§ 1. Mrs. Mannasked the Chancellor of the Exchequer whether he is aware that many retailers are complaining of losses incurred through reductions given to customers on stock bearing full rates of Purchase Tax, whilst others refuse to pass on reductions of Purchase Tax until such stock is sold; and whether he will introduce legislation to provide for uniformity of practice by wholesalers and retailers in passing on Purchase Tax reductions, wholly or in part, to their customers.
The Chancellor of the Exchequer (Mr. Derick Heathcoat Amory)I am aware of the facts stated. The situation is open to the free play of trade competition and I am not clear that legislation to enforce uniformity, even if practicable, would be in the interest of the consumer.
§ Mrs. MannBut is the Chancellor aware that already permission is given to clear old stocks, according to the reply given on 25th April, and there is no check on when old stocks are finished and new stocks begin? Is not this very 1072 confusing and does not it tend to make fun of the Purchase Tax relief?
Mr. AmoryI know that the hon. Lady, for whose views in general I have very great respect, and I hold different views about this particular matter, but I would remind her that, some years ago, the Government set up an independent committee to consider the question whether there was any way to provide compensation to retailers for their Purchase Tax-paid stocks in the event of a reduction in Purchase Tax. That committee said that it could find no feasible way in which this could be done. The present position is that it is quite legal for a retailer to base his selling price on the price of the goods, including Purchase Tax, if he has paid it. Equally, he is free to reduce that price at any moment if he wishes to do so. I believe that that is the fairest method that we can discover and it is also the method which is most favourable to the consumer.