§ 24. Mr. Nabarroasked the Chancellor of the Exchequer whether he is aware that wadded, or otherwise filled, tea cosies are tax free, whereas wadded, or otherwise filled, cushions are subject to Purchase Tax at 5 per cent., and wadded, or otherwise filled, nightdress cases, for boudoir use and not for travel purposes, are subpect to Purchase Tax at 30 per cent.; and why such articles, all made from the same wadded material, should be subject to different Purchase Tax treatment.
§ The Economic Secretary to the Treasury (Mr. F. J. Erroll)Because the relevant consideration in the tax Schedule is the character of the finished article, not that of the materials used.
§ Mr. NabarroCan my hon. Friend tell the House where elsewhere in the Tax Schedules wadding or similar material is considered to be a determining factor in the application of tax? Is a fat man taxed more heavily than a thin man? Why should basically the same article, a tea cosy or a boudoir case, merely because the different descriptions cause the Treasury to apply very widely differing rates of tax?
§ Mr. ErrollPersonally I am very glad that we are not as individuals taxed according to weight or wadding. In this case of Purchase Tax, the articles are subject to tax and not the materials from which they are made.
§ Mr. NabarroMy hon. Friend will have to change it all soon.
§ 25. Mr. Nabarroasked the Chancellor of the Exchequer whether he is aware that a household tray is subject to Purchase Tax at 15 per cent. when not fitted with legs, whereas the same article, fitted with legs, attracts Purchase Tax at only 5 per cent.; and, as this distinction between basically similar articles warps and twists design in a way contrary to the national interest, whether he will cause all trays to be treated in equivalent fashion so far as Purchase Tax is concerned.
§ Mr. ErrollThe articles chargeable at 5 per cent. are basically similar to occasional tables such as coffee tables, the assumption in the second part of the Question is accordingly wrong, and the answer to the third part is, "No, Sir."
§ Mr. NabarroEvidently my hon. Friend has forgotten his Answer the day before yesterday. Does he recall that he then used the words:
The Customs look at legs only where their presence, or absence affects the character of an article."—[OFFICIAL REPORT, 17th March, 1959; Vol. 602, c. 79.]Could it be more ridiculous that legs are thus taken into account—warping the design and patterns of manufactured goods—in determining the application of all these different rates of tax in the Schedules?
§ Mr. ErrollNo. I think that in this case legs do effectively alter the character of the article. A tray without legs is a tray; give it legs and it becomes a coffee table.
Mr. H. WilsonSince for seasonal reasons we must now be approaching the end of this long series of questions from the hon. Member for Kidderminster (Mr. Nabarro)—
§ Mr. NabarroOne hundred and eighty-eight up to today—twelve more to come next week to complete, making 200.
Mr. Wilson—would it not be possible for the Treasury to reward the hon. Gentleman's pertinacity and perseverance by at any rate offering to remove the Purchase Tax from badges on the front of motor cars?
§ 40. Mr. Gowerasked the Chancellor of the Exchequer what would be the approximate annual cost of removing all Purchase Tax from soap.
§ Mr. ErrollApproximately £6 million.
§ 41. Mr. Gowerasked the Chancellor of the Exchequer what would be the approximate annual cost of removing all Purchase Tax from stationery.
§ Mr. ErrollFor paper stationery, excluding greeting cards, picture postcards and pictorial calendars, about £28 million.