PURCHASE TAX COUPON SCHEME (Hansard, 29 July 1953)

§ LORD BARNBY
My Lords, I beg to ask the second Question which stands in my name on the Order Paper.

§ THE EARL OF SELKIRK
My Lords, the working of the purchase tax coupon scheme has now been carefully reviewed. The Government are satisfied that the imperfections inherent in this experimental scheme now outweigh the benefits derived from it, and that on balance of advantage it should be discontinued. It has not been possible to devise any alternative arrangements which would be free from the defects of the present scheme and would also incorporate adequate safeguards against abuse and loss of revenue. But although the purchase tax coupon scheme will therefore be terminated at the end of this year, the personal export scheme will, of course, continue to provide its valuable facilities for tourists.

§ LORD BARNBY
My Lords, while thanking the noble Earl for that reply, may I point out that he has stated that the present procedure is ineffective and that he holds out no hope that anything is to be substituted for it. The adverse Report of the Board of Trade Committee established the fact that great inconvenience is caused to visitors to this country and that the sale of a large amount of merchandise against dollars is thereby stopped. It seems unreasonable that the Board of Trade, while admitting that fact, should put forward no proposals for any alternative procedure. May I ask the noble Earl whether he can give any hope of something definite being done?

§ EARL JOWITT
My Lords, may I add that it seems to me that it is disadvantageous to this country that this scheme should be done away with altogether. Surely it is to the advantage of citizens of this country that foreign visitors should be encouraged to make their purchases here. If this scheme is unworkable, I hope that steps are being taken to find out whether there is not some workable scheme to enable that to be done.

§ THE EARL OF SELKIRK
My Lords, I do not think anyone questions the objects which this scheme envisaged. The noble Lord, Lord Barn by, used the word "paraphernalia," and I think it adequately describes the process by which this scheme works. There has been a well-informed Committee who, with the assistance of the Dollar Export Committee, have gone right into the question. They have been unable to find an alternative method of carrying on this scheme with- 1017 out bringing equal disadvantages. I will not go into the disadvantages, but they are fairly extensive. They amount to considerable abuses. Many people who do not get the advantage of it are annoyed—South Americans, and other members of the Commonwealth—and I am informed that even those for whom the benefit is given grumble a good deal about the inconvenience which is caused by form-filling and other methods. In these circumstances we have not been able to find any alternative which would meet the requirements, and whilst I should welcome any suggestion which the noble Lord has to make, I regret that I cannot hold out any hope at the moment that any useful scheme will be devised.

§ LORD CALVERLEY
Will the noble Earl at once order his Committee to reassemble and try to find an answer to this conundrum?

LORD BARNEY
While thanking the noble Earl for his reply, may I suggest that the time has come when the Government should take the risk of introducing a scheme in spite of its being abused?

LORD GIFFORD
Is there not a very simple answer: that is, to produce the passport at the time? While there might be abuse, I think the chance would be so small that it would not be worth worrying about.

§ THE EARL OF SELKIRK
It would, I think, be a little too easy to allow anyone to make retail purchases in this country, free of purchase tax, on the mere presentation of an American passport. I suggest that would really be asking for trouble.