Purchase Tax (Hansard, 15 March 1960)

§ 35. Mr. Nabarro
asked the Chancellor of the Exchequer whether he is aware that racks for gramophone records are subject to tax of 50 per cent. whereas cabinets are subject to tax at only 5 per cent.; why a rack is taxed ten times more than a cabinet, having regard to the identity of purpose between the two articles; and whether he will reduce the rate of Purchase Tax on record racks from 50 per cent. to 5 per cent., thus restoring uniformity and equality between record racks and record cabinets.

The Chancellor of the Exchequer (Mr. Derick Heathcoat Amory)
My hon. Friend appears to be in error. Racks and cabinets designed specifically for the storage of gramophone records are all taxable at the rate of 50 per cent.

§ Mr. Nabarro
No, I am not wrong again. Having regard to my right hon. Friend's reply, and to the fact that I checked this morning with the largest distributor of gramophone record racks in London that he has been collecting tax at 50 per cent. on these articles for the last four years, and as a mistake has obviously been made by Customs and Excise, would not my right hon. Friend undertake to refund the whole of the difference in tax to the people who have been illicitly charged?

Mr. Amory
No, Sir, the information my hon. Friend gives does not conflict with the Answer to ibis Question which I have given, but racks and cabinets are different things. I hope that my hon. Friend will not harass me to the point where I should express the wish that he should end up on the rack rather than in the Cabinet.

§ Mr. Nabarro
Will my right hon. Friend now undertake to re-examine this matter, as it is perfectly clear that his Department has illicitly collected a large sum in taxes during the last few years? I will send him the information tomorrow morning to enable him to refund the tax.

Mr. Amory
I will read my hon. Friend's letter tomorow morning, but will he read the reply I have just given?

§ 36. Mr. Nabarro
asked the Chancellor of the Exchequer, in view of the influence and incidence of Purchase Tax upon decor, for what reason paints and distempers used for that purpose are free of Purchase Tax, whereas wallpapers, friezes, panels and lincrusta attract Purchase Tax; why this discrimination is occurring against persons who prefer wallpaper to paint or distemper; and whether he will remedy this by abolishing Purchase Tax on all wall coverings.

Mr. Amory
I would remind my hon. Friend that whereas most wallpaper is used for domestic decoration, most paint is not; and, as regards the last part of the Question, that I cannot anticipate my Budget statement.

§ Mr. Nabarro
Yes, but why does my right hon. Friend allow his own personal idiosyncrasies and whims in matters of decor to obtrude into the Purchase Tax Schedules? Should he not treat all wall coverings with fiscal equity as he treats all floor coverings, including carpets, with fiscal equity? Why does he seek to discriminate and distinguish?

Mr. Amory
I think there are good reasons for discriminating between one type of decor and another. My hon. Friend has mentioned lincrusta, which I am told is a superimposed decoration on a layer of plaster impregnated with linseed oil on a paper base. I am sure 1112 that the decoration of which he is so rightly proud, being a genuine built-in article, does not come under that heading.

§ Mr. E. Johnson
Whilst I realise that my right hon. Friend cannot anticipate Ms Budget statement, will he look at the question of Purchase Tax on wallpaper, because it is having a serious effect on the industry?

Mr. Amory
If my hon. Friend will look at the sale of wallpaper over the past two or three years, he will see that it has been sharply on the upgrade.