Clause 5

HC Deb 03 July 1968 vol 767 cc1549-86

PURCHASE TAX

Mr. Taverne

I beg to move Amendment No. 185, in page 5, line 13, at end insert: 'and (c) as from 1st July, 1968, with the amendment of group 24 by the addition after paragraph (4) of the exemptions of the following paragraph: — (5) The following projectors namely—

1. (i) cinematograph projectors suitable only for film of 16 mm. width;
2. (ii) projectors suitable only for filmstrip;
3. (iii) cassette loaded loop projectors,
• and parts and accessories suitable only for use with a projector of any of those descriptions"'.

I am somewhat embarrassed by not having before me the Amendment which one of my colleagues was to move. I move the Amendment formally, and my right hon. Friend the Chief Secretary can explain the reasons for it.

Mr. Diamond

I apologise for the fact that I was momentarily discussing another matter when the Amendment was so ably and accurately moved by my hon. and learned Friend the Minister of State. There was only one thing which he did not make absolutely clear, and perhaps you, Mr. Deputy Speaker, could supply us with the information, namely, the precise number of the Amendment.

Mr. Deputy Speaker

It might help the House if I were to indicate that Mr. Speaker has suggested that with Amendment No. 185 we discuss Amendment No. 24 to Schedule 6, in page 55, leave out line 44.

Amendment No. 183, page 57, line 5, leave out 'and filmstrip'.

Amendment No. 180, page 57, line 7, at end insert: (3) Automatic motorised film-editing machines for 16 mm. film, and with separate sound track. Amendment No. 181, page 57, line 7, at end insert: (3) 16 mm. cinematograph projectors. Amendment No. 182, page 57, line 9, after 'width', insert 'filmstrip projectors'.

Mr. Diamond

I am obliged, Mr. Deputy Speaker, particularly because what you have said makes clear that my hon. and learned Friend was over-modest in withdrawing from the Dispatch Box rather than speaking to his own Amendment.

Mr. Taverne

I apologise—

Sir Stephen McAdden (Southend, East)

On a point of order. May I ask whether the hon. and learned Gentleman has exhausted his right to speak?

Mr. Deputy Speaker

The Minister has the right to reply to any Amendment in his name. He is also in the privileged position of being able to speak more than once on Report. It would be right to ask the Minister of State to continue his speech.

Mr. Terence L. Higgins (Worthing)

Further to that point of order. May we know whether the Chief Secretary or the Minister of State is moving the Amendment? It is confusing if they bob up and down alternately.

Mr. Deputy Speaker

The Amendment has been moved by the Minister of State. The Chief Secretary has spoken briefly and the Minister of State is making a second speech.

Mr. Taverne

I must apologise for an error which arose from Amendment No. 53, which I understood had considerable support but which was not moved.

The purpose of this Amendment is to exempt certain projectors specified in the Amendment. In Committee, I undertook to look at the question of certain projectors, particularly 16 mm. cine projectors and film strip projectors, which, it was argued, are largely used for educational purposes. We have found that outside the educational and industrial field the 16 mm. cine projector is used, for the most part, only by the advanced amateur who wants improved performance and by film-making societies. It is, therefore, clear that in the vast majority of cases the 16 mm. projector is used either in education or in industry for training purposes. It is, therefore, proposed to exempt them as a class.

The same is equally true of film strip projectors. Many of these slide projectors can be adapted to take film strip by an interchangeable carrier. It will, therefore, be necessary to confine the exemption to the projectors suitable only for film strip.

This is to some extent a matter which arises out of the other Amendments to be taken at the same time, but the nature of Purchase Tax is such that one cannot look at a particular purpose for which an object may or may not be used. At the time tax is imposed one does not necessarily know for what particular purpose the object will be used. One cannot say that, because in certain cases an object may be used for educational purposes, or has been used for educational purposes, but in other cases not, therefore it should be exempt from Purchase Tax and others should not be exempt.

Further representations were received in respect of the loop projectors which are widely used for training and educational purposes. These projectors are specialised for use with a distinctive type of cassette which enables a short run of film to be shown over and over again in a continuous loop, and can be regarded as a satisfactorily definable class for the purpose of exemption; because, of course, if a class is definable as a class which, by its very nature, is likely to be used mainly for educational or industrial purposes, then it is possible to grant exemption.

During our proceedings the hon. Member for Worthing (Mr. Higgins) raised the question of overhead projectors, because, he said, these were also identifiable in the same way. I think that he described them as a kind of projector used by schools and institutions. I then said that I would make inquiries about what these overhead projectors showed and how far they would be covered by any exemptions we might be able to make. I should tell the hon. Member for Worthing that overhead projectors which show neither film nor conventional slides are not regarded as within the scope of the present charge on cinematographic film strip slide projectors, and, therefore, it is not necessary to provide any exemption in their case.

Mr. Higgins

It is unfortunate that there was some confusion at the beginning of the Ministerial statements on this point, because I am not entirely clear from what has been said whether, in discussing Amendment No. 185, 24, 183, 180, 181 and 182 together, if the House decides it will accept the first, the Government are proposing also to accept the other Amendments, which are being linked with it. That was not entirely clear from what the hon. and learned Gentleman said, because this area raises some appalling anomalies of the kind my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) so frequently draws attention to. We should be quite clear what the position is about the other Amendments.

As to the overhead projectors, the hon. and learned Gentleman said that these will not fall within the scope of this tax. I think it would be helpful to those who have to delve through the complexities and anomalies of Purchase Tax if he would make it clear under which other heading he feels these items come. It certainly was not clear in Committee that these items were not included in the list of cinematographic and other equipment to which the 50 per cent. Purchase Tax rate was intended to apply. Therefore, if he is going to make a statement from that Box that these items are not included in this tax category we want to know in which category they are placed. We also want to know whether they will or will not be charged any particular tax so far as sales are concerned.

Having picked up those two points which arose from what the Minister himself said just now, I think there are one or two more specific points on which we also require clarification. It is perfectly true, as the Minister says, that the 16 mm. projectors are very largely used by other than private individuals. In Committee I quoted figures—educational establishments, 70 per cent.; churches 3 per cent.; industry; 10 per cent.; hospitals, 7 per cent.; other institutions, schools, private individuals, only 10 per cent. We can therefore see that there is here good reason for the Government accepting the Amendment proposed in Committee and moving this Amendment this afternoon. We certainly welcome the fact that this change is to be made.

6.15 p.m.

It is, of course, the case that the tax increase which was imposed on the group of items was something like 80 per cent. I would again ask the hon. and learned Gentleman to clarify the position. Am I right in thinking that these items will not now incur any tax at all because they are in the list of exempted items in the reformed category 24 in the Purchase Tax Act as it will now be amended —that is to say, this particular group of items mentioned in the Government Amendment will carry no Purchase Tax at all? This is not unreasonable, because it is, generally speaking, the case that items which are used for educational purchases do not bear Purchase Tax.

There is another point. In Committee we probed the reason why, in another Amendment, I think relating to calendars, the Government had inserted a date from which the Amendment should be operative. I think that is now incorporated in the Bill. The date applied was 20th March. We then got a subsequent Amendment, from 30th April.

Now this further Amendment is from 1st July, which, presumably, was the earliest date on which the Government's change of mind became apparent. Is this not rather unfair on those educational establishments and schools which, having heard that the Government had put up Purchase Tax on these items, but perhaps deciding that, none the less, it was necessary to buy them, bought them and paid the 50 per cent. Purchase Tax on them, and now find, as the result of the Government changing their mind, on a case which we on this side have thought obvious in the first place, that if they had delayed their purchases they would have avoided the 50 per cent. Purchase Tax? What do the Government propose to do about anyone of whom it can be shown that he purchased these items between the date when the increase was originally announced and the date when now, it is suggested, the increase should no longer take place?

I want to pursue one or two other points, because this whole area is engulfed in confusion, and I think it is helpful if speeches made in this House can do something to clarify the position. The first question is about the 8 mm. projectors which the hon. and learned Gentleman mentioned. He rightly pointed out that most of these are used in connection with cassettes which are used by educational establishments. I think I would be right in saying, though I am not very expert in the technology of this, that there are some 8 mm. projectors which do not use cassettes. What is the position about Purchase Tax on those items?

Another point which arises here is the question of editing machinery covered by Amendment No. 180 in the names of my hon. Friends and my own name—automatic motorised film-editing machines for 16 mm. film with separate sound track. As I understand it, these are major items costing about £500 apiece. I would have thought they could scarcely be described as "accessories" within the terms of the Government Amendment. What is the position with regard to them? Are they to be exempt from Purchase Tax, or to incur the 50 per cent. rate?

There is another point which seems to create a very considerable anomaly. When we discussed this whole matter in Committee we tended to base our attack on the need to encourage audio-visual aids for educational purposes, and stressed the folly of the Government themselves in imposing 50 per cent. Purchase Tax on items of this kind which, anyway, are largely bought by education authorities and so on.

What is the position now? If the Government's Amendment is accepted, I understand that these items will not carry Purchase Tax at all. We are glad about that. But what is the position concerning related audio equipment which may form part of the same general complex used in the same general educational establishment?

There are a number of points here which need to be brought out. There was the point raised in Committee by my hon. Friend the Member for Petersfield (Miss Quennell), who has again tabled an Amendment concerned with the bulbs used in projectors. There seems to be a clear anomaly here. The Government were not going to tax magic lanterns, but would tax more advanced electrical projectors. My hon. Friend rightly queried what the position was. Are we to understand from what has been said this afternoon by the Minister that this anomaly is to be eliminated and my hon. Friend's Amendment accepted?

I make two final points. First, what is the position concerning rear projection screens? I am sure that the Minister will agree that it is unlikely that anyone using an ordinary film projection unit in his home would use a rear projection screen. These are typically used only in educational establishments. But again we are by no means clear whether they fall within the scope of the Amendment, so what is the position there?

Secondly, what is the position about 16 mm. films? It seems that the Government are now exempting all 16 mm. film projectors, but they are not, so far as I can establish, intending to alter the Purchase Tax rate on 16 mm. films which fall under paragraph 4(1) of the Schedule as now amended. It is somewhat difficult jumping back and forth from Clause to Schedule and then back to the parent Act and so on, but I understand the exemptions will not include 16 mm. films, whereas they will include 16 mm. film projectors. The films of standard width are exempt specifically in the Finance Bill on page 57, line 12, cinematograph film of standard width. Sould that now be amended to include 16 mm. films within the definition?

I apologise for wearying the House on what may seem to be a number of detailed and trivial points. We do not believe that they are trivial. We believe that one of the main objections to Purchase Tax, as my hon. Friend the Member for Worcestershire, South consistently points out, is that the Government are in a morass of anomalies and contradictory definitions and the purpose of the Tax is becoming clouded. For that reason we are increasingly coming to the view that this is not a satisfactory Tax. At any rate, on this occasion I hope that the Minister will speak again and will be able to clarify the numerous points which I feel should be raised.

Mr. John Smith (Cities of London and Westminister)

I welcome this Government Amendment, and so will my constituents, Mr. J. Wallace Heaton and Mr. Anthony Negretti, who are both proprietors of good firms which have rendered good service to this country; and who, being vigilant, have both written to me about it. But they and I will, nevertheless, remain disappointed that, even if we accept the Amendment, there is still in this Finance Bill a considerable measure of discrimination against the photographic and cinematograph industry.

But, if we are to have these Amendments introduced at a late stage, however desirable, to the Purchase Tax Regulations, it is extremely important that the Customs and Excise should be efficient. Traders have to make up their catalogues and are moreover liable to penalties for failure to charge Purchase Tax. Therefore, they must know as quickly as possible what Purchase Tax is due on what.

I have had several complaints about delays by the Customs and Excise in pronouncing on these matters over the particular types of equipment which are the subject of this Amendment. I select one out of several, which relates to bib recording tape splicers. This manufacturer says: As a result of this year's budget, we received details from H.M. Customs and Excise that purchase tax had been introduced on tape splicers. This was re-confirmed by our local Customs and Excise office. Following this, we published new price lists and altered advertisements. We then discovered that other makes of tape splicers were being sold without purchase tax, and immediately took the matter up with Customs and Excise Headquarters in London. After some delay, they have now advised us that purchase tax is not applicable to our tape splicers. I have another example here with which I will not weary the House. All this reinforces the point which I made in Committee, I fear out of order then, as it is now, that the lethargic and dilatory attention which is paid by the Customs and Excise to these important matters is no service to traders who could otherwise be helping the economy.

Therefore, I welcome the Amendment, but I urge the Government, if they are to amend the Purchase Tax Regulations, to see to it that traders know early exactly where they stand.

Sir G. Nabarro

Any reduction in taxation, even at this late stage in the Finance Bill, is a cause for joy in the hearts of all who complain continuously about the onerous burden of taxes in this country. But the fashion in which the Government are today dealing with Purchase Tax is really preposterous. This Schedule is now reduced to incomprehensible gibberish. I do not understand it; traders do not understand it; none outside the Customs and Excise understand it.

It is futile for my hon. Friend the Member for the Cities of London and Westminster (Mr. John Smith) to ask for explanations to be sent to traders. The more explanations sent to traders, in my experience of Purchase Tax, the greater the dubiety created because of the language employed in the explanations from the Customs and Excise and the greater the number of queries and interrogations directed against the Customs and Excise, with the result that Customs and Excise take advantage of every situation and place the Tax at the highest possible level on its own interpretation. If the trader disagrees he is entitled to take the matter to the courts. He rarely does, because of the expense and trouble entailed.

This Schedule, dealing with photographic equipment, has now become so highly technical in character that none, other than experts in photography, could possibly begin to understand it. I claim on those grounds that we shall need in the forthcoming months new publications from the Customs and Excise. I suggest a complete new glossary of all Purchase Tax setting out the rates, the articles to which they are applied, and in terms that are easily understood by the trades involved in payment of Purchase Tax.

My hon. Friend the Member for Worthing (Mr. Higgins) has this afternoon asked a number of very difficult questions about photography which I could not follow. I do not know what the position is. The Government having presented this Schedule, then amended it, and no doubt in future they will amend it again by Order, tremendous dubiety now exists about the rate of tax applicable to any particular article of photographic equipment. We have now created, in one more great volume of manufactured goods, a state of affairs similar to that which has existed for several years relating to Purchase Tax on furniture, children's clothes, and many other articles where it is almost impossible to define the rate applicable to a particular article. Because children's clothes—and I mention this only in passing—are exempt from Purchase Tax, and because many women wear small sizes—

6.30 p.m.

Mr. Speaker

Order. We cannot discuss those anomalies. It is these anomalies about which we are talking.

Sir G. Nabarro

There is endless confusion in definition. Exactly the same will be the case with photographic equipment. In many instances it is impossible to define what is a piece of furniture, and what is a desk for educational purposes. It is equally impossible to define what is an ashtray, and what is a bowl.

Mr. Speaker

Order. I know the hon. Member's interest in all questions of Purchase Tax, but we are talking about only one limited aspect of it.

Sir G. Nabarro

This is all en passant to underline the difficulties which the Amendment will cause us all, good intentioned though it may be.

The only solution is the total reform of indirect taxation, and the substitution of a value-added tax for Purchase Tax and similiar forms of taxation.

Mr. Taverne

With the leave of the House, I hope that I might be allowed to reply to some of the points which have been raised.

The hon. Member for Worcestershire, South (Sir G. Nabarro) has pursued his familiar theme. The value-added tax was not advocated with the same enthusiasm when his party was in power, but we realise that he objects to the many anomalies which arise in the application of Purchase Tax.

Sir G. Nabarro

My party consistently, over the years, made progress towards a single and uniform rate of tax, thereby preventing the kind of complexities which the Government are now heaping upon us.

Mr. Speaker

Order. We must come back to the Amendment.

Mr. Taverne

The most glaring anomalies to which the hon. Gentleman drew attention were left by the Conservative Government when they went out of office.

Sir G. Nabarro

Quite untrue.

Mr. Taverne

The hon. Member for Worthing (Mr. Higgins) asked whether overhead projectors were covered by a particular item. The answer is "No". On further inquiry they have been found to be outside the scope of the tax schedule. There is no item in the tax schedule on which Purchase Tax is levied which covers these overhead projectors, and they are exempt from Purchase Tax.

The hon. Gentleman also asked what effect the Amendment would have on the items listed therein. I think that that is reasonably clear. In group 24 there are three paragraphs of items which are exempt from tax. There is now added a fourth paragraph which includes the items which are the subject matter of the Amendment; and these are therefore exempt from tax.

The hon. Gentleman asked whether an 8 mm. projector which was not cassette loaded was covered by the Amendment. The answer is "No". It is the cassette loaded loop projector which is exempted. Other forms of loop projectors do not come within the exemption. The reason is that loop projectors are used with a distinctive type of cassette. These are in a clearly definable class, and are used mainly for educational purposes.

The hon. Gentleman then asked what the effect was of the other Amendments which are being discussed with this one. As regards the Amendment in the name of the hon. Member for Petersfield (Miss Quennell), I undertook in Committee to make sure that the drafting was right. I am satisfied that it is, and that the various epidiascopes and parts and accessories about which she was concerned are exempt. There are specific exemptions for certain projectors and epidiascopes in 24 (i), (ii) and (iii) including parts and accessories suitable only for use therewith, and it is therefore quite clear that lamps which are suitable only for epidiascopes and projectors will still be exempt.

Amendments Nos. 180, 181, 182 and 183 are now covered by the Government Amendment, and I hope that the hon. Members who tabled them will be satisfied with what we have done.

I was asked about rear projector screens. Previously no representations were made to us either by the trade or by the Department of Education and Science that the dividing line was wrongly or inequitably drawn, and that rear projector screens were unfairly penalised. We are not aware that these screens are used mainly for educational purposes, which is what the Amendment is about. If it should turn out, perhaps as a result of some knowledge which the hon. Gentleman has, and of representations which he can make, that we should look at the position again, we shall do so, but we are not aware that rear projector screens are for the most part used for educational purposes. They therefore do not come within the scope of the Amendments.

The same is true of 16 mm. films. They are not exempted because the educational case, which is what the Amendment is about, refers essentially to projectors. Films can be purchased in large quantities by amateur photographers.

Lastly, I was asked why we had chosen the date of 1st July, and why this had not been made retrospective. It has always been accepted that we could not make Purchase Tax concessions retrospective. The 1948 experience was most unfortunate. The difficulty is to make sure that the tax rebate is passed on not only to the retailer, but, where the goods have been sold, to the final purchaser. In the past this has been found to be a formidable difficulty, and it still exists. Customers fail to understand that in certain cases tax is not paid on stocks on the retailer's premises at the time of the Budget. They are convinced that they are entitled to repayment of the tax which has been remitted. Apart from the problem of identifying a particular purchase as falling inside or outside the retailer's pre-Budget stocks, there will always be room for argument, in the former category, about whether the prices have been adjusted on account of the tax. It has been found impossible to trace the tax back into the hands of those who may or may not have paid it. For those reasons it has been found impossible to make any of these Purchase Tax concessions retrospective to the Budget date.

Amendment agreed to.

Mr. David Lane (Cambridge)

I beg to move Amendment No. 98, in page 5, line 13, at end insert: (c) as from 30th April 1968 with the amendment of Group 19 by the insertion after the words 'gramophone records' of the words' except gramophone records used for educational purposes' and the insertion at the end of paragraph (b) of the words 'gramophone records used for educational purposes'. As this is the first time that I have ventured into the jungle of Purchase Tax in these debates on the Finance Bill, I hope that the House will bear with me if I stray off the track at any point.

I was not a member of the Standing Committee, but I understand there was a general feeling that the position about gramophone records was unsatisfactory, and on reflection I believe that we have a chance to improve the Bill in a small but important respect. As I understand it, the effect of the Clause is that the rate of tax on gramophones, radiograms, and some other instruments is to be raised from 27½ per cent. to 33⅓ per cent., but the tax on all gramophone records is to be raised from 27½ per cent. to 50 per cent. The purpose of the Amendment is to bring back into the lower category—the 33⅓ per cent. category—gramophone records used for educational purposes.

In the light of what was said by hon. Members on both sides in Committee we want to find a common-sense dividing line which would lessen the burden on all sorts of records which none of us wishes to see penalised to the full extent of the 50 per cent. level which is now to apply. We have tried to draw this distinction according to end-use—that is, use for educational purposes. It seems the simplest way to take out of the higher penal range records that most would agree should bear a lower rate of tax.

I put forward this case on two grounds. First, without going into the argument of a high luxury level of tax being imposed on any gramophone records—which is not the purpose of this debate—it is absurd to apply this high luxury rate to records used in schools and universities, and for many other purposes that we can all describe—and know what we mean by describing—as being for educational purposes.

There is an increasing use of teaching by gramophone records at all levels. Further, many libraries—both public libraries and libraries of educational institutions—contain gramophone records, and unless we do something to remove this very high level of tax from records in these categories it will have a discouraging effect not only on the main business of education but on all that is being done to develop wider leisure opportunities for many members of the population.

The second argument is a more general one. Under this Government the education system has suffered one blow after another in the last three years. Surely the Government can take this opportunity to give at least a small pat of encouragement to the education world.

Mr. Kenneth Baker (Acton)

Without the Amendment the Clause puts all gramophone records, including educational records, into the luxury class of items for Purchase Tax purposes—the same class as jewellery, furs, and so on. The rate of tax upon educational records is four times that payable on the Savile Row suit made for the hon. Member for Worcestershire, South (Sir G. Nabarro).

Sir G. Nabarro

Your hon. Friend.

Mr. Baker

My hon. Friend. It is absurd to tax educational records, or records used for educational purposes, at this high rate, and the Amendment would reduce the rate.

When we discussed this matter more generally in Committee the Treasury Ministers said that they could not distinguish between different categories of record, and that it was impossible to distinguish educational records. Whole catalogues of educational records exist. They are generally, although not in all cases, prepared with the home student in mind—somebody who wants to learn a foreign language or a commercial skill.

The catalogue which I have here caters for several commercial skills which I could recommend to Treasury Ministers. There is elementary book-keeping, budgetary control and, finally, a course in liquidation and receiving. These records are being sold and used much more frequently today by students studying not only at home but at college, and it is most unfair to discriminate against them. This extra tax will put these educational records beyond the purses of some students, and we should not on any occasion place any hindrance in the way of a person who is seeking knowledge.

The previous Government Amendment gave special treatment to film strip projectors used for educational purposes, and I ask the Government to use the same standards in discussing this Amendment.

Furthermore, the company that produces these records also exports them. I need not rehearse the arguments which have been put forward to the effect that in order to have a good export trade there must be a sound home market. That is an additional reason why we should give special treatment to this category of gramophone records. In brief, they can be identified, and they are directed particularly to those who want to learn something. We should not put anything in the way of such people.

6.45 p.m.

Mr. Stanley Henig (Lancaster)

I have some sympathy for the aims of the Amendment but I cannot support it, for a number of reasons. It is true that certain companies exist to make educational records, in the narrowest sense of the term, and no doubt learning a course in liquidating and receiving would fit easily into such a category. But it is not so easy to draw the line in respect of records which are made of literary works, such as plays by Shakespeare. One of the best and most enterprising of our record companies specialises in producing records of this nature, and it would be logical to suggest that that company should also be exempted from the extra Purchase Tax.

Many people listen to such records for pleasure, and much the same argument can be applied to any gramophone record. The vast bulk of gramophone records could be conceived of as having an educational purpose, and if this argument were accepted it would mean that the Amendment, in logic, would provide that the extra tax should be removed from all gramophone records.

Mr. Joel Baroett (Heywood and Royton)

Hear, hear.

Mr. Henig

Many people—apparently including some of my hon. Friends— would welcome such an action, and in another year I' might join my hon. Friends in pressing this course upon my hon. and learned Friend. But it seems to me that a time when we are trying to raise taxation in a variety of ways is hardly the moment to go in for special pleading.

One point is relevant to the Amendment and to the debate on this subject. People talk about the record industry and records in general as if they were part of some great monolith, and as if there were a standard price for all records, which was being increased by 22½ per cent.—

Mr. Speaker

Order. In discussing this Amendment we cannot raise the question whether the increase in Purchase Tax should be applied to gramophone records in general.

Mr. Henig

The increase of 22½ per cent. does not apply to the full sum charged for the record, in the sense that in the record industry the margins made by the retailers are very high, so that the actual increase works out at much less than 22½ per cent. of the total price of the record. In recent years a differential structure has grown up in the price of gramophone records—

Mr. Speaker

Order. The hon. Member cannot discuss the question of Purchase Tax on gramophone records in general. That has been discussed elsewhere. It is not selected for discussion now. The question is whether we exempt from the increase in Purchase Tax educational gramophone records.

Mr. Henig

I understand that, Mr. Speaker, but if we accept the argument which I am putting forward that a gramophone record of Beethoven's Fifth Symphony is educational if it is played to schoolchildren, to people at university and even to older people, we must, in logic, look at the effect of this increase—

Mr. John Smith

Surely what the hon. Gentleman is saying is that something is not educational if one enjoys it—it is as simple as that.

Mr. Henig

I have not put forward that argument. I am saying that the definition of "educational purposes" put forward by hon. Gentlemen opposite means people learning or taking a course and listening in schools. I have been trying to widen the argument by suggesting that this exemption cannot be made because the demarcation between educational and non-educational purposes is— as the hon. Member for the Cities of London and Westminster (Mr. John Smith) more or less implied—virtually non-existent. The deleterious effect on education of this increase in the tax on all gramophone records will not happen because of the differential price structure in the industry which results in whole categories of records going from one price tier to a lower one. There are three distinct tiers.

In discussing educational records, we should remember that the companies are most anxious, as far as possible, to increase their sales for the optimum profit. This is one reason that they have introduced lower price tiers. But that, in effect, means that they are lowering the average price for all records. In other words, it is not so much culture or education which is taxed as, very often, some of the bigger record companies themselves.

That leads me to the final argument put by the hon. Member for Cambridge (Mr. Lane), that, if one taxes heavily companies producing educational records, it somehow damages their export prospects. Only in the last few weeks, the Financial Times and some of the recording magazines have reported that, during the last six months, British exports of all kinds of recording material, including educational records, have risen strongly. I am not sure how my right hon. Friend will react to this, but it also appears to be the case that, since this increase in Purchase Tax, there has been little sign either of the home demand for any records slackening.

Thus, as well as the Amendment being unworkable in fact, because one cannot differentiate between educational and other purposes, it does not matter in practice, because the kind of effects which hon. Gentlemen suggest on people's desire and need for culture have not occurred and there is not much sign that they ever will. I am sure that my right hon. Friend will regret that, in some ways, but it is a fact of the situation.

Mr. Peter Kirk (Saffron Walden)

I hope that the Minister of State will produce a slightly more convincing argument than that of his hon. Friend the Member for Lancaster (Mr. Henig), who did not seem to be able to define in his own mind what is education, and rejected the helpful suggestion of my hon. Friend the Member for the Cities of London and Westminster (Mr. John Smith).

It is clear that, if one approaches this matter in the way that my hon. Friend the Member for Cambridge (Mr. Lane) did and regards this as the end use of the product and not the product itself, it should be possible for the Customs and Excise to work out a reasonable system. I hope that the Government will be able to accept the Amendment, which is small in scope and carries out a very much-needed reform of the Bill.

My hon. Friend the Member for Acton (Mr. Kenneth Baker) said that education had taken a good beating from this Government already. Educational appliances have taken a good beating in this Budget. I have sent to the Chancellor details of other matters, like mobile sound guides for use in museums and country houses, which have had a 50 per cent. Purchase Tax slapped on, and which previously paid none at all. It seems right that the Government should make some amends on this.

I have had many representations about this, particularly from university students in my constituency, who find that, contrary to the experience of the hon. Member for Lancaster, this places an additional burden on them in their studies. It is true of other matters as well. I had a representation from a blind person who is learning languages by means of a radiogram—almost the only way, she says, that she can do it—and the additional burden on her may not be very much in the terms of the hon. Member for Lancaster but it means a good deal to her, and may mean that she will not be able to continue the course.

I do not know how much this modest Amendment would cost the Chancellor. I cannot believe that, in a year when an additional £900 million is to be raised, it will be so excessive as to wreck the whole deflationary approach of the Budget. For that reason, I join my hon. Friends in pressing on the Minister that this matter should be considered again. It has caused a great deal of alarm. There has been considerable correspondence in the Press and to Members of Parliament and it is a small piece of virtue which the Government could store up for themselves against the bad times which lie ahead for them.

Sir Harmar Nicholls (Peterborough)

I agree with my right hon. Friend the Member for Saffron Walden (Mr. Kirk): of course this can be done if the Treasury Bench wish it. Of course it can be identified and put in acceptable terms in the Bill. I hope that the Minister of State will consider the Amendment with sympathy. I thought that the speech of the hon. Member for Lancaster (Mr. Henig) was the best example I have seen to date of why the ex-Minister of Power resigned. That is the sort of argument and narrow approach which seems completely to disregard practicalities. I should be completely opposed to what appeared to be the hon. Member's interpretation.

When the Amendment is being interpreted, after the Minister has accepted it—as I hope that he will—I hope that the interpretation of "educational purposes" will cover some of the points which the hon. Member said should not be included, for all sorts of reasons which I could not understand. Certain gramophone records can be clearly identified as educational. A good example was that which my hon. Friend gave, of a blind person wanting to learn languages. It must be interpreted rather wider than the sheer, easily recognised "educational purposes". Otherwise, we shall be illogical.

The Minister of State, Department of Education and Science, who has responsibility for the arts, is getting a great deal of kudos—in many cases rightly—for the encouragement which she has given to ballet, operatic music and Shakespeare. We are giving great subsidies—I am not one of those who grumble at it—for all these works to be performed on the stage and at ballet schools, and it is money well spent. But the only taxpayers who can enjoy the result of those subsidies are those who can travel to the theatre. If we want to extend culture and the whole idea of spending money on the arts so that they can be embraced and enjoyed by a large proportion of the population, we should face the fact that, in this day and age, it is part of the educational distribution to have them on gramophone records—

Mr. Henig

Would the hon. Gentleman then make it clear that, by "educational purposes", he means every gramophone record except the "Top of the Pops"? If this is what he is saying, will he say it loud enough for everyone to hear?

Sir Harmar Nicholls

I was about to say how I think the interpretation should be based, and I will come a little more quickly to that suggestion.

I suggest that, when we are trying to interpret the Amendment, we should say that any work, whether music or words, which carries with it in its normal usage a Government subsidy, whether it is operatic music, ballet music, or the works of Shakespeare in the theatres, the National Theatre and the ballet schools, should qualify under the definition of "educational purposes". Otherwise, on the one hand we would be saying that we give these vast subsidies to encourage people to enjoy and use these works, and on the other would be making it more difficult, because more expensive, for them to do it in their own homes. I rather enjoy the "Top of the Pops", too, but I am not arguing in this instance—I should, in any event, be out of order to do so—that there is a good case, for export and other reasons, for not putting the extra tax on those records. For the purpose of the Amendment, we have to accept that any music or any work which does not attract the subsidy which makes it desirable in the eyes of the Government, ought not to be exempted.

7.0 p.m.

The Amendment ought to be accepted, perhaps not in its present words, which might not do what I am asking or what the Government would like to do, but certajnly in spirit, with the promise that appropriate words will be introduced later to exempt educational records and any records which represent work which normally carries a subsidy from the Government. For example, any works which the Minister responsible for the arts helps to keep alive by means of a subsidy should be exempt if they are translated on to a record. They should have the same sort of encouragement as that given by the subsidy.

I support the Amendment, hoping that its spirit will be accepted now and that a promise will be given to introduce later words which will give an interpretation of "educational". If the Government will do that, they will avoid being illogical in encouraging with the one hand and discouraging with the other.

Mr. James Dickens (Lewisham, West)

I am sorry that I missed the early speeches in the debate, but I am familiar with the argument because the point was debated in Committee.

I rise to give my general support to Amendment No. 98 and to its purpose, which is to make some differentiation between gramophone records for educational purposes and gramophone records in general terms. It is, of course, difficult to make a precise differentiation which would exclude, for example, records of classical music or other records of various theatrical performances from the general run of records produced for entertainment purposes. We could not accept the definition offered by the hon. Member for the Cities of London and Westminster (Mr. John Smith).

But we can differentiate in two importants respects. For example, we can clearly distinguish those records which are produced for a course of study, as with language records, which have an increasing use both in exports and elsewhere. That applies to the spoken word, too. There are certain courses of instruction which can be distinguished. For example, there is a course of records on early English, dealing with Chaucer and including "The Canterbury Tales" in early English, with text books issued as part of the course.

I can see no difficulty whatever in the Board of Inland Revenue clearly differentiating those records from the general body of recordings in this country and agreeing that records produced for those purposes, with text books, should be exempt from Purchase Tax. Consequently, I support the general drift of the Amendment on the Floor of the House, as I did in the debate in Committee.

Sir G. Nabarro

This subject was debated in Committee, but I was not a member of the Committee. I intervene for only a few minutes to draw attention once again to the preposterous state of affairs which exists today with the Purchase Tax Schedules. The Government propose to tax gramophone records at 50 per cent. They tax musical instruments at 33⅓ per cent. Why is a gramophone record 50 per cent. more luxurious than an oboe or a harp or a pianola?

Mr. Speaker

Order. The hon. Member cannot debate on the Amendment whether gramophone records should be subject to increased Purchase Tax. We are discussing an Amendment which seeks to exempt educational records.

Sir G. Nabarro

I was coming to educational records, Mr. Speaker. The records taxed at 50 per cent. will include educational records, which makes the anomaly even worse.

But the true analogy is between a gramophone record of an educational character and a book. These are the two essential media for educative processes which ought to be compared, the one with the other. I notice that the hon. Member for Lancaster (Mr. Henig) is laughing. One of my hon. Friends suggests that he took a course in it. But the course has not had any very obvious results. Educational gramophone records and books are exactly comparable. We do not tax books at all. We are to tax educational gramophone records at 50 per cent. It ought to be possible, on the lines generally laid down by my hon. Friend the Member for Peterborough (Sir Harmar Nicholls), to extract from the generality of gramophone records those which are generally applied for educational purposes, in universities, colleges, schools and educational establishments of all kinds, making one large group.

There is another large group of educational gramophone records used for teaching languages in the home. There are—I have never employed one, because I am so bad at languages—special institutions in London which specialise in the teaching of languages through the medium of educational language records. I am informed that they are very good. Clearly they would be subject to a special Purchase Tax rate or, for preference, no Purchase Tax at all. There are ways and means of doing this, and, while it is not a method which I like very much, because it is taking us further and further into the realms of discrimination in Purchase Tax, which I think is wholly bad, if we are to have foisted on us by a Socialist majority a 50 per cent. rate of tax on all gramophone records—which is a step never taken by the Tories—I would seek to make it a little better by taking educational records out of that general rate of tax applicable to all records.

When he winds up the debate, I hope that my right hon. Friend the Member for Birmingham, Handsworth (Sir E. Boyle), the Shadow Minister of Education, will make it clear that we feel strongly about this matter. Fiscal niceties apart, we feel strongly about that in an educational sense. I hope that he will invite us all to join him in the Lobby in voting in support of the Amendment, if we obtain no satisfaction from the Treasury Minister.

Mr. Taverne

There is a fundamental difficulty about this whole matter. In the earlier Amendment moved by the Government we took special categories of photographic equipment which, by their very nature, were suitable only for educational use or were used largely for educational purposes. This Amendment seeks to exempt gramophone records used for educational purposes.

Purchase Tax is imposed when the objects are in the hands of the wholesaler or retailer, and at that stage neither Customs and Excise nor the retailer know the purpose for which a particular object will be bought. A retailer cannot say whether a record will be sold to a teacher or to a pupil. Indeed, when he has stocks of records, in most cases he does not know whether they are records which will be used for educational purposes. It is impossible for Purchase Tax to be imposed or to be exempted depending on the actual use to which particular items may later be put. That is a fundamental objection to the Amendment.

Mr. Frederick Silvester (Walthamstow, West)

The hon. Gentleman will be aware that Customs and Excise already make an exception for the import of U.N.E.S.C.O. material for educational purposes. The order provides that exemption from import duty will be granted provided that they are satisfied that the goods so produced are of an educational, scientific or cultural character. Why cannot this case be dealt with in a similar way?

Mr. Taverne

The hon. Member will find that such exemption from import duty is given where U.N.E.S.C.O. certify that these are records which are produced by U.N.E.S.C.O. for a particular purpose. They can be clearly identified as having been produced for a particular purpose. One cannot say whether or not a classical or any other kind of record will be used for educational purposes. One cannot say whether it will be sold to a school or enjoyed at home. I am not denying that many records have educational value, but this is not what the Amendment has in mind. The Amendment has in mind records to be used in schools, universities or similar institutions.

Mr. J. E. B. Hill (Norfolk, South)

On the Minister's own showing, it should be possible to distinguish the sale of records to schools, since the record industry, as far as I am aware, has no wholesaling arrangements. Most orders have to be sent to the recording company. Surely, educational institutions could make sales direct so that it would be possible to identify the records as sold for educational purposes through educational institutions only.

Mr. Taverne

This is not a matter of administration. Records are taxed at a stage when it is not necessarily known for what purpose they are to be used. It would mean that where in a large concern stocks are held or particular records are sold those records would have to be left out altogether since at that stage the destination of the records would not be known.

The hon. Member for Peterborough (Sir Harmar Nicholls) chided my hon. Friend the Member for Lancaster (Mr. Henig) for being unpractical, but his approach was eminently practical and was concerned with the practical difficulties. It has been said that there are lists of educational records, but the records which are the subject of such lists are equally records which can be used for non-educational purposes. There are also many records not on the lists which could be used for educational purposes.

Mr. Kirk

Will the Minister say how he would use a language teaching record for non-educational purposes?

Mr. Taverne

There are certain records which perhaps could be said to be educational only, but the vast majority of records are not in that position. One could give many examples of almost any kind of record which could be used for educational purposes. Records can be used in schools for illustration; classical records can be used for educational purposes; one can illustrate in teaching music different kinds of music making; such records can all be used for educational purposes.

The hon. Member for Saffron Walden (Mr. Kirk) asked me what would be the cost of this concession. It is impossible to say what the cost would be, since almost any record could come within this definition. The only way in which this problem could be approached would be if one could exempt records which were suitable only for educational use. That is not what the Amendment does.

I said in Committee that I would look at the problem. I said that there would be difficulties in the anomalies that would be created, but nevertheless, if it were possible to isolate records which by their nature were suitable only for educational use, and if this did not lead to unacceptable anomalies, then we would examine the possibility of exemption.

The hon. Member for Worthing (Mr. Higgins), in Committee, referred specifically to language records, and asked us to consider as educational records those involving speech. One could perhaps say that language teaching records would be for educational purposes only. The concession had it been made would have had to be confined to records designed to form part of a course of instruction in language. There would have been considerable difficulties about this, but I cannot argue that it would have been administratively impossible. However, this would have been a concession which would have been strongly resented when other types of records also used for educational purposes would not come within that special category.

This was suggested by the hon. Member for Worthing when he put it more widely and referred to records involving speech. It is understandable that he should put it in that form, since records involving speech would be the way in which many people would want to approach it. That would include anything from a Shakespeare play to a music-hall turn. It would be impossible, without creating tremendous anomalies, to confine a concession to, say, language records or to records suitable only for educational use.

7.15 p.m.

Mr. Robert Cooke (Bristol, West)

Is the Minister able to give an example of a music-hall turn involving speech only which has been issued as a gramophone record?

Mr. Taverne

One would then have to say it should be speech without music. I can tell the hon. Member of records similar to music-hall turns which have been made by some of our eminent satirists involving speech only. It requires no great effort of imagination and very limited research to find long lists of records which involve speech only and which are in the nature of music-hall turns. However, the Amendment as it stands is not concerned with records suitable only for educational purposes. The Amendment would, therefore, be quite unworkable in practice and for that reason I must ask the House to reject it.

Sir Edward Boyle (Birmingham, Handsworth)

I am sure that the House is grateful to my hon. Friends who put down the Amendment, and in particular, to my hon. Friend the Member for Cambridge (Mr. Lane), who proposed it. I realise on listening to the debate that many hon. Members very pardonably wished we could have had a wider debate on Report covering the whole subject of Purchase Tax on gramophone records. I was not a member of the Standing Committee, and I am glad we have had this opportunity of attention to this more limited aspect. It is right that we should be considering this matter. As my hon. Friend the Member for Saffron Walden (Mr. Kirk) said, educational appliances have taken a beating from the Government.

My hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) was right to draw a contrast between the treatment of gramophone records for educational purposes and the treatment of books. It is also worth remembering that one must look at the problem faced by schools in the context of the Government's policy as a whole. Not only is there a steep increase in Purchase Tax, but the Government's policy on the rate support grant must mean that the local authorities and indivdual schools are in considerable difficulties when purchasing gramaphone records which are so important in an educational context.

I have listened carefully to the debate. I understand the view of the Minister of State when he says that records have to be taxed at a moment when their end use is not necessarily known. I recognise that there are difficulties about those gramophone records which can be used either for educational or for entertainment purposes. None the less, I agree with the view of the hon. Member for Lewisham, West (Mr. Dickens) that there is scope for differentiation. I agree with my hon. Friend the Member for Saffron Walden that surely we can work out a viable approach to the problem.

Constantly I have heard Finance Bill debates in the House, and I have even taken port in them, where the Government begin by saying that there is no solution to an administrative difficulty, but by the time there has been sufficient pressure from the House and outside it has very often happened that the administrative difficulty has been avoided, at any rate to a certain extent.

I felt disappointed by the Minister's reply. I believe that there are categories of records, some of which have been mentioned, which can clearly be identified as records for educational purposes and for no other purpose. I will mention three examples. The first is records concerned with the teaching of languages. My hon. Friend the Member for Saffron Walden, who is a much better linguist than I am, pointed out that one does not have these records for entertainment purposes.

Then, as the hon. Member for Lewisham, West pointed out, there are those records produced in connection with definite courses of study. I would add another feature which overlaps that category. It is not only those records which are designed with a course of study, but those which are—[Interruption.] Does my hon. Friend wish to intervene?

Sir G. Nabarro

No.

Sir E. Boyle

Though it is some time since I have taken part in a debate on the Finance Bill from the Front Bench, there were years when I got used to interjections from my hon. Friend in his earlier incarnation.

There are considerable numbers of records issued by companies to illustrate books produced for educational purposes, where a two-volume or three-volume manual of poetry is associated with gramophone records so that children can not only read and learn the poems but hear them performed. I believe that it would be possible to identify a considerable number of recordings as recordings purely for educational purposes.

I think that the Minister of State gave the real reason for the Government's refusal to move on this subject when he said that, although he agreed that there were records which could be identified in this way, he was afraid that this might be the thin end of the wedge. That is often the least persuasive type of argument to use with the House. In an administrative decision, there will be marginal cases, but I am convinced that there are a number of types of recordings, some of which have been referred to in the debate, which can be clearly identified as educational recordings.

The House has a good deal of business before it. We may not wish to devote more time to this matter now, but I feel sufficiently disappointed with the Minister's reply to advise my hon. Friends to divide on the Amendment.

Mr. Silvester

I am sorry to pursue this matter further, but the Minister's reply does not satisfy me. He said that the criterion was to be records which can only be used for educational purposes. I would remind him that his criterion was somewhat different in regard to cinematograph projectors, in connection with which the Government produced Amendment No. 185. A projector did not have to be used only for the purposes denned, but it did in the majority of cases.

We are not suggesting that one can define perfectly records which will be used for educational purposes, and only for those purposes. We are saying that for most normal, sensible people there are categories of records which the vast majority of us are sure will be used on most occasions for educational purposes. Although the Treasury may lose a small amount of money on those which happen not to be put to educational uses, it could well afford it because the sum is so small.

May I take the Minister back to another point about the U.N.E.S.C.O. Order? He is quite right in saying that the paragraph which concerns records refers to records produced by U.N.E.S.C.O. and is, therefore, defined. But there follows a paragraph concerning films. As I read it, that is not limited to U.N.E.S.C.O. but is concerned with an internal Ministry. It says: Import duty shall not be charged on any film, with or without soundtrack, which is certified by or on behalf of the Minister of Education to be of an educational character. It seems to me that there is a specific instance where the Government already accept that the Department of Customs and Excise, using the agency of the Minister of Education, can define a film in educational terms, and I cannot see why it is beyond the wit of the Minister to devise a similar system whereby records sold in this country cannot be similarly defined.

I do not suggest that it will be perfect, and no doubt many hon. Members, newspapers and others outside this House will be able to find anomalies and make fun of it. But at least we will get at the great bulk of educational records, which is what we are seeking to do. I would ask the Minister to think again. I know from what was said in Committee that the Government do not disagree with the principle. They say that it is beyond their understanding to devise an administrative system. But it is their duty to do so to give effect to the wishes of the House. I urge them to get on and do it.

Mr. J. E. B. Hill

Having heard the arguments put forward by my right hon. Friend the Member for Birmingham, Handsworth (Sir E. Boyle), I hope that the Government will think again. I am quite sure that, if there is a will here, a means can be found, whichever way one looks at it. If it is purely a question of identifying categories of records, surely the spoken word can be equated with the printed word, as my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) has urged.

Will it really be a great loss to the Revenue and a national disaster if a number of people who are not schoolboys or students buy records of Shakespeare? If that should happen, surely it would not be all that bad for the Treasury and the nation. I think that the recorded word can be put on the same footing as the printed word.

Then, as regards music, if a satisfactory definition were put forward by the Government, though admittedly it is difficult, it would be possible for recording companies wishing to fulfil the demands of education authorities for cheaper records so to make records in future that they came within the definition. It would be possible to record pieces of classical music for the public in general to enjoy and to re-record them for schools with a commentary attached. Such a record would be acceptable to a student, whereas it would be quite intolerable to listen to it in one's home. Nothing is done like that now, because there is no call for it, but I would ask the Government to think in terms of developments within the industry which might come forward to meet such a concession.

The whole argument put forward by my right hon. Friend about the burdens on education must be taken seriously by the Government. It is obvious that, with the financial pressures at work on education, nearly all the cuts will come at the margin, and some of the more pleasant parts will be omitted. The records and visual aids which are used form part of the capitation allowance, and they will be cut out. It follows, too, that if language and other educational records become more expensive to students and schools, some of the classical records which could be used for non-educational purposes will not be bought by schools and, therefore, the damage is cumulative.

In view of all the criticism in favour of trying to make it easy for schools to use gramophone records as a means of education, I hope, therefore, that the Government will think again. When they think again—and I prefer to say "when" and not "if"—would they consider the whole range of educational recordings? If the Minister is to think about the need to bring in educational gramophone records with a satisfactory definition, would he also think of educational recorded tapes, because they go together?

7.30 p.m.

Mr. Kenneth Lewis (Rutland and Stamford)

I was a little concerned that the Minister should suggest that a very serious speech that might be made by my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) should be put in the same category as a comic turn, and that the tax on a record of his speeoh should be the same as that on a record of someone entertaining the public.

I thought that the Minister accepted our case. He accepted that there was a reason for differentiation between the tax on a record made for entertainment and that on an educational record. He accepted the case, but said that nothing could be done about it because there was likely to be an administrative difficulty. I understand that the Chancellor said in his Budget speech that he believes that over a number of Budgets it is desirable that we should get away from increasing Income Tax and go over to increasing Purchase Tax and sales taxes. We on this side of the House have clearly said that we believe that there should be reductions of taxes on income and increases in taxes on spending. If Governments are to do that, the Treasury must find an administrative means by which categories of purchases by individuals, societies, industry or anyone else are exempt or have a lesser tax.

If the Government do not accept that, and taxes increase by 50, 70 or 80 or even 100 per cent. not only will articles bought for entertainment or popular use not concerned with education rise to a very high price but so will records and other objects which the public buy for their edification and education. If Purchase Tax increased right across the board people would be dissuaded from buying educational objects, whether records or anything else, which it was clearly in the public interest that they should buy. Language records, records of Shakespeare, records of poetry readings, which are now becoming more popular, records of our best orchestras and the like would not be sold because they would be clobbered with high taxation, which Governments did not intend to impose on them but really intended to impose on popular articles which they wanted to dissuade the public from buying. The Treasury must find an administrative means of securing such exemptions.

It is also necessary for it to do that because many societies are now making money through selling records. The Government and local authorities are frequently asked to subsidise orchestras. The Bournemouth Symphony Orchestra has been subsidised for many years, and so has the Halle Orchestra in Manchester. No one would wish them to go out of business. They depend very largely on selling their records and they have a limited public. The records are educational, though it is true that there are a few people who enjoy listening to them.

A Government with a "Minister of Arts", who receives an allocation from the Treasury, should aim to encourage the sale of those records. We may not yet have reached the position, though we are very near it with a high Purchase Tax. of 50 per cent., where people who want such records will not buy them. But it will be a very difficult decision for them, if Purchase Tax goes up across the board, as to whether they can afford to buy a record or to buy something else.

If such records and other items in future Budgets have imposed on them another considerable increase in Purchase Tax we shall reach the position where the public will not choose to buy that which will educate it and that which the "Minister of Arts" is trying to encourage people to buy. This will have on effect on orchestras and societies which at present are having a difficult time, because the revenue from their record sales greatly assists them at present. That revenue also assists the Government because if the orchestras and societies secured more revenue from the sale of records they would find it less necessary to ask for an increased subsidy. Therefore, it will pay the Government to encourage the sale of such records.

I am sure that over the next few years there will be a greatly increased demand for gramophone records, tapes and other things for learning languages. My hon. Friend the Member for Worcestershire, South said that he was not very good at languages. I do not think that many of our generation are, because we were taught at school from the book. School children now are taught from records, and young men and women leaving school are encouraged to take part in further education or to buy records and learn languages at home. It is important that they should do so, because we have an increase in foreign travel today. They are going abroad and it is an advantage to them if they can speak foreign languages. Language records should not be caught by a high Purchase Tax rate, which is bound to determine the public's attitude to their purchase and reduce their sales. I hope that the Minister will have another think about this matter.

Miss Harvie Anderson (Renfrew, East)

I was very disappointed by the Minister's reply, because it seems to me that he was working on the assumption that people throughout a great part of the country could obtain access to many things provided by records. I wish to make a plea for the remote parts of the country. There are many places where it is not possible to go to a concert to hear live music, and in such places records are perhaps appreciated most. This applies to a vast range of schools in Scotland which are far beyond any possible means of communication with a centre that will provide the live interest that we should all like.

The Minister made a very definite point about the difficulty of identification, which has been emphasised by many other hon. Members. But there should be no great need for close identification. If he lived in a very remote area in Wales, Cornwall or the North of Scotland and had never been to a concert, would he think it very unreasonable to expect a village school to put on a concert of records, and that those records should be bought for educational purposes? Would it be so very shameful if some of the great music of this land and other lands were heard for the first time by the whole community rather than just the children at school? Surely this is the purpose of education as we see it today—as the present Government, unfortunately, do not see it, but as the next Government certainly will. Education now embraces the whole community and no longer the very small range of people from the age of five to 15. We are expected to accommodate and provide for all who are prepared to take an intelligent interest in the best things of life, even if those things come to them a little late.

So the question of identification should not be too closely followed and certainly should not be used as a Treasury argument for exempting these records. There must be some point in the fact that if there were exemption for these records it would mean wider sales. So this would be advantageous to the Treasury. I should have thought that a benign Treasury would be able to reduce the Tax and thus allow more sales of the commodity, because in this way it would act in a commercial fashion towards an industry which provides much for the country and a considerable amount of exports. It is constantly put to us by those who make these records that if they had greater encouragement and greater sales they could increase their export potential. Not long ago when Conservative Members were sitting on the Government side we had the strongest representations along these lines from some of our most distinguished musicians.

Mr. James Dempsey (Coatbridge and Airdrie)

I am interested in the hon. Lady's argument about the need to exempt certain types of record used in Scottish schools. Would she include in her sample, for example, the records used for providing music for country dancing in schools throughout Scotland? Would they be part of the educational element in records that she feels should be exempted?

Miss Harvie Anderson

Certainly. As I understand it, country dancing classes are provided by further education authorities, and, therefore, are subsidised by the State. I see no distinction between subsidising the teaching of classes and the subsidising of music which is used.

The Treasury is very good when it seeks sources from which to extract finance. It is a constant source of wonder to me that it fails so utterly when asked to identify some worthy object to exempt from tax. I urge the Minister to take these considerations most seriously and perhaps belatedly revise what he has said.

Mr. Robert Cooke

I am glad to catch your eye, Mr. Speaker. You will notice that I have moved from the popular to the educational benches in order to make a brief intervention in the debate.

I was disappointed with the Minister's reply to an intervention from me. The only difficulty that he seemed to visualise was that certain satirical records might be purchased by the public at too low a rate of Purchase Tax. That might not be too bad a thing. To help him, I would say that he could easily have got the key to the problem by exempting these records of a large and expensive nature. These on the whole are the ones of an educational nature. I am sure that the Chancellor is worried lest exemptions should apply to the millions of pop records, which must bring in a good deal of revenue to the Exchequer. But this is not our point. We want to help the edu-

cational side. It should be easy to identify records of an expensive nature and those sold in sets.

We should do nothing, surely, to take away from the instruction and enjoyment which school children and other students can get from these records. Most schools are on a fairly tight budget when it comes to educational material, even schools financed by the State—I speak from personal experience, having served on management committees. Private schools, in which I was at one time a teacher, find themselves with little money for this sort of thing. If the budget has been fixed, a tax change means that less educational material will be available to the children.

I know that the Chancellor is not the hard-hearted person that some people might suggest. I notice a pleasant smile spreading across his face. So I sit down in the hope that he and his great Department will use their ingenuity to put this matter right, if not on this occasion, perhaps in the future.

Question put, That the Amendment be made:—

The House divided: Ayes 145, Noes 192.

Division No. 264.]	AYES	[7.46 p.m.
Alison, Michael (Barkston Ash)	Emery, Peter	McAdden, Sir Stephen
Allason, James (Hemel Hempstead)	Errington, Sir Eric	MacArthur, Ian
Astor, John	Eyre, Reginald	Mackenzie, Alasdair (Ross&Crom'ty)
Awdry, Daniel	Farr, John	Maclean, Sir Fitzroy
Baker, W. H. K. (Banff)	Fletcher-Cooke, Charles	Macleod, Rt. Hn. Iain
Balniel, Lord	Fortescue, Tim	McMaster, Stanley
Beamish, Col. Sir Tufton	Gibson-Watt, David	Maddan, Martin
Bennett, Dr. Reginald (Cos. & Fhm)	Gilmour, Ian (Norfolk, C.)	Maude, Angus
Biggs-Davison, John	Glover, Sir Douglas	Maxwell-Hyslop, R. J.
Black, Sir Cyril	Godber, Rt. Hn. J. B.	Mills, Peter (Torrington)
Blaker, Peter	Goodhart, Philip	Mills, Stratton (Belfast, N.)
Bossom, Sir Clive	Coodhew, Victor	Miscampbell, Norman
Braine, Bernard	Gower, Raymond	Monro, Hector
Brewis, John	Grant, Anthony	Montgomery, Fergus
Brown, Sir Edward (Bath)	Gurden, Harold	More, Jasper
Bruce-Cardyne, J.	Hall, John (Wycombe)	Morgan, Geraint (Denbigh)
Bryan, Paul	Harrison, Col. Sir Harwood (Eye)	Mott-Radclyffe, Sir Charles
Buchanan-Smith, Alick (Angus,N&M)	Harvie Anderson, Miss	Murton, Oscar
Buck, Antony (Colchester)	Hawkins, Paul	Nabarro, Sir Gerald
Campbell, B. (Oldham, W.)	Heald, Rt. Hn. Sir Lionel	Onslow, Cranley
Campbell, Gordon (Moray & Nairn)	Heath, Rt. Hn. Edward	Osborn, John (Hallam)
Carr, Rt. Hn. Robert	Higgins, Terence L.	Osborne, Sir Cyril (Louth)
Channon, H. P. G.	Hill, J. E. B.	Page, Graham (Crosby)
Chichester-Clark, R.	Holland, Philip	Page, John (Harrow, W.)
Clegg, Walter	Hooson, Emlyn	Pearson, Sir Frank (Clitheroe)
Cooke, Robert	Hordern, Peter	Peel, John
Costain, A. P.	Hornby, Richard	Percival, Ian
Craddock, Sir Beresford (Spelthorne)	Hunt, John	Pike, Miss Mervyn
Crowder, F. P.	Iremonger, T. L.	Pounder, Rafton
Cunningham, Sir Knox	Jenkin, Patrick (Woodford)	Powell, Rt. Hn. J. Enoch
Dance, James	Kirk, Peter	Prior, J. M. L.
Davidson, James (Aberdeenshire,W.)	Lane, David	Pym, Francis
d'Avigdor-Goldsmid, Sir Henry	Langford-Holt, Sir John	Ramsden, Rt. Hn. James
Dean, Paul (Somerset, N.)	Legge-Bourke, Sir Harry	Rees-Davies, W. R.
Dodds-Parker, Douglas	Lewis, Kenneth (Rutland)	Rhys Williams, Sir Brandon
Eden, Sir John	Loveys, W. H.	Rossi, Hugh (Hornsey)
Elliot, Capt. Walter (Carshalton)	Lubbock, Eric	Russell, Sir Ronald
Scott, Nicholas	Thatcher, Mrs. Margaret	Williams, Donald (Dudley)
Scott-Hopkins, James	Thorpe, Rt. Hn. Jeremy	Wills, Sir Gerald (Bridgwater)
Sharples, Richard	Turton, Rt. Hn. R. H.	Wilson, Geoffrey (Truro)
Shaw, Michael (Sc'b'gh & Whitby)	van Straubenzee, W. R.	Winstanley, Dr. M. P.
Silvester, Frederick	Vaughan-Morgan, Rt. Hn. Sir John	Wolrige-Gordon, Patrick
Sinclair, Sir George	Wadding ton, D.	Woodnutt, Mark
Smith, Dudley (W'wick & L'mington)	Wainwright, Richard (Colne Valley)	Wylie, N. R.
Smith, John (London & W'minster)	Walker, Peter (Worcester)	Younger, Hn. George
Stainton, Keith	Walker-Smith, Rt. Hn. Sir Derek
Summers, Sir Spencer	Ward, Dame Irene	TELLERS FOR THE AYES:
Tapsell, Peter	Weatherill, Bernard	Mr. R. W. Elliott and
Taylor, Sir Charles (Eastbourne)	Wells, John (Maidstone)	Mr. Timothy Kitson.
Temple, John M.	Whitelaw, Rt. Hn. William
NOES
Alldritt, Walter	Griffiths, Will (Exchange)	Norwood, Christopher
Allen, Scholefield	Hamilton, James (Bothwell)	Oakes, Gordon
Archer, Peter	Hamilton, William (Fife, W.)	Ogden, Eric
Atkins, Ronald (Preston, N.)	Hamling, William	O'Malley, Brian
Atkinson, Norman (Tottenham)	Hannan, William	Orme, Stanley
Bacon, Rt. Hn. Alice	Harper, Joseph	Oswald, Thomas
Barnett, Joel	Harrison, Walter (Wakefield)	Owen, Dr. David (Plymouth, S'tn)
Baxter, William	Haseldine, Norman	Owen, Will (Morpeth)
Beaney, Alan	Heffer, Eric S.	Page, Derek (King's Lynn)
Bence, Cyril	Henig, Stanley	Palmer, Arthur
Benn, Rt. Hn. Anthony Wedgwood	Herbison, Rt. Hn. Margaret	Pannell, Rt. Hn. Charles
Bennett, James (G'gow, Bridgeton)	Hooley, Frank	Parker, John (Dagenham)
Blackburn, F.	Houghton, Rt. Hn. Douglas	Parkyn, Brian (Bedford)
Blenkinsop, Arthur	Howarth, Herry (Wellingborough)	Pavitt, Laurence
Boardman, H. (Leigh)	Howie, W.	Pearson, Arthur (Pontypridd)
Booth, Albert	Hoy, James	Peart, Rt. Hn. Fred
Bottomley, Rt. Hn, Arthur	Hughes, Emrys (Ayrshire, S.)	Pentland, Norman
Braddock, Mrs. E. M.	Hughes, Roy (Newport)	Perry, Ernest G. (Battersea, S.)
Brooks, Edwin	Hunter, Adam	Perry, George H. (Nottingham, S.)
Brown, Hugh D. (G'gow, Provan)	Irvine, Sir Arthur (Edge Hill)	Prentice, Rt. Hn. R. E.
Buchan, Norman	Jackson, Colin (B'h'se & Spenb'gh)	Price, Thomas (Westhoughton)
Buchanan, Richard (G'gow, Sp'burn)	Jenkins, Rt. Hn. Roy (Stechford)	Price, William (Rugby)
Callaghan, Rt. Hn. James	Johnson, James (K'ston-on-Hull, W.)	Probert, Arthur
Cant, R. B.	Jones, Dan (Burnley)	Rankin, John
Carmichael, Neil	Jones,Rt.Hn.SirElwyn(W.Ham,S.)	Rees, Merlyn
Coe, Denis	Jones, J. Idwal (Wrexham)	Richard, Ivor
Coleman, Donald	Kelley, Richard	Robertson, John (Paisley)
Cullen, Mrs. Alice	Kerr, Mrs. Anne (R'ter & Chatham)	Rose, Paul
Dalyell, Tam	Kerr, Russell (Feltham)	Sheldon, Robert
Davidson, Arthur (Accrington)	Lawson, George	Shore, Rt. Hn. Peter (Stepney)
Davies, Ednyfed Hudson (Conway)	Leadbitter, Ted	Short, Mrs. Renée(W'hampton,N.E.)
Davies, Harold (Leek)	Ledger, Ron	Silkin, Rt. Hn. John (Deptford)
Davies, Ifor (Gower)	Lestor, Miss Joan	Silkin, Hn. S. C. (Dulwich)
Dell, Edmund	Lever, Harold (Cheetham)	Slater, Joseph
Dempsey, James	Lewis, Arthur (West Ham, N.)	Small, William
Dewar, Donald	Lewis, Ron (Carlisle)	Snow, Julian
Diamond, Rt. Hn. John	Lomas, Kenneth	Spriggs, Leslie
Doig, Peter	Loughlin, Charles	Steele, Thomas (Dunbartonshire, W.)
Dunn, James A.	Lyons, Edward (Bradford, E.)	Swingler, Stephen
Dunwoody, Mrs. Gwyneth (Exeter)	Mabon, Dr. J. Dickson	Symonds, J. B.
Dunwoody, Dr. John (F'th & C'b'e)	McBride, Neil	Taverne, Dick
Edwards, Robert (Bilston)	McCann, John	Thomson, Rt. Hn. George
Edwards, William (Merioneth)	MacColl, James	Thornton, Ernest
Ellis, John	Macdonald, A. H.	Tinn, James
English, Michael	McGuire, Michael	Tuck, Raphael
Evans, Ioan L. (Birm'h'm, Yardley)	Mackenzie, Gregor (Rutherglen)	Urwin, T. W.
Faulds, Andrew	Mackintosh, John P.	Varley, Eric G.
Fernyhough, E.	Maclennan, Robert	Walker, Harold (Doncaster)
Fitch, Alan (Wigan)	McNamara, J. Kevin	Wallace, George
Fletcher, Raymond (Ilkeston)	Mahon, Peter (Preston, S.)	Watkins, David (Consett)
Fletcher, Ted (Darlington)	Mahon, Simon (Bootle)	Watkins, Tudor (Brecon & Radnor)
Foley, Maurice	Mallalieu, E. L. (Brigg)	Wellbeloved, James
Foot, Michael (Ebbw Vale)	Manuel, Archie	Whitaker, Ben
Ford, Ben	Marquand, David	Whitlock, William
Forrester, John	Mason, Rt. Hn. Roy	Wilkins, W. A.
Fowler, Gerry	Mellish, Rt Hn. Robert	Williams, Alan (Swansea, W.)
Fraser, John (Norwood)	Millan, Bruce	William, Alan Lee (Hornchurch)
Freeson, Reginald	Miller, Dr. M. S.	Williams, Mrs. Shirley (Hitchin)
Galpern, Sir Myer	Milne, Edward (Blyth)	Williams, W. T. (Warrington)
Gardner, Tony	Moonman, Eric	Winnick, David
Gray, Dr. Hugh (Yarmouth)	Morgan, Elystan (Cardiganshire)	Woof, Robert
Greenwood, Rt. Hn. Anthony	Morris, Alfred (Wythenshawe)	Yates, Victor
Gregory, Arnold	Neal, Harold
Griffiths, Eddie (Brightside)	Newens, Stan	TELLERS FOR THE NOES:
Griffiths, Rt. Hn. James (Llanelly)	Noel-Baker,Rt.Hn.Philip(Derby,S.)	Mr. Harry Gourlay and
		Mr. Ernest Armstrong.