§ 31. Mr. Nabarroasked the Chancellor of the Exchequer to what extent it is his policy to place Purchase Tax on tools of trade.
§ Mr. BarberIn many instances, tools of trade are altogether outside the scope of Purchase Tax, or have been specially exempted from it. But no general exemption is possible and, in any particular instance, the interests of the trade must be weighed against the interests of the Exchequer.
§ 32. Mr. Nabarroasked the Chancellor of the Exchequer whether he is aware that the manuscript paper used by musicians is subject to Purchase Tax at 25 per cent., as are their instruments, whereas gramophone records are subject to tax at 50 per cent. and the specially prepared nibs used by musicians for exists against gramophone records and writing on manuscript paper are free of Purchase Tax; why such discrimination 149W in favour of nibs; and what steps he proposes to take in this matter.
§ Mr. BarberGramophone records are taxed at the higher rate for revenue reasons. Musical instruments and stationery and office requisites are taxed at the standard rate. The special drawing nibs with which the musical stave can be sketched at one stroke, if they are what my hon. Friend is thinking of, are outside the tax Schedule. I still cannot anticipate my right hon. Friend's Budget statement.
§ 34. Mr. A. Lewisasked the Chancellor of the Exchequer if he will state the rate of Purchase Tax chargeable on luxury items such as mink coats, diamond rings, luxury cars, in the financial year 1951–52; what is the comparable rate at present; and how much he estimates would accrue to the Treasury if this Purchase Tax rate was returned to its 1951–52 level.
§ Mr. BarberFor most of the financial year 1951–52, mink coats and diamond rings were chargeable with tax at 100 per cent. They are now chargeable at 25 per cent. Motor cars were chargeable at 66⅔ per cent., and are now chargeable at 50 per cent. I could not make the estimate asked for in the last part of the Question because I do not know where the hon. Member would draw his boundary line.
§ Mr. Nabarroasked the Chancellor of the Exchequer whether he is aware that vellums for drums are subject to Purchase Tax at 25 per cent. if cut to the required circular shape for the drum, but are not so subject when supplied uncut and invoiced by the supplier as uncut skins: and, having regard to the bad influence of this anomaly upon the production of drums, whether he will remedy matters by appropriate action.
§ Mr. BarberI do not regard the position as anomalous and I am not aware that it has a bad influence on production. Manufacturers of drums who are registered for tax purposes can obtain all their materials tax free.
§ Mr. Nabarroasked the Chancellor of the Exchequer why the toy xylophone is subject to Purchase Tax at 25 per cent. whereas a toy piano is free of Purchase Tax; whether a toy piano is classified as a toy or a musical instru- 150W ment; and in what circumstances Customs and Excise re-classify toy xylophones and pianos as musical instruments.
§ Mr. BarberToy pianos and toy xylophones, if they are designed to be played, are both toys and musical intruments and are therefore within both the appropriate Groups of the tax classification. The exemption in the musical instruments Group is applicable to pianos, whether toys or not.
§ Mr. Nabarroasked the Chancellor of the Exchequer for what reasons an infant's pair of mittens are free of Purchase Tax, whereas an infant's gloves, of the same size, carry Purchase Tax at 5 per cent.; and why special fiscal preference is thus expressed in respect of infant's mittens.
§ Mr. BarberThe exemption is for gloves suitable only for babies' wear. I am advised that these are always made in the form of mitts.
§ Mr. Nabarroasked the Chancellor of the Exchequer on what grounds electric moustache curlers are charged to Purchase Tax at the same rate as domestic heating appliances, namely, 25 per cent., whereas all other articles designed for use in bleaching, waving, curling, setting, dye tinting, and in any way dressing or treating the hair are charged to Purchase Tax at 50 per cent.; and whether he will arrange at an early date to reduce the tax on all such apparatus to 25 per cent. or less regardless of the technique involved.
§ Mr. BarberMy hon. Friend is in error. Not only electric moustache curlers, but all articles and appliances designed for heating the hair in the process of waving, curling or setting it are taxable at 25 per cent. As to the rest of the Question, I cannot anticipate my right hon. Friend's Budget statement.
§ Mr. Nabarroasked the Chancellor of the Exchequer what is his present policy with regard to the encouragement of National Savings; and when he intends to review the present position under which children's money boxes, including piggy banks, are chargeable to Purchase Tax at 25 per cent.
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§ Mr. BarberBoth parts of this Question raise issues appropriate to my right hon. Friend's Budget statement, which I cannot anticipate.
§ Mr. Nabarroasked the Chancellor of the Exchequer whether his attention has been called to the substantial increase in the export of commercial road vehicles since he abolished Purchase Tax on such vehicles in his last Budget; and what special steps he is taking to ascertain to what extent the export of other motor vehicles would benefit by similar tax treatment.
§ Mr. BarberI would refer my hon. Friend to the reply given by my right hon. Friend to his third Question on 10th November, and to that given by my hon. Friend the Minister of State, Board of Trade, to his second Question of 3rd March.
§ Mr. Nabarroasked the Chancellor of the Exchequer whether he will reconsider the position under which money belts are chargeable to Purchase Tax at 25 per cent., whereas ordinary belts, including uniform belts, are chargeable at 5 per cent.; and whether, in particular, he will now give greater encouragement to the use of money belts by reducing the tax thereon.
§ Mr. BarberI cannot anticipate my right hon. Friend's Budget statement.
§ Mr. Nabarroasked the Chancellor of the Exchequer whether, in view of the increasing difficulties of the National Coal Board, he will abolish Purchase Tax on all non-smoke-producing appliances, which directly, or indirectly, use home-produced fuel, including gas and electricity space and water heaters for domestic use.
§ Mr. BarberI cannot anticipate my right hon. Friend's Budget statement.
§ Mr. Nabarroasked the Chancellor of the Exchequer if he is aware that the effect of the 50 per cent. Purchase Tax on television sets is restricting the production of sets with 21-inch screens, with a consequent detrimental effect on United Kingdom competition in the export field with West Germany; and what proposals he is considering for the reduction of this rate of tax, with a view to assisting overseas sales.
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§ Mr. BarberI would refer my hon. Friend to the reply to the third of his Questions of 28th March.
§ Mr. Nabarroasked the Chancellor of the Exchequer what increase in the sale of electrical appliances has occurred in the United Kingdom since the Purchase Tax rate was reduced to 25 per cent.; and, having regard to the interests of women and labour-saving in the home, what further reductions in Purchase Tax upon electrical appliances he proposes to make at an early date.
§ Mr. BarberSeparate figures for retail sales of electrical appliances are not available, but particulars of manufacturers' deliveries of certain appliances are published in Tables 81 and 85 of the Monthly Digest of Statistics. Sales of these articles have been affected by a number of factors and it is not possible to isolate the effect of reductions in Purchase Tax. As regards the second part of the Question, I cannot anticipate my rt. hon. Friend's Budget statement.
§ Mr. Nabarroasked the Chancellor of the Exchequer whether he has yet formed an estimate of the stimulus which would be given to price reductions generally and of the effect on the cost of living, respectively, of making further substantial reductions in Purchase Tax; and with what result.
§ Mr. BarberMy right hon. Friend takes account of all relevant factors in his pre-Budget review of taxation; but I cannot anticipate his Budget statement.
§ Mr. Nabarroasked the Chancellor of the Exchequer whether he will give an assurance that no Budget Resolution which he intends to lay before the House will be intended to restrict discussion upon Purchase Tax and that in drafting such Resolutions he will have regard for the desirability of enabling this House to debate Purchase Tax no less freely than any other tax.
§ Mr. BarberI cannot anticipate the scope of the Budget Resolutions.
§ Mr. Nabarroasked the Chancellor of the Exchequer how many articles in the Purchase Tax Schedules have component parts which individually attract Purchase Tax at differing rates, but when combined in a single article are taxed at 153W the highest rate of any component part; as this leads to distortion in the case of many new products, whether he will introduce legislation to provide that articles containing components attracting Purchase Tax at different rates are taxed at the lowest rate of any component part; and what loss of revenue would result from such reform.
§ Mr. BarberAs I have already explained to my hon. Friend in correspondence, articles are classified under the tax Schedule by reference to their character as complete articles, not by reference to their components. As classification is under broad headings, not by items, I cannot say how many articles meet the conditions in the first part of the Question. As regards the last part of the Question, since materials in general are taxfree, such legislation would result in the destruction of the purchase tax revenue.