HC Deb 22 March 1962 vol 656 cc546-7
18 and 19. Mr. Johnson

asked the Chancellor of the Exchequer (1) on how many racing cars Purchase Tax was paid in the current financial year; and what was the average tax per car;

(2) if he will instruct the Board of Customs and Excise to make a further attempt to define Formula I racing cars as a class of vehicle.

45. Sir B. Janner

asked the Chancellor of the Exchequer if he is aware that many well-known racing drivers have decided to race for foreign countries because they cannot afford to go on driving in Britain if the racing tax concession is withdrawn; and if he will consider alternative steps to assist the racing car industry, and thereby avoid a loss of British prestige and trade.

Mr. Barber

My right hon. Friend has studied in consultation with my right hon. Friend the President of the Board of Trade the report of the debate on the Adjournment on 23rd February and the representations made by the R.A.C. and the S.M.M.T. This further study has shown that it may now be possible to define formula racing cars in such a way as to permit of their exemption from purchase tax. My right hon. Friend has asked the Board of Customs and Excise to discuss with the two bodies mentioned the formulation of a suitable definition. If this can be done he will table an Order relieving these cars from tax. The number of all kinds of racing cars on which tax has so far been paid in the current financial year is not known; on a Formula I car, the tax would have been in the region of £2,000–£2,700.

Mr. Johnson

Does my hon. Friend appreciate that his Answer will be very favourably received by the motor industry? Is he aware that the extra cost of Purchase Tax puts a very heavy burden indeed on small firms making these racing cars and that there is a danger of it being so heavy that they may register their teams abroad or withdraw from international racing altogether if nothing is done to help them?

Mr. Barber

Those are some of the factors which my right hon. and learned Friend has taken into account.

Mr. Gresham Cooke

Is my hon. Friend aware that the hundreds of thousands of people who watch car racing and all those who have the prestige of British engineering at heart will be disappointed if it is not possible to find a formula? Will he bear in mind that the definition of Grand Prix racing has been closely laid down by the international federation and therefore it should be possible to do this?

Mr. Barber

I am hopeful that it will be possible to find a satisfactory formula.