§ 3 and 4. Mr. Nabarroasked the Chancellor of the Exchequer (1) whether he will state the policy of the present Government in regard to Purchase Tax; (2) whether, in view of the fact that the lowest rate of Purchase Tax, namely, five per cent., now applies to all classes of clothes and furniture however costly and luxurious, he will give an assurance that he will give priority in further proposals for Purchase Tax reduction to the other categories of goods to which Purchase Tax is applicable, at 12½ per cent., 25 per cent., and 50 per cent., respectively, and which include a large range of goods now regarded as household necessities.
Mr. AmoryIt is the policy of the Government not to give any indication in advance as to possible changes in Purchase Tax.
§ Mr. NabarroIs it not the fact that my right hon. Friend has recently been making provocative speeches exhorting manufacturers to reduce their prices? 177 Should he not himself practise what he preaches, set a good example, reduce Purchase Tax with a view to its ultimate abolition at an early date, and thereby make a massive contribution to reducing prices in the shops for housewives and others?
Mr. AmoryI would describe my speeches as thought-provoking rather than provocative, but, with that reservation, I agree that my hon. Friend's Question is relevant. However, I consider that I have not a bad record in this respect. In the last two Budgets I have recommended to Parliament, and Parliament has approved, a reduction of something like £120 million in Purchase Tax, or 20 per cent. in the rates. I would be well satisfied if price reductions approximate to that reduction.
§ 5. Mr. Nabarroasked the Chancellor of the Exchequer whether he is aware that the number of new motor car registrations during the past three-and-a-half years in Western Germany and France have in each case exceeded those in the United Kingdom and that the ability of the British motor car industry to maintain and increase exports in competition with these two countries is dominated by the need for large-scale production; and, having regard to motor car Purchase Tax being levied at rates much higher than taxation on cars levied in Western Germany and France, whether he will undertake to reduce Purchase Tax on cars, as soon as possible, and thus assist the export competitiveness of the British motor car industry.
Mr. AmoryI am, of course, well aware of the bearing of large-scale production by the motor car industry on its ability to compete in export markets and this is one of the considerations which I have to keep in mind in considering the level of the Purchase Tax. But I can give no such undertaking as my hon. Friend suggests.
§ Mr. NabarroWould my right hon. Friend bear in mind that in the life of the last Parliament he took slow and faltering steps in the direction of the "Nabarro Plan" for Purchase Tax? Would he recall, in particular, that following the abolition of Purchase Tax on commercial vehicles there has been a big increase in sales abroad, as I recommended 178 to him. Will not my right hon. Friend now break into a brisk trot and accelerate these reductions?
Mr. AmoryI will not speculate as to the effect on the country's economy if I were to accept the "Nabarro Plan" in toto.
§ Captain PilkingtonWould the Chancellor consider stating his future policy towards the hon. Member for Kidderminster (Mr. Nabarro)?
§ Mr. NabarroAbsolutely unmentionable.