§ Subject to any order of the Treasury made after the passing of this Act under section 39 of the Purchase Tax Act 1963, all goods hitherto to chargeable to purchase tax at the rate of 15 per cent. shall be chargeable at the rate of 7½ per cent. and no more; and accordingly Part I of Schedule I to that Act shall be amended by substituting for any reference to a rate of 15 per cent. a reference to a rate of 7½ per cent.—[Mr. Jay.]
§ Brought up, and read the First time.
§ 4.30 p.m.
§ The Chairman
It will also be possible to debate, at the same time, the new Clause 2:Subject to any order of the Treasury made after the passing of this Act under section 39 of the Purchase Tax Act 1963, all goods hitherto chargeable to purchase tax at the rate of 10 per cent. shall be chargeable at the rate of 5 per cent. and no more; and accordingly 261 Part I of Schedule I to that Act shall be amended by substituting for any reference to a rate of 10 per cent. a reference to a rate of 5 per cent.If it is desired, there will be a Division on both of these new Clauses.
§ Mr. Jay
These clauses raise a rather simpler and larger point which, I hope, is easier to understand than the one which we have just been discussing. We are proposing here that there should be some reduction in at any rate the lower rates of Purchase Tax. The Bill is so drafted that we are compelled to discuss a single rate of Purchase Tax relating to all the items which come under that particular rate. Therefore, in order to discuss the individual items it is necessary to put down a rather sweeping Amendment of this kind.
I must say to the Chief Secretary to the Treasury that he cannot answer this debate with any cogency by saying that if these reductions are made on all these items the total would add up to a loss of revenue of £100 million, or some such sum, because he must realise that it would not be in order to take selectively those items which we regard as of first priority for reduction.
The Committee should look at Purchase Tax and at least investigate what is happening on this occasion, which is about the only occasion we have in the year for doing so. We should look at it if only because it has now become one of the most important taxes in the whole of our fiscal armoury. When hon. Members opposite were in opposition they used to tell us that they would abolish Purchase Tax almost entirely, or at least that it would remain on only a few luxury items, and we were given the impression that it would cease to be an important revenue-raiser. That promise from the party opposite has gone the way of all flesh, like most of their pre-election promises. So far from Purchase Tax having been abolished or contracted, it has expanded over a vast scale in recent years.
It is not merely that total revenue has risen, but it has been, in addition, extended to a whole lot of items, mainly essential elements of family consumption which were previously exempt. It was extended two years ago—and this is relevant to the rates in the first new Clause—to soft drinks, chocolates, confectionery 262 and sweets. We shall have something to say about that in the debate.
Also in recent years—and this is relevant to the other rates in the second new Clause—it has been extended to a vast range of clothes, furniture, boots and shoes and a number of household textiles which, in the period previous to 1951, were all exempted under the utility schemes of those days which covered more than 50 per cent. of these essential items in the consumption of the ordinary family.
We have had, therefore, a great extension of Purchase Tax not merely in terms of revenue, but in terms of the goods actually covered. I do not think that the Chief Secretary or the party opposite would deny or conceal that it is part of their whole policy of extending the range of indirect taxation to a number of items of general consumption not previously covered. In fairness, it should be said that the Chief Secretary is fond of saying that this is not so and that hon. Members opposite are following no such policy, because if we take indirect taxation and direct taxation as a percentage of total revenue and compare the percentages now with those of 1950 we shall find that indirect taxation has not risen as a percentage of the total.
The right hon. Gentleman may prove that if he includes insurance contribution as a form of direct, taxation. It can be shown that direct taxation has risen markedly and that even the percentage has risen in its favour. Even if one leaves out the insurance contribution one can reach that conclusion, but if we are not merely comparing direct and indirect taxation but progressive and regressive taxation, which would include both indirect taxation like Purchase Tax and also the insurance contributions, we would discover that the reality of this is that regressive taxation has increased as a proportion and that the right hon. Gentleman's percentages are not more than a form of trick to support his argument of the moment.
If we look more narrowly at Purchase Tax alone, it is a striking fact that total revenue—and there is no change of tax in this year's Budget—is rising at the moment a good deal faster than national money income. I imagine that the Chief Secretary accepts the Financial Statement of the Financial Secretary, which 263 shows that the increase this year in Purchase Tax revenue from last year's Budget estimate to this year's Budget estimate is from £545 million to £605 million in one year. This is an increase of much more than 10 per cent. in Purchase Tax revenue alone in one year, and I think that the right hon. Gentleman would not claim that the national income, even in money terms, will increase by more than 10 per cent. in the financial year in which we now find ourselves.
Purchase Tax has now risen to a level at which, barring tobacco, which we always have to bar, it is very nearly our most important single indirect tax. It is to raise in the coming year practically as much revenue as the oil taxes and more than double the total revenue from beer. Therefore, this has become a very formidable tax.
The point to which the Committee ought to direct its attention is that in so far as we go on raising indirect taxation year after year on all these articles of staple consumption of the ordinary family we are steadily raising the level of the cost of living. Since it is done by deliberate Government policy, in doing that we are automatically making it harder to achieve the incomes policy which the Government are always preaching, but which, in my opinion, we shall never achieve unless the Government are themselves following a policy of social justice both in taxation and in terms of other income.
There is no doubt that this wide increase in the range of Purchase Tax has helped to put up the cost of living in recent years. This means in the next round that by forcing up wage rates it tends to raise the price of exports and makes them more difficult to sell. We have had long and complicated discussions about possible ingenious export subsidies, such as the Gordon Richards Committee considered in connection with Purchase Tax and a sales tax, but we sometimes forget that one fiscal method of assisting our exports without infringing G.A.T.T. is to keep down the level of taxation on articles of ordinary consumption.
In this Budget, quite apart from this tax, we have had in the background taxes on beer and tobacco pushed up in 264 such a way as to raise the cost of living by nearly one point. Therefore, in all these ways, present Government policy is tending to raise prices and the cost of living.
The right hon. Gentleman has argued, as the Chancellor has argued, that he was compelled to do this this year because, if he had taken the alternative of raising Profits Tax—which I do not accept as an alternative—the revenue would not have been available till the following year. I do not accept that argument, and I shall not discuss it at length now, but I ask the right hon. Gentleman to consider for a moment where the argument leads if one is prepared to accept it. If we are to have an expanding economy, advancing year by year, with a high level of incomes, and if we are always to be told that. we cannot have restraint through the Profits Tax because it operates only next year, we shall have to increase indirect taxes every year.
This follows from the arguments produced by right hon. Gentlemen opposite, and I do not think that it is a very comforting or encouraging prospect. If we are to continue on that line, we shall make an incomes policy more and more difficult and throw an ever growing burden on our exports. It is of interest that, in the years during which this policy has been pursued by the Government, British exports, as we all agree, have been continually lagging.
By these two new Clauses, we ask the Committee to examine in particular the 15 per cent. and 10 per cent. rates of Purchase Tax. The 15 per cent. rate, which we suggest should be reduced by half, covers the chocolates, confectionery, sweets, soft drinks and ice cream which were all brought first into the range of taxation by the Government opposite two years ago. Here again, since we are confronted with the present Government's action in putting a tax on certain important foodstuffs, for virtually the first time in this country, through the Finance Bill and the normal fiscal machinery, it is right to point out that our Minister of Agriculture, Fisheries and Food—sometimes he forgets that he is Minister of Food—is introducing at the same time what he calls the new agricultural policy, by which he is simultan- 265 eously placing new taxes under the name of import levies on some of the more important foodstuffs consumed by the population.
It so happens that today, the very day on which we are discussing this question, the Minister of Agriculture, Fisheries and Food has announced some new levies on wheat imported into this country. This is yet another action tending to raise the price of food and to raise the cost of living for the British people. I do not know whether it is all part of the plan to harmonise our system with that of the Common Market countries or whether the Government really think that it is all justified on merit. Perhaps the right hon. Gentleman will give us some guidance on that.
The 10 per cent. rate of Purchase Tax, which is dealt with in the second new Clause, covers the most important items of all which enter into the general consumption of the ordinary family, the great bulk of clothing, boots and shoes, furniture, household textiles, carpets, linoleum and what I think the Customs and Excise usually call floor covering. These are all, of course, extremely important items in the weekly cost of living of the ordinary working family. They all bear tax now, whereas the great bulk of them were tax-free 15 years ago.
I put this point in particular to the right hon. Gentleman. Even leaving aside the effect of this new taxation on the ordinary cost of living, there seems to be evidence that the introduction of the tax at the 15 per cent. rate on the ice cream industry was too sudden and abrupt from an industrial point of view, quite apart from the effect on the consumer. According to my information, during the 18 months or two years since the tax has been effectively in operation, no fewer than five factories have closed down altogether in the ice cream industry and as many as 1,600 people have been dismissed.
Was this what the Government really intended? When they introduced this particular tax, did they intend to deal a blow of that severity at this industry, or was this an unintended effect which they never meant to produce but which turned out that way contrary to their expectations? If it is the latter, this is the occasion for taking amending action 266 to modify the severity of the blow. We should like to know whether that was the effect which the Government intended to produce, or whether they made a mistake and would now wish to come clean and repent of the consequences of their actions.
To sum up, I believe that we have gone too far in extending the range of taxation on these basic items which enter into the ordinary consumption of the people. The right policy should be that all foodstuffs should be exempt from any form of indirect taxation whatever and that other basic necessities, if they are not totally exempt, should bear a very low rate of taxation. When a Labour Government come to reform these matters, as, no doubt, they will soon, after the right hon. Gentleman has sung, his swansong today, one high priority for tax concessions, I believe, will be in some of these indirect taxes on necessities of ordinary consumption.
For this there is a powerful argument from the point of view of social justice and more equality in real standards of living. There is also a powerful argument from the standpoint of the vital objective of keeping down living costs and preventing the too rapid rise of price levels. Above all, from the point of view of immediate economic policy and our immediate economic difficulties, I believe that such a policy would have great value in making it more practicable to achieve some form of coherent and comprehensive incomes restraint, thereby assisting the essential development of our exports on which so many of our economic fortunes depend.
§ Dr. Horace King (Southampton, Itchen)
I share the concern expressed by my right hon. Friend the Member for Battersea, North (Mr. Jay) about the growth in yield of the Purchase Tax this year and the fact that it has already reached over £600 million, increasing this year by £1 per head of the population.
I am one of those who hoped that, over the years, the incidence of Purchase Tax would steadily decrease. When we introduced it during the war, it had an economic purpose; it was a disincentive to spending. Goods with 267 Purchase Tax on them were more expensive and people would be less inclined to buy them. We did not want people to buy goods because we wanted to make goods for the war effort. Even if they did buy goods which were expensive because of the Purchase Tax, according to "Boyle's Law", they would not have money left to buy other things. The main purpose of the Purchase Tax was economic then. Its revenue raising aspect in war time was incidental. It was one of the instruments for winning the war.
I was one of those who hoped that, in the post-war years, the Purchase Tax would, following Lenin's prophecy about the State, wither away. I am alarmed to find that, this year, far from withering away, it has been like Stalin's State and become more and more ruthless and more and more powerful. The most serious fact which the Committee has to consider now is that the original economic purpose of the Purchase Tax has gone into the background, unless the Chief Secretary can tell us that he still wants to discourage people from buying goods, and the tax has now become vital to the Treasury, so vital that it seems almost as though this incubus is to be round our necks for all time unless we halt the process now going on. As my right hon. Friend the Member for Battersea, North has pointed out, the range has got wider.
We are not talking about Purchase Tax on luxuries. We are talking about Purchase Tax on many articles which are vital to the housewife. There are two kinds of tax. We tax the citizen more or less according to his capacity to pay, and we tax him on a flat rate, whatever his income. I link this to the taxes which we levy when we make people pay for their insurance benefits—their poll taxes. The millionaire and the poorest person pay exactly the same poll tax, just as they pay exactly the same increased tobacco duty.
Purchase Tax is a poll tax, although not purely so because people do not have to buy goods with Purchase Tax on them. Concerning the essential range of goods which we are talking about in these two new Clauses, we are taxing the richest housewife in exactly the same way as we are taxing the poorest housewife. This 268 is only part of the pattern of the present Government which we can see elsewhere. They shift on to the poorer people burdens which ought to be put upon the shoulders of those most capable of carrying them.
The next Government will have to consider the fact that our system of national taxation and rating is becoming more and more inequitable and more and more regressive. I hope that when the next Government come to power they will examine the whole question of Purchase Tax and see whether they can halt the process, into which we have slipped in these past few years, of steadily increasing the yield of the tax and, in that way, adding to the burden borne by all people, whatever their income. If the Minister cannot accept the Clause entirely, I hope he will consider seriously whether he can accept it in respect of some of the goods which come within the 10 per cent. Purchase Tax category dealt with in the first new Clause.
§ Mrs. Harriet Slater (Stoke-on-Trent, North)
Once again, we are discussing the question of Purchase Tax and how heavily Purchase Tax falls on the poorer people. I would say to my hon. Friend the Member for Southampton, Itchen (Dr. King) that those of us who are in the Cooperative movement thought, when Purchase Tax was introduced, that it was wrong. We thought that if we wanted to stop people buying goods they should not have been produced in the shops. However, since its introduction it has been a very successful source of revenue for the Treasury, which has put it on more and more things.
The tax on sweets, chocolates, soft drinks, ice lollies and chocolate-covered biscuits was the first instance of the Government introducing a tax on food. They may argue, as they argued last year, that the tax was put on luxury food, but these things are not luxuries to children who spend their twopences and threepences—it used to be halfpennies and sometimes farthings with us—on them and have to pay tax on them.
The danger of this tax is that it may not stop at these kinds of food. It may be put on other foods. I thought last year that this was, and I still think that it is, a very unfair tax. Last year it looked almost as though it was a tax 269 introduced by a desperate Government looking where they could get a few more pounds. The people interested particularly in soft drinks are extremely worried about the effect which the tax has had on at least some of the smaller firms in the trade. This is one respect that the Government might have another look at.
I now turn to consider the tax on other goods. In the booklet of the Customs and Excise duties there is a great variety of articles which one could argue should be exempt. In Group 1, a tax is put on certain articles, but exemption is given to garments and footwear of a kind suitable for young children to wear. I have raised this issue before, and I raise it again. A mother with a child who is growing is forced to pay tax on shoes for that child, although children's shoes are exempt. Next door to me there is a little girl who is about 10½ years of age and who takes a larger size in shoes than I take—and my shoe size is not small.
Members who have children, particularly those whose children are going to secondary modern or grammar schools, or, as applies to hon. Members opposite, to public schools, find that because their children are getting taller, and, therefore, have larger feet, they are having to pay this tax. The Chancellor of the Exchequer told me that this was a difficult matter because some women would wear the large children's shoes. Some "modern misses" might wear "flatties", but, generally, one can tell a child's shoe from a woman's shoe. This is another case which the Treasury might consider.
We had the famous "pots and pans" Budget, when a tax was put on the tools which the housewife uses. That tax has never been taken off. I come from the district where pots are made. The industry has always felt aggrieved that, although a tremendous amount of effort has been put into turning out well-designed and good quality china products and building up a valuable export market, it should be penalised by this tax on pots. Nearly everything which a woman uses for cooking bears Purchase Tax—even the wire tray on which she cools her cakes after baking them. It is put on almost all kitchen ware and utensils because they are not used in trade. 270 The butcher's knife is exempt from tax, but the housewife's carving knife is not.
The Government profess to believe in helping young married people and in encouraging them to have comfortable homes. Yet all the furniture which they have to buy and household commodities, such as linoleum and carpets—I regret that the hon. Member for Kidderminster (Sir G. Nabarro) is not here today to help us out—and even wallpaper bear tax. If the Government really mean to encourage young people to have nice things in their homes and to furnish them properly—and everybody has the right to that; this is not something which should be restricted to those who can afford it—how foolish it is to put a tax on these things.
Young people are encouraged to pursue leisure time activities which will be useful to them. This is a matter which the right hon. Gentleman might look at with his right hon. Friend the Home Secretary if he wants to encourage local authorities to spend more money on youth clubs and leisure time activities so as to overcome some of the problems that confront us today. If I am interested in youth club activities, netball and so on, and, to encourage its members, I desire to buy a cup, I pay Purchase Tax on it, but if, by showing a little common sense, I buy a shield or plaque for them, I do not pay tax on it.
How ridiculous it is that to encourage team spirit and service to the community in our schools, youth clubs and other organisations I should have to pay tax on a cup as a trophy, but when I buy a plaque or shield I am exempt from paying 10 per cent. Purchase Tax on it. The right hon. Gentleman might say that it is not very much, but it all adds up when someone is encouraging schools, youth clubs or other organisations to pursue activities which would be of benefit to the country.
We should at least wipe out some of the silly distinctions that apply today. This is a case which we should look at again, especially as we are continually told that we are living in an affluent society.
§ Mr. William Clark (Nottingham, South)
I suppose that everyone has a certain amount of sympathy for both 271 new Clauses in that they attempt to reduce taxation. That is something for which one can always get a certain amount of sympathy, but I think that the Committee should not be misled about what it is being asked to do. If these Clauses were passed, I understand that the cost would be about £140 million a year. This, I would have thought, does not bear out the speeches made by the Opposition during the Budget debate that the Chancellor had in fact been a little too optimistic about the economic possibilities of this country and that he should have been a little more stringent in increasing taxation.
We cannot on the one side ask for an increase in taxation and on the other ask for a reduction in taxation of £140 million. I am astounded that the hon. Member for Battersea, North (Mr. Jay) lent his name to these two new Clauses because he and his hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) heavily and unfairly criticised the Chancellor during the Budget debate for being too optimistic.
Hon. Members opposite talk about indirect and direct taxation. I am sure that the hon. Member for Sowerby (Mr. Houghton) will remember that recently he wrote:A tax system suited to the affluent mass production economy of the second half of the twentieth century is almost bound to rely more and more upon indirect taxation.If this is so, I cannot see how the hon. Member for Sowerby can lend his name to Clauses such as this to reduce indirect taxation by £140 million.
§ Mr. Houghton
There are other fields of indirect taxation besides Purchase Tax. This extract from what I wrote has been quoted several times. It was a well-balanced article on taxation and if hon. Members who quote from it will read all of it they will see that it is a well-balanced article. There are directions in which, I believe, future Governments will have to rely on an extension of indirect taxation, and one of them has been under consideration by the Government recently, namely gambling. There are other fields in which there is a considerable amount of disposable income being spent, not on luxuries or on necessities, which 272 might provide a source of revenue to the Exchequer. Certainly, in indirect taxation there is an element of choice as to how we pay our taxes which there is not in direct taxation. [Interruption.] The hon. Member quoted me and now he must listen to my intervention. If in this field the burden of taxation is not harsh and it does not bear on the necessities of life, I see no objection to the extension of indirect taxation.
§ Mr. Clark
I am sure that the Committee is grateful for that intervention, or speech, particularly the Tory philosophy that seemed to be inherent in the hon. Gentleman's statement that it is much better to tax the spending end rather than the earning end. That is precisely what the Chancellor has done this year in his increase of £100 million taxation.
I would ask hon. Members opposite what they would do if they think that the Chancellor is far too optimistic in this year's Budget in that he has not claimed back sufficient taxation from the tax-paying public. If they are prepared to give £140 million in relief under these two Clauses, perhaps they would tell the Committee, and particularly the country, from where they intend to get £140 million. Surely we are entitled to know. It is all very well for hon. Members opposite to say, "You must reduce Purchase Tax by this, increase this allowance and reduce that", but if we are to keep the country going roughly at the same cost at which it is run at the moment and we reduce one tax we have to increase another. I would ask the categoric question: will someone on the Front Bench opposite give me a clear, not an ambiguous, answer as to where the Opposition would get the £140 million in substitution for the reduction of £140 million as proposed in these two Clauses?
If it is to go on direct taxation, presumably it has to go on P.A.Y.E.—the ordinary worker. If it does not go on the worker, will it go on companies or profits tax? Will it penalise our exporters more? It does not matter which philosophy the party opposite want to put over, but I think that the public are entitled to know what economic taxation they would impose if they ever got into power.
273 There is one other thing which we should remember when talking about Purchase Tax. We are at the moment talking about Purchase Tax in the range bracket of 25 per cent., 15 per cent. and 10 per cent. It was slightly different in 1951 when the financial wizards on the Opposition Front Bench were in charge of the finances of this country and when Purchase Tax was 100 per cent., 66⅔ per cent. and 33⅓ per cent I should have thought, Mr. Arbuthnot, that it was a little ungenerous and unfair of hon. Members opposite to criticise the Government on their record concerning reduction in Purchase Tax. I should like to give three other figures, Mr. Arbuthnot, if I may.
§ Mr. Clark
I am sorry. I get so excited when I try to fathom the economics of the Opposition that quite often I get terribly tongue-tied and I forget whom I am talking to but not necessarily what I am talking about. There has been a certain amount of criticism of indirect taxation, but I think that for the purpose of the record, and, I hope, to help some hon. Members, it would be as well to know what percentage is taken in indirect taxation of the gross national product.
In 1946, 14.8 per cent. of the gross national product was taken in indirect taxation. As the hon. Member for Sowerby will agree, his party were responsible then for the country's finances. The party opposite made an improvement. They do not like indirect taxation, because, as they say, it operates unfairly against the poorer members of the community, for example. By 1951, through their financial wizardry, the party opposite had been able to reduce the percentage from 14.8 to 14.75 of the gross national production, a reduction of 05 per cent.
The record of the Conservative Administration of the last 12 or 13 years is that even with my right hon. Friend's new provisions, indirect taxation takes only 11.5 per cent. of the gross national product. This gives the lie to Opposition accusations that Conservatives have not done much for the ordinary people.
§ Mr. Houghton
Does not the hon. Member recognise the difference between indirect taxation used in conditions of economic stringency, as occurred on consumption, and indirect taxation used as a revenue tax? Immediately after the war, Purchase Tax was a weapon avowedly used for economic and not for revenue purposes. The position today is entirely different.
§ Mr. Clark
I hope that I have not misled the Committee in speaking only about what happened immediately after the war. I gave the 1946 figure of 14.8 per cent. and the 1951 figure of 14.75 per cent. That was six years after the war. The party opposite is so good at managing and planning the economy that there should have been no stringency six years after the war. Unfortunately, we, of all the nations this side of the Iron Curtain, were living in more austere circumstances than any other Western democracy. That is one fact which the public should not be allowed to forget.
Whilst all of us would like taxation to be reduced, my criticism about the two new Clauses is that we have been given no alternative suggestion about where the money is to come from. Certainly, what the party opposite suggest is not borne; out by their record between 1945 and 1951 because of the figures which I have given. All I can assume is that the two new Clauses are merely electioneering to endeavour to hoodwink the public into thinking that if the party opposite got into power, they would immediately reduce taxation. My guess is that if the party opposite ever got back to power, we would again have the penal taxation that we had between 1945 and 1951.
§ 5.15 p.m.
§ Mr. Eric Lubbock (Orpington)
Why do hon. Members opposite always assume that arguments about the taxation distribution between 1945 and 1951 are relevant to present-day circumstances? I wish to argue against both of the new Clauses, but I hope that I shall not be as misleading no the Committee and to the electorate as to use that type of argument.
I want to touch, first, upon the point made by the hon. Member for Sowerby (Mr. Houghton) in his intervention when he said that while his party admitted that 275 indirect taxation might become increasingly important, one had to be careful that it did not bear upon the necessities of life. Certain speeches which have been made from these benches have referred to wallpaper, linoleum, and so on, which, various hon. Members claim, are particularly important. If that were really so, why did not the Labour Party put down an Amendment on the 25 per cent. Purchase Tax rate, which, I understand, covers various necessities of life, such as electric cookers, sewing machines, electric heaters, lamp bulbs, washing machines and many other items of home consumption? What is a luxury to one man is a necessity to another, and vice versa. Who are we in this Committee to say what should be luxuries or what should be necessities and to dictate the spending patterns of the public?
I should like to see a much wider spread of indirect taxation and rates lower than we have at present on the items covered. Certainly, in exceptional cases, social justification can be made for excluding certain items altogether from indirect taxation. It is, for example, iniquitous that we impose a 25 per cent. Purchase Tax rate on toothpaste. The Chancellor of the Exchequer has had a letter on this subject from the chairman of the dentifrice manufacturers' section of the London Chamber of Commerce. This is a tax upon health and it is even more anomalous when one considers that toothbrushes are not subject to Purchase Tax.
I introduce that aspect only to show that the 15 per cent. and 10 per cent. rates which are under discussion are not the only ones in which there are anomalies. If one looked at Purchase Tax entirely from a social viewpoint, one would have to bring in the whole spread of items covered by the tax and, indeed, other items of expenditure which are still excluded from it.
I agree with the hon. Member for Nottingham, South (Mr. W. Clark) that if one is to reduce taxation by, I believe, something like £73 million, if both the new Clauses were accepted—
§ Mr. Lubbock
Is not £138 million the total amount of taxation raised by the 15 per cent. and 10 per cent. levels?
§ Mr. Clark indicated dissent.
§ Mr. Lubbock
I will accept the hon. Member's figures. At least, it is a large sum. One has to say by what means one would raise this amount of taxation if one agrees with the basic premise that the Chancellor had to bring in another £100 million in this year's Budget. This would have entailed a large increase in the rate of Profits Tax, which is the only suggestion I have heard made from the Labour benches. Certainly, we agree that there are loopholes in our direct taxation system. I should like to see a legacy duty, a gift tax, a proper capital gains tax, and so on, but I do not think that any of these would raise the kind of money which we would lose to the Revenue by accepting the two new Clauses. This is one of the main reasons why we shall vote against them.
If, however, we had that kind of money to give away, there would be more valuable things that we could do with it. We should look, first, at the needy and the enterprising. For example, we should look at those in the lower rates of direct taxation and see whether there are not further concessions which could be given there. We should look at a fuel tax, which would help everybody. We should, perhaps, look—and I am certain that we will be looking later—at shifting some of the burden of rates to taxes. There are a good many other things that we could do with this large sum of money.
If one looked at the situation objectively, I do not believe that one would select these two groups of items—soft drinks and confectionery, and boots, shoes, clothes, and so on—as being the first priority. Admitedly, they cover a wide range of items of everyday expenditure, but so does the 25 per cent. Purchase Tax rate.
In all these matters, as the hon. Member for Nottingham, South has pointed out, there is the question of consumer choice. I happen to buy a new suit only once every three years, although I once had the honour of being called well-groomed by the Daily Herald. [An HON. MEMBER: "That was a reference to the hon. Member's haircut."] It may, indeed, have been something to do with my haircut. It is a question of choice whether I go out and buy a new suit or have an electric cooker. To that extent, therefore, one should not try by the taxation 277 system to control the choice of the consuming public.
We would welcome a spreading of the Purchase Tax network so that we were able to reduce taxation on all the items at present covered. I know that the Government have gone part of the way towards this, but it would be much fairer if one allowed the consumer to have as free choice as possible, with the one exception that there are social items such as toothpaste which should be excluded altogether from the network of indirect taxation. With that one exception, we think that the aim should be the widest possible spread of taxation on consumption at the lowest possible levels.
§ Mr. A. E. Cooper (Ilford, South)
If all the new Clauses we are to discuss today were added together, they would cost between £300 and £400 million a year. The hon. Member for Sowerby (Mr. Houghton) and his hon. Friends know perfectly well that in the economic situation now or in the foreseeable future reliefs to that extent are impossible.
Therefore, we can only assume that all the new Clauses are nothing more nor less than blatant electioneering and designed for no other purpose than to give the country the impression that Conservative Members of Parliament—I am happy to hear that the Liberal Party proposes to do the same—who vote against the new Clauses are doing great damage to the country and failing to give necessary reliefs.
§ Mrs. Slater
Does not the hon. Gentleman realise that my hon. Friends were voting and speaking against this Purchase Tax not in the pre-election year but in the year following the last General Election? Therefore, his attempt to show that this is merely electioneering falls to the ground. It is sheer bunkum.
§ Mr. Cooper
The hon. Lady may be as abusive as she likes, but she knows that the hon. Member for Sowerby, if sitting on this side of the House as a member of the Government, would resist every new Clause on the Notice Paper tabled by the Opposition. The hon. Lady knows, too, that, far from calling for reductions in tax, he would be doing what Sir Stafford Cripps and Mr. Gaitskell had to do under the Labour Govern- 278 ment, which was to put taxation up all the time.
§ Mr. Houghton
The hon. Member is quite wrong in his assumption. If I were sitting on the Government Front Bench now, some of the new Clauses would not have to be resisted because they would be in the Bill.
§ Mr. Cooper
As a piece of political sophistry, that will probably go down in history. If the hon. Gentleman is really telling the Committee that, he and his party must tell the country what taxation reliefs that we have given would not have been given by them. What would he have substituted for these reliefs? He cannot have his cake and eat it.
The hon. Gentleman knows perfectly well that taxation is already at a very high level and that to put it much higher would seriously undermine incentive and effort and do great harm to our industry and export potential. These are the facts of life. It does hon. Gentlemen opposite no good in the country, having accepted an increase in taxation this year of about £100 million to keep the ship going on an even keel, to come here now and bring forward new Clauses proposing reductions in taxation of £300 to £400 million a year. Who do hon. Members opposite think they are kidding? They are certainly not kidding the electors. I promise hon. Gentleman opposite that after the General Election they will still be sitting on the opposite side of this Chamber.
Let us ask a few pertinent questions of the hon. Member for Sowerby and his right hon. Friend the Member for Batter-sea, North (Mr. Jay). These new Clauses demand £300 to £400 million of new taxation. How will they find it? This question must be spelt out if necessary in capital letters until the right hon. Member for Huyton (Mr. H. Wilson) and his hon. Friends honestly tell the country how they propose to find the money. Will they find it by borrowing?
During the proceedings on last year's Finance Bill the hon. Member for Houghton admitted that the Labour Party would find a lot of these things from extra borrowing. He had better have a word with his right hon. Friend the Member for Battersea, North. Does he not know that an additional £300 to 279 £400 million of new borrowing would be highly inflationary? What would he do in that situation about old-age pensions, Service pensions and so on? Would he propose new increases in pensions to meet the inflationary situation which the Labour Party's monetary policy had created, or would hon. Members opposite do what they did between 1945 and 1951—rat on the old-age pensioners and give them nothing? The hon. Member for Coventry, East (Mr. Crossman) is on the record over and over again as saying that the Labour Party cheated the old-age pensioners when they were in power. So perhaps we may assume that the Labour Party will have learnt the lessons of 1945 to 1951 and may not go in for a high measure of new borrowing because of its very serious inflationary possibilities.
That being so, what will hon. Gentlemen opposite do about it? Will they raise £400 million in new taxation? Will they increase Income Tax? Will they increase Purchase Tax, the very thing they now want to reduce? Will they increase taxation in other fields? Hon. Gentlemen opposite must realise that they will have to find the £400 million. No one will wave a magic wand and make the £400 million come in through the window. It has to be found either by borrowing or by new taxation. There is no other way in which it can be done except one, and that is to increase the national growth above its present figure of 4–41½ per cent. Are hon. Gentlemen opposite seriously telling the country that if they were in power they could increase the national growth beyond 4½ per cent.
§ Mr. Cooper
The hon. Lady the Member for Cannock (Miss Lee) says "Yes", but she should consult her friends in the T.U.C. who are members of the N.E.D.C. and co-operating with the Government in this matter, who know perfectly well that at the moment 4–4½ is the only sustainable percentage of growth. But this is the only means by which the extra money which is necessary could be obtained. I would remind the hon. Lady that the 4–4½ per cent. growth with the taxation which it will inevitably bring to the Exchequer is already bespoken by the far-reaching 280 development programmes which the Government have introduced for schools, housing, hospitals, universities, roads and so on. Hon. Gentlemen opposite have admitted on no fewer than three occasions in the last few months that they could not do better than we are doing about houses, schools and hospitals. Therefore, where is the great extra growth to come from?
§ Mr. Cooper
I really do not know what that was intended to mean. We were always told "Nationalise the main industries, and you will get magnificent labour relations." So they were nationalised. However, with the exception of the coal mining industry over the last year or two under the very expert administration of Lord Robens, we have had more strikes in nationalised industry than in any of the private sectors of industry. So we do not seem to be getting the magnificent labour relations which hon. Members opposite thought we should.
§ The Temporary Chairman (Sir John Arbuthnot)
The hon. Gentleman seems to be getting rather far away from the subject of the Clause.
§ Mr. Cooper
I was provoked, Sir John. I apologise.
I should like to say a word directly about the two Clauses that we are considering. Let us not deny that a case can be made out for every single one of the new Clauses individually. The basic reason is that all taxation is bad. Everyone dislikes it and if we could do without any we should do so. But we must have revenue. The State has to be run and a very large sum of money is needed for it. But it is sheer irresponsibility of the highest order on the part of the Opposition to come here today and possibly tomorrow proposing new Clauses which would cost the country between £300 million and £400 million a year without telling us how it would raise the money.
§ 5.30 p.m.
§ Mr. Merlyn Rees (Leeds, South)
As the son of a former miner I am sorely tempted to follow the hon. Member for Ilford, South (Mr. Cooper) into the rather foolish argument that he put about the coal industry, but as that would be out of order I will hold myself back. It was an error in his argument equal to his confusion when he ignored the purpose of taxation as being for revenue raising and took the only purpose of indirect taxation as being to control the economy.
The hon. Member also overlooked the fact that the economic situation today is completely different from the economic situation facing us from 1945 to 1951 and that what we need today to obtain a growth of 4½ per cent., which would be considerably greater than the growth we have had in the last 12 years, is completely different from the sort of policy the Labour Government had to follow between 1945 and 1951.
The growth in that period was considerably greater than 4½ per cent. I concede that it was easier to get that sort of growth then because it was following a period of war and the figures are not strictly comparable. It would be better for both sides to get back to the situation as it is today. In supporting this Clause, I want to concentrate my remarks on a constituency interest in soft drinks and ice cream.
I have received representations from a soft drinks firm on behalf of both management and employees. It has been borne upon me by this firm, which is in my constituency, that since the imposition of this tax the turnover is the same but nevertheless 15 per cent. of the revenue has to be paid to the Government. The firm is having to economise on staff and if this financial year is as bad as the last it will have to shut down. For that reason, I bring the matter to the notice of the Committee. The firm tells me that the last financial year was the worst for 60 years.
The director of the firm concerned has given me information concerning five other firms in the wider neighbourhood outside my constituency which have had to shut down. It is surely, therefore, relevant for us to look at this tax to see if it is causing the situation. From 282 my own investigations I see that there are other reasons for the problems in the soft drinks industry. There has been a growth of what the economist would probably call "economies of scale"—this sort of drink can be turned out more cheaply by larger firms like Schweppes.
I believe, however, that it is not only economies of scale but the tax which is adversely affecting small firms. While I believe it to be inevitable that there should be a growth of large firms in many sectors of the economy, I still believe that there is a place for the small firms in this sort of industry. I put it to the Government that there is evidence that the 15 per cent. tax on soft drinks has adversely affected small firms to a degree where they will be unable to carry on in my constituency.
In the same way it has been borne upon me by small ice-cream men in my constituency that the 15 per cent. tax is affecting them adversely as well. They have put several reasons to me. They say that they now have to keep detailed records. I think that the Government will concede that this may well be quite an imposition on a small firm. They say that this is a constant worry to them and raises many problems. They claim that, because of this, more and more traders are being forced to give up producing their own ice cream and to buy it from wholesalers.
Sometimes I feel that this is what one might call an aesthetic question as well. Wherever one goes to eat, one gets these days the same sort of stuff which is called ice cream. Perhaps this is a sign of growing old but I always feel that the ice cream was better when I was young. Indeed, however, there is some truth in that for it was then made on a smaller scale and not by two vast firms. However, some of the small ice-cream producers in my constituency are being cut out by large-scale producers because of the imposition of taxation.
They go further, however. They say that by the very nature of their trade external influences outside human control affect them adversely. The more I think about that phrase the more stilted it seems, but it was put to me in those words, which might almost have come from a national organisation. However that may be, the tax is affecting them adversely—and not 283 for the high-falutin' reasons put by the hon. Member for Ilford, South, making comparisons over 20 or 30 years, or for those put by the hon. Member for Nottingham, South (Mr. W. Clark).
I have put simple constituency points. The imposition of the tax is adversely affecting small soft drink firms and small ice-cream producers and I am still sufficiently old-fashioned to regret seeing small firms in this kind of industry going out of business, just as I was pleased to see the small coal mining concern going out of business because it simply was not relevant in the modern coal industry. I have my regrets at what is happening in the soft drink and ice-cream industry. I hope that the right hon. Gentleman can offer some sort of amelioration in the near future.
§ Mr. John Farr (Harborough)
I want to follow up what the hon. Member for Leeds, South (Mr. Merlyn Rees) has just said, especially about soft drinks. One of my constituents has written to me in his capacity as vice-president of the National Association of Soft Drinks Manufacturers and has pointed out to me that since Purchase Tax was imposed on soft drinks the number of firms going bankrupt in that industry has considerably increased.
§ Mr. Merlyn Rees
On a point of order, Sir John. I thought that I heard the hon. Member giving me a title in the icecream industry that I certainly do not hold.
§ Mr. Farr
I was saying that I had received a letter from the vice-president of the National Association of Soft Drinks Manufacturers. I am sorry if my elucidation is not what it should be. The letter says that in recent years, since the Purchase Tax was put on soft drinks, quite a number of firms have been going out of business. He has written to me specifically in connection with this Clause.
I must confess that I feel that as soon as possible this tax on sweets, soft drinks and ice cream should be completely abolished but I appreciate that the moment is not opportune. I would like to read an extract from the letter show- 284 ing that the Clause would in no way solve this problem. It says:I would like to bring to your notice that it would be extremely difficult to ensure that such a reduction, which would amount to only a fraction of a penny on the normal family size bottle of soft drink, could be passed on to the consumer. A reduction in purchase tax that could not be passed on to the consumer would, in my opinion, be undesirable.He feels that the only eventual solution is complete abolition of the tax.
I join in the questions which have been addressed to the Opposition Front Bench, notably by my hon. Friend the Member for Nottingham, South (Mr. W. Clark) and my hon. Friend the Member for Ilford, South (Mr. Cooper). Exactly where would the Opposition find the £140 million involved in these two Clauses? Exactly how would they find the £300 million or £400 million which is the total cost of the concessions which they have tabled? Does not the hon. Lady the Member for Stoke-on-Trent, North (Mrs. Slater) remember that when the Socialists were in office the maximum rate of Purchase Tax was 100 per cent., and that since then it has been reduced to only 25 per cent? If she remembers that, it is useless for her to say that the Government have done little or nothing in that respect.
§ Mrs. Slater
We recognise that we are living in completely different circumstances from those which then obtained.
§ Mrs. Slater
Not because of the Tories. We could be living under much better conditions if we had had a Labour Government instead of a Tory Government for the last 12 years.
§ Mr. V. Yates
Like his hon. Friends the Member for Nottingham, South (Mr. W. Clark) and the Member for Ilford, South (Mr. Cooper), the hon. Member for Harborough (Mr. Farr) is living in the past. The hon. Member for Nottingham, South was so much in the past that he insisted on calling you "Mr.", Sir John. He charged hon. Members on this side of the Committee with a purely electioneering approach. He must be ignorant of the 285 fact that we have raised these questions of Purchase Tax for years.
Hon. Members will remember that when Lord Amory was the Chancellor of the Exchequer, we constantly questioned him about the Purchase Tax on pots and pans. I said that I was prepared to challenge him to a competition on the use of the rolling pin, which is one of those domestic articles which the working classes have to purchase. I said then and I say now that there are many working people, old-age pensioners in particular, who use a bottle for a rolling pin because they cannot afford a Pyrex rolling pin.
I was surprised when the hon. Member for Orpington (Mr. Lubbock) spoke about helping the needy. I would have thought that a very good way of helping the needy was to reduce the Purchase Tax on pots and pans, especially those which old-age pensioners find it difficult to replace.
Over and over again, when we have proposed Amendments to Finance Bills, hon. Members opposite have said that we have not worked out the cost of our alternatives. One hon. Member opposite frightened me when he talked about my hon. Friend the Member for Sowerby (Mr. Houghton) sitting on that side of the Committee—
§ Mr. Yates
—and possibly bringing in a Budget like this. I am sure that if my hon. Friend were on that side of the Committee, Amendments like these would not be proposed, because they would not be necessary.
Whatever may be thought about a uniform rate of tax, I should have thought that we were reaching a stage when we could abolish the taxes on some of the ordinary articles which the poorest section of the community uses every day. I was very sad when the Government decided to impose a tax on confectionery. It is very hard on the community as a whole and especially on the children and I cannot imagine such a proposal being put forward if there had been a Labour Government. If it had been, I am sure that it would have been strongly resisted.
286 What disturbs me in our debates on Purchase Tax is that while the Government bring in a Budget providing a general framework, before we state the case for our Amendments we are expected to say how we would alter that general framework. We are not responsible for the Budget and in our Amendments all we do is say what we think should be done in certain respects. The speech of the hon. Member for Ilford, South was old fashioned and was merely an attempt to tell us how he proposed to fight the election. I am certain that it will carry no weight. The working people are well aware of the burdens of Purchase Tax on the everyday items which they have to buy.
I have much sympathy with the hon. Member for Kidderminster (Sir G. Nabarro) who has constantly criticised Purchase Tax anomalies. I am disturbed that we do not have a proper investigation of these anomalies. I gave an example of one of them last year, as the Chief Secretary will be aware. I said that I could not understand why food should be included in the 15 per cent. Purchase Tax on soft drinks and confectionery. It applies to chocolate biscuits. I need not go over the ground again, but I explained how if the chocolate were on top of the biscuit, the tax was imposed, whereas if the chocolate were in the middle of a sandwich, there was no tax. That is idiotic, but that is the kind of anomaly with which we have had to deal, and there are many other examples.
I cannot appeal to the heart or the head of the Chief Secretary who last year accused me of being excited and heated about this matter. The right hon. Gentleman then said:This is a quite complicated problem which my hon. Friend the Economic Secretary has already discussed with representatives of the trade. The problem, briefly, is that there is a kind of chocolate biscuit sold in sweet shops which is very close to chocolate bars, with a different filling. There is also a type of chocolate biscuit which one buys at grocery shops and which to all intents and purposes is a biscuit. The difficulty… is to get the definition right. If we can find a definition with which the trade agrees and which we think workable… we shall be able to make some progress, but I do not dispute that the hon. Member for Ladywood has made a point."—[OFFICIAL REPORT, 28th May, 1963; Vol. 678, c. 1206–7.]287 What did he do about the point that I made? That just about takes the biscuit.
Later the Economic Secretary wrote to me and said:The simple point is that we have tried to be of assistance to the trade in general, and Customs have conducted negotiations on my authority with the trade associations to this end. Although agreement was reached, it is not apparently acceptable to Messrs. Mac-donalds…Because one firm out of many engaged in the trade objected, it was impossible for the Government to accept a definition which would remove a burden which housewives have to bear when they purchase these items.
I raised this matter a year ago, and I was supported by other hon. Members. We gave facts and figures to show the effect of this tax on the industry, and today hon. Members have referred to factories which make soft drinks going bankrupt. The Committee must take notice of all these matters. As a back bencher I have no control over the framing of a Budget, and it is not for me to say that one must do A, B, C and D before one can do E.
I am not making an electioneering speech. I am so opposed to Purchase Tax that if I had my way I would remove it altogether. I do not agree with those who say that all taxation is bad. We cannot live without taxation, and not all taxation is bad. What is bad is the method adopted. If the methods adopted by the Government impose heavy burdens on old-age pensioners and the less forunate sections of the community, the Government ought to consider ways of removing those burdens.
I should not have thought that it was beyond the bounds of possibility to abolish, or at any rate to reduce, the burden of tax on food and drink. I hope that the Chief Secretary will make one more attempt to see whether there is any prospect of the ordinary people in this country being able to enjoy better standards of living than they do now.
§ Mr. Raymond Gower (Barry)
The hon. Member for Birmingham, Lady-wood (Mr. V. Yates) made an important point when he said that his party was not responsible for the Budget, but I am sure that he will agree that proposals put forward for amending the Budget must be 288 viewed in the context of the country's current financial and economic position, and not in isolation or in the context of a Budget introduced two or three years ago.
Whatever the hon. Member for Sowerby (Mr. Houghton) may say, I think that these proposals have been put forward at a singularly inopportune time. It is not often that one finds so many economists, financial commentators and writers in agreement to the extent to which they have been this year. They agree that if there is a danger at present, it is not the danger of too little money, but rather too much, and that my right hon. Friend has perhaps not done enough to reduce the pressure.
Hon. Gentlemen opposite suggest that we should increase the pressure by about £100 million, or, as one of my hon. Friends said, by about £130 million. My hon. Friend the Member for Nottingham, South (Mr. Clark) was right when he said that if they make such proposals they should also make proposals for finding the money from other sources. If they do not, one is left to assume that they are asserting that we can let the economy run at a greater rate than it is doing now. Apparently they are prepared to take greater risks.
On many occasions hon. Members opposite have said that they are opposed to a policy of stop-go. The greatest danger lies in increasing the pressure on the economy by the amount suggested by hon. Gentlemen opposite, and I think that the hon. Member for Sowerby at least has an obligation to show why, in those circumstances, he has added his support to these proposals. He suggested that if his party were in power he would be able to find alternative sources of taxation to provide this money. That could be the answer, but he did not specify those sources.
The hon. Member suggested a tax on gambling as a source of revenue, but there is a good deal of evidence to show that the amount of money which could be recovered by a tax on gambling is far more limited than we once thought. The hon. Gentleman did not say whether he would bring in any form of indirect taxation. He did not suggest a tax on services. In fact, he made no attempt to elaborate his remarks, which he must do if he wants the Committee to accept 289 his contention that other sources of taxation are available.
§ Mr. Gower
The impression created by the proposals put forward by hon. Gentlemen opposite is that they are prepared to take this extra risk and let the economy run a little faster. Indeed, that suggestion has been made in many contexts. Hon. Gentlemen opposite have been pressing for vastly increased expenditure in many fields. We are, therefore, entitled to say that my right hon. Friend's decision was obviously a matter for very fine judgment. His judgment might be proved to be wrong, but I do not think that we should increase the risk of having to return to restraint and stop-go, which have been condemned on many occasions.
I do not think that at this stage we should increase the amount of money available for consumables. Instead of concentrating on making money available for products of this kind, the Government, rightly, have concentrated on making money available for the improvement of the capital resources of the country.
§ The Temporary Chairman (Sir John Arbuthnot)
Order. I think that we ought to return to the new Clause.
§ Mr. Gower
That point was made earlier, but I shall not pursue the matter any further.
I hope that the hon. Member for Sowerby, the right hon. Member for Battersea, North (Mr. Jay) and the hon. Member for Cardiff, South-East (Mr. Callaghan) will advise their colleagues that, in the context of our present economic position, the Government would be unwise to make the concessions which are being asked for, and that they will not press this matter to a Division.
§ 6.0 p.m.
§ Mr. A. V. Hilton (Norfolk, South West)
I support what my hon. Friends have said on the two new Clauses. From personal experience I have proved that Purchase Tax on the articles that we are 290 now discussing hits hardest the old, the sick, the unemployed and the lowest-paid workers. I have the honour of living in a cottage, among my constituents, many of whom are old, sick or unemployed, and I know what an added burden is imposed on them when they have to replace furniture that has become broken over the years, or clothing or shoes which have worn out. The 10 per cent. Purchase Tax on these essentials—they are not luxuries—hits very hard those persons to whom I have referred.
Many hon. Members opposite have said that before the Committee accepts the new Clause my party ought to say where the money will come from. I would remind them that if, four years ago, instead of handing £83 million to the surtax payers—about 2 per cent. of our population—the Government had knocked off Purchase Tax, part of this problem would not now exist.
I want to speak mainly of a constituency issue, which I have raised not merely this year, because it is election year, but ever since the tax was first imposed. I refer to the 15 per cent. tax on blackcurrant juice, or on the manufactured Ribena. I, too, am sorry that the hon. Member for Kidderminster (Sir G. Nabarro) is not here, because last year he and I joined forces. It was the first time that we have ever agreed on anything in this House. He, too, thought that this was a bad tax. Since then I have tabled a number of Questions upon this subject to the Minister of Agriculture and also to the Chancellor of the Exchequer.
The last Question that I put to the Chancellor asked how much revenue the tax had brought in. The Chancellor was unable to give me an answer. He said that the Inland Revenue lumped a certain number of taxes together, and implied that the revenue from this tax was insignificant. This is a serious problem for many people in Norfolk and other agricultural areas who grow blackcurrants. Since the imposition of this tax there has been a serious deterioration in the industry.
Another of my Questions to the Minister of Agriculture asked what acreage of blackcurrants was cultivated before the imposition of the tax, as compared to the acreage cultivated afterwards. He had to agree that the acreage had been 291 considerably reduced. This is not surprising, because last year, in particular, many of the smaller blackcurrant growers in Norfolk were unable to gather their crop, because the trade was not good enough. Although this is a valuable fruit crop many acres of blackcurrants were allowed to rot on the bushes.
There is a difference between the small horticulturist, or the farmer who grows a few acres, and the big farmer, to whom the loss of a few acres of blackcurrants does not matter, because he has eggs in other baskets. The small horticulturist often relies to a large extent on his blackcurrant crop. I am glad to see that the Chief Secretary is listening so intently. The imposition of this tax has hit them hard. It has had a serious consequence not only for the grower, but also for the manufacturer, who has had to increase the price to cope with the 15 per cent. Purchase Tax.
More important still is the effect of the tax on the very young and the very old—because blackcurrants have a tremendous medicinal value. People who live in rural areas swear by the value of blackcurrant juice for sore throats, colds, and that sort of thing. Owing to the increase in Purchase Tax on this product both the very old and the very young have been unable to have as much of this good medicine as they would have liked.
I hope, therefore, that the Minister will give serious consideration to this matter. Last year this was a non-party matter, raised not merely because there was an election in the offing, but because of genuine concern among hon. Members' constituents. The Clause that has been moved reduces to 7½ per cent. the Purchase Tax on goods now subject to a tax of 15 per cent. Personally, I would like to see Purchase Tax removed completely from blackcurrant juice, because it is a very valuable product for the small horticulturist, besides being of medicinal value. However, I would be prepared to meet the Government half way if they would agree to reduce the tax to 7½ per cent. I hope that the Minister will seriously consider the suggestion.
§ Mr. Nigel Birch (Flint, West)
The hon. Member for Birmingham, Lady- 292 wood (Mr. V. Yates), as far as I could make out, challenged my right hon. Friend to single combat with a rolling pin, a very bold move for a pacifist. I was impressed by that.
§ Mr. Birch
The hon. Member's pacifist conscience is clear.
The hon. Member said something with which I entirely agree. He said that his party does the same thing every year. What it does do every year is to say that there is grave danger of inflation and then produce a series of vote-catching Amendments which would enormously increase the risk of inflation. I hope that my hon. Friends will forgive me if I make a suggestion which might help the Labour Party. I believe that it would have a positively electrifying effect on the country if anybody on the Opposition Front Bench, when discussing finance, were ever honest.
§ The Chief Secretary to the Treasury and Paymaster-General (Mr. John Boyd-Carpenter)
I think that I can best be of service to the Committee if I seek to reply to one or two of the points affecting individual commodities which have been discussed in the debate and then come back to the main theme of the two new Clauses which we are discussing together I should like, first, to say that this is to my recollection the first Purchase Tax debate in which my hon. Friend the Member for Kidderminster (Sir G. Nabarro) has not taken part, and I am sure that the debate has lost a good deal in liveliness and knowledge from my hon. Friend's absence. I think that hon. Members on both sides of the Committee regret that absence and its cause.
May I take fairly quickly one or two of the individual points? In view of the serious threat which, as my right hon. Friend the Member for Flint, West (Mr. Birch) pointed out, the hon. Member for Birmingham, Ladywood (Mr. V. Yates) appears to be offering to me—although I thought that it was much more a threat to repeat frequently the tongue-twisting formula "mixed biscuits" than the rougher method which my right hon. Friend suspected—I should 293 like to come to the point about biscuits, because the hon. Member very properly quoted what I said in the debate last year and asked me what had happened.
It might be of help to the hon. Member and the Committee if I told him exactly what did happen. Provisional agreement was reached between the Customs and the trade association concerned, the Cake and Biscuit Alliance, as long ago as last July, and a formula for restricting the tax to the confectionery types of chocolate biscuits was arrived at. But, as I think the hon. Member indicated that he knew, this compromise was vigorously opposed by one major producer in this trade. The Cake and Biscuit Alliance subsequently had a talk with my hon. Friend the Economic Secretary and accepted that in the circumstances the proposal would have to be abandoned.
The position remains as my hon. Friend told the trade association—that the Government would be prepared to consider without commitment any fresh proposals which were put forward with unanimous support. To date, no such proposals have been put forward.
§ Mr. V. Yates
It was clear that the Government were not prepared to accept a proposal with which one firm did not agree. The trade association had, therefore, no alternative, had it?
§ Mr. Boyd-Carpenter
This is a very difficult question of definition, and we can help only if there is general good will in the trade to work a particular line of demarcation. I am again sorry that my hon. Friend the Member for Kidderminster is not here, because he is very good on the type of biscuit which attracts or repels tax. But this proposal could be worked only with the general agreement of the trade, and that agreement was not and is not forthcoming.
§ Mr. Boyd-Carpenter
I think that it has to be fairly unanimous if it is to be fair between traders who may mink that their interests are affected. We are prepared to consider anything generally accepted by the trade.
There has been a good deal of discussion about the effect on soft drinks, 294 ice cream and confectionery of the 15 per cent. rate of tax which is the subject matter of the first two Clauses. Several hon. Members raised the question of a disincentive to consume non-alcoholic drinks. I remind the Committee that in this Bill we are increasing the differential in tax between alcoholic and nonalcoholic drinks by increasing the tax on alcoholic drinks. In so far as there is any force in that argument, it is being diminished.
As to the state of the industry, I agree with one or two hon. Members that it has had certain difficulties, but it is doubtful whether they are much to do with the tax. There has been a concentration of the trade into fewer hands. There has been a move by some of the brewery interests into soft drinks, with fairly large-scale and highly competitive manufacture, and that has resulted in a number of the smaller firms closing down, though it is also a fact that some new firms have started. But there is one significant figure which I can give to the Committee, and that is that the bottling industry says that in 1963 it supplied 12 per cent. more bottles to the soft drinks industry as a whole than it supplied in the previous year.
Confectionery sales have fluctuated, but if one looks at the report of the main companies operating in this field there is certainly very little reason for gloom. Both Rowntrees and Cadbury-Fry—and this should rejoice the heart of the hon. Member for Orpington (Mr. Lubbock)—have shown substantial increases in their profits and in their dividends, and that is the general picture in the confectionery trade.
The ice cream situation is more complicated. I am bound to say that I had some sympathy with the hon. Member for Leeds, South (Mr. Merlyn Rees) when he said that ice cream did not taste as good as it did when one was young. But the Committee will appreciate that it is difficult to distinguish precisely the; effect on the trade of the tax and the effect of the two summers which have followed its imposition.
I will come to my main remarks on the new Clauses. The right hon. Member for Battersea, North (Mr. Jay) was rather anxious that they should not be taken at their face value. He started out by saying that I should refer to the 295 cost, but he said, "This is quite irrelevant because the Clause is simply a vehicle under our rules for a discussion of Purchase Tax generally". Nevertheless, I shall not be deterred from giving the Committee the cost, for this reason: if the new Clause is put forward as a vehicle for discussion, that is one thing, and one may well say that it is a sensible parliamentary expedient, but it would become quite another thing if the right hon. Gentleman led his hon. Friends into the Lobby for the reduction of these taxes, because however much he might seek, with Wykehamist sophistication, to explain what he meant, what he would be doing and would be understood to be doing by our fellow countrymen would be moving to reduce taxation in the shape of Purchase Tax by £112 million in a full year—£27 million in a full year on the first new Clause and £85 million on the second.
This is a bigger decrease in revenue on a full-year basis, than the amount likely to be obtained from the increased taxes on alcohol and tobacco. I think that my hon. Friends were entitled to challenge the right hon. Gentleman, certainly if he intends to divide the Committee on the new Clause. In doing so, is he contesting my right hon. Friend's economic judgment that the Budget this year should provide about £100 million extra in taxation? His hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) last week appeared so to do. But the right hon. Gentleman accepted it. If he does, and if he suggests that nonetheless there should be a counter movement to reduce taxation by £112 million, what are his proposals for making up that deficit?
§ Mr. Jay
Three proposals: first, a real capital gains tax, instead of the mockery which the Government have provided, and which, if it corresponded with the present American capital gains tax, would in itself raise more revenue than the whole of the taxes which we are discussing; secondly, a reasonable rate of Profits Tax on distributed profits; and, thirdly, an end to the gross evasion of death duties which is going on.
§ Mr. Boyd-Carpenter
I am obliged to the right hon. Gentleman for being a little plainer than he was—and I mean 296 that in no personal sense. But, as he appreciates, whatever the merits of his proposals, we may ask whether he thinks that the Labour Party wealth tax could be introduced in time to affect the revenue this year. Does he think that a capital gains tax, if that be the alias under which it will be disguised, could produce new revenue during the course of the current year? The right hon. Gentleman knows that none of the examples which he has given could affect the revenue in this year.
§ Mr. Boyd-Carpenter
No. What I am saying is that these proposals are, first, in themselves nonsense, and, secondly, irrelevant nonsense, because, as the right hon. Gentleman knows, none of them, if it produces revenue, could produce it in the year in which these new Clauses would deprive us of the revenue. Therefore, the right hon. Gentleman, who has some experience of Whitehall, knows that the three examples that he gave—it is very interesting to have them; the right hon. Gentleman may well regret having given them; I hope that he will give us some more—are not an answer to my question, because they could not be in this year.
It is now plain that, if the right hon. Gentleman leads his hon. Friends into the Lobby in support of the Clause, he is doing so to reduce the amount overall taken in taxation this year and is disregarding the inflationary effects of so doing. It is just as well that we in the House of Commons and those outside should note that.
Then the right hon. Gentleman gave an extremely selective account of the history of Purchase Tax. He referred, perfectly truthfully, to its increased scope in recent years, though I thought that the hon. Member for Sowerby (Mr. Houghton) when he intervened in the speech of my hon. Friend the Member for Nottingham, South (Mr. W. Clark), seemed to have some sympathy with an increase in its scope. Indeed, the hon. Gentleman offered some imprecisely stated suggestions for its further extension.
297 The right hon. Gentleman was very excited about the alleged increase in the scope of Purchase Tax. He did not think to mention—indeed, this was not mentioned until my hon. Friend the Member for Harborough (Mr. Fair) did so—that over these years there has been a very substantial reduction indeed in the rates of Purchase Tax. When the right hon. Gentleman left office, the maximum rate was 100 per cent. Today, it is 25 per cent. It is perfectly true that the tax has a wider scope, but it also has a very much lower rate.
Those of us who have studied these matters, this includes the right hon. Gentleman—know full well that this tax, if it is at lower rates and is more widely dispersed, has a very much less distorting effect on industry and production than very high rates, with all the anomalies that they create between one Purchase Tax class and another. The right hon. Gentleman's somewhat partial account of the evolution of Purchase Tax failed to bring out the great improvement in the shape of the tax which has taken place over the years.
I was very surprised at the hon. Member for Southampton, Itchen (Dr. King), because he seemed to think that it was a rather bad thing that at the same rates of Purchase Tax the yield was rising this year as compared with last year. I ask the hon. Gentleman to reflect. Surely this is a good sign. It is a sign of expansion, of more money in the hands of the people to spend on the articles covered by Purchase Tax. It is also a very clear indication, from the point of view of the industries whose products are subjected to Purchase Tax, that the tax is not having an inhibiting effect on the expansion of the consumption of their products. Therefore, I join issue with the hon. Gentleman. I think that the fact that the same rate of tax produces a substantially increased yield is a good thing in itself and a good indication of what the expanding economy under this Government is doing.
The right hon. Gentleman returned to his hobby-horse of the percentage taken by direct and indirect taxation. He was shot down in the Budget debate by my hon. Friend the Financial Secretary, who showed that the proportion taken in indirect taxation today was lower than it 298 was in 1951 under the Labour Government. However, the right hon. Gentleman came back today and said that my hon. Friend the Financial Secretary was able to show that only by excluding the National Insurance contribution.
I will not waste the time of the Committee on this, but I think that some of us would have some doubts of the place of the National Insurance contribution in any system of taxation and, indeed, about the relevance of mentioning it without mentioning the great increase in National Insurance benefits which has accompanied it.
However, I will give the right hon. Gentleman the point—only to show him that he is still wrong. If the employee's National Insurance contribution is added—this is what the right hon. Gentleman is after, I think; the employer's contribution is obviously in a different category for the purpose of this argument; I am sure I carry the right hon. Gentleman with me on that—in 1951, adding the employee's contribution to indirect taxation, the proportion taken was 50.4 per cent. In the latest year for which we have figures—1962—it was 48.4 per cent. Therefore, even giving the right hon. Gentleman what I think is a false argument, he still remains in error.
§ Mr. Boyd-Carpenter
The right hon. Gentleman cannot get away with that. The whole point of his argument was that we were piling what he called regressive taxation on to those unable to afford it. From that point of view, even if there be an argument about the employer's National Insurance contribution, it is an arguable proposition, though since we have had the graduated scheme even that has lost its force. The right hon. Gentleman cannot add the employer's contribution any more than any other element in the costs of industry generally.
The right hon. Gentleman also said, in his airy way, that he did not accept that Profits Tax could not have been brought in this year in time to make up 299 to the loss of revenue. Incidentally, the poor old Profits Tax is being used twice over, because first the right hon. Gentleman wanted to use it instead of the increase in the duty on alcohol and tobacco. Now he wants to use it instead of a decrease in Purchase Tax. It is no good the right hon. Gentleman saying that he does not accept it, unless he is prepared to say that what he is urging is retrospective taxation. If he does not do so, the yield of an increase in Profits Tax capable ultimately in a full year of producing the £100 million or so concerned would be £4 million in the current year. Therefore, the right hon. Gentleman is again just plain wrong.
Then the right hon. Gentleman referred to exports lagging behind, when in the first quarter of this year they were at a record level. Then he said that a Labour Government, if we had such a strange anomaly again—
§ Mr. Boyd-Carpenter
I would not be so sure about that, if I were the hon. Gentleman. The right hon. Gentleman said that a Labour Government would remove from the Purchase Tax certain articles now covered by it. That seemed to be plain contrary to what the hon. Member for Sowerby said in his intervention about increasing the scope. I was reminded of a parody of the old poem:Two voices are there; one is of the deep;And one is of an old half-witted sheep…And Labour, both are thine.We come back to the question whether this proposal is put seriously in the circumstances of this year to reduce the revenue from Purchase Tax on a full year basis by £112 million. Either that is put forward seriously to the country, with right hon. Gentlemen saying that they accept the consequences to the economy—that is not the line they have taken so far in this debate, and to his credit the hon. Member for Cardiff, South-East has not taken it—or they are saying that they attach such priority to a reduction in the Purchase Tax that they would impose some other taxation effective in this year. They have not told us of any taxation effective in this year which they would seek to impose.
We are, therefore, left with the clear indication that the attitude of right hon. 300 and hon. Members opposite is of such horrifying irresponsibility that I hope that people outside will note it.
§ 6.30 p.m.
§ Mr. Houghton
Hon. Members opposite have said very little about the merits of these two new Clauses. Until the Chief Secretary spoke their criticism was on two main grounds: first, that the proposals we were putting to the Committee were in marked contrast to the levels of Purchase Tax which existed when Labour were in office; and, secondly, on general economic and revenue grounds.
The Chief Secretary referred to some of the detail raised by my hon. Friends in criticism of the two rates of Purchase Tax. Clearly, my hon. Friend the Member for Birmingham, Ladywood (Mr. V. Yates) was not challenging the right hon. Gentleman to a duel with rolling pins, but criticising him for not yet having found an intelligent and acceptable definition of a chocolate biscuit. I said a year ago that one could not have much confidence in a Government which could not define a chocolate biscuit. To my astonishment, I found that this had been included in the Sunday Times' sayings of the year, which showed that it had some point.
The Chief Secretary has confessed that he has still not found his way out of this difficulty. It may be due to some awkwardness in the trade, or perhaps that the Government introduced a tax into this sphere without making sure beforehand that they could define what it was they were taxing. However, that difficulty still remains.
Our main criticism of the extension of Purchase Tax several years ago was that it moved into the realm of food on the one hand and, on the other, that it extended Purchase Tax to more necessaries, including clothing. Whatever comments I have made about the use of indirect taxation must not be regarded as meaning that all I have in mind is the extension of the existing field of indirect taxation. One form of indirect taxation can be substituted by another. The area of indirect taxation can move with the times. It can change according to the pattern of public expenditure and all sorts of possibilities open up when 301 a future Chancellor comes to consider present trends.
When I mentioned gambling it was not to suggest that all the money requisite to meet these two new Clauses could be obtained from a taxation on gambling, but gambling is not the only possible addition to the realms of indirect taxation. There are others.
§ Mr. Houghton
I will not stop to define them. [Laughter.] Obviously, there are others and anyone can think of them. What I am saying is that as the pattern of expenditure changes undoubtedly the pattern of indirect taxation will change with it.
My hon. Friends are bound to agree that in present circumstances no Chancellor could manage without a substantial amount of indirect taxation. That goes without saying. What the proportion in relation to direct taxation should be is a matter for consideration. At the same time, none can feel satisfied about the present proportion of indirect taxation to the total revenue so long as there are loopholes, leakages, shortcomings and inadequacies in direct taxation. Let us get direct taxation right first and then is the time to consider what part indirect taxation shall play.
If we are to revert in our discussion to conditions of money years ago, let me remind the hon. Member for Nottingham, South (Mr. W. Clark) that at the time the Labour Government were leaving office they had to face the painful and tragic necessity of accommodating within public expenditure an enormous additional burden for rearmament directly resulting from the disturbing development of the cold war. That had to be brought within the scope of expenditure at a time when great social changes and additions in social security were being made and when we were engaged in a long and painful struggle for economic recovery.
There is simply no comparison between the circumstances in which we had to levy Purchase Tax then and now. We had to accommodate it soon after the end of the war, when we thought we had dispelled fear from the world and the risk of a further war. We had to 302 accommodate no less a defence programme—
§ Mr. Houghton
I wish that the hon. Member would hold his horses for a moment. He may be Chairman of the Conservative Party Finance Group, but he has no need to behave like a jack-in-the-box.
I was saying that we had to bring within the scope of budgetary provision a defence programme which was then costing about 11 per cent. of the gross national product. It is costing not very much less now. It was heavy to bear at that time, particularly when so much was needed for the economic recovery of the country and our social progress.
§ Mr. Houghton
I am dealing with a point which the hon. Member for Nottingham, South himself raised. If he will listen to me I will later gladly give way.
I was pointing out that Purchase Tax was being levied then as a curb on consumption. It was an economic and not a revenue weapon. It was necessary to impose purchase tax to provide the essential discouragements on consumer expenditure—when there were too few goods being chased by too much money.
§ Mr. W. Clark
A new angle appears to be coming into the picture now. The hon. Gentleman is saying that when the Labour Party went out of office they had to increase Purchase Tax to 100 per cent. because of the rearmament programme due to the Korean War. Accepting that, the six years of Socialist planning, resulting in 100 per cent. Purchase Tax, still left this country in 1951 practically broke.
§ Mr. Houghton
The hon. Member's intervention gave the Committee not only a distorted but an offensive description of the six years of Labour Government. Cannot hon. Members opposite see the conditions under which the Labour Government were labouring at a time of economic recovery? There is surely no possible value now in comparing conditions which exist today with conditions of Purchase Tax levied at high rates 15 years ago.
§ Mr. Bruce Millan (Glasgow, Craigton)
When speaking of the levying of a purchase tax of 100 per cent. in 1951, the matter should be put in its right perspective by reminding the Committee that as recently as 1958—after seven years of Conservative government—the top rate of Purchase Tax was still 90 per cent.
§ Mr. Houghton
I want now to deal with the second main ground on which these two new Clauses have been opposed. The Chief Secretary had a good deal to say on this theme. He said that these Clauses are inconsistent with the general economic and revenue requirements of this year. We have been challenged by various hon. Members opposite to say where, if we reduce Purchase Tax as is here proposed, we should go for additional revenue. The hon. Member for Ilford, South (Mr. Cooper) said that the new Clauses on the Notice Paper, if added together, would probably cost the Exchequer £300 million or £400 million. If we added together all the new Clauses standing in the names of right hon. and hon. Members opposite they, too, come to a formidable total.
When Labour was in office, and the right hon. Gentleman the Member for Woodford (Sir W. Churchill) was putting forward numerous proposals during our Budget discussions which added to a considerable amount of revenue, and was challenged to say where he would go for the money, and whether he realised what the total of those proposals would be, his reply was that these were not aggregations but alternatives. Another reply he used to give was, "When we are in office, and have all the available information before us, we will decide how these things can be done"—
§ Mr. Houghton
It would be possible to give exactly the same reply now to hon. Members opposite, but who has said that it would be necessary to raise additional revenue to meet the revenue reduction resulting from acceptance of these new Clauses? Nobody has mentioned expenditure. Not a single hon. Member has even hinted at the suggestion that expenditure could be reduced by £100 million this year to accommodate the reduction in the revenue—
§ Mr. Houghton
It is not the slightest bit of good hon. Members opposite challenging the Chairman of the Public Accounts Committee to say where he would find the money. Any hon. Member can go to the Vote Office in five minutes, get hold of the Reports of the Public Accounts Committee and find where money could have been saved—and where it could be saved now.
If the right hon. Gentleman will stop the tax drain on company taxation, that will give him one-fifth of what he requires this year, and there are other directions in which expenditure could undoubtedly be curbed. If we look at the grand total of fruitless and futile defence expenditure, hon. Members opposite should surely feel ashamed that it is necessary to keep taxation at its present level at all.
The fact is that our Finance Bill debates are the occasion for ventilating grievances, for drawing attention to anomalies and injustices in our taxation system, and for putting forward possible remedies for what we feel to be wrong. The Committee stage covers not only the Clauses of the Bill, but the new Clauses as well. We must have some scope for debate on the Bill. We must have the right, as representatives of the people, to draw attention to where the shoe pinches, to where we feel that taxation is unfair or unjust, and the respects in which it should be remedied.
If we go into the Division Lobby, as I hope we shall, on these two new Clauses, it does not necessarily mean that we are trying to upset the shape of the Budget—although it is not the Opposition's job to reshape the Budget; that is the job of the Government. If the Committee expresses itself in any particular direction as dissenting from this or that item of taxation in general, what it will be doing is registering an opinion on a matter of great public interest.
That is not electioneering—[HON. MEMBERS: "Oh."] Goodness me, there is no need for us to go electioneering now. The new hon. Member for Faversham (Mr. Boston) brought the message into this Chamber only a few hours ago. On the very day that the Chancellor of the Exchequer was repeating and reaffirming his view that Labour's policies would be disastrous, 305 Faversham was recording its opinion that a Labour Government should succeed the present one. The fact is that hon. Members opposite are doing the electioneering, and very little success is attending their efforts.
The Labour Party has no need to go electioneering in a cynical sense when we are putting to the people constructive alternatives to the policies of this Government—[HON. MEMBERS: "Oh."] In a few moments, when we come to further new Clauses, I will quote to the Committee a sample from the large number of letters I have received in the last few days saying that the one thing the writers look to a Labour Government to do is to stop soaking the poor. Nothing that has captivated, the imagination of the many people who feel oppressed under the present Government more than that phrase, "Stop soaking the poor". These new Clauses are one step in that direction.
The right hon. Gentleman will not be able to chide us with sheer irresponsibility in moving new Clauses of this kind, because if he and his hon. Friends
§ are to put up any show at all in opposition, when they come to this side of the Chamber, they will want to exploit their political advantages, they will want to express the grievances as they see them of the people whom they represent, and nothing should inhibit them from doing so.
§ As for the right hon. Gentleman the Member for Flint, West (Mr. Birch), if he is getting rather tired of the tedious repetition of the same new Clauses coming forward year by year, and of hearing the same speeches from the Chief Secretary year by year, I can only say that he will not undergo that experience again, for the situation will be entirely different next year. He will be making the speeches himself, instead of listening to them. I hope that my right hon. and hon. Friends will support us in the Division Lobby on both these new Clauses.
§ Question put. That the Clause be read a Second lime:—
§ The Committee divided: Ayes 200, Noes 254.309
|Division No. 100.]||AYES||[6.48 p.m|
|Abse, Leo||Davies, Ifor (Gower)||Hilton, A. V.|
|Ainsley, William||Deer, George||Holman, Percy|
|Albu, Austen||Delargy, Hugh||Houghton, Douglas|
|Allaun, Frank (Salford, E.)||Dempsey, James||Howell, Charles A. (Perry Barr)|
|Allen, Scholefield (Crewe)||Diamond, John||Howie, W.|
|Awbery, Stan (Bristol, Central)||Dodds, Norman||Hoy, James H.|
|Bacon, Miss Alice||Doig, Peter||Hughes, Cledwyn (Anglesey)|
|Barnett, Guy||Donnelly, Desmond||Hughes, Emrys (S. Ayshire)|
|Baxter, William (Stirlingshire, W.)||Driberg, Tom||Hughes, Hector (Aberdeen, N.)|
|Beaney, Alan||Duffy, A. E. P. (Colne Valley)||Hunter, A. E.|
|Bence, Cyril||Ede, Rt. Hon. C.||Hynd, H. (Accrington)|
|Benn, Anthony Wedgwood||Edwards, Rt. Hon. Ness (Caerphilly)||Hynd, John (Attercliffe)|
|Bennett, J. (Glasgow, Bridgeton)||Edwards, Robert (Bilston)||Irvine, A. J. (Edge Hill)|
|Benson, Sir George||Edwards, Walter (Stepney)||Janner, Sir Barnett|
|Blackburn, F.||Evans, Albert||Jay, Rt. Hon. Douglas|
|Blyton, William||Fernyhough, E.||Jenkins, Roy (Stechford)|
|Boston, T.||Fitch, Alan||Jones, Rt. Hn. A. Creech (Wakefi|
|Bottomley, Rt. Hon. A. G.||Fletcher, Eric||Jones, Dan (Burnley)|
|Bowden, Rt. Hn. H. W.(Leics, S. W.)||Foley, Maurice||Jones, Elwyn (West Ham, S.)|
|Boyden, James||Foot, Dingle (Ipswich)||Jones, J. Idwal (Wrexham)|
|Bradley, Tom||Foot, Michael (Ebbw Vale)||Jones, T. W. (Merioneth)|
|Bray, Dr. Jeremy||Forman, J. C.||Kelley, Richard|
|Brockway, A. Fenner||Fraser, Thomas (Hamilton)||Kenyon, Clifford|
|Brown, Rt. Hon. George (Belper)||Galpern, Sir Myer||Key, Rt. Hon. C. W.|
|Butler, Herbert (Hackney, C.)||George, Lady MeganLIoyd (Crmrthri)||King, Dr. Horace|
|Butler, Mrs. Joyce (Wood Green)||Ginsburg, David||Lawson, George|
|Callagnan, James||Gourlay, Harry||Lee, Frederick (Newton)|
|Carmichael, Neil||Grey, Charles||Lee, Miss Jennie (Cannock)|
|Chapman, Donald||Griffiths, David (Rother Valley)||Lipton, Marcus|
|Collick, Percy||Griffiths, Rt. Hon. James (Lianelly)||Loughlin, Charles|
|Corbet, Mrs. Freda||Gunter, Ray||Mabon, Dr. J. Dickson|
|Craddock, George (Bradford, s.)||Hale, Leslie (Oldham, W.)||McBride, N.|
|Cronin, John||Hamilton, William (West Fife)||MacColl, James|
|Crosland, Anthony||Hannan, William||MacDermot, Niall|
|Crossman, R. H. S.||Harper, Joseph||Mclnnes, James|
|Cullen, Mrs. Alice||Hart, Mrs. Judith||McKay, John (Wallsend)|
|Dalyell, Tam||Hayman, F. H.||MacKenzie, J. G.|
|Darling, George||Henderson, Rt. Hn. Arthur (RwlyRegis)||Maekle, John (Enfield, East)|
|Davies, G. Elfed (Rhondda, E.)||Herbison, Miss Margaret||McLeavy, Frank|
|Davies, Harold (Leek)||Hill, J. (Midlothian)||MacPherson, Malcolm|
|Mallalieu, E. L. (Brigg)||Pearson, Arthur (Pontypridd)||Stones, William|
|Mallalieu, J. P. W. (Huddersfield, E.)||Pentland, Norman||Swain, Thomas|
|Manuel, Archie||Prentice, R. E.||Swingler, Stephen|
|Mapp, Charles||Price, J. T. (Westhoughton)||Symonds, J. B.|
|Marsh, Richard||Probert, Arthur||Taverne, D.|
|Mason, Roy||Pursey, Cmdr. Harry||Thomas, lorwerth (Rhondda, W.)|
|Mellish, R. J.||Randall, Harry||Thomson, G. M. (Dundee, E.)|
|Mendelson, J. J.||Rankin, John||Thornton, Ernest|
|Millan, Bruce||Rees, Merlyn (Leeds, S.)||Tomney, Frank|
|Milne, Edward||Rhodes, H.||Wainwright, Edwin|
|Mitchison, G. R.||Roberts, Goronwy (Caernarvon)||Watkins, Tudor|
|Monslow, Walter||Robertson, John (Paisley)||Weitzman, David|
|Moody, A. S.||Robinson, Kenneth (St. Paneras, N.)||White, Mrs. Eirene|
|Morris, John (Aberavon)||Rogers, G. H. R. (Kensington, N.)||Whitlock, William|
|Moyle, Arthur||Ross, William||Wilkins, W. A.|
|Mulley, Frederick||Shinwell, Rt. Hon. E.||Willey, Frederick|
|Neal, Harold||Short, Edward||Williams, W. T. (Warrington)|
|Noel-Baker, Francis (Swindon)||8ilkin, John||Willis, E. G. (Edinburgh, E.)|
|Noel-Baker, Rt. Hn. Philip (Derby, S.)||Skeffington, Arthur||Wilson, Rt. Hon. Harold (Huyton)|
|Oliver, G. H.||Slater, Mrs. Harriet (Stoke, N.)||Winterbottom, R. E.|
|O'Malley, B. K.||Slater, Joseph (Sedgefield)||Woof, Robert|
|Oram, A. E.||Small, William||Wyatt, Woodrow|
|Oswald, Thomas||Smith, Ellis (Stoke, S.)||Yates, Victor (Ladywood)|
|Owen, Will||Snow, Julian||Zilliacus, K.|
|Padley, W. E.||Sorensen, R. W.|
|Pannell, Charles (Leeds, W.)||Spriggs, Leslie||TELLERS FOR THE AYES:|
|Pargiter, G. A.||Steele, Thomas||Mr. Redhead and Dr. Broughton.|
|Paton, John||Stewart, Michael (Fulham)|
|Agnew, Sir Peter||Curran, Charles||Holt, Arthur|
|Allason, James||Currie, G. B. H.||Hooson, H. E.|
|Amery, Rt. Hon. Julian||Dalkeith, Earl of||Hopkins, Alan|
|Anderson, D. C.||Dance, James||Hornby, R. P.|
|Atkins, Humphrey||d'Avigdor-Goldsmid, Sir Henry||Hornsby-Smith, Rt. Hon. Dame P.|
|Awdry, Daniel (Chippenham)||Deedes, Rt. Hon. W. F.||Howard, Hon. G. R. (St. Ives)|
|Barber, Rt. Hon. Anthony||Digby, Simon Wingfield||Howard, John (Southampton, Test)|
|Barlow, Sir John||Donaldson, Cmdr. C. E. M.||Hughes Hallett, Vice-Admiral John|
|Beamish, Col. Sir Tufton||Doughty, Charles||Hughes-Young, Michael|
|Bell, Ronald||Duncan, Sir James||Hulbert, Sir Norman|
|Bennett, F. M. (Torquay)||Eden, Sir John||Hurd, Sir Anthony|
|Bennett, Dr. Reginald (Gos & Fhm)||Elliot, Capt. Walter (Carshalton)||Hutchison, Michael Clark|
|Berkeley, Humphry||Elliott, R. W.(Newc'tle-upon-Tyne, N.)||Iremonger, T. L.|
|Bidgood, John C.||Emmet, Hon. Mrs. Evelyn||Irvine, By rant Godman (Rye)|
|Biffen, John||Errington, Sir Eric||James, David|
|Biggs-Davison, John||Erroll, Rt. Hon. F. J.||Jennings, J. C.|
|Bingham, R. M.||Farey-Jones, F. W.||Johnson, Dr. Donald (Carlisle)|
|Birch, Rt. Hon. Nigel||Fell, Anthony||Johnson, Eric (Blackley)|
|Bishop, Sir Patrick||Finlay, Graeme||Jones, Rt. Hon. Aubrey (Hall Green)|
|Black, Sir Cyril||Fletcher-Cooke, Charles||Joseph, Rt. Hon. Sir Keith|
|Bossom, Hon. Clive||Freeth, Denzil||Kaberry, Sir Donald|
|Bourne-Arton, A.||Galbraith, Hon. T. G. D.||Kerby, Capt. Henry|
|Bowen, Roderic (Cardigan)||Gammans, Lady||Kerr, Sir Hamilton|
|Box, Donald||Gardner, Edward||Kershaw, Anthony|
|Boyd-Carpenter, Rt. Hon. John||Gibson-Watt, David||Kimball, Marcus|
|Boyle, Rt. Hon. Sir Edward||Giles, Rear-Admiral Morgan||Kirk, Peter|
|Braine, Bernard||Gilmour, Ian (Norfolk, Central)||Kitson, Timothy|
|Brewis, John||Glover, Sir Douglas||Langford-Holt, Sir John|
|Bromley-Davenport, Lt.-Col. SirWalter||Glyn, Dr. Alan (Clapham)||Leavey, J. A.|
|Brown, Alan (Tottenham)||Goodhew, Victor||Legge-Bourke, Sir Harry|
|Buck, Antony||Gower, Raymond||Lewis, Kenneth (Rutland)|
|Bullard, Denys||Grant-Ferris, R.||Lilley, F. J. P.|
|Bullus, Wing Commander Eric||Green, Alan||Linstead, Sir Hugh|
|Campbell, Cordon||Gresham Cooke, R-||Litchfield, Capt. John|
|Carr, Compton (Barons Court)||Griffiths, Eldon (Bury St. Edmunds)||Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfleld)|
|Carr, Rt. Hon. Robert (Mitcham)||Grimond, Rt. Hon. J.||Lloyd, Rt. Hon. Selwyn (Wirral)|
|Cary, Sir Robert||Grosvenor, Lord Robert||Longden, Gilbert|
|Channon, H. P. G.||Gurden, Harold||Loveys, Walter H.|
|Chichester-Clark, R.||Hamilton, Michael (Wellingborough)||Lubbock, Eric|
|Clark, Henry (Antrim, N.)||Harris, Reader (Heston)||Lucas, Sir Jocelyn|
|Clark, William (Nottingham, s.)||Harrison, Brian (Maldon)||Lucas-Tooth, Sir John|
|Clarke, Brig. Terence (Portsmth, W.)||Harrison, Col. Sir Harwood (Eye)||McAdden, Sir Stephen|
|Cleaver, Leonard||Harvey, John (Walthamstow, E.)||MacArthur, Ian|
|Cole, Norman||Henderson, John (Cathcart)||McLaren, Martin|
|Cooke, Robert||Hendry, Forbes||Maclay, Rt. Hon. John|
|Cooper, A. E.||Hiley, Joseph||Maclean, SirFitzroy (Bute&N. Ayrs)|
|Cooper-Key, Sir Neill||Hill, Mrs. Eveline (Wythenshawe)||Macleod, Rt. Hn. lain (Enfield, W.)|
|Corfield, F. V.||Hill, J. E. B. (S. Norfolk)||McMaster, Stanley R,|
|Costain, A. P.||Hobson, Rt. Hon. Sir John||Macmillan, Maurice (Halifax)|
|Coulson, Michael||Hocking, Philip N.||Maddan, Martin|
|Craddock, Sir Beresford (Spelthorne)||Hogg, Rt. Hon. Quintin||Maginnis, John E,|
|Critchley, Julian||Holland, Philip||Maitland, Sir John|
|Cunningham, Sir Knox||Hollingworth, John||Markham, Major Sir Frank|
|Marlowe, Anthony||Prior-Palmer, Brig. Sir Otho||Taylor, Frank (M'ch'st'r, Moss Side)|
|Marshall, Sir Douglas||Proudfoot, Wilfred||Taylor, Sir William (Bradford, N.)|
|Marten, Neil||Pym, Francis||Teeling, Sir William|
|Matthews, Cordon (Mariden)||Quennell, Miss J. M.||Temple, John M.|
|Maude, Angus (Stratford-on-Avon)||Ramsden, Rt. Hon. James||Thomas, Sir Leslie (Canterbury)|
|Maudling, Rt. Hon. Reginald||Rawlinson, Rt. Hon. Sir Peter||Touche, Rt. Hon. Sir Gordon|
|Mawby, Ray||Redmayne, Rt. Hon. Martin||Turner, Colin|
|Maxwell-Hyslop, R. J.||Rees, Hugh (Swansea, W.)||Turton, Rt. Hon. R. H.|
|Maydon, Lt. Cmdr, S. L. C.||Rees-Davies, W. R. (Isle of Thanet)||Tweedsmuir, Lady|
|Mills, Stratton||Ridsdale, Julian||van Straubenzee, W. R.|
|Miscampbell, Norman||Rippon, Rt. Hon. Geoffrey||Vane, W. M. F.|
|Montgomery, Fergus||Roberts, Sir Peter (Heeley)||Vaughan-Morgan, Rt. Hon. Sir John|
|More, Jasper (Ludlow)||Robson Brown, Sir William||vickers, Miss Joan|
|Morrison, Charles (Devizes)||Roots, William||Walder, David|
|Morrison, John (Salisbury)||Ropner, Col. Sir Leonard||Walker, Peter|
|Neave, Airey||Royle, Anthony (Richmond, Surrey)||Ward, Dame Irene|
|Nicholson, Sir Godfrey||Scott-Hopkins, James||Webster, David|
|Noble, Rt. Hon. Michael||Shaw, M.||Wells, John (Maidstone)|
|Nugent, Rt. Hon. Sir Richard||Skeet, T. H. H.||Whitelaw, William|
|Oakshott, Sir Hendrie||Smith, Dudley (Br'ntf'd &;Chiswick)||Williams, Dudley (Exeter)|
|Orr, Capt. L. P. S.||Smyth, Rt. Hon. Brig. Sir John||Williams, Paul (Sunderland, S.)|
|Osborn, John (Hallam)||Spearman, Sir Alexander||Wilson, Geoffrey (Truro)|
|Osborne, Sir Cyril (Louth)||Stainton, Keith||Wise, A. R.|
|Page, Graham (Crosby)||Stanley, Hon. Richard||Wolrige-Gordon, Patrick|
|Page, John (Harrow, West)||Stevens, Geoffrey||Wood, Rt. Hon. Richard|
|Partridge, E.||Steward, Harold (Stockport, S.)||Woodhouse, C. M.|
|Pearson, Frank (Clitheroe)||Stoddart-Scott, Col. Sir Malcolm||Woodnutt, Mark|
|Percival, Ian||Storey, Sir Samuel||Woollam, John|
|Pickthorn, Sir Kenneth||Studholme, Sir Henry||Yates, William (The Wrekin)|
|Pitman, Sir James||Summers, Sir Spencer|
|Pitt, Dame Edith||Tapsell, Peter||TELLERS FOR THE NOES:|
|Pounder, Rafton||Taylor, Sir Charles (Eastbourne)||Mr. Batsford and Mr. Ian Fraser.|
|Powell, Rt. Hon. J. Enoch||Taylor, Edwin (Bolton, E.)|