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Purchase Tax Exemptions (Woven Fabrics)

Volume 440: debated on Wednesday 16 July 1947

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10.56 p.m.

I beg to move,

"That the Purchase Tax (Exemptions) (No. 1) Order, 1947 (S.R. & O., 1947, No. 1255), dated 23rd June, 1947, made by the Treasury under the Finance (No. 2) Act, 1940, a copy of which Order was presented on 30th June, be approved."
The woven fabrics defined in the Schedule to this Order are commonly used as equipment for industrial processes. The Select Committee has had this Order under review and has decided that the circumstances did not warrant their making any special report on it to the House. The only point which might possibly arise came up during our discussions on the Finance Bill about an hour ago. Very properly the question was put by the right hon. Member for West Bristol (Mr. Stanley) to the Chancellor as to why this was not included in the Finance Bill with which we have just been dealing. The short answer, which I am sure will satisfy hon. Members opposite, is that this matter is somewhat technical, and if a matter of this kind is put into the Finance Bill it has to be done without spreading too widely the fact that it is about to be done. It was essential in this case, as the matter was technical and the fabrics were to be used for industrial purposes mainly in connection with some special class of machinery, to consult the trade concerned and give it an opportunity to express its views. Members of the trade have been helpful in framing the definition which has been put into the Schedule, and that is the reason why my right hon. Friend has proceeded by way of Statutory Rule and Order rather than by putting this in one of the Schedules to the present Finance Bill. The loss to the revenue will be something in the nature of £70,000 a year.

10.58 p.m.

I cannot think that anybody would be satisfied with the substance of the explanation of the right hon. Gentleman as to why this goes in an Order. Earlier we asked the Chancellor what was the dividing line between an Order and the Schedule of the Finance Bill, and he said either because it was too late—that was the reply he gave to the hon. Member for Tynemouth (Miss Colman)—or else it was too difficult to define; therefore, it was quite in order to put down this Order. I think we are entitled to protest against this—and I hope the right hon. Gentleman will not take exception to it—for this reason, that the Order was dated 23rd June and comes into operation, if passed, on 7th July. The 23rd June was during the long interval which very properly elapses between the Committee stage and the Report stage of the Finance Bill. That was the time when the right hon. Gentleman was considering with his officials and colleagues, as he has told us, all the changes he was going to make with regard to the Purchase Tax, and the outcome of those deliberations has been the subject of our talk for an hour or so tonight. He could not have failed, so far as we can see, to bring this matter forward in some sort of way.

If, in order to make the matter clear, I may refer back to the new Schedules we have just inserted into the Finance Bill. I would point out that there is in the first new Schedule a list of classes of goods to become exempt, and the dates at which they are to become exempt. Amongst that list there are ten lines describing the articles, and the dates from which they are to be exempt, 16th April and 10th July, 1947. These exemptions are at a date prior to that. There is no difficulty about the date. Even more strange, of course, is that the second new Schedule we inserted tonight into the Finance Bill amends the Seventh Schedule to the Finance (No. 2) Act, 1940. That is exactly what this Order does. This makes the Amendments to that Schedule quite incomprehensible to me. Why, when he was going to put a long list of Amendments into the Bill, could he not deal with this thing in that way?

The right hon. Gentleman's excuse is that this was somewhat technical, that they had to consult the trade and ask them to express their views, which they were good enough to do. That is all right. There is no reason in the world why a somewhat technical matter, after consultation, should not go into the Finance Bill at the Report stage. On this Finance Bill there have been consultations, during that interval between the Committee stage and the Report stage, with all sorts of people about all sorts of subjects. Four admirable new Clauses took the place of four bad ones as the consequence of consultations on one group of subjects. Certainly, I could not have approved if the right hon. Gentleman had said he had consulted nobody at all about any of these Purchase Tax changes, but I imagine he must have had conversations in order to make them, and—as I think he said in an earlier speech—in order to exempt the right things. While there were consultations—if not this year, there must have been consultations in general about these subjects, technical subjects, which have come into the Schedule—why on earth he could not have had them about this particular type of woven fabrics, in sufficient time to insert this in the Finance Bill, I do not know.

While there is no reason from our point of view why we should object to the exemptions, I think there is every reason why the House should object to this kind of procedure. Because if we are going to spend hours and hours on Committee and Report stages of the Finance Bill, dealing with changes in Schedules and the Purchase Tax, it seems outrageous that, on the very night we are doing that, we should then be asked to pass on exactly a parallel road to reach the same objective. There is nothing in the argument he put up in favour of making it by Order—that it was too late, or too difficult to define. It cannot be too difficult to define because he has defined it. It cannot be too late because, in point of fact, it came up before the Order Paper for the Report stage was circulated to hon. Members.

Therefore, I do invite the right hon. Gentleman to give this matter very grave consideration. Obviously, he cannot this time do anything, because we have just passed the Report stage of the Finance Bill, and we have no opportunity of making that Amendment there; but we do ask that next year, or whenever there is another Finance Bill, he will give a little more attention to the point of view of the House of Commons in a matter of this kind. There is only one conclusion some of us can come to in a matter of this kind—that possibly some other Department dealing with the matter omitted to tell the Chancellor of the Exchequer anything about it, so that he is the victim of lack of Departmental co-ordination.

11.5 p.m.

I should like to ask who was originally responsible for this Purchase Tax Order. I came into the House about half-an-hour ago to hear questions being asked about boats and nets, but it seems now that the Chancellor was playing a game. He offered a concession to the hon. Member for Tynemouth (Miss Colman), saying that he would put down a concession in an Order next year. But when my hon. Friend the Member for West Dorset (Mr. Digby) asked for a concession, the right hon. Gentleman said he could wait perhaps five years.

I said nothing of the kind. I treated the hon. Member for West Dorset with complete courtesy, and I said nothing about waiting until next year. The noble Lord is characteristically inaccurate, and to me, it is only too evident that he has only recently come into the House.

I think the Chancellor was playing the fool with the House. Why do Socialist Members ask for exemption from Purchase Tax at any stage which suits the Chancellor, when Conservative Members who ask for such exemptions have to wait and get no satisfaction from the Chancellor? Why do we get an Order for a Purchase Tax exemption of this kind? Why could it not be included in the ordinary law of the land? It seems utterly unreasonable and I protest most strongly against it. It is utterly wrong, and I think it reflects very badly on the Government.

Question put, and agreed to. Resolved:

"That the Purchase Tax (Exemptions) (No. 1) Order, 1947 (S.R. & O., 1947, No. 1255), dated 23rd June, 1947, made by the Treasury under the Finance (No. 2) Act, 1940, a copy of which Order was presented on 30th June, be approved."