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Clause 10—(Higher Rate Of Purchase Tax To Be One Hundred Per Cent)

Volume 390: debated on Wednesday 2 June 1943

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Motion made, and Question proposed, "That the Clause stand part of the Bill."

There is general appreciation of the Chancellor's difficulties in regard to the Purchase Tax and the raising of the tax on definitely luxury articles. Many of us feel that some of the things which are being manufactured are quite unnecessary and that if they were taken off the market there would be no injury to the war effort or the wealth of the country. I should like the Chancellor to go through these items, because one or two of them are not really luxuries. I will quote one case. If a parent wishes to supply a school boy with a sensible satchel, he will have to pay 100 per cent. Purchase Tax on it. That is one of the items which I hope the Chancellor will consider again. There is general appreciation of the fact that by transferring taxation from essentials to luxuries the Chancellor will get the same return. We have to bear in mind that the Government are by far the biggest direct employers of labour now. The cost-of-living figure is, therefore, a substantial item for the Government, so that anything that can be done to keep it down should be done. I should like to appeal to the Chancellor to collaborate with the Board of Trade to exempt things which are essential. I understand that the production of utility cutlery is contemplated. It will not be of permanent value in the sense that it will not be of a quality that anybody would buy to keep but would buy only as a wartime necessity because it will not be stainless. The tax should be removed from it. There is also the question of utility china.

We should not discuss the difference between utility and other articles, for that seems to be a question for another Ministry.

I am only dealing with the difference as it affects the Chancellor. Certain commodities such as clothing are subject to tax if it is not utility but exempted if it is utility. Utility china, however, is subject to tax. It is very utility and those who buy it are for the most part people who have been victims of enemy action or the newly married. I cannot imagine anybody buying it unless driven by necessity. While we appreciate what the Chancellor has done and have no objection to 100 per cent. tax on luxuries, there are a few items which are not luxuries and the tax on them imposes an additional burden on parents. Other articles which are purely utility might be relieved of the tax. If they were we should know where we were, trades-people would be in an easier position, and the Chancellor would be happier if he had the consciousness that this tax was not adding a burden on people who were trying to comply with the desire of the Government to keep their expenditure down to a minimum.

I am indebted to my hon. Friend for his statement, and I appreciate what he has said about the endeavour I have made to put 100 per cent. tax only on luxuries or semi-luxuries. I took the schedule of last year of articles which bore a tax of 66⅔ per cent. I then increased the tax on these articles. The only article my hon. Friend has mentioned is satchels. The 100 per cent. is put only on satchels which are composed of real leather. I myself should doubt whether very many parents to-day, or even in days gone by, provided their children with satchels made of real leather. My recollections are of satchels of the fabric type, which in due course were knocked about and damaged and which we then asked our parents to replace. I do not think any parents will be severely hit by reason of the 100 per cent. tax on satchels made of real leather. I will note what the hon. Member has said for future reference. Those and other matters are under consideration, because I saw a deputation of him and some of his friends headed by my right hon. Friend opposite. I have always been prepared to give, I think, reasonable consideration to his requests, and I think that on the whole the Committee will feel, as most people do, that a duty of 100 per cent. on the articles now set forth is not unreasonable. Look at the list. People are paying ion per cent. duty on piano-player records, articles made wholly or partly of ivory, amber, and so on. I would just mention cosmetics in passing. I do not think there will really be hardship over this. I will note what my hon. Friend has said, but I hope the Committee will regard the proposals in general as reasonable and fair.

While I very much appreciate "the right hon. Gentleman's reply, may I mention in connection with cosmetics that dusting powder is very necessary for tiny babies? I know that it is difficult to say that it shall be exempt, because a mother might use it exclusively for herself, but it is an instance of the little points that crop up when one begins to tax things. However, I feel that the Chancellor of the Exchequer would meet the point if it were at all possible to do so, because he would like to do the reasonable thing by fathers and mothers.

Question, "That the Clause stand part of the Bill," put, and agreed to.

Clause 11 ordered to stand part of the Bill.