HC Deb 25 March 1958 vol 585 cc195-8
1. Mr. Nabarro

asked the Chancellor of the Exchequer whether he is satisfied with the present arrangements for distinguishing office furniture from domestic furniture so far as Purchase Tax is concerned; whether, in view of the fact that the low rate of Purchase Tax charged on domestic furniture as opposed to office furniture has resulted in a considerable quantity of domestic furniture being used for office purposes, he will take steps to review this arrangement; and what has been the yield of Purchase Tax on domestic and office furniture for each of the last three years for which figures are available.

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

My hon. Friend will not expect me to anticipate my Budget statement.

Mr. Nabarro

Having regard to the fact that many items of furniture have a dual application and may be used equally efficaciously both in the home and in the office, is it desirable to keep these two rates in existence? Would not it avoid all the evasion and fiddling that goes on today to replace them by a single, low-level, uniform rate, applicable to furniture as to other manufactured goods?

Mr. Amory

I always like to agree with my hon. Friend over something, and I agree that in this field there are features common to both. Having said that, I would repeat what I said in answer to my hon. Friend's original Question, that he will not expect me to anticipate my Budget statement.

4. Mr. Nabarro

asked the Chancellor of the Exchequer whether he is aware that a pottery piggy bank is subject to 30 per cent. Purchase Tax but, if painted with the words "Razor Blades", is subject to 15 per cent. Purchase Tax, the former as a toy and the latter as a salvage receptacle; why this discriminatory fiscal treatment is accorded to piggy banks; and whether he will free piggy banks of tax, as being conducive to small savers on the one hand and to proper salvage of steel from used razor blades on the other hand.

Mr. Amory

The distinction arises out of the decision of this House that toys should be taxed at a higher rate than domestic hardware. My hon. Friend will not expect me in such a vital matter to anticipate my Budget statement.

Mr. Nabarro

Is not it a fact that a piggy bank is a piggy bank, whether it is used in furtherance of small savings or as a receptable for the salvage of razor blades? It is still a piggy bank. Is my right hon. Friend really pleading for a system whereby the end-use of an article shall determine the rate of Purchase Tax applicable to it? In any event, how could either of these articles be classified as a toy?

Mr. Amory

While I do not underestimate the importance of encouraging small savings, particularly when there is a rural bias, I think my hon. Friend exaggerates the influence of his proposals on National Savings and salvage. If he fills a piggy bank with his safety razor blades he will understand the difficulty of subsequently extracting the blades for salvage without permanent damage to the bank.

Mr. H. Wilson

While not dissenting from the dialectical statement of the hon. Member for Kidderminster (Mr. Nabarro) that a piggy bank is a piggy bank, which is agreed on all sides of the House, may I ask if the right hon. Gentleman is aware that while there have always been anomalies in the Purchase Tax scheme, the fact that we now have seven different rates for Purchase Tax compared with three in 1951 is the result of patchwork attempts to deal with the problem over the past five or six years? Will he take a look at the whole system again?

Mr. Amory

I agree with the right hon. Member to the extent that quite often when one sets out to remove one anomaly one finds one has created another.

Mr. Nabarro

That was a very helpful supplementary question.

16. Mr. Nabarro

asked the Chancellor of the Exchequer why boards and pillars used on a wedding, birthday or Christmas cake are free of Purchase Tax, whereas a sugar candle holder mounted on the cake is taxed at 15 per cent., the cake frill at 30 per cent., and artificial flowers at 60 per cent. unless they comprise paper leaves made without wire, when they are tax-free, but with wires for the same cake are taxed at 60 per cent.; and, as the Schedules lay down that when one article is part of another, the tax chargeable is that attributed to the complete article, and a cake is tax-free, whether he will remove all cake ornamentation from Purchase Tax.

Mr. Amory

I think perhaps my hon. Friend has misread Notice No. 78. The paragraph he has in mind relates to sales by registered persons. Cake makers are not registered and there is nothing anomalous in the fact that different articles used by them have already attracted different rates of tax according to their group classification. In any case, my hon. Friend will not expect me to anticipate my Budget statement.

Mr. Nabarro

Does not my right hon. Friend realise that there is nothing at all wrong with this Question? Is he aware that all the information in the Question has been carefully checked by the appropriate trade association, which is suffering all the vicissitudes of five different rates of tax applicable to a single article such as a wedding cake and the components of it? Amid all the range of absurdities in Purchase Tax, does not my right hon. Friend realise that this last Question I can put to him before his Budget takes the cake?

Mr. Amory

I want to be quite sure that my hon. Friend understands this matter. When he comes to celebrate his half centenary, if he has a birthday cake, and if all the candles are made of edible sugar, they will not attract Purchase Tax.

Mr. Nabarro

What about the frill?

Mr. Amory

His laurel wreath—if he has one—if it contains any wire, will do so.

27. Sir A. V. Harvey

asked the Chancellor of the Exchequer what sum has been received in respect of Purchase Tax on repaired cathode ray tubes from 1st January, 1957, until the latest convenient date.

Mr. Amory

I regret that it is not possible to furnish this information.

Sir A. V. Harvey

Is the Chancellor aware that about 60,000 cathode ray tubes are repaired annually by about 60 firms? My information is that very few firms are paying tax. Will the Chancellor have a good look into this question, because it affects many old people who are unable to pay either tax or the full replacement value? Will he consider completely withdrawing the Purchase Tax on cathode ray tubes and thereby simplifying the whole problem confronting everybody?

Mr. Amory

I agree with the hon. Gentleman that it is difficult to draw a line between small repairs and major repairs which amount almost to the provision of a new tube. The activities of the repair firms are very carefully watched to see that no tax liability is avoided.

Mr. Nabarro

Just one further Purchase Tax absurdity.