§ 4. Dr. D. Johnsonasked the Chancellor of the Exchequer whether he is aware that it is the practice in the pottery trade for the supplier to charge Purchase Tax on the cost of packing and postage in addition to the cost of the goods supplied; and on what administrative principle such a method of 998 charging Purchase Tax on the postage and packing of such goods is based.
§ Dr. JohnsonDoes my right hon. Friend not agree, however, that this tax is irritating to those who have to pay it out of all proportion to its value? Would he not also agree that it is morally opprobrious to exact a tax on Government revenue and thus impose a double impost?
Mr. AmoryWe have to have some common basis for all classes of goods. This principle was settled by Parliament in 1940 and has been followed ever since. If the basis were different and all packing were excluded, the rates might have to be correspondingly higher.
§ 16. Mr. Nabarroasked the Chancellor of the Exchequer whether he is aware that, whereas carpets attract 12½ per cent. Purchase Tax, electrical heating appliances 25 per cent., and transformers no Purchase Tax, Customs and Excise have ruled that an electrically-heated carpet, a new invention, shall pay 25 per cent. Purchase Tax as an electrical appliance, or twice as much as an un-heated carpet; and, as an electric carpet is fundamentally a floor covering, with the electric elements as ancillaries only, whether he will classify an electric carpet as a carpet carrying Purchase Tax at 12½ per cent. only.
Mr. AmoryPurchase Tax is charged at the standard rate of 25 per cent, on all domestic electric heating appliances, and I see no reason to differentiate here.
§ Mr. NabarroA carpet is not a heating appliance. Would my right hon. Friend not agree that the same problem arises with electric carpets, electric blankets and electric chairs? Why should the mere fact of electrically heating an article cause Purchase Tax on the article to be doubled in the case of a carpet and a blanket and multiplied by five times in the case of an electric chair, from 5 per cent, to 25 per cent.? Can we not be a little more realistic in these matters?
Mr. AmoryWe are being realistic. An electric carpet is a floor covering and is a heating apparatus. Under the present 999 law, where an article falls into two categories the higher rate of duty has to apply, and in this case it is 25 per cent. I will take another case in which my hon. Friend may be interested, that of electric moustache curlers, which are domestic heating appliances and, as such, attract duty of 25 per cent.
§ Mr. NabarroThe Chancellor's reply presupposes that I am wearing a false moustache. My moustache is not subject to Purchase Tax and, therefore, it is not in any way analogous to floor covering.
Mr. AmoryIt is not a floor covering. I was referring to it as an article of covering. The point is not the moustache itself but the mechanisms that are required to maintain it in a decent condition.