HC Deb 02 June 1964 vol 695 cc1018-35
Mr. Anthony Crosland (Grimsby)

I beg to move Amendment No.5, in page 10, line 1, to leave out subsection (2).

The Temporary Chairman (Mr. F. Blackburn)

With this Amendment we can take Amendment No.7, in page 10, line 14, leave out from "to" to end of line 16 and insert: any duty or group of duties of customs or excise (including purchase tax as such a duty) without: applying 10 other such duties".

Amendment No.8, in line 16, at end insert: or to the duties on one or more of the chargeable goods within any of the said groups without applying to the duties on the remainder of tie chargeable goods within those groups or any of them

Amendment No.10, in line after "the", insert "duty or".

Amendment No.11, in line 21, leave out subsection (5).

Amendment No.13, in line 42, leave out "groups" and insert "duty"

Amendment No.14, in line 45, leave out "group" and insert "duty".

Mr. Crosland

Yes, Mr. Blackburn. It is not surprising that in order to understand the Amendments we must understand the purpose of the Clause. Its purpose, as explained by the Chancellor in his Budget speech, is to make the regulator more flexible by dividing Customs and Excise duties into four large groups—broadly speaking, tobacco, alcohol, oil and Purchase Tax—giving himself the power to increase the use of the regulator for one or more of these groups without necessarily having to do the same for all. We are sympathetic to the idea of making the use of the regulator more flexible, if it is possible. The reason for our putting down this group of Amendments is that we have serious doubts whether the Clause, as it stands, gives a sufficient additional degree of flexibility, particularly when it is considered together with Clauses 1 to 4.

We have two or three serious doubts in the matter. In particular, we doubt whether this provision increases the amount of flexibility in the use of the regulator. In a sense, the reason why the Chancellor has introduced the Clause is that he thinks that he might have to use the regulator in the autumn, and since he presumably does not think that he can increase drink and tobacco duties any further he wants to give himself power to use the regulator in respect of the remaining two categories only.

Nominally, one might say that this was an increase in the flexibility of the regulator. The trouble is that the fact that he has already increased the duty on drink and tobacco in Clauses 1 and 4 makes the whole regulator very much less useful than it otherwise would be. Suppose it is true that in the autumn he can increase only Purchase Tax and oil duties. If the Chancellor had to do something—or if some other Chancellor had to do something—and if he could not do anything more with the duty on drink and tobacco, it has been estimated that the use of the entire 10 per cent. regulator on everything except drink and tobacco would bring in only about £100 million. The Minister will correct that figure if it is wrong. If that figure is right, it suggests that the Chancellor has very much weakened his reserve weapon. He may easily need to try to raise more money than that, which is the first reason why we doubt whether he has increased the flexibility of the regulator in the Clause as it is drafted.

The second reason—this is a point dealt with implicitly, at least, in our Amendments—is that the additional flexibility created by subsection (2) appears to be largely nullified by the provisions of subsection (5). Subsection (2) gives the Chancellor power to use the regulator for some of these groups without having to use it for the others. Subsection (5) makes clear that, for whatever groups he uses the regulator, he must either increase or decrease taxation by precisely the same amount. Subsection (5) rules out the possibility of having, say, a 10 per cent. increase for two groups and a 5 per cent. increase for the remainder. It is not at all clear why the Clause intends to increase flexibility by one subsection and at the same time reduce it seriously by another subsection.

The third of our doubts relates to the division of these duties into four groups. If there is an argument for dividing them into groups, would not it be sensible to go further and give the Chancellor power to use the regulator for individual duties and not simply for the four major groups? The basic object of the Amendments is to increase the flexibility of the regulator by saying that the Chancellor should have power to use it on certain individual items and at the same time not be compelled to use it for all the other items covered by the various groupings. That, basically, is the object of our Amendments; to try to do what we think that the Chancellor has failed to do by the provisions of this Clause, to make the regulator a great deal more flexible.

We feel strongly—at least I and some of my hon. Friends do—that it is desperately important to try to make the regulator more flexible. Even since the Chancellor introduced his Budget, evidence has been increasing—I should have thought—that the right hon. Gentleman or someone else would have to use the regulator in the autumn. All the statistics which we have had since the date of the introduction of the Budget indicate that the pressure of demand is building up heavily in the economy and we may be running into serious inflation by the autumn. Let us be frank. The chances that the regulator will have to be used by the present Chancellor, or his successor, are getting very high indeed. For that reason we attach importance to trying to make the regulator as flexible and as efficient as we can.

8.30 p.m.

Mr. Maudling

I am very interested in the point raised by the hon. Member for Grimsby (Mr. Crosland). We are discussing a group of Amendments, several in the names of hon. Members opposite and one in the name of my hon. Friend the Member for Birmingham, Yardley (Mr. Cleaver), on the question of the regulator. It is a rather unusual situation in that the Committee is proposing to give to the Chancellor greater powers than he is seeking.

The history of this matter is on these lines. Traditionally all changes in taxation take place at the time of the Budget, but that, as the late Aneurin Bevan once said, is following the traditions of a pastoral society, and I accept the view that under modern conditions we should try to get away from the purely annual Budget context. This first happened on Purchase Tax when the Committee gave flexibility in raising and lowering rates to the Chancellor That proved of advantage in the reductions made on motor cars. It was followed by the regulator: this was specifically designed for economic purposes so that one could make an immediate impact on totality of demand by putting up or down the general level of indirect taxes.

I think it was felt at the time that it would not be very readily acceptable to the Committee to go beyond that in the discretion given to Chancellors. There are two objections to giving too much power to change particular duties between Budgets. The first is that when we get pressure or claims for individual tax changes we should weigh the competing claims against one another and one can do that only at the time of the Budget. This is a sensible in-built reason for not having too great ability to exercise that power at a time when by its nature it probably should not be exercised.

The second reason is parliamentary control. Quite clearly parliamentary control over a change of taxes by order is of its nature less complete than parliamentary control over changes of taxation that have to be brought into being by the whole machinery of a Ways and Means Resolution and a Finance Bill. Therefore, in expanding the flexibility of the Chancellor's taxing powers in the case of the regulator it has so far been the view that this should be kept as a very general power, so that in using the regulator the Chancellor should be operating on the economy generally and that detailed provisions on relative tax rates judged on the basis of equity, and considerations related to particular industries, are better left to be dealt with in the Budget by the detail of particular tax changes.

That was the situation I faced this year. In looking at the regulator and deciding what to ask the Committee in the way of reviewing these powers, I thought it wise to ask for more flexibility, very much for the reason which the hon. Member has suggested. Having raised duties on alcohol and tobacco, it might be desirable at some stage to operate the regulator and yet difficult to operate the regulator if it involved a second increase in duties already increased in the Financial Bill. Therefore, I am asking the Committee to give the Chancellor of the Exchequer, whoever he may be—[HON. MEMBERS: "Oh"]—coming events do not cast their shadows that often—authority to exclude from the use of the regulator one of the main four groupings of indirect taxation.

Frankly, I considered going a little further, but I felt that the Committee might be unwilling to grant me such latitude. I am interested to find that the opinion, as shown in the Amendments and in the speech of the hon. Member, is rather inclined to give me further latitude than I thought the Committee would be willing to give. With the permission of the Committee, I should like to consider the question further. There are two matters before the Committee. One is the splitting up of the individual blocks of duties into rather smaller compartments. The other is the power, which would be given by the Amendment to eliminate subsection (5), to vary the rate of duty. For example, it might be put up or down by 10 per cent. On one section and 5 per cent. On another. Taking the two suggestions, I am not sure that in practice the first would yield very great benefit. Take the question of duties on alcohol. There is a balance always between beer and wine and spirits. It is unlikely that one would want to use the tax regulator on one without using it on the others.

Tobacco also is a homogeneous subject, and I think that within the hydrocarbon oil duties there is unlikely to be scope for making changes in one part of the block and not another. At first sight it seems that the scope for using regulatory powers within the four individual blocks of taxation is probably small, and I doubt whether the advantage of having additional power in that field would counter the rather serious arguments about Parliamentary control and about the need for considering comparative individual tax rates, as opposed to general economic changes of taxation, which only a Finance Bill can carry out. But I will consider this again, although I think that its advantage is rather doubtful.

On the second point, there is a strong argument for saying that one should have the power of introducing a regulator, whether up or down, of a character which does not necessarily impose the same rate, say 5 per cent. or 10 per cent., over the whole field. The argument has been rather well made for this power by those who have said that we should not bind ourselves, as subsection (5) does, to imposing the same rate of duty over the whole range of articles affected by the regulator.

With the permission of the Committee I will undertake between now and Report to consider the proposals before us. I am pretty certain that in principle I shall wish to accept the suggestion that there should not necessarily be uniformity of rates; in other words, in practice subsection (5) would be eliminated as suggested in my hon. Friend's Amendment. In principle I shall probably wish to accept that.

I am not so convinced about the other suggestion for having flexibility within the main blocks of taxation, because I feel that Parliamentary control ought to be a little closer than that. But I am interested in the attitude taken by the Committee and I am encouraged to find that the Committee, so far from being jealous of traditional privileges in the matter, has been inclined to give the Chancellor of the day a little more flexibility in these matters. I do not think that any Chancellor would be wise to spurn this opportunity of greater flexibility.

Mr. Leonard Cleaver (Birmingham, Yardley)

I was pleased to hear my right hon. Friend say that he would look at the matter again. My two Amendments simply try to give him more flexibility, as I strongly feel that the Chancellor of the Exchequer should have that flexibility when dealing with an economy which is on a knife edge, as our economy is. The two Amendments would give him power, if he wished, to make increases in some of the categories under subsection (2) and to leave out others or to make increases in different groups while leaving one chargeable section of goods out. This would give him more flexibility.

The right hon. Gentleman would use the regulator only in times of crisis, and at such times he should use it as a rapier rather than as a bludgeon. To give an example of the way in which he might use the regulator, he might feel it wise to increase the petrol duty, but if he did that under the powers of the Bill as they stand he would have to increase the duty on hydrocarbon oil and diesel oil. That would undoubtedly put up costs, which would affect exports as well as the home market, and he might not wish to do that. Similarly, he might wish to alter the duty on imported wines, but under the Clause the increase must apply to beer, too, and that might be unnecessary and undesirable.

Purchase Tax covers a very wide range, and it applies to necessities as well as to luxuries. Some of the goods to which it applies go for export. He would therefore be wise, if he had the power, to differentiate between one Purchase Tax class and another.

I am encouraged by what my right hon. Friend has said. I hope that, on reconsideration, he will decide to accept my Amendments. I believe that he should have the extra power. I ask him to take all these considerations into account.

Mr. Diamond

The Chancellor of the Exchequer is adding to his other manifest qualities the quality of undue modesty. He is being offered by the Committee the possibility of using existing powers—not additional powers—with greater precision. He doubts whether he is the man to accept this responsibility. We on this side have no doubt that he is the man to accept this responsibility, because this was the only argument when the regulator was first discussed.

The argument from this side was not whether this was a wise addition to the armoury of government. We questioned whether it was a wise addition to the armoury of government having regard to the complexion of the Government. At that time we on this side came to the conclusion that the arguments in favour of additional flexibility were far greater than the natural hesitation we had about entrusting further powers to a Government of the complexion they had held hitherto.

Those arguments are, perhaps, a little weaker now than they were at the time they were considered. Nevertheless, those were the arguments at the time. They are still the arguments. Nothing that has been said from either side of the Chamber supports the Chancellor's view that he should hesitate. This is not the first time the Chancellor has seen the Amendments. They have been on the Notice Paper. He has had an opportunity to consider them. While the rest of us have been enjoying our well-earned and temporary respite, the Chancellor has been busy at his desk every day reading the Amendments and considering his attitude to the Finance Bill. Therefore, he has had ample opportunity to consider whether he should accept the Amendments.

Both sides are anxious to give the Chancellor the power to use—the possibility of using—existing powers with greater precision, holding the weapon, as the hon. Member for Birmingham, Yardley (Mr. Cleaver) said, as a rapier rather than as a bludgeon. It was only a question of having a period of trial before these powers inevitably came to be more precise.

We on this side cannot see why the Chancellor should not now make up his mind. He has had plenty of time to consider the matter. We sympathise with him in his new rôle of a modest, retiring, withdrawn individual. We find it difficult to recognise him, but we sympathise with him in his new attitude. We do not know what occasioned it other than such things as public opinion polls. We take the view that there has been ample opportunity for the right hon. Gentleman to consider this matter. The Amendments are clear. The Chancellor has not said that they are drafted inaccurately or inadequately. He has not complained about a single word. It would have been surprising if he had, because my hon. and learned Friend the Member for Kettering (Mr. Mitchison) has drafted them with his usual expertise.

Therefore, we can only take it that the Amendments are verbally adequate and correct and serve their purpose. We find it difficult to believe that there is any reason to avoid reaching a conclusion. We like to get on. We do not like to dilly-dally and have a second and third bite at a simple cherry. It is a simple preposition which has been put forward by both sides of the Committee. We hope that the Chancellor will accept the argument. If he will not accept the argument which has been put forward in the Chamber, we will have to rely on the argument in the Division Lobby, but we believe that is completely necessary. We feel sure that the Chancellor will accept the argument which has been advanced.

8.45 p.m.

Mr. Maudling

To comment on the wording of the Amendments, I am advised that despite the extremely distinguished nature of their origin, they would not be entirely satisfactory in every detail.

I turn to the principle of them. I have been interested in this reaction because I have been concerned that the Committee should feel that I should not ask for too much and escape parliamentary control. I wanted to consider, therefore, not only what the Amendments were designed to do, but also to listen to the arguments adduced before forming a view on what would be the best sort of proposal to make on Report and how far it should go. I did not want to press the Committee further. I wanted to consider how far this degree of flexibility would be consistent with our tradition of parliamentary control.

I did not wish to make up my mind until I had heard the arguments, and I wanted to ask for time between now and Report to decide how far—and I will go a good way—I could go in this direction and how far I could recommend hon. Members to go.

Question out, That the words proposed to be left out stand part of the Clause:—

The Committee divided: Ayes 212, Noes 161.

Division No. 96.] AYES [8.46 p.m.
Agnew, Sir Peter Arbuthnot, Sir John Barter, John
Allan, Robert (Paddington, S.) Atkins, Humphrey Batsford, Brian
Allason, James Awdry, Daniel (Chippenham) Beamish, Col. Sir Tufton
Anderson, D. C. Barlow, Sir John Bennett, F. M. (Torquay)
Bennett, Dr. Reginald (Gos & Fhm) Hirst, Geoffrey Pearson, Frank (Clitheroe)
Berkeley, Humphry Hogg, Rt. Hon. Quintin Peel, John
Bidgood, John C. Holland, Philip Percival, Ian
Bingham, R. M. Hollingworth, John Pickthorn, Sir Kenneth
Bishop, Sir Patrick Holt, Arthur Pitman, Sir James
Black, Sir Cyril Hooson, H. E. Pitt, Dame Edith
Bourne-Arton, A. Hopkins, Alan Pounder, Rafton
Box, Donald Hornby, R. P. Powell, Rt. Hon. J. Enoch
Boyd-Carpenter, Rt. Hon. John Howard, Hon. G. R. (St. Ives) Price, David (Eastleigh)
Boyle, Rt. Hon. Sir Edward Howard, John (Southampton, Test) Proudfoot, Wilfred
Braine, Bernard Hughes-Young, Michael Pym, Francis
Brewis, John Hurd, Sir Anthony Ramsden, Rt. Hon. James
Brown, Alan (Tottenham) Iremonger, T. L. Rawlinson, Rt. Hon. Sir Peter
Buck, Antony Irvine, Bryant Godman (Rye) Redmayne, Rt. Hon. Martin
Bullard, Denys Jennings, J. C. Renton, Rt. Hon. David
Burden, F. A. Johnson, Eric (Blackley) Ridsdale, Julian
Butcher, Sir Herbert Johnson Smith, Geoffrey Roberts, Sir Peter (Heeley)
Carr, Rt. Hon. Robert (Mitcham) Joseph, Rt. Hon. Sir Keith Ropner, Col. Sir Leonard
Channon, H. P. G. Kerans, Cdr. J. S. Russell, Sir Ronald
Chataway, Christopher Kerr, Sir Hamilton Scott-Hopkins, James
Chichester-Clark, R Kershaw, Anthony Seymour, Leslie
Clark, William (Nottingham, S.) Kirk, Peter Sharples, Richard
Cleaver, Leonard Lagden, Godfrey Shaw, M.
Cordeaux, Lt.-Col. J. K. Lancaster, Col. C. G. Soames, Rt. Hon. Christopher
Cordle, John Langford-Holt, Sir John Spearman, Sir Alexander
Corfield, F. V. Leavey, J. A. Speir, Rupert
Craddock, Sir Beresford (Spelthorne) Lewis, Kenneth (Rutland) Stainton, Keith
Critchley, Julian Lilley, F. J. P. Stanley, Hon. Richard
Currie, G. B. H. Linstead, Sir Hugh Stevens, Geoffrey
Dalkeith, Earl of Litchfield, Capt. John Steward, Harold (Stockport, S.)
Dance, James Lloyd, Rt. Hon. Selwyn (Wirral) Stoddart-Scott, Col. Sir Malcolm
Deedes, Rt. Hon. W. F. Longden, Gilbert Studholme, Sir Henry
Digby, Simon Wingfield Loveys, Walter H. Summers, Sir Spencer
Donaldson, Cmdr. C. E. M. Lubbock, Eric Talbot, John E.
Drayson, G. B. McAdden, Sir Stephen Taylor, Edwin (Bolton, E.)
Duncan, Sir James MacArthur, Ian Taylor, Frank (M'ch'st'r, Moss Side)
Elliot, Capt. Walter (Carshalton) McLaren, Martin Temple, John M.
Emmet, Hon. Mrs. Evelyn Maclay, Rt. Hon. John Thomas, Sir Leslie (Canterbury)
Errington, Sir Eric Maclean, SirFitzroy (Bute & N.Ayrs) Thompson, Sir Kenneth (Walton)
Farey-Jones, F. W. McMaster, Stanley R. Thornton-Kemsley, Sir Colin
Farr, John Macmillan, Maurice (Halifax) Tiley, Arthur (Bradford, W.)
Finlay, Graeme Maginnis, John E. Touche, Rt. Hon. Sir Gordon
Fletcher-Cooke, Charles Maitland, Sir John Turner, Colin
Fraser, Rt. Hn. Hugh (Stafford & Stone) Markham, Major Sir Frank Turton, Rt. Hon. R. H.
Fraser, Ian (Plymouth, Sutton) Marshall, Sir Douglas Tweedsmuir, Lady
Freeth, Denzil Marten, Neil van Straubenzee, W. R.
Gardner, Edward Matthews, Gordon (Meriden) Vane, W. M. F.
Giles, Rear-Admiral Morgan Maude, Angus (Stratford-on-Avon) Vaughan-Morgan, Rt. Hon. Sir John
Gilmour, Sir John (East Fife) Maudling, Rt. Hon. Reginald Vickers, Miss Joan
Glover, Sir Douglas Mawby, Ray Wade, Donald
Glyn, Dr. Alan (Clapham) Maxwell-Hyslop, R. J. Walder, David
Glyn, Sir Richard (Dorset, N.) Maydon, Lt.-Cmdr, S. L. C. Walker, Peter
Goodhew, Victor Miscampbell, Norman Walker-Smith, Rt. Hon. Sir Derek
Green, Alan Montgomery, Fergus Ward, Dame Irene
Griffiths, Eldon (Bury St. Edmunds) More, Jasper (Ludlow) Webster, David
Grimond, Rt. Hon. J, Morrison, Charles (Devizes) Wells, John (Maidstone)
Grosvenor, Lord Robert Morrison, John (Salisbury) Williams, Dudley (Exeter)
Gurden, Harold Mott-Radclyffe, Sir Charles Wills, Sir Gerald (Bridgwater)
Hamilton, Michael (Wellingborough) Neave, Airey Wilson, Geoffrey (Truro)
Harris, Frederic (Croydon, N.W.) Nicholson, Sir Godfrey Wolrige-Gordon, Patrick
Harris, Reader (Heston) Nugent, Rt. Hon. Sir Richard Woodhouse, C. M.
Harrison, Col. Sir Harwood (Eye) Oakshott, Sir Hendrie Woodnutt, Mark
Harvey, John (Walthamstow, E.) Orr-Ewing, Sir Ian (Hendon, North) Worsley, Marcus
Hay, John Osborne, Sir Cyril (Louth) Yates, William (The Wrekin)
Henderson, John (Cathcart) Page, Graham (Crosby)
Hiley, Joseph Page, John (Harrow, West) TELLERS FOR THE AYES:
Hill, Mrs. Eveline (Wythenshawe) Pannell, Norman (Kirkdale) Mr. Hugh Rees and
Hill, J. E. B. (S. Norfolk) Partridge, E. Mr. R. W. Elliot.
NOES
Abse Leo Bowles, Frank Cronin, John
Ainsley, William Boyden, James Crosland, Anthony
Allaun, Frank (Salford, E.) Braddock, Mrs. E. M. Crossman, R. H. S.
Allen, Scholefield (Crewe) Bray, Dr. Jeremy Cullen, Mrs. Alice
Awbery, Stan (Bristol, Central) Brockway, A. Fenner Dalyell, Tam
Bacon, Miss Alice Broughton, Dr. A. D. D. Davies, G. Elfed (Rhondda, E.)
Burnett Guy Brown, Rt. Hon. George (Belper) Davies, Ifor (Gower)
Bence, Cyril Butler, Herbert (Hackney, C.) Davies, S. O. (Merthyr)
Benson, Sir George Callaghan, James Deer, George
Blyton, William Carmichael, Neil Delargy, Hugh
Boardman, H. Cliffe, Michael Dempsey, James
Bottomley, Rt. Hon. A. G. Collick, Percy Diamond, John
Bowden, Rt. Hn. H. W.(Leics, S.W.) Craddock, George (Bradford, S.) Dodds, Norman
Doig, Peter Lipton, Marcus Rhodes, H.
Donnelly, Desmond Loughlin, Charles Roberts, Albert (Normanton)
Driberg, Tom Mabon, Dr. J, Dickson Roberts, Goronwy (Caernarvon)
Duffy, A. E. P. (Colne Valley) McBride, N. Robertson, John (Paisley)
Ede, Rt. Hon. C. McCann, J. Robinson, Kenneth (St. Pancras, N.)
Edwards, Rt. Hon. Ness (Caerphilly) MacColl, James Rodgers, W. T. (Stockton)
Edwards, Walter (Stepney) McInnes, James Rogers, G. H. R. (Kensington, N.)
Evans, Albert McKay, John (Wallsend) Ross, William
Fernyhough, E. MacKenzie, J. G. Shinwell, Rt. Hon. E.
Fitch, Alan McLeavy, Frank Short, Edward
Fletcher, Eric MacPherson, Malcolm Silkin, John
Foley, Maurice Mahon, Simon Silverman, Julius (Aston)
Foot, Dingle (Ipswich) Mallalieu, E. L. (Brigg) Slater, Mrs. Harriet (Stoke, N.)
Fraser, Thomas (Hamilton) Manuel, Archie Small, William
Galpern, Sir Myer Mapp, Charles Smith, Ellis (Stoke, S.)
Ginsburg, David Marsh, Richard Sorensen, R. W.
Grey, Charles Mason, Roy Spriggs, Leslie
Griffiths, David (Rother Valley) Mendelson, J. J. Steele, Thomas
Griffiths, W. (Exchange) Millan, Bruce Stonehouse, John
Hamilton, William (West Fife) Milne, Edward Stones, William
Hannan, William Mitchison, G. R. Stress, Sir Barnett, (Stoke-on-Trent, C.)
Harper, Joseph Morris, Charles (Openshaw) Taylor, Bernard (Mansfield)
Hart, Mrs. Judith Morris, John (Aberavon) Thomas, Iorwerth (Rhondda, W.)
Hilton, A. V. Mulley, Frederick Thompson, Dr. Alan (Dunfermline)
Holman, Percy Neal, Harold Thomson, G. M. (Dundee, E.)
Houghton, Douglas Noel-Baker, Rt. Hn. Philip (Derby, S.) Thornton, Ernest
Howell, Denis (Small Heath) O'Malley, B. K. Warbey, William
Hughes, Hector (Aberdeen, N.) Oram, A. E. Weitzman, David
Hunter, A. E. Owen, Will Wells, William (Walsall, N.)
Hynd, H, (Accrington) Padley, W. E. Whitlock, William
Hynd, John (Attercliffe) Parker, John Wilkins, W. A.
Irving, Sydney (Dartford) Paton, John Williams, D. J. (Neath)
Jeger, George Pavitt, Laurence Williams. Ll. (Abertillery)
Jones, J. Idwal (Wrexham) Pearson, Arthur (Pontypridd) Williams, W. T. (Warrington)
Jones, T. W. (Merioneth) Peart, Frederick Winterbottom, R. E.
Kelley, Richard Pentland, Norman Woodburn, Rt. Hon. A.
Kenyon, Clifford Price, J. T. (Westhoughton) Woof, Robert
King, Dr, Horace Probert, Arthur Yates, Victor (Ladywood)
Lawson, George Pursey, Cmdr. Harry
Lee, Frederick (Newton) Randall, Harry TELLERS FOR THE NOES:
Lever, L. M. (Ardwick) Rees, Merlyn (Leeds, S.) Mr. charles A Howell and
Lewis, Arthur (West Ham, N.) Reynolds, G. W. Mr. Redhead.
Mr. A. Lewis

I beg to move Amendment No.6, in page 10, line 14, after "may", to insert "(a)".

The Temporary Chairman (Mr. F. Blackburn)

We can also discuss Amendment No.9, in line 16, at end insert:

and (b) notwithstanding anything in the said section 9 apply to the pool betting duty in the case of bets on dog races made by means of a totalisator on a licensed track without applying to any other of the duties included within the aforesaid group (d). In this subsection 'dog race' 'licensed track' and 'totalisator' have the same meanings respectively as in the Betting, Gaming and Lotteries Act 1963". and Amendment No.12, in line 37, at end insert: or the provisions of subsection (3) of this section under which an order may be made with respect to the pool betting duty therein referred to without applying to any other of the duties included within the group (d) specified in subsection (1) of this section".

Mr. Lewis

When I put these Amendments on the Notice Paper, with the support of my hon. Friends and some hon. Members opposite, I was not too sanguine of the Chancellor accepting them, but after listening to his remarks on the last batch of Amendments I feel quite hopeful. These Amendments are somewhat similar to those, but whereas the others were of a general character these deal with a particular point.

The purpose of the first Amendment is to enable the Chancellor to apply the regulator to the duties embraced in Clause 8(2,d) which, as framed, includes Pool Betting Duty in the case of bets placed on the totalisator and other forms of betting on greyhound racing without necessarily altering the amount of Pool Betting Duty, which is now 5 per cent., as fixed under Clause 7(1,a).

I pay tribute to the Chancellor and the Treasury for the fact that the percentage duty is reduced in the Bill to 5 per cent. from the previous 10 per cent. This is a courageous and correct step. Unlike my hon. Friends who spoke earlier, I am not against the taxation of gambling, betting and gaming. I am in favour of it, but I feel that all forms of 'letting, gambling and gaming should be dealt with on an equitable basis. This has not been the position in the past and is not even the position now.

The second Amendment is consequential on the first and is necessary to overcome the provisions of Clause 8(5), which provides that the orders made shall apply uniformly to all the duties in the groups set out in subsection (2). The Chancellor mentioned earlier that he would like some flexibility in the application of the Clause. Here is a case where, if he can make the same sort of speech as he made a few moments ago, I can promise that we shall not press the Amendment to a vote. We would willingly accept his promise to look at the matter further between now and the Report stage.

9.0 p.m.

Clause 7 deals with the Pool Betting Duty separately from the duties mentioned in the group. We feel that it is, therefore, appropriate that that particular type of duty should be separate and dealt with separately from the other duties in respect of the use of the regulator under Clause 8. We also feel that pool betting on greyhound racing is better dealt with under Clause 7.

The Amendment, in effect, gives power to the Chancellor to deal with pool betting duty on dog racing, for example, as entirely separate from all the other types. We have put down these Amendments in this form only for reasons of drafting. We want to give the Chancellor the opportunity of dealing with this matter on a flexible basis. It is obvious that if he wants to alter or amend the regulator to deal with pool betting on dog racing, it is a little stupid that he should have to deal with the whole of the other types of taxation within that group. It is equally stupid that if he wants to deal only with tobacco or whisky he should find that he is dealing under the regulator with pool betting on dog racing.

Greyhound attendances might be declining and totalisator takings dropping and it might be necessary for him to deal with these individually on their merits. We feel that if, as appeared to be the case, the Chancellor was considering the possibility of accepting the principle of the previous Amend- ment, here is an opportunity for him, by accepting our proposals, to put it into operation.

For many years the sport of greyhound racing, which is followed by many people, has been the only one to be taxed. Tomorrow, the House will have rather a slack day because a number of hon. Members opposite will be going to the Derby, but no Member will be taxed on his bets at Epsom. On greyhound racing the tax would be 5 per cent, which is much better than the previous 10 per cent. In again thanking the Chancellor for what he has done, I ask him to go one step further and accept these Amendments. These would provide for a more flexible operation of the regulator, which, I understand, the Chancellor desires to do.

Mr. Godfrey Lagden (Hornchurch)

I do not intend to keep the Committee for more than a few moments, but I should like, on behalf of many of those who are engaged in greyhound racing, to say that the Chancellor's action in reducing the tax from 10 to 5 per cent. has not gone unnoticed or without praise. At the same time, this resembles perhaps the modest punter who had hoped for a large win and had to be content with a place bet at considerably reduced odds. I think that the greyhound racing business really hopes that it is only a question of when the day will come when it can say, "Any to come?", and that the Chancellor's next effort will, perhaps, prove an all-time winner.

I join in what has been said by the hon. Member for West Ham, North (Mr. A. Lewis). It is most unusual for me to agree with the hon. Gentleman, and I hope that I shall not often do it.

Mr. A. Lewis

The hon. Gentleman is trying to increase his majority.

Mr. Lagden

On this occasion, however, I am quite sure that the hon. Gentleman's appeal will not have been wasted. My right hon. Friend is the first Chancellor for many years to show that he understands something of the predicament in which this form of racing has found itself.

Earl of Dalkeith (Edinburgh, North)

I express my appreciation to my right hon. Friend for the reduction from 10 per cent. to 5 per cent. which he has made in the duty. I am one of those who have taken part in this argument for some years, and I congratulate him on what he has done.

The arguments now are the same as they have been for many years. I only hope that my right hon. Friend will bear these arguments on principle in mind when, next year, he thinks about the matter again and, perhaps, knocks off the remaining 5 per cent. If he can do it sooner, so much the better. On behalf of those whom I represent in my constituency, I congratulate him on what he has done thus far.

Mr. Marcus Lipton (Brixton)

I associate myself with the plea which has been made by my hon. Friend the Member for West Ham, North (Mr. A. Lewis), the hon. Member for Hornchurch (Mr. Lagden) and the noble Lord the Member for Edinburgh, North (Earl of Dalkeith).

I have now lost count of the number of time5, on which I have been on deputations to see Chancellors of the Exchequer about the injustices from which the greyhound organisations have been suffering for years. It must be said to the credit of the present Chancellor that, at long last, he has recognised the validity of at least some of the arguments which have been put to him. I hope that he will be able to go just a little further and accept the Amendment which has been moved. It will do no harm if he does.

Mr. Maudling

I am grateful to hon. Members on both sides of the Committee who have said that the provisions in the Bill will be of help to greyhound racing, which has, I think, been suffering under a weight of taxation which was unfair and which, therefore, ought to have been reduced. My hon. Friend the Member for Hornchurch (Mr. Lagden) hoped that there might be more to come at some time. I think that I should remind him of the old maxim, which is not a bad one, that no one ever went "broke" taking a profit, and I think that the present profit should be helpful. It was generally agreed that the position of greyhound tracks called for some attention.

But this, of course, is not the point of the Amendment before us. This Amendment is an example of the general principle which was covered by the previous Amendment, and it is, therefore, covered in principle by what I said earlier, which I shall not seek to repeat verbatim now. It is an illustration of the difficulties which could arise. I believe that the regulator should be used for the purpose for which it is designed, that is, for regulating the movement of the economy and not primarily for the purpose of changing the incidence of duties between one subject of taxation and another. This, as I said before, must remain the function of the Finance Bill as such, when we can look at the whole picture of demand and the various claims and source s of revenue.

I wanted more flexibility in the regulator because its use without variation could, in certain circumstances, be unfair and difficult. I wanted, therefore, to have a situation in which the Chancellor of the day could use the regulator but had the power to exempt certain forms of taxation from it. My proposal was that there should be four blocks. It has been suggested that the size of the blocks should be reduced. It is now suggested that greyhound racing taxation, for example, should be capable of being excised from the fourth block in which it is at present included along with the Purchase Tax.

Clearly, the undertaking which I gave on the previous Amendment to consider all these possibilities covers this possibility as well, and I shall certainly consider it along with the others. I must make clear, of course, as I am sure the Committee will understand, that I can give no undertaking beyond that.

Mr. A. Lewis

I am much obliged to the Chancellor. It seems that he, too, is helping to increase my majority. Every time we ask for anything the Chancellor may not go the whole way, but he goes most of the way with us.

However, I would remind the Chancellor that on the last group of Amendments he spoke generally. But here is a particular question. In Clause 7 there is reference to the Pool Betting Duty. Surely it is strange to deal with the Pool Betting Duty for greyhound racing in Clause 8 when there is already a Clause dealing with the duty. Also the regulator is for a group of things which cannot be tied up with general industry.

I ask the Chancellor to bear in mind that this subject is most definitely different from any of the other subjects in the regulator group on which there may be some discussion if he wants to alter the tax. This is not tied up with anything else except the Pool Betting Duty such as fixed-odds and ante-post betting mentioned by my hon. Friend the Member for Bermondsey (Mr. Mellish). Surely that should be the category in which the Chancellor should deal with this group.

I thank the Chancellor for what he has said, and I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Question proposed, That the Clause stand part of the Bill.

Mr. Diamond

There is very little more that need be said, because the essence of the matter has already been discussed on an Amendment. I am sure that the Chancellor is aware of our views, that his existing powers could be improved by greater precision and greater sharpness in the tool which has been designed for "the Chancellor of the day", a very pleasant phrase which the Chancellor used and which I am only too glad to accept.

I noted with gratitude that the Chancellor said that he was still considering the precise form of an Amendment that he would no doubt introduce on Report. This is a very important Clause, and the only reason why I speak so shortly is that we have considered the essence of it on an Amendment.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Clauses 9 and 10 ordered to stand part of the Bill.