§ Subject to any order made by the Treasury under section twenty-one of the Finance Act, 1948, Part I of the Second Schedule to the Finance Act, 1958 (as amended by the Finance Act, 1959), shall be amended by the substitution in the percentage rates of tax specified throughout that Schedule of the figure 5 for 12½.—[Mrs. Slater.]
§ Brought up, and read the First time.
I beg to move, That the Clause be read a Second time.
The Committee has had one debate on a new Clause relating to Purchase Tax during which the hon. Member for Kidderminster (Mr. Nabarro) said that its provisions related to 100 per cent. of the people concerned. I can truthfully say that the provisions in this Clause relate to matters affecting 100 per cent. of the people of this country. The Clause deals with many of the commodities which were taxed when the right hon. Gentleman the Home Secretary, as Chancellor of the Exchequer, introduced his "pots and pans" Budget in which many household commodities were subjected to tax for the first time.
Originally, Purchase Tax was introduced to restrict the purchase of goods which, in the main, we wanted to export, but today Purchase Tax has become such an easy method of raising revenue that it has now been extended to almost everything we use. In this section many items are affected. It does not include electric sweepers, but it includes non-electric carpet sweepers, kitchen scales, personal weighing scales, wringers, mangles, cutlery, knives, spoons, slicers, fish servers, wallpaper, tiles, linoleum, hardware if not used for industrial purposes, coal bunkers, dustbins, mats, baking tins, bread bins and food storage jars. All those things come within the 542 section on which the amount of tax is 12½ per cent. at present.
Naturally, my hon. Friends and I are interested in pottery and that comes within the section on which 12½ per cent. is paid. The pottery industry produces about £60 million worth of goods annually. Some may say that it is not a very large industry, but it is a very important industry. It is important because a large proportion of the pottery which is produced and has been produced in this country over the years is exported and therefore brings income to the country. I believe that even now we are the largest European exporters of pottery. Yet, although we produce such lovely china and beautiful pottery of all kinds, half the families of this country own only one dinner service and just over half possess only one tea service. On average, only £1 a year is spent on pottery by a family.
That is distressing, not only from the point of view of the industry, but because the ordinary people do not spend more on beautiful china on which to eat their food and beautiful vases to be used in their homes. The fact that half our people do not possess necessary china is just not good enough.
We believe—this applies not only to pottery but to many other household commodities—that the ownership of good china is not a luxury but a necessity. To possess unchipped and sound pottery, especially when it is used for eating purposes, is healthy. It is unhealthy to use chipped pottery. I wish that that was realised more in this House of Commons and that when crockery became chipped it was thrown away. The use of good china has an aesthetic value.
If the Financial Secretary had been present, I could have reminded him that he has eaten food off the lovely civic china of Stoke-on-Trent of which we are extremely proud, for it is the best in the world. The Economic Secretary to the Treasury has seen some of that lovely china during the visit which he has made to Stoke-on-Trent, and I am sure that he agrees with me that to have food served on china of that quality makes a meal very much more enjoyable than if it is served on old earthenware and undecorated pottery. We therefore believe that there is an aesthetic value 543 in having about us, and using for the serving of our food, beautiful china and good, unchipped pottery. Any restriction, such as Purchase Tax at 12½ per cent., ought not to be tolerated, even if it restricts in only a very small way the purchase by the ordinary people of this country of some of that china which is produced in our district.
About three weeks ago in Stoke-on-Trent we had a pottery exhibition for our jubilee year celebration. Most of our pottery firms displayed their wares in that exhibition. We had on show not only china which had been produced for people in this country but some which we had borrowed from wealthy countries abroad. The exhibition also included a display of the modern tiles which are produced for bathrooms and kitchens. I cannot describe that display here tonight, but it showed the great variety and the great beauty of the wares produced in our city.
The industry feels very sore about the continuation of Purchase Tax at 12½ per cent. It is meeting very severe competition from both European and other countries. We still believe that we produce the best, but the competition exists.
During the post-war years the industry has endeavoured to meet that competition not only for itself but for the sake of the country. It has modernised its designs and its methods of producing pottery and tiles. It has tried to rationalise the industry, as far as that can be done in pottery, which is so much a craft industry. In addition, in order to comply with the Clean Air Act the factories have been modernised by introducing tunnel-oven firing rather than the old-fashioned bottle oven. All that has put an added expense on the industry, which feels that this further injustice of a 12½ per cent. Purchase Tax is one from which it ought to be relieved.
I speak on this section of Purchase Tax not only from the point of view of the industry which I am proud to represent but also from the point of view of the housewives of this country. They are almost the only people who can say that the tools of their industry suffer tax of this kind. All kinds of people have had this tax removed because they use these 544 articles in industry. Even the buckets used by the butcher do not bear tax, but the bucket which the housewife uses does bear tax. Almost everything that the housewife has to use bears this tax. If she wants to decorate her house, as all housewives do, she pays tax on the wallpaper. If housewives want to lay new linoleum or buy a new carpet, they have to pay tax. It is good for our souls as well as other things to have something new about the house. Housewives have pulled their weight and should rank with other workers in being relieved of this heavy taxation on every commodity which they wish to buy.
Therefore, the Economic Secretary and his right hon. Friend should come down to earth upon this Clause and give us some consolation by agreeing to it.
§ Dr. Barnett Stross (Stoke-on-Trent, Central)
The Economic Secretary will probably have refreshed his mind by looking up the debate following the imposition of this iniquitous tax in October. 1955. If he has, he will agree with me that the then Chancellor of the Exchequer made it very clear when we pressed him that he could not justify his action in terms of logic. The right hon. Gentleman said that that which he did was not logical and he could not so defend it, but he pointed out that at that time he had to have the money and take away purchasing power from the people and prevent them spending money. We were amongst the other victims.
The right hon. Gentleman said that the tax would produce £7 million. We warned him then that he would not get £7 million because he would damage the future and the structure of the industry. We were right. The yield was £5½ million in a full year. The right hon. Gentleman did not get £7 million because what we had pleaded for was of no avail and what we had warned him of came true.
We lost craftsmen and suffered a good deal of short time. There was a contraction of the industry as a whole. Since then, the situation has become clear to the Treasury, because it has cut Purchase Tax, on the goods we are describing, including pottery, first to 15 per cent. and last year to 12½ per cent.
We are fully justified in pleading for a further reduction to 5 per cent., and our case is strong. One can say three 545 things quite explicitly. Of all large-scale industries in this country or in the world, the craft of pottery-making is still more dependent upon the craftsmen than any other. The prime tool of the industry is still the hand of the potter. Lost craft labour in an industry like this is irreplaceable. It never comes back.
I say with sorrow that one of the reasons why lost workers do not come back is that our industry is not without its dangers to health. In recent years much money has been spent by employers, both on research and on carrying out the advice their own research organisations, the Factory Inspectorate and the union have given them, but it is not an entirely healthy industry. If an employer loses craft labour which it has taken half a lifetime to train well, he does not get it back. It is not only the industry that suffers, but the country as a whole. The impact of Purchase Tax causes a loss of craft labour and brings us short working time, which means the degradation of the standard of living of our workers.
First, we ask the Economic Secretary and his right hon. Friend to reduce this tax to our suggested 5 per cent. Second, we point out to him that the Treasury is guilty not only of imposing a tax to our detriment but of making its announcements at the wrong time of the year to suit the industry. We have pleaded about this for a long time, and only once have our pleas been listened to. From the present Home Secretary, who imposed what at that time was a 30 per cent. tax, we received some relief when he announced taxation changes in January and not at the time of the Budget. An announcement of changes at the beginning of the year means that we do not get stagnation for three months while the shopkeepers and traders wait to see which way the wind will blow.
Restrictions on credit were eased very considerably in 1959, and the trade then expected, but did not get, some modifications. If he has not the figures with him, the Economic Secretary will be interested to know that, as a result, in the first three months of last year as compared with the same period in the previous year our trade was £½ million less. I will not stress that point any more because I have a very strong 546 suspicion that representations on this have already been made to the hon. Gentleman and that he is aware of them.
From time to time, a review of the industry is made in order to see what is happening to the workers, to profits, to stocks and to orders. Eighty-eight firms are normally consulted, and the result of the review shows that in January of this year as compared with the number in October, 1955, there were 1,000 fewer males at work and nearly 2,000 fewer females. In January of this year, 769 males and 1,534 females were on short time, while the stock position was one of the highest on record, with the warehouses bursting with stock.
I do not want the Economic Secretary to think that I am crying "Woe" all the time about the industry. Despite all the onslaughts of competition from abroad, of new pottery industries being created in parts of the world that never made pottery before, and which, naturally, wish to protect their own industries; in spite of all the difficulties, and the enmity of the Treasury—and the Treasury is our enemy here—the industry has faced its difficulties very well, and is doing very well at the moment as compared with what one might have expected in view of what I have said.
When we consider that we are still able to export 45 per cent. of our ware in spite of quotas against us in almost every country in the world except the United States, the hon. Gentleman will realise that I appreciate that we are not impoverished at the moment. Nevertheless, this is a most vulnerable industry, and it is one that should be kept alive. We should not wait until it is moribund, nor do we expect a stab in the back from those whom we should have as friends—the Treasury.
We answer all our problems and difficulties in two ways, by rationalisation on the one hand, and by improvement in design and shape on the other. Our patterns and shapes in the post-war period are magnificently good compared with pre-war. I remember reading in the Encyclopaedia Britannica many years ago that nothing significant in shape or design in the pottery industry had been noted since 1800. That was the 1924 edition of the Encyclopaedia. Today, even some of our undecorated ware is a joy to look at, competing very well with 547 the most plastic and malleable of metals like silver and gold. If the hon. Gentleman has not seen them in our area, we shall be very glad to show him examples.
The wages bill of every manufacturer is essentially the biggest section of his expenses. I think that it is a little over 50 per cent. of all costs because of the craftsmanship in the industry. Despite that, we have introduced every kind of scientific aid into the industry in a way which I would not have thought possible in 1938 or 1939. But there is a limit and we think, although we shall go on defending ourselves as best we can, that we face very serious competition.
I do not wish to offend friendly and charming people but I do not think that the standard of life of the workers in Italy is as high as ours and I think the same is true of Western Germany; it is certainly true of Japan. We feel that we should have more sympathy for any pleas of this kind which we make, in one form or another, year after year.
Finally, I would say that this, the most modern and efficient industry of its type in the world, which employs the largest number of people working in the craft anywhere in the world—50,000 men and women work in our city—was a low-profit industry before the war. It is not a low-profit industry today, but it has ploughed back a tremendous percentage of its profits in order to survive in the post-war years. I think it is true that it is very vulnerable and therefore we appeal for some sympathy and understanding of our problem.
I do not think that the Economic Secretary, his right hon. Friend or anyone in the Committee wants to see the potteries suffer the fate of such contraction as has happened to the cotton industry in Lancashire. It is not in such a low state as all that. Perhaps it has been luckier than the cotton industry. There is not so much competition and the craft is not so easily learned in other parts of the world and, even where they are learning the craft, they are unable to produce the quality of body, design and shape that we do. I hope that tonight we shall hear from the Economic Secretary that he understands our problems, that he will agree that the changes in Purchase Tax ought to come in January 548 and not in May or June, and that the claim we make for a reduction from 12½ per cent. to 5 per cent, is a very modest request.
§ Mr. Ellis Smith
My hon. Friends the Members for Stoke-on-Trent, Central (Dr. Stross) and Stoke-on-Trent, North (Mrs. Slater) have made a reasoned and unanswerable case in support of this Clause. In addition, they have substantiated their case by direct evidence arising out of their close contact and experience of the industry. I want to make a few observations in support of the fine case which they have presented.
The proposal in the Clause is that there should be a reduction in Purchase Tax to 5 per cent. In my view, it should be abolished altogether. To be in order I propose to keep within the limits of the Clause. I cannot understand any political party in these days being a party to the continuation of a restrictive tax upon the export industry. I was in at the birth of the imposition of Purchase Tax. In the private meetings of the Labour Party a great battle took place in which we reasoned with one another, as we ought to be doing tonight, in order to come to a democratic and mutually acceptable correct conclusion.
As a result of pooling our ideas, our party, by an overwhelming majority, decided against Purchase Tax. Let me make it clear that we were prepared in those days to agree to anything to win the war. But we thought that the proposed method of restricting consumption was not fair and we suggested that the object should be achieved by more scientific methods. However, the party eventually bowed to the proposals of the Coalition Government, with the result that Purchase Tax was imposed to restrict consumption.
I am sure that the Financial Secretary will agree that the purpose of Purchase Tax is now revenue raising. Upon that I am not "going off the deep end" to say this, that and the other. It would be so easy to do that. But, having regard to the constant appeals made by the Chancellor and other Ministers to the National Joint Advisory Conucil, which meets quarterly to consider the best course for this country to adopt to further our export trade, I should think 549 that all restrictions on the export industries should have been removed before now.
It is admitted by all well-informed people that, relatively speaking, the pottery industry since 1945 has made an enormous contribution to this country's exports. I think that those exports could be greatly increased if we were to set about the matter. This country is now in such an economic position that we can no longer rely upon our income from investments abroad. Therefore, it is necessary that we should have the maximum exports so that we can not only maintain our present position but improve upon it.
If that is correct reasoning, then long before now all restrictions like Purchase Tax should have been removed. Is that fair reasoning? Is it correct reasoning? I suggest that my reasoning up to now has been in complete harmony with the economic policy constantly put forward by the Chancellor of the Exchequer. I have in my possession notes which I could produce, if anyone expressed doubt, showing that at meeting after meeting the Chancellor has pleaded with the trade unions and the employers to maximise exports. We all agree about that—
§ The Temporary Chairman (Sir Norman Hulbert)
Order. I hope that the hon. Member will endeavour to relate his argument to the proposed new Clause and not wander over the whole economic field.
§ Mr. Ellis Smith
I should have thought that that is what I have been doing from the beginning of my speech, Sir Norman.
I was hoping that tonight we would have had an undertaking so that we in this Committee could take steps, in harmony with the Chancellor's proposals, to remove Purchase Tax. We are not speaking for ourselves alone. We are Labour Members. We are real, uncompromising Labour Members. We are not trying to ride two horses. But we are also speaking for the manufacturers. I have documents which have been prepared by the manufacturers who are the political friends of the Financial Secretary and the Economic Secretary. Time after time they have taken part in deputations to the Chancellor.
550 Minister after Minister has visited the City of Stoke and has been taken round the finest pottery factories not only in the country, but in the whole world. They have gone to—what do they call them?—lunches and dinners, and they have talked about this, that and the other, but nothing has been done. Only a few weeks ago, my right hon. Friend the Leader of the Opposition went there. He gave an assurance, which we are trying to fulfil—if he were here he would be supporting us 100 per cent.—that it is time that the Purchase Tax on pottery was removed.
As my hon. Friend has said, we are subject to keen competition. It is quite unfair that an industry catering for the export trade to the extent that our industry is should be subject to restrictions of this kind, particularly when it is in competition with other countries such as Japan. Moreover, in an industry of this kind, it is necessary that there should be a thriving home market. Year after year, the manufacturers try out new designs and new methods of production. It is essential that research should be taking place all the time. To cater for development based upon research, together with new methods of production and decoration, it is necessary that the products should be tried out in the home market. If people stand in admiration of them, as they do, then in that way we can build up a greatly increased and thriving export trade.
Those are the reasons why we are so keen to have this change accepted. I do not think that the Economic Secretary has yet visited our city, but we have hopes of him also visiting us. We shall give him a great welcome if he does come.
§ Mr. Ellis Smith
If they do him as well as they did my right hon. Friend the Leader of the Opposition, he will do well. If he has any doubts about his possible experiences, let him consult those who have gone. I will go through them—the President of the Board of Trade, the Prime Minister. I do not think that the Chancellor—
§ The Temporary Chairman
Order. There is nothing in this new Clause to suggest whom the Economic Secretary should consult before he goes to the hon. Member's constituency.
§ Mr. Ellis Smith
I agree, Sir Norman. I am very sorry. I do not think that you have yet visited the city, so we will invite you as well.
For the time being, I am dealing with the Economic Secretary. I hope that he admits that we have made out a reasoned case. If he agrees that it is reasonable, then, if he cannot accept a reduction in Purchase Tax tonight, will he give an undertaking that, between now and the next opportunity which presents itself, he will use all the influence he possibly can within the Treasury to see that the tax is abolished altogether?
§ Mr. Harold Davies (Leek)
I have not with me a brief from the manufacturers. I would rather not have it, because the meticulous case they put forward might delay the Committee too long. Hon. Members opposite look tired and a bit bored. I assure them that I shall not speak for very long, but I hope that the Committee will listen to me for a few minutes.
There are other factors to be mentioned in this connection. It may seem strange that I, the Member for Leek, should be supporting the pottery industry, but, before my division was redistributed and about 26,000 industrial workers were taken out of it, including many in a large section of the pottery industry, much of that wonderful part of North Staffordshire was in the Leek constituency. I know very well that more than mere economics is involved in the pottery industry.
I ask the Committee to remember that one of the finest ambassadors of British greatness, before ever we had the steam engine, was the pottery industry. I have been there many times, but on one occasion when I was in the Hermitage Museum in Leningrad I had the exquisite pleasure of examining the famous Green Frog ware produced by the old, great Wedgwood. Incidentally, one of his relatives fought me at the last election and, despite the redistribution, he is not in the House of Commons today. I had the exquisite pleasure of examining this example of great British craftsmanship turned out by the great Josiah for the Empress Catherine. The pottery industry was the ambassador of Britain long before the engineering industry. Britain was fortunate. We had 289 steam engines before the rest of the 552 world had any. But, through the pottery industry, we were able to demonstrate to the world the craftsmanship of the British people.
My hon. Friends who represent Stoke-on-Trent are perfectly right. The Treasury seems to treat the City of Stoke-on-Trent like B.B.C. television, which gave an account of the "white country" the other day which annoyed many authorities in Stoke and the local people. North Staffordshire is not an area to be treated with jocularity, nor, I assure the House of Commons, is the division of Leek.
With all due deference to your Ruling, Sir Norman—and I would not dream of questioning it—my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith) was making a reasoned case for the export trade in the pottery industry. If we want money for overseas investment, and if we want to balance our trade, we must get it from where we can. The case against Purchase Tax 'has been made out by my hon. Friends. There is not the slightest doubt that this imposition on the pottery industry limits its dynamism to capture foreign markets. Where is the business acumen of the Tory Party which says, "You have never had it so good"? If hon. Members opposite call this business acumen, the sooner they come over to this side of the Committee and let us get over to that side the better.
Because of the world in which we live, it is not quite true to say that "we have never had it so good". The Government are not as much interested in propaganda tonight. They are a little more reasonable and sensible than they were at the hustings. The Government did not mean that "we have never had it so good". They meant that "we have never had it so rich". The trouble with the modern world is that we have never had it so noisy and so ugly. In some cases, never has taste been so low, and we should aim to uplift it. If we look at the modern education that both sides of the Committee are endeavouring to give to the young school girl—
§ The Temporary Chairman
I must ask the hon. Member to deal with the proposed reduction of Purchase Tax suggested in this new Clause.
§ Mr. Davies
The taste of the modern young housewife today, through her education, is such that she wants in her home things of beauty.A thing of beauty is a joy for ever",and a thing of beauty from the pottery industry cannot be produced at a price which the housewife can afford to pay if this tax is imposed upon it. Of course I am in order, Sir Norman. That is what I am driving at. The taste which has been developed as a result of the educational efforts of both sides of the Committee and which has been inculcated into the young housewife is being frustrated by the Tory Party which says "You have never had it so good". I appeal to the Government to give the housewife the chance to develop that taste by allowing the rich products of the pottery industry to get on to the tables of Britain at a price which she can afford to pay.
We were told today by a Conservative Member below the Gangway that American industry pays better wages than the captains of industry in Britain. I appeal to the Government to give the industry the chance to spread throughout the land so that its exquisite products can increase our standard and taste. The wonderful standard of design, the craftsmanship of the children in the school of Stoke-on-Trent, their art, their knowledge of painting and their drawing have to be seen to be believed. I am not making a sentimental case, but this great tradition which has been inherited over the centuries is something which could be lost. It would be tragic if either party were to do anything which had that result. We on this side attacked my own party about this when we were in power. Whoever the advisers in the Treasury are, they are just as dense in advising my party as they am in advising the party which is now in power. We attacked our own Government about this.
I appeal to somebody, somewhere, to have a little sense and to realise the needs of this industry, which has given a great name to Britain. Great families have built up the tradition of the industry. Surely, a sensible approach should be adopted.
Since I have lived in the area, as I have done for many years, it has been my tendency to turn over cups and 554 saucers all over the world. It is a thrill to do so. I remember occasions in Tientsin and in Bangkok and once in Saigon, when I turned over a beautiful cup and saucer to see where they were made. I do not want to advertise any firm; I am not looking for a free dinner set. It was made somewhere in the city of Stoke-on-Trent by a great firm which had put all it knew into the industry. We beg the Committee to consider this industry and this time, at least, to give the housewives a chance to have decent pottery on the kitchen and dinner tables of Britain.
§ Mr. Loughlin
I do not want to delay the Committee long, or to impinge too much upon the time of hon. Members who represent the Potteries constituencies. or even of my hon. Friend the Member for Leek (Mr. Harold Davies), who used to represent a pottery constituency until redistribution and now represents Leek proper. There are, however, other commodities involved in the tax about which something should be said. In the main, the commodities are those required for the housewife in the kitchen.
In introducing the Clause, my hon. Friend the Member for Stoke-on-Trent, North (Mrs. Slater) referred to the differences betwen the tax on industrial buckets and the tax on buckets used by the housewife. I appeal to the Economic Secretary to the Treasury to do something to assist the housewife in the purchase of these articles. We hear a great deal about the workpeople "never having it so good", but it is always well to remember that vast sections of our industrial workers are not having it quite so good as some people seem to think.
Even in the age in which we live, with all its prosperity, there are housewives whose husbands still have terminal wage rates of £8 10s. to £9 10s. a week. When taxation policy is being considered, it is this section of the community who should be given the greatest consideration.
It is incumbent upon the Government to examine whether it is absolutely necessary to tax articles which are described as tools of the trade of the housewife, particularly among that section of housewives who have to manage on wage rates which, under any examination, are not high enough to maintain a decent standard of life. Examination of the Clause should be related not merely to the 555 pottery industry, but to those other commodities about which so little has been said in the debate.
§ Mr. Darling
In spite of the excellent appeals made by my hon. Friends on behalf not only of the pottery industry, but of household commodities as well, I am sure that the Economic Secretary will say that he cannot accept the Clause because Purchase Tax brings in £530 million a year and the Chancellor wants the whole of that and will not make any concessions. But, as my hon. Friend the Member for Gloucestershire, West (Mr. Loughlin) has said, if one leaves out luxury items and one refers only to those covered in the Clause, it will be found that the burden of the tax falls in the main on ordinary housewives, on the people with small or middle incomes.
To the extent to which their purchases are taxed, their purchasing power is reduced, or, to put it the other way round, these people, the poorest in the community and also those with middle incomes, have to bear the burden of this taxation and in doing so have their living costs pushed up, even though they are the very sections of the community who need most help in this direction.
My hon. Friends have spoken about pottery, but from a constituency angle I could refer to cutlery, which is also covered by the Clause. Here is a craft industry the output of which is declining. Its overseas trade has been hit not only because of the difficulties which the industry encounters as a result of Purchase Tax, but also for other reasons. Leading manufacturers engaged in the cutlery industry will say that the main reason why they are in difficulties and output is declining is that ordinary housewives are sticking far too long to the canteen of cutlery given to them as a wedding present, because the cost of replacing cutlery is far too high when it carries the Purchase Tax which is now imposed upon it.
My hon. Friend the Member for Gloucestershire, West referred to other items in addition to pottery and cutlery which come within the range of the tax we are discussing. I would point out to the Economic Secretary what this tax means to the people whom the Government tell us they want to help, the people 556 who set up homes, the property-owning democracy. When they marry, whether they live in a rented house or a flat or purchase a home, they have to buy carpets and rugs and put paper on the walls. They have to buy furniture, baking tins, bread tins, pots and pans, teapots, cups, plates, tumblers. They have to buy—if they can afford them—a refrigerator, a vacuum cleaner, a washing machine, electric fires, carpet sweepers and spin driers. If they have a garden they want a lawn mower. They also want a television set and a radio. All these things come within this range of tax.
Therefore. what the Conservative Party is doing is going round the country putting up posters before an election saying, "You never had it so good" and making speeches to the effect that they want to develop the idea of a property-owning democracy and then, immediately they are in power, putting a financial imposition on those who want to set up homes so that they can enjoy the circumstances of a property-owning democracy. We think that for these reasons this range of taxation is very unfair.
These impositions fall particularly an young married couples who are setting up home, and this means a gross discrimination in the imposition of taxation generally. The fact that the tax falls on those people with small incomes is completely at variance with the principle of sharing the burden of taxation according to ability to pay, for people setting up their homes cannot avoid this tax. It has nothing to do with the amount of income they have; it is levied on their need for the things that they have to buy to set up their homes. This is a tax burden falling on the shoulders of the less well off.
The time has come to find other and fairer sources for the tax income that the Chancellor needs. This burden should be taken from the shoulders of the less well off by reducing the tax now levied upon their domestic necessities.
§ Mr. Barber
First, I should like to say to the hon. Gentleman the Member for Stoke-on-Trent, South (Mr. Ellis Smith) how grateful I am for his invitation to visit his city. I would have accepted it tonight with alacrity. But my only hesitation arises from the fact that I was 557 not sure whether it would be prudent to follow so soon in the steps of the Leader of the Opposition. However, I shall certainly remember what he said.
I would say at the outset that I think that one aspect of this debate, which has been very noticeable, is that everybody who has spoken, from the beginning to the end, has done so in most moderate terms. I myself felt that what they had to say was all the more persuasive for that.
The hon. Gentleman the Member for Sheffield, Hillsborough (Mr. Darling) said he expected that I should once again have to advise the Committee to reject this new Clause, and I must do that. I realise, of course, from looking at the list of the signatories to the new Clause, that it is essentially concerned with pottery, and I realise full well that the moving of the new Clause was [the only way in which they could bring about this discussion.
But the products embraced within the Clause are estimated to yield in this financial year £37½ million. They include floor coverings, which are estimated to yield £18 million; domestic hardware, kitchenware, tableware, including pottery, at £12 million; cutlery, spoons, forks at £2 million; domestic appliances at £2½ million; wallpaper at £3 million; making £37½ million in all. The cost of this proposed reduction, if the Clause were taken literally, although I appreciate its motive, would be about £23 million in a full year, and the Committee will appreciate that, on that ground alone, my right hon. Friend really would not be able to accept it.
The hon. Member for Hillsborough explained, with some graphic examples, that this rate of tax covered a very wide range of products. The hon. Lady the Member for Stoke-on-Trent, North (Mrs. Slater) also mentioned several of the items which are included in the relevant Schedule. She went on to concentrate on pottery. Shortly before the Budget I received a deputation of pottery manufacturers, and I am bound to say they also, like those who have spoken in this debate, spoke with moderation.
The Lady went on to give sound reasons why in this country we should have good pottery. I shall not follow her in derail, and would say only that I agree entirely with her in what she said 558 on the question of hygiene. On the aesthetic side, one of the happiest memories I have, one I shall always have, is of a visit last year, or the year before, in my previous position with the Prime Minister, to one of the most renowned manufacturers of china in the country. I also agree entirely with what the hon. Gentleman the Member for Stoke-on-Trent, South said about the potters' craft, in which one certainly finds remarkable skills.
It might be helpful if I were to say something in more detail about pottery. The first thing which it is fair to point out is that in the last few years there have been considerable reductions in the rate of tax. In 1955, the rate was 30 per cent. It was reduced in 1957 to 15 per cent., and in April last year it was reduced to 12½ per cent.
The hon. Lady the Member for Stoke-on-Trent, North complained of what she called the extent of this iniquitous tax, a point taken up by the hon. Member for Hillsborough, but the tax amounts to only one-twelfth of the retail price of the products. In considering this matter, one has to keep in in its proper perspective. A tea set costing about £3 bears a tax of about 5s., and if the Clause were so accepted that would be reduced to about 3s.
I know that the pottery industry experienced something of a recession in 1955–56, but it has recovered since then; home market sales have done well, and have been showing a moderate but steady increase each year. In terms of value, home sales for last year were the highest in any recent year.
The hon. Member for Stoke-on-Trent, Central (Dr. Stross) referred, in passing, to the question of holding back purchases of pottery before a Budget. I discussed that subject at considerable length with the deputation which came to see me. I realise full well that this was a serious matter at the beginning of 1959, when there was considerable speculation about Purchase Tax changes, but I think that events have shown that this year matters went very much more satisfactorily. I do not think that there was any serious postponement of retail buying prior to the Budget.
§ Mr. Ellis Smith
Did the deputation make the point that at the annual exhibition at Blackpool salesmen were holding 559 orders because of the uncertainty of Purchase Tax? If it did, has that been considered?
§ Mr. Barber
Yes, the deputation referred to the Blackpool Fancy Goods Fair which, I understand, is of great importance to the pottery industry, but when I looked into this matter, so far as I could see from the trade Press, there was very little, if any, holding back on this occasion, and this time the Fair, which was held in February, was particularly successful.
Total production in the pottery industry, for both the home market and for export, has been going up each year. Between 1957 and 1958, it went up considerably—by about 10.5 per cent. In 1958–59, the increase was very small, only marginal, but the Committee will be pleased to know that in January and February of this year the increase was 4.7 per cent, over the same period last year.
The hon. Member for Hillsborough mentioned cutlery. The rate of tax, 12½ per cent., is the lowest it has ever been and I think that the hon. Member will agree that the industry as a whole would not claim that home demand has been significantly affected by this tax.
Wallpaper was mentioned by the hon. Lady the Member for Stoke-on-Trent, North and she spoke of the cost to the housewife. Here, again, it is fair to point out how this rate of tax works out in practice. The Purchase Tax on wallpaper works out at only about one-seventeenth of the retail price. That means an average addition of about 3s. on the cost of papering an ordinary sized room. Once again I must make it clear that the overriding consideration in asking the Committee to reject this Clause is, of course, the cost.
§ house, or a room in a jerry-built house which is being sold for about £2,500 by rotten builders today? How big is the room?
§ Mr. Barber
It is a room in a nice little house.
The cost of accepting the Clause would be £23 million, which is more than the total of all the concessions which my right hon. Friend was able to make in this year's Budget.
I explained in connection with the new Clause in the name of my hon. Friend the Member for Kidderminster (Mr. Nabarro) why this year we have not felt able to recommend any net reduction in taxation. I will not weary the Committee by going again over all the ground which I mentioned then, because as far as the economy is concerned exactly the same considerations apply.
I repeat that I fully realise from the names which appear on the Notice Paper as sponsoring this new Clause that we are concerned almost entirely with a particular product—pottery. That being so, and in view of the amount involved, I must ask the Committee to reject it
§ Dr. Stross
In view of the hon. Gentleman's last sentence—and he has expressed this fact throughout his speech—does he mean that had it been possible to stage a debate on pottery alone in which we asked for a concession of between £1½ million and £2 million we might have fared better?
§ Mr. Barber
No, I could not accept that, because there are so many other types of articles which compete with pottery that I think it would be an unfair discrimination. It would certainly cause a great many anomalies if we were to make such a discrimination.
§ Question put, That the Clause be read a Second time:—
§ The Committee divided: Ayes 129, Noes 198.561
Division No. 117.]
|Ainsley, William||Braddock, Mrs. E. M.||Davies, Ifor (Gower)|
|Allaun, Frank (Salford, E.)||Butler, Mrs. Joyce (Wood Green)||Deer, George|
|Awbery, Stan||Callaghan, James||Dempsey, James|
|Bacon, Miss Alice||Castle, Mrs. Barbara||Diamond, John|
|Baxter, William (Stirlingshire, W.)||Cliffe, Michael||Dodds, Norman|
|Beaney, Alan||Craddock, George (Bradford, S.)||Driberg, Tom|
|Bellenger, Rt. Hon. F. J.||Cronin, John||Dugdale, Rt. Hon. John|
|Benn, Hn. A. Wedgwood (Brist'I, S.E.)||Crossman, R. H. S.||Ede, Rt. Hon. Chuter|
|Benson, Sir George||Cullen, Mrs. Alice||Edwards, Rt. Hon. Ness (Caerphilly)|
|Blyton, William||Darling, George||Edwards, Robert (Bilston)|
|Bowden, Herbert W. (Leics, S.W.)||Davies, Harold (Leek)||Fernyhough, E.|
|Fitch, Alan||McInnes, James||Slater, Joseph (Sedgefield)|
|Foot, Dingle||McKay, John (Wallsend)||Small, William|
|Forman, J. C||Mackle, John||Smith, Ellis (Stoke, S.)|
|Fraser, Thomas (Hamilton)||Mahon, Simon||Steele, Thomas|
|Ginsburg, David||Mallalieu, E. L. (Brigg)||Stones, William|
|Gourlay, Harry||Manuel, A. C.||Strachey, Rt. Hon. John|
|Greenwood, Anthony||Mapp, Charles||Stross, Dr. Barnett (Stoke-on-Trent, C)|
|Grey, Charles||Marquand, Rt. Hon. H. A.||Summerskill, Dr. Rt. Hon. Edith|
|Grimond, J.||Mendelson, J. J.||Sylvester, George|
|Gunter, Ray||Millan, Bruce||Symonds, J. B.|
|Hamilton, William (West Fife)||Mitchison, G. R,||Taylor, Bernard (Mansfield)|
|Hannan, William||Monslow, Walter||Taylor, John (West Lothian)|
|Hart, Mrs. Judith||Morris, John||Thompson, Dr. Alan (Dunfermline)|
|Hayman, F. H.||Noel-Baker, Francis (Swindon)||Thorpe, Jeremy|
|Herbison, Miss Margaret||Oram, A. E.||Timmons, John|
|Hilton, A. V.||Owen, Will||Ungoed-Thomas, Sir Lynn|
|Holman, Percy||Parker, John (Dagenham)||Wade, Donald|
|Houghton, Douglas||Pavitt, Laurence||Warbey, William|
|Hoy, James H.||Pentland, Norman||Watkins, Tudor|
|Hughes, Hector (Aberdeen, N.)||Popplewell, Ernest||Weitzman, David|
|Hunter, A. E.||Prentice, R. E.||Wheeldon, W. E.|
|Janner, Barnett||Price, J. T. (Westhoughton)||White, Mrs. Eirene|
|Jay, Rt. Hon. Douglas||Probert, Arthur||Whitlock, William|
|Jenkins, Roy (Stechford)||Randall, Harry||Willey, Frederick|
|Jones, Dan (Burnley)||Rankin, John||Willis, E. G. (Edinburgh, E.)|
|Jones, Jack (Rotherham)||Redhead, E. C.||Wilson, Rt. Hon. Harold (Huyton)|
|Kelley, Richard||Reynolds, G. W.||Winterbottom, R. E.|
|King, Dr. Horace||Roberts, Albert (Normanton)||Woodburn, Rt. Hon. A.|
|Logan, David||Rogers, G. H. R. (Kensington, N.)||Woof, Robert|
|Loughlin, Charles||Ross, William||Yates, Victor (Ladywood)|
|Mabon, Dr. J. Dickson||Silverman, Julius (Aston)|
|McCann, John||Skeffington, Arthur||TELLERS FOR THE AYES:|
|MacColl, James||Slater, Mrs. Harriet (Stoke, N.)||Mr. Lawson and Mr. Sydney Irving.|
|Agnew, Sir Peter||Dance, James||Hughes-Young, Michael|
|Aitken, W. T.||d'Avigdor-Goldsmid, Sir Henry||Irvine, Bryant Godman (Rye)|
|Allason, James||Deedes, W. F.||Jackson, John|
|Amory, Rt. Hn. D. Heathcoat (Tiv'tn)||de Ferranti, Basil||James, David|
|Ashton, Sir Hubert||Doughty, Charles||Johnson, Eric (Blackley)|
|Atkins, Humphrey||Drayson, G. B.||Jones, Rt. Hn. Aubrey (Hall Green)|
|Barber, Anthony||du Cann, Edward||Kerans, Cdr. J. S.|
|Barter, John||Duncan, Sir James||Kerby, Capt. Henry|
|Batsford, Brian||Elliott, R. W.||Kirk, Peter|
|Baxter, Sir Beverley (Southgate)||Emmet, Hon. Mrs. Evelyn||Leather, E. H. C.|
|Bennett, F. M. (Torquay)||Errington, Sir Eric||Leavey, J. A.|
|Berkeley, Humphry||Farey-Jones, F. W.||Legge-Bourke, Maj. Sir Harry|
|Bidgood, John C||Farr, John||Lewis, Kenneth (Rutland)|
|Biggs-Davison, John||Finlay, Graeme||Lindsay, Martin|
|Bingham, R. M.||Fisher, Nigel||Litchfied, Capt. John|
|Bishop, F. P.||Fletcher-Cooke, Charles||Longbottom, Charles|
|Black, Sir Cyril||Fraser, Ian (Plymouth, Sutton)||Longden, Gilbert|
|Bossom, Clive||Freeth, Denzil||Loveys, Walter H.|
|Bourne-Arton, A.||Gammans, Lady||Low, Rt. Hon. Sir Toby|
|Box, Donald||Gardner, Edward||Lucas-Tooth, Sir Hugh|
|Boyd-Carpenter, Rt. Hon. John||George, J. C. (Pollok)||MacArthur, Ian|
|Boyle, Sir Edward||Glover, Sir Douglas||McLaren, Martin|
|Brewis, John||Glyn, Dr. Alan (Clapham)||McLaughlin, Mrs. Patricia|
|Bryan, Paul||Clyn, Sir Richard (Dorset, N.)||MacLeod, John (Ross & Cromarty)|
|Burden, F. A.||Goodhew, Victor||McMaster, Stanley R.|
|Butcher, Sir Herbert||Gower, Raymond||Macpherson, Niall (Dumfries)|
|Carr, Compton (Barons Court)||Grant, Rt. Hon. William (Woodside)||Maddan, Martin|
|Carr, Robert (Mitcham)||Grant-Ferris, Wg Cdr. R. (Nantwich)||Maginnis, John E.|
|Cary, Sir Robert||Green, Alan||Markham, Major Sir Frank|
|Chataway, Christopher||Gresham Cooke, R.||Marlowe, Anthony|
|Chichester-Clark, R.||Grosvenor, Lt.-Col. R. G.||Marten, Neil|
|Clark, Henry (Antrim, N.)||Hamilton, Michael (Wellingborough)||Matthews, Gordon (Meridan)|
|Clark, William (Nottingham, S.)||Harris, Frederic (Croydon, N.W.)||Maudling, Rt. Hon. Reginald|
|Collard, Richard||Harrison, Brian (Maldon)||Mawby, Ray|
|Cooke, Robert||Harrison, Col. J. H. (Eye)||Maydon, Lt.-Cmdr. S. L. C.|
|Cooper, A. E.||Harvey, John (Walthamstow, E.)||Montgomery, Fergus|
|Cooper-Key, Sir Neill||Hendry, Forbes||Morgan, William|
|Cordeaux, Lt.-Col. J. K.||Hiley, Joseph||Neave, Airey|
|Cordle, John||Hill, Mrs. Eveline (Wythenshawe)||Noble, Michael|
|Corfield, F. V.||Hill, J. E. B. (S. Norfolk)||Osborn, John (Hallam)|
|Costain, A. P.||Hirst, Geoffrey||Osborne, Cyril (Louth)|
|Coulson, J. M.||Holland, Philip||Page, A. J. (Harrow, West)|
|Craddock, Sir Beresford||Hollingworth, John||Page, Graham|
|Critchley, Julian||Hopkins, Alan||Pannell, Norman (Kirkdale)|
|Crosthwaite-Eyre, Col. O. E.||Hornsby-Smith, Rt. Hon. Patricia||Pearson, Frank (Clitheroe)|
|Crowder, F. P.||Howard, Gerald (Cambridgeshire)||Peel, John|
|Curran, Charles||Howard, John (Southampton, Test)||Percival, Ian|
|Currie, G. B. H.||Hughes Hallett, Vice-Admiral John||Pickthorn, Sir Kenneth|
|Pilkington, Capt. Richard||Shepherd, William||Turton, Rt. Hon. R. H.|
|Pott, Percival||Skeet, T. H. H.||van Straubenzee, W. R.|
|Powell, J. Enoch||Spearman, Sir Alexander||Vickers, Miss Joan|
|Price, David (Eastleigh)||Stevens, Geoffrey||Wakefield, Edward (Derbyshire, W.)|
|Prior, J. M. L.||Steward, Harold (Stockport, S.)||Ward, Dame Irene (Tynemouth)|
|Prior-Palmer, Brig. Sir Otho||Stodart, J. A.||Watts, James|
|Ramsden, James||Stoddart-Scott, Col. Sir Malcolm||Wells, John (Maidstone)|
|Rawlinson, Peter||Studholme, Sir Henry||Whitelaw, William|
|Redmayne, Rt Hon. Martin||Summers, Sir Spencer (Aylesbury)||Williams, Paul (Sunderland, S.)|
|Rees, Hugh||Sumner, Donald (Orpington)||Wilson, Geoffrey (Truro)|
|Renton, David||Talbot, John E.||Wise, A. R.|
|Ridley, Hon. Nicholas||Tapsell, Peter||Wolrige-Gordon, Patrick|
|Ridsdale, Julian||Teeling, William||Woodhouse, C. M.|
|Roberts, Sir peter (Heeley)||Thomas, Leslie (Canterbury)||Woodnutt, Mark|
|Roots, William||Thomas, Peter (Conway)||Woollam, John|
|Ropner, Col. Sir Leonard||Thompson, Richard (Croydon, S.)||Worsley, Marcus|
|Scott-Hopkins, James||Thornton-Kemsley, Sir Colin|
|Sharples, Richard||Tilney, John (Wavertree)||TELLERS FOR THE NOES:|
|Shaw, M.||Turner, Colin||Mr. Brooman-White and|