavy loss and had involved the workers in disappointment by suggesting that they should be kept on a little longer it would have been a very difficult position for him. Frankly, the Chancellor ought not to put manufacturers generally into this position and he ought not to put my hon. Friend into this position, either.

I therefore hope that before we pass to the next Amendment we shall be told how these things happen. At the time of the autumn Budget of 1955 we were all much under the impression that the then Chancellor included all these items in Purchase Tax for the first time without even knowing that he was doing it. That was the legend which circulated around Whitehall and elsewhere. We thought that after his sad experience that could not happen again, but we have had it again this year. We had it with miners' protective clothing, with cloth and with shopping baskets. I will not say that we had it with buttons, because I think that that was a case where the debate genuinely convinced the Chancellor of the need for second thoughts.

I think we should like to be told how this happened. Was it put up by the Board of Customs and Excise? Did not the Chancellor read the papers before he made his decision? What were the junior Ministers doing?

Mr. Jay

Resigning.

Mr. Wilson

The Chancellor has no Economic Secretary. The Paymaster-General has many other responsibilities, as we all understand.

Mr. Gordon Walker (Smethwick)

What about the Law Officers?

Mr. Wilson

What was the Financial Secretary doing? One would have thought that he would have been through all this detail to relieve his master of doing so. The Solicitor-General could have been consulted. He is helpful to the Committee.

We should like to know how this came about. I hope that the right hon. Gentleman will be able to give the Committee some undertaking that steps are being taken in the Treasury to ensure that this kind of thing will not be repeated year after year if, by any mischance, he and his right hon. and hon. Friends are still on that side of the Committee when the next Budget comes.

Mr. Arbuthnot

I think that hon. Members on both sides will be extremely grateful to my right hon. Friend for the extremely generous way in which he has met the case—[HON. MEMBERS: "No."] Oh, yes. The position of the disabled people is now better than it was before the introduction of the Budget—

Mr. H. Wilson

I am not in any way attempting to mitigate that point, but it is really an odd way to carry on, to impose a tax and then take a bit off, therefore getting the gratitude of the House of Commons and the people. Would it not have been better in the first place to have taken it off before it was put on?

Mr. Arbuthnot

In spite of that ungenerous attitude, I am sure that people will be grateful to my right hon. Friend for what he has done. Anybody who has been with him, as I was when he was Minister of Pensions, will know the way in which my right hon. Friend's mind works and the way in which he really does look after the interests of the disabled and the blind. I would like to say "Thank you" to him for what he has been able to do.

Mr. Wade

I welcome the Financial Secretary's announcement. I think it is fair to say that it would have been very much better had the tax not been put on. These changes create great difficulties, and sometimes great anxiety, and I think that this is an example of anxiety being caused. However, it is better late than never and, the announcement having been made, I can assure the Financial Secretary that his decision will be welcomed.

Mr. R. T. Paget (Northampton)

When the Financial Secretary claims that he is entitled to the gratitude of the disabled for what he has done—when the hon. Member for Dover (Mr. Arbuthnot) says so, at any rate—I wonder a little whether the hon. and learned Gentleman or the hon. Member for Dover was inspired by the American soldier who is said to have been decorated for saving a woman from rape on the grounds that he had changed his mind.

Mr. Simon

I rise only to reply, as I think that I am bound to, to the right hon. Gentleman the Member for Huyton (Mr. H. Wilson). I ought to make it clear that the decision taken to make the tax changes that were made in the Budget and the Finance Bill as framed were made by Ministers and are solely the responsibility of Ministers in a very real sense, and, indeed, were informed and intended changes.

The right hon. Gentleman perfectly fairly asks why, in view of what happened in 1955, that change was made. The answer, as I think was made quite clear from what the right hon. Gentleman said, is that when the matter was debated it was felt—and I do ask hon. Members to recognise that there are very good grounds for feeling this—that the changes made left the disabled and the blind, on balance, no worse off, to put it at its very lowest. The reason for that is that the previous tax discrimination that they had was one of 50 per cent.

In other words, the previous tax on these articles was 60 per cent. but only 30 per cent. on articles particularly produced by the disabled and blind. The bags without lids were exempt from tax, and in regard to these articles which have previously been exempt the disabled and blind were given, for the first time, a tax discrimination in their favour. It is for that reason that the hon. Member for Shoreditch and Finsbury (Mr. Collins) and my hon. Friend the Member for Dover (Mr. Arbuthnot) are quite right in saying that the result of the changes that have been made has been to leave the disabled in a more favourable position now than they were in before.

I only desire to say this final thing. The right hon. Gentleman quite rightly said that what has just happened in relation to buttons was quite obviously a response to a well-argued debate. I assure him that equally the change which is being made in relation to shopping baskets is. Anyone who reads my right hon. Friend's speech on the last occasion will see that his aim was to see that the blind and disabled were placed at no disadvantage. It was in response to the arguments which were put forward and the obvious feeling of hon. and right hon. Members on both sides of the Committee, and, indeed, to the subsequent discussions with those very closely concerned with the welfare of the blind and the disabled, that this concession has been made.

Amendment agreed to.

Further Amendments made: In page 31, line 38, at end add: 7. In the case of buttons, including shapes and moulds therefor, the reduction under this Schedule of tax chargeable under Group 5 shall not be deemed to have had effect before the twelfth day of June, nineteen hundred and fifty-eight.—[Mr. Simon.]

In page 31, line 38, at end add: 7. As respects the period ending with the eleventh day of June, nineteen hundred and fifty-eight, tax shall be chargeable in respect of shopping baskets comprised in Group 23 (not being baskets fitted with lids or any other means of closing them) at 15 per cent. in the case of baskets which, except for external fitments, and except for bottoms of wood or other vegetable substance, are made wholly of cane or wicker, and at 30 per cent. in the case of other baskets of cane or wicker.—[Mr. Amory.]

Mr. Arbuthnot

I beg to move, in page 31, line 38, at the end to add: 7. As respects the period ending with the eleventh day of June, nineteen hundred and fifty-eight, tax shall be chargeable at 5 per cent. in respect of any such clogs and wooden-soled footwear as are comprised in Group 2 (c). In view of what the Chancellor has said, I understand that he proposes to accept the Amendment in my name and that of my hon. Friend the Member for Langstone (Mr. Stevens). It may be asked why we put today's date into the Amendment. That is because if it were made retrospective to the Budget it would mean the reopening of some cases.

Amendment agreed to.

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

Mr. H. Wilson

I think those hon. Members who have taken part in previous Finance Bill debates, particularly the autumn debate of 1955, will now be, on the precedent set on those occasions, settling down for a good all-night sitting. It will be recalled that, in the famous all-night sitting of November, 1955, when we came to this Question on the Schedule we had a very long debate which went on until 3 o'clock, when the then Patronage Secretary made the biggest mistake of his career and moved the Closure. It will be recalled that the debate went on until 8 o'clock and that we made very little progress.

I am, therefore, quite sure that hon. Members opposite would feel very disappointed if they thought that we were not going to subject this very intricate Schedule to an extremely full and exhaustive examination. I think that we should be fully entitled to do so, and I think that the Chancellor who places himself in the position of overhauling or examining the Purchase Tax Schedule, which has to be done every two or three years, must expect a rather lengthy debate on this Schedule.

I know it will be a great disappointment to hon. Members opposite when I suggest that, for my part at any rate, I do not intend to start off a debate of that kind. I do not know if any of my hon. Friends wish to do so. I personally am rather doubtful about it, and we have no intention of voting against the Schedule as a whole. We have voted on various items on which we feel that votes are called for. We certainly do not intend to vote on the Schedule. It is not for me to say, but I am doubtful whether my hon. Friends will wish to pursue this matter in debate.

10.30 p.m.

I trust that when, as may happen in other parts of the Bill, we find it necessary to subject various proposals to an exhaustive examination—and that is certainly our duty as a Committee, especially after the manifest failure of the Government in their attempts to curb dividends—there will be no signs of impatience on the part of hon. Members opposite if we attempt to do this job thoroughly. Should they be tempted to suggest that we are talking longer than they think necessary, I hope it will count to our credit that on this one outstanding occasion for eloquence, tempting and challenging though it may be, we have resisted all temptation and we are prepared to let the Schedule go through on the nod.

Mr. Charles Royle (Salford, West)

I am prepared to fall in with the suggestion of my right hon. Friend the Member for Huyton (Mr. H. Wilson) and will not detain the Committee for long. But I am one of the unfortunate Members whose Amendments were not called, and I regard the Amendment which is on the Order Paper in my name as of such great importance that I hope the Committee will forgive me if I spend two or three minutes discussing the matter in the only way which is properly open to me.

I refer to the Amendment in page 31, line 38, at the end to add: 7. Vehicles otherwise conforming to the conditions of fitness for the time being laid down by the Commissioner of Police of the Metropolis shall be exempt from tax under Group 35 notwithstanding that they are fitted with four doors. It is a very narrow but important point from the point of view of the provincial taxi-cab owner and driver. My remarks are concerned principally with the question of the fourth door.

The question of Purchase Tax on taxicabs has a long history, and it is mixed up with many other matters. It has a connection with the London Cab Order, 1934, and with the Runciman Committee of 1953, which reported in Cmd. 8804. I think it is necessary that I should explain the whole position. Under the Finance Act, 1946, Sections 16 and 18, all taxicabs were made subject to 60 per cent. Purchase Tax. This continued until the Finance Act, 1953, when the London town taxi-cab, the kind with which we are all so familiar, was exempted from 60 per cent. Purchase Tax. In that Act it was laid down that taxi-cabs which were exempt from Purchase Tax should be approved by the Commissioner of Police and should be built to a specification which complies with the conditions of fitness laid down by the Commissioner of Police for the purposes of the London Cab Order, 1934.

I want to make two matters clear. First, there was the London Cab Order, applying to that type of cab which was manoeuvrable in the busy conditions of our London streets, and which was constructed so as to be easy to turn and to park in London traffic conditions. The second point is that the Runciman Committee which examined this matter never recommended in the course of its Report that the Purchase Tax exemption should apply to a type approved by the Commissioner of Police. The taxi-cabs in question had to be built to a condition of fitness laid down by the Commissioner of Police. However, it turned out that the type approved and the condition of fitness together resulted in the abolition of the Purchase Tax on the London-type cab which had only three doors. The important part is that three-door question. That is where the difference arises between the type approved and the condition of fitness. It is a narrow difference, but it is extremely important.

I do not expect the Chancellor of the Exchequer will exempt from the Purchase Tax any type of motor car that happens to be used as a taxi. I do not press that, and I appreciate to the full the reasons why that could not possibly be done. When, however, the only difference is an extra door at the front of the cab, I suggest that it is a bit much that the cab should be subject to a 60 per cent. Purchase Tax, whereas in the case of three doors there is no tax at all.

Obviously, this difference arises from the provinces. Circumstances in Salford and Manchester I have in mind particularly. Our weather is not quite as good as London's, although in the last few months London has not been having exactly desirable weather. Manchester and district, however, has very inclement weather in comparison with London, and that is one of the things we have to put up with in that part of the country.

The taxi owners and drivers there began to see that the London-type cab was much better than the type they had been using. Therefore, they started to buy it. They found that it manoeuvred better in the streets and that it parked better, and they bought the London type of cab. They found, however, that the inclement weather caused difficulties and that there was no comfort. They had longer waiting hours than the London taxi river and they were never quite as busy as the London cabmen. Therefore, they had the fourth door fitted. Then, they found that they had to pay the Purchase Tax because of the fourth door.

Let me say straight away that negotiations have taken place and that the Board of Customs and Excise has appreciated the position; and where taxi owners in Manchester and district fitted the fourth door it has now been agreed to wipe out the Purchase Tax if the door is taken off. That is satisfactory up to that point. The trouble is—

The Chairman (Sir Charles MacAndrew)

The hon. Member was very polite when he began. I did not select his Amendment, and I hope he will not be too long on this aspect. We can discuss only what is in the Schedule.

Mr. Royle

I am obliged, Sir Charles, that I have been allowed to make my case. I have been trying something on and I accept your Ruling. I agree that I must draw to a conclusion. I hope that the Treasury Bench will appreciate the point that is being made.

I would make one strong point, if I may be allowed. In the last month, there have been four serious accidents in Manchester in which a taxi driver has been trapped in his cab and he has had no way out of the cab and a serious situation has arisen. I make an appeal that, in spite of the fact that I have not been able to move my Amendment, the Chancellor of the Exchequer or the Financial Secretary might treat this speech of mine as though I had been allowed to move it and that we might have a real opportunity—

The Chairman

There are limits to what we can do.

Mr. Royle

I hope that they will look at this matter before Report and will regard it as serious to the people who use this type of vehicle in that part of the country.

Mr. Simon

I want to say a few words only in reply to the hon. Member for Salford. West (Mr. Royle). I cannot, of course, reply to the details of the case which he made. I will certainly read his speech and I hope, therefore, he feels that he has done what he sought to do. As he indicated, the Customs and Excise has sought to meet the difficulty that has arisen and to avoid payment of the very heavy tax by an administrative concession in allowing the removal of the door.

We recognise that by re-writing a Schedule of Purchase Tax we have opened the door to very extensive debates which might have been very protracted. I assure the Committee that my right hon. Friend is extremely grateful far the very co-operative way in which matters have been discussed and, so far as I am concerned, the very enjoyable and informative way in which these matters have been treated.

Question put and agreed to.

Schedule, as amended, agreed to.