HL Deb 28 February 1962 vol 237 cc952-4

2.50 p.m.

LORD FERRIER

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

[The Question was as follows:

To ask Her Majesty's Government whether, in view of the importance of improving the load factor of the electricity supply system, they will give encouragement to the development of the off-peak load by abolishing or reducing the recently imposed purchase tax on electrical thermal-storage space-heating units.]

THE MINISTER WITHOUT PORTFOLIO (LORD MILLS)

No, my Lords. The importance of the contribution which off-peak consumption makes to improving the load factor and the efficiency of the electricity supply system is quite clear; but to use purchase taxes in its support is open to objection. Oil, gas and electric room heaters are now taxed at the same rate, and to make an exception of a particular type would introduce an undesirable discrimination into this field.

LORD FERRIER

My Lords, while thanking the noble Lord for his Answer, may I ask whether he, appreciating the advantages of the storage type heater for the off-peak load, would suggest to his right honourable friend that a reduction might be considered, perhaps sufficient only to bring the cost to the consumer of the storage type apparatus level with the cost of the non-storage type apparatus?

LORD MILLS

My Lords, they are actually at the same level, so I do not think there would be any purpose in making such a suggestion to my right honourable friend.

LORD STONHAM

Is it not the case that this difficulty has arisen because of the introduction of domestic type storage heating appliances, and that the industrial types were not previously subject to purchase tax? Is it not possible to find a way of exempting at least the industrial types on which previously no tax was paid?

LORD MILLS

My Lords, it is quite true that no tax was formerly paid on the industrial type and it now bears the same tax as the domestic type. That has really made possible the use of a domestic type, because the discrimination that existed before prevented many people from using them.

LORD STONHAM

That means to say that they all have to suffer alike, and that would make it easier for the domestic people. It is somewhat difficult to understand.

LORD FERRIER

My Lords, might I suggest that perhaps the noble Lord misunderstood my first supplementary, which implied that to the consumer the storage type heater is more expensive intrinsically than the non-storage type? Would my noble friend consider whether the tax could be adjusted, so that the ultimate cost to the user. including tax, could be the same?

LORD MILLS

Yes, my Lords, I quite understand the question. I will, of course, put the point before my right honourable friend, but I can hold out no hope that the purchase tax will be altered in the way suggested.

LORD AIREDALE

My Lords, following what was said by the noble Lord, Lord Stonham, would it not be perfectly easy to have different models of these heaters, one being exempt from purchase tax for use by industry, and one bearing purchase tax for use by domestic consumers? Could this not be perfectly easily controlled, bearing in mind that the electricity boards have to make connections of these units, and at the time of connection it could be confirmed that purchase tax was not being evaded?

LORD MILLS

Yes, my Lords; I see no difficulty. But the other course has been followed, which is to levy purchase tax on all types.