§ 32. Mr. Swinglerasked the Chancellor of the Exchequer the cost in loss of revenue in a full year of exempting pottery from Purchase Tax.
§ Mr SwinglerDoes the Chancellor recall that this tax was reimposed on pottery six months after the General Election of 1955 and seven months after the electioneering Budget of that year, and that it has had a totally harmful effect? If he were concerned to help hard-hit industries, would not this obviously be a tax which should be removed altogether?
Mr AmoryI understand that home sales of pottery last year were at the highest level for some years. I would also point out that in my proposals I have reduced the rate on pottery.
§ Mr NabarroWould my right hon. Friend confirm that pottery and carpets have both benefited from the Chancellor's generous proposals in his Budget?
§ 36. Mr. Croninasked the Chancellor of the Exchequer if he will give an approximate estimate for any convenient period as to what proportion of the Purchase Tax reliefs of his 1958 Budget were passed on to the consumer.
Mr AmoryThe range of taxable goods and the number of traders handling them are both so great that no such estimate is possible. It must be left to competition to secure that the benefits from tax reductions, like other reductions in cost, reach the consumer in one way or another, as I have no doubt they do.
§ Mr Croninis the right hon. Gentleman aware that last year there was not a fall in prices following the reduction in Purchase Tax? Would he make it clear that reliefs arc intended to reduce costs to the consumer and not to increase profits to the producer?
Mr. AmoryI would not accept the hon. Gentleman's statement that, following the Purchase Tax reductions made in the Budget last year, reductions were not made in retail prices. My information is, in general, entirely to the contrary.
§ 41. Mr. Beswickasked the Chancellor of the Exchequer if he will give the actual yield from Purchase Tax in the year 1957–58 and 1958–59, collected from those groups taxed at 5 per cent., and the estimated yield for the same groups for the year 1959–60.
Mr. AmoryIn 1957–58, about £51 million; last year, about E531 million; and for the current year the estimate is £55 million.
§ Mr. BeswickWill the Chancellor explain why over a period when the economy is said to have improved and when he has been able to make reductions all round, this regressive tax on essentials has steadily increased?
Mr. AmoryThe only reason for the increase was that there was an increase last year in this 5 per cent. category when I reduced the rate on certain items from, I think, 10 per cent. to 5 per cent.
Mr. H. WilsonIs not this a very funny way of running a Purchase Tax system —that when the Chancellor reduces the total Purchase Tax the parts dealing with essentials. which carry the lowest rates, are expected to yield more next year than last year? Secondly, will the Chancellor say why he has not taken out of this group those items put in by the Lord Privy Seal in the post-election Budget of 1955?
Mr. AmoryI should have thought, on the contrary, that the figures I have quoted show that this particular part of the tax is soundly based. The other part of the rise is due to the general rise in the standard of living and purchasing power of the people of this country.