HC Deb 26 January 1971 vol 810 cc301-2
8. Mr. Clinton Davis

asked the Chancellor of the Exchequer whether he is aware that purchase tax is imposed on goods manufactured by disabled persons undergoing rehabilitation in factories or workshops administered by local government welfare authorities; and if he will seek to exempt such goods from purchase tax.

Mr. Maurice Macmillan

I am sympathetic to the hon. Gentleman's motives in making this suggestion. But I could not justify such exemption because goods made in these circum- stances are sold in competition with those of commercial manufacturers and importers who have to bear the tax.

Mr. Clinton Davis

Is not the Chief Secretary aware that local welfare authorities are not making profits, in contradistinction to the other people about whom he spoke? Does not he also recognise that the manufacture and sale of these goods represents part of the therapy treatment that is available to disabled persons, and that purchase tax represents a serious discouragement to local authorities and disabled people?

Mr. Macmillan

Yes, but there is a problem here. First, a number of voluntary bodies are also doing similar work. Secondly, quite a large number of commercial firms deliberately employ a high proportion of handicapped people. In these circumstances, an attempt to alter the purchase tax in relation to the type of employment and the type of employer would lead to more complications and unfairnesses than keeping the present system which relates exemptions from purchase tax entirely to the character of the goods.

Sir B. Rhys Williams

In turning his attention to this problem, will my hon. Friend look at the precedent set already of special concessions for the blind and the positive payments for the constant attendance allowances? Will he consider the possibility of introducing a system of positive tax credits specially favourably slanted towards the disabled?

Mr. Macmillan

As first sight that sounds a somewhat complicated approach to the problem, but I would like to consider it.