HL Deb 05 December 1961 vol 236 cc3-5

2.40 p.m.

LORD MONTAGU OF BEAULIEU

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government whether for the sake of the future of British motor racing they will reconsider their decision to discontinue allowing purchase tax rebate on racing cars.]

THE MINISTER WITHOUT PORTFOLIO (LORD MILLS)

My Lords, Her Majesty's Government recognise the value to the British motor industry, on grounds of prestige and technical development, of successful British participation in international motor racing. They do not consider, however, that in present circumstances it would any longer be justifiable to maintain the special concession of a refund of purchase tax on racing cars. The industry willno doubt be prepared to give motor racing their support to the extent that they consider this to be warranted by the benefits which it would bring to them.

EARL HOWE

My Lords, may I ask the noble Lord whether he is aware that many firms who are interested in motor racing and who represent this country abroad are not big firms such as, shall we say, the British Motor Corporation; they are small firms making their headway? And if they are to be charged an unreasonable amount of purchase tax, how can they possibly afford to go on with their enterprises'?

LORD MILLS

My Lords, I am quite aware of the firms which participate in motor racing. I am not aware that they cannot afford to go on if this rebate is withdrawn, as it will be; nor am I aware that the British motor industry wouldnot continue to support them.

LORD DERWENT

My Lords, is it not a fact that purchase tax is chargeable on motor cars only if they are designed to carry passengers? If that is the case, if these cars are not designed to carry passengers why is purchase tax charged?

LORD MILLS

My Lords, that was all gone into in 1950, when it was decided to give this rebate. Ithink it is a fact that these cars come within the definition of cars liable to purchase tax.

LORD WINDLESHAM

My Lords, would the noble Lord and the Government not agree that in fact these racing cars are prototypes, and that the reliability of the cars in which your Lordships come to this House every day is largely affected by the experiments which are carried out in this way?

LORD MILLS

My Lords, I thought my original Answer testified to the importance of these cars. I agree they are important.

EARL HOWE

My Lords, could the noble Lord give the House any idea of what the gain of removing this concession would be to the Government?

LORD MILLS

Yes, my Lords: it will be about £30,000 a year off the Board of Trade Vote.

LORD STONHAM

My Lords, can the noble Lord say whether the amount of £30,000 has been set against the value of these cars for research purposes to the motor industry?

LORD MILLS

My Lords, I am not sure that that arises. It has been decided to stop this rebate. I have already said that the importance of motor racing to the industry is understood, and I have suggested that the motor industry will probably take that into account, too.

THE EARL OF SWINTON

My Lords, is this not perhaps another case for a pause for the moment?