§ The Deputy-ChairmanThe next Amendment is that in the name of the hon. Member for Oldbury and Halesowen (Mr. Moyle), to page 29, line 12. I think it will be convenient for the Committee also to discuss the following Amendment in line 13, in the name of the right hon. Member for Huyton (Mr. H. Wilson), the Amendment in the name of the hon. Member for Shoreditch and Finsbury (Mr. Collins), in line 14, dealing with garden furniture, and that in the name of the hon. Member for Oldbury and Halesowen in line 17.
§ Mr. RedheadI beg to move, in page 29, line 12, to leave out "Group 5 (haberdashery)".
We now pass, in our consideration of the First Schedule, from the discussion which we have been having on the broad principles and philosophy underlying the Purchase Tax to what I suppose must now be described as the pernickety details. So far as the philosophy and principles are concerned, as one of those who 988 had a pretty close association with the introduction of Purchase Tax, one of those luckless civil servants who have been accused this afternoon of fixing the rates of the tax but who, on the contrary, experienced just as many headaches as the traders themselves in trying to interpret what Parliament intended, I have never been able to discern any fundamental principles underlying the tax. The Amendment which I now propose is a paving Amendment to the further one to page 29, line 17, which has for its object the reduction of the tax on all items in Group 5 to 5 per cent., as distinct from the Chancellor's intention, as expressed in the Schedule as a whole, of reducing only some of the items under this heading to 5 per cent. and others from 30 per cent. to 15 per cent.
In passing, let me say that it is perhaps rather intriguing in this connection to note that a bachelor Chancellor with great gallantry is going the whole hog in reducing the tax on ladies' modesty vests from 30 per cent. to 5 per cent. I am not claiming that 5 per cent. in this connection has any particular virtue as a rate. Indeed, I feel in regard to the whole range of articles to which this rate applies, it might well be that we could eliminate the tax entirely without any serious effect upon the revenue, and thus avoid a good deal of the vexatious nuisances where trade is concerned. In this connection, 5 per cent. is proposed on the grounds of equity and uniformity which the Chancellor has expressed to be part and parcel of his general concern in this matter.
In the same sub-paragraph of the Schedule (1) (1, c), the Chancellor also seeks to reduce from 30 per cent. to 15 per cent. the tax on many other articles of wallpaper and certain other papers and articles of paper which appear in Group 10, and upon garden furniture in Group 16 (b), and upon trophy cups in Group 26 (c). I want first to turn my attention to Group 5 and to haberdashery.
The Chancellor's purposes in all these revisions of the Schedule have been explained as being part of his desire to seek simplification and clarification and, as he expressed it, to bring about a greater degree of uniformity in these matters. He rightly claimed that it is impossible in a tax of this kind to avoid all anomalies. That is apparent. He 989 went on to say that it was his desire, in seeking to remove existing anomalies, that he should not produce another crop. In this category, that is precisely what he is doing.
Whereas he has reduced the number of tax rates from seven to four over the whole range of Purchase Tax, in this category he has taken a whole range of articles which were formerly subject to one common rate of tax and has applied to those articles no fewer than three rates of tax; for he has reduced the tax on some from 30 per cent. to 5 per cent., on others from 30 per cent. to 15 per cent. only, and, by taking some completely out of Group 5 and proposing to constitute an entirely new group, he is maintaining the tax on others at 30 per cent.
Some further explanation is required of why some articles are being left at 15 per cent. whereas others are having the tax on them reduced to 5 per cent. I notice from Notice 78N that the rate is to be reduced only to 15 per cent. in respect of hand embroidery frames, darners, wool winders, needle cases and similar requisites for domestic needlework. What distinction is drawn between those articles and others elsewhere in the group where the tax is being reduced to 5 per cent. is not clear.
Likewise, the tax on blind acorns and tassels, covered upholstery nails and other upholstery trimmings, tie presses, shoe trees, coat hangers, button hooks, shoe horns, glove and stocking stretchers and driers; garment protectors, mothproof covers and shoulder covers is being reduced to 15 per cent. In addition to that, for some inexplicable reason, the Chancellor feels that it is now appropriate to remove bootlaces from exemption and with insoles to charge them at 5 per cent. Again we are entitled to some explanation of why in the pursuance of uniformity the Chancellor wants to remove an exemption of long standing and also to remove from exemption hat pins and tie pins which are to be charged at 30 per cent.
I cannot believe that these changes will make for simplification and clarification in the understanding of the Schedule by the trades concerned. Let us examine what sort of anomalies will now be created. I can quote only a few inconsistencies and incongruities which are difficult to explain. Garters and 990 suspenders are to be chargeable at 5 per cent. but a stocking holder or drier will be chargeable at 30 per cent.; the tax on a coathanger is to be reduced from 30 per cent. to 15 per cent., whereas the hat stand upon which the hanger may be placed will be chargeable at only 5 per cent; a tie press or shoe tree will be chargeable at 15 per cent., but the wardrobe in which those articles may be reposed will be chargeable at only 5 per cent. A glove and stocking stretcher will be chargeable at 15 per cent. but the clothes holder will be chargeable at only 5 per cent. Bootlaces which have hitherto been exempt will, along with corset laces, now be chargeable at 5 per cent. A garment cover or mothproof cover will be chargeable at 15 per cent. whereas the garment upon which they may be placed will be chargeable at only 5 per cent.
The Chancellor would agree that in seeking to produce what he describes as uniformity and to remove some anomalies he has created other anomalies. It is interesting to observe that the tax on military buttons, pips and stripes is to be reduced to 5 per cent. whereas ordinary buttons for civilians, if bought as replacements as distinct from being part of the garment, are to be taxed at 30 per cent.
I cannot believe that there is much difficulty in the Chancellor's acceding to my suggestion that the whole group should be reduced to 5 per cent. without any of the exceptions. The revenue from this group, even at a general charge of 30 per cent.—and clearly the Chancellor expects a substantial reduction in that—hitherto has been only a little above £6 million.
I will leave to my hon. Friends with more knowledge and perhaps detailed acquaintance with the trades concerned the arguments about other specific items. However, I must point out that wallpaper is another item which has been previously chargeable at 30 per cent. but which is to be reduced to 15 per cent. I urge upon the Chancellor that there is here a very strong case for going even further and reducing that tax, as has been proposed, to 5 per cent. Indeed, one can make a very logical claim for the complete exemption of wallpaper and its kind and thus sensibly make some contribution towards easing the burdens in what 991 all of us know to be the heavy expenses of home decoration. That would be reasonable since there is no Purchase Tax on paint, distemper or varnish or other essential materials for home decoration.
I have a lively recollection of when the tax on paper household goods was first included in the Schedule. Everybody said that that must include such things as paper baking cases and that they were therefore chargeable under that heading. I remember how the trade revolted against the idea and how the confectioners said that these cases were not household paper goods but were their stock in trade in the sale of cakes and confections in the ordinary commercial way. The Commissioners of Customs and Excise solemnly decided that they could settle this terrible dilemma only on some basis of dimension. If I remember rightly, being associated with the great decision, we decided that a chocolate eclair case which measured 3¾ inches must be for the trade and not chargeable, whereas if it were less than that it would fall to be chargeable to Purchase Tax.
Even here there is a strong case for exemption under this heading and if one were to refer to the classification in Notice 78 one would see some remarkable incongruities, as to what should and should not be chargeable under that head. All that is being asked for is some degree of uniformity.
The Chancellor is not being called upon to make very great sacrifices, for the total revenue from the whole of Group 10 which has been chargeable at 30 per cent., including not only wallpaper but display paper and household paper goods, has been just under £5 million. In any case, the Chancellor is clearly clipping a good deal off that by his present proposal.
8.30 p.m.
Garden furniture is also included in the list of articles in respect of which it is proposed to reduce the tax from 30 per cent. to 15 per cent. Again I ask why it should not be reduced to 5 per cent. It would be logical to put garden furniture in parallel with the whole range of ordinary domestic and office furniture which, under another group heading, is chargeable at only 5 per cent. This would make for the simplicity, clarification and greater degree 992 of uniformity which is the express desire of the Chancellor's revisions. The revenue under this head must be very trifling, for even at the current charge of 30 per cent. the total for the whole group is apparently so insignificant that it is not even listed separately but comes under the miscellaneous heading which yields only about £3 million.
Trophy cups are the subject of a proposal for a reduction from 30 per cent. to 15 per cent. They are awarded as prizes, and I will leave one of my hon. Friends, who feels keenly about this matter, to develop the case that she believes exists for the total exemption of these articles.
In general, however, I hope that it will be recognised that this is a constructive Amendment, designed to fulfil the purpose that the Chancellor had in mind, not only of bringing about a greater degree of uniformity but avoiding the creation of a further crop of anomalies. I suggest, therefore, that in the present circumstances—if the Financial Secretary will not take it amiss—that the Chancellor could chance his arm in this regard without any undue risk.
§ Mr. MoyleThe Financial Secretary and the Chancellor have listened to the pleas made by hon. Members on both sides of the Committee for reductions in, or the abolition of, Purchase Tax. All I want to say to the Financial Secretary, in the absence of the Chancellor, is that I see no hope of the return of the Government after the next Election unless they abolish not only Purchase Tax, but all taxation. That is their only hope of escaping what awaits them at the Election.
The Chancellor has explained a number of times why these variations in Purchase Tax rates have been made. He has said that he has acted in the interests of equity, to make the adjustment more equitable in relation to other articles, or to make the system more logical. There is a later Amendment, in page 29, line 17, at the end insert:
(d) for any charge at 30 per cent. under Group 5 (haberdashery) there shall be substituted a charge at 5 per cent.in the name of some of my hon. Friends and myself, and I propose to refer to the subject matter of that Amendment now. I have been told that it will be in order for me to do so.
§ The Deputy-ChairmanYes. I have suggested that the Committee should also discuss that Amendment.
§ Mr. MoyleWhat has the Chancellor got against buttons? This serious omission cannot be explained upon grounds of equity or logic. I can explain it only on the ground of sheer vindictiveness. I do not know whether the Chancellor had the experience that I did, but I remember that when I was a young bachelor the use of cotton and needles was completely out of my competence, and I was attracted by an advertisement urging me to buy a set of bachelor buttons. I fell for that advertisement.
I carried out the instructions which said that I must bore a hole in the top of the trousers and press this button in, aided by a kind of gadget on the other side of it, and, by that means, avoid the use of needle and thread. That was all right, but when I completed the operation and used that method of keeping my trousers up, I found that in the course of a week the top part of the trousers was leaving the lower part, and as a consequence I felt a deep resentment against the button manufacturers for exploiting my credulity in that way.
I want to ask the Financial Secretary whether he will inquire of the Chancellor whether he had a similar experience, he being, of course, a long-time bachelor, and whether his experience had set up in his heart and mind the kind of resentment that I felt against button manufacturers when I was "led up the garden" by them. There must be some subjective psychology to explain this peculiar exception of the button from the relief of Purchase Tax from 30 per cent. to 5 per cent.
Let us see what family the button is included in. I would say for the benefit of the Financial Secretary that I am advised by the trade that the classical definition of a button is "a common device for fastening clothing," and that that is the particular button in which I am interested. Together with other common devices for fastening clothing, there are hooks and eyes, press studs, snap fasteners and zip fasteners. These common devices for keeping one's trousers up and fastening one's clothes are competitive articles in the market in relation to the button.
994 The extraordinary thing is—and I beg the Financial Secretary to have a look at this—that in this Budget the Chancellor has decided to reduce the tax on all the articles I have mentioned, and which have something in common with a button from 30 per cent. to 5 per cent. and has left the poor button to stand in splendid isolation. I wish to know the reason for the apparent distinction, and this crippling of the trade of button making. Why should this embargo be imposed on the button and the burden relieved from its competitors? That cannot be explained in terms of logic or equity, so I beg the Financial Secretary to try to find out what went wrong. I have a constituency interest in this——
§ Mr. OsborneNow we are getting down to it!
§ Mr. MoyleMy hon. Friend the Member for Merthyr Tydvil (Mr. S. O. Davies) has a constituency interest and my hon. Friend the Member for Ladywood (Mr. V. Yates), who made an admirable speech, has a certain interest in the matter. The astonishing thing is that I have not been able to persuade the manufacturers who briefed me to join the Labour Party. But they have asked me to try to melt the Chancellor's heart, because representatives of the trade have failed to do so. I should warn the Financial Secretary that if I secure this concession, I may also recruit a number of people to the Labour Party.
The firm in my constituency which is affected has been in existence for over 100 years and there is a healthy export trade combined with this industry. The hon. Member for Croydon, North-West (Mr. F. Harris) spoke continually of the need to reduce Purchase Tax on articles in which he was interested because it was vital to provide a buoyant market for them. If the Government wish the firm in my constituency to continue to export, it is vital that this anomaly should be removed. The button must be put on equal terms with other competitive articles.
The Chancellor has an interest in this matter. A lounge suit takes about 36 buttons, and the Chancellor is still a bachelor. I feel that if the Financial Secretary works things rightly, I shall be able to secure a concession which will gladden the hearts of those engaged in this industry.
§ Mr. John Harvey (Walthamstow, East)I am not unsympathetic to some of the arguments advanced by the hon. Member for Walthamstow, West (Mr. Redhead) although I appreciate that the Chancellor may look with a more jaundiced eye than did the hon. Member at the suggestion that £2 million or £3 million, or a few hundred thousand pounds here and there, do not matter very much.
I wish to take up the point that the hon. Gentleman's constituents and mine have an interest in the old-fashioned phraseology of part, at any rate, of paragraph (1, c) referring to "baskets and other cane or wicker receptables"——
§ The Deputy-ChairmanOrder. The hon. Member is referring to an Amendment which comes later.
§ Mr. HarveyI was under the impression that we were discussing a number of Amendments together, Sir Gordon.
§ The Deputy-ChairmanThe next Amendment deals with baskets.
§ Mr. HarveyI am sorry. I will wait until we discuss that.
§ 8.45 p.m.
§ Mr. CollinsI hope that the hon. Member for Walthamstow, East (Mr. J. Harvey) will have an opportunity to speak later, because I shall be interested to hear his observations on the subject which concerns him. Meanwhile, I hope that the Financial Secretary, who is perhaps having a little difficulty with his own buttons, will, for that reason, pay greater attention to what has been said by my hon. Friend the Member for Oldbury and Halesowen (Mr. Moyle).
I will not apologise for going from buttons and bows and hairslides and bibs to garden furniture. They have nothing in common except that in both sections we on this side of the Committee are asking for a reduction in the tax from the present rate of 15 per cent. to 5 per cent. I understand that it has been agreed for the convenience of the Committee that these matters should be introduced in a general debate. I therefore ask the Financial Secretary to consider particularly this application that we are making for the tax, which formerly was 30 per cent. and which the Bill reduces to 15 per cent., to be further reduced to 5 per cent. and, therefore, brought into line with the generality of furniture.
996 I have to declare both a personal and a constituency interest, because in my constituency more furniture is made than, I think, in any other in the country. I ask the hon. and learned Gentleman, when he consults his right hon. Friend the Chancellor of the Exchequer about the Amendment, to have particular regard to the right hon. Gentleman's dictum that the object of Purchase Tax is primarily to raise revenue and not to discriminate between one article and another. The right hon. Gentleman is discriminating in a marked degree against garden furniture as compared with nearly all the other types of furniture on which the tax is 5 per cent.
The Chancellor has just told us that he has had to resist demands for the removal of anomalies because he could remove them only by raising the tax. This is an example where no such disability exists. The right hon. Gentleman can easily remove this anomaly by reducing the tax. He may be said to have recognised this fact already by reducing the tax from 30 to 15 per cent., but why leave it there? Last year, we pointed out that there was a similar discrimination against hall stands and similar hall furniture and against metal office and other furniture. We are glad to know that in this Bill the Chancellor has seen the light and removed this discrimination by bringing them all in at 5 per cent.
Why has the Chancellor not taken the same step with garden furniture? It cannot be that this is a luxury group, although, there again, the right hon. Gentleman told us this evening that he would not be prepared to define what was a luxury article. I remind the Financial Secretary that garden furniture includes the humble deckchair and even camp stools. Why should these things, costing, in some cases, less than £1, be taxed that 15 per cent. when the most expensive dining suite or bedroom suite costing £300 is taxed at only 5 per cent.?
Included in this group are slatted seats and tables of the kind used in public parks and gardens. They must perforce be of an exceptionally strong and utilitarian character. It is indefensible that they should be singled out for this special impost, especially when they are purchased largely by local authorities and the Treasury must, in any case, pay 997 a considerable part of the cost of the tax.
When one examines the list, it positively bristles with anomalies, all of which could be removed if the tax was reduced to 5 per cent. For example, a table in a café used indoors is taxed at 5 per cent., but as soon as it is put outdoors and a hole is cut in it to take a sun umbrella, it becomes a garden table and a tax of 15 per cent. must be charged. This is abject nonsense.
A café proprietor decides to give some protection from the sun and to serve his customers with al fresco meals as a greater means to health and he immediately has to pay another 10 per cent. in tax. In the same way stone seats and stools are subject to this discrimination which the right hon. Gentleman and the Financial Secretary say they are determined to avoid.
These garden seats, apart from the stone ones, are of the knobbly, rustic kind and are quite inexpensive. They are rather hard and uncomfortable and there seems no reason why higher tax should be paid on them.
§ Mr. CollinsI quite agree. If people are so hardy that they determine to sit on them why should they suffer the further disability of paying an extra tax? We laugh and joke about these things, but people do not joke about them outside. They are quite unacceptable. Traders and people who examine these things think that we are daft to have these differences, for which there seem to be no sound reasons. We cannot justify the imposition of a tax three times as high on a comparable article in the garden than on a piece of furniture in the home.
It becomes still more indefensible if we compare humble garden articles with those luxuriously comfortable folding lounge chairs with Dunlopillo cushions sold at £30 each, which can be bought in a West End store and on which, quite properly, the tax is 5 per cent. Why is it that fern baskets, in the garden group, are taxed at 15 per cent. but that similar cane baskets, mainly used by exhibition and display florists, do not pay tax at all? They are the same, except that one is made of wire and the other is made of cane.
998 What is garden bordering wire? Is it a special kind of wire and, if so, how can it be distinguished from other wire? If it has spikes on it I understand that it is still garden bordering wire. I should also like to know why fishing stools are included in garden furniture. I say this in all seriousness to the Financial Secretary and I hope that if he cannot consider it tonight he will certainly consider it before we finish the Finance Bill. The plain, undeniable truth is that there is no justification for the continued existence of Group 16, the garden group. In my submission it was built up for reasons and under a variety of conditions which no longer exist. Lawn mowers could easily go into Group 12 and the rest should be in Group 11 and taxed at 5 per cent.
What I have said has been based on practice for at least twelve or fourteen years. These are facts I am giving the Financial Secretary and they are the result of discussions long since past and settled. I ask him to have a look at the possibility of doing away with Group 16 altogether, putting lawn mowers in Group 12 and garden furniture, where it belongs, in Group 11, and then he could accept my proposal and tax it all at 5 per cent. We should then save ourselves a lot of trouble and it would not cost a great deal of money. The Chancellor has made some substantial and welcome strides towards simplification and against discrimination, and this is one more step which he could take without any substantial loss of revenue. He would, at the same time, remove a whole crop of anomalies.
§ Mr. R. H. Turton (Thirsk and Malton)While I do not support the full sweep of the Amendment, which is very wide, I support the arguments used by the hon. Member for Oldbury and Halesowen (Mr. Moyle), who referred to the button industry. It seems to me that the Chancellor has made a curious mistake. In a previous Budget, the position was that buttons, hooks and eyes, zip fasteners, snap fasteners and slide fasteners were all taxed at 30 per cent.
This is a highly competitive industry. The button manufacturers try to get the garments fastened by buttons, while their competitors try to get them fastened by press tuds for the trousers or hooks and eyes for other garments. This is there-for hurting one part of the industry to 999 the advantage of the remainder, and I am certain that that is the last thing that my right hon. Friend wants to do. I ask him to give us an explanation why he has chosen to help the hook and eye and the zip by reducing taxation on them from 30 per cent. to 5 per cent. while leaving that on buttons at 30 per cent.
It has caused considerable worry to the button manufacturing industry all over the country. There is a large button factory in York where my constituents work, and I am therefore personally interested in the matter, but, quite apart from that, the Budget seeks to remove anomalies and not to create them. An anomaly has been created here, and I should like an explanation from the Financial Secretary of why it has been done.
§ Mrs. Harriet Slater (Stoke-on-Trent, North)Perhaps I should tell my hon. Friend the Member for Oldbury and Halesowen (Mr. Moyle) that if he is unfortunate enough to lose some buttons he has to pay tax on the needle requisites necessary to stitch on fresh buttons.
If one looks carefully at the whole of this group which we are discussing one finds numerous anomalies in it. For instance, children's reins, with or without harness, are taxed at 30 per cent. while other safety reins or belts are tax-free. To a mother with a small child who wishes to dash around the whole time children's reins which are harnessed are an essential piece of equipment. With them, when she takes the child out she has at least some measure of safety and she can control the child much more closely. The mother with small children who takes them shopping can be harassed if they try to run away, and in the interests of her safety and that of her children I ask that these reins should be included in the examption given to other safety belts.
Perhaps I may turn to the question of wallpaper being brought within the terms of the Amendment and the tax on it being reduced to 5 per cent. This was mentioned by my hon. Friend the Member for Walthamstow, West (Mr. Redhead). If we impose a heavy tax on wallpaper we tax both cleanliness and the woman who is houseproud. It means that if the woman who is houseproud is not content to leave the same wallpaper 1000 on the walls for ever and ever, or at any rate for many years, she must pay a heavy tax on the new wallpaper. I am sure that all of us who are interested in both cleanliness and the houseproud woman would like the Financial Secretary to speak to his right hon. Friend on the subject and to see whether, even though some reductions have been made in the taxation on wallpaper, there cannot be a further reduction to bring it within the scope of the Amendment.
The next question I want to raise is that of trophy cups. The time has passed when just a few schools use them. Almost every school now has its array of cups for swimming, cricket, football, rounders, netball or table tennis. Our youth clubs also have them. Instead of relying upon the old-fashioned method of punishment for children who do not measure up to the standards and conditions prevailing in our schools, we are trying to encourage the team spirit. We have instituted the house system and we encourage competition in schools—something which hon. and right hon. Gentlemen opposite are very fond of bringing in in other respects. I can think of many ordinary schools, junior schools and secondary modern schools, as well as youth clubs and other centres, where the fact that there are trophy cups to be won by individuals or teams makes a tremendous difference in the outlook of the children and encourages a good general spirit in both sport and conduct.
I ask that the trophy cup shall no longer be regarded as it was, perhaps, twenty years ago when only a few clubs or organisations had them. Because of their importance in developing a good interest and spirit generally in our schools and clubs today, trophy cups also should be brought within the terms of the Amendment.
9.0 p.m.
There are all manner of other discriminations within the general provision we are discussing. For the life of me, I cannot understand why the poor housewife who has to darn her husband's socks, if he still insists upon wearing woollen ones instead of nylon or Terylene, should have to pay tax on her darner. I cannot understand why, in these days of mechanisation when we are trying to encourage people, particularly women, to take up doing something with their hands 1001 like needlework or embroidery, we should put a tax on the embroidery frames and implements which are used. The woman who tries to save money and bring comfort into her home—perhaps even being successful in persuading her husband to do something also—has to pay tax on the winder she uses for her wool if she wants to make gloves or some such article in her own home.
If we could bring about a general reduction to 5 per cent., we could, at one sweep, almost wipe out very many of the anomalies which exist.
§ Mr. S. O. Davies (Merthyr Tydvil)I do not propose to roam into the innumerable anomalies dealt with by these Amendments because my hon. Friends have done that work extremely well tonight, but I must give what support I can to the plea made from both sides of the Committee to end the extraordinary anomaly in the tax on buttons and zip fasteners.
I have a substantial interest in this plea which I make to the Chancellor. I cannot for the life of me appreciate the extraordinary sense of humour of an hon. Member who laughs, who makes a great forced laugh out of any honest declaration made by an hon. Member on either side of the Committee. Of course, I know that this anomaly exists, and I know how grievous its effect is. I have assembled all the proof anyone could need in my constituency where there is a struggling industry, employing many scores of my constituents, which needs this concession from 30 per cent. down to 5 per cent. I hope that hon. Gentlemen opposite will really try to restrain their peculiar sense of humour in matters of this kind.
I do not know whether the Chancellor can really explain this anomaly. The button on one's shirt or trousers, as has been said by my hon. Friend the Member for Oldbury and Halesowen (Mr. Moyle), is placed in a totally different category from that of a zip fastener or a hook and eye. I do not understand that. There are, however, graver reasons why the Chancellor should reconsider this matter. He can easily verify this fact. I am led to believe that the struggle in the button industry has been extraordinary difficult during the last 12 or 18 months. Old-established button factories have been closed down in that period.
1002 I hope the Chancellor will make inquiries along the lines that I have suggested, because we must not forget that the competition in buttons from abroad is extremely intensive and places the British manufacturer in an extremely difficult position. The Chancellor might make inquiries about the quantity of buttons that come into this country from Hong Kong. I am the last hon. Member to suggest that anything should be done to place the people in Hong Kong in greater difficulties than they are in at present. But we know that the conditions under which those people work and are paid are not comparable with those of people who are employed in the same industry in my constituency.
In view of these considerations, I say to the Chancellor that there are the strongest reasons why this anomaly should be removed. In view of the fact that button factories have been closed in the last 18 months and that competition from abroad is getting keener every week, I hope that the Chancellor will place buttons in the same category as zip fasteners as hooks and eyes.
§ Mrs. Barbara Castle (Blackburn)Every hon. Member has a personal if not a constituency interest in buttons. I do not suppose that there is any hon. Member who is not dependent on buttons in the very personal sense of the word. I hope that the Chancellor has listened with sympathy to the compassionate appeal made by my hon. Friend the Member for Merthyr Tydvil (Mr. S. O. Davies). I can say nothing to add weight to his very moving plea.
I want to refer to the speech of my hon. Friend the Member for Stoke-on-Trent, North (Mrs. Slater). I agree with her on the two points that she emphasised about wallpaper and trophy cups. However, I should like to correct her on one small detail. Our Amendment asks for the total exemption of wallpaper from Purchase Tax, not a reduction of 5 per cent., to which she referred.
The reason why we are putting forward this case for wallpaper is that we cannot understand why, at this stage of our postwar developments, successive Chancellors should continue to regard wallpaper as a semi-luxury. In the last Budget the Chancellor halved the Purchase Tax on carpets and linoleum. At that time wallpaper was and has continued to be in the same 1003 group, but wallpaper remained at 30 per cent.
For the past year wallpaper manufacturers and the general public have had to suffer this heavy tax although other items in the same group have been reduced. It is incomprehensible to us why there should be a differentiation to the disadvantage of wallpaper. We shall have something to say later about carpets, but what we are saying about wallpaper now is that it should be grouped in the category to which it naturally belongs, that is the category of materials used for interior decoration, such as paints, varnishes and distemper. If they can be exempt from tax it is difficult to understand why wallpaper should be picked out in this way.
We are all delighted to know we have passed through the period of post-war austerity. There has been a flowering of colour in our homes and an absolute boom in redecoration, interior and exterior. It has done an enormous amount to brighten the lives of people in our cities and in the countryside, too, in the last few years. It has done an enormous amount to lift the morale of every one of us. There has been a tremendous boom in "do-it-yourself" because very few working-class people—great masses of our people—can afford heavy bills for professional interior decoration. All the magazines contain advice on how to put up wallpaper and how to do the paint-work, and so on, and there has been a great public response.
In my part of the world there is a preference for wallpaper. If the people there were free to choose between various materials bearing similar Purchase Tax my constituents would plump for wallpaper rather than distemper. At this time of stringency they have to consider price as affected by tax when choosing between taxed and untaxed materials. This tax puts a burden of an extra 6d. a roll, roughly, on the most popular ranges of wallpaper, that is, wallpapers costing between 4s. and 6s. a roll, which are what most people look for when they start a brightening up campaign in their homes. Sixpence on a roll is an addition to the price which makes them think twice about buying it.
1004 We are now in a situation in which I am told by a firm of wallpaper manufacturers in my constituency that this year the anticipated spring boom in wallpapering is not taking place, and that there has been a reduction in demand compared with this period last year. They fear that that may be related to the short-time and general falling off in employment locally. They fear they will feel the pinch, that there will be a snowballing effect. Short-time in the cotton mills means that the cotton workers have to postpone certain domestic amenities such as redecoration. That hits the local firm of wallpaper manufacturers, so trade is reduced, and so the effects go on, snowballing.
We on this side of the Committee feel very strongly that this additional burden of 6d. is too much in circumstances like that. The firm in my constituency tells me that for every £1 they pay in wages they have to pay £1 in Purchase Tax, and that is a very heavy item indeed, particularly when the wallpaper industry has been suffering under the very steep rise in the prices of its raw materials. The Chancellor of the Exchequer will be well aware that the price of the basic paper on which they work has risen from about £10 pre-war to £73 per ton now.
9.15 p.m.
Therefore the wallpaper manufacturers are being squeezed between the rising price of their raw material and the burden of Purchase Tax. We ask the Chancellor of the Exchequer, in the interests of the "brighten your home campaign", and in the interests of lifting the burden of tax from a household essential, to put wallpaper into the exempt class with paint, distemper and varnish.
I want to put a brief point about trophy cups. I know it sounds a rather frivolous item from which to suggest the tax should be removed, and hon. Members can have a little laugh about it. It sounds as though one was suggesting it for the sake of suggesting reductions in tax, which is always popular. However, I want seriously to ask the Chancellor to consider the point made by my hon. Friend the Member for Stoke-on-Trent, North. It was brought home to me very vividly only this last weekend when I was in my constituency.
I was attending the thirteenth year of the Blackburn Festival for Music, Drama and Ballet. This is a cultural activity 1005 and the local enthusiasts have managed since the war with a certain amount of local authority financial help. It is not very generous because the Government's economic policy has been squeezing local authority expenditure so much by the pressure of high interest rates that there is not all that much money to spend. When I went along to the finals in the junior section of the musical part of the Festival, it was brought home to me what an important part these festivals play in the life of the children locally, and what it means to them to win a trophy. We had the threadbare situation that the compére of the festival had to plead twice during the week for some generous donor to produce another trophy because they were a couple short.
I realised that this was a serious item because about seventy trophies have had to be found to reward all the classes and all the sections in this festival—
§ The Temporary Chairman (Mr. Malcolm MacPherson)Order. I am sorry to interrupt the hon. Lady, but I am afraid she must leave the discussion of trophies until we discuss the Question, "That this be the First Schedule to the Bill."
Mrs. WhiteWith great respect, Mr. MacPherson, we were told by your predecessor in the Chair that it was in order to discuss garden furniture and trophy cups under the general heading of haberdashery.
§ The Temporary ChairmanI am enlightened and grateful to the hon. Lady, but I am still rather puzzled. According to my reading it would not be in order, but I will certainly give the hon. Lady the benefit of the situation.
§ Mrs. CastleThank you, Mr. MacPherson, I am very grateful to you. I ventured on this theme only because previous speakers had been allowed to refer to this subject.
I say to the Chancellor in all sincerity that these trophies play a very real part in the lives of schools and of children engaging in these local contests. I saw the junior choirs who had competed for one section of this Festival. One of the local primary schools had proudly won a trophy, and then there was a shortage 1006 of one trophy because the local authority grant had run out. The appeal made to the members of the audience did not meet with a very rapid response because one could see people who would have liked to give a trophy making a rapid calculation—about £20 or £30. It is a big item, and an important part of that cost is represented by Purchase Tax.
It is therefore on serious grounds of public interest that we ask the Chancellor of the Exchequer to remove the tax on trophy cups which, after all, are not for personal enjoyment but are symbols of, and part and parcel of, widespread sporting and cultural activities.
§ Mrs. Eirene White (Flint, East)It is not very long since we had one of the usual reasonable and friendly speeches which we come to expect from the Chancellor of the Exchequer, in which he said that in dealing with the Purchase Tax his aim was to simplify and to streamline it and, as far as possible, to get rid of the anomalies. Had one left it at that, of course, everything would have been satisfactory, but the moment we turn from Clause 1 to the consideration of the First Schedule, on which we are now engaged, we find at once that, far from simplifying or streamlining it or getting rid of the anomalies, it so happens that the particular section with which we are especially dealing, that of Group 5, has become considerably more complicated and a number of anomalies have remained.
My hon. Friends have dealt with the major matters that we wished to discuss. It is true that one or two anomalies have been removed. I notice, for example, that whereas previously nightdress tops were charged at 30 per cent., whereas the rest of the garment was charged only 5 per cent., all are now to be charged at 5 per cent. My hon. Friend the Member for Walthamstow, West (Mr. Redhead) drew attention to the matter of ladies' modesty vests. There was an anomaly between ladies' modesty vests and blousettes. Modesty vests must not exceed 14 inches at the front and 10 inches at the back. If the garment exceeded those measurements, it became a blousette. If it was a modesty vest, it was charged 30 per cent. and if a blousette it was charged 5 per cent.
It seems to me that what would be a modesty vest for my hon. Friend the 1007 Member for Exchange Division of Liverpool (Mrs. Braddock) would probably be a blousette for my hon. Friend the Member for Blackburn (Mrs. Castle). I would at least congratulate the Chancellor on the fact that now there is no discrimination between modesty vests and blousettes, and I think that he has done something very worth while there.
§ Mr. RedheadWould my hon. Friend allow me to point out that it is fair to remark that the Chancellor has at the same time reduced the tax on shirt dicky fronts to 5 per cent., so that there is to be no sex discrimination?
§ Mrs. WhiteI agree there is to be no sex discrimination, and we give him a good mark for that, but he has at the other end met the Freudian wish of the hon. Member for Kidderminster (Mr. Nabarro) and imposed a tax on corset laces, which seems to me quite unnecessary.
The article of haberdashery which has aroused the greatest discussion has been the button, and I am sorry that the Chancellor was not here in person to listen to the really impassioned pleas made to him on both sides of the Committee. He has given way at very great expense indeed on dividend stripping, and at very much less expense on miners' helmets, and I strongly suspect that he will find it politic to give way on buttons. It is quite clear that there is very strong feeling in this matter. He has now discriminated against buttons, having left them at a very high rate of tax, and having reduced the tax on all competitive forms of fastening. That is palpably unfair, and I cannot think that the Chancellor really intended to do this.
One of my hon. Friends was saying that there was no rational argument for this treatment of buttons, and suggested that the Chancellor himself, being a bachelor, had such difficulty with buttons that he had such a feeling of resentment which could be expressed only by this punitive rate of tax. I notice that almost every other form of fastening which was highly taxed has had the tax reduced, but nevertheless buttons, cuff links and studs remain at a punitive rate, and I can only think that there must a psychological explanation for this. The Chancellor obviously loses his buttons, loses his studs and cannot manage his cuff links, and 1008 has expressed that in his first Budget by taxing them at an exorbitant rate.
The indignation of the manufacturers of buttons is genuine and the tax seems completely unfair discrimination against an industry, small but very important in its own localities. We cannot see any rhyme or reason for the discrimination. Zip fasteners and buttons are strongly competing articles, and I seriously suggest that the Chancellor reconsiders the matter.
The other matters which we have been permitted by courtesy of the Chair to discuss under the heading "haberdashery" are wallpaper, garden furniture and trophy cups. The logic behind that is that in each case it is proposed that the tax should be reduced by similar amounts. Here again some very cogent arguments have been adduced. I was especially impressed by the speech of my hon. Friend the Member for Shoreditch and Finsbury (Mr. Collins), who pointed out how ridiculous it is that certain articles of furniture of the most utilitarian nature should be taxed at 15 per cent. whereas the most luxurious article of furniture within the four walls of a house is charged at only 5 per cent.
My hon. Friend pointed out that there is hardly any justification for Group 16 and that if the Chancellor is concerned to tidy up Purchase Tax, this would have been a very obvious group to have eliminated altogether. There has been some little rearrangement in the Second Schedule which on the whole has been sensible, but this seems to be an opportunity so far missed. I hope the Chancellor will be able to carry the reorganisation of the Second Schedule a little further before we reach it.
My hon. Friend the Member for Blackburn made a very strong case about wallpaper and other hon. Members have mentioned the subject. It is true that there are some things in this group to which a little tax will not do any harm, things such as cutlet and ham frills and pie-dish collars. I do not think that we should worry ourselves unduly about them, but when we come to the serious matter of wallpaper, some encouragement should be given. Wallpaper is a household necessity, and I cannot see any justification for keeping this relatively high level of tax on wallpaper.
1009 If the Chancellor does not wish to deal with the entire group, and if he wishes to keep the somewhat higher rate on the other types of paper, display paper and so on, we would at least be prepared to hear arguments on that issue, but we strongly feel that wallpaper is something which affects household comfort and cheerfulness. We believe that people should be encouraged to keep their houses in a good state of decoration and that wallpaper is not a suitable subject for tax.
I will not add to the very eloquent pleas on a not unimportant Amendment about trophy cups. My hon. Friends have given good reasons why at least some consideration should be given to that subject. Without more ado, I hope that the Chancellor or the Financial Secretary will tell us that the Government have listened to our arguments and are prepared to give us an assurance that what we have suggested will be accepted. Otherwise, we shall feel obliged to express our opinions in the Division Lobby.
§ 9.30 p.m.
§ Mr. Charles Royle (Salford, West)In just a few sentences I want to support what has been said about wallpaper, with perhaps a different argument, and from a different point of view from that which has so far been expressed. My hon. Friend the Member for Blackburn (Mrs. Castle) has very ably dealt with the technical and economic side of the matter, as it affects the industry, and I hope that her arguments will affect the Treasury to such an extent that it will be prepared to give way.
There is another argument. I represent a working-class, industrial constituency, as do many of my hon. Friends, and we are very much concerned with the housing situation. When we have been discussing housing matters arguments have been advanced from the Treasury Bench about the need for both landlords and tenants to keep in proper repair houses which will have to be occupied for many more years before they are replaced. Right hon. Gentlemen opposite have urged that landlords and tenants should do something to preserve them and maintain them as reasonable dwellings. I suggest that to some of the occupiers of these poorer dwellings the question of wallpaper is vital. It is not a question of distemper, paint or enamel. Something needs to be covered up, and 1010 the only thing that can properly cover it up is wallpaper. There may be objections to removing Purchase Tax from the more expensive types of wallpaper, but I suggest that the Chancellor should examine the possibility of taking it off the less expensive kinds.
It must have been in the Budget of 1946, when wallpaper was carrying a very heavy tax, that I made this sort of appeal to my right hon. Friend the Member for Bishop Auckland (Mr. Dalton). He saw the point, and reduced the tax, and it has continued at that level until the present time. I am grateful to the Chancellor for the reduction that he is now making, in line with other commodities, but I suggest that he should make wallpaper free of Purchase Tax, so that the occupants of some of the very poorer types of house may have an opportunity as cheaply as possible to cover up some of the cracks and damage caused by time.
I am sorry to see that the Financial Secretary to the Treasury has his arm in a sling. I dread to think what condition he will be in by Wednesday night if we keep discussing Purchase Tax. If he will start off with his right hon. Friend by giving way on this group of Amendments I can assure him that we shall do our best to see that he is in a much better physical state by Wednesday.
Mr. AmoryI am very sorry for my hon. and learned Friend—but it is only his left wing which is affected.
§ Mr. SimonThe hon. Member for Oldbury and Halesowen (Mr. Moyle) said that unless the present Government remitted all taxation they would have no chance of winning the next Election. Laudable as that object is, now that my right hon. Friend has returned to the Chamber I certainly could not sacrifice, on his behalf, the revenue involved in accepting this series of Amendments, but I hope to satisfy the Committee that the structure of the tax which is embodied in the Schedule is a reasonable one.
I will deal first with haberdashery. The fundamental fallacy lying at the basis of the very entertaining speech of the hon. Member for Walthamstow, West (Mr. Redhead) is to imagine that haberdashery consists of one type of goods. In point of fact, the haberdashers' shops sell three quite distinct types, and this is now recognised in the reconstruction of the 1011 Schedule. Haberdashery ranges from such things as ties, belts and muffs to shoe-trees and coat hangers—hard haberdashery. Some haberdashery has affinities with clothing, and that has been reduced to 5 per cent., to fit in with the clothing taxation under the Purchase Tax Schedule. The second class has an affinity with domestic hardware, things like shoe-trees and coat hangers, and therefore they have been put in the 15 per cent. class. The third type merges into imitation jewellery and is therefore taxed now at 30 per cent.
I do not think that there is any doubt about the first lot—the Committee will not want me to go further into that, because those articles are at the 5 per cent. rate which is recommended in this Amendment—except to say that we have managed to correct a great number of anomalies in the reconstruction of this part of the tax. For example, ties were taxed at 30 per cent., as earlier my hon. Friend the Member for Macclesfield (Sir A. V. Harvey) pointed out, men's collars at 5 per cent., suspenders at 30 per cent. but braces at 5 per cent., cummerbunds, for some reason, at 30 per cent. but waistcoats at 5 per cent. All these articles are now taxed at 5 per cent.
The second class of haberdashery goods is quite a distinct class of goods. These are the hard haberdashery, like the darners which the hon. Lady the Member for Stoke-on-Trent, North (Mrs. Slater) mentioned, wool-winders and coat hangers, shoe-trees and buttonhooks. They are quite different types of goods. They are not worn on the person at all and in many cases, indeed, there is an alternative charge for them as domestic hardware.
I am bound to point out that if the Amendment of the hon. Gentleman the Member for Oldbury and Halesowen were accepted, there would be very little loss of revenue because, in fact, these goods would be caught by the Schedule in so far as it applies to domestic hardware.
§ Mr. RedheadAm I right in saying that if one has a garment which may be simply smothered in buttons or sequins the charge will be the charge appropriate to the tax on the garment, namely 5 per cent., whereas if a button is purchased as a replacement, as a single item, the tax will be 30 per cent.? If that is so will 1012 the hon. and learned Gentleman explain the logic of it?
§ Mr. SimonThat is perfectly correct. I have not yet come to buttons. I am coming to them next. I wanted first to satisfy the Committee that it would be illogical to tax articles of hard haberdashery in the same way as clothing, to put them into the clothing group simply because they are traditionally sold in haberdashers' shops.
I now come to the third class where haberdashery merges into articles of artificial jewellery and I shall also deal in that connection with buttons. There are two main groups. There are such things as beads, sequins, buttons, cufflinks, studs, tiepins, tie retainers, scarf rings, scarf holders and similar articles. One has only to enumerate them to see how they merge into the sphere of artificial jewellery. The hon. Lady the Member for Flint, East (Mrs. White) will forgive me a personal reference, but one has only to glance at her charming appearance to see that buttons are very different things from "common articles," as the hon. Member for Oldbury and Halesowen defined them. Of course, the sort of buttons that men wear are common articles but the buttons worn by the hon. Lady the Member for Flint, East, and by other hon. Ladies, become articles of artificial jewellery, and, if I may say so, very attractive they are. It would be quite wrong not to treat them as such, and, in fact, we should get the grossest of anomalies if we failed to treat them in that way.
§ Mr. Julian Snow (Lichfield and Tamworth)I am intrigued by this definition of haberdashery. May I ask who defines haberdashery in this way, because what the hon. and learned Gentleman is saying will make the old gentlemen of Oxford Street turn in their graves.
§ Mr. SimonAll I know is that this particular Schedule of the Purchase Tax, which, I imagine was agreed with the trade, has from the inception been headed "haberdashery". I think I am right in saying that all these articles are sold by haberdashers' shops and for that reason they are called haberdashery. I hope I have convinced the Committee that straight away, we have three quite separate classes of goods.
§ Mr. MoyleHaving regard to the explanation which he has just given, may I ask the Financial Secretary how he accounts for something which has been put to me by the trade? In March, 1938, hooks and eyes, press studs, snap fasteners, slide fasteners, zip fasteners and buttons were in the same category and attracted Purchase Tax at 30 per cent. How is it that in the present Finance Bill all the fasteners are relieved of 25 per cent. of the tax but the buttons still attract 30 per cent.?
§ Mr. SimonIf the hon. Gentleman will be patient, he will find that I shall deal with all the points which have been made, including that one.
§ Mr. TurtonWhat proportion of buttons manufactured in this country are classified as artificial jewellery?
§ Mr. SimonI shall not be able to answer that question categorically, but I think that I shall be able to satisfy my right hon. Friend on the subject.
I have dealt with the first part of the third group of haberdashery, beads, sequins, and so on, and buttons and cufflinks, which obviously merge into artificial jewellery. I do not say that they are all identical but it is impossible to define the borderline. The other group, which is also traditionally haberdashery, includes such things as hairpins, hair grips, hair combs, dress combs, hair slides, and so on, which have affinities with other hairdressing goods and, to some extent, in things like hair slides, with artificial jewellery.
§ Miss Margaret Herbison (Lanarkshire, North)Not like this one that I am holding?
§ Mr. SimonNot that, but even with my limited experience I have seen other sorts which are very near to artificial jewellery, and therefore they cannot fit into the 30 per cent. group.
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 manufactures of snap fasteners, press studs and so on. That is not so, because when the button manufacturer sells to a registered manufacturer, he sells tax-free. Of course that includes the bulk of the sales of ordinary buttons which are not 1014 merging into imitation jewellery. I hope that answers the question of my right hon. Friend the Member for Thirsk and Malton (Mr. Turton). I cannot, of course, say what proportion of the button trade is made up of the ordinary buttons used for male or female attire. 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—and, so far as there is competition, also with press studs.
9.45 p.m.
I see a number of hon. Members waiting to jump on me. I have not quite finished, but perhaps I may give way.
§ Mr. S. O. DaviesIs not the hon. and learned Gentleman aware that in many cases in the button trade the manufacturer retails a large proportion of the output? I know, for instance, where a little over 50 per cent. is sold directly to retailers. There, this 30 per cent. Purchase Tax will hit the industry badly.
§ Mr. RedheadSurely, the distinction that the Financial Secretary is drawing of buttons which merge into the imitation jewellery class, upon which he rests his justification for discriminating in respect of what has hitherto been regarded as haberdashery chargeable at a common rate, is a position which has existed all along. This has not precluded buttons being included, in common with all the other items listed as haberdashery, at one common rate of 30 per cent., while imitation jewellery has been at 60 per cent. Why now discover this great difficulty?
§ Mr. SimonIn answer, first, to the hon. Member for Walthamstow, West, it is true that so far the soft haberdashery, the hard haberdashery and the imitation jewellery have been lumped together as haberdashery; but this Schedule is a rationalisation of the tax. We are trying to bring some sense into its structure. It is for that reason that this differentiation has now been brought about. In reply to the hon. Member for Merthyr Tydvil (Mr. S. O. Davies), I am not sure—it would be wrong if I pretended to the knowledge—how much of the trade is across the counter retail and how much is to the manufacturer, but I am assured that the bulk of the 1015 trade, as one would expect, is to the manufacturing tailors.
I ask the Committee to consider the sale across the counter to the housewife whose husband has lost a button and who goes in and buys an odd few. She will not buy a zip fastener then, she will not even buy a press stud. She will buy buttons, because she wants buttons, and the tax will not be of more than marginal significance in an infinitesimal proportion of the cases. When we are reconstructing a tax of this nature, I ask the Committee to look at it with a sense of realism.
One other question concerning haberdashery was put to me by the hon. Lady the Member for Stoke-on-Trent, North. It concerned children's reins. I am able to assure the hon. Lady that children's reins are among the articles of haberdashery on which the tax has been reduced from 30 to 5 per cent.
§ Mrs. SlaterI was asking that they should be included in the bracketed group beneath and so not be chargeable to tax.
§ Mr. SimonThe hon. Lady is asking for just a bit too much. These are articles of haberdashery. They have been brought down the full amount from 30 to 5 per cent. I hope that the hon. Lady will at least be thankful for that amount, which is quite considerable.
The next issue was wallpaper.
§ Mr. OsborneIt seems to me that my right hon. Friend is increasing the tax on all buttons because certain undefined female buttons could be used as costume jewellery. What differentiation is there between a male button or a female button? Secondly, what makes a female button either common or decorative, and what is the proportion?
§ Mr. SimonIn the first place, I did not invent the term "female button". Second, it is not the purpose to increase the tax on buttons at all. It is intended to leave the tax on buttons as it is at the moment. I can say, without giving any undertaking to the Committee at all, and without implying any undertaking, that my right hon. Friend, who was not here during the bulk of this debate, will study the arguments which have been put forward and give them full consideration.
1016 I pass to the subject of wallpaper. This matter was raised by the hon. Lady the Member for Stoke-on-Trent, North, the hon. Lady the Member for Blackburn (Mrs. Castle), the hon. Lady the Member for Flint, East and, finally, the hon. Member for Salford, West (Mr. Royle). I certainly found their appeals very moving. These are matters which relate to the home. I can remember my mother describing the difference she found over her lifetime in the sort of homes to which the hon. Member for Salford, West referred, between fifty years ago when she started her social work and today. I know that the supply of good quality wallpaper within the purses of people of people trying to keep up their homes is a very important matter. It is for that, among other reasons, that my right hon. Friend has reduced the tax on wallpaper in this Budget from 30 per cent. to 15 per cent. At 15 per cent. it fits in naturally with the household conception.
I do not ask the Committee, and particularly I do not ask hon. Members opposite, to accept that conception as something inherently desirable, but that is the present structure of the tax. The standard rate is 30 per cent. and the reduced rates are 15 per cent. and 5 per cent., of which 5 per cent. is particularly on such things as clothing and furniture in the home. The other household requisites are taxed at 15 per cent., and wallpaper fits into that category. It fits in with other articles taxable at the same rate, such as linoleum and carpets.
§ Mrs. CastleHow does the hon. and learned Gentleman classify paints, varnish and distemper? Are not they in the household category? Yet they are exempt.
§ Mr. SimonThey are exempt partly for industrial reasons. I am sure the hon. Lady was right when she said that, in spite of the fact that there has been a very much greater tax discrimination in the past than there is now, that has not prevented people from exercising a preference for wallpaper. I believe the reduction in the tax from 30 per cent. to 15 per cent. will enable a number of those who wish to exercise that preference to do so.
I am bound to point out that the Amendment would cost £3 million in revenue, and, as my right hon. Friend pointed out, that is a matter which he is 1017 bound to consider in looking at these Amendments. I repeat that he has gone a long way to meet the perfectly valid points urged movingly by hon. Members and hon. Ladies opposite in reducing the tax from 30 per cent. to 15 per cent.
§ Mr. Niall MacDermot (Lewisham, North)When the hon. and learned Member speaks of £3 million, is he referring to the Amendment on haberdashery or to the item of wallpaper?
§ Mr. SimonWallpaper. I pointed out that the haberdashery Amendment will not cost as much as it might appear because the articles are caught by one of the other parts of the Schedule.
I come to the debate on garden furniture, which was dealt with mainly by the hon. Member for Shoreditch and Finsbury (Mr. Collins), who speaks on these matters with considerable authority. He says, "You need only take a table out of the house, cut a hole in it and stick an umbrella in it, and it becomes chargeable at the higher rate of tax as garden furniture." Very effective and entertaining that sounded as he said it, but, frankly, people do not behave in that way. They do not take their domestic table out into the garden and cut a hole in it. The whole point of the differentiation is that by and large garden furniture is distinct from domestic furniture.
§ Mr. CollinsIf the hon. and learned Member rejects my definition, will he tell us what is a garden table, suitable for a garden umbrella, but a table with a hole in the middle?
§ Mr. SimonOf course it is a table with a hole in the middle, but it is made as garden furniture, which is quite distinct. The 5 per cent. rate of tax is for the domestic article, for the furniture inside the house. Garden furniture has always been treated separately from domestic and office furniture for Purchase Tax purposes, as far as I know from the inception of the tax. It embraces a very much wider range of articles. If I may take the hon. Member back to his courting youth, I would remind him that it includes such things as hammocks, pergolas, rustic arches, plant boxes and so on, all in a quite distinct category from the category of domestic furniture.
§ Mr. Hector Hughes (Aberdeen, North)Where in the Bill, or anywhere, is there 1018 a definition of garden furniture? Where is there anything to distinguish an indoor domestic table from a table for use in the garden?
§ Mr. R. T. Paget (Northampton)Supposing one buys the table and the umbrella separately, is one then all right?
§ Mr. SimonI should not like to advise the hon. and learned Member for Northampton (Mr. Paget) on such a matter. If the hon. and learned Member for Aberdeen, North (Mr. Hector Hughes) will look in page 44 of Notice No. 78 he will find the various definitions of garden furniture.
§ Mr. OsborneHe has only just come into the Chamber.
§ Mr. SimonThe Bill reduces the tax on garden furniture from 30 per cent. to 15 per cent. and it goes a good deal of the way to meet the hon. Member's argument. Again, I ask the Committee to say that this is fixed at a reasonable rate.
10.0 p.m.
The tax on trophy bowls has been reduced from 30 per cent. to 15 per cent. I quite appreciate the point made by the hon. Lady the Member for Stoke-on-Trent, North and the hon. Lady the Member for Blackburn about the part which these articles play in stimulating proper rivalry in schools, clubs and so forth; but that is not the only use for these articles. Again, one must look at the matter as a whole. The reform of the tax, among other things, has followed one of the principles quite rightly, I think, laid down by the hon. Member for Shoreditch and Finsbury, namely, that articles made of different materials but serving the same purpose should not be differentiated as to tax. For that reason, the tax on gold and silver bowls has been brought down to 15 per cent.
Flower vases and bowls which are used for holding flowers on the table are taxed at 15 per cent. as tableware. How can one really distinguish a trophy bowl from a rose bowl? Quite often, in fact, a rose bowl is a trophy bowl. For that reason, they are quite correctly, in my respectful submission, put into the 15 per cent. category, where they fit conveniently with other articles with which they might compete and where they already enjoy a reduction from 30 to 15 per cent.
I hope that I have answered the various points made in the debate. For the 1019 reasons I have given, I could not advise the Committee to accept any of the Amendments.
§ Question put, That "Group 5 (haberdashery)" stand part of the Schedule:—
§ The Committee divided: Ayes 198, Noes 164.
1021| Division No. 130.] | AYES | [10.2 p.m. |
| Agnew, Sir Peter | Goodhart, Philip | Mott-Radclyffe, Sir Charles |
| Aitken, W. T. | Gough, C. F. H. | Nabarro, G. D. N. |
| Amery, Julian (Preston, N.) | Graham, Sir Fergus | Nairn, D. L. S. |
| Amory, Rt. Hn. Heathcoat (Tiverton) | Green, A. | Neave, Airey |
| Arbuthnot, John | Grimston, Hon. John (St. Albans) | Nicholls, Harmar |
| Armstrong, C. W. | Grosvenor, Lt..Col. R. G. | Nicholson, N. (B'n'm'th, E. & Ch'oh) |
| Atkins, H. E. | Hall, John (Wycombe) | Nugent, G. R. H. |
| Baldock, Lt.-Cmdr. J. M. | Harris, Frederic (Croydon, N. W.) | Oakshott, H. D. |
| Baldwin, A. E. | Harris, Reader (Heston) | Orr, Capt. L. P. S. |
| Balniel, Lord | Harrison, Col. J. H. (Eye) | Osborne, C. |
| Barlow, Sir John | Harvey, Sir Arthur Vere (Macclesf'd) | Page, R. G. |
| Barter, John | Harvey, John (Walthamstow, E.) | Pannell, N. A. (Kirkdale) |
| Bell, Philip (Bolton, E.) | Heald, Rt. Hon. Sir Lionel | Partridge, E. |
| Bennett, Dr. Reginald | Heath, Rt. Hon. E. R. G. | Peel, W. J. |
| Bevins, J. R. (Toxteth) | Hesketh, R. F. | Peyton, J. W. W. |
| Bidgood, J. C. | Hicks-Beach, Maj. W. W. | Pike, Miss Mervyn |
| Biggs-Davison, J. A. | Hill, Rt. Hon. Charles (Luton) | Pilkington, Capt. R. A. |
| Bingham, R. M. | Hill, Mrs. E. (Wythenshawe) | Pitt, Miss E. M. |
| Bishop, F. P. | Hinchingbrooke, Viscount | Price, David (Eastleigh) |
| Body, R. F. | Hirst, Geoffrey | Price, Henry (Lewisham, W.) |
| Bossom, Sir Alfred | Hobson, John (Warwick & Leam'gt'n) | Prior-Palmer, Brig. O. L. |
| Boyle, Sir Edward | Holland-Martin, C. J. | Profumo, J. D. |
| Braine, B. R. | Hornby, R. P. | Rawlinson, Peter |
| Braithwaite, Sir Albert (Harrow, W.) | Hornsby-Smith, Miss M. P. | Redmayne, M. |
| Bromley-Davenport, Lt.-Col. W. H. | Horobin, Sir Ian | Remnant, Hon. P. |
| Browne, J. Nixon (Craigton) | Howard, Gerald (Cambridgeshire) | Renton, D. L. M. |
| Bryan, P. | Howard, Hon. Greville (St. Ives) | Ridsdale, J. E. |
| Burden, F. F. A. | Howard, John (Test) | Rippon, A. G. F. |
| Butcher, Sir Herbert | Hughes-Young, M. H. C. | Roberts, Sir Peter (Heeley) |
| Butler, Rt. Hn. R. A. (Saffron Walden) | Hurd, A. R. | Roper, Sir Harold |
| Carr, Robert | Hutchison, Michael Clark (E'b'gh, S.) | Ropner, Col. Sir Leonard |
| Channon, Sir Henry | Russell, R. S. | |
| Chichester-Clark, R. | Hyde, Montgomery | Scott-Miller, Cmdr. R. |
| Clarke, Brig. Terence (Portsmth, W.) | Hylton-Foster, Rt. Hon. Sir Harry | Sharples, R. C. |
| Cole, Norman | Irvine, Bryant Godman (Rye) | Shepherd, William |
| Conant, Maj. Sir Roger | Jennings, J. C. (Burton) | Simon, J. E. S. (Middlesbrough, W.) |
| Cooke, Robert | Johnson, Dr. Donald (Carlisle) | Smithers, Peter (Winchester) |
| Cooper-Key, E. M. | Johnson, Eric (Blackley) | Spearman, Sir Alexander |
| Cordeaux, Lt.-Col. J. K. | Joseph, Sir Keith | Speir, R. M. |
| Corfield, Capt. F. V. | Keegan, D. | Stanley, Capt. Hon. Richard |
| Craddock, Beresford (Spelthorne) | Kerr, Sir Hamilton | Steward, Sir William (Woolwich. W.) |
| Crosthwaite-Eyre, Col. O. E. | Kimball, M. | Storey, S. |
| Crowder, Sir John (Finchley) | Kirk, P. M. | Stuart, Rt. Hon. James (Moray) |
| Crowder, Petre (Ruislip—Northwood) | Lancaster, Col. C. G. | Studholme, Sir Henry |
| Cunningham, Knox | Leather, E. H. C. | Taylor, Sir Charles (Eastbourne) |
| Currie, G. B. H. | Leburn, W. G. | Taylor, William (Bradford, N.) |
| Dance, J. C. G. | Legge-Bourke, Maj. E. A. H. | Teeling, W. |
| Davidson, Viscountess | Legh, Hon. Peter (Petersfield) | Temple, John M. |
| D'Avigdor-Goldsmid, Sir Henry | Lindsay, Hon. James (Devon, N.) | Thomas, Leslie (Canterbury) |
| Deedes, W. F. | Low, Rt. Hon. Sir Toby | Thorneycroft, Rt. Hon. P. |
| Digby, Simon Wingfield | Lucas, Sir Jocelyn (Portsmouth, S.) | Thornton-Kemsley, Sir Colin |
| Donaldson, Cmdr. C. E. McA. | Lucas, P. B. (Brentford & Chiswick) | |
| Doughty, C. J. A. | McAdden, S. J. | Tilney, John (Wavertree) |
| du Cann, E. D. L. | Macdonald, Sir Peter | Turton, Rt. Hon. R. H. |
| Dugdale, Rt. Hn. Sir T. (Richmond) | McKibbin, Alan | Vane, W. M. F. |
| Eden, J. B. (Bournemouth, West) | Mackie, J. H. (Galloway) | Wall, Patrick |
| Elliott, R. W. (Ne'castle upon Tyne, N.) | McLaughlin, Mrs. P. | Ward, Rt. Hon. G. R. (Worcester) |
| Emmet, Hon. Mrs. Evelyn | Macleod, Rt. Hn. Iain (Enfield, W.) | Ward, Dame Irene (Tynemouth) |
| Errington, Sir Eric | Maddan, Martin | Whitelaw, W. S. I. |
| Fell, A. | Maitland, Cdr. J. F. W. (Horncastle) | Williams, Paul (Sunderland, S.) |
| Finlay, Graeme | Marlowe, A. A. H. | Wilson, Geoffrey (Truro) |
| Fisher, Nigel | Marshall, Douglas | Wood, Hon. R. |
| Fletcher-Cooke, C. | Mathew, R. | Woollam, John Victor |
| Fraser, Sir Ian (M'cmbe & Lonsdale) | Maudling, Rt. Hon. R. | Yates, William (The Wrekin) |
| Freeth, Denzil | Mawby, R. L. | |
| Gammans, Lady | Maydon, Lt.-Cmdr. S. L. C. | TELLERS FOR THE AYES: |
| Gibson-Watt, D. | Molson, Rt. Hon. Hugh | Mr. Wills and Mr. Brooman-White |
| Glover, D. | Moore, Sir Thomas | |
| NOES | ||
| Ainsley, J. W. | Bacon, Miss Alice | Blackburn, F. |
| Allaun, Frank (Salford, E.) | Baird, J. | Boardman, H. |
| Allen, Arthur (Bosworth) | Benson, Sir George | Bowden, H. W. (Leicester, S. W.) |
| Allen, Scholefield (Crewe) | Beswick, Frank | Bowen, E. R. (Cardigan) |
| Bowles, F. G. | Hughes, Cledwyn (Anglesey) | Peart, T. F. |
| Braddock, Mrs. Elizabeth | Hughes, Hector (Aberdeen, N.) | Pentland, N. |
| Brown, Thomas (Ince) | Hunter, A. E. | Popplewell, E. |
| Burke, W. A. | Hynd, H. (Accrington) | Prentice, R. E. |
| Burton, Miss F. E. | Hynd, J. B. (Attercliffe) | Price, J. T. (Westhoughton) |
| Castle, Mrs. B. A. | Irvine, A. J. (Edge Hill) | Probert, A. R. |
| Champion, A. J. | Irving, Sydney (Dartford) | Pursey, Cmdr. H. |
| Chapman, W. D. | Isaacs, Rt. Hon. G. A. | Randall, H. E. |
| Chetwynd, G. R. | Jeger, George (Goole) | Rankin, John |
| Coldrick, W. | Jeger, Mrs. Lena (Holbn & St. Pncs, S.) | Redhead, E. C. |
| Collick, P. H. (Birkenhead) | Jenkins, Roy (Stechford) | Reeves, J. |
| Collins, V. J. (Shoreditch & Finsbury) | Jones, Rt. Hn. A. Creech (Wakefield) | Reynolds, G. |
| Corbet, Mrs. Freda | Jones, David (The Hartlepools) | Roberts, Goronwy (Caernarvon) |
| Craddock, George (Bradford, S.) | Jones, Elwyn (W. Ham, S.) | Robinson, Kenneth (St. Pancras, N.) |
| Cronin, J. D. | Jones, J. Idwal (Wrexham) | Rogers, George (Kensington, N.) |
| Crossman, R. H. S. | Jones, T. W. (Merioneth) | Ross, William |
| Dalton, Rt. Hon. H. | King, Dr. H. M. | Royle, C. |
| Davies, Stephen (Merthyr) | Lawson, G. M. | Short, E. W. |
| Deer, G. | Ledger, R. J. | Silverman, Julius (Aston) |
| Dodds, N. N. | Lee, Frederick (Newton) | Slater, Mrs. H. (Stoke, N.) |
| Dugdale, Rt. Hn. John (W. Brmwch) | Lindgren, G. S. | Snow, J. W. |
| Ede, Rt. Hon. J. C. | Mabon, Dr. J. Dickson | Sorensen, R. W. |
| Edelman, M. | McAlister, Mrs. Mary | Sparks, J. A. |
| Edwards, Rt. Hon. John (Brighouse) | MacColl, J. E. | Steele, T. |
| Edwards, W. J. (Stepney) | MacDermot, Niall | Stones, W. (Consett) |
| Evans, Albert (Islington, S. W.) | McGhee, H. G. | Stross, Dr. Barnett (Stoke-on-Trent, C.) |
| Evans, Edward (Lowestoft) | McGovern, J. | Summerskill, Rt. Hon. E. |
| Fernyhough, E. | McInnes, J. | Sylvester, G. O. |
| Finch, H. J. | McKay, John (Wallsend) | Taylor, Bernard (Mansfield) |
| Foot, D. M. | Mahon, Simon | Taylor, John (West Lothian) |
| Fraser, Thomas (Hamilton) | Mallalieu, J. P. W. (Huddersfd, E.) | Thomas, Iorwerth (Rhondda, W.) |
| Gaitskell, Rt. Hon. H. T. N. | Mann, Mrs. Jean | Tomney, F. |
| George, Lady Megan Lloyd (Car'then) | Marquand, Rt. Hon. H. A. | Viant, S. P. |
| Gibson, C. W. | Mason, Roy | Wade, D. W. |
| Greenwood, Anthony | Mayhew, C. P. | Weitzman, D. |
| Grenfell, Rt. Hon. D. R. | Mikardo, Ian | West, D. G. |
| Grey, C. F. | Mitchison, G. R. | Wheeldon, W. E. |
| Griffiths, David (Rother Valley) | Monslow, W. | White, Mrs. Eirene (E. Flint) |
| Griffiths, Rt. Hon. James (Llanelly) | Moody, A. S. | Wilcock, Group Capt. C. A. B. |
| Hall, Rt. Hn. Glenvil (Colne Valley) | Moyle, A. | Willey, Frederick |
| Hamilton, W. W. | Mulley, F. W. | Williams, Rev. Llywelyn (Ab'tillery) |
| Hannan, W. | Neal, Harold (Bolsover) | Williams, Rt. Hon. T. (Don Valley) |
| Harrison, J. (Nottingham, N.) | Noel-Baker, Rt. Hon. P. (Derby, S.) | Willis, Eustace (Edinburgh, E.) |
| Hastings, S. | Oliver, G. H. | Wilson, Rt. Hon. Harold (Huyton) |
| Hayman, F. H. | Oram, A. E. | Winterbottom, Richard |
| Henderson, Rt. Hn. A. (Rwly Regis) | Orbach, M. | Woof, R. E. |
| Herbison, Miss M. | Owen, W. J. | Yates, V. (Ladywood) |
| Hewitson, Capt. M. | Paget, R. T. | Zilliacus, K. |
| Hobson, C. R. (Keighley) | Paling, Rt. Hon. W. (Dearne Valley) | |
| Holman, P. | Palmer, A. M. F. | TELLERS FOR THE NOES: |
| Holt, A. F. | Pannell, Charles (Leeds, W.) | Mr. Pearson and Mr. Simmons. |
| Hubbard, T. F. | Parker, J. |
§ Mr. CollinsI beg to move, in page 29, line 14, to leave out from "furniture)" to the second "or" in line 15.
§ The ChairmanWe may discuss with this Amendment the hon. Member's Amendment, in page 29, line 35, at the end to insert:
(c) in the case of articles which, except for external fitments, and except for bottoms of wood or other vegetable substance, are made mainly but not wholly of cane or wicker, where the rate under Group 23 would be so reduced to 30 per cent., it shall instead be reduced to 15 per cent.and the Amendment in the name of the hon. Member for Dover (Mr. Arbuthnot) in page 31, line 2, at end insert:5. Rush baskets previously chargeable under Group 23 (a) at 60 per cent. shall be chargeable at 15 per cent.
§ Mr. CollinsAs you have indicated, Sir Charles, this Amendment stands with 1022 others on the same subject, and as the Committee will realise, if it were moved in isolation it would have the effect of retaining the higher rate of tax instead of the 15 per cent. reduction which the Chancellor has arranged. That is the very reverse of our intention, so I hope the Chancellor will realise that what we have in mind is the exemption of shopping baskets from Purchase Tax and all the other baskets of a domestic and personal character which are covered in this group; in other words, the return to the special position which shopping baskets enjoyed, and have enjoyed since 1955.
Although the same general case exists for the exemption from tax of baskets of a domestic and personal character as exists for all those in Group 23, the position is somewhat complicated, and it may be helpful if I explain and I hope hon. Members will bear with me, because 1023 although I know it is getting late and we are anxious to go home, this is a matter of very considerable importance to a number of people whom everybody in the Committee, I know, is anxious to help.
Tax of 30 per cent. was imposed in 1955 on all the items in this group. In Committee on the Finance Bill then an Amendment was accepted which exempted shopping baskets from tax irrespective of the materials of which they were made. I would ask the Chancellor to bear that in mind. The present Bill cancels that exemption so that shopping baskets are subject to the same tax provisions as the remainder of the group, namely, that articles wholly of cane or wicker are taxed at 15 per cent. but those including any other materials are taxed at 30 per cent. The previously exempted shopping baskets have, therefore, gone up from nil to 15 per cent. or 30 per cent. according to the materials of which they are made.
10.15 p.m.
It may well astonish the Committee, at a time when the Chancellor has found it possible to reduce Purchase Tax by £41 million in a full year, to find that he has suddenly decided to impose this severe and crippling tax on the humble but useful shopping basket, and to do it in such a way as to involve indefensible discrimination. I am sure that when I have explained the position, the right hon. Gentleman will agree that the discrimination he has allowed, perhaps inadvertently, is indefensible.
I have searched for reasons for this utterly unreasonable action, and I have been given two possible explanations. The first, which I find difficult to accept, is that because some firms in the ladies' handbag trade have been importing small ladies' handbags made of cane from Hong Kong and have been selling them as shopping bags or baskets free of tax honest traders have objected. The Customs and Excise seem to have decided that if shopping baskets and ladies' handbags made of cane are chargeable at the same rate there will be no loophole left. If this is the explanation, I am sure the Committee will reject it, because it is the business of the Customs officers to see that the law is carried out, and it is indefensible that blind and disabled persons should become unemployed because of a racket in a 1024 different industry and because Customs officers are unable to prevent a few traders from acting dishonestly.
The second and equally unacceptable explanation is that the Chancellor, having made a welcome decision to reduce tax on certain domestic baskets, thought it would remove an anomaly if he re-imposed the tax on shopping baskets and brought them into the same group. If this is the explanation, he has signally failed in his objective, since in removing a possible anomaly, which the House fully approved in 1955, he has created a lot of new ones. The right hon. Gentleman told us in an earlier debate that he refused to remove anomalies because he can only do so in some cases by increasing taxation. In this case he has, perhaps inadvertently, created a whole group of new anomalies of which, for the sake of brevity I will mention only two or three.
Of recent years, as the Committee is aware, shopping baskets on wheels—those with a walking-stick handle—have become popular with tired housewives and are becoming increasingly popular with the growth in supermarkets. These are made of cane and wicker and will be subject now to 15 per cent. tax although they were formerly tax-free. The Customs and Excise have always agreed that if exactly the same basket is made in unpeeled brown willow with the bark on, it is a garden weeding basket and therefore free of tax, whereas the peeled one with the bark off is a shopping basket on wheels and will now be taxable. I know there will be a big increase in the sale of garden weeding baskets, but people, particularly in blind workshops, ought not to be driven to this expedient. That is anomaly number one.
Anomaly number two is that the 15 per cent. tax on shopping baskets only applies to those made wholly from cane and willow. People like a little bit of decoration, a little colour, in shopping baskets, and this is often done by introducing a few strands of coloured plastic material or coloured seagrass or coloured raffia. Any such basket is now taxable at 30 per cent., although it was previously exempt. Only a few minutes ago the Financial Secretary, in replying to a previous debate, said he agreed entirely with my submission that when a basket was the same basket or an article was the 1025 same article, and there was only a difference in the type of material, they ought to be charged at the same rate of tax.
I would like the Chancellor to see how utterly absurd this particular anomaly is. I have in my hand two small pieces of material which are indistinguishable from that distance or from this distance. One is plastic, the other is cane. One is subject to tax at 15 per cent., the other is subject to tax at 30 per cent. I will give them to my right hon. Friend the Member for Warrington (Dr. Summerskill) to pass across to the Chancellor since he may like to see them. So if the right hon. Gentleman has been trying to remove anomalies, this is one which I am certain he cannot defend. It seems an extraordinary price to pay for a little colour, especially when the plastic is made here and the cane has to be imported from abroad. The effect of the anomaly and of the 30 per cent. tax is to stop the production and sale of this kind of basket altogether, and these were the ones for which there was the most demand.
The third anomaly is that a plastic and cane bread basket is now taxed at 15 per cent.—it has been reduced from 30 per cent. If a handle is put on it and it becomes a shopping basket, it will pay 30 per cent., when formerly exempt, if there happens to be a little colour. I do not believe that the Chancellor would have imposed the tax if he had known that it would create such absurdities and injustices. Imagine doubling the tax on an article because one puts a handle on it!
There is one other anomaly, and perhaps the craziest one of all. When shopping baskets were exempted from the tax in 1955, the exemption did not apply to baskets with lids or which were supplied with any means of closing them. They still stood at 30 per cent., when the whole generality of shopping baskets was exempt. Now the tax has been reduced to 15 per cent., but, of course, shopping baskets, formerly exempt, are now charged at 30 per cent. if they have a little bit of colour in them.
I ask the Chancellor seriously, to consider this matter. I have mentioned only four of the new anomalies created, every one of which is utterly indefensible. I do not believe that there is a single 1026 hon. Member of this Committee who could go into the Lobby honestly to suggest that these things are justified. I do not think anything could be more crazy or more calculated to drive people to despair.
I have mentioned these things because the Chancellor, in the other changes he has made, has moved towards the policy of taxing articles according to their construction and use, and not according to the nature of the materials used. His action with shopping baskets is completely opposite. My main appeal to him to cancel this tax and to restore the exemption previously enjoyed by shopping baskets does not depend on absurdities. This Amendment and this appeal are not funny, and this matter is not funny to a lot of people who are anxiously awaiting the result of the debate on this Amendment and who have been wondering why I did not raise this matter at a previous stage of the Budget debate. I have not been able to do so, and I therefore make this appeal tonight, and I am confident that it will not fall on deaf ears.
The real case for the cancellation of this tax is the fact that the making of these baskets provides employment for a large number of blind and disabled people. I have been connected with them all my life, and I should like to quote from letters which I have had sent to me from workshops in the constituencies of different hon. Members on both sides of the Committee. I hope they will not think that I am doing anything which is not customary in this House. I am not poaching on their preserves, but I do want to mention some of the messages which I have received.
The Committee will recall that in 1955 the present Leader of the House, then Chancellor of the Exchequer, for the first time imposed a tax of 30 per cent. on a wide range of household goods. This list included shopping baskets and brushes, and almost every item in it was strongly opposed from these benches. For reasons which he thought good at the time, the then Chancellor resisted every Amendment from this side of the Committee except two, concerning shopping baskets and brushes, both of which he accepted. I did not even have to move those Amendments myself, because the right hon. Gentleman had put down his own Amendments, which the Committee 1027 accepted. The right hon. Gentleman then made it perfectly clear that he was asking the Committee to amend the Finance Bill because he was convinced that the tax would have a grave effect on the employment of blind and disabled workers.
Everyone in the Committee knows that these people obtain their skill painfully and bravely. It takes much longer for them to acquire their skill than other people. They cannot be easily transferred to other forms of employment. There are no other forms of training available to them, or other forms of employment suitable for them. It is useless to say that, if somebody is out of a job, we want mobility of labour so that they can go into some other industry. These people cannot go into other industries. The same arguments that were accepted by the Leader of the House in 1955 apply today with even greater force, because foreign competition has made it even more difficult to find sufficient work, and the Chancellor, and especially the Financial Secretary, are fully aware that the problem of finding work for the disabled has now become more difficult. Even now he is considering proposals which I and my colleagues have made in other directions to increase the supply of work.
In those circumstances, how utterly absurd and how utterly cruel it is to take away the work which they already have. It does not make sense. We all deplore the fact that unemployment generally is steadily increasing, but it is far worse for a blind man to sit with idle hands. That is what is happening now, and will happen to a far greater degree unless we alter the present proposals.
The taxpayers willingly pay £½ million every year in augmentation to blind workers in order that they may have a reasonable wage and be kept in full and useful employment. Is this work to be taken from them for the sake of perhaps only £10,000 in tax? The Chancellor rightly said that the purpose of Purchase Tax is revenue. I fully agree, but this revenue will be far too dearly bought, because it will cost us another £100,000 in increased augmentation to make up wages when these blind people are out of work.
The Committee knows that I speak with knowledge of the subject of blind workshops. Blind workshops have been 1028 stunned and are at a loss to know the extent of this new burden which is to be placed upon them. Immediately after the Budget, I had a large number of letters from all parts of the country. One letter came from the Royal Institution for the Blind, Sunderland, and said:
We would be most grateful if you would look into the question of Purchase Tax on 'shopping baskets on wheels'. We are told locally that these are now liable to 15 per cent. under the Budget and are also informed that garden weeding baskets, a similar basket, are tax free. It is most unfortunate if they are in fact liable to tax, as we now have a very nice little business growing for this work and it is most suitable for our blind employees.A letter from the Workshops for the Adult Blind, Newcastle, which was typed in Braille by a blind employee, says:I was extremely disappointed to learn that the Chancellor of the Exchequer had decided to reimpose a tax of 15 per cent. on shopping baskets. There has been unemployment in our basket department for some little time, and this latest setback is hardly likely to improve trade.The unemployment mentioned has been such that they have worked one week and have not worked the next. That was before the Budget. The language is quite restrained.The Norwich Institution for the Blind said:
We make a considerable number of shopping baskets at this Institution, and I am fairly certain this applies elsewhere, and undoubtedly it will have an effect on sales and, goodness knows, we are having enough difficulty at the present time to find full employment for our blind workers particularly in the basket trade. In March we had four weeks on short-time, i.e., a four-day week, and the decision of the Chancellor yesterday"—this letter was written the day after the Budget—to withdraw the exemption which we have enjoyed would seem to be very wrong indeed.Another letter came from a store in Newcastle and said:I consider that the current Budget proposals to reimpose Purchase Tax on shopping baskets is a gross betrayal of the spirit of the concession given by Mr. Butler. As a result of such a concession, many institutions and workshops for the blind laid themselves out to cater for the home market. I have specialised in the sale of blind-made shoppers, and I have already found that as a result of customers' resistance to taxed baskets, I shall be obliged to discontinue buying the better quality baskets, thereby causing further unemployment among blind operatives.1029 10.30 p.m.It must be borne in mind that these conditions do not apply only in workshops for the blind. Most ordinary commercial firms in the basket industry employ a very high percentage of disabled workers—a far higher percentage than any other industry. For example, in the village of Mawdesley in Lancashire, and around Wigan, there are many small firms with a total of about 600 workers, a large percentage of whom suffer from various disabilities; some have missing limbs, others are blind, deaf and dumb, or mentally retarded, some are people who have come out of tuberculosis sanatoria, and some are cripples. In most cases basket making is the only possible occupation open to them, unless they have a further lengthy period of training in another suitable handicraft—and it is idle to pretend that they would have this opportunity.
This community is almost exclusively engaged in making shopping baskets, and it has been successful in meeting the threat of foreign competition, by finding new outlets for its goods. For example, many food firms order large quantities of suitable containers for the Christmas trade. They have been able to get these orders, but immediately this tax was put on they lost the chance of those orders. There has been a standstill on them, and if the tax is not removed they will be out of work. In addition to those who actually go to the factories there are others who cannot attend because of their infirmities, and they are employed part-time. The materials are taken to their homes.
The fact that this work has been made available to them has in many cases brought about a miraculous improvement in their health and happiness. Here is just one more extract, from a letter written by an individual whom I know to be a hard-headed but soft-hearted Lancastrian. He says:
As you well know, the small basket-making firms are ceasing to exist—another one finishes this week. It would seem that the Government wishes to finish us off altogether. Pre-war my firm made a thousand dozen a week, today not more than 80 dozen. One might say, 'Why worry?', but any employer of labour should and must consider his workers. There can be nothing more soul-destroying for a good worker than to have to go on the dole, especially when you consider that most of our people are disabled. I expect you already know that trade in shopping baskets has come to a full stop. Our stocks are piling up. I shall have 1030 to start discharging workers, but have no desire to cause hardship to some who can never get another job. One even comes in a wheel-chair because he is paralysed in the back and both legs. Will you advise me whether it is worth while holding on a little longer, or should I start dismissing staff at once?I asked him at least to wait until we had taken the first three days of the Committee stage of the Bill, when I thought we could get an answer from the Chancellor. I would ask him tonight: Why let this debate go on? Why not accept the Amendment? I am sure hon. Members on both sides of the Committee will want to join with me in pleading that the same exemption which the Committee rightly gave these people in 1955—which I honestly believe has only inadvertently been taken away from them—should be restored.Let the Chancellor take the same action as he took over protective clothing, and make this announcement tonight. I know beyond any peradventure that he must remove the discrimination between the 50 per cent. and the 30 per cent.; we cannot go on with that; it is simply absurd. I know that his advisers must so advise him. This discrimination would bring the whole tax into contempt.
But that is only half. It is not enough to remove the absurdity. I am asking him to remove an injustice. Even if the case does not stand up on cold business lines—although I think it does—it stands up on the basis of the duty that we owe to these people, to give them assistance, or not to deprive them of the work they already have. It is a duty which every hon. Member likes to be able to discharge.
I ask the Chancellor, therefore, to give us the assurance for which I have asked, and send out a message that these people, who deserve all the help we can give them, will be able to carry on with the work which they love, and by which they live.
§ 10.35 p.m.
§ Mr. ArbuthnotPreference has been rightly given in past Finance Bills to materials such as cane used in basket-making by blind and disabled people, and I am sure that my right hon. Friend listened sympathetically to the case argued for a tax reduction upon such articles in this Bill. There is in this Bill a differentiation between cane and materials of an artificial nature such as 1031 plastics. For some reason, rushes are classed among the artificial materials. I suggest that rushes should qualify for the same preference as cane. They are used as much as cane in the making of baskets by blind and disabled people.
§ Mr. Tom Brown (Ince)I join with my hon. Friend the Member for Shore-ditch and Finsbury (Mr. Collins) in his plea for the cancellation of the tax on these articles. The Chancellor cannot justify its imposition on shopping baskets, I wonder whether consideration has been given to the arguments advanced when the Finance Act of 1955 was being discussed, which resulted in the Chancellor withdrawing the proposed tax on shopping baskets on that occasion. Such a tax cannot be regarded as a revenue-producing measure. Is the Treasury so hard up that it has to impose a tax on the products of blind and disabled people, which will bring in only £20,000 or £30,000 in a Budget of between £4,000 million and £5,000 million? Surely we have not reached that stage; surely we are able to lend a helping hand to the disabled and the blind?
The country has spent thousands, if not millions, in years gone by on training these unfortunate people so that they may take their place in society and play a part in industry, and now the Chancellor proposes to tax what they produce and make it harder for them to earn a living. I maintain that this matter has not been considered with the seriousness it merits. Such a step cannot be justified as a tax-raising measure or economically, and certainly it cannot be justified on humane grounds.
People have given their lives to training the blind and the disabled, fitting them into society and giving them a place in life. Are we in the House of Commons, with our sympathy which we should have towards these unfortunate people, to make their task more difficult by the imposition of a tax of this character? I hope not. I hope that the Chancellor will think again and accept the Amendment. I do not intend to advance the argument which was advanced in years gone by. I thought that we had concluded that stage of our arguments against the imposition of a tax on the products of people who were disabled and blind. I beg the Chancellor to look again at this tax.
1032 My hon. Friend the Member for Shoreditch and Finsbury has quoted several letters that he has received. I, too, have had letters from people who are interested, not so much in the profit motive, but in the motive of doing their level best to see that these people are employed in an industry which gives them a place in life and which gives them the feeling of independence. In the mining industry, we have the paraplegic cases. We are now finding that this is the only job that these unfortunate people can do. Does the Chancellor, by this tax, intend to make it more difficult for these men to fit themselves into society and into industry? Is he so hard-hearted? Is he so crazy—because, surely, this is a crazy tax—as to make it more difficult for people to earn their livelihood, all for the paltry sum of £20,000–£30,000 a year out of a Budget of £4,000 million to £5,000 million? I cannot think that serious consideration was given before the Treasury recommended that shopping baskets should carry 15 per cent. Purchase Tax.
I have a letter on behalf of a number of men who exist, not to make profit, but to find work and to do a great human service for individuals whose lives have been overtaken by misfortune. My correspondent writes:
Dear Mr. Brown,I am writing to you … to ask for your personal support for the protest of bona fide basket makers to the recent Purchase Tax imposed on household shopping baskets. Basket-making is still a craft, rather than an industry on a mass-production scale, and as such it gives employment to many disabled and blind persons who would otherwise find it difficult to serve any useful purpose in the community. Even without the addition of Purchase Tax, the industry has been faced with fierce competition from imported shopping baskets ….I want to emphasise that. I wonder whether the Treasury, before making this recommendation, gave consideration to the fierce competition from abroad by baskets made by cheap material, by baskets made by slave labour or under bad labour conditions. This industry and these unfortunate people have to face this fierce competition from abroad, and now the Chancellor imposes another tax to make things more difficult.My correspondent continues:
There is another point which has been raised on previous occasions and which, we believe, was helpful in getting Purchase Tax removed from shopping baskets some time ago. 1033 That is, that there are a number of small family businesses in this area—that is, in Lancashire, to which my hon. Friend the Member for Shoreditch and Finsbury referred—making shopping baskets up to the £500 limit, which means that they can legitimately sell without Purchase Tax. This concession lays itself open to abuse. When one member of the family has reached his limit of £500, sales are then conducted through another member of the family, and so on.Again, unfair competition by the concession given by the Chancellor some years ago. The letter goes on to say:I feel sure that I can rely on your help in this matter and I thank you for your co-operation.10.45 p.m.There is an expression of opinion by a man who is not out to make a profit or to conduct business on a mass production scale but to do the right thing by his fellowmen, to find them work in producing an article that the public wants. The Chancellor and the Treasury would be well advised to have a look at this matter again and to see whether they cannot find a way out without imposing a tax on shopping baskets.
I have had a letter from the United Basket Industry Ltd. I shall not read it all, as I do not want to weary the Committee. It says:
Did you ever hear of so foolish a Tax as the 15 per cent. now imposed on shopping baskets?…The major proportion of the shopping basket industry is concentrated in the Wigan area…. The industry has always found work for a high percentage of otherwise unemployable disabled.That statement I have checked and found to be truthful, taking the figures from the local juvenile bureau and the employment exchange. It goes on to say:Before the war we employed over 400 people on shopping baskets alone—today we have about 100 employees and they are not all engaged on shopping baskets.This I want to impress on the Chancellor:We used to produce over 900 dozen baskets per week against 80 dozen today, and even this is in excess of demand.We cannot say that is due to the tax now proposed, but what we can say and prove is that it is because of the fierce competition that is brought to bear by the importation of foreign-produced baskets. The letter goes on to say:You will appreciate that this fall in demand is not entirely a matter of change of fashion….Bags that come from abroad have to carry only 10 per cent. import duty 1034 against this 30 per cent. The letter continues:We don't know why, especially as they have rocked the industry to its roots and numerous of the smaller firms are now out of business.The writer begs me to do my best to try to persuade the Chancellor to withdraw the suggested Purchase Tax on shopping baskets. He does that first on humane grounds and secondly:because the amount collected is chicken-feed (say £20,000 out of a Budget of £5,000 millions). If this rural industry is to survive it is in need of protection from foreigners. May we enlist your support in our efforts to remove this ridiculous tax on shopping baskets?In my experience of this House over sixteen years, and long before I came to the House, I have always found that when the human element came in, when the desire to help unfortunate people was raised, we rose to it. Surely the Chancellor can rise above this niggardly, parsimonious policy he is pursuing by levying a Purchase Tax on shopping baskets, produced by people who are unfortunate not to be able to take their part in normal industrial careers.
Mr. AmoryAfter which the hon. Member for Ince (Mr. T. Brown) said, I am beginning to feel like a monster. This is a complicated matter, because several Amendments and several different kinds of baskets are involved, but I do not believe that any changes which we are proposing here would work to the detriment of the blind or the disabled. If I were convinced that in fact they would, I should certainly not wish to make those changes.
On bags and baskets generally the tax was at the 60 per cent. rate, and I propose that it should be 30 per cent. The tax on cane and wicker baskets was 30 per cent., and I propose that it should be 15 per cent. That difference was because a substantial proportion of the cane and wicker baskets were made by disabled people. We are still giving cane and wicker baskets a preference of half the rate. Hon Members may say that a preference of 15 per cent. on 30 per cent. is not as good as a preference of 30 per cent. on 60 per cent., but by reducing the general rate we are making those products more competitive.
The hon. Member for Shoreditch and Finsbury (Mr. Collins) raised the question of cane and wicker baskets which may not be wholly made with cane and wicker but may have an element of some 1035 other material, which may be plastic, in them. The reason that I cannot accept his suggestion is that I am advised that it would be extremely difficult to define what "mainly" meant in that connection. I see the point which he made, but if we once embarked on defining "mainly" in that connection we should be all over the shop.
My hon. Friend the Member for Dover (Mr. Arbuthnot) raised the question of baskets made of rushes instead of cane and wicker. To the best of my knowledge only a small minority of those baskets are made by the disabled. The bulk of them are made commercially. If we accepted his suggestion and reduced the rate we should facilitate the entry into this country of very cheaply made baskets, made of that material, which would be very much to the detriment of home-made baskets. Moreover, not all baskets, apart from cane and wicker baskets, are to carry tax at 30 per cent. Clothes baskets, log baskets—the kind of baskets used as household requisites—are subject to the 15 per cent. rate in the Bill.
§ Mr. Edward Short (Newcastle-upon-Tyne, Central)The right hon. Gentleman will agree that the baskets made of vegetable fibre of which he was speaking are the cheapest kind of market basket, the type used by the poorest sections of the community, and that if they have a handle they carry tax at 30 per cent.
Mr. AmoryIf we attempted to do anything else there we should get into a series of anomalies which would be far worse than anything to which the hon. Member can point in the proposals which we are making.
If you will allow us to discuss this, Sir Charles—I am not sure whether it it was one of the Amendments which you called—we come to the question of shopping baskets, and this is the question with which hon. Members are mainly concerned. They are at present exempt. Very many anomalies arise from this which are causing great difficulty in administration.
Our proposal there was, instead of maintaining the exemption, to impose a tax on cane and wicker shopping baskets of 15 per cent. and a tax on shopping bags of 30 per cent. Many cane and 1036 wicker baskets, admittedly, are made by the blind and disabled, and I could not agree more with what hon. Members have said about the suitability of this kind of work for the disabled. I should be very miserable indeed if I had done anything at all which made it less likely that that work would be available for the disabled. When I was Minister of Pensions, I used to go round and see some of the work done, and I felt then that everything possible should be done to encourage such work. It is hard enough for those responsible for the running of the institutions to find appropriate work for severely disabled people, and the last thing I should want to do—whatever the yield to the Revenue—would be to make it more difficult for the products of this work to be disposed of.
On present advice, I must say that I am not convinced that this would be so. What we should be doing would be this. At present, the exempted shopping baskets compete with shopping bags, both of them being exempt. Under our proposal, there would be a tax of 15 per cent. on the baskets and a tax of 30 per cent. on the bags. I think that shopping baskets made by the disabled would be in a better position than they are now. But I am absolutely at one with hon. Members in wanting to make certain that any change we make here is not to the detriment of the disabled. Therefore, I am willing to consider this matter of the exemption of shopping baskets again to satisfy myself whether or not the views of hon. Gentlemen——
§ Dame Irene Ward (Tynemouth)And Ladies.
Mr. Amory—and Ladies who feel that what is proposed would be to the detriment of the disabled can be sustained. If I find that that view can be sustained and that I can leave shopping baskets exempt without creating a host of anomalies, which would prove impossible to work, then I will consider it sympathetically.
§ Mr. CollinsIs it the right hon. Gentleman's intention that, in page 31, line 33, provided that he is satisfied on the matters I put to him, he will take out the word "shopping-baskets"? If that is the intention, then it would restore the position as it was formerly without reviving the difficulty which he mentioned 1037 about bags, and it would do what I believe all hon. Members want to do—certainly what I want to do—that is, restore to the blind workers the chance of making baskets as they have been doing and which, because of the change proposed, they would have far less chance of doing. Although I had to range rather widely in my speech, I am concerned almost entirely with shopping baskets made by blind workers.
Mr. AmoryYes. I think that the hon. Gentleman understands me aright. I will repeat that I said I would consider further whether it would be possible to continue the exemption which is at present given to shopping baskets—shopping baskets made of cane and wicker, I think——
§ Mr. CollinsTo restore it.
Mr. AmoryYes, to leave the situation there, as at present. I cannot say now, but I will consider it sympathetically in view of the views which have been expressed.
§ Several Hon. Membersrose——
§ The ChairmanDr. Stross.
§ Mr. Hector Hughes (Aberdeen, North)May I ask the Chancellor a question?
§ The ChairmanI called Dr. Stross to ask a question.
§ Mr. HughesI want to ask a question, not to make a speech.
§ The ChairmanI called Dr. Stross to ask a question, not to make a speech.
§ Dr. StrossMay I ask the right hon. Gentleman a question? I do not propose to make a speech. Has the Chancellor had representations from the local authorities, many of which have blind workshops? So many of them have workshops for the blind. Having heard the Chancellor say he is very anxious to know what hon. Members think about this, and as he has promised he will look carefully into the matter, may I assure him that we have had urgent representations from the local authority looking after the blind in Stoke-on-Trent, and that it feels very nervous about this matter?
§ 11.0 p.m.
Mr. AmoryI have had so many representations on Budget proposals of one kind and another that I cannot say for certain whether I have had one from local authorities. I am not aware of having 1038 had one, but I will find out whether I have or not. In the meantime, if the hon. Member wishes to send me representations he has had I shall be glad to consider them.
§ Mr. J. EdwardsIn view of the assurance the right hon. Gentleman has given, I would advise my hon. Friend to seek the leave of the Committee to withdraw his Amendment.
§ Dame Irene WardNot yet. On a point of order.
§ Mr. CollinsI quite agree with my right hon. Friend, and in view of the assurance the Chancellor has given us that he will consider this matter further and refer to it again at a later stage, I shall beg to ask leave to withdraw the Amendment.
§ Dame Irene Ward (Tynemouth)I am not going to make a long speech, and I do not intend to keep the Committee long, but as my family has for several generations been associated on Tyneside with workshops for the blind and have tried to organise work for the blind, I think I am entitled to add a word to persuade the Chancellor of the Exchequer. I noticed that in his speech this afternoon in the general debate on Purchase Tax he said that his new arrangement for Purchase Tax had been designed to help the social as well as the other sides. I think the whole Committee will agree with me that this is a social question.
My right hon. Friend put his case, as he always does, most sympathetically and generously, and he seemed to think, having, of course, a very large number of powerful advisers behind him, that under this new arrangement for baskets the blind would be better off, but I do want to emphasise that there is a psychological approach to this matter. He seemed to keep referring to what hon. Gentlemen thought. Sometimes hon. Ladies have a better psychological approach than hon. Gentleman [Interruption.] I think it is very unkind for hon. Gentlemen to be so anxious to get home. I do not mind if they leave and let me have the Chancellor to myself.
All I want to say to the Chancellor is that there is a psychological problem. When he so rightly acquiesced in the 1039 representations by both sides of the Committee to withdraw the tax on protective clothing for miners, he did it because it was psychologically the right thing. Probably the miners would not have minded paying that additional tax, but it was a psychological matter and the Chancellor responded to the representations, and we were all glad he did.
It is most important that people should be given the opportunity to see that we do look at these questions from the human point of view. I am not concerned in this matter with money, but at the fact that after announcing to the world a few years ago that we had managed to get these articles exempted it is now suddenly announced that we are once again to impose Purchase Tax on baskets which are made by the blind. The whole nation hates it, and I do not mind telling the Chancellor that. Although I think his Treasury advisers may be very clever and able, I do not think they are good psychologists. I think the Chancellor is a much better one, and I hope, if for no other reason, that he will accede to this request and let us have these baskets made by the blind, whatever may be the difficulties, free of tax. It would be far better if all baskets were exempt and the Purchase Tax and the Budget made untidy than to do psychological harm to these disabled and blind persons. I hope the Chancellor will bear this in mind.
§ Mr. Hector HughesBefore leave was asked to withdraw this Amendment, I rose to ask the Chancellor of the Exchequer a question, and I submit to you, Sir, that I should be permitted to ask the question. It was significant that the Chancellor was not aware whether or not he had received representations from the various organisations for the blind. In my submission, the Chancellor ought to have known that, and I say to him that the organisations for the blind are the best judges of what the blind do and of what is best for the blind. If he is not aware whether he has received such representations, I ask him now to invite representatives from the various organisations for the blind, so that he may be guided on what is the best interest of the blind in this matter and whether to deal with the tax in accordance with the plea which has been made from this side of the Committee.
§ Mr. CollinsI beg to ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
Mr. AmoryI beg to move, That the Chairman do report Progress and ask leave to sit again.
I hope that my hon. Friend the Member for Tynemouth (Dame Irene Ward) will not think that this Motion has any connection with her offer to remain with me in the Chamber. I think we have had a very useful discussion and made a useful start on these subjects. We have a tremendous amount of work still in front of us, and I hope that with the good will of hon. Members generally we shall be able to make good progress tomorrow.
§ Question put and agreed to.
§ Committee report Progress; to sit again Tomorrow.