CRITERIA FOR DETERMINING DUTY ON ORDINARY LICENCES (Hansard, 20 April 1972)

§ Mr. S. C. Silkin (Dulwich)
I beg to move Amendment No. 1, in page 15. line 25, after 'it', insert 'is a penny machine or if it'. I am certain that I need not remind the Solicitor-General of the argument that I deployed on Second Reading, in which I raised a doubt whether the Clause was true consolidation in that it appeared to substitute a higher rate of tax for a penny machine for the lower rate which it appeared to attract under the previous law.
After listening to my argument and doing me the courtesy of saying that he thought that he understood the point, the hon. and learned Gentleman went on to say that he did not accept it but that he would see that it was examined. Since then, I have heard nothing further. Whether it has been examined, is still being examined or has yet to be examined, I know not. Not having heard. I thought it desirable to table an Amendment which seemed to meet the point which was troubling me. No doubt the hon. and learned Gentleman will be able to tell the Committee whether the Amendment is necessary to make this a true consolidation Measure and, if not, why not.

§ The Solicitor-General (Sir Geoffrey Howe)
The uninformed observer of the scene might well wonder what kind of examination I was being required to pass if he were to study and brood over the seven words of the Amendment. I gather that the candidate is required to answer all the questions posed by the hon. and learned Member for Dulwich (Mr. S. C. Silkin), and he is right to say that the 903 only question is whether the Bill reproduces the old law. The answer is that it does.
I proceed to answer the next question, which is why it does. I agree that on Second Reading the hon. and learned Member for Dulwich gave an accurate analysis of the law as it will emerge from the Bill. The question is whether that is different from the old law as it is today.
I take for convenience the state of the old law at 1st September 1971, for reasons which will appear. The provisions contained in Clause 22(5) are taken directly from Section 5(5) of the Finance Act, 1969. Those are the provisions for the two levels of duty.
The provisions in Clause 27(2), which define a coin as meaning lawful currency, are taken from Section 5(15) of the Finance Act, 1969. Of course, in 1969 the old penny was lawful currency.
The provisions in Clause 27(2) defining this fascinating object, described as a penny machine, are taken from Section 3(4) of the Finance Act, 1970. A penny machine in both provisions, the old and the new, is a machine which accommodates the new penny, the new halfpenny and the old penny.
Section 1(3) of the Decimal Currency Act, 1969, provided that the old penny should not be legal tender at the end of the transitional period. The hon. and learned Gentleman referred to that last time. As a result of Statutory Instrument No. 1123 of 1971, to which he also referred last time, the transitional period ran out on 31st August last year, and on that day the old penny ceased to be legal tender.
The state of the law which the hon. and learned Gentleman analysed as emerging from the Bill is the state which the law had reached on 31st August last year, because at that time the old penny ceased to be legal tender. Therefore, the position became as described by him. Theoretically, from then on a penny machine using old pennies became dutiable at the higher rate. Therefore, the Bill reproduces that slightly odd situation. It gives rise to no practical difficulty, because there are not many penny machines still playable, if that is the right word to apply to a penny machine, by the 904 insertion of an old penny. However, the Customs and Excise has continued to treat those which remain as lower rate machines, or as penny machines as formerly defined in Section 3 of the Finance Act, 1970.
I assure the Committee that there is no intention of changing that practice.No evil consequences follow from the state of the law as it was, as it is, or as it will be, to the doubtless fascinated citizens who still own, operate, and play with penny machines which accept only old pennies. On that basis, I invite the Committee toreject the Amendment.

§ Mr. S. C. Silkin
I was fascinated by the Solicitor-General's explanation which, to my surprise, I succeeded in following. I gather that the nigger in the woodpile was the transitional order rather than the consolidation Measure. That is the explanation of the difficulty. That transitional order changed the law from what it was before, but I understand that the Revenue will treat the position as though it had not changed the law for this purpose, so that, notwithstanding the consolidation Measure, we shall be proceeding in accordance with the law as it was before the transitional order.
On that assurance from the Solicitor-General, I am only too happy to withdraw the Amendment. I beg to ask leave to withdraw the Amendment.