HC Deb 24 January 1963 vol 670 cc260-1
11. Mr. Bence

asked the Chancellor of the Exchequer What would be the cost of abolishing Purchase Tax on sewing machines.

Mr. du Cann

Precise information is not available, but it is estimated that the cost would not exceed £2 million a year.

Mr. Bence

Is the hon. Gentleman aware that in this industry, centred in Clydebank, there has been a drop in the labour force of 4,500 in the last three years? Would he not agree that if this tax, of only £2 million a year, were abolished it would enable sales to be increased? Then, with increased sales and more efficient manufacturing processes, the costs of production would fall and the product could be sold much more cheaply.

Mr. du Cann

From inquiries I have made I am not satisfied that it is the imposition of Purchase Tax which has led to increased unemployment in this industry. It seems largely due to a reorganisation in one factory in the hon. Member's constituency, but of course I shall bear in mind what he has said.

Mr. Bence

The reorganisation is due to the fact that sales are not big enough. That is why the factory had to reorganise. If Purchase Tax could be reduced more sales could be made and more employment provided.