HC Deb 04 April 1960 vol 621 cc52-4

I turn now to my Budget proposals proper. I have explained the need for a moderate amount of restraint on the economy, and have referred to the additional expenditure which we are likely to have to meet during this year. It is clear, therefore, that I cannot make any net reduction in taxation in this Budget. I consider, indeed, that the position calls for some modest net increases. I have thought it right to take the opportunity to make a number of changes which will lead to improvements in the tax law, and, indeed, one or two concessions for which I think there are particularly strong arguments.


My first proposal relates to hackney carriages. I am proposing to amend the legal definition of a hackney carriage so that the amount of Excise licence duty payable on this type of vehicle will no longer depend on the period for which it is hired.


Next, in the field of Customs and Excise, I propose the abolition, root and branch, of a duty which is hallowed by 249 years' existence on the Statute Book. The duty of 3d. on a pack of playing cards is now outdated, playing cards being chargeable with Purchase Tax. I therefore propose to abolish this duty from 4th August at a cost of £40,000 this year and £60,000 in a full year. I trust that this concession will not lead to untoward dissipation.


Next, I propose to simplify the collection of tobacco retailers' licences. They are at present renewable annually at a cost of 5s. 3d. and will in future be issued for a period of four years, at a cost of £1. This new arrangement will take effect from 1st October.


Inspired by reforming zeal, and moving on from one bold action to another, I propose to make a small alteration in the scope and administration of the duty on mechanical lighters.


I propose, too, to make a change in the administrative control of the hydrocarbon oil duty in so far as it affects heavy oils used in road vehicles.

Details of these minor Customs and Excise changes will be found in the White Paper. I have to mention all these things that require Resolutions.


I have now certain changes to propose in the wine duties. During the negotiations which led up to the signature of the Convention of the European Free Trade Association, the Portuguese representatives emphasised their great concern about the level of duties on heavy wines, which form an important and traditional part of their exports to this country. I had to say that, as this was a budgetary matter, it could not be dealt with in the negotiations, but I undertook to give careful consideration to the Portuguese submission. As it happened there were other, purely domestic, reasons which made it desirable to adjust these duties.

The Committee will recall that two years ago I improved the structure of the wine duties by bringing the rates for heavy wines into a better relation with those for light wines, but that I was then unable to go as far as I would have wished. The duties on heavy wines are still out of line to some extent and the position is unsatisfactory, both for the trade and for the revenue. I now propose to complete this reform of the wine duty structure by reducing the rates for imported heavy wines by 12s. a gallon. This is not a reduction that I would have chosen to make on this particular occasion were it not for the trade reasons I have mentioned.

In this new structure, the duty on light wines imported in cask will remain unchanged. But the present rates of duty on light wines imported in bottle, including sparkling wines, will be reduced by the same amount, 12s. a gallon, since some of them would otherwise be higher than the new rates on heavy wines. In conformity with the new structure, the excise duty on British wines will be reduced by 8s. a gallon for still heavy wines and 12s. a gallon for all sparkling wines.

These changes, which operate from tomorrow, are estimated to cost £3¾ million this year and £4 million in a full year.


Next, I come to entertainments duty. This was discussed very fully in our debates on the Finance Bill last year, and I have continued to receive numerous representations about it.

As the Committee is aware, very substantial reductions have been made in this duty over recent years, the latest being the provision in last year's Finance Act relieving cinemas of the first £20 of their weekly duty liability. Although these concessions have been of real benefit to the trade, and, in particular, to the smaller cinemas, most of which have been completely relieved of duty, the steep decline in attendances has continued during the past year and many more cinemas have closed: and it seems that this process is not yet at an end. While, no doubt, this decline is mainly attributable to other factors, I have come to the conclusion that the continuation of the duty in present circumstances is no longer justified.

I have, therefore, decided to recommend its abolition at a cost of £6½ million this year and £7 million in a full year. This change, which I am sure will be welcomed on both sides of the Committee, will take effect from 10th April. My right hon. Friend the President of the Board of Trade is considering whether any changes should be made in the regulations governing the collection of the exhibitors' levy. In the meantime, no exhibitor's liability to levy will be increased as a result of the abolition of the duty.