HC Deb 15 October 1940 vol 365 cc608-9W
Mr. Hannah

asked the Chancellor of the Exchequer whether he is aware that the Purchase Tax, applied to light castings, grates, ranges, etc., will greatly interfere with the repair of air-raid damage and possibly lead to profiteering; and what action does he propose to take?

Sir K. Wood

There is no provision in the Finance Act which would exempt from Purchase Tax goods purchased for special purposes. I have no reason to believe that the imposition of the tax will have the effects suggested. As regards profiteering, if my hon. Friend has any reason to suppose that advantage is being taken of the levying of the tax to raise prices unduly, I hope that he will send particulars of the matter to my right hon. Friend the President of the Board of Trade, who will be glad to consider whether any action should be taken.

Mr. Wedgwood

asked the Chancellor of the Exchequer whether he is aware that the Government of the United States of America must inevitably add the British Purchase Tax price to the American duty on all such goods exported to America; whether he has formed any estimate of the loss of exports to America that will result; and whether even now that alteration in the method of collecting the tax can be introduced so as to avoid the loss of American exchange?

Mr. Johnstone

I have been asked to reply. The amount of the tax may fall to be added to the dutiable value of those goods of which purchases in this country are chargeable with the tax and which are liable on importation into the United States to ad valorem rates of duty. The answer to the second part is in the negative. In answer to the third part, I am not in a position to add to the reply which the then President of the Board of Trade gave on 21st August to my hon. Friend the Member for Moseley (Sir P. Hannon).

Mr. Lipson

asked the President of the Board of Trade whether, in view of the fact that traders are being informed by certain wholesale dealers that it will be permissible for them to lump the Purchase Tax in with the cost of goods and to treat the whole as the cost price, marking up on that figure in accordance with the Prices of Goods Act, he will issue a statement on the matter for the guidance of traders?

Major Lloyd George

It would not have been practicable to require retailers in all cases to state separately the price of every article they sold and the amount of Purchase Tax attributable to each. The retailer is not, however, permitted by the Prices of Goods Act to make any profit on that part of the cost price which is represented by the Purchase Tax, and it follows that he must proportionately reduce the percentage mark-up which he was previously entitled to add. A statement on this and other matters relating to the pricing of goods on which Purchase Tax is chargeable has been issued by the Central Price Regulation Committee for the guidance of traders.