Purchase Tax

HC Deb 16 March 1959 vol 602 cc23-6

33. Mr. Nabarro

asked the Chancellor of the Exchequer whether he is aware that blotting paper donated as gift from a manufacturer to the British Safety Council and bearing a safety message designed to reduce the high industrial accident rate was ruled by Customs and Excise as subject to Purchase Tax at 30 per cent. whereas plain blotting paper is not subject to Purchase Tax; what was the reason for this; and what remedial steps he proposes in the matter, in the interests of industrial safety.

The Economic Secretary to the Treasury (Mr. F. J. Erroll)

My hon. Friend is mistaken. Plain blotting paper is chargeable with 30 per cent. Purchase Tax.

Mr. Nabarro

I think my hon. Friend has mistaken the purport of this Question. Is he not aware that a large number of Members of this House have been sitting for 17 long sittings in the Standing Committee on the Factories Bill, which is designed very largely to improve industrial safety? Why should he, therefore, put Purchase Tax on an industrial safety message because it is printed on a piece of blotting paper, though donated by the Ford Company to the particular safety organisation which I mentioned?

Mr. Erroll

For the very simple reason that the tax is on the blotting paper and not on the message.

34. Mr. Nabarro

asked the Chancellor of the Exchequer whether he is aware that printed envelopes in the same quantity and quality and at the same price attract differing amounts of Purchase Tax according to the channel of distribution; what steps the valuation branch of Customs and Excise have taken to investigate this and with what result; and, in view of the distinctions thus produced and their effects upon trading arrangements, whether he will now free all printed envelopes from Purchase Tax.

Mr. Erroll

To equate the tax payable on purchases of bespoke printed stationery by retailers, or direct by users, a basis of assessment has been agreed between the Customs and the trade associations, and for printed envelopes the Customs have suggested a modification to avoid tax difference where quality, quantity and price do not differ.

Mr. Nabarro

Has my hon. Friend noted the extraordinary identity of views between the Federation of British Industries which in their Budget recommendations to the Chancellor have called for the abolition of Purchase Tax on stationery and the views of my hon. Friend the Economic Secretary, who used these words: I think all of us, including the Chancellor, are agreed that the taxation of business stationery is inflationary. It is a direct cost to industry. and he then continued: There is no principle here, but merely a matter of expediency."—[OFFICIAL REPORT, 14th February, 1951; Vol. 484, c. 558–9.] Does my hon. Friend recall using those words in this House on 14th February, 1951, and will he now concede that, for once, the Federation of British Industries, himself and myself are exactly in agreement on these important matters?

Mr. Erroll

My right hon. Friend the Chancellor of the Exchequer did a great deal last year to remove the Purchase Tax anomalies to which I was referring in 1951. As to the tax itself, I think it is important to remember that it yields £35 million a year, a point which the Federation of British Industries might do well to remember.

Mr. Gresham Cooke

Could the Economic Secretary tell us by how much Purchase Tax on blotting paper and other materials may have to be increased to pay for the heavy cost of the numerous Questions asked by my hon. Friend the Member for Kidderminster (Mr. Nabarro)?

Mr. Nabarro

That fell very flat.

35. Mr. Nabarro

asked the Chancellor of the Exchequer, whether he is aware of the difficulties experienced by individual traders in knowing whether certain items of printed matter are regarded as subject to Purchase Tax without submitting each on an individual basis to Customs and Excise, thus causing considerable inconvenience and delay both to the Department and to the trader; and what steps he proposes to take to remedy this state of affairs.

Mr. Erroll

I would refer my hon. Friend to the reply given to him by my right hon. Friend on 17th February.

Mr. Nabarro

May I refer my hon. Friend to his speech in this House on 14th February, 1951, on this matter? Can he give the House an assurance that as he was then attacking a Socialist Chancellor of the Exchequer on the same matter he will now go away and attack a Tory Chancellor of the Exchequer with a view to removing this shocking burden on industry on 7th April next?

Mr. Erroll

I would not think of attacking my right hon. Friend the Chancellor of the Exchequer. I would only say that successive Chancellors have considerably improved the taxation system relating to these articles since those days. Both Governments have had some experience in this matter, and the tax is in much better shape than it was when I made my criticisms.

Mr. Lewis

Can the hon. Gentleman explain why the hon. Member for Kidderminster (Mr. Nabarro) keeps putting these Questions but when hon. Friends of mine put down Amendments to abolish these taxes the hon. Gentleman voted against doing the very thing which he now advocates? Can he explain that? He has consistently voted for these taxes.

Mr. Nabarro

The hon. Gentleman is very flatulent today.