HC Deb 11 May 1959 vol 605 cc983-1007
Mr. H. Wilson

I beg to move, That the Chairman do report Progress and ask leave to sit again.

I move the Motion not merely because we have, as I am sure the Committee would agree, made remarkable progress on the first day of the Finance Bill Committee stage. It is probably the most remarkable progress made on a Finance Bill at any time since the war.

There is another, and rather more serious reason. If we were to continue tonight we should be proceeding with Clause 12, which deals with Purchase Tax, and it has become clear that, because of the Financial Resolution tabled by the Government during the Budget debate, the Committee is being denied its usual facilities for debating Purchase Tax. We have given notice of this point to the Chancellor of the Exchequer and the Leader of the House. An extremely serious situation has arisen on which we shall in a few moments wish to hear a statement by the Chancellor.

In past years when no debate has been possible on individual items—we all recognise that there are years when it is not desirable to have a full debate on every individual item in the Purchase Tax Schedule—it has been usual to have debates on each of the main rates. They are now 50 per cent., 25 per cent., 12½ per cent. and 5 per cent. When on this occasion we sought to table Amendments to vary these rates—to reduce three and abolish one—we were informed by the Public Bill Office that it would be out of order on the Financial Resolution to move Amendments of this kind. I would say right away that in our minds there is no possible reflection on the Public Bill Office for the advice it gave us, which is incontestable, and still less on the Chair.

Our criticism is directed at the Government in that they have altered the basis of the Financial Resolution, and have done so in defiance of precedent, or, at any rate, such practice and procedure as has been adopted over the past few years, and also, if not in defiance of, with scant regard for the assurance given by the Lord Privy Seal in 1955.

Perhaps I might indicate the background to this Purchase Tax Committee procedure. It will be recalled that for a year or two after the war when my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) was Chancellor of the Exchequer hon. Members found it possible to table Amendments to almost every item in the Purchase Tax Schedule. There would be half-an-hour on tooth brushes and half-an-hour on something else, and that could go on for several hours, and indeed for several days.

In 1949 the then Chancellor of the Exchequer, Sir Stafford Cripps, moved a Financial Resolution which precluded all discussion of Purchase Tax. This led to an outcry from hon. Members opposite who were then sitting on this side of the Committee. That led to consultations and discussion out of which an agreement was reached—the Labour Government were still in office at the time—which provided that in any year when there were not changes in the coverage of the tax schedules—that is, movement of items from one group to another or out of groups—it would be possible to have at any rate general debates by discussing the various rates then in force. It was considered that if that were done, it would enable some three, four or five separate debates to take place, depending on the number of rates in force and would enable hon. Members in all parts of the Committee to raise questions on individual items of the goods that were covered by any one of these groups.

10.0 p.m.

After that agreement was reached, and that precedent was established in the 1950 Finance Bill, and continued again in 1951, though there were changes in the Purchase Tax in that year, these precedents were followed until a particularly difficult point arose in the Autumn Budget of 1955. It will be recalled that on that occasion the Lord Privy Seal brought a number of items into Purchase Tax which were not previously in the tax schedule and, at the same time, brought back into the Purchase Tax Schedule certain items that had been taken out. A very difficult procedural point arose during our debates, and I am sure that the Lord Privy Seal will remember the point, which I think defied his ingenuity and that of most other right hon. and hon. Gentlemen, from the procedural point of view.

We are not concerned with the actual point at issue on that occasion. The debate took place on 22nd November. 1955, and I think it of great interest to constitutional historians, but, in fact, what we were discussing was the fact that the then Chancellor had introduced a number of items into Purchase Tax and we were not able to vote against them item by item. It is not a point that arises at present. The reason was given in a procedural debate on a similar Motion to report Progress, and I want briefly to quote one or two of the things that were said during that debate.

The then Chancellor of the Exchequer, now the Leader of the House, said this: I wish to be fair to the Committee on the point about the drafting of the Purchase Tax Resolutions. I have, of course, followed a good deal of precedent in this, precedent set not only by Sir Stafford Cripps but set also in the time of office of the right hon. Member for Leeds, South (Mr. Gaitskell). It is always difficult to provide for adequate debate on the Purchase Tax and it is always impossible not to draft the Financial Resolutions with certain limitations. In this case, however, as I drew to the attention of the right hon. Member for Leeds, South—he knows I drew his attention to this—it was possible for the Opposition to put down particular Amendments—".—[OFFICIAL REPORT, 22nd November, 1955; Vol. 546, c. 1271.] and then he went on to define a number of items.

It was clear that the Lord Privy Seal at that time, at any rate, considered himself in general bound by the precedents established in 1950, even though a particularly knotty problem had arisen on that particular Finance Bill. Then, as the debate proceeded, and it went on for longer than perhaps we may expect to debate this matter this evening. another point was raised by my right hon. Friend the Member for South Shields (Mr. Ede) about Money Resolutions as distinct from Financial Resolutions. I do not think I need worry the Committee with that, except to mention that case and to say that the Chancellor referred to it and said: I have had a word with the Leader of the House and he says that we are following, in general, in respect of Money Resolutions, the procedure laid down by the late Mr. Neville Chamberlain in the case of the Financial Resolutions attached to the Budget"— and this is what is relevant— we are following, so far as we can, precedents created and left to us by our predecessors. He went on to say: I can honestly say to the Committee that in the case of Purchase Tax every Chancellor is faced with a very difficult situation. It distracted the supreme intelligence of Sir Stafford Cripps and, indeed, worried him more than any other subject. It very much disturbed and distracted the intelligence of the late Oliver Stanley, who found our debates on Purchase Tax almost impossible to bring within the bounds of ordinary Parliamentary order. It has been a source of considerable distraction to my immediate predecessor, and a source of considerable worry to myself. On this occasion, we were trying to make it possible to debate each of the rates."—[OFFICIAL REPORT, 22nd November, 1955; Vol. 546, c. 1286.] It was clear that the then Chancellor, the present Lord Privy Seal—three Chancellors ago now—intended that we should debate each rate separately.

That has been the position ever since. I will not weary the Committee with further quotations from that debate, except to say that the then Chancellor said that he would undertake that in future drafting of Financial Resolutions attached to Budgets care would be taken to pay attention to what my right hon. Friend the Member for South Shields had said about Money Resolutions and Financial Resolutions and what other hon. Members had said about back bench opinion. When I asked him if there could be consultations on this question, he said that he was prepared to see that consultations took place, and some consultations did take place.

So much for 1955. This year, almost for the first time for ten years, we find that we cannot debate the four rates of Purchase Tax. I want it understood that frankly we are not complaining that we cannot debate individual items. We recognise that there will be some years when it will not be possible to have what used to be called a "Dutch auction" of individual items. We had a fair "Dutch auction" last year, although we did not get very far with it, even though we spent some days on it. We had another four years ago. However, we have considered it to be within the rights of the Committee to be able to debate the rates of Purchase Tax so that individual Members could raise constituency or other issues.

Now that we have come to study the Financial Resolution—and it may have escaped the notice of most hon. Members; frankly, it escaped our notice—we have found that we cannot move Amendments to reduce the 50 per cent., 25 per cent. and 12½ per cent. rates below their present levels. It would be in order to move Amendments to raise the rate of Purchase Tax, provided that we did not raise the level to a figure higher than that at which it stood before Budget day. In other words, if they feel so minded, hon. Members can move Amendments to raise the 50 per cent. figure to not higher than 60 per cent., the 25 per cent. figure to not higher than 30 per cent., and the 12½ per cent. to not higher than 15 per cent.

What is apparently not in order is for hon. Members to move to reduce the rates of Purchase Tax below the figures which the Chancellor in his wisdom set in his Budget statement. The 5 per cent. rate, however, is slightly different. That is cut out of the Financial Resolution. On the other hand, the Financial Resolution precludes an Amendment to abolish the 5 per cent. rate. We cannot move to reduce the rate from 5 per cent. to nothing, but we can and propose to move that the 5 per cent. rate be reduced to a negligible rate.

Having now described the position with which the Committee finds itself faced, I ask the Chancellor whether this is what the Government intended. I cannot believe that after the very clear assurances, as I regard them, of the Lord Privy Seal four years ago, either he or the present Chancellor would be a party to restricting the Committee's usual rights of debate in this way. I cannot believe that they intended this to happen. It may well be that some clerk in the Chancellor's office rather slavishly followed the wording of the 1957 Resolution.

It will be recalled that two years ago the right hon. Member for Monmouth (Mr. P. Thorneycroft) increased the number of Purchase Tax rates, despite the hon. Member for Kidderminster (Mr. Nabarro), to seven separate rates. That was a year in which rates were changed. The Financial Resolution on that occasion precluded discussion of the rate reduced from 30 per cent. to 15 per cent., although we were free to move Amendments to the remaining six rates. We could debate six of the seven rates, but not the new one created by the then Chancellor.

It may be that someone has rather slavishly followed that precedent and, although the words may be the same as in the previous 1957 Financial Resolution, the effect is entirely different, because we could on that occasion debate six out of seven rates separately and on this occasion we cannot debate any of the rates except the 5 per cent. rate which is untouched by the Chancellor's Budget decisions. As I have said, this presents us with an extremely difficult situation. I know it will be said that we can debate most of these items on the Motion "That the Clause stand part of the Bill," but that is a quite unsatisfactory way of dealing with the situation. It raises the whole question of a vote and I am sure that hon. Members in all parts of the Committee will see the difficulties about that.

I submit that we have reached, perhaps not a major constitutional issue—I am not trying to pretend it is—but at any rate a matter of some importance When the Committee is precluded, as it is on this occasion, perhaps by careless drafting of the Financial Resolution, from moving to reduce the rates of Purchase Tax introduced by the Chancellor in 'his Budget. I hope that the Chancellor will be able to give us a satisfactory explanation and in particular tell us what he proposes to do to put it right.

Mr. Amory

The first thing I should like to say is that a complete and unrestricted debate like last year is the exception rather than the rule. In fact, apart from last year, it was provided for only in 1948. This year's Resolutions are admittedly drawn in restrictive form, but we felt that it would be the will of the Committee that we should not again this year go in for the protracted debates that we had last year about which there was indeed some criticism at the time. We spent several days in discussing at some length what were really very minor changes. Detailed debates seemed reasonable last year because I then proposed what amounted to recasting almost the whole tax, but that is by no means the case this year.

The main object in the more restrictive Resolutions this year, as the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) implied, was not to open the way for Amendments to alter the rate of tax on individual articles or groups of articles within what I may call a rate group. But though the Resolutions are in a restrictive form this year, as again the right hon. Gentleman the Member for Huyton implied they still permit full debate on the full range of Purchase Tax, and allow a limited number of Amendments on which the Opposition can divide the Committee if that is its wish.

I thought that would be the degree of restriction that the Committee would wish for this year. I did not consider that the Committee as a whole would have attached very great importance to their ability to move Amendments and divide on the rates for the various groups. if I had considered that, it would have been possible to have drawn the Resolution slightly less strictly so as to have permitted that to have happened, but I am not convinced even now that the Committee as a whole would have wished for that increased power.

The restrictive nature of this year's Resolution is, of course, not without precedent. In 1949 the Labour Government so phrased the Budget Resolution that no discussion on Purchase Tax was possible at all. No changes in rate were made that year and the Government used that fact as a reason for withdrawing this important set of taxation wholly from the purview of the House. The right hon. Gentleman the Member for Colne Valley (Mr. Glenvil Hall) said on that occasion: During previous discussions on this matter in the House, particularly by hon. Members opposite, we have been informed that these discussions on Purchase Tax changes are somewhat undignified. The right hon. Member for West Bristol (Mr. Stanley), certainly on one occasion, referred to the Committee stage on the Purchase Tax as a kind of Dutch auction. It would be rather absurd during the Com- mittee stage of the Bill to engage in a Dutch auction of that kind, if the only person present with any money to spend in that connection indicated that he was not going to spend it."—[OFFICIAL REPORT, 18th May, 1949; Vol. 465, c. 439.] This year the only person with money to spend has indicated the limit to which he is prepared to allocate it to a reduction of this particular tax. He has allocated a very large reduction indeed.

The right hon. Member has referred to the exchanges which took place on the drafting of the Resolution's on Purchase Tax in 1955, but I should remind the Committee that the circumstances were not quite similar. The right hon. Member was then protesting that the Government had drafted a Resolution imposing a new tax on a range of goods previously tax-free in such a way that no amendment of that tax could be proposed. The undertakings about consultation given by my right hon. Friend the Lord Privy Seal related especially and specifically to these rather special circumstances where a new tax was being put on. This year, of course. the circumstances are very different because reductions are being made.

10.15 p.m.

Finally, the general Resolution which imposes this restriction on debate was before the Committee throughout the four days of the Budget debate. All through that debate the Opposition did not raise the point which the right hon. Member is raising now. Still less did it divide against the Resolution. Nor did it refer to it at all during the Second Reading debate on the Finance Bill. If hon. Members opposite had felt it was so important that they should feel the burning indignation they now display, they should surely have voted against the Resolution.

I cannot help thinking that bon and right hon. Members opposite have managed to work themselves up into a state of rather artificial concern about a matter to which in their hearts they feel no great objection, and on which they even may feel some slight relief. The Resolution in question has, of course, in any case been approved by the Committee without a Division, and hon. Members will find plenty of opportunities of making any points they wish to make during the debate. The right hon. Member implied that we might find some way of varying the Resolution so as to permit them to move the Amendments which they now seem interested in moving, but I think that would be neither feasible nor desirable at the present time.

As to the future, if this Committee expressed the desire that in future years the rates of Purchase Tax on each particular group should always be open for discussion—if the Committee as a whole feel that is what it would wish to do in future—that is a view to which my right hon. Friends and I would attach weight We would not think for the future that it would be unreasonable that we should make provision for that, but I think to change the basic Resolution which is behind all our debates at this stage would be neither feasible nor desirable.

Mr. H. Wilson

I am amazed at the answer the Chancellor has given us tonight. In the first place, it was quite clear that the answer was prepared before he heard the speech I made, or he would not have spent so much time knocking down arguments I did not use.

I admitted that in 1949 there was this rather sweeping move which led to such an outcry and feeling that there were consultations between both sides of the Committee so that it should not happen again. I think it was quite out of place for the Chancellor to quote it as a precedent for this year. Every Chancellor since 1949 has felt himself bound by the agreement reached following those consultations, certainly the Lord Privy Seal. I agree that the point at issue in 1955 was quite different. It was not necessary for the Chancellor to read that page of his notes as I had already said that in the Committee. From the passages I have read from the debates it is clear that the Lord Privy Seal felt himself bound by the precedents of 1950 and succeeding years. I do not think there can be any doubt about that.

It has been left to this Chancellor, this year, to change the basis. Instead of telling the Committee that he is sorry, that this is not what he intended and that he did not realise its effect because he simply borrowed the wards from 1957, he has tried to make a virtue of it. I was surprised to hear him arguing in that way, and we certainly cannot leave the matter where it is if that is to be his attitude. Had he said, as I expected him to say, that he had not intended the Committee not to have the right to debate these matters, and that it had worked out rather differently from his expectations when he tabled the Resolution, I could well have understood that sort of answer. We should have been prepared to discuss, through the usual channels or in any other way what could be done about the future.

That is not his argument. He is trying to make a virtue of this. He says that the Opposition ought to have picked it up in the Budget debate. He knows perfectly well that no Opposition could have voted against that Resolution. I have been absolutely frank and I have said that this was not picked up by any hon. Member in any part of the Committee. I am certain that no hon. Member in any part of the Committee, including the Chancellor, knew what was being done. If the Chancellor knew, then I submit that it was his duty to inform the House, in view of what the then Chancellor said in 1955. I think it is fair to say that no one in the Committee spotted the point. I have admitted that frankly in respect of this side of the Committee, but I am also certain that no hon. Member opposite spotted it. If any hon. Member did spot it and will say so, I am prepared to apologise to him. Even if it had been spotted, we could have voted against this restriction only by voting against the reduction in Purchase Tax, which I am sure that no hon. Member in any part of the Committee would have been prepared to do. The Chancellor is putting up a phoney and bogus point.

Having dealt with the point about 1949, he then said that the Lord Privy Seal's argument in 1955 related to something else. I have admitted that. The debate in 1955 was initiated because of a different kind of difficulty. Nevertheless, in the course of it the Lord Privy Seal uttered the words which I have quoted, showing that he regarded himself bound by the precedent of 1950 and succeeding years.

It seems that the Chancellor has his legal adviser by his side, but that will simply confuse counsel further. I have no doubt that the Chancellor can find a number of debating reasons for what he has done, but I ask him to think about this matter again. It is not good enough to say that this was done ten years ago or that he has all sorts of procedural excuses for doing it this year. Why does he not honestly admit that this was not the effect which he intended?

I am sure that the Chancellor did not go right through the Budget and Finance Bill debates knowing that he had this new and restrictive device in force but without telling the House about it. If he had understood what it meant he would have told the House. Why does he not say, "I did not realise that this would happen. I took the words from 1957, in all good faith." We should have understood that argument.

The Chancellor could still admit it. He has given us his set piece. He himself is rather contrite about what has happened, but obviously the official responsible for misleading him has given him a more aggressive speech to read. We have now heard that speech. It is on the record. We are not worried about that. Having made that speech, why does the Chancellor not now admit, as a Member of the House of Commons, that a mistake has been made? This is not basically a party point. It is a point about the relations between the Government and the entire Committee. Exactly the same speech would have been made by hon. Members opposite if we had been in power and had done it. The noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) would have put the point infinitely better than I can hope to pit it. Why does not the Chancellor admit that he has made this mistake and undertake to consider what can be done?

At the end of his remarks he said that it is not feasible or desirable to do anything about it. It is perfectly feasible. He could do it now. While the House is debating post-war credits he could put down a Motion on the Order Paper requiring the recommittal of this Financial Resolution tomorrow, which would enable us tomorrow evening to debate these individual rates of Purchase Tax. He could do that easily.

The Lord Privy Seal set a precedent for this in 1952. The Lord Privy Seal in 1952 claimed the right as Chancellor to introduce in manuscript an Amendment to recommit the Financial Resolution. He did not do that. He tabled a Motion for the next day.

It would be feasible—I am not putting it higher than that—for the Chancellor tonight to table the kind of Motion which would enable the Committee to have its usual rights tomorrow.

The Chancellor may decide in the few minutes left before perhaps the Committee adjourns that it would not be very easy for him to find the right form of words and to table the Financial Resolution. At any rate let the Chancellor say to the Committee that he recognises that the Committee has a case. I am putting this on behalf of some hon. Members opposite. I am sorry that the hon. Member for Kidderminster (Mr. Nabarro) is not here. Let the Chancellor say that he recognises that there is a case against the Government on this and that he will consider the matter and consider what, if anything can be done to put it right.

I am not insisting. My right hon. and hon. Friends and myself are not pressing that the Chancellor should table a Motion tonight, because I do not think that that would give sufficient time for the Government to consider the postition, although we raised this matter with them some days ago. If the Chancellor would say that, if he cannot put it right for tomorrow and if we are precluded from debating these rates tomorrow evening, nevertheless he will try to put the matter right by recommitting on Report stage or in some other way so that we can have our normal rights of debate. I am sure that hon. Members on both sides of the Committee would be satisfied. I press the Chancellor to be frank now, to admit what the position is and to undertake at any rate—we are not asking much —that he will consider the matter and report to the Committee tomorrow.

Mr. Amory

I have very little to add to what I said. I said just now that I did not consider that the Committee as a whole, or any substantial number of members of the Committee, would have attached importance to this right to put down Amendments to the rates in each group. I agree with the right hon. Member for Huyton (Mr. H. Wilson) that my main object in this was to prevent the possibility of us devoting the same amount of time as last year to the consideration of individual changes. I admit that I did not consider whether the Resolution would have precluded what in fact it has precluded. I still say that I did not consider that in any case that was a matter that would have been of interest to the Committee. I would have thought —I still think—that there will be plenty of opportunities for all members of the Committee to make the points they wish to make during the course of the debate. What I still think will not be feasible or desirable will be to alter that Resolution for our discussions this year.

Mr. John Cronin (Loughborough)


Mr. Amory

Perhaps the hon. Member will allow me to finish.

I have said that I would be perfectly willing to consider any view the Committee likes to express about what our procedure should be for future years and, if there is any way in which we can collectively decide on a course of action which will guide us in future years, provided that that action is reasonable, we would be very glad to consider it. I do not think that at this stage we can consider altering the present resolution which has been already passed by the House of Commons.

Mr. Jay

I cannot believe that the Chancellor is being frank with the Committee. Did the Chancellor make this arrangement and place it in the Resolution deliberately, or did he do it by mistake? He did not sound to me at all happy in either of the speeches he has made tonight. If what he was saying was what he meant, which I can hardly believe, he has made one of the most extraordinary statements we have heard from a Chancellor in a Finance Bill debate for a long time.

10.30 p.m.

There is a very real point of substance here. It is, after all, one of the main functions of the House of Commons to discuss and amend matters of taxation. Purchase Tax is one of the most important, complicated and controversial of all taxes. I believe that the right solution to this rather difficult problem is not to have what has been called the Dutch auction every year. We are not disputing that at all; it is carrying the thing too far to have Amendments relating to every single commodity. Nevertheless, it has become agreed between the two sides of the Committee throughout the last ten years, I think, that, though we do not go as far as that, we certainly should not perform our functions as representatives in this Committee if we did not have an opportunity to discuss and to vote at least on the main rates of tax. That has been the accepted principle for ten years now.

This does not affect one side of the Committee only; it affects all hon. Members. Under the arrangement we have had for the last ten years it has been possible to have an Amendment to reduce each rate of tax, and, in the course of debating that Amendment, it has been possible for hon. Members to raise arguments on any individual commodity coming under the rate. Therefore, we preserved the right to advance arguments relating to each commodity and to vote in favour of reductions in the rate.

It is no answer for the Chancellor to say that that was not done in 1949 by the original Resolution. As he will surely recall, in that Budget there were no reductions in Purchase Tax. The arrangement under which we have worked for ten years has been that, when the Government make reductions, they must at least enable hon. Members on both sides of the Committee to move Amendments to make changes different from those which the Government propose.

Where are we now? It is no good the Chancellor saying that it is possible for the Committee to discuss Purchase Tax under this arrangement. The only opportunities we have are two. First, we can discuss the Question, That the Clause stand part of the Bill. I really think that hon. Members, if they are candid, will agree that it is quite impossible to have a rational and proper discussion of the individual items of Purchase Tax if the whole thing is rolled into the Question, That the Clause stand part of the Bill.

The only other thing we can do is to put down Amendments not to reduce the rates of tax but to raise them. But this is to reduce the procedure to a farce if we can discuss the matter only by advancing argument in favour of an Amendment to which we are, in fact, opposed. We do not wish to raise the rates of tax, and the Chancellor, in this extraordinary manoeuvre, has put us in the position of being able to discuss the thing only if we move an Amendment which is in its effect precisely the reverse of the result we wish to achieve.

I ask the Chancellor again, did he do this on purpose or by mistake? I can hardly think that he did it on purpose, but I must say that one part of his first speech—which was very uncharacteristic of him—in which he almost boasted that nobody on either side understood what his Resolution meant in the Budget debate suggested that he might be boasting of the trick which he had successfully perpetrated on the Committee.

Mr. Amory

indicated dissent.

Mr. Jay

I do not believe that that can be true, but, if it is, it would be nothing but a piece of Parliamentary sharp practice which the Chancellor was foisting on us. I am asking whether it is true. If the truth is—as is more charitable to assume—that he made a mistake, he should say so. We have already had one oversight or blunder from the Chancellor today, and if the truth is that this is a blunder, that he did not himself understand what his own Resolution meant in this very important matter, he ought to put the mistake right. We are prepared to believe that it is a mistake; we know that it might have happened. If he is willing to put it right, it means, in practice, that he will amend the procedure so as to enable the House and the Committee—on both sides—at least to put down Amendments to reduce the rates, as has been done in recent years.

The Chancellor threw doubt on whether or not it was procedurally possible to do this. My information is that by recommittal it would be possible, even now—if the right hon. Gentleman would act tonight, or, at least, tomorrow morning—to have the proper discussion that we should have. I will not argue the procedural point now, but I do appeal to the Chancellor to do this. If he does not want us to think that he did this deliberately, will he give us an assurance tonight that he will take these steps if it is procedurally possible to do so?

Mr. Cronin

This is a matter of the utmost gravity and concern to all back benchers. We have heard the Chancellor say that he did not anticipate that the Committee would expect to have a detailed debate on the Purchase Tax Clauses this year, but he also complained that last year there was prolonged and detailed debate on the Clauses. That should have indicated that we would require the detailed debate that is necessary. The implication seems to be obvious.

We are now dealing with some quite fundamental principles of the functions of this Committee. This is not a debating society. Always in the past the Committee has shaped the fiscal legislation by Amendments from both sides—and hon. Gentlemen opposite certainly did their share last year in tabling and debating Amendments to the Purchase Tax Clauses. The Committee this year is being denied an active share in this part of the fiscal legislation. It is quite clear that we will not be able to give Clause 12 that detailed consideration it should have, but will merely have a repetition of a Second Reading debate.

It is also important to record that fiscal legislation at present is largely drafted by civil servants, and is also the result of pressure by and negotiation with outside interests. Unless the Committee and the House take an active and detailed part in this legislation the public have no protection, except that of the Chancellor and the Treasury Ministers, against what may be a purely bureaucratic interpretation of the fiscal legislation. I suggest, therefore, that, from the point of view of both sides of the Committee, it is an intolerable innovation to be denied discussion of such an important matter, and I hope that the Chancellor will reconsider the position, and recommit the Financial Resolution.

Mrs. Eirene White (Flint, East)

I want very strongly to support what has been said by my right hon. Friends. On this occasion the Chancellor's political good faith is in question. Those of us—

Mr. Glover

On a point of order, Sir Charles. Before we go further with this debate, may I ask whether it is in order for an hon. Member to say that my right hon. Friend's good faith is in question when, in fact, the Financial Resolution was passed by a unanimous vote of the House? As nobody voted against it, how can anybody's good faith be questioned?

The Chairman (Sir Charles Mac-Andrew)

The Motion before the Committee is that I do report Progress and ask leave to sit again. Mrs. White.

Mrs. White

And it is exactly to that that I am now addressing myself, and if the hon. Gentleman had paid attention to what was said earlier he would have appreciated that one could not have voted against that Resolution unless prepared to vote against all reductions in Purchase Tax, which is not the wish of most members of this Committee, whatever may be the views of the hon. Gentleman.

As I was about to say, those of us who have been concerned with Purchase Tax on previous occasions took it for granted, I say quite frankly, that the present Chancellor would abide by the gentlemen's agreement observed on those occasions. We were perfectly well aware that this was not one of the years in which it would be possible to put down Amendments on individual items, as we did last year. That was quite clear to all of us, and we made no complaint about it. As my right hon. Friend the Member for Huyton (Mr. H. Wilson) said, we realised that to have that every year was wearisome for the Committee, and possibly for you yourself, Sir Charles. We do not expect that on every occasion. We had a good debate last year on the individual items, and that was not expected again this year.

We did most emphatically expect, however, in the light of our past experience and understanding, that it would be open to members of the Committee to move Amendments on the main groups of tax. The Chancellor himself, by his action last year, made that, if anything, easier, because he reduced the number of groups from seven to four. Thereby, the number of debates would be shortened.

The Chancellor implied that nobody mentioned the matter at all, but it was referred to several times on Second Reading of the Bill. The Financial Secretary was sitting in his place at the time when it was referred to, in the sense that we appreciated that we could not discuss individual items but were anticipating that we could discuss the main groups. There was some interchange on this very point between the hon. Member for Kidderminster (Mr. Nabarro) and me.

If we were under a misapprehension at that time, surely it was the business of the Government to acquaint the House with the situation? They took no steps whatever to enlighten us. Therefore, I think we were perfectly reasonable in our assumption that on this occasion the gentlemen's agreement—I stress that—which had been reached with previous Chancellors would be observed. Therefore, I am perfectly entitled on this occasion, I think, to say that there is a breach of faith on the part of the Chancellor with the Committee. Had he intended to depart from the agreement which had been previously understood to have been reached, I think it was his duty, in fairness to his fellow members of the Committee, to make it quite clear that on this occasion he had a different line. and that he had quite deliberately—if it was deliberate—decided that this year he was going back to the pre-1950 agreement. It was his duty to inform us that that was his intention. If it was not his intention, if it was done by inadvertence, then the very least he could have done was to correct that inadvertence by the procedure suggested by my hon. and right hon. Friends.

Mr. Donald Wade (Huddersfield, West)

I think the Committee is in some difficulty. I am not interested in the question whether the Resolution was moved by mistake or with intention. I am interested only in getting out of the difficulty.

Mr. Ede

We all are.

Mr. Wade

I agree that there are objections to having a debate on individual items, but we are concerned tonight with the problem of the rates of duty. As I understand it, we are debarred from moving a reduction in any of the rates. Furthermore, as I understand it, we are unable to move the abolition of the 5 per cent. rate. However, apparently it would he in order to move that the 5 per cent. rate be reduced to 1 per cent. That seems to me to create an anomalous state of affairs.

Let me give an example for illustration. Hon. Members may consider that the 5 per cent, rate is scarcely worth the cost of collection, at any rate on some of the items in the 5 per cent, category. An hon. Member holding that view could scarcely contend that the rate should be reduced from 5 per cent, to 1 per cent. because if it is not worth the cost of collection at 5 per cent, it is obviously not worth the cost of collection at 1 per cent., but bon. Members holding that view are placed in this difficulty: they must either oppose the reduction to 1 per cent., or support it knowing that that will increase the difficulty about which they are concerned.

I mention that as an example of the position in which we are placed as long as we are unable to move a reduction or abolition of a rate. It would be helpful if some way could be found whereby the Committee could consider and vote upon the question of a reduction of tax without permitting a debate on individual items.

10.45 p.m.

Mr. Amory

I only want to add that I really did not believe, and I still do not believe, that there was a gentlemen's agreement which I have contravened this year. The agreement, such as it was, referred to different circumstances. Secondly, I should like to say that I did not deliberately set out to stop debate on groups this year. I deliberately set out to stop wider debate on individual items, about which I now understand there is no difference between us. When it was discovered that this Resolution was more restrictive than that, I did not imagine that it would stop hon. Members effectively or handicap them in the debate.

Mr. Ellis Smith

That is a matter for the Chair.

Mr. Amory

I still believe that it leaves plenty of room on the Question, That the Clause stand part of the Bill.

Mr. Jay

When the right hon. Gentleman speaks about "when it was discovered that the Resolution was more restrictive" than previously, does he mean that he discovered, it only after the Resolution was passed?

Mr. Amory

Yes, because I was attaching no importance to the point raised now. I considered that there would be an opportunity, and I still think that there will be an opportunity, for hon. and right hon. Gentlemen to make what points they wish to make with the Resolution standing as it does. I should like to correct one point. A vote against the general Resolution would not have amounted to a vote against the Purchase Tax reductions, which were dealt with by the special Resolution dealing with Purchase Tax reductions.

Mr. Mitchison

I am most grateful to the right hon. Gentleman. The difficulty arises out of the last Clause, not the Purchase Tax Clause. If we had voted against the last Clause we should have been in the position we were in immediately before the 1955 General Election when a Budget with such a Clause was introduced and any new Clause and most Amendments were quite impossible.

Mr. Amory

I can understand hon. and right hon. Members not wishing to vote against it for other reasons, but not for the reason that it would be a vote against Purchase Tax reductions.

Mrs. White

The Chancellor suggests that we can discuss this matter equally adequately on the Question, That the Clause stand part of the Bill. Surely, the right hon. Gentleman realises that he takes from the Committee any power of decision which, in theory, at least, still resides with the Committee. It would mean that if we were opposed to the reduction of the rate on one group, in order to secure the decision of the Committee on that point we should have to vote on the entire Clause 12. Therefore, that would be removing from the Committee power of decision on this vital matter.

Mr. Amory

I repeat that I did not think that the Committee would attach importance to the point to which hon. Members opposite appear to attach importance, judging from what they have said this evening. I still think that it would not be possible to alter the Resolution. I will think over what hon. and right hon. Members opposite have said. I am perfectly prepared to consider—and I am sure that my right hon. Friends will be prepared to consider with me—any agreed arrangements that we can make for future occasions to ensure that if that is the Committee's wish there shall always be in future opportunities for debating and voting separately on any alterations in the group rates.

Having said that, I should have no objection Ito reporting Progress, though not for the reasons which right hon. Gentlemen opposite have suggested.

Mr. Ede

As long as we can report Progress at some time and feel that we really have made some progress, I am sure everybody will be happy to hear the last words of the Chancellor.

I regret that it has been suggested that the position we are in is the real responsibility not of the Chancellor but of some civil servant. With all due respect to those who have raised that point, it is a quite wrong one to take. The right hon. Gentleman has been frank. He said he saw the Resolution and did not at that time realise that the point raised by my right hon. Friends was precluded from our discussions. I am certain from that that he gave no instructions to the draftsman of the Resolution that this point was to be excluded from our discussions. By a bit of luck, he finds that the Resolution deals with something which was not in his mind in a way that he would not have asked for it to be dealt with if he had known that that would be the effect of the Resolution. That, I understand, is the right hon. Gentleman's explanation.

Seeing the importance that my right hon. Friends attach to this point and the progress that we have made today, it is not asking too much of the right hon. Gentleman to ensure that nothing is excluded other than the exact things that he wanted to exclude when the Resolution was put in hand and passed by the House. We are told that we can enter into some agreement or there may be conversations by which agreement can be entered into to deal with future years. I have noticed a Report from the Committee on Procedure, before which I gave evidence, and where I was severely questioned by hon. Gentlemen from both sides of the House, which made me think that there were a considerable number of Members, particularly on the Committee on Procedure, who thought there ought to be no further Committee stages of the Finance Bill on the Floor of the House.

I went as far as to say that I thought the proper thing might very well be that when we were to have a very detailed discussion on Purchase Tax as we did last year it might very well take place in a Committee upstairs, but I hope the Committee will realise from the discussion this evening that there is very considerable value in having the Committee stage of the Finance Bill on the Floor of the House. It is up to all of us to ensure that it is conducted in a commonsense way in which what the right hon. Gentleman calls "the feeling of the Committee as a whole" may have some consideration.

Of course, when a right hon. Gentleman speaking from the Government Front Bench says "I should welcome the opinion of the Committee as a whole", he is very glad to glance to his right and see the Patronage Secretary sitting there to make sure that the view of the Committee as a whole shall be the view expressed from the Treasury Bench.

I suggest to the right hon. Gentleman that, in view of the spirit in which the debate has been conducted on the Committee stage of the Bill so far and his admission that what we find precluded is something which he did not expect to find precluded when he drew up the Resolution, the case made by my right hon. Friends is one which ought to be conceded and that some expeditious way should be found—I am certain that a little conversation through the usual channels would produce an expeditious way—of enabling us to have before the Committee stage ends the discussion which the right hon. Gentleman thought was not precluded.

Mr. H. Wilson

I do not want to press this matter much further tonight. I think that it should be said to the Chancellor, in case the wrong impression gets abroad, that he must realise why it is that we could not vote against the outstanding Resolutions in the Budget, even if, to be frank, we had spotted their effect, because so to have voted would have meant that we were voting against the desirability of making any changes whatsoever in the law relating to the National Debt and taxation, and only in extreme circumstances are an Opposition justified in voting in that way.

The other matter on which I wish to take issue is the way in which the Chancellor has rather made light of the Lord Privy Seal's remarks in 1955. The Chancellor said that he was not aware of any gentlemen's agreement. I do not want to make any issue of any talks there might have been with the Lord Privy Seal, the Prime Minister or others. I stand pat on what has been said in the House. That is all one is entitled to do in this respect. I do not want to weary the Committee by quoting it again, but it is quite clear that the Lord Privy Seal said: In the case of the Financial Resolution attached to the Budget, we are following, so far as we can, precedents created and left to us by our predecessors."—[OFFICIAL REPORT, 22nd November, 1955; Vol. 546. c. 1286.] If any Chancellor after that statement wants to depart from those precedents, he should take hon. Members into his confidence, and there should be consultations through the usual channels, and a statement in the House. That is now being done, but I think that the Chancellor is making light of it to an extent which is not justified.

What he has just said was very different from his first speech, and we welcome the fact that he is moving along with us so far. What he has now said is that he, almost alone among hon. Members, knew what this restrictive Resolution and its implications were, but that he did not think that the Committee as a whole would want to debate the group rates of tax. He said that he felt that there was a general desire against having the Dutch auction procedure, and I think that he is right about that. We had enough of it last year.

However, for him to take upon himself the decision that the Committee should not debate Purchase Tax rates on a group basis when every Chancellor for the last ten years has allowed it, is going a little too far. He told us that he knew what the Resolution did, but thought that the Committee would not care. He is obviously wrong about that, at least where this side of the Committee is concerned.

That is why I ask him to look at the matter again. It is not good enough for him to say that he will look at it for another year. Certainly we do not expect to find him or any of his right hon. Friends at that Box in a year's time. Even if by some mischance there is a Conservative Chancellor, it is unlikely to be this one. Over the last four years, the expectation of life of Tory Chancellors has been very much less than what he has already surpassed. We have been told by the hon. Member for Kidderminster (Mr. Nabarro) that he will have the job anyway. Whoever it might be, in any case after what happened with the Lord Privy Seal in 1955 we are in some difficulty. The Lord Privy Seal said what he said on that occasion in all good faith and if he had been consulted about this, I am sure that he would have honoured what was the position in 1955.

We have had three Chancellors in four years and with changes in Chancellors a lot can happen. I suggest to the right hon. Gentleman that he look at this matter again overnight, that he sleep on it and discuss it with the Lord Privy Seal, who is very much involved in this—and one can understand his difficulties—and we will give him another chance tomorrow to see whether he has anything that can be done.

I do not propose to press him further on the point tonight, but I would suggest to the Chancellor that he should look at this matter again and perhaps we may come back to it tomorrow afternoon when we resume consideration of the Bill. If it is in order and you, Sir Charles, agree, within your discretion, to allow it, I would once again move, "That the Chairman do report Progress and ask leave to sit again," so that tomorrow we can see if the Chancellor has found a way out of the difficulty in which we find ourselves.

Question put and agreed to.

Committee report Progress; to sit again Tomorrow.