House of Commons
Tuesday, June 8, 1948
The House met at Half past Two o'Clock
Prayers
[Mr. SPEAKER in the Chair ]
Private Business
Church of Scotland Trust (Amendment) Order Confirmation Bill
"to confirm a Provisional Order under the Private Legislation Procedure (Scotland) Act, 1936, relating to the Church of Scotland Trust," presented by Mr. Woodburn, and ordered (under Section 7 of the Act) to be considered Tomorrow, and to be printed. [Bill 108.]
William Brown Nimmo Charitable Trust (Amendment) Order Confirmation Bill
"to confirm a Provisional Order under the Private Legislation Procedure (Scotland) Act, 1936, relating to the William Brown Nimmo Charitable Trust," presented by Mr. Woodburn, and ordered (under Section 7 of the Act) to be considered Tomorrow, and to be printed. [Bill 109.]
Oral Answers to Questions
Town and Country Planning
Cranmer Hall
asked the Minister of Town and Country Planning why he has reversed the decision of the Norfolk County Council not to approve the removal of the upper floor of Cranmer Hall, an 18th century building the beauty of which will be destroyed for the sake of the lead on the roof, and has thus discouraged every local authority which is seeking to preserve beautiful buildings.
The question was whether the owner of this large uninhabitable and partly derelict mansion should be permitted to remove the top storey and divide the building into three separate dwellings. For reasons which I stated fully in a letter to the district council on 30th April last I reversed the local authority's decision to refuse permission because in my view the merits of the owner's proposals, which provided accommodation for himself and two other families, outweighed the architectural value of the mansion which was not outstanding. I am satisfied that no local authority anxious to preserve beautiful buildings need be in the least discouraged by this decision.
Is the Minister aware that since he gave his approval to this gross commercial vandalism there has been a fire which has done serious damage to the house, which is surely a sign of the wrath of Heaven, and in view of that fire will he consider re-opening the matter?
Until I knew more about the causes of the fire I should not like to attribute it to the wrath of Heaven or anything else. Of course, it is always open to the local authority to deal with the matter again if they wish.
In reinforcing what has just been said by the hon. Member for Twickenham (Mr. Keeling), may I ask the Minister to bear in mind that the scheme of conversion referred to in this Question is most extravagant and costly and that in these circumstances it is not one which ought to be undertaken at present? Will he take that into account?
That is not entirely a matter for me. I was satisfied that this conversion was the right thing.
When my right hon. Friend says that this building is not of outstanding architectural merit, will he bear in mind that 18th century domestic architecture generally is of outstanding architectural merit and that there is none too much of it left?
Is there any reason to think that the local authority had not considered the matters which the right hon. Gentleman mentioned before they came to the decision which he reversed?
Every local authority carefully considers its decision, but there is an appeal to me. I have to endeavour to do the right thing.
Norfolk and Suffolk Broads
asked the Minister of Town and Country Planning to what extent he has consulted with those authorities concerned with the Norfolk and Suffolk Broads on the maintenance and development of the amenities of the Broads; and if he will make a statement.
My officers consulted with officers of the Norfolk and East Suffolk County Councils in November last, and I sent a letter to both Councils in December. I am sending my hon. Friend a copy of the letter.
Is the right hon. Gentleman aware of the continued deterioration of this great national playground, and does he realise that unless something is done soon most of the amenities will disappear altogether?
I am very well aware of that, and I am doing what is possible.
Chalk Excavation
asked the Minister of Town and Country Planning whether he will set up a Committee to investigate the methods and extent of chalk excavation in Great Britain, and to advise on measures to ensure that future excavation is confined to scheduled areas and is conducted by methods involving the least possible damage to local amenities.
These matters will be examined as part of the process of preparing development plans under the Town and Country Planning Act, 1947. I hope to be able to arrange discussions, before long, with the branches of the industry and the local authorities concerned, and I will bear my hon. Friend's suggestion in mind.
Will the Minister take into account the fact, as stated by the Minister of Works yesterday in reply to a Question, that the present areas of excavation in this country are inadequate for future chalk requirements and that, therefore, there is a considerable danger that existing areas of scenic beauty may be disfigured unless there is carefully controlled development?
It is one of the purposes of the Town and Country Planning Act to ensure that the most suitable areas are used for excavations.
Does the same regulation apply to the excavation of gravel?
Will the Minister take into account the fact that some exploration might be made as to the possibility of using chalk from the extensive cliffs around our coast, instead of destroying the countryside by getting it there?
Cement Works (Cauldon Low and Hope Valley)
asked the Minister of Town and Country Planning whether he is aware that the British Portland Cement Company have not availed themselves of the permission granted in 1944, after a public inquiry, to start a new cement works at Cauldon Low; and whether he will bear in mind this earlier authorisation when considering the application for authority to extend the cement works in the Hope Valley, which was the subject of a public inquiry at Chapel-en-le-Frith on 14th April.
I understand that development of the Cauldon Low site has been held up because the company have not yet been able to complete their arrangements for securing an adequate water supply. As regards the second part of the question, I will consider all relevant factors before reaching a decision.
Is the Minister aware that, at the inquiry three and a half years ago, when permission to develop Cauldon Low was granted, one of the reasons put forward was that there was an adequate water supply, and will he make quite certain that this company is not trying to get permission to develop a new area before it has taken advantage of the permission given three and a half years ago?
I was not aware of those facts, which, of course, relate to before my time, but I will certainly look into the matter raised by the hon. Gentleman.
Purbeck Training Area
asked the Minister of Town and Country Planning whether he is now in a position to announce the Government's decision on the report of the local public inquiry into the retention by the War Office of the Purbeck training area.
Consideration is now being given to the Report on this public local inquiry, and it is hoped that it will be possible to announce the Government's decision shortly.
New Town, Aycliffe
asked the Minister of Town and Country Planning what is the population for the new town at Aycliffe, Co. Durham; is he aware that the surrounding townships of Shildon, Bishop Auckland, Spennymoor, Crook and Willington are disturbed about the uncertainty of this matter; and will he remove this by making a factual statement.
The Development Corporation is preparing for population of the order of 10,000. This is the figure I discussed with the local authorities concerned when the Corporation was set up, and I made it clear that if any change appeared to be necessary I should discuss matters again with the authorities. I cannot at this stage say whether any change will be necessary, but the question will come under review in the near future in connection with the plan which is being prepared for the North Eastern Development Area.
Do I understand from that reply that nothing will be begun until the Minister has taken the local authorities into consultation?
That is exactly what I intended to convey.
Westbury Cement Works
asked the Minister of Town and Country Planning if he has considered the presentation of case sent to him by the planning committee of the Wiltshire County Council with regard to the proposed Westbury Cement Works; and whether he is prepared to re-open the inquiry.
I have received from the Clerk of the Wiltshire County Council a statement of the views of the Wiltshire Joint Planning Committee, which I am still considering.
The Minister will be aware that it has been suggested that he should visit the site himself. Is it his intention so to do, and, if so, will he give an opportunity to the representatives of the local councils—the Wiltshire County Council, and the Westbury Urban and Rural Councils, to send representatives, if they so wish, to accompany him on any such visit?
I propose to visit the site next Monday, and I will certainly see that the appropriate authorities are invited, but I must also invite the applicants.
In view of the increasing alarm among many people on the subject of this factory, will the Minister see that the people who have views on this matter have an opportunity of airing them?
They have had that opportunity. They have had two public inquiries.
Windmills (Preservation)
asked the Minister of Town and Country Planning what is the number of windmills still in working order throughout the country; whether he will take steps to preserve them; and whether in the case of those many other mills which are features of the landscape he will have them listed and brought to the notice of the Society for the Protection of Ancient Buildings.
I am not aware of the exact number of working windmills still standing. Most working corn-grinding windmills will be included in the statutory lists of buildings now being prepared; water-pumping windmills and those corn-grinding windmills which are no longer working, but are features of the landscape, will be included in the lists or not, according to their degre of architectural or historic interest as well as their degree of preservation. The position of listed mills in regard to preservation is the same as that of other listed buildings. The Society for the Protection of Ancient Buildings are supplied with a copy of each statutory list when it is made.
Can the Minister assure the House that an adequate number of windmills will be retained against which the hon. Member for Bedford (Mr. Skeffington-Lodge) may tilt?
Will my right hon. Friend also have a look at a windmill in my constituency, which is, I think, the only surviving specimen in the London area?
Is my right hon. Friend aware that a considerable number of local authorities have made it their business to preserve windmills in their localities, and where local authorities are not doing that, will he encourage them to follow that excellent example?
The 1947 Act provides that encouragement in regard to windmills which are buildings of architectural or historic interest.
National Insurance
Non-employed Married Women
asked the Minister of National Insurance whether he will make regulations to allow all women under sixty years of age who are not gainfully employed and whose husbands are over 65 and were not previously insured, to enter the National Insurance scheme on 5th July.
My right hon. Friend regrets that it would not be practicable to consider this particular class of non-employed married women in isolation from non-employed married women generally. As regards the latter, I would refer the hon. and gallant Member to the reply which I gave to the hon. Member for Cheltenham (Mr. Lipson) on 4th May.
Widows
asked the Minister of National Insurance what difference in pension there will be after 5th July for widows already over sixty on that date and those who reach that age subsequently.
10s. widow pensioners aged 60 or over at 5th July, 1948, will have their pensions increased to the 26s. rate at age 65 or on earlier retirement. They will not pay contributions for National Insurance under the new scheme or be able to qualify for increments on the standard rate of pension. Widow pensioners with children, and some others who are under age 60 at 5th July, 1948, will from that date be entitled to have their pensions increased to the rates of the new scheme, and, so long as they are so entitled, they will not be required to pay contributions for National Insurance. The remaining 10s. widow pensioners who are under age 60 at 5th July, 1948, will become insurable in their appropriate class from that day. If they pay their contributions, they also will be able to have their existing pensions replaced by retirement pensions at the 26s. rate at age 60 if then retired, or, if not, at the higher rate due when they retire or reach age 65.
Does my right hon. Friend tell me that what all that means is that a woman under the age of 60 now getting 10s. a week will have to pay the contribution at the new rate out of that 10s.?
Of course, it depends on the circumstances, and if my hon. Friend will pay particular attention to this reply, in which we have tried to outline the whole position, she will, perhaps, find that it clears up that point.
Can the Minister say why the first group of widows whom he mentioned will not get the pension until they are 65?
When I referred to the first group, I was referring to the 26s. pension at age 60, because they are not entitled to 26s. a week between 60 and 65 if they have not retired.
Can my right hon. Friend say why a widow of 58 now drawing 10s. a week will not be able to draw 26s. at 60, though not paying the contribution?
Because the whole conception of widows' pensions has been altered in the new scheme. This was all threshed out and discussed on the Beveridge Report, the Government White Paper, and in all the other discussions. We appreciate the position so far as it concerns the widow who is approaching 60 at the present time, and we are giving the widow who is between 55 and 60 a special concession in this regard by giving her a credit from the age of 55 to the appointed day, at least; whether she pays the contribution or not, she will be entitled to an increased pension.
Will my hon. Friend make clear whether in the regulations provision is being made for the widow whose only income is 10s. a week, so that she may be given some assistance towards paying her contributions?
I think it is perfectly clear that the widow with children will get the widowed mother's allowance, and also, if she is incapacitated, she will be entitled to apply for the 26s. pension. It is only other groups of women with whom we are concerned in these cases
What amount of pension will be received by widows between 55 and 60?
What I said was that the widow between 55 and 60 will get credits from her 55th birthday to the appointed day. These amounts of credits will entitled her to a pension at 60. She already has 10s. The pension varies according to the particular widow's age and the time which elapses between her 55th birthday and the appointed day.
Many pensioners are uncertain to what extent they will benefit, and in view of that, and to clarify the position, will the Minister have a simple leaflet printed, exhibited at Post Offices and also made available to Members of Parliament to send to their constituents?
We are very concious of that fact and we have provided a very large number of leaflets which are available to hon. Members in the Library. They are available in Post Offices and also at the local offices of the Ministry of National Insurance.
New Entrants
asked the Minister of National Insurance how many persons are due to register under the new Insurance Act on 5th July; and how many had, in fact, registered at the latest available date.
I assume the hon. Member refers to new entrants to insurance on 5th July next. It is estimated very approximately that these will number rather over three million. Up to last week about 1,400,000 new entrants of all classes had applied for National Insurance cards. Of these just over 500,000 were in the self-employed and non-employed classes. I should like to take this opportunity of urging all self-employed and non-employed persons who have not yet applied for cards to do so as soon as possible in order to assist in the smooth introduction of the new scheme.
Is the Minister aware that on 2nd November, 1944, I warned the Minister that this scheme would break down in administration, and is he also aware that complete chaos will commence on 5th July?
Of course, I am not aware of that, but as the hon. Gentleman is so often wrong that comforts me exceedingly.
Will the Minister make it quite clear that in addition to registering under the National Insurance scheme, the individual will, of course, have to register separately with a doctor?
Yes, it is a matter on which there is some misunderstanding. Those who have not been insured before are asked to register under the Ministry of National Insurance; and, of course, so far as the Health Service is concerned, a separate registration is required.
Is the Minister aware that in rural areas considerable delay is being caused to applicants owing to the fact that the necessary forms are not available at the village post offices?
I have not heard of that, but I will have the matter looked into.
Can my hon. Friend say whether any use is being made of the B.B.C. to notify people of the need for registration?
We started this campaign for registration by the speech of my right hon. Friend, and we have tried to get this across as best we could. It is true that since the distribution of the "Family Guide," which has been completed, there has been an increase in registrations.
Will the hon. Gentleman see that some of these forms are available in the post office of the House of Commons?
They are available.
According to comments behind me, they are.
They were not last week.
Industrial Injuries (Claims)
asked the Minister of National Insurance what are the arrangements for dealing with claims under the National Insurance Industrial Injuries Act to unemployability supplement and constant attendance allowance by persons entitled to workmen's compensation on the appointed day.
Leaflets and application forms relating to these benefits will be available at local National Insurance offices on Wednesday, 16th June, and persons wishing to claim should get in touch with their local office, the address of which can be ascertained from the local post office. Copies of the leaflet will also be sent to branch secretaries of unions concerned with heavy industries so that they can bring the benefits to the notice of possible claimants. I should add that under the new Act it will in many cases be to the claimant's advantage to receive sickness benefit instead of unemployability supplement, and where this is so, his claim will be dealt with accordingly.
Will the Minister give the maximum publicity to these arrangements so that the people affected may know of their responsibilities as well as their rights under the scheme?
We certainly want to do that, and I hope this Question and answer will receive the widest possible publicity.
Unemployment Allowances
asked the Minister of National Insurance the number of persons in receipt of unemployment allowances at the most recent date for which the information is available; and the relative figure for the years 1936–37–38.
The number of persons in Great Britain in receipt of unemployment assistance allowances other than allowances in supplementation of insurance benefit was 18,720, at 19th April, 1948. The comparable figures for the years 1936, 1937 and 1938, at or about the same time of the year, were 655,845, 611,790 and 540,653 respectively.
Can the Minister give the total number of insured persons at the most recent date at which the information is available?
I should need notice of that question.
Employment
Ex-Service Men (Appointments Department)
asked the Minister of Labour how many ex-officers and other ranks were registered with the appointments department at the latest convenient date.
At 10th May, 18,553, of whom 10,998 were in employment. There were also, at 31st March, 269 ex-officers and other ranks on the registers of the nursing appointments offices. Of these 145 were in employment.
How do these figures compare with those of last year? Is the appointments department still meeting with success or is it finding difficulty in placing these men?
Without referring definitely to a period of last year, I can say that the scheme up to date has provided employment for 27,900 persons, of whom 17,500 were ex-officers and 7,500 formerly other ranks.
Wages and Hours
asked the Minister of Labour if he will, during the period of Marshall Aid to Great Britain, issue monthly or quarterly lists of the activities in which there has been authorised an in crease or a decrease in the union wages or hours of work.
The principal changes in rates of wages and in hours of labour are reported each month in the Ministry of Labour Gazette.
Would it not be desirable for the Minister, speaking on behalf of the Government, to make this statement quite clear, so that the American people would know we are making our own efforts to look after ourselves while receiving Marshall Aid from them?
Would it not be equally desirable to refer to prices and dividends at the same time?
In answer to the hon. Member, I can say that we publish these figures, but we are a little doubtful as to our authority to amplify them overseas.
Could not the Minister make one clear statement so they could know we are doing our full share to look after ourselves?
If the question is asked and repeated in Parliament, that is the best way of getting publicity.
Is it not a fact that Representative Taber is right, after all?
Without criticising an eminent statesman of another country, I would like to say that I do not think he was right on this occasion.
Airdrie and Coatbridge
asked the Minister of Labour if he will give the number of unemployed men and women registered
The numbers of insured men and women registered as unemployed at the Airdrie and Coatbridge employment exchanges, at the dates in question, were as follow: 10th May, 1948. 12th May, 1947. Men 18–64. Women 18–59. Men 18–64. Women 18–59. Airdrie … … … 860 1,028 1,170 786 Coatbridge … … 669 781 1,211 1,114
Cotton-Weaving Factories (Conditions)
asked the Minister of Labour what progress has been made in improving the ventilation stands of cotton-weaving factories; and can any figures be given to ascertain the rate of progress.
The Joint Advisory Committee of the Cotton Industry, set up by the Chief Inspector of Factories in 1944, has recommended improved methods of ventilation by mechanical means, and a recent survey of Lancashire weaving sheds showed that approximately 25 per cent. had ventilating systems up to the suggested standards. The remaining sheds are being encouraged to fall into line, though there is considerable difficulty at present in obtaining the necessary plant.
Does not the hon. Gentleman agree that the fact that in only 25 per cent. of the cases have ventilation at Airdrie and Coatbridge employment exchanges at the latest date; and the corresponding figures for the same date last year.
As the reply includes a table of figures, I will, if I may, circulate it in the OFFICIAL REPORT.
In the table which he is circulating, will my right hon. Friend divide the figures into those who have been unemployed for six months and those who have been unemployed longer?
Not in the figures I shall publish immediately, but I will bear the hon. Member's question in mind and see whether we could do that in a later report.
Following is the reply:
standards improved shows very slow progress, and will he not do all he can, and bring pressure to bear, to see that further progress is made urgently?
I am afraid I cannot agree with that conclusion. There has been very considerable progress since the end of the war in Lancashire in bringing factories up to the standard recommended and I think I should pay a tribute to the Lancashire employers for the steps they are taking in this direction. There are backward employers who are being dealt with, but our great difficulty is to get ventilation plant.
Is it not a fact that many factories—75 per cent.—cannot get on with the work because the Ministry of Supply will not give them the stuff?
I should not like to put the percentage quite as high as that. It is true that a large number of employers have their plans ready and are awaiting plant, but there is a small minority of firms that have taken no steps at all, and we are applying pressure to them.
asked the Minister of Labour if any inquiry has been made into the problem of noise in cotton-weaving factories; what recommendations have been made; and to what extent they have been acted upon.
The Joint Advisory Committee of the Cotton Industry considered the problem of noise in cotton-weaving factories, and their inquiries showed that further research was necessary. Investigations are now being carried out by the British Cotton Industry Research Association.
West Indians
asked the Minister of Labour if he is aware that some hundreds of West Indians, many of them ex-Service men skilled in various trades, are now on their way to this country in search of work; and if he will instruct his officials to meet the ship in which they are travelling and assist them to find suitable work in undermanned industries, in the interests of production and of the welfare of these British subjects.
They will be met at the ship and told how to register for employment at the appropriate local offices. The arrival of these substantial numbers of men under no organised arrangement is bound to result in considerable difficulty and disappointment. I have no knowledge of their qualifications or capacities and can give no assurance that they can be found suitable work. I hope no encouragement will be given to others to follow their example.
While entirely agreeing with my right hon. Friend's final words, may I ask whether he will reconsider the position in view of what he says about the disappointment that will arise through there being no organised arrangements? Can he not go a little further to provide some organised scheme to enable these British citizens in a strange land to contribute usefully to production?
No, Sir. I consider that those who organised the movement of these people to this country did them a disservice in not letting us here know, and so enabling us to take care of them. My reference to the organisation was in that respect. When they get here we shall do all we can to look after them and to place them. However, it will be a matter of some difficulty—for I understand that there will be 400 of them—to find out where they are to be put, and where they are to sleep when landed at the dock. If they suffer any inconvenience, the blame will be on those who sent them and not on those who receive them.
Would the right hon. Gentleman say who was responsible for this extraordinary action?
I wish I could, but we do not know. All I can say is that we have information that they are in the ship and are coming here. It is a great disappointment. They are British subjects, and we want to place them. However, I have no knowledge of what their trades are. All I know is that we shall do our best for them when they get here.
Will the right hon. Gentleman make inquiries, perhaps through the Secretary of State for the Colonies, to find out who was responsible for this extraordinary action?
That has already been done.
Is my right hon. Friend aware that it was precisely with some knowledge of the difficulties to which he has referred that I put this Question down, hoping that he might be able to do something a bit more definite and positive and on a bigger scale than simply to refer them to the employment exchanges?
That is the proper thing to do. When these men get here they will have to be sent somewhere and given resting places for the night. The best thing to do is to put them in touch with the employment exchanges in the areas where they will have their residence, and to place them in work there. We cannot put a man on the dock at Southampton to guide these people into jobs.
If the Minister wants to discourage them, would he consider sending them to see the housing conditions in Scotland? Then they will want to go back to the West Indies.
Let me say at once that there is no desire to discourage them. The desire is to see the thing properly organised, and to help them.
Scotland
Streptomycin Supplies
asked the Secretary of State for Scotland if he is aware of the serious shortage of streptomycin in Glasgow and other parts of Scotland; and what steps he is taking to increase the supply.
Supplies of streptomycin are still very limited, but the supply to the five treatment centres in Scotland has recently been increased by almost 70 per cent. The number of hospital beds in use for this treatment has been increased from 27 to 37, and the number will shortly be substantially increased as supplies become available from manufacture in this country.
While thanking my right hon. Friend for that answer, may I ask whether he is aware that up to Friday of last week—I do not know if that is the most recent date—there was a shortage of this essential drug in the City of Glasgow, and that just before that there was a shortage also in Aberdeen and Dumbarton?
One of the treatment centres is in Glasgow. I will consider the point raised by my hon. Friend.
Tourist Trade, Island of Arran
asked the Secretary of State for Scotland what steps the Scottish Tourist Board is taking to develop the tourist industry in the Island of Arran.
The Scottish Tourist Board are an independent body and are not subject to my control. I am, therefore, forwarding the hon. Member's Question to them. The attractions of Arran are widely known, and the Island does a very thriving tourist trade.
Is the Secretary of State aware that, while I agree with what he says about the attractions of Arran, that is not of much help to us so long as the people at Lamlash have no pier? They are very anxious that the pier should be re-opened. Will my right hon. Friend do something about it?
I understand that the state of the pier is said to be due to the usage of war. Perhaps, my hon. Friend could apply to the Admiralty for their assistance.
Is it not the case that the Duke took compensation for damage to the pier, but did not do anything to repair the damage?
I am not aware of that.
Jute Industry
asked the Secretary of State for Scotland on what bodies advising him is the Scottish jute industry represented; and whether he is satisfied that this Scottish industry is sufficiently represented in relation to its importance in the national economy.
The Scottish Economic Conference, the Scottish Council (Development and Industry), and the Scottish Board for Industry, which are the principal advisory bodies on industrial matters in Scotland, do not consist of members selected as representatives of individual industries. I am satisfied, however, that these bodies, through their contacts with every branch of Scottish industry, are fully competent to advise on any industrial problems that may arise.
Sub-Tenants, Glasgow
asked the Secretary of State for Scotland if he is aware that three sub-tenants in a house occupied by Mr. Joseph Laverie, at 36, Dalhousie Street, Glasgow, C.3, live in constant threat of having their furniture seized and sold under a sheriff's warrant in order to meet rent arrears incurred by the principal tenant, even though the sub-tenants pay their rent regularly; and if he will take steps to protect them.
The Sheriff granted a decree against Mr. Laverie for arrears of rent amounting to £17 on 30th March. I understand that this amount has since been paid, and that no warrant of ejection has been granted. In answer to the last part of the Question, it is for the court to determine the rights of a landlord over sub-tenants' property in satisfaction of rent due by the tenant, and in such matters I am not in a position o intervene.
Seeing that the law gives so little protection to tenants of furnished rooms, does not my right hon. Friend agree that it is time that we changed the law in their favour?
asked the Secretary of State for Scotland if he is aware that two sub-tenants have been evicted from a house occupied by Mrs. Lilian Richards, at 54, St. Vincent Crescent, Glasgow, C.3, on a warrant issued for the ejection of the principal tenant; and if he will take action to prevent such evictions.
I understand that a warrant of ejection against the principal tenant, Mrs. Richards, for arrears of rent was granted in the Sheriff Court on 10th May. The right of the landlord to evict sub-tenants in such circumstances is a legal matter for determination by the court, in which I have no jurisdiction to intervene.
Seeing that these two tenants claim to be tenants of unfurnished rooms, would it not be fairer to have their claim tested by the court rather than to accept the word of the house-factor?
The question as to whether the thing is fair in this case is a matter for the courts of law to determine, and it would be improper for me to make any observation on it.
On a point of Order. May I ask your guidance, Mr. Speaker, as to why these Questions and answers about tenancies of this kind in Scotland appear to be in Order, even though the Secretary of State says he is not responsible in the matter, while Questions on important matters concerning the nationalised industries are ruled out of Order?
To tell the honest truth, I cannot answer that at short notice. I was wondering exactly how far these Questions were infringing our Rules.
May I ask my right hon. Friend—for I know of one or two cases like this—if it is not possible, while not interfering with the decision of the court, to suspend the operation of the decree until some form of alternative accommotion is found?
Really, a Minister of the Crown cannot interfere with the due process of law.
Would the right hon. Gentleman draw that salutary conclusion to the attention of his right hon. Friend the Secretary of State for the Home Department?
Cancer Cases (Pension Applications)
asked the Minister of Pensions whether he will make a statement on applications for pension in respect of cancer, in view of Mr. Justice Denning's recent judgment in the case of Lee v. Minister of Pensions.
I have read the judgment in the case of Lee and note that the appeal was allowed primarily on the grounds that an earlier diagnosis of cancer and operative treatment might have prolonged life. I am glad of this opportunity of assuring my hon. Friend that the reasons given by the learned Judge for allowing Mrs. Lee's appeal do not constitute any new approach to pension entitlement in cancer cases. Although, with very rare exceptions, cancer is authoritatively held to be not caused by war service, rejection of applications for pension is not automatic. All cases are examined sympathetically to see whether there was delay in diagnosis or treatment due to war service which may have hastened death. Where there has been such delay my Department do not hesitate to grant pension. Indeed an appreciable number of cases have been admitted on this basis.
Can my right hon. Friend give an indication of the number that have been granted, and the approximate number outstanding at the moment?
No, Sir. I think it would be better if the hon. Member would put down a Question so that I could deal with it more fully.
While I know that in many cases sympathetic consideration has been given by the Minister in considering the applications of men who gave service to the country when it was in urgent need, is it not a fact that now that these men, through cancer, are in the most bitter need, there seems to be no consideration, or very little consideration, for them?
The hon. Member is aware and has admitted—as I wish many of his friends would—that we have given this matter sympathetic consideration. This matter has been raised in the House before and has been discussed. It is a question of the Royal Warrant. If the hon. Member wishes to raise that question again, I shall be pleased to answer him. Meanwhile, we have expanded as never before the law as it stands, so as to give decent treatment to these people.
Chancellor of the Duchy of Lancaster (Salary)
asked the Prime Minister the Vote under which the higher salary of the Chancellor of the Duchy of Lancaster will be paid.
I have been asked to reply. The salary of the Chancellor of the Duchy of Lancaster, additional to the remuneration paid from Duchy funds, will, as heretofore, be paid for out of Subhead E of the Vote for Treasury and Subordinate Departments (Class I, Vote 4).
Can the Lord President say how he justifies this increase, in view of the Government's policy that increases shall come about only as the result of greater output; and is it proper for the taxpayer to be called upon to pay Dane-geld to maintain the internal peace of the Labour Party?
This is the customary salary of a Minister who is a Member of the Cabinet. I may say that similar circumstances arose during the time the noble Lord the Member for Horsham (Earl Winterton) was holding the office of Chancellor of the Duchy from 1937 to 1939. From March to May, 1938, he was deputy to the Secretary of State for Air, and in June, 1938, he became assistant to the Home Secretary. From March, 1938, to January, 1939, he was in the Cabinet, and his salary consisted of £5,000 a year.
Will the Lord President explain why it is that the duties of the right hon. Member for Horsham (Earl Winterton) were then known, but there is nothing known about what the Chancellor of the Duchy of Lancaster is to do for his £5,000?
That is not the Question on the Order Paper.
Industrial Productivity (Working Groups)
asked the Lord President of the Council if he will publish a list of the working groups under the panels of the Committee on Industrial Productivity, giving the terms of reference of each working group and the names and qualifications of the chairman and members.
The panels of the Committee on Industrial Productivity from time to time entrust particular tasks to specially constituted groups the composition and personnel of which changes according to the stage reached by the investigations. The responsibility for the work and for all advice given rests with the panels whose terms of reference and composition were given by my right hon. and learned Friend the Chancellor of the Exchequer in answer to a Question on 1st June. I am not prepared to publish any further lists in the circumstances.
Can the Minister say whether there are any people employed on the working groups in addition to the list of names published last week, and, if so, can we have their names, as a number of gentlemen are going round masquerading as members of these panels?
If I may so, I feel that the hon. Gentleman has been treated quite well about this matter. The Chancellor of the Exchequer, when he answered previously, gave a very long list of the people involved. There must come a point when this must cease, otherwise there would be no end to it. I do not think the hon. Gentleman need be concerned on the point that he has mentioned.
Will the right hon. Gentleman cause the Panel on Imports Substitution to be re-named, since the whole House hopes that the work in which this panel is engaged is far less idiotic than this misleading and illiterate title indicates?
National Finance
Purchase Tax (Evasions)
asked the Chancellor of the Exchequer if he is aware of the widespread evasion of Purchase Tax obligations and of the fact that the £500 exemption limit offers particular opportunity for evasion; and what steps he is taking to tighten up the collection of Purchase Tax.
I am aware that Purchase Tax is evaded in various ways, among others by the £500 limit. The question how best to check these evasions is kept constantly under review.
Would the right hon. and Jearned Gentleman consider lowering this limit, since with the increase of Purchase Tax it offers considerable temptation for evasion?
I will certainly consider any successful way of stopping the evasion of any tax.
Swiss Currency (Travel Agencies)
asked the Chancellor of the Exchequer what proportion of Swiss currency available for tourists is allocated to travel agencies.
The Authorisation Office for Travel to Switzerland, which administers the monthly quotas of Swiss currency for tourist travel, reserves 55 per cent. of each quota for travel agencies.
Is the right hon. and learned Gentleman aware that these agencies receive considerable commission from hotels in Switzerland, and that those who take tickets through these agencies cannot get any currency unless, at the same time they agree to go to the agency hotels; and that this prevents many people from going to cheaper hotels? Does he not think that this is an undesirable practice?
I think that it is desirable that the travel agencies to whom many people go should have a certain quota, fixed at 55 per cent.
Treasury Deposit Receipts
asked the Chancellor of the Exchequer whether he has any announcement to make regarding the currency of Treasury Deposit Receipts.
Yes, Sir. It is proposed that as from the week beginning Monday, 14th June, Treasury Deposit Receipts shall be issued with a currency of five and seven calendar months in addition to the existing currency of six months. The rate of ⅝ per cent. per annum which now applies to the six months' period will also apply until further notice to the five and seven months' periods. The object of this technical change is to obtain greater flexibility, the need for which will become particularly marked during the current financial year.
Will the Chancellor of the Exchequer take the second step and make an improvement in the terms of issue of Treasury Bills?
No, Sir, not at present.
Post-war Credits
asked the Chan cellor of the Exchequer what is the amount of Post-war Credits outstanding at each age year.
No statistics are available for the different age groups.
Is it the intention of my right hon. and learned Friend to release any of the Post-war Credits before the recipients reach the age of 60, and, if so, would he consider lowering the age limit by one year each Budget day, so that those concerned may know when they will be receiving it?
There is no intention at present of making any Post-war Credits available.
Would the right hon. and learned Gentleman consider the cases of men over 65 or over 60 who are suffering very greatly through illness or unemployment?
I am always prepared to consider any case.
Conveyor Belting (Purchases, U.S.A.)
asked the Chancellor of the Exchequer if, in view of the fact that dollars were made available to the National Coal Board for the purchase of conveyor belting in excess of requirements, he will immediately review the system under which dollars are allotted; what was the estimated loss of dollars involved; and what steps he has taken to punish the persons responsible for this unnecessary depletion of our hard-pressed dollar resources.
I would refer the hon. Member to the reply which my hon. Friend the Economic Secretary to the Treasury gave to the hon. Member for Sutton Coldfield (Sir J. Mellor) on 3rd June.
Is the Chancellor of the Exchequer surprised that Marshall Aid is being held back when the National Coal Board play the fool with dollars in this way; and will he sack Lord Hyndley?
Income Tax Arrears (Ex-Service Men)
asked the Chancellor of the Exchequer the number of claims made and outstanding for under-payment of Income Tax by the Inland Revenue Department against ex-Service men in respect of their wives' earnings in industry during the war; and the total amount of taxation arrears involved.
I regret that this information is not available. I should, however, say that in such cases the Inland Revenue do not ask for immediate payment of the arrear. They arrange as a rule for its collection by increased P.A.Y.E. deductions spread over a later year or years.
If I put down a Question in a week's time, will the information be available, because it is of great importance?
No, Sir. It would be much too expensive to collect all this information, and it would disrupt the very important and useful work now being done in the collection of taxes.
Will the right hon. Gentleman say whether Postwar Credits are allowed to be set off against these liabilities as in the case of ex-officers?
Perhaps the hon. and gallant Gentleman will put that Question on the Order Paper.
Are not these claims entirely due to the negligence of Service Departments and of the Inland Revenue, and is it not most unfair to burden these men who have difficulty in meeting their current liabilities?
No, Sir, it is certainly not due to negligence either by the Inland Revenue or the Service Departments.
In view of the unsatisfactory nature of the reply, I beg to give notice that I will raise the matter again on the Adjournment.
Purchase Tax (Imported Clothing)
asked the Financial Secretary to the Treasury if, in view of the higher prices now ruling for clothes on the Continent, he will instruct customs officers to waive the Purchase Tax on articles of clothing up to the value of £5 brought in by returning tourists.
No, Sir.
Would the Financial Secretary go down to Dover, or one of the other ports to which tourists return, and see what happens; and would he seek the advice of the Customs officers to see if he cannot find some better way of encouraging tourists to make honest declarations?
War Damage (Late Claims)
asked the Financial Secretary to the Treasury whether he will consult further with the War Damage Commission about late war damage claims, with a view to the admission of those claims where it can be established beyond doubt that prior knowledge of the damage sustained by the property in question was in the hands of the Commission, having been notified to the Commission by the local authority covering the area in which the property is situated.
The War Damage Commission only decided on their policy for dealing with late notifications of war damage after the fullest consideration. For reasons given to my hon. Friend in my letter of 28th May, the Commission have felt themselves unable to adopt her suggestion.
But is my right hon. Friend aware that I have here a file of correspondence from constituents, concerning cases, that I have interviewed the claimants, and scrutinised the correspondence with great care, and that I would say that in each case—and I think my right hon. Friend would agree with me—there is a strong claim for consideration; and would he not approach the War Damage Commission again with a view to getting this matter reconsidered?
As my hon. Friend knows only too well, this has been discussed many time with the War Damage Commission. I hope she knows the difficulties, which have been pointed out to her. Doubtless we shall be discussing this again, because I notice that this is the subject of the Adjournment Debate on Friday next.
During the height of the war, were not local authorities appointed as agents for the War Damage Commission?
Yes, but the trouble was that the information gathered by local authorities was of the vaguest description, and is now completely unreliable.
In view of the vast number of cases still outstanding, will my right hon. Friend be prepared to receive representations from the local authorities concerned in what are known as the "blitzed areas"?
We have already seen Parliamentary representatives of the authorities concerned, and have discussed the matter fully with them.
Would the right hon. Gentleman consider some method of appeal? At present the Commission, rightly or wrongly, rules out a case, refuses to give an interview, and refuses to discuss the matter, and if ever there was a way of enraging the public that is the best one up to now.
The Commission is a statutory body, which acts under the authority of Parliament and the Act laid down for its guidance, and I cannot overrule the Act. I would say, however, that the Commission have, in my experience, been extremely anxious to do the right thing when genuine claims have been presented.
Is my right hon. Friend aware that claims are deposited within the proper period, but are also extremely vague so far as the description of damage is concerned; and is he further aware that the War Damage Commission assessors have found no difficulty in dealing with claims so deposited, vague though they are?
Yes; and that, of course, is what they are there for. But the last bomb did fall some years ago, and it is very difficult now to decide what is war damage and what is simply disrepair owing to the lapse of time.
Is the Financial Secretary aware that this matter needs to be entirely reconsidered; and will he state that he will look into it again?
Will the Minister approach the War Damage Commission, and ask them to take the trouble to investigate some of these cases and base their decisions on the facts and not on refusal to consider the evidence?
That is exactly what the War Damage Commission are doing.
No.
Would the Financial Secretary be good enough to convey to the War Damage Commission that there really are a great many cases in which claims were made in circumstances of great mental stress at the time of the "blitz," by persons who have since died, and that it is important for the facts to be entirely re-examined in some of these claims?
Is my right hon. Friend not aware that a great many of these difficulties would not have arisen but for the changed policy in the Ministry of Health, who took workmen off the "blitzed" houses and put them on to building new houses about three years ago; and are we to understand from his reply that the door is not yet really closed?
With genuine claims, no, the door is not closed. I would point out, however, that out of 3,400,000 claims dealing with the kind of property mentioned in the Question, the overwhelming majority have been accepted.
Is the Financial Secretary suggesting that the War Damage Commission can tell whether a claim is genuine or not without examining it?
In view of the unsatisfactory nature of the reply, I give notice that I shall be here on Friday to support my hon. Friend the Member for Mitcham (Mr. Braddock) when he raises this matter on the Adjournment.
Thoroughly unsatisfactory.
"Report to the Nation" (Goal Production)
asked the Economic Secretary to the Treasury what steps were taken when preparing "Report to the Nation, No. 17," to ensure the accuracy of the comments on coal production.
The usual procedure of checking with the responsible Departments was followed in this instance.
Can the Minister explain how it was that in "Report to the Nation, No. 17" coal output was shown as a "Thumbs up" item, whereas only four days previously the Chairman of the National Coal Board had said in a public speech that the output of deep-mined coal in the past few weeks had been very disappointing?
I am afraid the party opposite is becoming victim to its own propaganda. Surely the hon. Gentleman knows that coal production and exports this year have been far higher than last year or the year before.
Can the Economic Secretary explain two statements in this "Report to the Nation"? When it claims credit for the fact that we are "almost abreast of the target," does that mean that we are trying to hit the target or trying not to hit it? Secondly, when the Report says "Target in danger," is that a proper way of describing a target in no danger of being hit?
I should not attempt to compete with the hon. and learned Member in verbal questions of this kind.
Civil Service (Car Allowances)
asked the Financial Secretary to the Treasury what check is kept on the actual costs incurred by officers of Government Departments who use their own cars for public business so as to ensure that the allowances paid are adequate to meet the actual costs incurred.
The allowances are settled after discussion on the Civil Service National Whitley Council, on such evidence of costs as both sides of the Council can produce. The present allowances are now being discussed by the Council.
Could the Financial Secretary say how often these reviews take place; and is he taking into account the fact that a great many junior officers are today having to run aged cars, whose running costs are very high?
I am sorry, but I cannot say how often the reviews take place, beyond saying that they take place at such intervals as is thought desirable. The one now taking place has before it a great mass of figures, including figures dealing with the points which the hon. Gentleman has now mentioned.
Trade and Commerce
Frustrated Exports
asked the President of the Board of Trade if he will grant a revised import licence to Messrs. London and Suburban Commercial Vehicles Ltd., London, S.W.9, to enable them to sell in this country cycles originally imported for re-conditioning and subsequent re-export, in view of the fact that export markets for these articles formerly open are now closed.
I would refer the hon. Member to the statement on frustrated exports made by my right hon. Friend on 25th May in the Debate on the Board of Trade Vote. The case of Messrs. London and Suburban Commercial Vehicles Limited is one of those now under consideration.
Can the Parliamentary Secretary say when the frustration to which this firm has been subjected will be made good by his Department?
Just as soon as the Committee are able to advise us what should be done about it.
Must they wait until the Committee are finished?
Yes, Sir.
Fertilisers (Export)
asked the President of the Board of Trade whether, in view of the acute shortage of fertilisers for farmers in all parts of the country, he will explain why substantial quantities of fertilisers are being shipped from East Coast ports to the Continent; and whether, in view of the urgent need for fertilisers at home, this practice will be discontinued.
Nitrogenous fertilisers are under international allocation by the Food and Agriculture Organisation, and the shipments referred to are part of our commitments under that allocation. Much of this material is in the form of ammonium nitrate, which is not suitable for use by farmers in the United Kingdom.
But is not the Parliamentary Secretary aware that ammonium nitrate is of great use to sugar beet people; is he further aware how deplorable it is that not only these fertilisers, so much needed by home producers, but implements are being shipped to the Continent? What a Government!
My information is that supplies of nitrate fertilisers during the year under discussion were adequate to meet the needs of our farmers, although there was recently a slight fall, which has now been put right.
In view of the fact that I cannot get any sense out of the Government, I give notice that I shall raise this matter on the Adjournment.
Vactric Factory, Newhouse
asked the President of the Board of Trade what numbers are employed in the new Vactric factory at Newhouse; and how many are expected to be in employment there this month.
I regret that I cannot disclose this information, which was obtained in confidence.
Anglo-Soviet Discussions
asked the President of the Board of Trade whether in view of the clause in the Anglo-Soviet commercial agreement providing for negotiations to be started by the end of May for a long-term agreement, any steps have yet been taken.
I have nothing to add yet to the reply given on 1st June to my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman).
Capital Punishment
May I ask the Leader of the House a question regarding business? The right hon. Gentleman will no doubt remember the questions and answers which were exchanged between the Home Secretary and myself on Friday last about the Criminal Justice Bill and the commutation of death sentences. Can he now tell us when the Home Secretary will be in a position to make a statement?
My right hon. Friend has under careful consideration the points which have been raised and representations which have been made by the Opposition through the usual channels. He will be making a statement as soon as possible; I hope it may be this week, but I cannot be sure; quite likely it may have to wait until next week. The right hon. Gentleman can be sure that my right hon. Friend will make the statement as soon as he can.
Will the right hon. Gentleman and the Home Secretary bear in mind—as I am sure they will—in view of a statement of policy made in another place, that it is a matter of some urgency that a reply should now be given here?
I will do what I can to meet the wishes of the House.
May I ask the Leader of the House whether some machinery cannot be invented, if only for this occasion, by which some sort of notice can be given? A severe tax, and not a fair one, is imposed upon those hon. Members who are interested in this matter but who might not always be here at 3.30 every day week after week. Is there not some way in which the right hon. Gentleman can predict when this matter will be dealt with?
I do not think it would be proper to put it on record that hon. Members do not have an obligation to be here at 3.30. As soon as we know, we shall certainly advise the usual channels so that they can convey to hon. Members, as convenient, what is likely to come along. One does not always get notice, however; I had only about two minutes' notice that this question was coming up last week. One cannot always help that.
Business of the House
Proceedings in Committee on Gas [Money] (No. 2) exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House).—[ Mr. H. Morrison. ]
Orders of the Day
Finance (No. 2) Bill
Considered in Committee [ Progress, 7th June. ]
[Major MILNER in the Chair]
EIGHTH SCHEDULE—(Purchase Tax.)
3.35 p.m.
It may be for the convenience of Members of the Committee if I make a suggestion in connection with the various Amendments on Purchase Tax, of which there are a good number on the Order Paper. The Committee will have observed that the various items are grouped in separate divisions in the Schedule. I propose, with the agreement of the Committee, to read out the number of the group and then indicate in advance the Amendments which I have selected. I think this method will be helpful to the Committee and will enable hon. Members with associated Amendments which have not been selected to make their contributions on the Amendments which are called. I hope that this will be for the convenience of the Committee.
In Group 1 I have selected those Amendments to the Eighth Schedule relating to lines 30, 32 and 38, on page 62, in the name of the hon. Member for West Fife (Mr. Gallacher). I have also selected the Amendments in the name of the hon. Member for Thirsk and Malton (Mr. Turton) affecting line 32 on page 62, and line 4 on page 63 also in the Eighth Schedule. I have also selected the Amendment in the name of the hon. Member for Hitchin (Mr. Asterley Jones) to page 63, line 15, and that of the hon. Member for Oldham (Mr. Hale), also to page 63, line 15. Perhaps any hon. Members who are not quite clear will be good enough to see me.
I beg to move, in page 62, line 30, to leave out "First," and to insert "Exempt."
There are several Amendments in addition to those put down by my hon. Friend the Member for West Fife (Mr. Gallacher) and myself. I hope that the Chancellor of the Exchequer will give consideration to all those in this particular group affecting garments and footwear. These commodities should carry the least possible burden. Utility goods, articles for industrial wear and items of footwear should not carry Purchase Tax. This is the general principle on which I approach this question.
I am sorry if I did not make the position entirely clear to the hon. Member for Mile End (Mr. Piratin). I think it would be advisable to deal separately with his first Amendment rather than discuss it with the others, which deal with industrial clothing.
The purpose of this first Amendment is to remove the Purchase Tax on utility fully fashioned stockings. Perhaps this is an item which could have been expounded better by the hon. Member for Coatbridge (Mrs. Mann) on behalf of the users of women's clothing but apparently it falls to my lot to do so. Many Members of the Committee know what are fully fashioned stockings and others will be keen to know. I hope that in the course of our discussion we shall all know what they are, even if the Chancellor cannot see his way to grant exemption from Purchase Tax. The particular merits of fully fashioned stockings, as I understand them from my wife, are these: They are dearer than unfashioned stockings because they are made to fit the shape of the leg and, therefore, last longer. Because they last longer the manufacturer makes the customer pay more for them. The quality is not necessarily any better than that of the unfashioned stocking. The chief difference is that they are made on the basis of a seam and so fashioned to fit the leg.
They cost more than the unfashioned article, a fact of which hon. Lady Members will be more aware than hon. Gentlemen. If the purchaser of these stockings is already paying extra for them because they are fully fashioned she is already paying enough for their additional value. They may last a little longer than the unfashioned article, but their users are paying a higher price for them. What, then, is the purpose of the Chancellor in asking for 33 per cent. Purchase Tax upon fully fashioned utility stockings when there is no Purchase Tax on non-fashioned utility stockings? It seems to me that utility garments of this kind should be exempt from Purchase Tax. I do not want to state a long case, because there are no doubt other points of view which Members will want to put before the Committee to strengthen the argument. Therefore, I hope that the Chancellor will see his way to exempt fully fashioned utility stockings from Purchase Tax.
It might be for the convenience of the Committee if I said a word on how I hope to deal with these various Amendments. It is quite obvious that there are a tremendous number of competing claims. There are 159 Amendments covering practically the entire Schedule, and if I were to be so foolhardy as to accept them all there would be no Purchase Tax left. On the other hand, I am most anxious, within the possibilities—and they are very small—to give any benefits there may be by way of reduction of Purchase Tax on those items which obviously need them most. But that is impossible to decide until one has heard the arguments on the rival claims.
In those cases, however, where I say that I am prepared to consider the matter, I hope that, when we reach the end of the whole Schedule, and before we rise, tomorrow morning, I may be able to tell the Committee on which, if any, of these matters to which I have promised consideration, I find myself able to make some adjustment. I make that suggestion because if anything is to be done it is very desirable that those who are in the trade should know as quickly as possible. Therefore, if we are to do anything we should do it now, rather than leave it over to the Report stage, although it may formally have to be done at that stage, so that those concerned will know as early as possible one way or the other.
3.45 p.m.
I think that that arrangement will well suit us. We agree that it is not right that it should be "first come, first served," and that Members who happen to make popular cases early on should not necessarily get something, with the result that there would be nothing left for those at the end. I am not sure that I very much like the idea of the right hon. and learned Gentleman making his announcement at the end of what may be a very long discussion when he cannot have had very much time to consider the later Amendments. I sympathise with him on the matter, and I think it is most desirable that the trade should know early what has been decided.
The only suggestion I would make, although I have not discussed this with anyone, is that there will be no objection whatsoever to the right hon. and learned Gentleman taking a little longer to consider the whole matter and making his statement on what he is going to do elsewhere, so that the trade will know, and then to regularise the matter when we come to the Report stage. My only other point is that I am sure that you, Major Milner, will take a sympathetic view in regard to those Amendments which are rejected and in respect of which there is no opportunity to take a Division, and I would express the hope that, while you will not of course be able to say what may be discussed on Report stage, you will be able to convey the situation to Mr. Speaker.
It will not make any difference to my view on the merits of the case whether we divide or not. I do not want it to be thought I am saying that I will consider something in order to prevent a Division. I shall look at the thing just as impartially whether or not there is a Division.
I wish to say a word in support of the Amendment moved by my hon. Friend the Member for Mile End (Mr. Piratin). I am not myself an authority on legs, but I know that legs are considered to be of very great importance. There has been much discussion in the past, and there are many pictures to be seen in the illustrated Press, on the importance of legs. I was looking at one of the newspapers the other day, and I saw a picture of a Tory garden party which showed a Tory gentleman peeping from under a screen at a number of legs in order to judge which was the most acceptable and prize-winning pair. I am quite certain that the pair of legs which had fully fashioned stockings would have a better chance of winning.
As my hon. Friend has said, those who want to present a desirable picture, particularly to the male section of the population, should not have to pay considerably more for fully fashioned stockings. People have already to pay a higher price for these stockings, and that is no reason why there should be the added burden of the Purchase Tax. There is something in what the Chancellor of the Exchequer said, that if he accepts all the Amendments there will be no Purchase Tax left, but I do not think that that would be a bad thing, despite all this talk about inflation. I agree that in dealing with these Amendments it should not be just a question of "first come, first served," but surely the very first Amendment should get very special consideration and should be entitled to a prize because it is the first.
It is eminently suitable that the first Amendment today should be moved by the Communist Party, and it is still more suitable that it should be in favour of removing the tax on what I am creditably informed is an article which concerns fashionable people. I fully admit there is a great deal to be said in these dull, drab days, brought about by the Socialist Government, for cheering up the lives of the ordinary people. I realise that extreme pressure must have been exerted by certain women supporters of the Socialist Party to put this fashionable article first. While I am certainly in favour of some adjustments in the Purchase Tax on these articles, I should not like it to be thought that there are not some other things more highly deserving of exemption. There are certainly other items in regard to which I should like to see the Purchase Tax reduced, and for that reason I hope that the right hon. and learned Gentleman will not be swayed by the argument that this happens to be the first Amendment, or influenced by the rather more attractive nature of the article. I hope that kind of argument will not necessarily be applied by the Government today, because the mere fact that an Amendment is coming on first in a long list is no reason why the Government should give way on it. I emphasise this all the more as we realise how very fine is the sway over the Government exercised by the hon. Members for West Fife and Mile End.
May I make one suggestion about the question dealt with just now by the Chancellor of the Exchequer. When he makes up his mind on the Amendments at a later stage, instead of a declaration at the end of the day it would be better if he put the reliefs down on the Order Paper at the earliest possible moment so as to relieve the trades' anxieties in the matter. Having put forward that suggestion I would say that many of us are looking forward to the answer on the particular question as to whether fully fashioned stockings will be exempt. Might it not be better if, instead of exempting them they went down the list of Amendments and no longer occupied the first place? Might that not be a compromise that would help the Treasury in this matter? There is a great deal to be said in favour of these articles though I am not sure that they qualify for full exemption.
May I ask the Economic Secretary to indicate what this will cost?
The answer to the hon. Member is about £2½ millions a year. In answer to the hon. Member for West Fife (Mr. Gallacher), while I would not contest the aesthetic aspects of his arguments, I cannot accept the proposition that because this is the first Amendment we ought to accept it. The fact is that utility fully fashioned stockings are a very good export proposition and the information that we have indicates that if the tax is left at 33⅓ per cent. we are most likely at the present time to get the maximum exports in this particular line. For that reason we do not feel prepared to align this article with the other utility articles in the Schedule and we are not prepared to place fully fashioned stockings on the list of products which we are prepared to consider.
Amendment negatived.
I beg to move in page 62, line 32, after "skin," to insert "(other than of rabbit or mole)."
It would be for the convenience of the Committee if we took all the rabbit and mole skins together at this stage.
I will gladly fall in with your suggestion. Major Milner, as it would be a very happy way of dealing with this problem. The fact that these skins are not included in the Schedule must be a slip on the part of the Government, because over two years ago the whole question of the rabbit was argued for some considerable time in the early hours of a considerable number of mornings, and it was made quite clear that we had persuaded the Government, although it is quite true that it was a different Chancellor of the Exchequer, that there was a good case for the exemption of rabbit furs and rabbit skins from Purchase Tax. Indeed, we got an indication from the then Chancellor that he would consider domestic or native animals in this exemption. I should like to recall the words used on the occasion by the present Chancellor of the Duchy of Lancaster. He said:
I make a strong plea for rabbit or mole skin. They are in many cases made out in utility garments with which may of these Amendments deal, and in all cases these skins cannot be regarded as a luxury. The widespread feeling in the country about which the Chancellor of the Duchy of Lancaster talked reveals that the public have a good idea as to the value of this trade to the food and agricultural industries of the country. The domestic or the wild rabbit makes a double contribution to the nation's revenue. It is a dollar saver. If somebody gets a coat or a pair of gloves made of rabbit fur, he or she is saving the dollars needed for buying the more expensive furs and at the same time the remainder of the rabbits are going to be a very appetising change of diet in our meat ration. All over the country in backyards people are engaged in this rabbit industry, and, therefore, it is quite wrong to put this tax upon their shoulders.
With regard to the mole, I cannot hold out any hope at the moment that it has a double purpose in being able to form part of the star item on our menu. We have not got to the degree of starvation that the mole comes into that category, but the mole and the wild rabbit share the distinction of being two of the greatest agricultural pests. If the killing of rabbits and moles is encouraged for their furs, agriculture is also helped by getting rid of these pests.
What about golf-course rabbits?
4.0 p.m.
They are the same. Equally, I am told—I do not want to be contentious—we find some in the party opposite on certain occasions, who when they have their name down to a telegram, run away. I hope that whoever replies will tell us the cost of this new impost on the domestic rabbit. I am not quite sure whether my Amendments as drafted go far enough, but I have designed them so that if we have merely a fur skin it will be exempt from Purchase Tax, but when made up into other categories of garments it will be in the First Schedule which is a higher rate of tax than it paid before. Previously it was exempt and I therefore ask the Economic Secretary to consider whether rabbit skins might not be entirely exempt from the tax following the very good lead set by the previous Chancellor of the Exchequer. If he does that, he will help the agricultural industry as well as the nation's nutritional system.
I am concerned with the effect of the Amendment, if accepted, on the export trade. I believe that the sale of rabbit skin coats abroad is not very considerable and that there is a certain amount of justice in what the hon. Gentleman has said regarding the matter.
Will the hon. Member please speak up. We cannot hear what he is saying.
There is a certain amount of justice in the hon. Member's claim that the Chancellor should give favourable consideration to this Amendment. The main argument is that in view of the shortage of textiles, the rabbit-skin coat provides a useful substitute during the winter. It is a warm coat produced from domestic animals which are very often regarded as pests, and it can in no way be classed with the high-priced first quality luxury furs which represent the bulk of our exports in this commodity. I hope that reasonable consideration will be given to this claim. It is reasonable that this class of fur, which is not a luxury fur and which ordinary people use because they cannot afford to pay high prices for other types, should be free of tax.
I support this Amendment very strongly. I hope that the hon. Gentleman who is to reply will give us some reason why there has been this change from what was conceded by the previous Chancellor of the Exchequer, for that gave considerable pleasure and benefit to large numbers of people. I cannot believe that the sum produced will do the Chancellor's Budget any very great service. The amount must be very limited, but this is a very valuable industry in rural areas. In my constituency it is a widespread one and it provides a large number of small homes with a little extra money, and it certainly provides a notable contribution to the food supply. In view of that and the cheap fur coats which are of the greatest value to people in the lowest income groups, I hope the Chancellor will reconsider this, because it cannot mean a great financial loss and it will greatly help large numbers of very small householders.
I shall always be glad to follow any example set by my right hon. Friend the Chancellor of the Duchy of Lancaster, and we must have sympathy with the hon. Member for Thirsk and Malton (Mr. Turton) in wishing to encourage the home production of rabbits and rabbit skins. However, we are afraid that it would not be administratively possible to secure the desired object in this way. The difficulty arises from trying to give the concession by reference to the type of animal from which the skin is produced. For instance, it would not be possible to confine the concession to small breeders or even to skins produced at home. We should have to extend it to imported articles as well. We could not confine it to the cheaper skins which the hon. Member had in mind but would have to extend it to skins like Angora. The serious difficulty is that if we did it this way it would involve discriminating in favour of rabbit and moleskins as against sheepskins, red fox and other skins of the less expensive varieties.
Is it any more difficult to do that than it was last time?
It has been looked into rather more carefully since the last time it was discussed. We have sympathy with the object which most hon. Members have in mind, but we are afraid that we cannot secure the result in this way.
That reply is not at all satisfactory. We have had no explanation why the tax was taken off rabbit skins two years ago—it worked entirely satisfactorily—and has been slipped into this Bill without a word being said either in the Budget speech or on Second Reading. I do not agree at all that the object of my hon. Friend the Member for Thirsk and Malton (Mr. Turton) was to limit the exemption to the cheaper kind of skin. It has worked perfectly well that all rabbit skins should be exempt, including Angora rabbits. If this tax is persisted in it will have a very serious effect not only on the supply of this useful contribution to clothing, but also on the supply of food. The removal two years ago of the tax from rabbit skins and garments made from them stimulated the breeding of tame rabbits. I am not suggesting that the tax, if it is persisted in, will reduce the production of wild rabbits, because wild rabbits have their own ideas about that, but it will undoubtedly reduce the production of tame rabbits. The removal of the tax from moleskins and moleskin garments would likewise increase the production of moleskin garments.
The drafting of these Amendments is not perfect. Hon. Members will see that if in accordance with the first Amendment moleskins and rabbit skins are taken out of ( c )—which relates to utility garments—it will put them into ( d ) and therefore utility garments made of such skins will be exempt, but that is not the effect of the second Amendment because if rabbit skins and moleskins are taken out of ( f )—which relates to non-utility articles—they will fall into ( a ) and that will draw non-utility garments made of such skins into the group paying the lowest rate of Purchase Tax. So I want to make it perfectly clear that the object of these Amendments is to restore the complete exemption of rabbit skins, and garments made of rabbit skins, which has been employed for the last two years, and to add to that the exemption of moleskins.
I would like to add my protest against what has been said by the Economic Secretary. I do not think the objections he put forward to removing the tax really hold water It is perfectly simple to devise a method based on the difference between high value and the low value skins. It has been done before, and therefore his argument is not sound that people might avoid paying Purchase Tax on some of the higher variety of skins saying that they were rabbit. I do not think the hon. Gentleman realises what will be the effect of this tax. There have been formed all over the country small groups of people who now make up simple articles of clothing, gloves and so on, from rabbit skins. They are per forming a useful function. They have formed rabbit clubs, and so on, and have built up a village type of industry which brings in a small but helpful sum into families very often of men who are partly disabled. Quite a lot of that work has been encouraged by those trying to develop activity on the part of disabled men and women. I do not think that this deliberate, petty attack—
indicated dissent.
can be intended by the Chancellor of the Exchequer, and I cannot believe that the Economic Secretary will continue to jay-walk all through life in quite such a dangerous way, because he is rendering himself liable to be run over by the march of events. He will receive enormous protests from all over the country which will give him far more trouble than the revenue he will derive from this tax is worth. Indeed, the valuable time of himself and others in the Treasury would be much better spent on other matters.
I do not want to associate myself with the idea that the Economic Secretary is trying to stab rabbits and moles in the back. I have no doubt that the world will go on whatever the tax on skins, but I would ask my hon. Friend this question: as I understood it, he was saying that he had some sympathy with this proposition, but that it was not practicable to do it this way, and I thought he had in his mind some other way in which it might be done. If so, we should be glad to hear it and have it considered before the Report stage.
I join with the hon. and learned Member for North Hammersmith (Mr. Pritt) in hoping that even now the Economic Secretary will be able to tell us what he is prepared to do, because he said he had sympathy with the Amendment. Surely it follows logically that he must be prepared to do something to give expression to that sympathy? If he will forgive me for saying so, the Economic Secretary has been in his present office only a short time, as indeed he has been only a short time a Member of this House. That is not his fault, but I thought he treated in a somewhat cavalier manner the suggestions made from this side of the Committee. Indeed, I thought all those now responsible for carrying on the affairs of the Treasury are acting in a way contrary to the line pursued by the Chancellor of the Duchy of Lancaster when he was Chancellor of the Exchequer. I repeat that I thought it was a little cavalier of the Economic Secretary to say that those who are now responsible at the Treasury know much better than the Chancellor of the Duchy what to do about this Amendment; in other words, they in their wisdom have seen more light on this subject. I, for one, cannot accept that answer. Indeed, the hon. Gentleman went a long way towards eating his own words when, before resuming his seat, he said he had considerable sympathy with the Amendment. However, he has left us completely in the dark as to how far along the road to meet our wishes his sympathy will take him.
4.15 p.m.
I have complete sympathy with what was said about the Amendment being designed especially as a dollar-saving device and, therefore, on that ground alone it has my support, inasmuch it would result in many people being able to secure at a cheaper rate the furs they desire, not merely to look nice, but also to keep themselves warm. However, my support of this Amendment is based particularly upon the deleterious effect there will be on the agricultural and food situation generally if it is not accepted. My hon. Friend the Member for Thirsk and Malton (Mr. Turton) speaks for the wolds and dales of Yorkshire, but I can assure him that the rabbit pest and, indeed, the mole pest in Southern Scotland is just as great as in the largest county of England.
If this Amendment, or something on these lines, is not accepted there will be a certain resulting loss of valuable and nutritious food. There are many ways of cooking rabbits, and the hon. Member ought to develop that. However, I do not suppose he has had the same opportunities for eating rabbits that I have had, but let me assure him that the great merit of rabbit as a table dish is the variety of ways in which it can be cooked. It can be roasted, boiled, stewed, and made up into a large number of other dishes with which I will not weary the Committee. If there is to be no encouragement given to the killing of rabbits, which will be the result if our Amendment is not incorporated in the Schedule, there will be this loss of a valuable nutritative article of food, and concurrently the rabbit pest to agriculture will mount more largely than ever before.
There will be the same result with regard to moles, so that we shall be depriving people in the lower grades of income of a nice article of wearing apparel, and, at the same time, dealing a blow at agriculture because there will be no longer the same incentive to catch the mole. Let the hon. Gentleman be assured that, just as with the rabbit, if not properly kept down the mole can be one of the biggest pests to agriculture, yet this Government are never tired of telling us, in trying to win the votes of the agricultural community—which they have not a hope of doing—that their one desire is to put the agricultural industry of Great Britain upon a proper footing so that it can play its real part in the body economic and politic.
I trust that the Minister will look at this matter again. I believe that when he reads his speech in HANSARD, he will not be at all satisfied with it. His argument, as far as I can discover, was based on what could be done about the imports of rabbits, and so on. He knows perfectly well that if he wants to deal with such matters, he can do so with the greatest ease. Also, I do not believe it has been fully recognised how useful such an industry as this is from time to time for a group of disabled persons. The British Legion and other people are anxiously concerned about these men and are looking for ways of developing certain light industries in different parts of the United Kingdom. Hon. Members will remember the interest which was taken in the Looe rabbiteries some time ago. These places were fulfilling a twofold purpose by providing food as well as pelts. On 2nd December, 1947, when I was arguing on the Floor of the House about the Purchase Tax, the present Chancellor of the Exchequer came to the Box at the end of the discussion and said:
"I do not believe that my views are so much better than those of anybody else that one can always absolutely rely upon them."—[OFFICIAL REPORT, 2nd December, 1947; Vol. 445, c. 268.]
With those words I ask the Economic Secretary to think again on this question, and to give a more adequate answer at the Box than he gave in his original speech.
I think every one of us will agree that the Committee were indeed fortunate in having the very sage advice of the hon. and learned Member for North Hammersmith (Mr. Pritt). It must be extremely difficult for the Government to get out of the pertinent question which he put when he asked precisely why within a comparatively short time the Government should change their view, for the Chancellor of the Exchequer seemed in favour of an Amendment of this kind.
indicated dissent.
I say "seemed to be" and if the wobbling from side to side of the Financial Secretary's head means anything he can get up and explain to us. The general impression left on the House was that the Chancellor would look into the matter favourably. But after looking into the matter favourably, from a Treasury point of view, rather than from the point of view of the Amendment, he has taken precisely the opposite course. This attitude will result in enormous discouragement to the killing of vermin, because rabbits and moles are among the worst forms of vermin in the country.
I wish to examine what may have caused the Treasury to make this change in favour of encouraging vermin production in the country. I give my full support to everything that has been said about the valuable back garden rabbit industry. It was said just now on behalf of the Government that it would be difficult to operate this Amendment because other forms of fur would escape taxation. It is perfectly easy to arrange that by an import duty and by making certain that all the duties are collected. That would be better than the present tax. It would have the immense advantage that the person building up the garment would know that it was better to buy British rather than some forms of foreign fur.
For the sake of farming I would like to see every wild rabbit killed and I would like to see the vast majority of moles destroyed, because I believe they are doing great harm to agriculture. But all this tax does is to discourage people from keeping rabbits. The trapping industry will not be encouraged to kill every rabbit they can, nor to kill moles, because it will tend to make the pelts of such animals of less use. It seems to be part of the determined view of the Chancellor to make all possible difficulties for agriculture. I have had to complain of this before and it is about time the country realised that this is not merely an accident, but part of the Chancellor's determination to encourage two great agricultural pests. Why he should want to do so, beats me entirely, but there can be no other sane interpretation of the rejection of the Amendment.
I ask whoever is to reply to take the opportunity, while the Chancellor is absent, as so often, from our deliberations, to strike a blow on behalf of agriculture and against these verminous creatures. Moles are useful in the form of moleskin waistcoats. One of my ambitions has been to possess such a waistcoat, although I am afraid I shall never have one. I think it would be most interesting. I put that suggestion out and possibly hon. Gentlemen opposite, who are so kind to me in every way, may give me one for Christmas. It is a small luxury which used to be quite common in this country. Also in the chilly days rabbit skins are of great value and help with the decreasing amount of coal and everything else. Does the hon. Member for Bolton (Mr. J. Lewis) wish to interrupt?
It seems to me that the hon. Member is inviting interruption in order to think of what to say next. I made reference to the shortage of textiles, not to the shortage of coal.
That is awfully nice—
Even if the hon. Member is inviting interruption, I hope the invitation will not be accepted.
I have not invited interruptions. It may seem that I do so, but my real object is not in any way to do that, and I certainly do not want interruptions to allow me to think of what I am going to say next because I generally know that when I get up. If not, I take other methods. Unless we get a satisfactory answer I may be tempted to say how dastardly I think is the behaviour of the Government—if they do not accept the Amendment—in doing everything they can to encourage two of the worst forms of vermin in this country. It is a disgraceful thing.
I regret that the Minister of Agriculture is not here. I do not blame people like the Economic Secretary, for, after all, he is only a professor. I do not blame him for not knowing that a rabbit eats crops, or that a mole does damage. They have clear evidence that the hon. and learned Member for North Hammersmith is disgusted with them. If I fully interpreted his speech he thinks they behaved in not too good a fashion, to put it mildly and so as not to provoke interruption I ask the Government to put this on a priority list of the things which the Chancellor will think over, or, as it is such a bad case, they might accept the Amendment straight away, which might save the Government a lot of trouble. It will be most interesting to hear what legal argument the Government have for the preservation of vermin. How are they to meet the case of a farmer who is ordered by his agricultural committee to destroy his vermin if he turns round and says, "The Government themselves are encouraging me not to destroy vermin"?
rose—
4.30 p.m.
This eagerness on the part of the Government to reply means only one thing, that they intend to accept this Amendment and show some sense.
I must offer my apologies to the Committee and to the hon. Member for Torquay (Mr. C. Williams) for having assumed that he had come to a conclusion. Having listened to his speech, I had rather forgotten what the more serious arguments by other hon. Members in support of this Amendment had been. I do not want to repeat the arguments which have already been adduced in reply by my hon. Friend the Economic Secretary to the Treasury but to confine myself to one point, namely, the inconsistency which some hon. Members thought they had observed between the policy now adopted in regard to rabbit skins and the policy previously followed by my right hon. Friend the Chancellor of the Duchy of Lancaster. There is no inconsistency. My right hon. Friend expressed himself as he did when we were discussing the Finance Act, 1946. We were then discussing Section 16 which dealt with chargeable processes.
Hon. Members will recollect that "chargeable processes" was a new conception which was introduced by that Act, which imposed a tax upon the making up of non-chargeable articles into chargeable articles. That was an altogether different thing from the tax upon sales by wholesalers of furs. There was a case for exempting rabbit skins when one was considering chargeable processes as distinct from wholesale sales. When we were considering Section 16 of that Act a case was made on behalf of the small rabbit breeder, the man who bred rabbits "in his back garden" which is, I think, the phrase which has been used, who made up some of his own rabbit skins for some purpose or other into what would, had the exemption not been conceded, amount to chargeable goods. That consideration does not obtain when one is considering wholesale dealing in these matters.
Last year, we had the case of the small breeder who had his own rabbit skins from a very limited breeding of rabbits and who made them up into whatever garments he wanted to use them for. When we introduced Section 16 into the 1946 Act that process of making up by the small breeder of his own skins into chargeable goods would have been subjected to the tax had we not then conceded the exemption in his case. That was an exemption which the House agreed was proper to be accorded to the small breeder of rabbits. It was applicable only to chargeable processes as distinct from wholesale dealing.
What was urged in support of that exemption cannot be urged in support of the exemption which is now sought on a much wider scale. The Economic Secretary to the Treasury has pointed out that if we are to grant exemption in respect of rabbit skins we cannot logically, unless we are to make the tax inconsistent, limit it only to the small rabbit breeder. The larger rabbit breeder will be put at a disadvantage if we do, and will have grounds for complaint. We cannot limit it to exclude imported skins or to limit it simply to the cheaper type of skin. It would have to include the more expensive type and other skins, etc. Once a concession is granted in respect of rabbit skins generally the case can be equally strongly put in respect of various other types of skins. Indeed, it has been urged in the case of sheep skin, hair seal, red fox and other cheap types of skin. There would be no ground, in justice, for limiting such an exemption to rabbit skins. That would amount to unfair discrimination against this other type of cheap skins which I have just enumerated.
It was for that reason that my hon. Friend said that it would not be feasible, consistent with the equitable operation of the tax over various sorts of persons producing cheap skins who would be affected by it, to try to limit the concession to rabbit skins. It cannot be limited to the small breeder of rabbit skins as that would be inequitable between the large and the small breeder.
May I ask the hon. and learned Gentleman, in ho carping spirit, whether he has ever heard of a large breeder of rabbits?
One of the arguments in support of the Amendment is to extend the scope of breeding, to make it possible to breed on a larger scale. There are perhaps, not large breeders but larger and smaller breeders, and the argument, I gathered, was that it was hoped to expand the scale of those who had not reached the former degree of success. But in saying that I am doing what I said I would not do, that is to repeat the arguments which have already been advanced.
I rose because I thought I might assist the Committee by reminding them of what was said by the Chancellor of the Duchy of Lancaster. He was simply dealing with chargeable processes. There are special considerations to be adduced and to be taken into consideration when considering chargeable processes as distinct from the general incidence of the tax upon wholesale dealing, as applicable to any class of goods which come into the sphere of the tax. So far as hon. Gentlemen feel that there was inconsistency in the policy adopted by the Government in regard to rabbit skins, I hope I have explained that there is no inconsistency at all, and that the previous Chancellor was dealing with something quite different.
Am I to understand from what the Solicitor-General says that under the present Finance Bill a chargeable process dealing with rabbit skin or moleskin is not covered by this provision, that it is exempted from tax by the 1946 Act?
This provision does not alter the provision with regard to chargeable processes. This provision simply deals with the ordinary sale by the wholesale producer or manufacturer of garments which are made up and include rabbit skins, or indeed other fur skins if one takes the Schedule in its present unamended form.
May I ask two questions? Are we to understand that no article made of skin which was exempted by the 1946 Act is now to be taxed? Secondly, is the Solicitor-General not impressed by the argument for extending the 1946 exemption, which applied only to rabbit skins, to mole-skins, and if so will he give consideration to putting such a provision down at a later stage on the same basis as the 1946 provision?
The first of those two questions I have already answered.
Not quite clearly.
I cannot keep on repeating my answers. The previous Act dealt with chargeable processes. This Bill does not deal with chargeable processes. With regard to mole-skins, that case was also made when the Debate was on chargeable processes, and the arguments in support of the examination of the mole met with less favour. I do not see, when one is dealing with the wholesale sale of furs, that there is any case for excluding mole-skins any more than rabbit skins.
I am not at all satisfied with the reply we have heard about mole skins and rabbit skins, that there cannot be differentiation between them and sheep and other skins. These two animals, especially moles, are pests. In most parts of the country immense damage is being done by the mole. If the Economic Secretary will consult either the Minister of Agriculture or county agricultural committees he will be told that probably the mole is now a far greater pest in this country than it has been within living memory. It attacks especially reseeded areas, and there are a large number of such areas in this country. The mole burrows underneath the short grass and lifts it up, and a large amount of the grass dies off. In addition, a large number of root crops have been grown for cattle and sheep, and the mole has a habit of getting underneath the rows of mangels or swedes or kale and going right up the row, lifting all the roots, and doing an immense amount of damage.
For those reasons I think every facility and incentive should be given to catching such a pest. I can tell the Economic Secretary that before the war the charge for catching moles in many districts was about 2½d. per acre. Now, for a variety of reasons, it is most difficult to get skilled mole catchers, and in many cases the charge per acre has gone up to 8d. or 10d. The value of the mole when caught is so small that in many cases it is not worth while skinning it and sending the skins to market. I hope that every facility will be given for increasing the value of the mole so that part of the charge for catching it can be recovered from the value of the skin. I hope the Minister will consider again this question of rabbits and moles before he finally turns it down.
May I make one appeal to the Government? Quite clearly the Solicitor-General introduced a new factor under the question of chargeable processes. The Economic Secretary did not make that point. Indeed, he has considerable sympathy with our point. I would ask the Government to reconsider this in the interval between the Committee and Report stages, and in particular to see whether the fur made from rabbits and moles should not bear a lighter scale of duty than the more expensive furs. That is, whether they should actually put on the 100 per cent. scale of duty, in view of the fact that the fur does comes from England and is a dollar saver. If they would give that limited assurance, I should be able to withdraw this Amendment, and we could look at the narrower point on the Report stage.
I am sorry I cannot give the hon. Gentleman that assurance. If it follows from that that he and his hon. Friends desire to take this matter to a Division, there is nothing more to be said. It is the view of the Chancellor of the Exchequer that there are, in the Amendments now before the Committee, other items which have a much greater appeal if tax remissions are to be given. Those who were present when we began our labours will remember that he did indicate that it would be much fairer of him, as the discussion proceeded, to say definitely at each stage whether it was or was not a thing that he might consider and deal with later when we come to the question that the Schedule be agreed to. I have to say on his behalf, as well as on behalf of my hon. Friends behind me, that we do not think that this is the kind of thing to which further consideration should be given.
4.45 p.m.
I think that the request made by my hon. Friend the Member for Thirsk and Malton (Mr. Turton) was a reasonable one, but in view of the attitude which the Government have adopted I shall not be surprised if my hon. Friends decide to take this to a Division.
I would comment on one remark made by the Financial Secretary in which every Member of the Committee should take an interest. He told us that his right hon. and learned Friend had decided that this Amendment was not desirable. But his right hon. and learned Friend has not seen fit to be present. Are we to understand from that that the Chancellor, who is probably usefully employed in some other matter, has left it upon the backs of his three representatives—four, if we include the Paymaster-General who has, I understand some function, I do not know what—that the Chancellor has gone away leaving instructions that each of these Amendments is to be resisted, irrespective of any arguments put forward? If that is the case it is a sad comment upon where our Parliamentary institutions have got to under the pre-
sent Government. This is a further step along the totalitarian road. The Opposition are to be allowed to put forward their arguments, but the right hon. Gentleman has been instructed in advance that they are to be resisted, whatever is said on either side of the Committee. All he has to do is to ring a bell, fetch in a majority of those who have not heard a single word of our discussions, use the steam roller and vote us down.
Question put, "That those words be there inserted."
The Committee divided: Ayes, 132; Noes, 275.
Division No. 188.] AYES. [4.47 p.m. Agnew, Cmdr. P. G. Grimston, R. V. Osborne, C Amory, D. Heathcoat Hannon, Sir P. (Moseley) Peake, Rt. Hon. O. Assheton, Rt. Hon. R. Harvey, Air-Cmdre. A. V. Pickthorn, K. Astor, Hon. M. Henderson, John (Calhcart) Pitman, I. J. Barlow, Sir J. Hulbert, Wing-Cdr. N. J. Ponsonby, Col. C. E. Beamish, Maj. T. V. H. Hurd, A. Poole, O. B. S. (Oswestry) Beechman, N. A. Hutchison, Lt.-Cm. Clark (E'b'rgh, W.) Raikes, H. V. Boles, Lt.-Col. D. C. (Wells) Hutchison, Col. J. R. (Glasgow, C.) Ramsay, Maj. S. Bowen, R. Jarvis, Sir J. Rayner, Brig. R. Bower, N. Jeffreys, General Sir G. Reed, Sir S. (Aylesbury) Boyd-Carpenter, J. A. Keeling, E. H. Reid, Rt. Hon. J. S. C. (Hillhead) Braithwaite, Lt.-Comdr. J. G. Lambert, Hon. G. Roberts, P. G. (Ecclesall) Buchan-Hepburn, P. G. T. Lancaster, Col. C. G. Roberts, W. (Cumberland, N.) Bullock, Capt. M. Law, Rt. Hon. R. K. Robinson, Roland Butcher, H. W. Legge-Bourke, Maj. E. A. H Ross, Sir R. O. (Londonderry) Carson, E. Lennox-Boyd, A. T. Sanderson, Sir F. Challen, C. Linstead, H. N. Scott, Lord W. Channon, H. Lloyd, Maj. Guy (Renfrew, E.) Smiles, Lt.-Col. Sir W. Clarke, Col. R. S. Lloyd, Selwyn (Wirral) Smithers, Sir W. Clifton-Brown, Lt.-Col. G Low, A. R. W. Spearman, A. C. M Conant, Maj. R. J. E. Lucas, Major Sir J. Spence, H. R. Crosthwaite-Eyre, Col. O. E. Lucas-Tooth, Sir H. Stanley, Rt. Han. O. Crowder, Capt. John E MacAndrew, Col. Sir C. Stewart, J. Henderson (Fife, E.) Cuthbert, W. N. McCorquodale, Rt. Hon. M. S. Stoddart-Scott, Col. M. Darling, Sir W. Y. Macdonald. Sir P. (I. of Wight) Strauss, H. G. (English Universities) Digby, S. W. McFarlane, C. S. Sutoliffe, H. Dodds-Parker, A. D. Mackeson, Brig. H. R. Taylor, Vice-Adm. E. A. (P'dd't'n, S.) Donner, P. W. MoKie, J. H. (Galloway) Teeling, William Drewe, C. Manningham-Buller, R. E. Thorneycroft, G. E. P. (Monmouth) Dugdale, Maj. Sir T. (Richmond) Marlowe, A. A. H. Thornton-Kemsley, C. N. Duncan, Rt. Hn. Sir A. (City of Lond.) Marples, A. E. Touche, G. C. Duthie, W. S. Marsden, Capt. A. Turton, R. H. Eccles, D. M. Marshall, D. (Bodmin) Vane, W. M. F. Eden, Rt. Hon. A. Marshall, S. H. (Sutton) Wakefield, Sir W. W. Elliot, Lieut.-Col Rt. Hon. W Mellor, Sir J. Ward, Hon. G. R. Erroll, F. J. Molson, A. H. E. Watt Sir G. S. Harvie Fleming, Sqn.-Ldr. E. L Morris, Hopkin (Carmarthen) Webbe, Sir H. (Abbey) Fletcher, W. (Bury) Morris-Jones, Sir H. Wheatley, Colonel M. J. (Dorset, E.) Fraser, Sir I. (Lonsdale) Morrison, Maj. J. G. (Salisbury) Williams, C. (Torquay) Galbraith, Cmdr. T. D. Morrison, Rt. Hon. W. S. (Cirencester) Williams, Gerald (Tonbridge) Gammans, L. D. Mott-Radclyffe, C. E. Willoughby de Eresby, Lord Gates, Maj. E. E Nield, B. (Chester) York, C. George, Maj. Rt. Hn. G. Lloyd (P'ke) Noble, Comdr. A. H. P. Glyn, Sir R. O'Neill, Rt. Hon. Sir H. TELLERS FOR THE AYES: Gomme-Duncan, Col. A. Orr-Ewing, I. L. Mr. Studholme and Sir Arthur Young.
NOES. Acland, Sir Richard Ayrton Gould, Mrs. B. Bing, G. H. C. Adams, W. T. (Hammersmith, South) Balfour, A. Binns, J. Allen, A. C. (Bosworth) Barstow, P. G. Blenkinsop, A. Allen, Scholefield (Crewe) Barton, C. Blyton, W. R. Anderson, A. (Motherwell) Battley, J. R. Bottomley, A. G. Attewell, H. C. Bechervaise, A. E. Bowden, Fig. Offr. H. W. Austin, H. Lewis Bellenger, Rt. Hon. F. J. Bowles, F. G. (Nuneaton) Awbery, S. S. Benson, G. Braddock, Mrs. E. M. (L'pl, Exch'ge) Ayles, W. H. Beswick, F. Braddock, T. (Mitcham) Bramall, E. A. House, G. Pursey, Cmdr. H Brock, D. (Halifax) Hoy, J. Randall, H. E Brooks, T. J. (Rothwell) Hubbard, T. Ranger, J. Brown, T. J. (Ince) Hudson, J. H. (Ealing, W.) Rankin, J. Bruce, Maj. D. W. T. Hughes, Hector (Aberdeen, N.) Reeves, J. Butler, H. W. (Hackney, S.) Hynd, J. B. (Attercliffe) Reid, T. (Swindon) Byers, Frank Irvine, A. J. (Liverpool) Rhodes, H. Carmichael, James Irving, W. J. (Tottenham, N.) Richards, R. Castle, Mrs. B. A. Isaacs, Rt. Hon. G. A. Ridealgh, Mrs. M. Chamberlain, R. A. Jay, D. P. T. Roberts, Emrys (Merioneth) Champion, A. J. Jeger, Dr. S. W. (St. Pancras, S.E.) Roberts, Goronwy (Caernarvonshire) Chater, D. Johnston, Douglas Robertson, J. J. (Berwick) Chetwynd, G. R. Jones, D. T. (Hartlepool) Rogers, G. H. R. Cluse, W. S. Jones, P. Asterley (Hitchin) Ross, William (Kilmarnock) Cobb, F. A. Keenan, W. Royle, C. Cocks, F. S. Kenyon, C. Scott-Elliot, W. Coldrick, W. Kinley, J. Segal, Dr. S. Collins, V. J. Kirkwood, Rt. Hon. D Shawcross, Rt. Hn. Sir H. (St. Helens) Colman, Miss G. M. Lang, G. Shinwell, Rt. Hon. E Cooper, Wing-Comdr. G. Lee, F, (Hulme) Silverman, J. (Erdington) Corbet, Mrs. F. K. (Camb'well, N.W.) Lee, Miss J. (Cannock) Silverman, S. S. (Nelson) Cove, W. G. Leonard, W. Simmons, C. J. Crawley, A. Leslie, J. R. Skeffington, A. M. Cripps, Rt. Hon. Sir S Lever, N. H. Skeffington-Lodge, T. C Crossman, R. H. S. Levy, B. W. Skinnard, F. W. Daggar, G. Lewis, J. (Bolton) Smith, C. (Colchester) Daines, P. Lewis, T. (Southampton) Smith, H. N. (Nottingham, S.) Dalton, Rt. Hon. H. Lipton, Lt.-Col. M. Snow, J. W. Davies, Rt. Hn. Clement (Montgomery) Logan, D. G. Solley, L. J. Davies, Edward (Burslem) Longden, F. Sorensen, R. W. Davies, Ernest (Enfield) Lyne, A. W. Soskice, Sir Frank Davies, Harold (Leek) McAdam, W Sparks, J. A. Davies, Haydn (St. Pancras, S.W.) McAllister, G. Stross, Dr. B. Davies, R. J. (Westhoughton) McEntee, V. La T. Stubbs, A. E. Davies, S. O. (Merthyr) McGhee, H. G. Summerskill, Dr. Edith Deer, G. McGovern, J. Sylvester, G. O. Diamond, J. Mack, J. D. Sylvester, G. O. Dodds, N. N. McKay, J. (Wallsend) Taylor, H. B. (Mansfield) Driberg, T. E. N. Mackay, R. W. G. (Hull, N.W.) Taylor, R. J. (Morpeth) Dumpleton, C. W. McKinlay, A. S. Thomas, D. E. (Aberdare) Dye, S. McLeavy, F. Thomas, I. O. (Wrekin) Ede, Rt Hon. J. C. Macpherson, T. (Romford) Thomas, John R. (Dover) Edelman, M. Mainwaring, W. H. Thomas, George (Cardiff) Edwards, Rt. Hon. Sir C. (Bedwellty) Mallalieu, E. L. (Brigg) Thurtle, Ernest Edwards, John (Blackburn) Mallalieu, J. P. W (Huddersfield) Tiffany, S. Edwards, W. J. (Whitechapel) Mann, Mrs. J. Titterington, M. Evans, Albert (Islington, W.) Manning, C. (Camberwetl, N.) Tolley, L. Evans, E. (Lowestoft) Manning, Mrs. L. (Epping) Usborne, Henry Evans, John (Ogmore) Marquand, H. A. Vernon, Maj. W. F Ewart, R. Mathers, Rt. Hon. George Viant, S. P Fairhurst, F. Mellish, R. J. Wadsworth, G. Farthing, W. J. Messer, F. Walkden, E. Fernyhough, E. Middleton, Mrs. L. Walker, G. H. Follick, M. Millington, Wing-Comdr. E. R Wallace, G. D. (Chislehurst) Foot, M. M. Mitchison, G. R Wallace, H. W. (Walthamstow, E.) Forman, J. C. Monslow, W Warbey, W. N. Fraser, T. (Hamilton) Moody, A. S Watkins, T. E. Freeman, Peter (Newport) Morley, R. Watson, W. M. Ganley, Mrs. C. S. Morris, Lt.-Col. H. (Sheffield, C.) Weitzman, D. George, Lady M. Lloyd (Anglesey) Morris, P. (Swansea, W.) Wells, P. L. (Faversham) Gibbins, J. Morrison, Rt. Hon. H. (Lewisham, E.) Wells, W. T. (Walsall) Gilzean, A. Mort, D. L. West, D. G. Glanville, J. E. (Consett) Moyle, A. Westwood, Rt. Hon. J. Goodrich, H. E. Murray, J. D. Wheatley, Rt. Hn. J. (Edinburgh, E.) Granville, E. (Eye) Naylor, T. E. White, H. (Derbyshire, N.E.) Greenwood, A. W. J. (Heywood) Neal, H. (Claycross) Whiteley, Rt. Hon. W. Grenfell, D. R. Nichol, Mrs. M. E. (Bradford, N.) Wilkes, L. Grey, C. F. Noel-Buxton, Lady Wilkins, W. A. Griffiths, D. (Rother Valley) Oldfield, W. H. Willey, O. G. (Cleveland) Griffiths, W. D. (Moss Side) Oliver, G. H. Williams, D. J. (Neath) Guest, Dr. L. Haden Orbach, M. Williams, J. L. (Kelvingrove) Guy, W. H. Paling, Will T. (Dewsbury) Williams, R. W. (Wigan) Haire, John E. (Wycombe) Parkin, B. T. Williams, Rt. Hon. T. (Don Valley) Hall, Rt. Hon. Glenvil Paton, Mrs. F. (Rushcliffe) Williams, W. R. (Heston) Hamilton, Lieut.-Col. R. Paton, J. (Norwich) Wills, Mrs. E. A. Hannan, W. (Maryhill) Pearson, A. Wise, Major F. J. Hardy, E. A. Peart, T. F. Woodburn, Rt. Hon. A Harrison, J. Perrins, W. Woods, G. S. Hastings, Dr. Somerville Poole, Cecil (Lichfield) Yates, V. F Haworth, J. Popplewell, E. Young, Sir R. (Newton) Herbison, Miss M. Porter, G. (Leeds) Hobson, C. R. Price, M. Philips TELLERS FOR THE NOES Holman, P. Pritt, D. N. Mr. Joseph Henderson and Holmes, H. E. (Hemsworth) Proctor, W. T Mr. Richard Adams.
5.0 p.m.
I beg to move, in page 62, line 32, to leave out "Second," and to insert "First."
The group of articles to which I wish to draw the attention of the Committee relates to utility garments made wholly or mainly of fur skin. The object of the Amendment is to reduce Purchase Tax upon them from to 66⅔ to 33⅓ per cent. A very good case can be made out for doing so. The Amendment is wider than the previous Amendment, and, I suggest, presents the matter in a fairer way for the consumer. I am concerned particularly with the consumers' point of view. I understand that other hon. Members who have added their names to the Amendment are concerned with the point of view of the producers. I hope that after a brief Debate the Chancellor of the Exchequer will see his way to accept the Amendment.
The garments in question are worn mainly by working-class women. I have been in the fur trade—quite a long while ago—and I know something about the matter. The main fur that goes to make up utility fur garments is that of the rabbit. We import a good many rabbits from Australia, and we also use opossum and lamb. The skins are made up into furs, and then into utility fur garments, which are worn in the main by working-class people, particularly in the Northern parts of the country and Scotland, where winter temperatures are less moderate than in the South. In Yorkshire and in Scotland I have seen workingclass women wearing rabbit coats, which provide more comfort for them in cold weather than would otherwise be the case. It is unfair to impose a tax of 66⅔ per cent. upon these people for these garments. The tax was 33⅓, and I hope that the Chancellor will see his way to explain the reason for the increase. Above all, I hope that he will see his way to accepting the Amendment.
I want to make my position quite clear. I see a very big gap indeed between this matter and the Purchase Tax upon non-utility furs. The hon. Member for Twickenham (Mr. Keeling) stated that, as he understood the earlier Amendment, it would not make sense, but I think he made a mistake. The earlier Amendment related only to non-utility furs, but I am referring only to utility furs. I agree, in the case of non-utility, that perhaps the tax should have remained at 125 per cent. I urge the Chancellor, or the Economic Secretary to the Treasury who is dealing with this matter, to reduce the tax from 66⅔ to 33⅓.
I am happy to associate myself with the hon. Member for Mile End (Mr. Piratin) on this topic. I believe very strongly that the Chancellor ought to modify his policy of doubling Purchase Tax on utility garments made wholly or partly of fur skin. I have a very different point of view to put from that of my hon. Friend. I am concerned at the serious effect that the tax will have upon factories being set up, or already set up, in the development areas in the Country. In the North-East coast area, South Wales and Cumberland, a number of factories are making garments of utility fur. The tax at 66⅔ per cent. is making the selling price of the articles prohibitive and buyers are now cancelling orders with those concerns.
The results are that the firms are now unwilling to expand and are unable to occupy new premises which have been or are being built for them. As the Economic Secretary knows, accommodation has been a difficult enough problem for the past two years. The frustration experienced by these firms at finding, after two years of anxious waiting and just when the raw material position has been to some extent solved, that they are unable to go into production for financial reasons, is very worrying to them. Two of the firms are discharging workers who have been occupied for the past two years learning the trade and have been employed in temporary premises.
As my hon. Friend is well aware, this is the right kind of industry for the development areas. The industries came to our aid when we most needed them. They provided a light and varied type of work to take the place of some of the older and more basic industries. They are employing disabled men in a good proportion, and men and women in the right proportion for the development areas. Two firms in the North-East are now employing 500 people. They hoped in the Summer to go into two factories and to employ 1,300 people. They are now very perturbed about the future of their business. Their whole future is in jeopardy because of the Purchase Tax. On those grounds I appeal to the Chancellor of the Exchequer to meet us in this matter and to reduce this tax from two-thirds to one-third. It would be a tragedy if, at this stage, after all the inducements which have been offered to firms to go to development areas, projects were cancelled or postponed because of this tax. The imposition of the tax has shaken confidence and good will in these industries, which have been led to believe that if they went to development areas they would receive every consideration and that every priority would be given to them.
An additional point is that this is the only kind of utility garment upon which there is Purchase Tax, which is therefore a discrimination against this kind of garment in favour of the cloth coat. Not only has the tax risen by stages from 16⅔ per cent., to 33⅓, and now to what I call the punitive level of 66⅔, but it has the effect, as my hon. Friend the Member for Mile End has pointed out, of removing utility fur coats from the range of the ordinary purchaser, the working woman of this country, who is as much entitled to a fur coat as is anybody else. Because of this tax, the utility fur coat has now become a luxury article, but people who have money would prefer to buy the real thing, even with the 100 per cent. tax on.
There is a definite threat of unemployment in this business. If the object of the tax—and this is the only object I can see—is to raise revenue, it obviously fails in this case, because fewer garments will be sold. The Chancellor will discover that the money he will get with the tax at 66⅔ will be much less than what he would have got had the tax remained at 33⅓ per cent. It cannot be stated that the tax is put on to divert these utility goods to the export market, because all the evidence shows that the export market is drying up, if it has not already dried up, for these articles.
I think I have given overwhelming reasons for a reduction in the tax. There is a very strong case for reconsideration of the tax, which is unfair, is punitive, is against the interests of the consumer and is diametrically opposed to the policy which the Government have successfully pursued in relation to Development Areas.
Before the Government make up their minds finally on this point I hope that they will try to find out exactly how many firms have been set up in the development areas during the last 2½ years to manufacture precisely the type of article which is the subject of this Amendment. I know that the number of firms involved is considerable. There seems to be something of a contradiction in inviting private firms to come to development areas and then placing upon their products a tax which imperils their economic future. The Government may think that this article is something of a luxury product. I hope that they will look at the matter from the point of view of the producer. The development areas need these so-called luxury products. When the basic products of development areas fell upon evil days it was only the luxury products which could lead them back to better times with the full employment which they now enjoy.
Looking at the problem from the regional point of view, it cannot be said that these articles are luxuries. When viewed economically, they give the area a balance which it had not before. Therefore, when looked at narrowly from the point of view of the article itself it may be said that it is not a very high priority product to the national economy but when viewed regionally, it has indeed a most important aspect in relation to our economic recovery. I hope that the Government will look at the problem broadly.
Having listened to the arguments of my hon. Friends, I must say that I think that a stronger case has been made than that made on the previous Amendment. This proposal sets out to define the tax with reference to the final product, and not with reference to the nature of the animal from which the fur was obtained. That makes it administratively easier to consider than was the case with the last Amendment, though I am afraid that it would not have been in Order for me to say that during our earlier discussion. At the same time, I think that the proposal goes some way to meet the same point raised by hon. Members opposite about the production of rabbit skins. It is also true that the argument from the point of view of employment in areas where employment is needed must be given weight, as well as other considerations, when we are discussing changes in the Purchase Tax.
As my hon. Friend the Member for Stockton-on-Tees (Mr. Chetwynd) said, the tax on utility fully-fashioned stockings stands at 33⅓ per cent. There is, therefore, a serious case for adjusting the tax on utility fur garments also so as to bring them into line. As the Chancellor said, we are extremely unwilling to lose revenue. Against the arguments put forward we must weigh the possibility or probability that some Revenue will be lost. Nevertheless, having heard the arguments advanced by my hon. Friends on this Amendment, and also having considered some of those advanced on the last Amendment which were relevant to this point, we are willing to place this matter on the list of the proposals which we shall consider sympathetically.
In view of the statement made by the Economic Secretary, and having consulted my hon. Friends, I beg to ask leave to withdraw the Amendment.
It seems to me that this tax is a suitable one on which to ask the Economic Secretary a question. The hon. Member for Stockton-on-Tees (Mr. Chetwynd) said that the market abroad for these utility fur garments was drying up and that stocks of these garments were available at home. Would the Economic Secretary tell us whether the policy of the Government is to maintain Purchase Tax for the purposes of revenue—which is rather what I thought he said—in cases where it is clear that the available supplies can no longer be sold abroad and are piling up at home? What is the policy on Purchase Tax in relation to a case like that of utility fur garments, if I am right in thinking that the stocks are piling up at home?
5.15 p.m.
This is a case where there has been a promising export trade. I think that it is in difficulties at the moment, but it is quite possible that the trade may revive. We would not seek to raise the Purchase Tax if the effect of that was so to kill demand at home that we would neither get revenue or supplies on the home market nor exports. We certainly seek revenue and if, by maintaining production, the effect is to secure exports as well, we shall score on both points.
Amendment negatived.
On a point of Order, I understood that the mover of the Amendment asked leave to withdraw it.
I have already put the Question. It may be perfectly true that the hon. Member for Mile End (Mr. Piratin) asked leave to withdraw the Amendment, but another hon. Member, quite within his rights, rose and made a speech. Therefore, I had to put the Question in the form in which I have just put it.
On a point of Order. May I ask for guidance in this case, and perhaps in cases which arise later for myself and other hon. Members? Earlier this afternoon the Chancellor of the Exchequer announced that he would have to look at all the Amendments and that he could not take a decision on earlier, Amendments merely because they happened to come before later Amendments. That suggestion was agreed to on this side of the Committee and it was also accepted by the Opposition. Just now I was in some confusion what to do. The Economic Secretary said that the Government were prepared to look into the matter. Therefore, I was not sure whether or not to withdraw the Amendment.
That is not really a point of Order. The position is that any hon. Member proposes an Amendment and he hopes for a favourable result when the reply is given. It is then open to him to ask permission to withdraw the Amendment or, if he so wishes, to take the matter to a Division.
In that case, if the Government should accept this suggestion, I take it that it will be for the Chancellor to put down an Amendment on Report stage?
That is not a matter for the Chair; it is a matter for the right hon. and learned Gentleman.
I beg to move, in page 62, line 38, to leave out "First," and to insert "Exempt."
On this Amendment there may be a general discussion on industrial clothing.
Does that mean that the Amendment in my name, in page 63, line 4, will not be called?
That Amendment will be called.
I am glad that it is proposed to consider all questions of this kind simultaneously. There are a number of Amendments on the Order Paper which deal with this matter and a general question of principle is involved. This relates to:
"Articles made wholly or partly of rough-tanned, undyed sheep or lamb skin with wool attached and designed specially for industrial use."
The proposed Purchase Tax is 33⅓ per cent. and we ask that the goods should be exempt. The main point is that these garments whatever they be—and they cover a wide range—are primarily for industrial use. Many of them must be bought by the workers themselves from their own money as part of their equipment. In the same way that many workmen have to buy their own tools, many workers must buy this type of clothing as part of their equipment. It is most unjust that these articles should be subject to Purchase Tax even in the first category of 33⅓ per cent. That is the main reason which I submit for this Amendment, for it seems to me to cover the general principle of industrial garments, which, in other cases, are exempt from the Purchase Tax.
I wish to support this Amendment, which gives me the opportunity of raising a certain issue. I should have preferred to see other articles necessary for industrial use included, and I refer in particular to rubber aprons, which are as important as the articles provided for in the previous Amendment. It will be noted that we are not, at the moment, concerned with the use of these articles other than for industrial purposes. We are only concerned with their use, and the necessity for them, in certain industries. In my own Division, the rubber apron is a very important article used in the production of tinplate and tin sheets. Most hon. Members are aware that both the rubber apron and the sheepskin are indispensable in the making of tinplate, and, whether these articles, or some of them, are provided by the owners of the industry or whether payment in part is made by the employee, the present rate of Purchase Tax is a very considerable handicap to small industries.
Whatever we may think of these small undertakings, they exist, and, until they are modernised, it is incumbent upon us to see that no unnecessary hardships are placed on industries the success of which is essential to other people's existence. The high cost of materials is a serious enough handicap to the industry at the present moment, but, taken together with the Purchase Tax, it is a very real problem. If the Chancellor says he cannot accept the Amendment, many of us on this side of the Committee will be very disappointed. The information which I have to put before the Committee has reached me in a letter from the manager of one of these undertakings, dated 3rd April of this year.
In order that hon. Members may have an idea of the hardship unnecessarily inflicted upon the industry, I would like them to note that a piece of sheepskin measuring only 42 inches by 15 costs the undertaking 14s. 3d., and, with the rate of Purchase Tax payable in April of 17s. 10d., there was a total cost for that article of 32s. 1d. For a piece measuring 38 inches by 15, the cost is 13s., and the tax is no less than 16s. 3d., which makes the total charge 29s. 3d. Another kind of skin, which is imported, is charged at 1s. 5½d. per yard, and the tax is 8¾d. per yard, making the total of 2s. 2¼d. per yard. I understand that the rate of tax on that article is 50 per cent. but on sheepskin it is 100 per cent.
I should also like to refer to the rubber aprons, which are equally essential and are part of the protective clothing of the workers in this essential industry. A piece 13 inches square costs 8s., and with tax of 2s. 8d., the total charge is 10s. 8d. If the piece measures 25 inches by 36, the price is 9s. 6d., the tax is 3s. 3d. and the total cost is 12s. 9d. We feel that this tax, imposed in order to exercise some probably necessary restraint on the luxury trades, should not affect materials used in industries in which production and more production is so essential to our existence. If my right hon. and learned Friend is not impressed by our disappointment if be declines to accept the Amendment, I hope he will have some regard for the position of these small industries, upon which it will have a serious effect, and that, without damaging his reputation as the austere Chancellor, he will accept the Amendment in the interests of the people on whose behalf it has been moved.
I believe it was your Ruling, Mr. Beaumont, that the two Amendments in my name and those of my hon. Friends—to page 63, lines 37 and 40—should be taken now. These Amendments refer to gloves used for industrial purposes, and we were in some doubt whether to put down our Amendments under the heading of gloves or in the classification of garments for industrial purposes. The Bill takes certain types of industrial gloves out of the third category of Purchase Tax and places them in the first. The object of our Amendment is to exempt them entirely, for much the same arguments as those adduced by the hon. Gentleman who has just spoken.
These gloves form a part of the necessary equipment in a great many industries, sometimes for the protection of the worker, and one thinks at once of such afflictions as dermatitis. It is, therefore, desirable that these gloves should be available at as low a cost as possible. They represent a charge, though perhaps only a small one, on the industry concerned, and, by virtue of the fact that their cost is inflated by Purchase Tax, they add something in a small way to the cost of the industry. Whether one is concerned for the welfare of the workers, which must always come very prominently into our thoughts, or whether one is concerned with removing this small burden from the shoulders of industry, we contend that to exempt these gloves used only for industrial purposes is a worthy object.
5.30 p.m.
I wish to support the Amendment of the hon. Member for Mile End (Mr. Piratin). I want to make a special plea to the Chancellor for two sections of industrial workers which have been lost sight of in the last few years. Their conditions have seriously deteriorated because of the improvement in certain sections of the industry, namely the mining industry, which has reflected itself in the creation of hardship among two sections of mine workers. I want to refer to these men who are engaged in the lamp rooms at the collieries. In days gone by these men used to deal with filling the lamps with oil, but consequent upon the changed lighting conditions which have been brought about these last few years, the oil lamp has become practically nonexistent. In its place has been introduced the Seac electric lamp. One is used as the electric cap lamp and the other in the hand lamp. In the process of recharging these lamps after the shifts are over, these men are called upon to use acid. Any hon. Member knows very well the penetrating and destroying power of acid.
In days gone by, when oil was used, the apron, of whatever material it was made, used to last three or four years. Now we have reached a stage in that section of the work in which these men have to renew their aprons five times a year. Having to buy five aprons as against one in every three years, and having to pay Purchase Tax, creates an additional hardship upon the industrial worker engaged in that section of the colliery work. I could go on to deal with the effect of the acid on the person recharging these lamps and on the other garments they wear, but I am particularly concerned about the protective clothing, as I call it, which these men are compelled to wear—namely, aprons.
There is another section of the workers among whom wear and tear has increased considerably—namely, the men who are employed in the prop yard. That is a term used at the pit, and I hope hon. Members will understand the term. In days gone by they used only timber in the pits, and there was not the same amount of wear and tear. Now, they are called upon to use steel props, steel bars and steel girders, and practically 75 per cent. of our roof supports are of steel. The effect of handling that steel day after day and week after week is tremendous in its wear and tear on the clothing of these men. I say, therefore, that if men have to renew their clothing so frequently, by comparison with the days before they introduced steel, it is an added hardship if they are compelled to pay Purchase Tax on the clothing they need to carry out their job.
A great deal has been said, and rightly so, to the effect that we should give incentives to the workers for higher production. To a certain point I am in full agreement with that, but I think the greatest incentive which could be given to these two sections of workers, who carry out a very responsible job at the pits, would be for the Chancellor to give them some sympathy and relief in the way of lifting the Purchase Tax on the clothing which they are compelled to wear to carry out their jobs.
May I first deal with the Amendment which has been moved? It purports to exempt from Purchase Tax
The difficulty here, as has so often been explained at Question Time by the Chancellor of the Exchequer, is to find a definition which will include the articles designed for industrial use and not also include articles which should bear their fair portion of the Tax. The present categories are in any case very difficult to administer, and if certain exemptions were introduced it would be a temptation—it has already proved a temptation—to some traders to force articles within the definitions laid down. That is not the sort of thing we desire to encourage.
Dealing with this particular Amendment, I think it would be anomalous—and I hope the Committee will agree—if industrial clothing containing fur skins were entirely exempt and other industrial clothing were taxable because of the difficulty we have found in the past in finding a definition which would include them and would not include other forms of light clothing. We have had it, the Committee will remember, with gloves; we have had it with certain kinds of footwear, and we have had it with other articles of clothing used by workers. We have had it over and over again.
All I can say, therefore, is that where it is possible to exempt by definition a class of goods which is in general use by workers engaged in industrial processes, exemptions are made, but where anomalies would arise and the difficulty of the definition is too great for the Customs and Excise experts, we have unfortunately to leave them out. As this Amendment, therefore, is completely one-sided, and the situation is as I have described it, I must ask the Committee to reject it.
May I clear up one point with the Financial Secretary? Does this mean he is going to refuse to exempt gloves unless the trade or somebody can evolve some definition which is watertight? I hope the right hon. Gentleman will be prepared to consider exemptions in such specifications which could be evolved by the trade which would satisfy him and convince him that they are watertight. Will he be prepared to listen to such representations?
Efforts have been made over and over again—in the case of gloves, for example, which was the example used by the hon. and gallant Gentleman—but it is almost impossible to find a definition which would not let in or let out, as the case may be, articles which we do not want either to include or to exclude.
The argument advanced by the right hon. Gentleman is the very same argument we have had on previous occasions. I recall when we tried to get exemption for miners' boots and miners' safety gloves. The very same argument was advanced then. Whenever we try to bring a certain class of workers into the benefit of exemption there is always some administrative difficulty. These administrative difficulties are very often thrown up by the Treasury. I think it is within the realm of possibility to designate these articles. In the main there are only two—gloves and aprons which the men wear to protect their ordinary clothing while at work. Surely, there ought to be no difficulty about that. I do think the right hon. Gentleman and the Department ought to have another look at this, in order that this kind of clothing—safety clothing, it may be designated—may be exempted from Purchase Tax.
Amendment negatived.
I beg to move, in page 63, line 4, at the end, to insert:
A more important case than that can be made out for the Amendment. That is that agriculture is, unfortunately, one of the hardest industries on clothing. Moreover, it is very difficult at the present time for agricultural workers to replenish their wardrobes under the present coupon rationing system, especially if they have children. It is very desirable that this surplus Army clothing should be used by the agricultural workers, because although their wages are higher than they were, they are not at such a height as to give them surplus purchasing power for clothing. I submit that on the ground of the need in agriculture, this Amendment deserves the approval of the Committee.
Another point that arises is that it is clearly to the advantage of the Government to dispose of their large surplus stocks of Army clothing. Every sale is, in fact, a saving to the Chancellor of the Exchequer. The problem of large ordnance surplus stores has somehow to be resolved in these after-war years. Therefore, I ask the Government to go into the July sales by taking off the Purchase Tax from this Army surplus clothing.
5.45 p.m.
I understand that "overalls" in the hon. Member's Amendment refers, in fact, to surplus Service clothing, and his suggestion is that we should exempt a certain class of Army surplus stores. I am afraid there are considerable difficulties about that. The first is the difficulty of principle in selling secondhand Government surplus stores free of Purchase Tax, in competition with goods produced by clothing manufacturers which would have to bear tax. We have considered getting over that difficulty by including these surplus reconditioned garments in the utility scheme, but for technical reasons, I am afraid, that has been found to be impracticable.
It is also true that experience shows that the tax in the case of these surplus stores is often actually paid at the expense of the middlemen or the merchant out of his profits, and, to some extent, not at the expense of the consumer. Experience does show that; and that, so far, weakens the case for the concession. It is also true that, in any case, the price of these secondhand clothes is, generally speaking, fairly low; and it seems to us that to that extent there is less hardship in the consumers' paying the Purchase Tax. Because of the difficulty in principle, because we think the hardship on the consumer is not very great, and because we must not forget the Revenue in this Debate, we feel that, on the whole, this is not one of the proposals we can accept.
The state of the Order Paper is such that we are to have a lengthy pilgrimage, and thus one does not want to spend too much time on individual Amendments, but I am bound to say that the resistance of the Economic Secretary to this proposal rested on such flimsy foundations that I think a word or two more should be said about it. I do not think the hon. Gentleman should ride off on every occasion—as he did on the last Amendment—by merely saying that there are technical difficulties in the way of these concessions, unless he tells the Committee what the technical difficulties are. I think we should be given a great deal more information on that subject. Is he really right when he tells us that the Purchase Tax in the case of this kind of Army surplus stores is carried by the middleman?
To some extent.
To some extent, yes; but that, surely, is not a foundation on which to base resistance to an Amendment of this kind. Let the hon. Gentleman address himself once again to the main argument in favour of the Amendment. This would be of great assistance to those engaged in the essential task of food production. Here are these stores. The Government want to sell them. If they did not, they would not have been made coupon free by the President of the Board of Trade. The logical consequence of that is to assist their disposal by making them more readily available to the agricultural worker, who has not a great deal of money to spend on such things. Battle dress and so on would be of the greatest possible use to the agricultural workers. One felt that the hon. Gentleman that if he gave this concession he would be engaged in an inflationary action. He would, in fact, be bringing clothing to an essential task, and I think that if the Government are going to turn down the proposal they ought to do so on stronger grounds than we have had from the Economic Secretary. Would he be good eonugh to tell us what are the technical difficulties in the way of administering this concession?
The hon. Gentleman did not say in his reply that all these articles of clothing are easily identified. Every one of them is marked as being Government stores. It is not easy to reproduce the Government stores mark. I think that that makes a considerable difference. I would not like the Economic Secretary to consider this matter from the agricultural point of view only, vital as that is. It refers to a very wide field of industry and to inshore fishermen as well, who make considerable use of these articles.
Is there not some danger that if these articles are not disposed of reasonably quickly, the Government will be stuck with them, and would it not be in the interest of the Treasury to facilitate their disposal?
The people who purchase these articles do so at a comparatively small price, and they charge what they think the market will bear. If they are to be relieved of the Purchase Tax, that sum will go into their pockets. If they are so keen to pass on these goods—and they are passing them on, because we know of no hold-up in their disposal—the only effect will be to put this amount in the pockets of the people who are buying them cheaply on a large scale.
Amendment negatived.
I beg to move, in page 63, line 6, after "moulders," to insert: g ) which exempts from Purchase Tax other classes of people completely incapable of carrying out their work. I submit to the right hon. and learned Gentleman that some protection is absolutely essential to the farmer and agricultural worker in the interests of agriculture itself.
May I refer the Committee to what has happened to this kind of boot during the past nine months? In the autumn of last year, farmers' agricultural boots were selling at from 55s. to 60s. a pair, but since then there has been the removal of the subsidy on hides and also an increase of wages in the factories, and as a result the retailer is today buying in this type of boot at from 51s. to 54s. a pair—almost the price at which it was selling before. The fact is that this particular type of boot, instead of selling at between 54s. and 60s., as it was in the autumn of last year, is now selling at £5 a pair. Hon. Members, including the hon. Member for Thirsk and Malton (Mr. Turton), have pointed out that the wage earned by agricultural workers and by shepherds is not such that they can possibly afford to pay £5 for a pair of boots.
The Purchase Tax on these boots is 33⅓ Per cent. If that were removed it would mean a substantial reduction in the price of these boots. I know there is a utility range of agricultural boots. They are of inferior quality. Although they are quite suitable for flat country and the lowlands, whether in England or Scotland, they are quite unsuitable for work on the hills. They knock to pieces in no time, and they let in water. It is with reference to the importance of agriculture and the absolute need for farm workers to have good boots that I hope the Chancellor of the Exchequer will sympathetically consider this Amendment.
I support the Amendment, and I sincerely trust that the Chancellor of the Exchequer will pay due attention to it. During the first Budget which the Chancellor introduced, he said, in answer to a speech of mine, that he was a countryman and had great sympathy with and understanding of the rural areas. There have been certain differentiations between the miners and other workers and the agriculture workers, and I feel that the Chancellor has the opportunity today at least of doing something, although it is not very much, to help the agricultural worker by accepting the Amendment. I think that he probably realises that there is a vast difference in the actual amount of money available to the agriculture worker in comparison with the others. Here is an example where a little of that might be made up. Apart from that, I should like to clarify one other point. In the Bill, the words used are
"protective boots designed for use by miners or quarrymen or moulders."
I would like the Chancellor to state that by the word "miners" he means miners—that is to say, anyone who has anything to do with mining, such as tin miners in Cornwall or china clay miners. I would like to make certain that that is the intention of the Bill, because, from time to time, we have had this argument in the House, and we have suddenly discovered that the word "miners" is used to describe a certain type of miner. I therefore sincerely trust that the Chancellor will give sympathetic attention to this matter.
I join with hon. Members in all that they have said about the necessity for this Amendment. I should like also to point out that when the Chancellor of the Exchequer unfortunately had to be absent from the Committee at the beginning of our discussion this afternoon, no doubt for some very good reason, the Financial Secretary to the Treasury, in our opinion, let slip a very valuable opportunity of doing something very beneficial to the agricultural industry as a whole. We now have another opportunity, not altogether the same kind of opportunity, but one which should certainly appeal very much to the heart of the Chancellor and all who sit on the Government Benches. Here is an Amendment designed to do something specially for the agricultural workers, for the shepherds, the farmers, and indeed for every kind of agricultural labourer.
We on this side are very moved by the appeal which the hon. Member is making, but the proposed Amendment refers to
"boots specially designed for shepherds and farmers."
Could the hon. Member tell us of one factory which manufactures boots specially designed for shepherds and farmers? If he cannot, and if such boots are not manufactured, how on earth could this be applied?
6.0 p.m.
That, if I may say so, is very wide of the point. No doubt the hon. Member has specific knowledge with regard to boot factories, which I have not got at the moment. What is intended is the kind of gumboots—if that is the right term—which they have been in the habit of wearing. The hon. Member must know that quite well. Indeed, why did he not interrupt my hon. and gallant Friend when he was giving those very telling figures regarding the way in which the price of footwear which agricultural workers use has mounted in the last 12 months? The figures showed, certainly to every fair-minded person, I should have thought, that footwear for agricultural workers, and particularly the shepherds and farmers whom this Amendment is designed to benefit, is now, owing to inflation and increased Purchase Tax, quite beyond the purchasing power of these people.
I think it will be agreed, or should be, by the hon. Member for Elland (Mr. Cobb) who is so slick with his facts—I do not use the word offensively—that this class of manual worker should be benefited and assisted in every way. When the hon. Member interrupted, I was about to point out that here was a fine opportunity for the Chancellor and those behind him, including the hon. Member for Elland, to show their desire to do something, not merely for the welfare of the agricultural industry, but for those who man the industry. Unless those who man the industry are provided with reasonable footwear, and other wearing apparel as well, the industry is bound to slip back into the Slough of Despond—something we all wish to prevent.
I should like to point out, particularly with regard to shepherds, that it is essential for this class of agricultural worker to be assisted in this manner. The Chancellor, with his knowledge of rural conditions in England, will know something of what is at the back of my mind. I am thinking of what the shepherds, particularly in Scotland, have to bear owing to climatic conditions. Think of the conditions in the winter of 1947, during the lambing season, when these very gallant men—[ Laughter. ] This is no laughing matter, as I can assure the hon. Member for Heston and Isleworth (Mr. W. R. Williams), who seems to find it amusing. If he does not believe me, let him see for himself; let him tramp over these hills in winter. If reasonable footwear is not to be provided for these people, then we are getting into a very dangerous state of affairs.
I was glad that my hon. and gallant Friend the Member for Pollok (Commander Galbraith) stressed, not merely the discomfort but the other ills which will certainly follow if these people are not properly clad, particularly so far as their feet are concerned. My hon. and gallant Friend mentioned rheumatism; but very often the seeds of tuberculosis are sown in this way. I hope the Chancellor will profit by the opportunity now afforded to him, and will indicate that he is prepared to agree to this very reasonable Amendment and make the first concession in today's proceedings.
I am afraid that if I were to respond to all the appeals to my heart, I should turn out to be a very bad Chancellor of the Exchequer. It is perfectly easy to make a good case on appeals to the heart in regard to all the 149 Amendments which have been put down; but that is not really what we have to look at. On this particular Amendment, I am relieved from any difficulty in that respect, because it would be completely and entirely unworkable, for this reason. The specially designed protective boots which are dealt with under the existing paragraph of the Schedule are boots manufactured in a specially and easily identifiable way, for the purpose of people who are liable to have heavy weights falling on their feet; they have protective toecaps, and have to pass an impact test laid down by the British Standards Institution. Therefore, whoever wears them, they are perfectly easily identifiable as an article. Frankly, I have never heard of
"boots specially designed for shepherds and farmers."
I know of stout boots, which are worn by shepherds and farmers. But I guarantee that if this Amendment were accepted every pair of stout boots in the country would be labelled as "specially designed for shepherds and farmers," and nobody could dispute that every pair of stout boots fell within that category. The truth is that under this tax, as has been said again and again, where goods are taxed at the wholesale stage and nobody knows the use to which they will be put, a category cannot be made unless the goods can be identified. A category cannot be made by saying there is a general class of those which are used by So-and-so. That is impossible under a tax of this kind. This suggestion to insert
"and boots specially designed for shepherds and farmers"
would only mean that every pair of stout boots and shoes in the country would automatically be exempted, which would cost millions of pounds, and we certainly cannot afford to do it.
Is not the Chancellor aware that boots specially designed for shepherds, and easily identifiable as such, are made at May bole in my constituency?
I would ask the Chancellor to go a little further on the point I made with regard to miners.
I did so, but perhaps the hon. Gentleman did not hear me. I referred to the fact that it is the boot which is exempted, whoever wears it. If the hon. Member himself bought a pair of those boots to go out walking in, they would be exempted, because it is the boot which is exempted, and not the use to which it is put.
Amendment negatived.
I beg to move, in page 63, line 15, after "appliances" to insert: I understand it is the practice for sufficient surgical material to be allocated to the factory, in order that the supplies may be kept down.
From what I can gather, there seems to be a rather peculiar anomaly, because the question whether or not Purchase Tax shall be charged on these articles does not appear to depend upon whether a medical certificate is granted, but upon what sort of medical certificate is granted. I have had mentioned to me a number of diseases which, I must confess, I had never heard of previously. Let me quote one of them. I understand there is a disease called visceroptosis. When this disease is suffered in its normal condition any surgical support which is prescribed for it attracts Purchase Tax, because it is not on the list of diseases supplied by the Ministry of Health for exemption from tax. If, however, the same disease is suffered in an acute form, the surgical support is free of Purchase Tax. The situation, therefore, is that one has to be very ill before becoming free from this tax. For the disease in its moderate form extra money has to be paid to take the necessary preventive action. If that is a correct interpretation the present system is unfair. The purpose of my Amendment is to make free of Purchase Tax all articles prescribed by a medical certificate which I should have thought was an ample guarantee against abuse.
I quite understand the desire of the hon. Member for Hitchin (Mr. Asterley Jones), but I do not think he is right as regards the present coverage of this exemption. The articles are, in fact, exempted on their physical construction and not on the question whether or not there is a medical certificate. There are cases, however, in which a medical certificate is required as an administrative matter, as a revenue safeguard to prevent abuse of this provision. There is a clearly defined category of articles—belts and other items of that kind—specially designed as surgical appliances for people suffering from such unfortunate diseases or states of health as that which the hon. Member for Hitchin has mentioned.
If the words he suggests were to be added, we should get away from the distinction created by the form of the article and get down to a distinction of nothing but a medical certificate. As he has rightly said, there are—at least, so I understand—a number of sorts of corsets which are made of particularly strong or other material which gives support. I believe some people wear them as a normal matter. Others wear them because a doctor says he thinks it would be good for them to wear that kind of corset, although they are merely ordinary corsets. If worn, they are used in substitution for some other sort of corset; there is nothing special, extra or additional about them.
I am not clear from the Amendment whether, when the hon. Member says "prescribed by a registered medical practitioner," he means that one cannot buy Dr. Jones' corsets, for instance, which may be prescribed as being a good thing for people to wear, as covering the whole category of a particular make of corset; or whether he means one should go to a doctor and say, "I want to buy this sort of corset in order to avoid paying Purchase Tax. Will you give me a certificate?" If the certificate costs less than the Purchase Tax, that would be a good economic proposition.
We do not believe that is the right basis for a tax of this kind. Again, we are dealing with a tax imposed at the wholesale stage. Not until the goods reached the retailer's shop would the retailer know whether he would get a doctor's certificate for one pair, 50 pairs, or for no pairs at all. In those circumstances, how does the tax come off? Presumably, the retailer would be forced to sell the article to a member of the public with a doctor's certificate; he would already have paid the tax himself, but would not be able to recover it from the public to whom he has sold the article. That is not a rational way of dealing with any tax.
We must keep to the method of the distinction of the goods themselves so that they can be identified at the wholesale stage. Anything which depends upon the user of such articles getting a medical certificate or anything else is out of the question so far as Purchase Tax is concerned. It may be possible with other taxes, but not with Purchase Tax. I am sorry, therefore, that we are unable to agree to this Amendment.
6.15 p.m.
I think the Chancellor has convinced many of us that the proposal in the Amendment is not workable. There is no desire behind the Amendment for any unfair action against the shopkeeper, who had bought the goods wholesale, or against the Treasury. From what I have heard, however, I think there may be a way, in the case of these and other articles of real value for health purposes, of making a concession such as that proposed.
There is a chance that, unless something of this kind is done, we may create real hardship to people who are genuinely ill. It would be worth while for the Chancellor to get some of his officials to look into this matter with some of his medical friends rather more closely than has been done so far. I see that the Chancellor agrees with my opinion, and I thank him. I am glad that the Amendment—now he nods the other way and I do not know where I am. I hope that his first gesture was right. I hope this issue will be gone into carefully. I do not think he would genuinely wish to create hardship on those who are at times forced to buy expensive articles for the sake of their health. For these reasons, I hope the Chancellor will give a kindly eye to this matter in the immediate future.
One reason why I am not sorry the Chancellor has not accepted this Amendment is that it would have involved another certificate from a doctor. Medical men in this country are having to spend an enormous amount of time signing certificates. The new Health Service is not likely to work if unnecessary burdens are added.
There are two further points I should like to address to the Chancellor. Surely it is perfectly clear that the wording "prescribed by a registered medical practitioner" cuts out such things as "Dr. Jones' corsets," although I have a great respect for anybody of that name. The wording means a definite recommendation by a definite doctor. My second point is that the Chancellor has said that a retailer of these articles already would have paid the tax and would have to recover it from the wholesaler. That is not true because the vast majority of surgical supports have to be made to measure by the wholesaler and are not sold retail in shops.
The Chancellor says that he cannot differentiate when the same article is used for two different purposes, but that is precisely what is happening now. He said in his opening statement that for administrative purposes a medical certificate is required. If so, what happens if a certificate is not granted? Surely, in the one case, he must absolve the corsets from Purchase Tax and, in the other case, charge them for the tax, otherwise the medical certificate cannot possibly have any use.
Will the Chancellor of the Exchequer clarify his reference to a medical certificate for revenue purposes? I take it he meant that the certificate was for revenue purposes other than for the collection of Purchase Tax; otherwise the statement he subsequently made seems rather illogical.
The identification of the article is by the article, and it is in order to prevent an abuse of that, that in some cases a medical certificate is required.
If the article is not subject to Purchase Tax, how can a medical certificate or the absence of a medical certificate make any difference?
Amendment negatived.
I beg to move, in page 63, line 15, at the end to insert:
"( k ) Articles knitted or crocheted by hand without mechanical aid, including such articles embroidered by hand needlework—Exempt."
This Amendment and the four Amendments in lines 32 and 46, and in page 64, lines 11 and 30, carry out an undertaking we gave to exempt Shetland handmade knit-wear from Purchase Tax. They will greatly benefit the crofters in the Shetlands, and that is the main purpose of the exemption. Similar articles made elsewhere, including imported articles, will also be covered owing to the nature of the tax, but the exemption applies only to articles which are hand-knitted and cannot be extended to articles made by small hand-driven machines, because they could not be distinguished from mass-produced articles.
How can a person knit without knitting needles? Surely knitting needles are a form of mechanical aid. I should like to have a legal opinion on this, and to have it explained why knitting needles are not a form of mechanical aid.
Amendment agreed to.
I beg to move, in page 63, line 15, at the end, to insert:
"( k ) Articles of uniform officially prescribed for the use of Boy Scouts, Girl Guides, Wolf Cubs, members of the Church Lads Brigade and such other similar organisations as may from time to time be prescribed—Exempt."
I think it would be for the convenience of the Committee if we also discussed the Amendment, which will not be called, in the name of the hon. Member for Northern Dorset (Mr. Byers), in page 63, line 15, at the end to insert:
"( k ) Articles of uniform and clothing required by members of all uniformed forces under the control of the Crown."
Members will be aware of the value of these bodies both to the individual and to the nation. They develop boys of the best type. I am informed that they are always financially embarrassed, and that it is difficult for parents and these bodies to find the means with which to buy the necessary distinctive material. The Chancellor of the Exchequer could do nothing better than help these bodies, because after all uniform has always the tendency to make an individual feel that he is a useful entity in an organisation.
I should like to support what has been said and to appeal, not so much to the Chancellor's heart, but to his head, for which I have very great respect, except for certain financial aberrations. This Amendment concerns the supply of clothing for units of which we are all proud, the Boy Scouts, Girl Guides, Sea Scouts and so on, which provide splendid training for good citizenship. This training is particularly valuable in these uncertain times, and it will be of even greater value as our uncertainties increase. I speak as President of the Sea Scouts at St. Ives, which is an appointment of which I am very proud. I have observed that the training not only makes for good neighbourliness, but teaches the boys to be handy in the use of craft, which again is of good service to the country. I have had a little assistance from the Treasury on this matter, and I gather that there may be some relief in regard to certain articles of clothing. The reason why I appeal to the Chancellor's head in particular is because I understand that there is to be no relief in regard to the headgear worn by Boy Scouts, or in regard to the caps worn by the Sea Scouts. That seems to be to me most lamentable, because in many cases these boys and girls come from quite poor homes. This anomaly also applies to scarves and neckerchiefs. I think that this is so good a cause that we shall have a favourable response from the Treasury.
I hope that the second Amendment will be considered by the Chancellor of the Exchequer, because, to instance only one case with which I am personally acquainted—the case of the police—the Purchase Tax does make a material difference to the cost of the uniform which falls on the various police authorities. The cost of police uniform is very greatly enhanced by the Purchase Tax, and I hope therefore that consideration may be given to this Amendment by the representatives of the Treasury.
The second Amendment is for the purpose of relieving Purchase Tax on all uniforms, particularly in respect of uniforms of members of the Armed Forces. My hon. Friends and I have had a large number of letters from soldiers, sailors and airmen in all parts of the country who feel a very grave injustice is being done by the fact that Purchase Tax is charged on officers' uniforms. I went this morning to a large outfitters in the centre of London to make special inquiries for the purpose of finding out how much there was in this grievance. Without informing the people concerned that I was a Member of Parliament I had a chat with them and also with a number of men serving in His Majesty's Forces. I wish the Chancellor of the Exchequer had been with me, because he would have enjoyed it. The language perhaps was not always polite, but there was a deep sense of injustice underlying the thoughts of these officers, because they are finding it difficult to make ends meet. I do not wish to dwell on that side, although one man emphatically said that any man who became an officer found his whole time occupied in "keeping out of the red." A bank overdraft is generally written in red lettering—hence the expression.
6.30 p.m.
It was stressed that men had to wear His Majesty's uniform when on duty, but at the same time they naturally desired to wear ordinary civilian dress in off duty hours and after the emergency is over finally they will be compelled to wear ordinary civilian clothing because, as one naval lieutenant said, "We are not really allowed to wear uniform when we go off the ship." In those circumstances is it fair to penalise the officers in the three Services? Not only when they buy their civilian dress but when they buy their uniforms they are compelled to pay Purchase Tax to the extent of 33⅓ per cent. It seems quite unreasonable, and I hope the Chancellor will give consideration to this matter between now and the Report stage with a view to taking the tax off altogether. We are anxious to have the best type of men in the three Services, and it would be an additional inducement if young men felt they were being given a square deal in the matter of the Purchase Tax.
I agree with the general case that has been put by the hon. Member for Buckrose (Mr. Wadsworth), but the Amendment standing in my name has a much more limited purpose and deals only with the question of naval replacement, which is on a slightly different basis from that of the other two arms of the Services.
When a man is in the Army or the Air Force and serving in the ranks it is possible by the normal machinery to obtain uniform as replacement without any cost at all and to have some part of the replacement war clothing allowance set towards it. One does save in Purchase Tax when one does it in that way. In the Navy the position is different. The Navy as part of its "Q" distribution machinery uses ordinary private firms, and the Navy actually has found it necessary for years to approve of a process which is not in force in the other two Services. It is customary for the sailor to open up what is called an allotment account with a private firm. These private firms have to be approved by the Board of Admiralty, and the consequence of paying into an allotment account is that a certan sum per month is deducted from a man's pay which is available to these particular firms. If naval personnel require replacement of uniform, and there is no naval stores depot in the part of the country where they happen to be they utilise these particular firms, but if they do so, they find themselves penalised by having to pay Purchase Tax.
This is not the position in the other two Services, and the object of my limited Amendment is to bring the Navy into line with the rest. I am aware that difficulties arise, because naval personnel can obtain clothing from the Service Stores and obviously there is a loophole there, but the general purpose of my Amendment is to put the Navy personnel on the same basis as the other Forces. If the Chancellor does not feel able to accept this Amendment, I hope that on the Report stage he will be able to do something which will achieve the purpose which I have in mind.
I support this Amendment because of its importance to the youth movement of this country. I happen to be associated with three youth organisations which are the foundation of our defence system. There is the Sea Cadets, which have grown rapidly throughout the country. A movement of that kind should have the consideration of the Chancellor of the Exchequer, and he should make it as easy as possible for boys to be members of the organisation. They give a great deal of their time to drilling and other activities, and they spend Sunday morning under qualified tutors which makes them better citizens as well as better sailors, soldiers and airmen. Take the A.T.C. organisation. I have seven units of this organisation in my area and these boys give a great deal of time to this work. First-class tutors, who are excellent officers, look after the training of these young men. I was making an appeal to the Secretary of State the other day for the Army Cadet Force, and he was sympathetic in extending his influence and support to that movement.
Here is the foundation of our future defence organisation, and surely if we penalise these boys by putting Purchase Tax on uniforms and suchlike clothing we are doing very poor service to the future of our country. Nobody, I am sure, is more surprised at that situation than the Chancellor himself, and I submit to him that he should accept the Amendment on the ground, first, of the importance of training the youth of this country to the extent that they will be eventually responsible for the defence of the country; secondly, the importance of wearing a uniform; and, thirdly, the fact that the wearing of that uniform will make for better citizenship.
In this Debate there has been far too much special pleading for the Armed Forces and there seems to be in it that love of uniform which used to characterise the Hitler regime. It used to be said that it was the Germans who had great love of uniform, but here we are showing the same kind of mentality. If anyone is dressed in the uniform of what used to be described as the "hired assassin," we are asked to give special consideration for them. When we examine this Amendment we notice how wide a door it opens in some directions. For example, there seems to be consideration for the Church Lads Brigade but none for the Salvation Army, and it appears quite illogical to exempt the uniform of the Church Lads Brigade and not that of the Salvation Army. I know that the Amendment says: "such other similar organisation" but that is a very wide definition. If it goes into the Bill it leaves the door very wide open indeed.
We have had a strong plea for serving officers. We are asked to think sympathetically of Army officers who have to pay extra for their uniforms. We might as well say "civilians." They are up against the same difficulty. Why should not miners' overalls be exempt? I fail to see why there should be this special pleading for the Armed Forces, because it represents only consideration and concern for a particular class.
On a point of Order. May I point out that my Amendment includes the Salvation Army which I had particularly in mind?
That is not a point of Order.
The hon. Member for South Ayrshire (Mr. Emrys Hughes) has not quite the same idea as most hon. Members about our putting in a plea for a reduction in this tax. There never was a time when these organisations should be more encouraged. Young people are being asked to join these organisations and are being given all sorts of training to help them to grow up as useful citizens. It is quite wrong to give them the extra burden of this Purchase Tax. The Chancellor of the Exchequer should bear in mind that the members of these youth organisations come from all sections of the community, rich and poor alike, and if we add Purchase Tax to the articles which they must buy, we shall find that the parents of some members will be able to buy the uniforms and others will not, and that will create a discrimination between youth movements which there ought not to be.
A movement at one end of the city might have a bad uniform and might not be able to afford extra uniform while, at the other end, the movement may be well uniformed and well turned out. A feeling of disparity will be created. I, therefore, ask the Chancellor to consider these purely youth movements—Boy Scouts, Sea Scouts, and Girl Guides—organisations which should be very definitely encouraged so that young people may grow up useful citizens of which the country can be proud.
6.45 p.m.
Could the Chancellor of the Exchequer, for the guidance of the Committee, give the approximate cost in each case. The hon. and gallant Member for North Portsmouth (Major Bruce) and the hon. Member for Buckrose (Mr. Wadsworth) have made reference to their Amendments and have put views, with which I entirely agree. As to the Amendment about which the hon. and learned member for St. Ives (Mr. Beech-man) has spoken, the Chancellor may say that a great number of utility garments which are necessary for the children are already free of tax. He may say that clothing, such as gloves, for Girl Guides is not really necessary. No doubt the Chancellor has had to do with children just as much as most hon. Members, and he should remember that there may be certain items which it can be argued are not really necessary, but when children are together they all like to be the same, and the expense falls on the father or mother, and it is a heavy burden. Everything possible should be done to help any form of youth movement of this kind. There is no discrimination—except in the case of the hon. Member for South Ayrshire (Mr. Emrys Hughes), whose argument I do not understand—in any part of the Committee about the goodly qualities of the Guides and Scouts and the other organisations covered in "Such other similar organisations," as expressed in the Amendment.
As to the Scouts, I would draw the Committee's attention to the fact that the intake into His Majesty's Services is not so good and that to get training and discipline, and ideas of patriotism and love of country in the early stages, helps a great deal when we suddenly require our men if the country is in danger. I sincerely trust that the Chancellor will apply his mind to these points. He will be in a dilemma as to the cost, but if there is a means by which he can give a certain degree of satisfaction, it would be a good decision on his part to do so and would be in accord with the spirit of the Committee.
I must first dissociate myself from the hon. Member for South Ayrshire (Mr. Emrys Hughes) in his prejudice against all uniform as such. I do not share that prejudice, whether it is against the uniform of the Salvation Army or of the Royal Navy. The Government share the wish of hon. Members on both sides to try to do something to assist these organisations, but I am afraid that we do not think that changes in Purchase Tax, at any rate at the present time, is the proper or appropriate way to do it. In answer to the hon. Member for Bodmin (Mr. D. Marshall), I am afraid that we cannot estimate in this case the amounts of the concessions in terms of loss of revenue, but they would probably carry us all a long way in the end and involve us in substantial losses.
As to the first Amendment relating to Boy Scouts and Girl Guides, there are several reasons why we do not feel that we can consider this proposal. In the first case, we have already utility clothing and young children's non-utility clothing exempt from Purchase Tax. In the second place, uniforms of Sea Cadets, Army Cadets and A.T.C. are already supplied free by the Government. If we were to accept this Amendment, it would be an unanswerable objection that we could not stop short at the organisations mentioned in it. Already the difficulty over the Salvation Army has arisen and the hon. and learned Member for St. Ives (Mr. Beechman) has sought to meet it. It is clear that if any such phrase as "such other similar organizations" were included in the law, great difficulties would arise. The fact that that phrase is in the Amendment has already given rise to some difficulty.
What about youth organisations? The Amendment reads:
"Such other similar organisations as may from time to time be prescribed."
The Amendment says that, but another difficulty would be that many of the items of clothing which these organisations would use could not be differentiated at the wholesale stage. In the case of scarves, shoes and shirts and so forth, it would not be possible to do it. I am informed that it might be a little easier in the case of headgear for the scout organisations, but there is some doubt even about that.
As to the Armed Forces and the police, I must remind hon. Members that in the case of the police the uniforms for practically the whole Police Force, right up to the level of Chief Constable, are already supplied free by the Government. Also, as the Committee knows, throughout the Services all these officers purchase their own uniforms for which, in most cases, they obtain an allowance.
Can I interrupt the hon. Gentleman?
The hon. Member will no doubt have an opportunity, if he catches the Chairman's eye. But, as I say, in most cases officers receive a personal allowance, and in some cases Income Tax relief, whereas personnel throughout the Army, Navy and Air Force are, generally speaking, supplied with uniforms free. I do not say that that covers the whole of the Debate, but most of it, and if there should be a case for making further concessions, we do not think that in this Budget changes of the Purchase Tax would be the right way to do it.
Is the hon. Gentleman aware that, as regards the police, the uniforms are not supplied by the Govern- ment? On the contrary, police uniforms are purchased by the police authorities concerned and to my certain knowledge, in a police authority with which I am associated the Purchase Tax has made a material difference in the amount which has to be paid for police uniforms, and that falls eventually to a great extent on the ratepayers and the taxpayers.
I am sorry if I said the Government when I should have said the public authority concerned—
The taxpayers and the ratepayers.
but the point is that the individual policeman does not have to purchase his own uniform.
I am sure that other hon. Members want to speak on this matter, but I want to put one or two points to the Chancellor of the Exchequer. There is disappointment in the Committee at the attitude which the Economic Secretary has taken to these Amendments, though I understand the practical difficulty of the Chancellor in accepting them as drafted. As I understand it, the Purchase Tax works like this: as far as clothing is concerned, there is a certain range of utility clothing free from Purchase Tax altogether, but beyond that range, tax has to be paid. The general suggestion is that there is no need to buy expensive clothes. The line the Government have taken is, "If you do not like to buy expensive clothes, you do not have to pay Purchase Tax." I have always thought it rather hard that clothes, whether more or less expensive, should be subject to tax, but I am not arguing that case now.
We have a good illustration from the second Amendment with regard to officers' uniforms. An officer cannot say, "I will not have that article of clothing." He is obliged to buy it, and therefore he is obliged to pay Purchase Tax which other people can avoid paying if they do not buy a certain article of clothing. The Government ought to answer that point and see whether they cannot do something to help us out in connection with it. As far as the youth organisations are concerned, I was impressed by what the hon. and learned Member for St. Ives (Mr. Beechman) and the hon. Member for Moseley (Sir P. Hannon), and others said, and the reply from the Government indicated that the uniforms of Air Cadets, Sea Cadets, and others, are supplied—not paid for. However, I am not quite certain whether that goes for replacements and whether it is true with regard to boots. I should like to be reassured on both points. I know the Committee is extremely glad that the Government support these organisations now, and officially recognise them, and we want to do all we can to help them.
Some way could be found of getting round this difficulty in the case of uniforms used by Boy Scouts, Girl Guides, Wolf Cubs, Church Lads Brigade, the Salvation Army, and so on. These articles of clothing are exceptional, and if they are bought Purchase Tax has to be paid. The argument cannot be met by the Government's usual reply that those who do not want to pay Purchase Tax can buy another class of goods, because those who want to be in the Boy Scouts must have the uniform. It is clear that a little ingenuity in the administrative recesses of the Government would undoubtedly find a way round this difficulty. I have seen much more difficult problems resolved by people who really want to resolve them, and I am certain that the Economic Secretary to the Treasury could do it in no time because he has had plenty of experience of these things. It is clear that there are difficulties, it is clear that there might be some loopholes even in a scheme prepared on the most careful lines, but the sense of the Committee is that we should like the Government to try to help us over this, and therefore I ask the Chancellor to give it a little more consideration.
I can assure the right hon. Gentleman that we have given this careful consideration and with every good wish towards these organisations, but I hope the Committee will realise that the Purchase Tax is not the means by which to help desirable organisations. I can understand, if something were to penalise a desirable organisation, that someone might say, "Remove it because this is penal," but when it is merely the general application of a Purchase Tax, the helping of these most desirable organisations is not a reason for making a variation in the Purchase Tax in a particular case. The function of helping the Sea Scouts or the Boy Scouts or the Youth Cadets as the right hon. Member knows, is a function of the Admiralty, the War Office, or whoever deals with these matters. It is not the function of the Exchequer, through the devious way of making special allowances under Purchase Tax, which are not available to other citizens, to distinguish between what are and what are not desirable activities of this kind.
I apologise for interrupting the right hon. and learned Gentleman. It is the fact that the Defence Departments cast a friendly eye on these organisations, but they are mainly supported by the voluntary contributions of friends in their respective localities, and therefore the burden falls either upon the parent of the cadet or upon the local committee.
But the hon. Member will see that there are many desirable private organisations such as the Woodcraft Organisation of the Co-Operatives.
One of the smallest.
I am not saying whether they are small or big. There cannot be any point in the size of an organisation. We will not start to levy Purchase Tax by the size of an organisation, whatever else might happen.
Why not?
There are Labour Leagues of Youth, there are the Young Conservatives, there are a mass of these organisations of all sorts, kinds and descriptions connected with particular schools. It is impossible to draw lines of distinction which would enable the governing authority to set out the garments they should wear, and say that those are to be exempt from Purchase Tax. Let me take the case of the Boy Scouts. As far as I know, the Boy Scouts wear a pair of shoes, a pair of stockings, a pair of shorts, a khaki shirt and a hat, a tie and a belt—[An HON. MEMBER: "And a whistle and a knife."] A whistle is not clothing and I am dealing with clothing. Every one of those articles, with the possible exception of the hat, is an ordinary article of clothing worn by everybody else in the same form. A khaki shirt is worn by hundreds of young people. Khaki shorts, khaki stockings, brown shoes, or whatever colour they are—all these are ordinary articles of clothing. It would be impossible to lay down a provision that when a scout goes into a shop to buy a khaki shirt, he is to pay a different price from the schoolboy who buys a similar shirt on a similar occasion. We cannot distinguish in that way on Purchase Tax.
It would be through the organisation.
7.0 p.m.
Through the organisation would not do, because the organisation is not a wholesaling organisation or a retailing organisation. It would have to be a buying organisation. It is possible, and I know it has been done in certain cases, for some of these organisations to get their articles manufactured on the utility basis. I know one very good organisation which did that in order to avoid having to pay Purchase Tax, perfectly legitimately. They got the clothes made from utility material and it was made up on a utility specification. There was nothing to prevent them getting it on the utility range and therefore paying no Purchase Tax on it. It is not possible to distinguish between these sorts of goods purchased by the person who buys them. I am afraid it is the same point I have repeated more than once this afternoon. We cannot make distinctions between the purchasers, but between the classes of goods, which must be identifiable right through the process, especially through the wholesale side, when the tax is taken. Much as we have sympathy and are always anxious to help these bodies, this is not the right way to help them.
The right hon. and learned Gentleman has been at a slight disadvantage in replying, Major Milner, as your predecessor, the hon. Member for Reigate (Mr. Touche) allowed discussion on a series of Amendments and the right hon. and learned Gentleman, anxious to get on with the Bill, has not been able to address himself to all the points affecting them. I wish to pinpoint the Amendment in the name of the hon. and gallant Member for North Portsmouth (Major Bruce) with whom I find myself in agreement for the first, and very likely the last, time. The arguments the Chancellor has just placed before us do not apply to the particular category of goods mentioned in that Amendment. All the arguments of the hon. and gallant Member dealt with the lower deck in the Royal Navy and in his speech he explained the system by which the clothing is purchased. That immediately destroys the argument advanced by the Chancellor about the difficulty of administration. These articles are clearly identifiable and the control can be complete, absolute, and effective. I think it a pity we could not have had that Amendment put separately for discussion and for a Division if necessary. I do not know whether it was intentional, but the hon. and gallant Member left out a very important branch of the Service, namely, the petty officers, and those above the rank of petty officer. They wear what is known as the "fore-and-aft," as do chief petty officers.
On the general argument about the relief from Purchase Tax of uniforms of His Majesty's Forces, which is a slightly different point from that of youth organisations, I feel that the right hon. and learned Gentleman perhaps did not have time to deal with the matter in detail or he was so anxious to deal with other subjects that he could not devote himself to this matter. There was a time when the Chancellor was an advocate of a united front. Today he has succeeded in setting up a united front of all parties on the main objective of these Amendments. Members behind him, opposite to him and below the Gangway have all spoken in much the same strain and on the same lines. When he tells us that this is not the way to do it and the Purchase Tax is not the right way but that it is a matter for the Department, the Admiralty, War Office and the like, he knows perfectly well that he emerges in another character the moment such Departments put up such propositions. Then the right hon. and learned Gentleman with equal suavity will say, "This is not the way to do it, we must cut down on Service Estimates," and he assumes the role of Jekyll and Hyde on these two matters.
The right hon. and learned Gentleman has not told us, as perhaps he had not the time, about Sea Cadets' boots. That is an important point. I am told they are not a free issue.
They are not.
My noble Friend assures me they are not. Here is a case in which the tax might be remitted, but if the Admiralty came forward and put that point of view—
If I may interrupt my hon. and gallant Friend, the reason why they are not is that the Treasury steadily refuse to allow the Admiralty to treat them as such.
I am obliged to my noble Friend, because that reinforces the point I was putting that the Chancellor tells us Purchase Tax is not the way to deal with the matter, but that the Department should put it forward, yet no one more sternly resists such propositions from the Department. I felt that it was not quite worthy of one with such a distinguished career and one who is such an able advocate. When he appears for the Treasury he is less impressive than he was when he appeared for the prosecution sitting in Opposition. While his speech was agreeable, he has failed to deal with the main arguments addressed to him, in particular those regarding the Royal Navy put forward by the hon. and gallant Member for North Portsmouth, and if it is possible for that Amendment to be put from the Chair, I shall go into the Lobby to support it.
I know that my right hon. and learned Friend is very sympathetic to young people and to youth organisations, but I am sorry he is so obdurate about this matter tonight. I quite agree that this is not an ideal way of helping youth organisations. There is provision in existing legislation for helping, by means of grants, in respect of premises and in other ways, but it is very difficult for the organisations to avail themselves of the help because of the shortage of leaders and the difficulty of getting buildings erected. Although the method we are discussing is not ideal, nevertheless it is one way in which we can help those organisations, which we all agree are in need of help.
I am disappointed that my right hon. and learned Friend and the Economic Secretary should consider it impossible to work out a system by which these articles of clothing can be freed from Purchase Tax. It would be perfectly possible to work out a scheme in co-operation with the headquarters of the organisations by which the articles of clothing could be obtained through the Boy Scouts Association, or through the Church Lads Brigade, for the use of members of those organisations free from Purchase Tax. My right hon. and learned Friend said it would be difficult to say which were and which were not desirable youth organisations, but there is a perfectly good standard by which they are judged already. That is laid down by the Minister of Education in the Youth Service. I suggest to the Chancellor of the Exchequer that between now and the Report stage he should consider, perhaps in co-operation with the Minister of Education, whether a scheme could be worked out with the Youth Service in order to arrive at the end desired by all hon. Members of the Committee.
I tried to interrupt the Economic Secretary when, speaking of articles of uniform and clothing of all Forces under the control of the Crown, he said that the uniform allowance provided to officers of His Majesty's Forces is sufficient to cover Purchase Tax. I have never heard that argument from the Front Bench before. He knows perfectly well that it is not sufficient. It has rarely been sufficient to cover the increased cost of clothing. It certainly has not been increased enough to cover Purchase Tax. These men are forced to buy uniform, and in the near future they are to be forced, or at least I think they may be forced, to buy a slightly different kind of uniform because of the introduction of a new kind of "blue." That will hit them very hard just at a time when the Chancellor's colleagues in the Government want to encourage recruiting, particularly the recruiting of officers. I ask him to look at this matter again. It is really a hardship on Regular members of the Forces and particularly on part-time volunteers.
I regard Purchase Tax in essence as a rotten tax which constantly gets one into difficulties, difficulties which the Chancellor and the Government have tried to get out of by saying that necessities are not taxed. That is the basis of all their arguments, that, for example, if one likes to wear utility clothing only one does not have to pay the tax. But here we are concerned with people who are obliged to buy something which is not utility clothing. Officers have to buy these uniforms, and that is an argument which the Chancellor has not met.
I should not like this Debate to finish without telling the Chancellor how much I regret the fact that he has shown no indication of being able to make a concession. I have conducted a sporadic correspondence with him on this subject. I do not think that any Member could give serious weight to the argument which was put forward by the Economic Secretary that this matter cannot be dealt with at the wholesale level. That may be perfectly true, but if so, it is equally true that some other method could easily be devised. When the Chancellor said that certain youth organisations receive a free issue of uniform from the responsible authorities, I felt that he had not strengthened but seriously weakened his case.
The point has been made—I think a valid one—that the desperate difficulty of the Youth movement and of all kinds of cadets is to get young men and women who are willing to act as leaders. Leadership is the difficulty. Unless leaders come forward the Youth movement will dwindle at a time when it is more desperately needed than ever before. I do not think that anyone can contemplate the figures for juvenile delinquency and the stories of juvenile crime today without being most anxious to help the Youth movement in every possible way. When a man becomes a Scoutmaster or a woman becomes a Girl Guide commissioner he or she has to provide his or her uniform. They are voluntary workers who are finding the time and money and everything else necessary, out of the goodness of their hearts and out of a desire to help the community.
It merely makes matters a little worse when one or two selected organisations, perhaps under the direct responsibility of the Service Departments, are given their uniforms not only without Purchase Tax but entirely free, because that is to put a premium on one kind of service and to put at a discount another kind of service which is voluntary and, therefore, all the more commendable. I hope that the Chancellor will give this matter more thought before the Report stage. It would be a pity if the matter were left as it is now. The Chancellor has, like us all, an affection for youth and everything that goes towards ensuring a happy young community life. I hope that the Chancellor will be true to himself rather than to the strictly Treasury view, and that when we reach the Report stage we may hear something better than we have so far heard.
7.15 p.m.
I wish to refer only to one point, the question of Purchase Tax on badges worn by these youth and other voluntary organisations. Members of all these organisations wear badges on their arms or caps and it seems quite wrong that they should have to pay tax upon them. I have here some specimen badges made in my constituency. One is that of the State certified midwife. I can quite understand that if the State certified midwife wanted to purchase a brassiere she would have to bear the cost of the 25 per cent. uplift, but I see no reason why she should have to pay 33⅓ per cent. Purchase Tax on a badge. I desire to ask the Chancellor whether he will at least give way in regard to Purchase Tax on these badges. It is an important point and would not cost very much money.
With most of these youth organisations it is the parents of the children who have to pay Purchase Tax and not the organisation. So we have the position that parents who are really concerned to see that their children are among the right kind of people and who encourage them to join such organisations as are available, are penalised, whereas the parents who do not care and let their children run about unsupervised, escape. Anything which is a penalty to those parents who have a real, sound sense of parental responsibility should not be encouraged by the Treasury and everything should be done to encourage such parents. If it is not possible to do so immediately through the medium of the Purchase Tax, I appeal to the Chancellor to collaborate with his friends at the Board of Trade to extend the range of utility goods so that it covers practically all the requirements of these youth organisations.
As for the difficulty suggested by the Economic Secretary in defining such organisations, I would point out that most of them are already in touch and are collaborating with the Ministry of Education. They are recognised, with the result that the Purchase Tax on the requirements of members of youth organisations—I am
not speaking about the other classes—is really a burden on education. I hope that we shall have some further assurance before we pass from this subject.
Question put, "That those words be there inserted."
The Committee divided: Ayes, 123; Noes, 278.
Division No. 189. AYES [7.18 p.m. Agnew, Cmdr. P. G. Granville, E. (Eye) Poole, O.B.S. (Oswestry) Amory, D. Heathcoat Grimston, R. V. Prior-Palmer, Brig. O. Assheton, Rt. Hon. R Hannon, Sir P.(Moseley) Rayner, Brig. R. Astor, Hon. M. Harris, H. Wilson (Cambridge Univ.) Reid, Rt. Hon. J.S.C. (Hillhead) Beamish, Maj. T. V. H Harvey, Air-Cmdre. A. V. Roberts, Emrys (Merioneth) Beechman, N. A. Henderson, John(Cathcart) Roberts, P.G. (Ecclesall) Boles, Lt.-Col. D. C. (Wells) Howard, Hon. A. Roberts, W. (Cumberland, N.) Bowen, R. Hurd, A. Robinson, Rolland Bower, N. Hutchinson, Lt.-Cm. Clark (E'b'rgh, W.) Ropner, Col. L. Boyd-Carpenter, J. A. Hutchison, Col. J. R. (Glasgow, C.) Ross, Sir R. D. (Londonderry) Braithwaite, Lt.-Comdr. J. G Jarvis, Sir J. Sanderson, Sir F. Buchan-Hepburn, P. G. T. Jennings, R. Scott, Lord W. Bullock, Capt. M. Keeling, E. H. Shepherd, W.S. (Bucklow) Butcher, H. W. Lambert, Hon. G. Smiles, Lt.-Col. Sir W Byers, Frank Lancaster, Col C. G. Smith, E. P. (Ashford) Challen, C. Lancaster, Col. C. G. Smithers, Sir W. Channon, H. Law, Rt. Hon. R. K. Spearman, A. C. M Clarke, Col. R. S. Lennox-Boyd, A. T. Spence, H. R. Clifton-Brown, Lt.-Col. G. Linstead, H. N. Stoddart-Scott, Col. M. Cooper-Key, E. M. Lloyd, Selwyn (Wirral) Strauss, H.G. (English Universities) Crosthwaite-Eyre, Col. O. E. Low, A. R. W. Studholme, H. G. Crowder, Capt. John E. MacAndrew, Col. Sir C Cuthbert, W. N. MacFarlane, C.S. Sutcliffe, H. Darling, Sir W. Y. Mackeson, Brig. H. R. Taylor, Vice-Adm. E.A. (P'dd't'n, S.) Davidson, Viscountess Mckie, J. H. (Galloway) Thomas, J. P. L. (Hereford) Do la Bère, R. Maclean, F. H. R.(Lancaster) Turton, R. H. Digby, S. W. Macpherson, N. (Dumfries) Vane, W. M. F. Dodds-Parker, A. D Marples, A. E. Wadsworth, G. Drayson, G. B Marsden, Capt. A. Wakefield, Sir W. W. Drewe, C. Marshall, D. (Bodmin) Ward, Hon. G. R. Dugdale, Maj. Sir T (Richmond) Marshall, S. H. (Sutton) Watt, Sir G. S. Harvie Duthie, W. S. Mellor, Sir J. Wheatley, Colonel M. J. (Dorset, E.) Eccles, D. M. Mott-Radclyffe, C. E. White, Sir D. (Fareham) Elliot, Rt. Hon. Walter Neven-Spence, Sir B. Williams, C. (Torquay) Fletcher, W. (Bury) Nield, B. (Chester) Williams, Gerald (Tonbridge) Foster, J. G. (Northwich) Noble, Comdr. A. H. P Winterton, Rt. Hon. Earl Fraser, Sir I. (Lonsdale) Orr-Ewing, I. L. Yerk, C. Fyfe, Rt. Hon. Sir D. P. M Osborne, C. Young, Sir A. S. L. (Patrick) Galbraith, Cmdr. T. D. Peake, Rt. Hon. O. Gammans, L. D. Peto, Brig. C. H. M. TELLERS FOR THE AYES: George, Lady M. Lloyd (Anglesey) Pickthorn, K. Major Conant and Glyn, Sir R. Pitman I. J. Major Ramsay. Gomme-Duncan, Col. A Ponsonby, Col. C. E.
NOES. Acland, Sir Richard Blyton, W. R Coldrick, W. Adams, Richard (Balham) Boardman, H. Collins, V. J. Adams, W. T. (Hammersmith, South) Bottomley, A. G. Colman, Miss G. M. Allen, A. C. (Bosworth) Bowden, Fig. Offr. H. W. Comyns, Dr. L. Allen, Scholefield (Crewe) Bowles, F. G. (Nuneaton) Cooper, Wing-Comdr. G. Anderson, A. (Motherwell) Braddock, Mrs. E. M. (L'pl, Exch'ge) Cove, W. G. Attewell, H. C. Braddock, T. (Mitcham) Cripps, Rt. Hon. Sir S. Austin, H Lewis Brook, D. (Halifax) Daggar, G. Awbery, S. S. Brooks, T. J (Rothwell) Daines, P. Ayrton Gould, Mrs. Brown, George (Belper) Dalton, Rt. Hon. H. Baird, J. Brown, T. J. (Ince) Davies, Edward (Burslem) Barstow, P. G. Bruce, Maj. D. W. T. Davies, Ernest (Enfield) Barton, C. Burden, T. W. Davies, Harold (Leek) Battley, J. R. Butler, H. W (Hackney, S.) Davies, Haydn (St. Pancras, S. W) Bechervaise, A. E. Carmichael, James Davies, R. J. (Westhoughton) Benson, G. Castle, Mrs. B. A. Davies, S. O. (Merthyr) Berry, H. Champion, A. J. Deer, G. Beswick, F. Chater, D. Diamond, J. Bing, G. H. C. Chetwynd, G. R. Dodds, N. N. Binns, J. Cluse, W. S. Donovan, T. Blackburn, A. R Cobb, F. A. Driberg, T. E. N. Blenkinsop, A. Cocks, F. S. Dugdale, J. (W. Bromwich) Dumpleton, C. W. Lipton, Lt.-Col. M Robertson, J. J. (Berwick) Durbin, E. F. M. Logan, D. G. Ross, William (Kilmarnock) Dye, S. Longden, F. Royle, C. Ede, Rt. Hon. J. C. Lyne, A. W. Sargood, R. Edwards, Rt. Hon. Sir C. (Bedwellty) McAdam, W Scott-Elliot, W Edwards, John (Blackburn) McEntee, V. La T. Segal, Dr. S. Edwards, N. (Caerphilly) McGhee, H. G. Sharp, Granville Edwards, W. J. (Whitechapel) McGovern, J. Shawcross, C. N. (Widnes) Evans, Albert (Islington, W.) Mack, J. D. Shawcross, Rt. Hn. Sir H. (St. Helens) Evans, E. (Lowestoft) McKay, J. (Wallsend) Silverman, J. (Erdington) Evans, John (Ogmore) Mackay, R. W. G. (Hull, N.W.) Silverman, S. S. (Nelson) Ewart, R. McKinlay, A. S. Simmons, C. J. Farthing, W. J. McLeavy, F. Skeffington, A. M. Fernyhough, E. Macpherson, T. (Romford) Skeffington-Lodge, T. C. Field, Capt. W. J. Mainwaring, W. H. Smith, H. N. (Nottingham, S.) Fletcher, E. G. M. (Islington, E.) Mallalieu, E. L. (Brigg) Snow, J. W. Follick, M. Mallalieu, J. P. W. (Huddersfield) Solley, L. J. Foot, M. M. Mann, Mrs. J. Soskice, Sir Frank Forman, J. C. Manning, C. (Camberwell, N.) Steele, T. Fraser, T. (Hamilton) Manning, Mrs. L. (Epping) Stewart, Michael (Fulham, E.) Freeman, Peter (Newport) Marquand, H. A. Stokes, R. R. Ganley, Mrs. C. S. Marshall, F. (Brightside) Stress, Dr. B. Gibson, C. W. Mathers, Rt. Hon. George Stubbs, A. E. Gilzean, A. Mellish, R. J. Sylvester, G. O. Goodrich, H. E. Messer, F. Symonds, A. L. Gordon-Walker, P. C. Middleton, Mrs. L. Taylor, H. B. (Mansfield) Grenfell, D. R. Millington, Wing-Comdr. E. R. Taylor, R. J. (Morpeth) Grey, C. F. Mitchison, G. R. Thomas, D. E. (Aberdare) Griffiths, D. (Rother Valley) Monslow, W. Thomas, I. O. (Wrekin) Griffiths, W. D. (Moss Side) Moody, A. S. Thomas, John R. (Dover) Guest, Dr. L. Haden Morgan, Dr. H. B. Thurtle, Ernest Guy, W. H. Morley, R. Tiffany, S. Haire, John E. (Wycombe) Morris, Lt.-Col. H. (Sheffield, C.) Titterington, M. F Half, Rt. Hon. Glenvil Morris, P. (Swansea, W.) Tolley, L. Hamilton, Lieut.-Col. R. Morrison, Rt. Hon-H. (Lewisham, E.) Tomlinson, Rt. Hon. G. Hardy, E. A. Mort, D. L. Ungoed-Thomas, L. Harrison, J. Moyle, A. Usborne, Henry Hastings, Dr. Somerville Murray, J. D. Vernon, Maj. W. F. Henderson, Rt. Hn. A. (Kingswinford) Naylor, T. E. Viant, S. P. Henderson, Joseph (Ardwick) Neal, H. (Claycross) Walker, G. H. Herbison, Miss M. Nichol, Mrs. M. E. (Bradford, N.) Wallace, G. D. (Chislehurst) Hobson, C. R. Noel-Buxton, Lady Wallace, H. W. (Warthamstow, E.) Holman, P. O'Brien, T. Warbey, W. N. Holmes, H. E. (Hemsworth) Oldfield, W. H. Watkins, T. E. Horabin, T. L. Oliver, G. H. Watson, W. M. House, G. Orbach, M. Wells, P. L. (Faversham) Hoy, J. Paling, Will T. (Dewsbury) Wells, W. T. (Walsall) Hubbard, T. Palmer, A. M. F. West, D. G. Hudson, J. H. (Ealing, W.) Pargiter, G. A. Westwood, Rt. Hon. J. Hughes, Emrys (S. Ayr) Parker, J. Wheatley, Rt. Hn. J. T. (Edinb'gh, E.) Hughes, Hector (Aberdeen, N.) Parkin, B. T. White, H. (Derbyshire, N.E.) Irving, W. J. (Tottenham, N.) Paton, Mrs. F. (Rushcliffe) Whiteley, Rt. Hon. W. Isaacs, Rt. Hon. G. A. Paton, J. Norwich Wigg, George Jay, D. P. T. Pearson, A. Wilkins, W. A. Jeger, G. (Winchester) Peart, T. F. Willey, O. G. (Cleveland) Jeger, Dr. S. W. (St. Pancras, S.E.) Perrins, W. Williams, D. J. (Neath) Johnston, Douglas Piratin, P. Williams, J. L. (Kelvingrove) Jones, D. T. (Hartlepool) Platts-Mills, J. F. F. Williams, R. W. (Wigan) Jones, P. Asterley (Hitchin) Popplewell, E. Williams, Rt. Hon. T. (Don Valley) Keenan, W. Porter, G. (Leeds) Williams, W. R. (Heston) Kenyon, C. Proctor, W. T. Willis, E. King, E. M. Pursey, Cmdr. H. Wills, Mrs. E. A. Kinley, J. Randall, H. E. Wise, Major F. J. Lang, G. Ranger, J. Woods, G. S. Lawson, Rt. Hon. J. J. Rankin, J. Wyatt, W. Lee, F. (Hulme) Rees-Williams, D. R. Yates, V. F. Leonard, W. Reeves, J. Young, Sir R. (Newton) Leslie, J. R. Reid, T. (Swindon) Younger, Hon. Kenneth Levy, B. W. Rhodes, H. Lewis, J. (Bolton) Richards, R. Lewis, T. (Southampton) Ridealgh, Mrs. M. TELLERS FOR THE NOES Lindgren, G. S. Roberts, Goronwy (Caernarvonshire) Mr. Collindridge and Mr. Hannon.
On a point of Order, Major Milner. Are you going to point out what Amendents you are selecting in Group 2?
I am proposing to select, in addition to the Amendment of the Chancellor of the Exchequer which I Was just about to call, the Amendment on page 63 in the name of the hon. Member for West Ealing (Mr. J. Hudson).
:I beg to move in page 63, line 32, at the end, to insert:
"( h ) Articles knitted or crocheted by hand without mechanical aid, including such articles embroidered by hand-needlework … Exempt."
I have already explained that this is formally to carry out the undertaking given in this Bill.
Amendment agreed to.
7.30 p.m.
I beg to move, in page 63, line 32, at the end to insert:
Would the hon. Member also discuss at the same time the Amendment standing in his name on page 63, line 46, regarding children's gloves?
I am very glad to do so. With regard to children's headgear, these are covered at the moment by the first paragraph in group 2, where articles not comprised in any of the following paragraphs of this Group are put in the first category of Purchase Tax, meaning that they pay 33⅓ per cent. I would like to know why children's hats, caps and gloves, which are very necessary articles, as any parent will be able to assure the Government, should be taxed at this rate, and why they can not be exempted entirely from Purchase Tax. I think there is an additional ground for pressing this Amendment when one looks down the list of articles in Group 2 of the Schedule and notes that wigs are entirely exempt. Although children are not concerned with wigs as headgear, there are on the Government Front Bench right hon. Members who are. I notice some surprise on the face of the Financial Secretary; I was not thinking of him, but of my right hon. and learned Friend the Chancellor of the Exchequer who on occasion dons his wig, as does the Solicitor-General. The Government exempt wigs entirely from this tax, and yet they impose a tax on children's headgear. I want to know why a distinction of that sort should be made.
In more serious vein, I would remind the Government that children's headgear is an important item in the average family, particularly in view of the way that boys use their caps, as we all know from our experience. Caps are a very expensive item. Bearing in mind what we have recently heard on the question of Boy Scouts' clothing, I submit that there is no case for a tax of 33⅓ per cent. on children's hats. There is even more reason to take a sympathetic view at the other end of the scale, because children's footwear are an expensive item. If some relief could be afforded in respect of the price of children's hats, footwear and gloves, many fathers and mothers would be very glad. I speak with hope and confidence that the Government, who have had much experience in these matters, will give this proposal favourable consideration.
I wish the Solicitor-General had been here to reply to these Amendments, because he has recently had an addition to his family. In the next few years he will discover for himself how children's heads grow and how new hats are constantly required to meet children's needs. If the Solicitor-General can allow his own wig to be free of tax, surely he will agree that the hat that his little one will be wearing one day, should also be free of tax.
I support the hon. Member for West Ealing (Mr. J. Hudson) in this important matter, and I do so without any personal feeling because I have no special concern with young children, but I do suggest to the Financial Secretary that if he will look into this matter with his advisers at the Board of Trade he will find that this is a concession which he can well make. The amount of material involved in these articles, both hats and gloves, is very small indeed, Children's hands are very tiny, and children's heads are not large. They are not yet swollen with expectation of favours to come. I think there is an element of niggardliness in this provision which the Financial Secretary might well consider.
Children's headgear are part of their protective clothing. A child has a softer head than an adult, or even an adolescent, and this headgear is not merely the fanciful idea of an indulgent mama or papa. It is really necessary for the child's comfort, protection and warmth. That consideration must surely be in the mind of the Financial Secretary when he gives this matter his attention. The amount of material actually required to make a small knitted cap is less than two skeins of wool, and the amount of cloth required is possibly less than one-eighth of a yard. Therefore, it cannot be an expensive or luxurious extravagance for the Chancellor to accept this Amendment.
There are other considerations. Clothes are very important in the development of the child's mind. Children who are brought up to be indifferent to the importance of clothes are brought up badly. For a child to feel the importance of having his or her little gloves or cap is an important part of the child's education. In these days education is costly, but this is an inexpensive piece of education. I have heard many proposals in Parliament about which I must say, although I have politically supported them, I have not felt very ardent, but this is a plea for small children whose hands get chapped, raw and red on cold days, and whose heads bump against the upper part of their perambulators or cribs. These are the kind of things for which we are pleading, and I find myself in excellent company when I join the hon. Member for West Ealing in this matter. He has pleaded successfully for causes which have commanded less attention from me, but this is the cause of little children, which would cost very little money and should not leave unwrung the withers of the Financial Secretary.
I support the plea of the hon. Member for West Ealing (Mr. J. Hudson) and my hon. Friend the Member for South Edinburgh (Sir W. Darling). Anybody who walked along Princes Street on a cold windy day without gloves or hat could not but suffer, and it would be a great tragedy if children were not protected against those Scottish winds. I hope the Financial Secretary will give us good news on this occasion.
I have constituents who are manufacturers, and it might be of interest to the Committee if I quoted one or two extracts from typical letters which I have received from them. One says: and will remove Purchase Tax from children's hats and gloves for the simple reason that they are necessary utility protective clothing.
I only wish to ask for a word of explanation from the hon. Member for West Ealing (Mr. J. Hudson). I would like to know if "children's headgear" includes tile hats.
I have not had an opportunity of wearing a tile hat.
I cannot accede to the suggestion made by my hon. Friend the Member for West Ealing (Mr. J. Hudson). I am sorry, because I would like to have done something for him if it had been possible. Ever since the original exemption in respect of children's clothing was made in the Finance (No. 2) Act, 1940, the exemption has been confined to garments and footwear of a sort suitable for young children to wear, but has always excluded headgear and gloves.
Why?
I am about to give the reasons. The reasons were simple. The first reason was that it was considered at that time that headgear and gloves were not so essential as other forms of children's clothing. The real reason was that it was difficult to confine the exemption to children only. No one in this short Debate has indicated how far up the scale he would desire to go. The hon. Member for South Edinburgh (Sir W. Darling) was obviously talking about tiny children, but the term "children's headgear and gloves" can include those of boys and girls of 15 or 16, some of whom would be rather big. Many of the sizes supplied for them would fit some grown men and certainly many grown women.
For that reason it has been impossible until now to include headgear and gloves in the exemptions for children's wear. I will not enlarge upon the headgear side of the matter, because it is obvious. Women's hats do not have to fit tightly to the head. It would be possible for a woman to wear a hat which had been made for a child, and I imagine she might look quite charming and smart in it.
Will the Financial Secretary allow me to send him a baby's bonnet so that he can see what it looks like on his wife's head?
Unfortunately we could not confine this concession to baby's bonnets. At any rate, that is not the proposal made by my hon. Friend. He is talking about children's headgear and gloves.
The position today is better than it was in 1940, when it was found impossible to extend the exemption to headgear and gloves. Today there is a wide range of utility gloves and headgear. I am informed, and the hon. Member for South Edinburgh should know about this even better than I do, that nearly all the gloves supplied today are utility gloves and that there is a wide range of hats and gloves suitable for wear not only by children, but by adults, if the garments happen to fit them.
The short answer to my hon. Friend is that we believe that most children can be suited at the present time and that their parents will find, in the ranges that are available in utility types, gloves and hats sufficiently cheap—so far as things are cheap today—for their children's wear. It would be impossible to extend the exempted classes to these two forms of article by accepting the Amendment, because the articles could be used by adults. I am positive that my hon. Friend does not want adults to be included under the Amendment which he has moved. I am sorry to say that I must ask the Committee to reject the Amendment.
7.45 p.m.
Once again the answer which we get from the Treasury Bench is most disappointing. If it proves anything it proves that the Purchase Tax is rotten and that the sooner it is altogether withdrawn the better. It certainly operates unfairly with regard to clothing. I very much doubt whether there is any justification for continuing the Purchase Tax on clothing at all, except perhaps upon the most expensive kinds of fur coat.
The arguments which the Financial Secretary put forward did not seem to be at all reasonable. The case made by my hon. Friend the Member for South Edinburgh (Sir W. Darling) was very strong indeed. I am bound to say that I was surprised at the point made by the hon. Member who moved the Amendment, when he drew attention to the fact that wigs had been exempted altogether. The judge and the barrister are to have their wigs free, but the little baby's hat is to be subjected to the Purchase Tax.
It was suggested that a certain amount of utility headgear is available for children. Hon. Gentlemen opposite may want us all to wear utility clothing, but I tell them that the average mother and father in this country do not want their children to wear utility clothing. They want a little distinction. When one has a baby one is very interested and excited. It is a long time since my children were at that age, but I can well remember the interest there was in them at that time. Parents do not want to dress their children in regimented, utility clothing.
In the group which comprises garments I see that
The Financial Secretary ought to think again about this matter. I feel pretty sure that if we leave it, he will come back on the Report stage and say that he is really sorry that he made a mistake and that he is going to make some concession in this direction.
I cannot agree with the right hon. Gentleman that the Financial Secretary was unreasonable in his reply. He was thoroughly disappointing, but with a good ground for the disappointment that he occasioned. I have to admit that it is difficult administratively to meet the situation which my right hon. Friend described, but it seems to me that he could easily promise to consider between now and the Report stage whether children's gloves could be classified in sizes. There is no chance of a baby's glove being worn by a man.
I speak under correction, but I am told that "children's wear" does not mean babies' wear and that there is a distinction between them. I have to take the wording of the Amendment, which is "children's wear," and which does not mean children of four or five years old only, but children of 14 and 15.
The Financial Secretary is encouraging me in the hope that what is classified as "children's wear" is distinct from babies' wear, which is not the wear of adults. I hope that the matter will be considered again by the Treasury. If my proposal is administratively impossible it will be foolish of me to press the Amendment to a Division. For that reason, I beg to ask leave to withdraw the Amendment.
Before the hon. Member withdraws the Amendment, may I ask whether the Financial Secretary can consider using the same kind of definition as is used in the group, of articles of a kind suitable for young children's wear." Why cannot hats and gloves be limited to young children? If that were done, the very proper arguments of the Financial Secretary about boys and girls of 15 and 16 would not arise. Perhaps between now and the Report stage it might be possible for him to find a satisfactory definition, so that what we and the Financial Secretary himself desire may be carried out.
If the Department can make a classification of boots and shoes for children, is it beyond the capacity of the same competent person who made that classification to make a similar classification of headgear and gloves? I should have thought that boots and shoes presented more difficulty. I cannot imagine an adult person wearing a baby's bootee. I will take the Financial Secretary back to the days when he was a delightful child in a blue bonnet and ribbons, and I ask him to extend the same delight to other generations.
I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Amendments made: In page 63, line 46, at end, insert:
"( f ) Articles knitted or crocheted by hand without mechanical aid, including such articles embroidered by hand-needlework—Exempt."
In page 64, line 11, at end, insert:
"( e ) Articles knitted or crocheted by hand without mechanical aid, including such articles embroidered by hand-needlework—Exempt."—[ Mr. Jay. ]
I beg to move, in page 64, line 11, at the end, to insert:
The leather lace cannot be regarded as a luxury. It is absolutely necessary to the very heavy industrial footwear which is used by miners, engineers, agricultural workers, transport workers, builders, and so on and so forth. At the moment leather laces are classed as haberdashery. If that be so—and I stand corrected if I am wrong—they are classed in the luxury line of laces, like the silk lace. I am sure it is more practicable, and that abuse could be prevented, if these leather laces were placed in the correct category. If they must be classed under haberdashery for simplification of administration, I suggest they should be placed under Group 4 ( c ) as utility articles, and as utility articles should be exempt from Purchase Tax. I feel it would be possible to mark the bundles and cards of laces with the necessary mark.
I hope, therefore, that it is possible for the Chancellor of the Exchequer to accept this Amendment. I may say, in a few final remarks, that the removal of the subsidy on leather has increased the price of leather laces. That can be understood. Whilst there is a small amount of trade being done in the hard currency areas, it is necessary to have a certain home market in order to assist that particular drive. I do not stress that part of my remarks, but I stress my opening remarks, because I feel this is a logical step to take and I hope the Chancellor of the Exchequer will be willing to accept the Amendment.
We, of course, agree with the hon. Member for Harborough (Mr. Attewell) that leather laces are far from being luxuries. The difficulty, I am afraid, arises from the fact that for taxation purposes they are, as the hon. Member for Harborough said, classed as haberdashery and not as footwear.
I would remind him that in this year's Budget we reduced the Purchase Tax on haberdashery from 50 per cent. to the low level of 33⅓ per cent. for very much the same reasons as those he put forward, because we recognised that this covers a class of relatively necessary articles. We have, therefore, gone a considerable distance this year to meet my hon. Friend's requirements. We do not feel it is possible to go further, because that would involve distinguishing between leather laces, on the one hand, and other necessary products in the haberdashery group, on the other hand, such as sewing needles or thimbles, which I am sure my hon. Friend will agree are probably equally necessary products. Therefore, we feel that this year we shall have to be content with the reduction from 50 per cent. to 33⅓ per cent. for the whole of this Group.
I must register grave disappointment that the Government are not willing to accept the Amendment on leather laces. The hon. Member for Harborough (Mr. Attewell) put his case so well that I should have thought it would have softened the heart even of the representative of the Treasury now sitting in front of him.
I am not altogether surprised at this decision because, after all, the effect of the Tax falls mainly on agricultural labourers and the people who work very hard in the fields and mines. Those who have rural interests naturally prefer good leather laces to any sort of made-up stuff which we may be unfortunate enough to have to use. I say I am not surprised at this decision because there has been no sympathy shown for the classes of people I have mentioned—agricultural labourers, those who work on the farms, and so on. I recognise, as the Economic Secretary to the Treasury said, that the Government have gone some way to meet this request this year. I am not in any way depreciating that; it is a matter of helpfulness. I would like to say that these leather laces are things which last a very long time if they are properly made. They are things which are used very largely by people who give their shoes and boots very much harder wear than that given by the ordinary classes or by anyone living in the towns. I would urge the Government, if they have any sort of kindness or thoughtfulness for those poorer or harder working sections of the community, to reconsider this matter before the Report stage.
I think this decision creates great dissatisfaction among Government circles and I would add to the plea from both sides of the Committee, from the kind-hearted people on my side and the less kind-hearted people on the other side who appeal here for help for the agriculture workers and for people of that kind in the matter of leather laces. I am hoping that the hon. Member for Taunton (Mr. Collins) will support me in a minute, because it would be useful to have any support we can find for the agriculture community, and I notice we may have some support from the North as well. I hope the Government this time, or next year at any rate, will allow their kindly feelings to overcome them on this matter and will follow my advice, and even that of the advisers behind them, rather than that of the stoneyhearted official who says, "Leather laces? Cut them out and tax them all you can."
8.0 p.m.
I also ask the Government to reconsider this matter. It is an important matter for many of the industrial workers. It should be possible to grant this very small concession. The Treasury is an extraordinary Department. Here is a Department which comes down to this Committee and includes leather laces in haberdashery. It is an extraordinary thing for the Treasury to do. Laces of that kind cannot be classified in ordinary language as haberdashery. I would ask that this concession should be made for people doing heavy work.
Amendment negatived.
I beg to move, in page 64, line 18, at the end, to insert:
"( b ) Non-utility mattresses, bolsters and pillows) Non-utility mattresses, bolsters and pillows First."
I understand that my Amendment on the Paper—in page 64, line 8, after "attached)," to insert "other than sheepskin insoles"—has fallen, as I was, unhappily, out of my place when it was reached. I wonder if instead I may be allowed to move a subsequent Amendment which immediately precedes on the Paper the one the right hon. and learned Gentleman the Member for Hillhead (Mr. Reid) is moving, namely in page 64, line 11, at the end, to insert:
"( e ) Sheepskin insoles) Sheepskin insoles Exempt."
We have passed that point now. That Amendment would have been discussed, in any case, with the previous one to which the hon. Member has referred. Perhaps he can raise the matter at some other stage of the Bill.
This Amendment raises, I think, somewhat different considerations from any that have been put forward today. We had some indication at the beginning of the Debate that there were to be some concessions made in its course, and I am very hopeful that the Financial Secretary will break the ice on this occasion, because I think I can show him that there is an unusually strong case here for a concession. It is clear that the disparity between the charges for utility and non-utility bedding have grown while the actual differences between these classes of bedding have shrunk to almost vanishing point. According to my information the main distinctions between certain classes of utility and non-utility bedding have disappeared. The distinctions up to date have been that utility needed dockets and utility ticking, at least, was subsidised. I am not sure about the other components of these articles. Now, of course, there are no dockets on these goods, and the subsidy has certainly gone.
Now, I am told, the contrast, so far as quality is concerned, is not in the least between utility and non-utility, but is, rather, between that class which consists of spring mattresses and that which consists of the old non-spring mattresses which, I believe, are still made in some considerable quantities. I am told that the trouble is that a great part of the ticking—it may be a third—is non-utility; and, of course, one cannot make a utility mattress out of that; and, therefore, one has to make a non-utility which is almost identical in price, apart from tax, and in quality with the utility articles, so that the distinction is purely technical.
Those who administer this matter do not wish, as I understand it—and certainly I do not wish—to seek any substantial financial concession in this matter. They say that much the best way of dealing with this would be to take all the articles, utility and non-utility, of a particular class—spring mattresses, let us say—and charge them all at the same rate. Of course, we cannot propose that utility spring mattresses should be taxed. The Government could. I am not suggesting that, except in answer to a possible plea that the Government cannot afford to make this concession on financial grounds. My case is that the concession is justified and ought to be made on practical grounds. I should be quite content if the Government were prepared to take off all the Purchase Tax on the mattresses. I should be quite prepared to accept that, but I can see it is unlikely they would do that. Therefore, they ought to relieve tax on these non-utility articles, which are really only non-utility for technical reasons. They ought to reduce tax on those articles. If they want to recoup themselves, I understand nobody in the trade will object to the raising of certain of the utility classes in order to bring the like classes into the like categories.
The difficulty, of course, is that, when amongst more or less corresponding mattresses one has to pay tax on one because, for technical reasons, that article is non-utility, and not on the other, obviously the public are not going to buy non-utility mattresses at a higher price, but will rather wait—all who can wait—until they can get utility ones. The merchants do not want to stock this class of non-utility goods, and therefore, a lot of material which is there available is not being properly used. I am told in consequence the manufacturing capacity for that material is also not being used. The result of the discrepancy is that the production of articles is being seriously hampered.
It is for that very practical reason we seek a concession in this matter. I think the Treasury have been made aware of the views of all concerned. I would point out that this is not merely the view of bedding manufacturers, but that also the National Union of Furniture Trade Operatives have concurred in the representation, and also the wider body, the Retail Furnishers Chamber of Trade. So I contend that all concerned in the trade wish to have this anomaly put right. If the Government's answer is that they cannot afford it, they have had put forward to them the method by which it can be afforded. It is really very difficult to understand why technicalities should result in material lying unsaleable, or virtually unsaleable. People will not pay extra tax when they are not getting any extra quality for it. That reflects back to the people making the things and to their workmen. It is obvious, therefore, why the National Union of Furniture Trade Operatives concur with the manufacturers. They want to see their services fully utilised, just as the employers want to see their services and their manufacturing capacity fully utilised.
I do not in the least suggest that any change should be made in the cheaper classes of mattresses. There may be other difficulties with regard to the other items in the Amendment. I have dealt chiefly with mattresses because my information deals chiefly with mattresses. There may be certain difficulties with regard to the other items, although I am not aware of them. I think the investigations that have been made do disclose that there are no practical difficulties in connection with mattresses, and they are the most important item. However, if there are any practical difficulties, and a way has been offered to preserve the Government from financial loss and still to leave utility articles on the market, that would seem to be the suitable course to pursue. I am not seeking that the tax should be imposed on anything that is not already taxed. If the answer of the Government is, "We cannot afford this," then what I have suggested is the way out. If it is not, there is no practical answer of which I know, and, therefore, I hope that the Government will at least add this to the list of matters which they are to consider between now and the Report stage.
I am happy on at least this occasion to associate myself with the case put forward by the right hon. and learned Member for Hillhead (Mr. J. S. C. Reid). I think that he has presented the case most fairly especially in its technical aspects. I should be glad indeed to take the Economic Secretary to any shop where mattresses are sold, utility and non-utility, side by side, and challenge him to pick out each from each. He might find it very difficult on account of the change in quality which has taken place since dockets were removed four or five months ago. He may find that for the non-utility item he is asked to pay £12 10s. which includes 66⅔ per cent. tax and for the utility item only £7 10s. I would defy him to say what is the difference in quality in the two items. In these essential items—no hon. Member will argue that beds and bedding are non-essential items in any home—we have had an increase in the last two years from 33⅓ per cent. to 50 per cent. Purchase Tax, and it now rests in this Bill at 66⅔ per cent.—66⅔ per cent. on essential items of household equipent. Bedding now comes into the category of fur coats and cars costing more than £1,280. It seems that in determining this tax the Treasury tossed up a penny and it came down the wrong way.
The main demand for mattresses today is by young people setting up homes, and in the 700,000 new apartments and houses which the Minister of Health has provided in the last two-and-a-half years, there are many young people who are setting up homes for the first time who are being denied the right sort of bedding. Will hon. Gentlemen, when, in the small hours of tomorrow morning they crawl back to their soft beds, be inspired to think of the many people affected by this 66⅔ Purchase Tax? And let us pray that the Treasury should especially be aware of that point of view. As the result of these very high prices, there is a glut of non-utility mattresses in most of the retail shops, with the result that all orders have ceased. That is immediately reflected in the work available to the members of the union—N.U.F.T.O.—to which the right hon. and learned Gentleman referred.
There is a considerable amount of under-employment among mattress makers at the present time. I know that that is the situation in my constituency. I should be glad to support the step suggested by the right hon. and learned Gentleman, and I am sorry that his suggested reduction does not go far enough. By reducing the Purchase Tax to the first category, we thereby put many men back into full employment because the demand will certainly increase. We shall not only remove a technical anomaly but mattresses will be provided for consumers who greatly need them and work will be provided for the operatives in making them.
There are one or two other anomalies to which I should like to refer. It is interesting, in view of the high cost of new mattresses, that many people are having old mattresses made up. They send them to the mattress repairer, and if he provides the ticking it is subject to Purchase Tax. Of the cost of 47s. 6d. for repairing the mattress 17s. 6d. is Purchase Tax on materials like ticking, but if the owner of the mattress provides the ticking and sends it to the manufacturer, then the manufacturer can repair the mattress and no Purchase Tax is incurred. That is an anomaly that ought to be cleared away. But it is the main case which I am presenting, which I believe, is unchallengeable. I therefore heartily support the right hon. and learned Gentleman in his appeal that the tax should be reduced.
8.15 p.m.
I should like to support the reduction of this tax, chiefly on the case, which the right hon. and learned Member for Hillhead (Mr. Reid) put to the Economic Secretary so well, that there is practially no difference in quality. In that he is supported by the hon. Member for Wycombe (Mr. Haire). I also support the Amendment very strongly on the grounds of ex-Service people—young people who have come back from the Forces, who are finding great difficulty in getting these household articles. From a human point of view, the least that the Economic Secretary can do is to encourage these young people to be able to provide themselves with very necessary articles in their homes. Many hon. Members like myself get numbers of letters on this subject. I feel that I cannot support a more human suggestion that that contained in this Amendment on behalf of the masses of the people who are so badly in need of these household commodities. I beg the Economic Secretary seriously to consider this matter, and to see whether, in view of the case put forward, he can get round it if there is any difficulty. I am perfectly certain that can be done, if he has the will to do it.
I would have been very pleased if the right hon. and learned Member for Hillhead (Mr. Reid) had come out for no tax at all. According to the Scriptures, when Jesus gave the instruction, "Take up thy bed and walk," there was nothing said about paying Purchase Tax.
The Government have taken up a most peculiar attitude on this matter. If anything could be considered a necessity, I should have thought that it was a mattress. I do not know how many Members on the Front Bench opposite will be sleeping on the floor tonight, but I should have thought that the number would be very few. Therefore, a mattress is in the nature of a necessity. In the present situation, we have had the appeal ad misericordiam of the very hard case of young people who cannot get mattresses. As to financial loss, I should have thought that there would be less loss to the Government if they reduced the tax to 33⅓ per cent.
The present position in the trade is that ticking for utility mattresses is very hard to get. I do not think that the manufacturers can supply half the amount of ticking demanded for utility mattresses and, therefore, they cannot be manufactured. As regards the non-utility mattress, which is now very similar in quality, the price, with the 66⅔ per cent. Purchase Tax, is so prohibitive that retailers will not handle non-utility mattresses and, therefore, the stock of material for making non-utility mattresses is left on the hands of the manufacturers.
Let us get down to a few figures and see what is the position. A flock or fibre mattress, 6 feet by 4 feet, cost before the war about £1 4s. The better quality utility mattress sells today at £4 4s. The non-utility mattresses will be up to six guineas, of which one-third is tax. That is too high for the ordinary purchaser. Rich people will think nothing of paying six guinea; but the ordinary citizen, the ordinary working man, cannot afford a six-guinea mattress for which before the war he paid £1 4s. There is a great shortage of mattresses, which are not luxuries, and the only result of this two-thirds duty will be to stop the trade in non-utility mattresses almost entirely, and I do not think the Government will achieve an increase in the Purchase Tax over what they used to get when it was 33⅓ per cent.
In my opinion, having consulted with people in my constituency who deal in these things, from the financial point of view the Government would do better with a Purchase Tax at the old 33⅓ per cent., which at the same time would free material now lying in the manufacturers' hands and cannot be used. The most important point of all is that people would be enabled to buy mattresses, when at present they cannot afford them. The condition of many people's bedding, and such like, is bad because people are not able to afford proper mattresses. This is a punitive tax upon what seems to me to be an ordinary necessity for ordinary people. I appeal to the Government to accept my right hon. and learned Friend's reasonable suggestion, not to exempt these articles altogether—which could be urged—but to reduce them to the original rate of 33⅓ per cent.
At the beginning of this Debate the Chancellor said that we would listen to the arguments advanced and would make up our minds in the light of what we heard, although the hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) cast some doubt on our sincerity in that respect. I have listened carefully to the arguments advanced on these Amendments from both sides of the Committee, and I am impressed by the at least prima facie cogency of the case which has been made.
We would all agree, I think, that bolsters, mattresses and pillows are necessities, and that in normal years, at any rate, we should not wish to place a high tax upon them. But on the other side there are two strong arguments which we have to weigh in the balance. The first, of course, is that utility mattresses, bolsters and pillows are already exempt from Purchase Tax. That is an important point. In the case of mattresses the exemption was restored by the present Government in the Budget of April, 1946, so to that extent we already recognise that these are necessities. Secondly, we have to recognise—and I think it is a little easier for the Opposition than for the Government to ignore this factor in this Series of Amendments—that there are a number of other almost equally necessary textile products—such as blankets, bedspreads, babies' pillowcases, and so on—for which equally, or almost equally, strong cases might perhaps be made.
We have to look rather carefully at that aspect of the argument, and, quite frankly, if we were to extend the same concession to all other items of the class dealt within the Amendments I am afraid that we should lose more revenue than we could afford to lose if we are to maintain the general structure of this Budget. In our opinion, having heard what has been said, we think the arguments are pretty nicely balanced on this series of Amendments, and we propose to consider these items carefully. I cannot now foreshadow whether we can think of anything, nor what precisely we should seek to do if we came to the conclusion that we could; but we will carefully consider this series of proposals.
There are one or two points which I should like the Chancellor to consider. First, I should like him to consider some kind of coordination between his work and that of the Board of Trade. I have a very long experience of mattress makers and mattress making, from visiting factories and seeing the mattresses made, and the conditions under which the employees work. The last time I went to a factory in Glasgow I was told by the manager that the only difference between the utility mattress and the non-utility mattress was the price. He was quite frank about it, and said: "We can do nothing about it. This is the kind of material that is allotted to us by the Board of Trade; we have to take it, and we do not get sufficient for utility mattresses. We get a material with one strip of a different colour for non-utility mattresses, and we pay a much higher price for it. The public are being robbed on it, and the utility mattress is actually paying its way."
In those circumstances there can be no excuse whatever for not having in the Government somebody responsible for coordinating these two things and protecting the public. I would remind the Chancellor that those who are suffering most from the lack of decent bedding, mattresses and bed linen are the poor people, not the rich people. The well-to-do had a good stock, and the nouveau riche, who made money out of the war, can buy it in the "black market." The only people who are suffering are the ordinary workers, who cannot replace their worn out bedding. I appeal to the Chancellor to abolish the tax altogether, to put a fair price on this commodity, and so permit the people to get the bedding they need.
I wish to support very strongly what the hon. Member for West Renfrew (Mr. Scollan) has said. As I am sure he would be the first to realise, this applies not only to his constituency but to every constituency in the country, where there are illustrations how utility and non-utility goods vary only by a stripe, or something like that, although they are sold at very different prices. That is really responsible for the vast stocks of goods which people cannot afford to buy, simply because they are technically non-utility articles.
I welcome the fact that there have been two or three speeches from the Government benches pointing out how, through the use of the word "utility"—a perfectly hopeless word I always thought—we have got into a position which bears most heavily on the workers. I welcome the fact that the Economic Secretary said he would look into this matter again, because it means that in all constituencies—and I have a considerable number of houses going up in my division. [HON. MEMBERS: "Hear, hear."] Nothing like as many as we could and did build under private enterprise. I am sure hon. Members opposite would want me to bring that out, because the people who tell me that most in my division are, curiously enough, representatives of the Socialist Party. A great number of new mattresses will be needed for those occupying these houses. I receive the same complaints as hon. Members opposite, the only difference being that probably I am rather closer to my division, not being quite so plutocratic in outlook as most hon. Gentlemen opposite.
I ask a special favour of the Chancellor which is that he should read and digest very thoroughly the excellent speech of his hon. Friend the Member for Wycombe (Mr. Haire), which he missed. That was a speech of great value; it was thorough and competent, and, in a way which has seldom happened, it exposed the complete folly of much of what the Chancellor and the Government are doing. It was a complete exposition of the folly of the way in which the Government are handling the position. If I had said it the Chancellor would look gloomily at me and shake his head. As the speech came from one of his supporters, however, he must read it and before the Report stage accept it and cut out a great many things. I suggest this in a decent way. I do not want to be told that I am to be put on the mat tomorrow morning. The Chancellor could glean much benefit and do a great deal of good if he carried out every recommendation contained in that astonishing speech from his own side of the Committee.
Every quarter of the Committee will be gratified by the announcement of the Economic Secretary. We all believe that in the end the Chancellor will make a substantial concession. Before I ask leave to withdraw the Amendment I would say a word to the Chancellor. I am sure he will agree it is of the utmost importance for the stability of a taxation system that people who have to pay the taxes shall regard them as being founded on a reasonable basis. It is quite clear that it is impossible to find any reasonable basis for the distinction today between utility and non-utility mattresses. On that general consideration, which is almost as important as the particular considerations at issue, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
8.30 p.m.
I beg to move, in page 64, line 22, at the end, to insert:
Baby carriages, invalid chairs—all essential articles—are not required to pay Purchase Tax. The item in question is in precisely the same category. A short while ago it was pointed out that articles for young children were exempted from this form of tax. This very necessary requirement should be exempted equally. The case for the removal of the tax is obvious. This is no doubt one of those instances where the particular item has been missed by an oversight. With the very large range of articles which the Budget covers it would be inhuman not to expect that from time to time some small item would be overlooked.
If the Chancellor feels that the case made by the hon. Member for St. Marylebone (Sir W. Wakefield) is reasonable, I think that he will find himself in administrative difficulties. Cot sheets need not necessarily be made from latex rubber. The hon. Member will no doubt agree, on consideration, that he should have omitted the word "latex," because rubber sheeting can be made from calandered sheet rubber and be of precisely the same consistency. The hon. Member mentioned that babies' pants are free from Purchase Tax. That is quite true, but the same sheet material can be used also for the manufacture of bathing caps and trunks, which cannot be regarded as essential. Whilst there is a reasonable argument for exempting protective cot sheets we must recognise the existence of certain administrative difficulties. No doubt the Chancellor will be able to say whether it is possible to exempt protective sheets made from the same type of material which could be used for non-essential goods, a purpose for which they are, in fact, used very day.
In this case there is, indeed, an administrative difficulty. As the hon. Member for Bolton (Mr. J. Lewis) has pointed out, there are other types of material which can be used not only for protective cot sheets but for non-essential purposes. The Amendment seeks merely to exclude from the charge which is imposed protective cot sheets made of latex rubber. I understand that this item can be made equally well of plastic or of waterproofed cloth. So far as I can see there is no valid reason for selecting for exclusion from the charge only those made of latex rubber.
In asking the Committee not to accept the proposal, I would urge that there is no specific reason for singling out this kind of domestic article from amongst many others which are subject to the charge. Group 5 is a group which includes, generally speaking, articles made of any material used as domestic soft furnishings or as domestic bedding, subject to an exclusion of utility articles. In view of that general charge, is there a case for excluding this type of article made from the particular substance of latex rubber?
In a wide range of various articles which are useful for one purpose or another a case may be made out for exclusion, but, as my right hon. and learned Friend pointed out at an early stage of the Committee, it is not practicable to accept all possible proposed exclusions which can be supported by perfectly reasonable arguments for one reason or another. One has to be selective in this matter and to select for exclusion from the tax those proposals which, ranging them in order side by side, one feels can be most strongly supported. I have given the chief reason, that there are really no special grounds for singling out this particular type of domestic soft furnishing, and therefore, looking at the matter in order of priority and from the point of view that a sufficient case has not been made out, I ask the Committee to reject the Amendment.
I would point out to the Solicitor-General with great respect that administrative difficulties exist to be got over. It is not enough to plead administrative difficulties, unless it can be shown that they cannot be got over, and I suggest that the right hon. and learned Gentleman has not succeeded in doing that. My hon. Friend the Member for St. Marylebone (Sir W. Wakefield) has referred to protective cot sheets made of latex rubber, but what he really meant, which was quite obvious, was protective cot sheets. These articles are of extreme importance to the very young, and are sometimes of extreme importance to the very old, and today we are encouraging people to be born, and also encouraging people to live as long as they possibly can. I suggest that the Chancellor of the Exchequer should ignore the particular type of protective cot sheet mentioned, and should apply his mind to seeing whether something in the nature of a general amnesty might not conceivably be arranged for all protective cot sheets.
8.45 p.m.
As so often happens in discussions in the House of Commons an Amendment admirable in intention has had a flaw in it exposed. The hon. Member for Bolton (Mr. J. Lewis) pointed out an administrative difficulty, and he was followed by the Solicitor-General who criticised the Amendment on the grounds that it was too narrow and that cot sheets made of latex formed only a part of the protective cot sheets made from other materials. He then went on to argue that the Government had to be selective in these matters, and said that a case had not been properly made up. As we have seen signs of grace on the previous Amendment dealing with mattresses, when almost for the first time in this long discussion we obtained a statement that the matter would be reconsidered, I am wondering whether this cannot come within the same category.
These protective cot sheets form part of the apparatus to which the right hon. and learned Gentleman has already directed attention, and I understand that certain articles of apparel in this category are already free from Purchase Tax. The right hon. Gentleman has already shown that his mind is running in the direction of giving help to parents of young children, and he has already made a concession only 43 hours after delivery of his Budget speech. While the Amendment may be too narrow and contain administrative difficulties, I suggest that it might not be a bad thing for the Government to look at the matter again from the wider aspect, if my right hon. Friend will be willing to withdraw his Amendment.
I am sure that the hon. and gallant Member wants to be fair. He will appreciate that protective cot sheets are not manufactured articles but are merely made by cutting a strip of the roll without any fabrication being necessary, and that therefore precisely the same material can be used for a variety of other purposes.
The hon. Member is by way of being an expert on this subject, and one naturally defers to him, but he is rather anxious to protect the Government from what is a reasonable argument. Admitting everything he has said, we consider that there might be some administrative method whereby this difficulty could be surmounted if the Government were sympathetic towards the proposal. We say that something ought to be done to bring these cot sheets within the ambit of the help being given in other directions to parents of young children, and that the Chancellor should see whether between now and Report stage he cannot find something which is administratively workable.
The hon. Member for Bolton (Mr. J. Lewis) has made the point that these protective cot sheets can be cut from the roll and do not require any additional work for their completion, but the same argument could be applied to mattresses, because it would be possible, if one wished, to make a pair of pyjamas out of tick cloth. Surely the question which arises here is whether it is wise, if mattresses are to be free, that protective cot sheets should be restricted, thereby running the risk of these utility mattresses being spoilt after they have been purchased. Is this not, therefore, a kindred matter for consideration by the Chancellor of the Exchequer?
I hope that between now and Report stage the Government will have another look at this matter and will try to find some way round the administrative difficulty. I believe that where there is a will there is a way, and in the hope that the Government will take another look at this matter, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
The next series of Amendments come under Group 6, and I propose calling the Amendments standing in the names of the Chancellor of the Exchequer, the hon. and gallant Gentleman the Member for Central Glasgow (Colonel Hutchison), the hon. Member for Orkney and Shetland (Sir B. Neven-Spence and the hon. Member for St. Marylebone (Sir W. Wakefield).
I beg to move, in page 64, line 30, after "Group," to insert:
Amendment agreed to.
I beg to move, in page 64, line 30, to leave out "Second," and to insert "First."
This Amendment raises the question of the amount of Purchase Tax to be levied on materials known as pile and woven-figured fabrics. It seeks to put them in the first category and to take them out-of the second category where they lie at the present time. These cloths or fabrics have been subject to a considerable amount of negotiation in the recent past in regard to the amount of Purchase Tax to which they were subjected. At the end of last year the tax of 100 per cent., to which at that time they were subject, was raised to 125 per cent. As a result of representations made between the trade and the Government, and no doubt as a result of—if I may use a colloquialism—of much "chewing of the rag" these fabrics were, in fact, reduced from 125 per cent. to 50 per cent.
That was the position when the new Budget made its appearance. The right hon. and learned Gentleman was in the dilemma of having to decide whether goods on the 50 per cent. rate of Purchase Tax, which would disappear, should be in the first category, of 33⅓ per cent. or in the second of 66⅔ per cent. These fabrics have had a very up and down career, and having been reduced from 125 per cent., which was their zenith, they fell to 50 per cent. and now have risen to 66⅔ per cent.
Let me point out some of the anomalies which arise as a result of this tax being at that level. When a woman wants to buy this material in order to make clothing for herself or her children she has to pay 66⅔ per cent. Purchase Tax. If she buys exactly the same garment in a made-up form in a shop she pays 33⅓ per cent. and if the garment is for her children she pays no Purchase Tax at all. Could there be a greater discouragement or disincentive to the women of this country to buy this cloth to manufacture articles for themselves? I should have thought that that was a thing which, on the contrary, we should encourage. It cannot be argued, if the Government wish to put forward such an argument, that this 33⅓ per cent. leviable on the finished article is, in £ s. d., approximately the equivalent of 66⅔ per cent. on the material because, in fact, the disparity between the two is not big enough to bring them together in that way. In the case of children's clothing the disparity is even greater still.
There is one other aspect to which I should like to draw attention and that is that the goods to which 66⅔ per cent. tax is being attached are, in fact, being bought less and less. If this tax were take off we suggest that it would stimulate purchases of material of this kind and it is upon such material that much of our overseas programme is built up. We hear continually how materials are being counted upon to increase the export trade of the country. I do not believe that the right hon. and learned Gentleman thinks there could be any similar expansion in the category of finished dresses and frocks. It is upon the home market which ultimately—I think the right hon. and learned Gentleman is coming more to realise this—depends a successful export trade being developed, and this 66⅔ per cent. tax is having a deleterious and damaging effect upon the possibility of exports. For these reasons, for the anomaly which exists at home in the matter of making dresses or buying them in the shops and the beneficial effect it would tend to have on the export trade of the country. I am moving that this tax be reduced.
In supporting what has been said by my hon. and gallant Friend the Member for Central Glasgow (Colonel Hutchison) I would remind the Chancellor that two years ago his predecessor, in reply to an Amendment I had put down regarding the Purchase Tax on silk, reduced it from 100 per cent. to 33⅓ per cent. At that time I thought he was a very fine Chancellor but I have changed my mind since then. I do not wish to refer to silk alone but to silk and rayon because screen printers at the moment are dealing with 85 per cent. rayon and 15 per cent. silk. There is at the present time an exhibition in London of silk and rayon fabrics and I dropped in last evening to see it for a while. It is a most successful show. Orders are coming in from overseas, and some £12,000 of materials were sold to foreign countries in a matter of a few hours yesterday. This is a very good trend because we want to see that trade continue in ever increasing volume.
Apart from the 66⅔ per cent. tax there is only 10 per cent. of the total production allowed for experiments and for the home trade. In fact, it is rather less than 10 per cent., something between 5 and 10 per cent. That completely annihilates the home market so far as the producer is concerned. High quality goods bring in new designs, and large sums of money are spent on artists and designers, in travelling abroad and improving the designs which, in turn, are sent abroad when orders may be secured. It is worth noting that often within 12 months there are repeat orders for the cheaper goods. They follow the designs of high quality, and all sections of the trade benefit accordingly.
If the present situation continues the textile industry is going to be in a very bad way. That is the information that I have got from those in the industry. They are alarmed at the way their existing stocks are building up, so much so that there are pockets of unemployment appearing. As I said in the Adjournment Debate last Friday morning, that is so particularly in my own division. Several firms are having to stand off men and women. The Economic Secretary told us this afternoon that where unemployment appears in a particular industry he is prepared to give special consideration to the question of the Purchase Tax. I do not think that this is a situation which should be allowed to continue. The President of the Board of Trade has had to reduce the coupon value in some cases, and it is far better to deal with the situation and face up to it.
Another point regarding the Purchase Tax concerns the retailers. They have to pay the tax when taking their goods into the shops. A large firm in London have paid £1 million on non-utility goods and the directors have now told the buyers to order only utility goods. If these things go on there will be no new designs and no exports. I urge the Chancellor to take action on this matter right away. If he takes the Purchase Tax right off it would encourage competition and prices would come down accordingly. The men running our mills and screen printers are quite convinced on that point, and I believe one result of it would be that more exports would follow. I ask the Chancellor to do something for this industry. I have spoken to workmen and employers, and they are convinced that the situation could not be more serious than it is at the moment and that it deserves most earnest attention.
9.0 p.m.
The Amendment would have the effect of reducing the tax on the whole of the tissues and fabrics described in Section ( a ) of Group 60. I am advised that that reduction of tax would involve a very considerable sacrifice of revenue. It would in itself involve a loss of £11 million, and because it would involve, in equity and fairness, corresponding adjustments of the tax on clothing, the total cost would be £40 million. I need hardly tell the Committee that reductions of that kind are quite outside the scope of the consideration which my right hon. and learned Friend promised this afternoon to give to some reductions of tax.
I understood from the hon. and gallant Member for Central Glasgow (Colonel Hutchison) that he only wished to draw attention to Section ( a )—though his Amendment covered all of it—and in particular, to pile fabrics and woven figured fabrics, which are put in as a simplification of the total tax. It is surely a simplification to have them back in the main group rather than put them in a separate group. We must remember that the tax on these, as he admitted, has been substantially reduced during the past year. I cannot accept his general argument that the reduction of the tax on the home consumption of these goods would at this stage be helpful to our export trade. On the contrary, I should think that the maintenance of the tax at its present reduced level certainly ought to run for some considerable time before we can judge its effect on the export trade. Therefore my right hon. and learned Friend cannot undertake to consider the proposal at the present time.
The hon. Gentleman has not referred to a single point in the speech which I made. That is a distinct lack of courtesy. Will he give some sort of reply? The industry wants to know where it stands.
So far as I followed the speech of the hon. and gallant Gentleman, he seemed to be talking mainly about the clothing aspect and not the Purchase Tax.
No. Nothing of the kind.
If I failed to understand him, I am sorry.
I support the Amendment. The Chancellor of the Exchequer has not paid quite enough attention to the points which have been raised. I would start by declaring an interest, because in the intervals between being a politician I am still a textile manufacturer. I hate raising points and pressing cases which benefit one's own pocket, but, on the other hand I have a preference for speaking on the two or three things about which I know something rather than the very many things of which I know nothing. In this case I am appealing very definitely to the Chancellor's head and not his heart because I agree with what he said, that the organ in the breast of a good Chancellor of the Exchequer should be of the armour plated variety.
The difficulty about the higher grade rayon piece goods is that the present price gap between the utility and non-utility types is too big. That will reflect dangerously on our export prospects. The difference between utility and non-utility is in some cases only a matter of a tiny difference in a specification. The Purchase Tax on utility is nil and on the higher grade non-utility 66⅔rds per cent. as proposed. I am not against the utility fabrics at all. On the contrary, the utility production plan has worked extremely well and been very valuable. I hope that in essentials it will go on, but there is no doubt that our export trade prospects depend on the development of the higher quality fabrics rather than of the utility.
The overseas trade is meeting grave competition in higher quality fabrics from America and continental countries. All our prospects there depend on the manufacturer having the chance to experiment and carry out research, trials and fashion tests on the very limited part of his production which can at present be sold in the home market. The Chancellor of the Exchequer and the President of the Board of Trade must be tired of having this point made but in present circumstances the factor of basic production is absolutely essential. The public are becoming more and more price conscious. The limiting factor will soon be not coupons but price. In particular, the public are becoming very resistant to prices swollen by heavy Purchase Tax. As a nation we cannot be content to concentrate entirely on the utility fabrics. Disaster lies that way. The present trouble is that it is too sharp a step-up from no duty on utility to 66⅔ on those fabrics on which the future prospects of our export trade depend.
I ask the Chancellor of the Exchequer to look at it very carefully from that point of view, not in the interests of the manufacturers and merchants, but in the interests of our future national export trade, and to consider whether it is not short-sighted to have this enormous step-up on the higher grade fabrics. I am only speaking of rayon piece goods, and if this Amendment is not well designed to deal with that type, I hope the Chancellor of the Exchequer will devise some other Amendment to deal with it.
I want to make one point arising out of the last words of the hon. Member for Tiverton (Mr. Amory). I do not think any hon. Member could support this Amendment with any justification in its present form, and the figures quoted by the Postmaster-General are quite conclusive, but I hope that the Chancellor of the Exchequer will look at it again to see if something can be done to meet the real point of difficulty, which is that the range of materials covered by the Amendment is far too wide. In the earlier stages of Purchase Tax on materials, the clear distinction between high grade luxury articles and the more ordinary types of fabric suitable for people with a small income was clearly understood and recognised by the imposition of 125 per cent. Purchase Tax on the expensive materials and only 33⅓ per cent. on the cheaper types. The defect of the present system is that the tax is 66⅔ per cent. on the whole range.
The heavier types of fabrics such as moquettes, irrespective of Purchase Tax, are far beyond the purses of people of the middle and lower income groups. These articles are therefore well beyond their range, and in present conditions, in order to preserve essential revenue, they may properly bear a tax of not less than 66⅔ per cent. It is in fact generous treatment to reduce the former tax by a half. That recognises the point made about exports but when we come to curtains and upholstery fabrics in the cheaper ranges, we must remember that they were first taxed at 33⅓, and last Autumn raised to 50 per cent., and now we have gone the wrong way, from the point of view of both the revenue and the housewife, in raising the tax to 66⅔ rather than dropping it to 33⅓ per cent. Fabrics of that kind with 66⅔ Purchase Tax added are not worth the money.
This particularly affects people in the lower income groups because they just cannot buy the goods, and generally they have been in that position for several years. In the main they are the people who, for reasons only too well known, could not afford to buy before the war, and I submit that if some means can be found of sub-dividing these fabrics according to weave, or in some way which will indicate price and quality, and the 66⅔ is retained for the heavier, more expensive range while the lower ranges are reduced to 33⅓ it will meet the point I have been putting and, at the same time, it will not reduce the total revenue from the tax in any way. I hope, therefore, that while the Chancellor cannot accept the Amendment in its present form, he will say that he will look at it before the next stage of the Bill and see if some sub-division can be made.
I should like to put one point to the Chancellor and, if he disagrees, I hope he will say so because it is fundamental to the Committee that this matter should be settled. It is this: in producing for the export market a commodity which relies on its workmanship or on its creative design, the important factor is a healthy home market; that is to say, I am absolutely certain that it is because the British public in the past have been fastidious as to what they want, that we still have this great demand abroad—for how long, I am not certain—for really high quality goods which come into this category. I hope that the right hon. and learned Gentleman agrees with me on that. He must know that many of our friends abroad who wish to buy our goods are today deploring the fact that there is a certain decline in quality, and I hope that the Paymaster-General and the Chancellor will accept the fact that quality cannot be planned centrally by a Government. It is, in the final analysis, the British consumer who will determine that, and who will determine also the success of the export drive.
I feel that this matter is left in a most unsatisfactory situation by the information which the Committee has been given so far by the Government, and I hope that the matter will be made very much clearer before the Committee parts with this Amendment. The first question to which I think the Committee is entitled to have an answer is to the suggestion made from these benches that there is substantial over-stocking at present in the type of commodity referred to. Is that so? Is it agreed that there is at present substantial over-stocking? The second point to which we are entitled to have an answer is whether it is agreed that at the moment there is a tendency to change over to the manufacture of utility goods.
If that is the case, and if it is true that there is over-stocking, then the Government should admit frankly those two facts and say to the Committee that they want this rate of duty purely in order to get the revenue. If that is the position, it is capable of being understood at all events, whether or not it meets with our agreement, but we should have some frankness on the matter as to whether the Government admit these substantial points which have been put forward from both sides of the Committee about the unsatisfactory state of affairs with regard to various types of fabric mentioned in this Amendment.
Of course, the speech of the hon. Member for Taunton (Mr. Collins) illustrates the difficulty of the Opposition in regard to these matters, because whenever we have brought forward an Amendment dealing with rather a narrow range of goods the point has been made against us, why not let in all sorts of other goods of a similar type? Now, when we bring forward a fairly wide Amendment, the point is taken that it is far too wide and it should apply only to a rather narrow selection of materials. The Government cannot have it both ways all the time, and this is a case in which we are entitled to some much more detailed explanation than we have had yet.
9.15 p.m.
If the case of the Government is that they must have this rate of Purchase Tax in order to ensure the revenue. I think the right hon. and learned Gentleman would be well advised to consider the law of diminishing returns. I do not believe that in the present state of affairs people will go on paying the sort of prices they will have to pay if Purchase Tax remains at this rate. Having consideration to the Revenue, I am not at all sure that we should not have regard to the law of diminishing returns. The Chancellor has issued great exhortations to manufacturers to reduce prices. I remind him that example is better than precept, and if he reduces the rate of Purchase Tax on this selection of goods it will have the effect of reducing prices and enabling people to keep down the cost of living. The Committee has been dealt with in a most unsatisfactory manner so far and I ask the Government to state their position more clearly. If they do not do so, I hope that my hon. Friend will take the matter to a Division.
Should we not have more information rather than taking up the time of the Committee by
going through the Lobbies? Is it not possible for the Paymaster-General to reply more fully, as he has entirely ignored the speech of my hon. and gallant Friend the Member for Macclesfield (Air-Commodore Harvey) who comes from a constituency intimately concerned with this matter and who put forward some cogent arguments?
Before the Question is put, may I appeal to the right hon. and learned Gentleman to give us a little more light on this matter. Out of the discussion it is clear that by inadvertence the Amendment has been more widely drawn than the Paymaster-General can agree with or would give effect to and he also said that it was not possible to put some of these goods in separate categories. But that is exactly what was done prior to this Budget. Pile fabrics and woven-figured fabrics were played about with and reduced and increased as a category by themselves on a number of occasions. The hon. Gentleman gave me some encouragement, and that is why I appeal to him to make his words clearer, when he said that effect could not be given to this particular proposal. Has he then in mind considering before the Report stage certain categories more limited than the wide range covered by the Amendment, something less widely drawn to which he could give it?
No, we have not in connection with any part of this category. If there are to be remissions we feel there are much more reasonable remissions which can be made than in this category.
Question put, "That the word 'Second' stand part of the Schedule."
The Committee divided: Ayes, 283; Noes, 106.
Division No. 190.] AYES. [9.20 p.m Acland, Sir Richard Battley, J. R. Brown, T. J. (Ince) Adams, Richard (Balham) Bechervaise, A. E. Bruce, Maj. D. W. T. Adams, W. T. (Hammersmith, South) Benson, G. Burden, T. W. Allen, A. C. (Bosworth) Beswick, F. Butler, H. W. (Hackney, S.) Allen, Scholefield (Crewe) Binns, J. Carmichael, James Alpass, J. H. Blackburn, A. R. Castle, Mrs. B. A. Anderson, A. (Motherwell) Blenkinsop, A. Chamberlain, R. A. Anderson, F. (Whitehaven) Blyton, W. R. Champion, A. J. Attewell, H. C. Boardman, H. Chetwynd, G. R. Attlee, Rt. Hon. C. R. Bottomley, A. G. Cluse, W. S. Austin, H. Lewis Bowden, Fig. Offr. H. W. Cobb, F. A. Awbery, S. S. Bowles, F. G. (Nuneaton) Cocks, F. S. Ayles, W. H. Braddock, Mrs. E. M. (L'pl, Exch'ge) Coldrick, W. Ayrton Gould, Mrs. B. Braddock, T. (Mitcham) Collindridge, F. Baird, J. Brook, D. (Halifax) Colman, Miss G. M. Barstow, P. G. Brooks, T. J. (Rothwell) Comyns, Dr. L. Barton, C. Brown, George (Belper) Cooper, Wing-Comdr. G Cove, W. G. Jones, D. T. (Hartlepool) Ranger, J. Crawley, A. Jones, P. Asterley (Hitchin) Rankin, J. Cripps, Rt. Hon. Sir S Keenan, W. Rees-Williams, D. R. Daggar, G. Kenyon, C. Reid, T. (Swindon) Daines, P. King, E. M. Rhodes, H. Dalton, Rt. Hon. H. Kinghorn, Sqn.-Ldr. E. Richards, R. Davies, Edward (Burslem) Kinley, J. Ridealgh, Mrs. M. Davies, Ernest (Enfield) Kirkwood, Rt. Hon. D. Roberts, Goronwy (Caernarvonshire) Davies, Harold (Leek) Lang, G. Robertson, J. J. (Berwick) Davies, Haydn (St. Pancras, S.W.) Lawson, Rt. Hon. J. J. Rogers, G. H. R. Davies, R. J. (Westhoughton) Lee, F. (Hulme) Ross, William (Kilmarnock) Davies, S. O. (Merthyr) Leonard, W. Royle, C. Deer, G. Leslie, J. R. Sargood, R. Delargy, H. J. Lewis, J. (Bolton) Scollan, T. Diamond, J. Lewis, T. (Southampton) Sharp, Granville Dodds, N. N. Lindgren, G. S. Shawcross, C. N. (Widnes) Donovan, T. Lipton, Lt.-Col. M. Shawcross, Rt. Hn. Sir H. (St. Helens) Driberg, T. E. N Logan, D. G. Silverman, J. (Erdington) Dugdale, J. (W. Bromwich) Longden, F. Silverman, S. S (Nelson) Dumpleton, C. W. Lyne, A. W. Simmons, C. J. Durbin, E. F. M. McAdam, W. Skinnard, F. W. Ede, Rt. Hon. J. C. McAllister, G. Smith, C. (Colchester) Edwards, Rt. Hon. Sir C. (Bedwellty) McEntee, V. La T Smith, H. N. (Nottingham, S) Edwards, John (Blackburn) McGhee, H. G. Solley, L. J. Edwards, N. (Caerphilly) McGovern, J. Soskice, Sir Frank Edwards, W. J. (Whitechapel) Mack, J. D. Sparks, J. A. Evans, Albert (Islington, W.) McKay, J. (Wallsend) Stewart, Michael (Fulham, E.) Evans, E. (Lowestoft) Mackay, R. W. G. (Hull, N.W.) Stress, Dr. B. Evans, John (Ogmore) McKinlay, A. S. Stubbs, A. E. Ewart, R. Maclean, N. (Govan) Swingler, S. Fairhurst, F. McLeavy, F. Sylvester, G. O. Farthing, W. J. Macpherson, T. (Romford) Symonds, A. L. Fernyhough, E. Mainwaring, W. H. Taylor, H. B. (Mansfield) Fletcher, E. G. M. (Islington, E.) Mallalieu, E. L. (Brigg) Thomas, D. E. (Aberdare) Follick, M. Mallalieu, J. P. W. (Huddersfield) Thomas, I. O. (Wrekin) Foot, M. M. Mann, Mrs. J. Thurtle, Ernest Forman, J. C. Manning, C. (Camberwell, N.) Tiffany, S. Fraser, T. (Hamilton) Manning, Mrs. L. (Epping) Titterington, M. F. Freeman, Peter (Newport) Marquand, H. A. Tolley, L. Gaitskell, Rt. Hon. H. T. N Marshall, F. (Brightside) Tomlinson, Rt. Hon. G Gallacher, W. Mathers, Rt. Hon. George Ungoed-Thomas, L Ganley, Mrs. C. S. Mellish, R. J. Viant, S. P. Gibbins, J. Messer, F. Walkden, E. Gibson, C. W. Middleton, Mrs. L Walker, G. H. Gilzean, A. Mitchison, G. R. Wallace, H. W. (Walthamstow, E.) Goodrich, H. E. Monslow, W. Warbey, W. N. Gordon-Walker, P. C. Moody, A. S. Watkins, T. E. Greenwood, A. W. J. (Heywood) Morley, R. Watson, W. M Grey, C. F. Morgan, Dr. H. B. Weitzman, D. Griffiths, D. (Rother Valley) Morris, Lt.-Col. H. (Sheffield, C.) Wells, P. L. (Faversham) Griffiths, W. D. (Moss Side) Morris, P. (Swansea, W.) Wells, W. T. (Walsall) Guy, W. H. Morrison, Rt. Hon- H. (Lewisham, E.) West, D. G. Haire, John E. (Wycombe) Mort, D. L. Westwood, Rt. Hon. J Hall, Rt. Hon. Gtenvil Moyle, A. Wheatley, Rt. Hn. J. T. Edinb'gh. E) Hamilton, Lieut.-Col. R. Murray, J. D. White, H. (Derbyshire, N.E.) Hannan, W. (Maryhill) Naylor, T. E. Whiteley, Rt. Hon. W Hardy, E. A. Neal, H. (Claycross) Wigg, George Harrison, J. Nichol, Mrs. M. E. (Bradford, N.) Wilcock, Group-Capt. C. A. B. Hastings, Dr. Somerville Nicholls, H. R. (Stratford) Wilkes, L. Henderson, Rt. Hn. A. (Kingswinford) Noel-Buxton, Lady Wilkins, W. A. Henderson, Joseph (Ardwick) O'Brien, T. Willey, O. G. (Cleveland) Herbison, Miss M. Oliver, G. H. Williams, D. J. (Neath) Hobson, C. R. Orbach, M. Williams, J. L. (Kelvingrove) Holman, P. Paget, R. T. Williams, R. W. (Wigan) Holmes, H. E. (Hemsworth) Paling, Will T. (Dewsbury) Williams, Rt. Hon. T. (Don Valley) Horabin, T. L. Palmer, A. M. F. Williams, W. R. (Heston) House, G. Parker, J. Willis, E. Hoy, J. Parkin, B. T. Wills, Mrs. E. A. Hubbard, T. Paton, Mrs. F. (Rushcliffe) Wise, Major F. J Hudson, J. H. (Ealing, W.) Paton, J. (Norwich) Woods, G. S. Hughes, Emrys (S. Ayr) Pearson, A. Wyatt, W. Hughes, Hector (Aberdeen, N.) Peart, T. F. Yates, V. F. Irvine, A. J. (Liverpool) Perrins, W. Young, Sir R. (Newton) Irving, W. J. (Tottenham, N.) Piratin, P. Younger, Hon. Kenneth Isaacs, Rt. Hon. G. A. Poppiewell, E Jay, D. P. T. Porter, G. (Leeds) TELLERS FOR THE AYES: Jeger, G. (Winchester) Proctor, W. T. Mr. Snow and Jeger, Dr. S. W. (St. Pancras, S.E.) Pursey, Cmdr. H Mr. George Wallace. Johnston, Douglas Randall, H. E.
NOES. Agnew, Cmdr. P. G. Beamish, Maj. T. V. H. Boyd-Carpenter, J. A. Amory, D. Heathcoat Boles, Lt.-Col. D. C. (Wells) Bracken, Rt. Hon. Brendan Astor, Hon. M. Bowen, R. Braithwaite, Lt.-Comdr. J. G Buchan-Hepburn, P. G. T. Hurd, A. Renton, D. Carson, E. Hutchison, Lt.-Cm. Clark (E'b'rgh, W.) Roberts, Emrys (Merioneth) Challen, C. Hutchison, Col. J. R. (Glasgow, C.) Roberts, W. (Cumberland, N.) Channon, H. Jarvis, Sir J. Ropner, Col. L. Clarke, Col. R. S. Jennings, R. Sanderson, Sir F. Conant, Mai. R. J. E. Keeling, E. H. Scott, Lord W. Cooper-Key, E. M. Law, Rt. Hon. R. K. Shepherd, W. S. (Bucklow) Corbett, Lieut.-Col. U. (Ludlow) Lennox-Boyd, A. T. Smiles, Lt.-Col. Sir W. Crosthwaite-Eyre, Col. O. E. Lloyd, Selwyn (Wirral) Smith, E. P. (Ashford) Cuthbert, W. N. Low, A. R. W. Smithers, Sir W. Darling, Sir W. Y. Lucas, Major Sir J. Spence, H. R. Davies, Rt. Hn. Clement (Montgomery) McCorquodale, Rt. Hon. M. S. Stoddart-Scott, Col. M. De la Bère, R. McFarlane, C. S. Sutcliffe, H. Digby, S. W. Mackeson, Brig. H. R. Taylor, C. S. (Eastbourne) Dodds-Parker, A. D. Maclean, F. H. R. (Lancaster) Taylor, Vice-Adm. E. A. (P'dd't'n, S.) Drayson, G. B. Macpherson, N. (Dumfries) Thornton-Kemsley, C. N. Drewe, C. Maitland, Comdr. J. W. Touche, G. C. Dugdale, Maj. Sir T. (Richmond) Manningham-Buller, R. E. Turton, R. H. Duthie, W. S. Marples, A. E. Vane, W. M. F. Eccles, D. M. Marshall, D. (Bodmin) Wadsworth, G. Fletcher, W. (Bury) Marshall, S. H. (Sutton) Wakefield, Sir W. W. Fraser, Sir I. (Lonsdale) Moore, Lt.-Col. Sir T. Wan, Sir G. S. Harvie Fyfe, Rt. Hon. Sir D. P. M. Morris, Hopkin (Carmarthen) Wheatley, Colonel M. J. (Dorset, E.) Gage, C. Neven-Spence, Sir B. White, Sir D. (Fareham) Galbraith, Cmdr. T. D. Nield, B. (Chester) Williams, C. (Torquay) George, Lady M. Lloyd (Anglesey) Noble, Comdr. A. H. P. Williams, Gerald (Tonbridge) Glyn, Sir R. Orr-Ewing, I. L. Willoughby de Eresby, Lord Gomme-Duncan, Col. A. Osborne, C. York, C. Granville, E. (Eye) Peake, Rt. Hon. O. Young, Sir A. S. L. (Partick) Grimston, R. V. Peto, Brig. C. H. M. Hannon, Sir P. (Moseley) Pitman, I. J. TELLERS FOR THE NOES: Harvey, Air-Cmdre. A. V. Poole, O. B. S. (Oswestry) Mr. Studholme and Hope, Lord J. Rayner, Brig. R. Major Ramsay. Howard, Hon. A. Reid, Rt. Hon. J. S. C. (Hillhead)
9.30 p.m.
I beg to move, in page 64, line 37, at the end to insert:
The basic industries over a large part of this area are agriculture and fishing. For geographical and geological reasons the possibility of developing the agricultural industry are distinctly limited, and for the same reasons it is almost impossible to locate any manufacturing industries in a large part of that area. For those reasons, there is very little alternative employment in the Highlands and Islands outside those two main industries of agriculture and fishing, and that is why it is so vitally important to the Highlands and Islands that everything possible should be done to develop the ancillary industries of the type which fits in with the main ustries—industries like hand-knitting, lobster fishing and hand-loom weaving, the subject of this Amendment.
I believe that is the only way by which we can put an end to the constant draining away of the population which has gone on for generations and which is going on at the present day. This draining away leads to depopulation and the presence of an altogether excessive number of elderly people in the community living on old age pensions and remittances from their sons and daughters who have been forced to leave their native land. Hand-loom weaving fits in very well indeed with a community of smallholders, but the story of hand-loom weaving in recent years has been a very sad one, certainly so far as my own constituency, Orkney and Shetland, is concerned, and I think that also applies to wider areas. During 1946 and 1947 everywhere looms were standing idle because the weavers could not get sufficient yarn, and yet all the time quite enough wool was being produced in the Islands to meet all their needs for weaving. Unfortunately, much of the wool was sent away and never came back. It was mixed with other less valuable kinds of wool and turned into articles which were ultimately sold as Shetland articles, although they were not produced there and brought no benefit to the Islands.
At that time, there was an unprecedented demand for hand-weaving, and they were receiving many orders, and hundreds of thousands of orders from all over the world were being turned down during the year, and when the yarn did become available in a greater quantity the next difficulty was the lack of export permits. Now that the wool is available and export permits are being granted, the export market has vanished completely and the only hope left to the hand-loom weavers is the home market. But the hand-woven tweed is a very expensive article and the addition of the Purchase Tax has simply made the price prohibitive. That was so with the old rate of 33⅓ Per cent. and the result was complete stagnation in the hand-loom weaving industry. Looms are idle and men unemployed. Wherever I turn I get the same kind of evidence about this. There is an organisation known as the Highland Home Industries, a non-profit making concern. Their warehouses are choked and they can take no more because they cannot sell it.
This is entirely due to the price and the old rate of tax is responsible for this state of affairs. I get the same story from the Shetland Crofters and Weavers Ltd., which is a co-operative organisation, and one merchant recently told me he had had orders cancelled for 242 rolls of tweed in the home market. That represents orders worth £6,800, and that was when Purchase Tax was at the old rate. If the industry was strangled when the Purchase Tax was 33⅓ per cent., what hope can there be of reviving it when the Purchase Tax is doubled?
What do the Government gain by this? That is what I want to know. They lose Purchase Tax, they lose Income Tax; they have to pay unemployment benefit; and in the end they lose some very good citizens, who will be forced to leave the country. The only people who get anything out of this are officials. I do think the Chancellor ought to treat the hand-loom industry in exactly the same way as he is treating the hand-knitting industry, and exempt it from Purchase Tax altogether. It will be of benefit to nobody if this ancillary industry is destroyed, and once it is destroyed it will be very difficult to build up again.
I support the Amendment. I appeal to the Chancellor to consider the position of those hand-loom weavers in the Hebrides and in my own native Islands of Shetland. I want him to bear in mind that many of the men who served their country in the war put their gratuities into the purchase of hand-looms. They hoped their ventures would ensure them a livelihood. But what has happened? Purchase Tax at 66⅔ has dashed their hopes to the round. They cannot do sufficient export trade to keep their looms going. Therefore, they have to depend on the home market. Potential customers will not pay the price that this tax at 66⅔ imposes. As the hon. Member for Orkney and Shetland (Sir B. Neven-Spence) so well asked, What does this mean to the Government? Loss of trade will mean loss of revenue, and if these men are put out of business they will have to appeal to public assistance. Therefore, the Government lose on both hands. To my mind there seems no sense in imposing a tax that kills a man's livelihood.
This tax goes further than even the crofter class. A firm in a border town engaged in hand-loom weaving has been compelled to discharge workers within the past fortnight because of the decline in sales. The export trade has deteriorated. I have a letter here which I wish to quote. It says:
We have already shown, I think, in the earlier Amendment that we put down to exempt hand-knitted goods altogether, our sympathy with the aim and purpose of the mover of this Amendment. We think that that will go a long way to help the producers in the Shetlands, and, on the whole, as between hand-knitted and hand-woven goods, we are inclined to think that the hand-knitted are the more important from every point of view. We also found, when we came to analyse this matter, that, whereas it is administratively practical to make this concession in the case of hand-knitted goods, there are very great practical difficulties, which we cannot, at present, see our way to overcome, in the case of the hand-woven goods. I would like to tell the Committee what are those practical difficulties.
The first is that it would not be possible to confine any exemption or concession to goods of this type produced in the Shetlands. We would have to extend the concession to similar goods produced in any part of the United Kingdom, and, as a result of the various trade treaties, we would also be compelled to extend it to imported goods. [HON. MEMBERS: "Why?"] Because, unfortunately, the nature of the trade treaties approved by this House would compel us to do that. The result of that would be that we should have to make a concession over a field very much larger than the production which we wish to assist.
Can the hon. Gentleman say what are the trade treaties to which he has referred? He is explaining a matter of very considerable importance, and we would like to know what are those trade treaties.
I cannot give hon. Members the full details now but there are treaties which would affect this issue. I was going to say that, secondly, as I think hon. Members will know, most of the smaller tailors and dressmakers are unregistered and pay Purchase Tax on the cloth which they buy, instead of on the garments which they sell. Therefore, if we want to exempt the tax on cloth, garments made of tweeds coming from the smaller tailors would escape tax, whereas garments made by the larger registered tailors would not. That would give rise to an anomaly which would, I think, force one to extend the concession to all the garments made by the larger tailors.
The third difficulty, which I think, presents probably the most serious obstacle, is that many machine-made tweeds resemble the hand-made tweeds so closely both in texture, in price and in quality that it would be very difficult, if not impossible, to exempt one without exempting the whole of the larger class. Therefore, I am afraid that we are faced with a situation in which, in order to give assistance to this small class of products which we would wish to do, as we have in the case of knitted wear, we should be compelled to grant it over a large field which would involve us in a serious loss of revenue.
I have put to the Committee quite frankly what the difficulty is, and I would not like to mislead the Committee into thinking that we see our way round his difficulty at the moment when, in fact, we do not. We do not believe that the effect of paying this tax would be to kill this industry, as some hon. Members have suggested, or anything approaching such a serious effect as that. If we should see our way to overcoming these difficulties by way of isolating the product which the Committee desires to assist, without all these repercussions, we would certainly consider doing so.
9.45 p.m.
The reply of the Economic Secretary is wholly unsatisfactory. It is a miserable reply, and one unworthy of the statesmanship which we expect from Members on the Government Front Bench. We are dealing here with this splendid, hardy people in the Shetlands, who are engaged in a most interesting industry which, over the years, has developed a character of its own; an industry whose products have been in great demand all over the world in more favourable circumstances. They now find themselves in extreme difficulties, but His Majesty's Administration refuses to make this small concession which would enable the industry to be carried on with a measure of success.
Here again we find ourselves up against the difficulties which arose at Geneva. We have been lending ourselves to international obligations which will cripple and murder a Scottish industry in these islands. I am getting tired of hearing these excuses made from the Government Front Bench. Here we have a splendid body of people in these islands carrying on this industry for years and years. I myself have worn tweed made in the Shetlands; I was very proud to wear that dress in my young days when I used to drive over the horizon to a ball. Yet the Economic Secretary lends himself to what is really the murder of an interesting enterprise in the Shetlands. His excuses are wholly unacceptable to this side of the Committee, and I hope that we shall divide on this Amendment.
I should like to support my hon. Friend the Member for Sedge-field (Mr. Leslie). I would remind the Government Front Bench that there is nothing to which more lip-service has been paid than the reversal of the process, which has gone on for generations, of the depopulation of Scotland, and especially of the Highlands and Islands. This Tax on hand-woven tweeds is bound to have the effect of increasing that process of depopulation. I have watched these hand-weavers at work, and while the countryside is very beautiful, they work in poverty stricken surroundings. It is proposed to impose a 66⅔ per cent. Purchase Tax on the result of their handicraft. Coming from the Highlands and Islands down to the City of Glasgow, there has recently been the ramp known as "buy or quit." Enormous sums are being charged in respect of the sale of property. Why is there no Purchase Tax on that?
If it is desired to get this Purchase Tax without imposing hardships on hard-working peasant people, let the 66⅔ tax be removed from the hand-woven tweeds made in the Highlands and Islands, and take 66⅔ off the purchase price of all property that is changing hands in Glasgow at the present time.
The hon. Member cannot discuss that issue on this Amendment.
I did not expect to get as far as that. I simply wanted to bring out that contrast. I hope that the Chancellor and his associates will consider that and withdraw this tax on hand-woven tweeds. I am sorry to say that if there is a Division, however unsatisfactory the statement of the Economic Secretary may have been, my colleague and myself will not be able to support the Amendment in the Lobby.
The Economic Secretary used the expression that his colleagues had very carefully analysed this situation. In what light and from what angle? This is an important instance as I will try to show, of the position likely to arise in this country. The Government have analysed this small industry and are overwhelmed with the arguments that administrative difficulties will stop them from saving an industry which is in jeopardy because the export market has dried up. We see on every single side today—and everybody on both sides of the Committee knows perfectly well—that the export markets are drying up.
Does the Economic Secretary really mean to tell the Committee and the country that their machine, their ideas and their hidebound lack of planning are such that as all our industries, including the larger ones, in turn, get into the same situation as this particular industry, we shall have the same ridiculous and inadequate answer, that administrative difficulties prevent swift action being taken? The only way to safeguard those industries, as they fall into the zone of jeopardy one after another, is by having sufficient flexibility of action and casting aside out-of-date preconceived notions to deal with the matter in a common-sense way. The situation has not been dealt with in a common-sense way.
In my time I have been what I might call a large user of this type of tweed. I would like to controvert the argument of the Economic Secretary—who also takes an economic amount of cloth for his suit—when he says, on the question of quality, that the hand-loom material is being imitated and that there is confusion between the two. That is not so. Anybody who knows, and has a respect for quality in any way, knows that that argument is entirely false. Anyone who thinks differently can go to any of the export countries and see whether that is true. This is one of the very worst instances of confusion we have ever had. The answers of the Economic Secretary did not go so far as to say whether any of the treaties concerned had been reexamined. If they had been, his memory must be overtaxed; he must be totally unable to say what particular treaties were being used.
I can assure the hon. Member for Bury (Mr. W. Fletcher) that the treaties in question included not merely the recent general agreement on tariffs and trade at Geneva but also the trade agreement of 1938 with the United States, for which, as he knows, this Government were not responsible.
How much of this product comes from the United States?
Those treaties do include the Geneva one, on the admission of the Economic Secretary, as well as those which took place before and those which have followed since. If the position is to be regarded in the light that, when we find ourselves in a precarious position over this and other industries as they fall into the danger zone, we cannot take swift action to save ourselves, it is about time the Government came out and enabled us to make good our position, as the other parties to the treaties all over the world are doing for their own benefit. This is one of the most miserable instances of a lack of foresight, imagination and efficiency on the part of the Government that I have ever seen.
I think the hon. Member for Orkney and Shetland (Sir B. Neven-Spence) by generously changing his original Amendment to hand-woven instead of Shetland tweeds, may have run into some difficulty. Can the Economic Secretary tell us whether it is possible to describe the speciality products of hand-woven tweeds of the Islands of Harris and Lewis in such a way that there is no possibility of their being matched by any imports whatever? Surely that is not beyond the capacity of the Treasury and is the right way to attack the question. No one can say that these tweeds cannot tie distinguished: they look different, smell different and are quite different. They are absolutely distinctive. One of the reasons why the Treasury have run into this difficulty is that they have raised the Purchase Tax on other tweeds to such an enormous extent that it is beginning to make it extremely difficult and troublesome to distinguish between Highland and other tweeds. This enormous difference is justifiable if for no other reason than to enable the Highlands to get going again, and as the hon. Member for West Fife (Mr. Gallacher), with whom I do not often agree, has said, it is absolutely essential that the Highlands should be given this type of preference.
One wonders just what has come over this wretched Government. In 1945 they got in for the purpose of looking after the poor and the needy, and here is an opportunity for them to do so. But what have they done about it? A few days ago they tried to throw out any possibility of helping the Empire by refusing our request in regard to Empire tobacco.
On a point of Order. What has this to do with the Amendment?
I do not think the hon. and gallant Member is out of Order.
I would remind hon. Members opposite that you, Mr. Touche, are the Chairman, because there seems to be some confusion. Again, they refer to the Geneva Agreement as the excuse for denying further assistance to our Imperial grown tobacco. Then, on the question of wines, they raised the issue of the agreement with the French, and now they are refusing not only to encourage the ties of Empire but are trying to throw Scotland back into hands of the Nationalists. This decision which has been taken tonight by the Government will be used by every Scottish Nationalist against the unity of England with Scotland. Let me go back to my first remark, that this Government have as a first obligation the care of the poor. Here are the very poorest of the poor, the woman engaged on the loom and the man out fishing. The Government have not done much to help the fishing industry. We have seen fish being thrown back into the sea because markets cannot be found.
We cannot go into the fishing industry.
I am merely using this as an example, and I am sure that you will agree, Mr. Touche, that it is very pertinent to the subject I am debating. For this industry no machinery has to be imported, and therefore, no dollars are involved, which should appeal to this Government, who seem to be dollar crazy. It is a question of everything for dollars, forgetting that there is an internal trade and that the people in this country have to be supported. All they think about is how many pineapples they can import from America. This industry is conducted by the ingenious skill of a hard-working and thrifty people. It demands great physical energy, but it does not demand anything of which the Government are short, except intelligence. I should like to reinforce what my hon. Friend the Member for Orkney and Shetland (Sir B. Neven-Spence) has said, and what a very loved Member from a different part of Great Britain has said in defence of our poor people in Scotland. They have represented a case which no Government with any segacity, honour or decency can refuse, and I am sure that in view of the arguments which have been used and the attacks I have made there is no way out but to accept this Amendment.
10.0 p.m.
I should like to say one word about this very important Amendment. I regret that I was not present at the beginning of the discussion, but I know the facts of the case only too well. I should like to ask those on the Government Front Bench whether they really mean it when they say that they will do everything for the Highlands of Scotland to restore their flourishing conditions. [An HON. MEMBER: "Yes."] One hon. Member says "Yes," but those on the Government Front Bench have not said "Yes," for by everything they have done they prove very clearly that they mean "No." There was this question of petrol, of the Catering and Wages Act for Highland hotels, the Purchase Tax on this material and several other things, every one of which makes it plain that the minimum is done for Highland industry in Scotland. If the Financial Secretary can deny what I have said, nobody will be more happy than I.
The hon. Member for West Fife (Mr. Gallacher) agrees with me 100 per cent. in this, as I agreed with what he said just now. [ Laughter. ] It may be amusing to hon. Members who are not concerned with this part of the country, but it is not amusing for the, people who live there. [ Interruption. ] I beg hon. Members opposite if they do not understand the problem, at least to listen when they may perhaps learn something. I hope the right hon. Gentleman will reconsider this in the light of the facts of the situation in Scotland today. It is absurd, if I may say so with the greatest respect, to say that there are administrative difficulties which prevent this from being carried into effect. If the Treasury and other Government Departments cannot do it, then they should not be where they are, because it is perfectly obvious that this industry can be protected without muddling it up with any other. If the Financial Secretary cannot give an undertaking that this will be further considered I, for one, will vote for the Amendment in the Lobby.
I should like to say a few words in support of this trade. The domestic industries of the Highlands of Scotland were once capable of maintaining a very hardy race in health and in comfort. Where have those people gone? They have gone abroad largely because of the neglect of their interests by previous Governments. They have gone to Canada, to Australia and to New Zealand, and if it were possible for these domestic industries in the Highlands to be rid of this iniquitous Purchase Tax of 66⅔ which is imposed on their products, there is no doubt whatever that the Scots people in Australia, in Canada and in New Zealand would gladly purchase goods that are manufactured in the Highland crofts of Scotland. I want to support entirely the proposal for the removal of this iniquitous tax and if it goes to a Division I, for one, will vote for its removal.
My hon. Friend the Member for Orkney and Shetland (Sir B. Neven-Spence), in moving this Amendment, said quite explicitly that unless it was accepted the industry in the Shetlands was in serious danger of being killed outright. That was not denied in any way by the Economic Secretary. If he chooses now to get up and deny it, let him do so. The spearhead of the attack of the Government was based on "If this industry will be killed we cannot help it." That is, in effect, what the hon. Gentleman said. If he wants to deny that, let him get up and say so.
I said that the Government did not accept that that would be the effect. That may be the information of the right hon. and learned Gentleman, and obviously he has a great deal of information about this point, but it is not our information. We may be wrong or he may be wrong, but we do not accept it.
The hon. Gentleman may not accept it but it seems obvious that Scotsmen in all parts of the Committee are unanimous on this point. It seems still more obvious that there is no representative of the Scottish Office on the Front Bench to advise the hon. Gentleman. Has the hon. Gentleman got that information from the Scottish Office or from some Englishman who has never been within 500 miles of Shetland? Up to date the case stands uncontradicted by anybody who has any right to contradict that this means the death of an industry if the Government will not give way. It is no good for the Economic Secretary to come along and tell us that some civil servant has advised him that that is not true. Where did he get his advice? Perhaps the hon. Gentleman does not know that there is a Scottish Council for the development of industry. Have they been consulted? They are the people who have been set up to advise the Government on questions of Scottish industry. I challenge the hon. Gentleman. Have they been consulted? [HON. MEMBERS: "Answer."] Plainly, no.
This is typical of the way in which the Treasury treats Scotland. I do not object to the Treasury being a United Kingdom Department provided that it gets its information from somebody who is in a position to advise it properly. The hon. Gentleman will not tell us that he has consulted anybody who is in a position to speak for Scottish industry. Therefore I say that we must proceed to a Division on the footing that the hon. Gentleman is prepared deliberately to kill a Scottish industry for the sake of these technicalities. That is the position which he is going to take up and which he will ask his hon. Friends to take up. It will be interesting to see how many Scottish hon. Members follow me into the Lobby.
rose —
Mr. Rankin.
I want to—
I was addressing the Economic Secretary, Mr. Touche, and I merely gave way when I saw him getting to his feet. Does he want to interrupt? Perhaps not. Let him think it out a little while and see what the answer is. This is a deliberate case of standing by and letting an industry die because of technicalities. Let us see what these technicalities are. Treaties. I have made my views about Geneva plain before and I shall not do it again now. Is Geneva the only thing standing in the way? The only other treaty which the hon. Gentleman could find was that with the United States of America.
Let me ask him two questions about that. In the first place, what have been the imports into this country in the past from the United States of America of hand woven tweed? Secondly, is he prepared just now to make any dollars available for the import of hand woven tweed from that country? That is surely a purely theoretical objection. If it is not, the United States of America have been extremely generous to this country in order to put us on our feet again, and does the hon. Gentleman say that if he went to Washington and said, "Will you facilitate our keeping alive one of our country industries by giving way on this point?" Washington would be so ungenerous that they would say, "No." Of course they would not. This is purely Treasury theory and nothing else.
Let me come to the second point, that there is some technical difference between the small tailor and the big tailor which will stand in the way. Is the hon. Gentleman really going to have it put abroad in the Scottish Highlands and Islands that because of this minor business technicality, an industry must die? Thirdly, this question of resemblance. It may be that he or I, who are not experts, would fail to detect certain weaves one from the other. What do the experts say? Do they say that they cannot detect? The hon. Gentleman knows quite well that Harris tweed is branded, and there would be no difficulty at all about getting every roll of this tweed branded as hand made tweed in the place where it is manufactured. Therefore, that is a purely technical objection. So for the sale of three technical, pettifogging objections the hon. Gentleman stands by and kills an industry.
First, the right hon. and learned Gentleman said that we need not be deterred by theoretical difficulties arising from trade treaties, but we cannot ignore a treaty just by calling it theoretical. Unfortunately, the points which the right hon. and learned Gentle man raised do not exempt us from the treaty even if there were no imports of United States goods—
rose —
May I continue? I intend to speak only for a few moments. The hon. and gallant Member for Perth and Kinross (Colonel Gomme-Duncan) asked me whether the Government were sincere in their intention to revive this industry and to revive industry generally in Scotland. He knows well the figures because I gave them to him in a Debate the other day, and I must say that this Government have done more in 20 months to revive Scotland than the party opposite did in 20 years.
rose —
No, I cannot give way.
I must ask the hon. and gallant Member to sit down unless the Minister is prepared to give way.
I happen to know something about this because I have spent at least three years working on this particular venture, and I think that perhaps I know almost as much about it as the Scottish Council for Industry which the right hon. and learned Gentleman mentioned. The fact is that we have built more factories in the industrial areas of Scotland since the war than the party opposite did in 20 years before the war. As far as this Shetland industry is concerned, the right hon. and learned Gentleman suggested that we had not consulted with the people concerned. We have had many representations from the interests concerned and we have, as I said—and it is no good him denying it because it is true—analysed all the possible practical ways of doing this, which we want to do every bit as much as the right hon. and learned Gentleman.
I said in my first speech that we wished to assist this industry as much as anybody in this House, that we had not been able to find a practical way, but that if we could find a practical way we would do it. Hon. Members have made speeches about dollars and about fish and about a number of things that had nothing to do with the case, but they have not answered my argument; they have called it theoretical and administrative, but they have not shown how it can be done. Therefore, I can say no more now than I said before, that if we are shown how it can be done, we are prepared to do it.
Before the hon. Gentleman sits down may I ask him which is the insurmountable obstacle? Is it the treaty? If it is the treaty, supposing the Government make the hand woven American tweed duty free, they could not let it in. If they are not going to let it in, whether it is duty free or not does not matter. Is it really the small shopkeeper as against the big shopkeeper? If it is not that, let the hon. Gentleman say it. As for resemblance, why cannot we have stamped hand woven tweed? What is the practical objection to that?
rose —
Answer.
Sunk without trace.
Although I have not heard the Debate, I think this is a much more important matter than possibly the Committee appreciates. Scotland is a small country with a population of five million people. The hand-woven tweed industry is a small and, I suppose, in the eyes of the Government, a relatively unimportant one. However, I put it to the Government that if those persons who are engaged in the hand-woven tweed industry have to abandon their task, as they may well have to do, what other calling in the lonely places in which they live and work can they be expected to follow?
10.15 p.m.
This is not the killing of an industry but the killing of the skill of men and women. In this world of mass production and large scale enterprise it might be possible for a great Government to cherish a few of these industries, and this is one of the industries dear and native to the heart of Scotland. I know from commercial experience that it has a remarkable appeal to the United States, Canada and even to Australia.
I think the Minister is not on strong grounds when he tells us that he has studied the question for three years and is as well-informed as the Scottish Industrial Development Council can be. Does he seriously tell us that he knows as much about it as Sir Steven Bilsland or William Murdoch, the President of the Scotttish Trades Union Congress and Deputy-Chairman of that Council? Has he consulted the Scottish banks? There are eight, of which three are engaged in this business, and they are independent banks. Has he consulted the Transport and General Workers' Union who for a considerable time have been engaged in carrying the yarn and the finished products in the Orkneys and Shetlands?
This is a small plea to a great Government. This is a powerful Government with a large majority and this pitiable little plea for the maintenance of a Scottish industry has apparently to go by default. Does not Scotland give enough to the National Economy? Her whisky goes primarily to finding dollars, she is an exporter of coal to the southern part of this island as well as abroad and an exporter of electricity and of fish. Are not these very considerable tributes to pay? I suggest that this is an important matter. There is a discriminating public, and a small but growing trade in Harris and other Scottish tweeds which, once lost, cannot be recaptured. The man who buys a Harris or other Scottish tweed becomes wedded to it and seeks it again if it is possible to get it. If it is impossible to get, the industry is dead and lost for ever. Here is a chance for maintaining an industry. His Majesty's Government are labouring with some success in starting new industries in Scotland and a great amount of money has been spent on factories and Development Areas, but here is an industry which they do not require to start. We ask them to refuse to sign its death sentence but to allow this small industry to grow, to foster it and assure it of a great future.
My hon. Friend says that this tax would not destroy this industry. I wish to ask if he really feels that the tax will be helpful to the industry? I put the point to him, because I am certain he wants to be helpful to the industry. As a Member of the Government he wishes to play his part in another aspect of help which the Government have started on behalf of the Highlands of Scot- land. A little over three years ago the Government appointed a Highlands and Islands Advisory Panel. Its purpose was to try, if not to recreate the life of the islands, to bring new industries to them, and to foster industries already there. If they could not recreate these things, at least they wished to stabilise that life.
I wish to suggest that in inflicting this tax on this industry my hon. Friend is not playing his part, or at least the part he should be playing, in helping the work of the Highlands and Islands Advisory Council. I want him to do that. Therefore, because I would like to see the left-hand of the Government trying to understand what the right hand is doing, I would like my hon. Friend to agree to have another look at this matter. I wish him not to reject this Amendment tonight, but perhaps to be able to give us some helpful result by the Report stage as a result of his reconsideration of the matter.
Surely we are to have some further statement from the Government. There has been a unanimous request from all sides of the Committee—[HON. MEMBERS: "No"]—not a single Scotsman has risen to defend the Government's policy nor is there a single Scotsman sitting on the Front Bench opposite, not one. [HON. MEMBERS: "The Lord Advocate."] We are now favoured with the presence of the Lord Advocate. I challenge the Lord Advocate to support the Government's policy because although it may be news to the Lord Advocate it is certainly not news to the Commitee that supporters of the Government who have spoken have singularly failed so far. The Lord Advocate is learned in the law and as a Scottish Member he has long experience of this matter. He does not come forward like the Economic Secretary, who says, "I know all about this. I studied this for three years, and what do I care what Sir Steven Bilsland thinks or what Murdoch of the T.U.C. thinks. What do I care for the other Members of the other various Scottish boards and bodies which have been set up by the Government, and which have advised them. In three years I have mastered all this."
Let us know what he has mastered. He was asked by my right hon. and learned Friend a very simple question, What is the obstacle? I ask him again. [An HON. MEMBER: "What did you do?"] The Economic Secretary did not answer my right hon. and learned Friend as to what is the obstacle. He does not answer that question yet. He cannot. My right hon. and learned Friend asked him two or three simple questions. He did not answer one of them. My right hon. and learned Friend said, "If the Treaty is an obstacle have you asked that the terms should be modified?" The Economic Secretary rode off on the suggestion that we cannot wave away a treaty. He was asked, "Have you tried to come to a composition list?" There was no answer. He was asked several other specific questions which he did not even try to answer. He not only failed to convince my right hon. and hon. Friends on this side of the Committee, which might be said to be due to their party prejudice—[HON. MEMBERS: "Hear, hear."] Very well. What of the party prejudice of the hon. Members for Govan (Mr. N. Maclean) and Tradeston (Mr. Rankin)? Are we to be told—
The party prejudice?
Surely, the hon. Members for Tradeston and Govan put the case for this Amendment as strongly as any hon. or right hon. Member on this side of the Committee? When I say party prejudice I say their prejudices, if any, are more—
When the right hon. and gallant Gentleman was Secretary of State for Scotland, what did he do about it?
The hon. Member for Govan (Mr. N. Maclean) has been too long in the House to think he can get away with that. We did not impose
this tax, we are not maintaining this tax. The prejudices of the hon. Member for Govan, if any, are in favour of his own Front Bench. The prejudices of the hon. Member for Tradeston (Mr. Rankin), if any, are in favour of his own Front Bench. They turn an attentive, a hopeful, a favourable ear to the arguments advanced by their Economic Secretary. So woefully disappointed were they that one of them has announced his intention of going into the Lobby against his own Government, and the other one addressed the strongest possible plea to the Government to reconsider their decision. That is the measure of the specialist arguments of the Economic Secretary.
That is the measure of any hon. or right hon., or right hon. and learned Member from Scotland who defends the case which is being put up here, with a total lack of success by hon. Members of whom the utmost that any of them can say on his own behalf is that he has given three years thought to the problem. Their attitude is, "We cannot argue with our heads, we will vote with our feet." Tramp, tramp, tramp, the boys are marching. All right, but it goes out to Scotland tonight from here that the Government refused to make a concession to Scotland which was asked for by every Scottish hon. Member who spoke, and was supported by hon. Members from their own side of as long standing and as honourable a record as any hon. Member in this House. Let them have that, and win the Division, if they wish. They will have struck a grave blow at the Highlands and a grave blow at the prestige of their own Government.
Question put, "That those words be there inserted."
The Committee divided: Ayes, 117; Noes, 278.
Division No.191.] AYES. [ 10.27 p.m. Agnew, Cmdr. P. G. Channon, H. Duthie, W. S. Amory, D. Heathcoat Clarke, Col R. S. Eccles, D. M. Assheton, Rt. Hon. R Cooper-Key, E. M. Elliot, Lieut.-Col. Rt. Hon. W. Astor, Hon. M. Corbett, Lieut.-Col. U. (Ludlow) Fletcher, W. (Bury) Barlow, Sir J. Crosthwaite-Eyre, Col. O. E Foster, J. G. (Northwich) Beamish, Maj. T. V. H. Crowder, Capt. John E. Fraser, Sir I. (Lonsdale) Bowen, R. Cuthbert, W. N. Fyfe, Rt. Hon. Sir D. P. M Boyd-Carpenter, J. A. Darling, Sir W. Y. Gage, C Bracken, Rt. Hon. Brendan De la Bère, R. Galbraith, Cmdr. T. D. Braithwaite, Lt.-Comdr. J. G. Digby, S. W. George, Lady M. Lloyd (Anglesey) Buchan-Hepburn, P. G. T Dodds-Parker, A. D. Glyn, Sir R. Byers, Frank Drayson, G. B. Gomme-Duncan, Col A Carson, E. Drewe, C. Granville, E. (Eye) Challen, C. Dugdale, Maj. Sir T. (Richmond) Grimston, R. V. Hannon, Sir P. (Moseley) Mackeson, Brig. H. R. Ropner, Col. L. Harris, F. W. (Croydon, N.) McKie, J. H. (Galloway) Sanderson, Sir F Harvey, Air-Cmdre. A. V. Maclean, F. H. R. (Lancaster) Scott, Lord W. Henderson, John (Cathcart) Maclean, N. (Govan) Smiles, Lt.-Col. Sir W Hogg, Hon. Q. Macpherson, N. (Dumfries) Smith, E. P. (Ashford) Howard, Hon. A. Maitland, Comdr. J. W. Spence, H. R. Hughes, Emrys (S. Ayr) Manningham-Buller, R. E Stoddart-Scott, Col. M Hurd, A. Marsden, Capt. A. Sutcliffe, H. Hutchison, Lt.-Cm. Clark (E'b'rgh, W.) Marshall, D. (Bodmin) Taylor, C. S. (Eastbourne) Hutchison, Col. J. R. (Glasgow, C.) Marshall, S. H. (Sutton) Taylor, Vice-Adm. E. A. (P'dd't'n, S.) Jarvis, Sir J. Moore, Lt.-Col. Sir T. Thorneycroft, G. E. P (Monmouth) Jennings, R. Morris, Hopkin (Carmarthen) Turton, R. H. Keeling, E. H Neven-Spence, Sir B. Vane, W. M. F. Lambert, Hon. G Nield, B. (Chester) Wadsworth, G. Lancaster, Col. C. G Noble, Comdr. A. H. P Wakefield, Sir W. W Law, Rt. Hon. R K Orr-Ewing, I. L Watson, W. M. Legge-Bourke, Maj. E A. H Osborne, C. Watt Sir G. S. Harvie Lennox-Boyd, A. T. Peake, Rt. Hon. O. Wheatley, Colonel M. J. (Dorset, E.) Leslie, J. R. Peto, Brig. C. H. M White, Sir D. (Fareham) Lindsay, K. M. (Comb'd Eng Univ.) Pitman, I J. Williams, C. (Torquay) Lloyd, Selwyn (Wirral) Poole, O. B. S (Oswestry) Williams, Gerald (Tonbridge) Low, A. R. W. Ramsay, Maj. S Willoughby de Eresby, Lord Lucas, Major Sir J. Rayner, Brig. R York, C McCorquodale, Rt. Hon. M S Reid, Rt. Hon. J S. C. (Hillhead) McFarlane, C. S. Renton, D. TELLERS FOR THE AYES: McGovern, J Roberts, Emrys (Merioneth) Mr. Studholme and Major Conant.
NOES. Acland, Sir Richard Davies, Edward (Burslem) Henderson, Joseph (Ardwick) Adams, W. T. (Hammersmith, South) Davies, Ernest (Enfield) Hobson, C. R. Alexander, Rt. Hon. A. V Davies, Harold (Leek) Holman, P. Allen, A. C. (Bosworth) Davies, Haydn (St. Pancras, S.W.) Holmes, H E. (Hemsworth) Allen, Scholefield (Crewe) Davies, R. J. (Westhoughton) Horabin, T. L. Alpass, J. H. Davies, S. O. (Merthyr) House, G. Anderson, A. (Motherwell) Deer, G. Hubbard, T. Attewell, H. C. Delargy, H. J Hudson, J. H. (Ealing, W.) Attlee, Rt. Hon. C. R. Diamond, J. Hughes, H. D. (W'lverh'pton, W) Austin, H. Lewis Dodds, N. N Hynd, H. (Hackney, C.) Awbery, S. S. Donovan, T. Hynd, J. B. (Attercliffe) Ayles, W. H. Driberg, T. E. N. Irvine, A. J. (Liverpool) Ayrton Gould, Mrs. B. Dugdale, J. (W. Bromwich) Irving, W. J. (Tottenham, N) Bacon, Miss A. Dumpleton, C. W. Isaacs, Rt. Hon. G. A Baird, J. Durbin, E. F. M. Jay, D. P. T. Barstow, P. G Ede, Rt. Hon. J. C. Jeger, G. (Winchester) Barton, C. Edwards, Rt. Hon. Sir C. (Bedwellty) Jeger, Dr. S. W. (St Pancras, S. E) Battley, J. R. Edwards, John (Blackburn) Johnston, Douglas Bechervaise, A. E Edwards, N. (Caerphilly) Jones, D. T. (Hartlepool) Beswick, F. Edwards, W. J. (Whitechapel) Jones, P. Asterley (Hitchin) Binns, J. Evans, Albert (Islington, W.) Keenan, W. Blackburn, A. R Evans, E. (Lowestoft) Kenyon, C. Blenkinsop, A. Evans, John (Ogmore) King, E. M Blyton, W. R. Evans, S. N (Wednesbury) Kinghorn, Sqn.-Ldr. E. Boardman, H. Ewart, R. Kinley, J. Bottomley, A. G. Fairhurst, F. Lang, G. Bowden, Fig. Offr. H. W. Farthing, W. J Lee, F. (Hulme) Bowles, F. G. (Nuneaton) Fernyhough, E. Leonard, W. Braddock, Mrs. E. M. (L'pl, Exch'ge) Fletcher, E. G. M. (Islington, E.) Lewis, J. (Bolton) Braddock, T. (Mitcham) Foot, M. M. Lewis, T. (Southampton) Bramall, E. A. Forman, J. C Lindgren, G. S. Brook, D. (Halifax) Fraser, T. (Hamilton) Lipton, Lt.-Col. M Brooks, T. J. (Rothwell) Freeman, Peter (Newport) Logan, D. G. Brown, George (Belper) Gaitskell, Rt. Hon. H. T N Longden, F. Brown, T. J. (Ince) Ganley, Mrs. C. S. Lyne, A. W. Bruce, Maj. D. W. T Gibbins, J. McAdam, W Burden, T. W. Gibson, C. W. McAllister, G. Burke, W. A. Gilzean, A. McEntee, V. La T. Butler, H. W. (Hackney, S.) Goodrich, H. E. McGhee, H. G. Chamberlain, R. A Gordon-Walker, P. C. Mack, J. D. Champion, A. J. Greenwood, A. W. J. (Heywood) McKay, J. (Wallsend) Chetwynd, G. R Grey, C F. Mackay, R. W. G. (Hull, N.W.) Cobb, F. A. Griffiths, D. (Rother Valley) McKinlay, A. S. Coldrick, W. Griffiths, W. D. (Moss Side) McLeavy, F. Collindridge, F. Gunter, R. J. Macpherson, T. (Romford) Collins, V. J. Guy, W. H. Mainwaring, W. H. Colman, Miss G. M Haire, John E. (Wycombe) Mallalieu, E. L. (Brigg) Comyns, Dr. L. Hale, Leslie Mallalieu, J. P W (Huddersfield) Cove, W G. Hall, Rt. Hon. Glenvil Mann, Mrs. J. Crawley, A. Hamilton, Lieut.-Col. R Manning, C. (Camberwell, N.) Cripps, Rt. Hon. Sir S. Hannan, W. (Maryhill) Manning, Mrs. L. (Epping) Crossman, R. H. S. Hardy, E. A. Marquand, H. A. Daggar, G. Harrison, J. Marshall, F. (Brightside) Daines, P. Hastings, Dr. Somerville Mathers, Rt. Hon. George Dalton, Rt. Hon. H. Henderson, Rt. Hon. A (Kingwinford) Mellish, R. J Messer, F. Richards, R. Tolley, L. Middleton, Mrs. L Ridealgh, Mrs. M. Tomlinson, Rt. Hon. G Mitchison, G. R Roberts, Goronwy (Caernarvonshire) Ungood-Thomas, L. Monslow, W Robertson, J. J. (Berwick) Vernon, Maj. W. F Moody, A. S Rogers, G. H. R Viant, S. P. Morley, R. Royle, C. Walkden, E. Morgan, Dr. H. B. Sargood, R. Walker, G. H. Morris, Lt.-Col. H. (Sheffield, C) Scollan, T. Wallace, G. D. (Chislehurst) Morris, P. (Swansea, W.) Segal, Dr. S. Wallace, H. W. (Walthamstow, E.) Mort, D. L Sharp, Granville Warbey, W. N Moyle, A. Shawcross, C. N. (Widnes) Walkins, T. E Murray, J. D Shawcross, Rt. Hn. Sir H. (St. Helens) Weilzman, D. Neal, H. (Claycross) Shinwell, Rt. Hon. E. Wells, P. L. (Faversham) Nichol, Mrs. M. E. (Bradford, N.) Silverman, J (Erdington) Wells, W. T (Walsall) Nicholls H. R. (Stratford) Silverman, S. S. (Nelson) West, D. G. O'Brien, T Simmons, G. J. Westwood, Rt. Hon. J. Oldfield, W H Skeffington, A. M White, H. (Derbyshire, N.E.) Oliver, G. H Skinnard, F. W. Whiteley, Rt. Hon. W Orbach, M Smith, C. (Colchester) Wigg, George Paget, R. T Smith, H. N. (Nottingham, S.) Wilcock, Group-Capt C. A. B. Paling, Will T. (Dewsbury) Snow, J. W. Wilkes, L. Palmer, A. M. F Solley, L. J. Wilkins, W. A Pargiter, G. A. Sorensen, R W Willey, F. T. (Sunderland) Parker, J Soskice, Sir Frank Willey, O. G. (Cleveland) Parkin, B. T. Sparks, J. A Williams, D. J. (Neath) Paton, J (Norwich) Stewart, Michael (Fulham, E.) Williams, R. W. (Wigan) Pearson, A Stokes, R. R Williams, Rt. Hon. T. (Don Valley) Pearl, T. F Stubbs, A. E Williams, W. R. (Heston) Perrins, W. Swingler, S Wills, Mrs E. A Platts-Milis, J. F. F Sylvester, G. O Wise, Major F. J Porter, G. (Leeds) Symonds, A. L. Woods, G. S Pritt, D. N. Taylor, H. B. (Mansfield) Wyatt, W. Proctor, W. T Taylor, R. J (Morpeth) Yates, V. F. Pursey, Cmdr. H Thomas, D. E. (Aberdare) Young, Sir R. (Newton) Randall, H. E Thomas, I. O (Wrekin) Younger, Hon Kenneth Ranger, J Thomas, John R. (Dover) Rees-Williams, D. R Thurtle, Ernest TELLERS FOR THE NOES Reid, T. (Swindon) Tiffany, S. Mr. Popplewell and Rhodes, H Titterington, M. F. Mr. Richard Adams.
I beg to move, in page 65, line 18, at the end, to insert:
"( n ) Plain knit, unbleached, all cotton, fabric of loose texture made on a circular machine for single yarns being of a type normally used for the purpose of covering food or cleaning machinery) Plain knit, unbleached, all cotton, fabric of loose texture made on a circular machine for single yarns being of a type normally used for the purpose of covering food or cleaning machinery Exempt."
The object of this Amendment is to take the materials which are described in it out of the 66⅔ per cent. group, in which they are now placed, and to have them exempted. These materials are used entirely for utilitarian purposes. They are used primarily for food coverings and by engineers for cleaning machinery. I suggest that for these reasons it is only right that they should be exempted. The Government have again and again urged industry to reduce prices. One of the ways to enable industry to reduce prices is to reduce the various expenses which it must incur in producing goods. This is a small but necessary cost upon industry. One of the ways to reduce inflation is by reducing the cost of these materials. Now that there is a buyers' and not a sellers' market in the export trade, this is one way to help to retain that trade.
The Chancellor of the Exchequer may very well ask whether it is possible for this to be dealt in a satisfactory manner administratively. I submit that the materials described in this Amendment cannot be used, or adapted, for clothing or for any similar purposes; there is no question of any person buying some of this cloth and using it for any but the specific purpose for which it should be used. That applies to the lighter weights. The heavier fabrics have to undergo compulsory disfiguration in order to comply with the Specification 693, and there is a wide difference between these fabrics and hosiery fabrics. Because of this there should be no difficulty in accepting the Amendment, and I hope that the Chancellor, for the reasons I have stated, will agree to it.
Furthermore, apart from the desirability of helping industry, it is obvious that for the covering of food, something which is hygienic is necessary. This material is the answer. As the Chancellor has said again and again, there is no desire to tax things unnecessarily, especially if those things are needed for industry or for food. I hope that the right hon. and learned Gentleman will remember those points and agree to the Amendment.
I have on the Order Paper an Amendment, which has not been selected, dealing with the more limited range of butter muslin and milk-straining cloths. We are to have a preliminary canter over the whole of the Schedules and I hope that it will be possible to deal with that more limited point on the Report stage. At the moment, I should like to tell the Committee that earlier in the year I had a letter from some of my constituents saying that the tax of 50 per cent. on these cloths constitutes a hardship on the agricultural industry, as well as the housewife who wants to keep her food pure. I could not raise the subject then because the Chancellor's Budget was coming in, and I was horrified to find in that Budget that the Chancellor actually raised the tax by 16 per cent. I claim that there is a strong case for this range of products to be exempted altogether from Purchase Tax. I cannot see why there should be a tax on the raw materials of industry, and this applies, I suppose, to cleaning rags for industry; but on the food production side it is vital that these raw materials should be exempt from tax.
Surely the housewife should be encouraged to keep food as clean and pure as possible. I have a certain amount of medical evidence in support of our argument. Unlike the Economic Secretary to the Treasury, I cannot say that I know British Specification 693, not having studied it over three years, and I cannot say how far my Amendment is a better one than that of my hon. Friend the Member for St. Marylebone (Sir W. Wakefield). It may be that his range is easily discernible; we heard earlier today of difficulties in this field because certain goods could not be easily discerned. It may be that all this range can be excluded, but if that is not possible, then I ask the Chancellor to consider butter muslin and milk straining cloths. It cannot create anomalies if they are selected for exemption, because they are easily discernible. Even the Financial Secretary to the Treasury would not go about draped in butter muslin.
Why "even"?
I said "even" because on an earlier Amendment he said he might as well be seen going about with a child's cap on his head. I though that perhaps in this case he might believe we thought of him going about in butter muslin. This raw material is used purely for the sake of cleanliness in industry, and I hope the Chancellor will accept it.
10.45 p.m.
We entirely agree that commodities used as raw materials in industry should, if possible, be exempt from tax and that is why the Schedule we are discussing does make provision for exempting large numbers of these things such as bolting cloth, tracing cloth, etc. As one hon. Member admitted, our difficulty, frankly, is the difficulty of definition—not to arrive at a definition of the cloth which is quite satisfactorily defined in the Amendment which the hon. Member for St. Marylebone (Sir W. Wakefield) has moved, but to define the use. Even he has to use the words "normally used" and in his speech he said "primarily used." It is possible that these things can be used for other purposes.
Such as?
Dish cloths. I assure the Committee that those experts who advise us have looked very carefully for a satisfactory definition which might exempt all kinds of fabrics used in industry in similar ways, and they have been unable to find one in this case. I must, therefore, ask the Committee to reject the Amendment.
Once more we get the same argument advanced that because one cannot separate certain items from the major group, therefore one has to tax the lot. That is the most damning argument against Purchase Tax as a whole, but in this case I am surprised to hear, as I have been surprised on each Amendment, that the Government do not advance any argument to show where the balance lies. In the group which the hon. Member for Thirsk and Malton (Mr. Turton) mentioned, butter muslin and milk straining cloths, there is no doubt that a certain amount of that material can be used for other purposes, as is the case with material used for industrial purposes.
In order to analyse properly the effect of this tax, the Treasury ought to be able to work out, and should have worked out, how big a proportion of the materials in question is used for industrial purposes and how much is used for non-industrial purposes. In this case we might have expected from the Paymaster-General a statement showing that the balance of the material used in this group was used by non-industrial users. That would have been a point of substance but we have not on this Amendment, nor on any other Amendment, heard that case advanced.
The case for butter muslin and milk straining cloths to be exempted is unanswerable. In my own constituency, during the last two weeks we have had a conference at which it was pointed out that cases of food poisoning are increasing. Butter muslin is one of the best ways of keeping out the insect which is very prone to carry the various diseases and poisons, namely, the ordinary housefly. This week we have had a report from the committee which deals with improving the cleanliness of milk, and there can be no doubt whatsoever that any means which are available for keeping food clean ought to be used. Yet here we have the Government, not, I agree, imposing the tax, but increasing the tax upon those commodities. I consider that the Government have made no case against this Amendment; they have advanced no reasons why they cannot exempt the whole of this group from the Purchase Tax, and I hope that we shall take appropriate action and divide on this Amendment.
I support this Amendment. I have been trying to think what one can use butter muslin for other than the purpose indicated in the Amendment. I must confess to the Paymaster-General that I have occasionally used a little bit to clean my gun, and once in a while to strain a bottle of port; but that is a tiny use. In a milk-producing district every farmer's wife has to buy butter muslin for her dairy. If we were living in the Victorian age, when curtains were fashionable—people seem not to mind others looking in at their windows nowadays—I suppose it could be used instead of net. I do not know; I am not a woman. However, I hardly think that is a widespread use now. What I do know is that in cheese making, and in dairies generally, everybody has to use this material. Considerable disappointment will be caused if this Amendment, which could not have very great financial importance, is not accepted.
I have one short observation to make in connection with this Amendment, which is that the Opposition have, to some extent, put themselves in a difficulty by referring in the Amendment to the cleaning of machinery. The greater part of this type of material which is used for cleaning material is known as "mutton cloth" which, after cleaning, is used for the purpose. But that is not the primary purpose for which the material mentioned in the Amendment is used.
I wish to reinforce what has been said by my hon. Friends who speak for agricultural constituencies, and have referred specifically to butter muslin. Its use in dairies is, of course, extremely well known; but there is also this factor which is of importance, that in villages and country households where there are no refrigerators it is of immense importance to the housewife that she should be able to cover her food—what she has of it—with butter muslin, which may or may not have been damped beforehand. It is a tremendous help towards the good health of the people in the villages, as well as in the farms. Although I do not think it plays a very large part in urban households, it does play a very considerable part in country life.
There is this to be considered too, that if an article of common use like this is made unnecessarily expensive there is immediately a tendency to use the same cloth again, and again, and again, without properly replacing or washing it, which is itself very unhygienic. I ask the Chancellor not to be deterred by the fact that butter muslin is sometimes used as a substitute for ectoplasm by frustrated and fraudulent mediums, but to give it the benefit of the doubt, or at all events to exclude butter muslin from this tax.
I only want to add one or two words to the appeal which has been made to the Chancellor with regard to the use of this cloth for cleaning machinery. Nobody is more anxious in these days than the Chancellor himself to intensify and expand production in all our large works throughout the country. Every element that enters into the efficiency of machinery employed in production is of importance with regard to the lowering of costs of production. The Chancellor knows well that one of the difficult problems of the times is the cheapening of the prices of competitive articles in foreign markets, and therefore every means of reducing the cost of articles, including the cost of the cleaning of machinery, is of importance. This may be perhaps a small thing to submit, but the Chancellor knows that in large works throughout the country the cleaning of machinery is of first-class importance and helps to keep production at the highest possible level. For these reasons, I put in this plea for making this cloth tax-free in the interests of our vital export plans.
I also would like to add my plea, and I trust that the Chancellor of the Exchequer may make a rather different approach to this matter from that of the Paymaster-General. The argument that the Government have adduced this evening has been: How are we to differentiate between these articles when they are used by different persons for different purposes? I do not see how they can be unduly concerned about that. I believe that the Confederate Army in the American Civil War were dressed in butter muslin, but surely no one suggests that the modern army is going to be dressed in that manner? Is there not a case for this change when it would do something for the great agricultural community? I would like the Chancellor to think about it again, but if he does not do so, I for one will most certainly wish to divide against him.
I think that the Paymaster-General's reply was extremely unsatisfactory. He started off by saying that the Government were entirely sympathetic, but that the difficulty—
I must correct the hon. and learned Gentleman. I said that the Government were sympathetic to the plea that things used for industrial purposes should be examined.
I understand that is what the Amendment says.
And a lot more.
I think that I am not misrepresenting his arguments when I say that he expressed sympathy with the object of the Amendment, and then went on to say that it could not be accepted because of the difficulty of definition, that this cleaning cloth might be used for other purposes, and because of that the legitimate case put forward could not possibly be met. Is it agreed that among these other purposes, this cloth might be used for dish cloths? While the Government are in sympathy with using this cloth for covering food, are we to understand that they are not in sympathy with cleaning the plates on which the food has to go?
The hon. and learned Gentleman should understand that we are not in favour of people being able to buy such things free of Purchase Tax.
Not for the purpose of using them as dish cloths? That is the example he gave. If he has other examples in mind, perhaps he could give them to the Committee; but the purpose he had in mind which prevented this material from being free of Purchase Tax was that it might be used as dish cloths, and therefore people are to pay a tax of 66⅔ per cent. on cloths used for cleaning their plates. That is an argument which is not worthy of serious consideration. What he has not said, and something upon which he has given no indication at all, is the estimated amount of tax which would be lost if this material were exempted. It would be a very trivial amount, and having regard to the valuable purposes to which this material can legitimately be put, a strong case has been made out for this concession.
11.0 p.m.
With regard to butter muslin, which was referred to by the hon. Member for Thirsk and Malton (Mr. Turton), the Paymaster-General has said not a single word, and we must ask that something shall be said about it. There is a strong case for it. I need not repeat the arguments, but in the absence of any statement from the hon. Gentleman or the Chancellor that they will favourably consider exempting butter muslin, and in the absence of any further satisfaction with regard to cleaning cloths used for the purpose of covering food or cleaning the plates, we can only show our disgust at the attitude adopted by the Government in one way.
I do not wish in any way to deter hon. Members opposite from dividing on this Amendment; I am just replying as a matter of courtesy. The Amendment we are debating is concerned with the material known as mutton cloth which, curiously enough, is used for wrapping mutton in and is not used for cleaning machinery except in a subsequent stage after it has wrapped mutton and after it has been washed, when it falls into the category of rags, which are exempt from the tax, so that the cleaning part of this does not therefore arise. Secondly, butter muslin is in itself a very vague expression. The material is a loosely woven fabric, and it can be, and is, used for many other purposes besides making butter, of which unfortunately not a very great quantity is made in this country at the present time, and for straining milk. In all these cases, we have to remember that, however great our desire to assist this or that particular set of people, if we were in each of these cases to say either that we would consider it or give a remission, we should end up on this Schedule, when we have got through the next 112 Amendments, without any assets at all so far as the tax is concerned.
As I said at the beginning, the problem so far as I am concerned, is that there
is a very small possibility of making some adjustment because of the difficulty as to what should be selected for an adjustment, and it is not a question of being able to give away money wholesale on anything as regards which there is a hard case. I presume that all of us would wish that we were in such a state of affairs that we did not need to have any Purchase Tax at all. We would all be much happier for that. However, so far we have all agreed that this money has to be raised. If it is whittled away time after time by concessions here and there, it will be found in the long run that the money cannot be raised.
Can the right hon. and learned Gentleman say what the cost of this concession would be? We ought to have some information on that.
I am afraid that the vagueness of the definition makes it impossible for us to arrive at any ascertainment of the bulk of goods which would be covered by it. This is not a sufficiently precise definition of the particular type of material to enable us to arrive at an assessment of the amount.
Question put, "That those words be there inserted."
The Committee divided: Ayes. 101; Noes, 280.
Division No. 192. AYES. [11.4 p.m Agnew, Cmdr. P. G. Harris, F. W. (Croydon, N.) Osborne, C. Amory, D. Heathcoat Harvey, Air-Cmdre. A. V. Peto, Brig. C. H. M. Assheton, Rt. Hon. R. Henderson, John (Cathcart) Pitman, I. J. Barlow, Sir J. Hogg, Hon. Q. Poole, O. B. S. (Oswestry) Beamish, Maj. T. V. H. Hope, Lord J. Ramsay, Maj. S. Bowen, R. Howard, Hon. A. Rayner, Brig R. Boyd-Carpenter, J. A. Hurt, A. Reid, Rt. Hon. J. S. C. (Hillhead) Bracken, Rt. Hon. Brendan Hutchison, Lt.-Cm. Clark (E'b'rgh, W.) Renton, D. Braithwaite, Lt.-Comdr. J. G. Hutchison, Col. J. R. (Glasgow, C.) Ropner, Col. L. Buchan-Hepburn, P. G. T. Jarvis, Sir J. Sanderson, Sir F. Carson, E. Lambert, Hon. G. Scott, Lord W. Channon, H. Lancaster, Col. C. G. Shepherd, W. S. (Bucklow) Clarke, Col. R. S. Legge-Bourke, Maj. E A. H Smiles, Lt.-Col. Sir W. Cooper-Key, E. M. Lennox-Boyd, A. T. Smith, E. P. (Ashford) Corbett, Lieut.-Col. U. (Ludlow) Linstead, H. N. Smithers, Sir W. Crosthwaite-Eyre, Col. O. E. Lloyd, Selwyn (Wirral) Spence, H. R. Crowder, Capt. John E. Low, A. R. W. Stoddart-Scott, Col. M Cuthbert, W. N. Lucas, Major Sir J. Studholme, H. G. Darling, Sir W. Y. McCorquodale, Rt. Hon. M. S Taylor, C. S. (Eastbourne) De la Bère, R. McFarlane, C. S. Taylor, Vice-Adm. E. A (P'dd't'n. S.) Dodds-Parker, A. D. McKie, J. H. (Galloway) Teeling, William Drayson, G B Maclean, F. H. R. (Lancaster) Thomas, J. P. L. (Hereford) Drewe, C. Macpherson, N. (Dumfries) Thorneycroft, G. E. P. (Monmouth) Dugdate, Maj. Sir T. (Richmond) Maitland, Comdr. J. W. Touche, G. C. Duthie, W. S. Manningham-Butler, R. E. Turton, R. H. Eccles, D. M Marples, A. E. Wakefield, Sir W. W. Elliot, Lieut.-Col. Rt. Hon. W Marsden, Capt. A. Wheatley, Colonel M. J. (Dorset, E.) Fletcher, W. (Bury) Marshall, D. (Bodmin) White, Sir D. (Fareham) Foster, J. G. (Northwich) Marshall, S. H. (Sutton) Williams, C. (Torquay) Fraser, Sir I. (Lonsdale) Moore, Lt.-Col. Sir T. Willoughby de Eresby, Lord Fyfe, Rt. Hon. Sir D. P. M Morris, Hopkin (Carmarthen) York, C. Gage, C. Neven-Spetice, Sir B. Galbraith, Cmdr. T. D. Nield, B. (Chester) TELLERS FOR THE AYES: Grimston, R. V. Noble, Comdr. A. H. P Major Conant and Hanson, Sir P. (Moseley) Orr-Ewing, I. L. Brigadier Mackeson.
NOES. Acland, Sir Richard Freeman, Peter (Newport) Mitchison, G R Adams, Richard (Balham) Gallacher, W. Monslow, W. Adams, W. T. (Hammersmith, South) Ganley, Mrs. C. S. Moody, A S Alexander, Rt. Hon. A. V. George, Lady M. Lloyd (Anglesey) Morley, R. Allen, Scholefield (Crewe) Gibbins, J. Morgan, Dr. H. B Alpass, J. H. Gibson, C. W. Morris, Lt.-Col. H. (Sheffield, C.) Andersen, A. (Motherwell) Gilzean, A. Morris, P. (Swansea, W.) Attewell, H. C. Glanville, J. E (Consett) Mort, D. L. Austin, H. Lewis Gordon-Walker, P. C. Moyle, A. Awbery, S. S. Granville, E. (Eye) Murray, J. D. Ayles, W. H. Greenwood, A. W. J. (Heywood) Neal, H (Claycross) Bacon, Miss A. Grey, C. F. Nichol, Mrs. M. E. (Bradford, N.) Baird, J. Griffiths, D (Rother Valley) Nicholls, H. R. (Stratford) Balfour, A. Griffiths, W. D. (Moss Side) O'Brien, T. Barstow, P. G Gunter, R. J. Oldfield, W. H Barton, C. Guy, W. H. Oliver, G. H. Bechervaise, A. E Haire, John E. (Wycombe) Orbach, M. Beswick, F. Hale, Leslie Paget, R. T. Blackburn, A. R. Hall, Rt. Hon. Glenvil Paling, Will T. (Dewsbury) Blenkinsop, A. Hamilton, Lieut.-Col. R. Palmer, A. M. F. Blyton, W. R. Hannan, W (Maryhill) Pargiter, G. A. Boardman, H. Hardy, E. A. Parker, J. Bowden, Fig. Offr. H. W. Harrison, J. Parkin, B. T. Braddock, Mrs. E. M. (L'pl, Exch'ge) Hastings, Dr. Somerville Paton, J. (Norwich) Braddock, T. (Mitcham) Henderson, Rt. Hon. A. (Kingswinford) Peart, T. F. Bramall, E. A. Henderson, Joseph (Ardwick) Perrins, W. Brook, D. (Halifax) Herbison, Miss M. Piratin, P. Brown, George (Belper) Hobson, C. R. Platts-Mills, J. F. F. Brown, T. J. (Ince) Holman, P. Popplewell, E. Bruce, Maj. D. W. T Holmes, H. E. (Hemsworth) Porter, G. (Leeds) Burden, T. W. House, G. Pritt, D. N. Burke, W. A. Hoy, J. Proctor, W. T. Butler, H. W. (Hackney, S.) Hubbard, T. Pursey, Cmdr. H. Byers, Frank Hudson, J. H. (Ealing, W.) Randall, H. E. Carmichael, James Hughes, Emrys (S. Ayr) Ranger, J. Chamberlain, R. A Hughes, Hector (Aberdeen, N.) Rankin, J. Champion, A. J. Hughes, H. D. (W'lverh'pton, W.) Rees-Williams, D. R. Chetwynd, G. R. Hynd, H. (Hackney, C.) Reeves, J. Cobb, F. A. Hynd, J. B. (Attercliffe) Reid, T. (Swindon) Coldrick, W. Irvine, A. J. (Liverpool) Rhodes, H. Collindridge, F. Irving, W. J. (Tottenham, N.) Richards, R. Collins, V. J. Isaacs, Rt. Hon G. A. Ridealgh, Mrs. M. Colman, Miss G. M. Jay, D. P. T. Roberts, Emrys (Merioneth) Comyns, Dr. L. Jeger, G. (Winchester) Roberts, Goronwy (Caernarvonshire) Cooper, Wing-Comdr. G. Jeger, Dr. S. W. (St. Pancras, S.E.) Robertson, J. J. (Berwick) Cove, W. G. Johnston, Douglas Rogers, G. H. R. Crawley, A. Jones, D. T. (Hartlepool) Ross, William (Kilmarnock) Cripps, Rt. Hon. Sir S. Jones, P. Asterley (Hitchin) Royle, C. Grossman, R. H. S. Keenan, W. Sargood, R. Daggar, G. Kenyon, C. Scollan, T. Daines, P. King, E. M. Segal, Dr. S. Dalton, Rt. Hon. H. Kinley, J. Sharp, Granville Davies, Edward (Burslem) Lang, G. Shawcross, C. N. (Widnes) Davies, Ernest (Enfield) Lee, F. (Hulme) Shawcross, Rt. Hn. Sir H. (St. Helens) Davies, Harold (Leek) Leonard, W. Shinwell, Rt. Hon. E. Davies, Haydn (St. Pancras, S. W.) Lewis, J. (Bolton) Silverman, J. (Erdington) Davies, S. O. (Merthyr) Lewis, T. (Southampton) Silverman, S. S. (Nelson) Deer, G. Lindgren G. S. Skeffington, A. M. Delargy, H. J. Lipton, Lt.-Col. M. Smith, C. (Colchester) Diamond, J. Logan, D. G. Smith, H. N. (Nottingham, S.) Dodds, N. N. Longden, F. Snow, J. W. Donovan, T. Lyne, A. W. Solley, L. J. Driberg, T. E. N. McAdam, W. Sorensen, R. W. Dugdale, J. (W. Bromwich) McAllister, G. Soskice, Sir Frank Dumpleton, C. W. McGhee, H. G. Sparks, J. A. Durbin, E. F. M. McGovern, J. Steele, T. Ede, Rt. Hon. J. C. Mack, J. D. Stewart, Michael (Fulham, E.) Edelman, M. McKay, J. (Wallsend) Stokes, R. R. Edwards, John (Blackburn) Mackay, R. W. G. (Hull, N.W.) Stubbs, A. E. Edwards, N. (Caerphilly) McKinlay, A. S. Swingler, S. Evans, Albert (Islington, W.) Maclean, N. (Govan) Sylvester, G. O. Evans, E. (Lowestoft) McLeavy, F. Symonds, A. L Evans, John (Ogmore) Macpherson, T. (Romford) Taylor, H. B. (Mansfield) Evans, S. N. (Wednesbury) Mainwaring W. H. Taylor, R. J. (Morpeth) Ewart, R. Mallalieu, E. L. (Brigg) Thomas, D. E. (Aberdare) Fairhurst, F. Mallalieu, J. P. W (Huddersfield) Thomas, I. O. (Wrekin) Farthing, W. J. Mann, Mrs. J. Thomas, John R. (Dover) Fernyhough, E. Manning, Mrs. L (Epping) Thurtle, Ernest Fletcher, E. G. M (Islington, E) Marquand, H. A. Tiffany, S. Foot, M. M. Mathers, Rt. Hon George Titterington, M. F. Forman, J. C. Mellish, R. J. Tolley, L. Fraser, T. (Hamilton) Middleton, Mrs. L. Tomlinson, Rt. Hon G Millington, Wing-Comdr E. R Ungoed-Thomas, L. Vernon, Maj. W. F. West, D. G. Williams, J. L. (Kelvingrove) Wadsworth, G. Westwood, Rt. Hon. J. Williams, R. W. (Wigan) Walkden, E. Wheatley, Rt. Hn. J. (Edinburgh, E.) Williams, W. R. (Heston) Wallace, G. D. (Chislehurst) White, H. (Derbyshire, N.E.) Willis, E. Wallace, H. W. (Walthamstow, E.) Whiteley, Rt. Hon. W. Wills, Mrs. E. A. Warbey, W. N. Wigg, George Wise, Major F. J. Walkins, T. E. Wilcock, Group-Capt. C. A. B. Woods, G. S. Walson, W. M. Wilkins, W. A. Wyatt, W. Weitzman, D. Willey, F. T. (Sunderland) Yates, V. F. Wells, P. L. (Faversham) Willey, O. G. (Cleveland) Younger, Hon. Kenneth Wells, W. T (Walsall) Williams, D. J. (Neath) TELLERS FOR THE NOES: Mr. Pearson and Mr. Simmons.
11.15 p.m.
I beg to move, in page 65, line 22, to leave out "Second" and to insert "First."
The Amendment has reference to Group 7, which speaks of plastic sheeting, whether in the piece or in cut lengths such as may be used for garments, tablecloths, soft furnishings, or in similar ways. There has been a tax on articles of this sort up to the present time of 50 per cent., but things have become worse, because the Bill proposes to raise the tax to 66⅔ per cent. I am not suggesting entire exemption, but that the tax should be reduced to 33⅓ per cent. It seems to me that at a time when housewives are having to put up with all sorts of extremities—[HON. MEMBERS: "Hear, hear."]—particularly the difficulty of obtaining cloth needed for curtains, tables, and so on, there is a very good case for this Amendment, even if the Tories support it. Tories do not always have things right. We sometimes perceive from our own experience the difficulties of the women in our own movement. [HON. MEMBERS: "Hear, hear."] It is easy to perceive that I am speaking successfully on their behalf.
We have said sufficient, have we not, about the need to reduce prices? Here is an ordinary commodity that can be useful in the home in all sorts of ways. Though hon. Gentlemen opposite know precious little about such problems, I am glad they understand there is a case for this Amendment. I have a good deal more I could say for the Amendment, but as the hour is late I shall refrain from saying it. [HON. MEMBERS: "Go on."] If one has a case and makes it, one should be content to have made it briefly. I shall leave my case there, asking the Chancellor seriously to consider the proposition.
The hon. Member for West Ealing (Mr. J. Hudson) has made a case, with which we must all have sympathy, for reducing the tax on these materials, but I am afraid that, as my right hon. and learned Friend said a minute or two ago, it is not sufficient, unfortunately, simply to prove it would be a pleasant thing if we could reduce the tax on this or that item. What we have to do tonight is to select those items for which the case is stronger than it is for others, and apply a reduction in those cases. In the instance before us, we find that plastic materials for this purpose compete with cloth, and, therefore, it is necessary that the tax on plastic materials should be the same as it is on cloth, because we have to have regard to the equity and logic of taxation as well as to giving relief to particular classes of consumers. Any concession here would have to include both materials, and were it extended as widely as that, it would involve some appreciable amount of loss to the Revenue. We are not convinced that we ought to select this material for a concession.
I have the greatest possible pleasure in supporting the Amendment moved by the hon. Member for West Ealing (Mr. J. Hudson) There is great satisfaction on this side of the Committee in seeing that wisdom dawns sometimes in hon. Gentlemen opposite. We have had this evening a full manifestation of that wisdom which the hon. Member for West Ealing has so frequently displayed in the House on other subjects which he regards as important. The case he made for the relief of the housewife must command the sympathy of the whole Committee. Hon. Gentlemen and hon. Ladies must feel that the plea is made with sincerity and must appeal to every housewife in the country.
I imagine the electors of Ealing saying tomorrow morning, "What a splendid Member we have for Ealing." The hon. Gentleman has established a position for himself which is peculiarly his own in the party of which he is a member. He is the first really sincere advocate who has stood up and asked that materials necessary for the housewife be made more easy of acquisition. He has done a real service to his constituents; he has done a real service to the Committee; and, I submit, he has done a real service to the country in the Amendment which he has moved.
I also would like to congratulate the hon. Member for West Ealing (Mr. J. Hudson) on the courage which he had in moving this Amendment. Throughout the whole Debate, he is the first Member of the so-called Labour Party, most of whom have never done a stroke, to appeal on behalf of the housewives, in spite of the dark looks from many Members of his own Party, more particularly those not of his own sex.
The hon. Gentleman who answered, so quickly that no one else was allowed to support the small mutiny from behind him, referred to the last Amendment. If my information is correct, there are coupons for cloth, but none for plastics, which means that this Amendment is in an entirely different position from the previous one. If that is so, the Government's argument falls to the ground. If this is material which does not require coupons, then it is not consuming materials badly needed and does not come under the same category as cloth. For that reason, surely it is not so necessary to use this tax to prohibit people from using plastics. I should have thought that was a strong additional argument for putting them on an entirely different basis from cloth. I think that is so, but someone on the Front Bench may be able to contradict me, and if it is not so, they have a new answer to make.
So far as the vast majority of my constituents are concerned, the case for the Amendment lies on the lines of absolute need. One of the great advantages of plastic sheeting is that it is easily washed. I do not know whether I ought to take a practical thing and expose it before the genteel ranks of a Socialist Party, but washing up is a thing which has to take place. These plastics are much easier to wash and take much less soap than tablecloths. In other words, they are an immense saving to the housewife, with whom all of us on this side of the Committee sympathise—and I am glad that we have one recruit on the other side. They do save that kind of washing; and they save the materials in soap, and save a great deal of labour and the use of laundries. They also save coupons.
But I am not concerned only with that side of the matter. There is another side which I expected the hon. Member to mention. It is a small point compared with the housewives, but I did believe that the hon. Member for West Ealing was moving the Amendment for this purpose; namely, that this material, I am informed, is of great use for bars. I do not know whether it is useful in bars or not, but I thought that might be the hon. Member's real reason for moving the Amendment. I notice that he looks pleased. I have evidently an understanding of what is in his mind on this matter.
So far as I am concerned, I am content to rest on the case of the housewives, the saving and the general utility. But there is one other point; it is that where the unfortunate husband is compelled, from time to time, to wash up—and this may apply to the Chancellor of the Exchequer—it would be a great saving to him. As most of us might be in that position from time to time, I ask the Chancellor to have a little pity upon us, and particularly upon those junior Ministers of whom we see pictures in the newspapers from time to time washing up.
I am concerned with one point made by the hon. Member for Torquay (Mr. C. Williams); that is that these plastic substances, to which he referred with enthusiasm, are non-absorbent in character and are quite useless for washing up.
I am sorry if my English is too perfect for the hon. Member for South Edinburgh (Sir W. Darling). I believe that these substances have to be washed up. I was not advocating their use in washing up.
I was under the impression that the hon. Member was still in the realms of butter muslin. This plastic fabric is entirely non-absorbent, and has a shiny surface. It is useful for screens for bathrooms. It has a slight, agreeable opacity, and it is possible to bath behind it with the outline of the figure shown without causing any objection. It is, as the ladies know, not suitable in the main for garments, because it has a cold and somewhat clammy feel- ing, but it is admirably suited for curtains, in the lighter and thinner grades; for tablecloths, and for covers of all kinds, and it has the advantage that it is not made from any imported substances.
I put it to the Economic Secretary, who has given three years' study to the Scottish tweed industry, that he has not given the same amount of time to the alternative to Group 7. He exempts jute fabrics and imported fibres; he exempts felt fabrics, which are imported woollens; he exempts glass fibre fabrics, and tracing cloth, which has a cotton base. He exempts abrasive cloth, and varnished or bitumenised cloth. All these, the housewife should know, are exempt, but this new material, which is helping to bring brightness and lightness to somewhat drab homes, is placed in what I claim is a penal category. I think the hon. Member for West Ealing (Mr. J. Hudson) has been more carefully and accurately briefed than my hon. Friend the Member for Torquay (Mr. C. Williams), and it is a tribute to the hon. Member for West Ealing that his well-informed presentation has made such an impression on the representative of the queen of watering places.
11.30 p.m.
I will go farther and say that this substance is the product of a relatively new industry. Plastics, speaking relatively, are a product of the war, and housewives have been delighted by the volume of this material which has become available, and which is in great demand at home, although in no great demand for export. It may be that it is a little cold and clammy, but there is no justification for putting it in the second category while the other fabrics made from imported materials, which might be available for export, are exempt altogether. We may go to a Division on this, and those who do not vote for the housewives' plain desire in this matter may go home in the cold of the early morning, but they will "get it very hot" when they reach home.
I should like to add my plea to that made by the hon. Member for South Edinburgh (Sir W. Darling) and ask that this tax should not be increased. The housewife has had a very hard job, and we should do all we can to offer her relief. This material is used for curtaining. It may be said that now that curtains are coming off coupons, the position will be different; but there will be none in the shops to buy. This material can be used for very many things, although no housewife in her right senses would buy plastic if she could buy other materials. The hon. Gentleman said that this is a relatively new industry, and I hope that plastics will be made more serviceable as time goes on, but in view of the fact that we are so short of materials and that the housewife has suffered so much, I hope the Chancellor will give us the lower tax on plastics.
I support what the hon. Lady has just said. I thought that the hon. Member for West Ealing (Mr. J. Hudson) was rather roughly treated, and I thought that the Economic Secretary might have informed us what the actual figures would be if the Purchase Tax were reduced as the hon. Gentleman suggested. I should also have thought that the argument that it would be unfair to the textile manufacturers was a slightly odd one, because I have understood that we want most of our textiles to go overseas. If that is so, there will be an inadequate supply for the home market, and these plastics will become very welcome to the housewife. What I am also mystified about is that, all through this Schedule, these are the only articles, apparently, which are made of plastics and which are mentioned. I should have thought there might be some plastic articles which might be taxed because they are not anything like as necessary to the housewife as are curtains and material for making garments and tablecloths. I hope the right hon. and learned Gentleman will reconsider what he has said and give us a better reason for turning down this Amendment, which seems to me to be very excellent.
In view of the fact that an explanation has been given which gives me at least the impression that the Government will on a subsequent occasion reconsider the matter, I beg to ask leave to withdraw the Amendment.
No.
Amendment negatived.
I beg to move in page 65, line 42, to leave out "Second," and to insert "Exempt."
The effect of my Amendment would be to exempt from Purchase Tax paper handkerchiefs, paper towels, paper serviettes, paper doyleys, paper table covers, paper table decorations, shelf paper and similar articles of paper. If, as I believe, the right hon. and learned Gentleman is a householder, I imagine his own experience as well as mine should prove my case to be irresistible. For years past, both during the war and since, the housewives have been desperately short of household linen of every kind, but the supply of towels, as I believe lady Members will agree, has improved. At last there are a number of towels on the market again, but the trouble is that there is no household linen book. Many times appeals have been made to the President of the Board of Trade to issue a household equipment book so that housewives could buy what is needed for the upkeep and equipment of their houses without breaking into the clothing ration book, but on each occasion the President of the Board of Trade has turned that down. So although there are towels and other linen articles to be bought, there are not the coupons to buy them. The only alternative is paper.
The position with regard to handkerchiefs is almost equally difficult and is exaggerated by three factors. One is the cost, another is the fact that they are on coupons, and the third is the difficulty of maintaining them during their peregrinations through the laundry. Everyone knows the conditions of laundries in these days. They are short of staff and it takes weeks to get things back, during which time further handkerchiefs have to be used. It is an expensive process. I am not blaming the laundries but I ask any hon. Member to give his experience and say just how long a handkerchief is maintained intact after it has been through our present laundries three or four times. There is another unfortunate factor, connected with our climate, and that is that many of us, and I personally, suffer from catarrhal infections during the winter, with the result that a handkerchief becomes not a social necessity but a sanitary precaution. Today we cannot get the necessary number of linen handkerchiefs; it is impossible for the average person either to buy them or to spare the necessary coupons; nor can people keep themselves going with handkerchiefs while the laundries are dealing with them to the best, or worst, of their ability. Therefore, I think that in this case I have a very strong series of arguments in my favour.
The same thing applies to all the rest of the articles in this category. Shelf paper is a necessity for the clean and tidy housewife. At present she has no substitute for shelf paper, and the imposition of this tax on these articles means adding one more burden to the women of this country in their efforts to have nice, clean, well-kept houses. If the President of the Board of Trade would agree to issue a household equipment book I should have very little to say about this Amendment; but, as he has refused time after time to do that, the only alternative is to take the tax off these paper substitutes entirely.
I support my hon. and gallant Friend the Member for Ayr Burghs (Sir T. Moore). I wish to refer particularly to the subject of paper towels. Previously, the Chancellor gave as his reasons for refusing to accept an Amendment which I moved that it was vague and that the cost could not be ascertained, although he sympathised with the object, namely, relief for industry. Those arguments will not hold good so far as paper towels are concerned. The exact extent of the manufacture of paper towels is known. Some 200 million paper towels are manufactured during the course of the year; of that quantity 70 per cent. goes into industry, 25 per cent. into schools, and the remaining 5 per cent. into cinemas and hotels.
The putting of a 66⅔ per cent. Purchase Tax on these articles makes a direct charge on industry. In moving a previous Amendment, I adduced that as an argument; here is another example, and these instances could be multiplied time and time again. This means that an unnecessary charge is being put upon industry, resulting in the handicapping of our export trade during this period of change from the sellers' to the buyers' market.
I know that there is the difficulty of the shortage of paper and shortage of dollars, and perhaps a difficulty in getting paper from Canada—although there is, of course, Scandinavia. But the amount of paper required to make these paper towels is not very great, some 1,000 tons in all being the amount needed. A substantial part of the paper used for this purpose can be recovered and used again, so it is not really 1,000 tons but probably half that—perhaps even less, with the re-use of this paper for cardboard making. Acceptance of this Amendment would effect a saving in linen, in soap—which is in short supply—in laundries and laundry labour; and not only that, but it would be valuable in factories where the use of paper towels instead of dirty linen towels would probably cut down absenteeism by avoiding the spread of contagious diseases. We all know that, owing to the short supply of towels, in many factories the towels get into a disgusting, disgraceful state, especially if the workers are engaged on dirty work. Paper towels provided by the management would overcome that difficulty. They would mean that workers are able to have clean hands in the middle of the day when they might not be able to if the towels were too dirty.
I suggest that it is important that the Chancellor of the Exchequer should favourably consider this Amendment, and that, bearing in mind the oft-repeated desire to help industry, stop inflation, reduce prices and costs, he will, for a change, give an example to private industry by giving a lead in reducing these costs which can only cause a vicious spiral. I have much pleasure in supporting the Amendment.
11.45 p.m.
Both hon. Members have spoken principally of paper towels and handkerchiefs, and I think that the Committee will generally agree with them that these are the most worthy of the list of articles here for consideration. Their arguments are substantial, and it is possible here fortunately not to be limited by the difficulty of definition, and I am glad to say that my right hon. and learned Friend is prepared to consider a modification of the tax in respect of towels and handkerchiefs, although he is not prepared to go further than that in this list.
I rise to express my gratitude to the hon. Gentleman for the concession he has made. When any concession is made to this side of the Committee from the other side, we unite in giving our warm applause. I happen to be the President of the Industrial Catering Association under which, in various works throughout the country, catering is carried on at the instance of the workpeople themselves, and very successfully, too. Therefore the concession will be of very great benefit to them, to our canteens in works, which are conducted in the most cleanly, healthy and helpful fashion. I see that these towels are called in the text of the Bill "serviettes." I wish they were called napkins, for that is decent English. The Chancellor has seen fit to make one gentle, kindly and little concession. What he is doing for us is giving us clean towels and handkerchiefs, and I am very grateful to him.
I am very much obliged for the sympathetic consideration the Government have given to this Amendment. They have been, perhaps, swayed by the appeal I made, and I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
I beg to move, in page 66, line 9, after "furniture," to insert "except kitchen furniture."
It will be within the knowledge of the Committee that within the past two years there have been a number of violent changes in the incidence of Purchase Tax on a considerable number of articles of household equipment, such as kitchen cupboards, units, and draining boards. I believe that some of my hon. Friends will be dealing with certain items of kitchen furniture, and I shall concentrate particularly on draining boards, which may be of a variety of types and on which the incidence of Purchase Tax today seems to be most unreasonable.
The House was advised by the Financial Secretary to the Treasury in answer to a Question put to him by the hon. Member for Spen Valley (Mr. Sharp) on 15th April, that draining boards installed as built-in fixtures are exempt altogether from Purchase Tax, but in the same answer the Financial Secretary went on to say that other types of draining board now have to pay tax at a rate of 33⅔ per cent., whereas previous to this Budget they had been exempt. The right hon. Gentleman did not appear to appreciate that there was yet another category of draining board which is now taxed at 66⅔ per cent., and it is with this type that I am particularly concerned. This is a new category of draining board made of aluminium alloy. It is called the "tub cover drainer" and it has only recently been made available to the public, as it is an entirely new form of manufacture.
This is a matter of very considerable importance to Scotland because this new type of tub cover drainer has been specially designed to fit the tub sets found in the kitchens of Scottish houses. I am advised that a number of the local authorities in Scotland who wished to purchase quantities of this new and very suitable type of fitting for installation in housing schemes are seriously concerned at the sudden rise in Purchase Tax to 66⅔ per cent. When they considered placing the orders originally, there was no idea that there would be any Purchase Tax at all on the fitting. It is most important that this matter should be reconsidered and that there should be a reduction in the Purchase Tax of this item in the interests of the occupants of these houses. It will be much more hygienic than the old type of draining board, and it is obviously a useful device. We in Scotland have not enjoyed very much success this evening. We have received rather short shrift from the Government in answer to various appeals to assist Scottish industry. However, I hope that on this occasion the Government will see fit to give way and reduce the tax on kitchen furniture, with particular reference to this type of draining board.
The matter which I wish to press on the attention of the Chancellor is much wider and much more important than the one which has just been described. My Amendment is in page 67, line 11, at the end, to insert: that he had hardened his heart into a condition of complete imperviousness to ordinary pleading, and I do not propose to assault a fortress of that kind with ordinary arguments. What I do appeal to is his well-known sense of equity and his strong sense of social justice, because what I am concerned with here is the extraordinarily serious impact of this new tax on the local authorities in this country, who are charged with the major task of building the new houses for our people.
Every hon. Member is terribly well aware that in existing conditions, with the immense development of responsibilities thrown upon them in all directions, local authorities everywhere are struggling with financial problems of the greatest magnitude and gravity. Yet here in this tax—this proposal to impose a Revenue tax of 66⅔ per cent. on essential furnishings of new houses—the Chancellor is adding to these burdens in a way which must be completely unjustifiable. Every hon. Member knows that the rising costs of house building in these days, being translated into rents—as they must be translated—is placing such a burden upon the lower-paid workers of our country that they find it almost impossible to enter into the new houses which are being erected for them.
This Committee must surely take the most serious view of any addition which is made to that burden and to the cones-sequences which follow from it. I am informed that in an average working-class house, where the cost of the fittings mentioned in my Amendment are round about £30, this new tax, on the average, will impose an extra burden of £20 on every house. It is within the knowledge of every hon. Member that we are expecting next year to build—I hope as a minimum—at least 150,000 new houses through the activities of our local authorities. It is a simple calculation which anybody can make, therefore, that the total burden being imposed on our local authorities in their housebuilding activities in the whole year by this new tax will be of the order of £3 million. The most progressive local authorities, building the most houses, will make the biggest contribution, therefore, in the tax contribution to the Revenue.
That seems to me to be a totally indefensible proposition. In my own constituency, the City of Norwich, we shall build next year a minimum of at least 350 houses, and that will mean an additional cost imposed upon the Norwich municipality, and through them upon the citizens of Norwich, of an extra £7,000 in one year. That is a 2d. rate on every citizen of Norwich. If any Member of the Government, say the Minister of Health, had come to the House and suggested that hon. Members should reduce the housing subsidies paid by the Government by the sum of £3 million, every Member on these Benches beside me, and every Member on the other side, would have offered absolute opposition to the proposal. Yet the effect of this new tax is the exact equivalent of an action of that kind.
12 m.
I say to the Chancellor that this is completely indefensible. I know he must have his revenue, but surely he need not have his revenue from the adoption of policies which have grave consequences of this kind. This is an anti-social tax in its effects so far as housing is concerned. It is, therefore, an immoral tax. It is a tax on the social necessities of our people, many many thousands of whom are waiting anxiously for these homes the building of which is bound to be retarded by this additional impost. I appeal to my right hon. and learned Friend at least to look at this proposition again. I have tried to fit into the demand that has been made on every Amendment that such items should be in an identifiable category, so that no insuperable problems of administration arise. Here is a perfectly identifiable category—kitchen furniture of a permanent kind installed in new houses. Nothing could be more easily identifiable, and, since the materials concerned in the construction of these fittings are controlled as part of the timber allocation of the new houses, there can obviously be no administrative difficulty in removing the tax from them. For these reasons, I ask the Chancellor to look at this matter again, and see whether he cannot remove this burden from the shoulders of our local authorities.
As the hon. Member has introduced this word "permanent," which is not on the Order Paper, would he define a little more clearly what he has in mind?
It is to cover dressers, draining boards and things put into a new house as part of its permanent fittings.
rose —
On a point of Order, Major Milner. As we are discussing a whole series of Amendments, are we to have the Chancellor's reply before any of the others are adumbrated?
That is not a point of Order for me.
When you made your statement on taking this group, Major Milner, you said that a number of Amendments would be covered. Are we to understand that Amendments in the names of my hon. Friends relating to camp beds, metal kitchen furniture, carpet sweepers, baby cots, and so on, are to be discussed now, or will opportunity be given later?
My proposition was that they should be discussed on this Amendment, or on the later one in the name of the hon. Member for Norwich (Mr. Paton) which deals with general furniture.
Further to that point of Order, there is an Amendment standing in my name—
The right hon. and learned Gentleman is entitled to rise at any point in the Debate.
I am sure my hon. Friend will excuse me for one moment. I have not the slightest desire to stop anybody speaking. I thought it desirable, in view of the speech we have just heard from the hon. Member for Norwich (Mr. Paton) to make it clear that there is no tax on any of the permanent furniture he has mentioned. It is expressly excluded in the phrase—and I do not blame him for not recognising it in the technical terms used—
"Builders' hardware, sanitary ware and other articles of kinds ordinarily installed by builders as fixtures."
That covers the whole. I thought it desirable to let the Committee know that before we proceeded further.
I am very grateful to the Chancellor for giving me that assurance and that interpretation of the phrasing. I can assure him that my own local authority had completely failed to get hold of this point.
I rise to support the plea made by my hon. and gallant Friend, and parts of the speech of the hon. Member for Norwich (Mr. Paton). During the evening the Economic Secretary has referred from time to time to logic. Will he inform me of the logic of certain matters I am about to mention? I would refer the hon. Gentleman, for instance, to Groups 12 and 13, where we find, for example, that cutlery suitable for domestic or personal use is included in the first category, and that wash boilers and wash coppers are exempt, and that stoves, grates, ranges and fireplaces are exempt. Let me take first the question of cutlery. That is in the first category. When we come to the kitchen table and the kitchen chair, which presumably one would not use without using cutlery, we find that the tax on them is 66⅔ per cent. We find irons are exempt, but that ironing-boards, which are part of kitchen furniture, are subject to tax at 66⅔ per cent. I cannot see that there is any logic in that. Surely, the furniture that is needed to enable us to use other things should not be in a category different from that of those other things?
I make this plea to the right hon. and learned Gentleman. After all, the kitchen is the foundation of efficient house management. Without a properly equipped kitchen, one cannot have an efficiently run household. Therefore, I suggest to him that it would not be right to maintain this tax of 66⅔ on the kitchen furnishings. There have been a number of pleas made tonight—one by the hon. Member for West Ealing (Mr. J. Hudson), another by the hon. Lady the Member for North Ilford (Mrs. Ridealgh)—on behalf of the housewives. I have heard time and again from the Front Bench opposite His Majesty's Minister paying tribute to the good work of the housewives during recent years and the way they have borne the great burdens which they have had to carry. I am certain of one thing, and that is that the housewives need all the assistance they can get. They have yet a very heavy load to carry. Much of their kitchen equipment is obsolete today. Therefore, I suggest to the right hon. and learned Gentleman that he might do a very great deal to ease their burden by lowering this tax.
The hon. Member for Norwich spoke almost entirely of the equipment of new houses. I think there is a case for the renewal of equipment in older houses. Much of the equipment in our existing kitchens is completely obsolete. Not only that—it is insanitary, and ought to be replaced. There is not much encouragement in replacing all that equipment when one has to pay a tax of 66⅔ per cent. on it. There are young people who occasionally have the good fortune to obtain old houses. It is not very often, but occasionally they do. What joy is there to go into the kind of kitchen that exists in those houses, and what opportunity is there for them to acquire new equipment when there is a tax of 13s. 4d. in the £ on all the new equipment they may wish to purchase? I say that to remove this tax, or to reduce it, would be greatly to the advantage of the morale of the women who run our homes today, and who are completely frustrated in these years, since they cannot have all the things they require without paying exorbitant prices for them.
So much in regard to the renewals. There is also the effect of this tax on the new houses that are being built. That was referred to by the hon. Member for Norwich, though he referred to it in regard to fitted furniture. Of course, there are types of furniture which are not fitted and which are subject to this tax. There is the question of cupboards which are movable, and there is the question of the kitchen units which are movable and subject to tax at 66⅔ per cent. There will be a very grave effect upon the local housing authorities as a result of this tax. The hon. Gentleman referred to what might happen in Norwich. May I give an example of what will happen in Glasgow? The Corporation of Glasgow have written, I understand, to the Chancellor as follows:
In the light of the statement just made by the Chancellor, how can the hon. and gallant Gentleman repeat that?
But the statement happens to be true. The right hon. and learned Gentleman was talking of built-in furniture. This is not furniture which is built in, but which is placed in the kitchen.
Why do they not build it in?
The right hon. and learned Gentleman must address that question to the Socialist majority in the Corporation of Glasgow. It is no use addressing it to me. For the various reasons I have given, there is no logic in this tax. It is detrimental to the efficient running of any household and ought to be reduced or done away with altogether.
The reason I tried to intervene before the right, hon. and learned Gentleman made his intervention was that I am very anxious to carry the discussion away from the question of new houses. I think it would be a great pity if it were confined to new houses. I am grateful to the hon. Member for Norwich (Mr. Paton) for raising this matter. There certainly has been some misunderstanding about the proper meaning of the words. I speak now as one who has some experience of building houses since the war. I rather share the view, so far as new houses are concerned, that those articles are not liable to duty if included as part of the contract by the builders, but would still be liable if built after as an extra. I am sure the right hon. and learned Gentleman will elucidate that further.
If the hon. Member for Norwich will forgive me for saying so, I rather regret that the earlier part of the discussion was concentrated on new houses, because they do not arise here. In Oldham there are 10,000 houses which ought to be demolished. They will not be demolished for very many years to come. This furniture is a real need for these people. There are some houses that have no pantries. There are some that have no back doors—they are still back-to-back. Where there is this overcrowding, cupboards are a real boon. They have been unobtainable for years, and have just come into production. This is an important question. I see no earthly reason why Norwich should not pay £20 in tax if Mrs. Jones of Oldham has to pay it. I do not see why Mrs. Jones has to pay that tax. It is a heavy burden to meet that very real need which she has been trying to meet for some time. In that respect this tax is a hardship. The hon. Member for Norwich said that Norwich had to pay it. I am in favour of Mrs. Jones of Norwich and Mrs. Jones of Oldham, and even Mrs. Jones of Torquay.
I want to say to the right hon. and learned Gentleman in all seriousness—I was in my constituency shortly after five o'clock tonight and I have to be in it again at nine o'clock this morning, and I have come some 400 miles to put this point—that the effect on employment in my constituency will be very real. The question of concessions in this group is the most important, not merely to my constituency but to many others, that has arisen in the course of these discussions. I ventured to submit to the Financial Secretary immediately after the Budget a very substantial memorandum on this question, giving figures of employment and so on, and I suggested to him some reasonable compromise in the matter which would protect the interests of my constituents and of the purchasers. I have always received from the right hon. Gentleman the utmost courtesy, but up to now I still have not received the announcement which I was hoping he would make some weeks ago.
12.15 a.m.
As far as these firms are concerned, this matter does affect many other constituencies, but I can speak only of Oldham, as I have knowledge of the matter there. The firms concerned have grown up since the war, and have provided good employment, and fairly well-paid employment, in my constituency, and they have a good employing record. For the kitchen cupboard and draining board, they are using mostly aluminium. Even the small allocation of steel which they have had up to now is being replaced by thick glass. The range of prices is from £7 or £8 to something like £28 or £29. It is a useful fitting to have in a house. As the right hon. and learned Gentleman has already pointed out, there is some anomaly in this. If these goods are supplied to a builder direct, they are free from tax; but if they are sold to a multiple store from which they are bought by people and installed in their houses, they attract this substantial tax. That is an anomaly which ought to be cleared up.
There is another matter which arises on this. I am sorry to take some time on this, but it is a matter of importance to me and to my constituents. We are facing at this moment—and I say this with reluctance—what I feel are very substantial problems in the engineering industry in Lancashire. These problems may become rapidly more acute. This particular type of manufacturer was just beginning to export kitchen specialities. One of the firms to which I am referring employed 250 men, and had begun to experiment on the manufacture of a loom which they regarded as being of importance to the weaving industry, and likely to add much to our export trade in the carpets and weaving sections. That work, some of the most promising in this country today, was obviously being subsidised out of the profits from the manufacture of the kitchen cabinets. It was hoped that this new venture would provide an alternative means of employment which would afford useful work for many of my constituents. If this tax goes on, I suggest that the market in goods of this kind must be lost. Where people have saved for a time to get some small addition to the amenities of their homes, an increase in price from £30 to £50 is wholly prohibitive.
I have tried to deal with this matter as temperately as I could, and at the same time to put it with the utmost seriousness, and as a matter of real gravity. This is a new and developing industry. It is developing for more than one reason—developing not merely because it is using material in fairly full supply and because it was desirable and received encouragement from the Ministry of Supply; but also because of the construction of houses of a type which readily takes this particular type of fitting. The whole conception of house construction has altered during the last few years. The tendency now is to have built-in fittings, cupboards, draining boards, and so on, and to lay out on the built-in pattern. I hope the right hon. and learned Gentleman is going to say that in the circumstances, having regard to what has been said tonight, and to the representations made to him over this period in correspondence and by deputation, he feels that the industry and the purchasers have made out their case, and that he is prepared to grant it.
The hon. Member for Oldham (Mr. Hale) has covered many of the points upon which I intended to speak. I ask the Chancellor to look again at what appears to be an anomaly in regard to fixed or built-in fittings. I have been for many years a member of a union which has spent much time in conference on what is fixed or built-in furniture. The technique of the production of these things nowadays does not conform to the ordinary conception of "built-in." These things are made to plan into the kitchen and if put in in their proper sequence they might be deemed to be built-in, but in the ordinary sense of trade terms they are not "fixed" or "built-in," and I hope that, because of the definition, they will not have to bear the tax. Cannot the definition be made more satisfactory in order to remove some of the doubts which many of us have?
I support what has been said by the hon. Member for Oldham (Mr. Hale) in his plea for this reduction. If the Chancellor does not concede this reduction, he will put out of employment thousands of people and break up a new industry which is not only supplying urgently needed articles for our homes, but is also building up a completely new export trade. I have evidence from constituents of mine that, from having quite a flourishing business, they are facing bankruptcy. If the Chancellor's object with this tax is to get revenue, he will defeat his own object, and if it is to save materials, I would remark that this kitchen furniture is mainly made of aluminium, which is in good supply.
indicated dissent —
It is in better supply than timber, and all I can say is that, if that is not the case, these businesses should not have been encouraged to turn over to metal furniture manufacture. Many of these firms were making something or other during the war and were asked to manufacture metal furniture. They did this and, with a flourishing home market, they have gone over to export as well. Believe me, all that is going to be killed. I have one example of a firm which had £50,000 worth of orders cancelled when this was announced, and not more than £500 worth of orders were taken in a week, and they are facing absolute bankruptcy. I hope that the Chancellor will help this industry and not kill it; I hope he will help it to go ahead, because it seems to me that, as hon. Members opposite have said, it is doing at present a valuable work in producing kitchen and other domestic things urgently needed by the women of this country. If the Chancellor is unable to help in this way, then it seems he is going to ruin a new industry, damage our export trade, and put thousands of people out of employment. I beg him to reduce this tax.
We have had an interesting discussion on this subject matter, which has dealt with two points—the built-in furniture for kitchens and fixed furniture. As regards the built-in furniture, I was asked whether we would not look at the wording again. We will do that, although it is felt that the wording is fairly clear. Ordinary articles fixed in a building—articles which are ordinarily installed by builders as fixtures—we deal with substantially as part of the house, and not as furniture, but where, on the other hand, they are bought in the shops and used for older houses, which is desirable, then we deal with them as furniture. The arguments put forward in favour of some action in this matter have been really on two bases—first, as regards the desirability, especially in older houses, of replacing worn-out or insanitary furniture, which should be replaced if possible, and secondly, on the basis that this is an industry which has grown up since the war, particularly in the aluminium manufacturing section, and which is now beginning to launch out into an export trade which may be of considerable value.
I said at the beginning of this discussion that I would consider whether I could do anything in cases which seemed to be strong ones, and I am bound to say that I think this case does seem to be a strong one. I would, therefore, give consideration—and again I am giving no pledge, because we are getting a gradual accumulation of these considerations; they may not sound many, placed a distance apart in the discussion, but there is quite a number of them—I would, therefore, give consideration to the question of reducing the tax on movable kitchen cupboards, dressers, and draining boards. That I think covers the main features of what has been discussed. I might perhaps say that I cannot possibly go into the further range of all furniture used in the kitchen. I think an hon. Member mentioned tables, which may, of course, be used anywhere and for any purpose. They are in a rather different category from the specialised fitments. I hope that in those circumstances hon. Members will think I have done my best and will let us pass on to the next Amendment.
There is just one point. I am sure the Committee is obliged to the Chancellor for his consideration. If I understood him aright, he means that any fitment which is in fact built-in by the builder will not be charged with Purchase Tax—
Will come under the exemptions.
but unfortunately it does not, because the exemption says:
"articles of kinds ordinarily installed by builders as fixtures."
Either the Chancellor knows now what are ordinarily installed by builders, or if he does not, how will he find out?
I think the right hon. and learned Gentleman will see that is merely a bit of reasonable administration. If you had some very extraordinary thing which someone managed to get built-in, let us say, a grand piano built into a kitchen in order to keep off the tax, that would not be "ordinarily installed by the builder." Cupboards, draining boards or meat safes are ordinarily fixed and they would get the exemption.
He is prepared to accept then, I take it, fitments which are "reasonably" fixed by the builder rather than "ordinarily" fixed? This is rather important.
A man might "reasonably" fix a grand piano if he has paid for it. What is unreasonable in a builder, who has been paid for it and told to do it, fixing a grand piano into a kitchen? Absolutely nothing.
The Chancellor's views on what is reasonable are obviously wider than we have hitherto appreciated. Secondly, it would be very difficult to say that a grand piano was kitchen furniture. But be that as it may, I suggest that the wording might be looked at again.
Certainly. I told the Committee I would look at it again.
Then I understand that the right hon. and learned Gentleman will consider cupboards, dressers and draining boards, but not other kinds of tables?
indicated assent.
We must be thankful for small mercies.
In view of the encouraging observations made by the Chancellor, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
12.30 a.m.
I beg to move, in page 66, line 10, to leave out "Second" and to insert "First."
The effect of this Amendment would be to reduce the Purchase Tax on non-utility domestic furniture from 66⅔ to 33⅓. I make this plea on the broad ground that we ought to make the homes of our people as comfortable as possible. In my view, a comfortable home is half way towards a happy home, and in present conditions it is essential that we should do as much as we can to make the homes of our people comfortable. There are two essentials for a comfortable home: first, sufficient room; secondly, sufficient furniture. We all know that owing to the housing shortage, in many constituencies people are living under conditions in which they have not sufficient room; families are living in one and two rooms. We are remedying that as quickly as we can, but those conditions still exist, and I suggest that the least we ought to do is to try to see that the people get as much furniture as they need to make their homes as comfortable as possible.
Now, there is a great shortage of domestic furniture, and about ten days ago the President of the Board of Trade said that there was a great unsatisfied demand for domestic furniture. Every- body knows that is true. The Government have, to some extent, tried to meet that demand by means of the utility furniture scheme; but the snag about that scheme is that there is not enough utility furniture. Because there is not enough utility furniture the priority dockets system has been introduced to restrict the amount of furniture which could be bought. However, it is common knowledge that newly-married couples, even with the dockets which are allowed to them, cannot get enough utility furniture properly to furnish their homes. Also, there are large numbers of people, not newly married, who want domestic furniture but are unable to buy it. In due time we may get enough utility furniture to satisfy everybody, but it will be some considerable time before that happens.
What is the immediate remedy? I suggest the immediate remedy is to make available to these would-be purchasers of essential furniture such non-utility furniture as there is at reasonable prices. Increasing the Purchase Tax, as is at present proposed, will not help these people to buy this furniture at reasonable prices. I cannot understand how a Government, which wishes to improve the comfort of the people, yet sees them living in the cramped conditions they are in today, short of essential furniture, can justify increasing taxation on this kind of furniture, making it more difficult for people of limited means to acquire it. In effect, this increase to 66⅔ per cent. means that for many of the workpeople the price of this utility furniture has now become prohibitive.
I have in my constituency a large number of small manufacturers who have an agreement with the Board of Trade whereby they produce domestic furniture of a non-utility character made according to Board of Trade specifications, and the price is also controlled by the Board of Trade. The people making this furniture are small firms each of which has possibly only two or three people working for them. Their workshops are so small that they are unfitted to be put on to the production of utility furniture. This is about the only form of production upon which they can engage.
If the tax on this furniture is increased to the extent proposed, something essential to the homes of working people will be taxed, and I do not think that the Chan- cellor will want to do that. I have always understood the Chancellor as a very worthy man, as a great believer in family life, who thinks that the family is the core of the whole nation, and one which ought to be fostered as much as possible. I believe the Christian Socialist Group strongly believe in that, and the dignitaries of the Church, with whom he is on excellent terms, also believe in that policy, because they believe the comfort and the happiness of the family to be at the core of our national life. I am reluctant to believe that the Chancellor would deliberately increase this tax in order to make it more difficult for poor people of limited means to make their homes as comfortable as possible by means which I regard as essential.
I know we must have revenue. The Chancellor has admitted, as have other Chancellors, that the Purchase Tax is a very easy and convenient means of raising revenue. Because it is that kind of tax, Chancellors are reluctant to let it go, but I suggest to my hon. Friend on the Treasury Bench that a system of taxation of that kind, desirable though it may be, should not be employed to take money out of the pockets of people who are very poor, but should be employed on luxury articles, and articles which are not essential. I do not think the tax, if applied in that way, would do very much harm, but I think it is quite a wrong thing in these days in which people are living—and indeed it is a wicked thing—to use this means of taxation in order to prevent them from getting something which is essential for a comfortable home. Therefore, for these reasons I hope the Chancellor or his friends will give further consideration to this proposal, and see whether they cannot agree to the reduction I propose.
On a point of Order, Mr. Beaumont. May I ask for your Ruling whether, with regard to the Amendment in page 7, line 11, to insert "chairs designed and bought for use in schools," it would be for the convenience of the Committee, and in accordance with your wishes, if that Amendment were to be discussed together with the Amendment now before the Committee.
I think that will be quite acceptable.
I rise to support the Amendment moved by the hon. Member for Shoreditch (Mr. Thurtle). In this House during the whole of the present Session of Parliament and for ages gone by, we have attached the greatest importance to the sanctity of the home, which is the unit of society in this land in which we live. The plea of the hon. Member, who is a very old Member of the House, like myself, and has made a constant and expanding contribution to the work of the House, can hardly be resisted from the Government Front Bench.
Imagine a poor man entering a house which would normally require £120 to furnish. With Purchase Tax at 33⅓ per cent., he has to find an additional £40, but under the proposal in the Bill he has to find another £80. This Committee should be no party to imposing such a burden on a man of modest means who is trying to furnish a habitation for himself and his family. It is an extraordinary suggestion. We have all these difficulties of the housing situation—Birmingham has 52,000 on the register for housing—and when these people are provided with houses, furnishing becomes of first consequence to them. Yet the Chancellor proposes to saddle them with a 66⅔ per cent. burden of cost on their furniture.
It is a sort of violation of common decency on the part of the Government Front Bench to do anything of that kind. I am sorry that the Chancellor is not present. I hate to embarrass the Chancellor, because I feel a personal affection for him. I know that his outstanding attachment to the fundamental principles of Christianity dominates every phase of his life, and therefore it is incomprehensible that he should be responsible for placing this burden on someone taking and equipping a house in order to raise a family. The Amendment should be sustained by the Committee, and I hope that from the Government Front Bench, where common sense sometimes makes itself evident, we shall have an expression of agreement with it. The hon. Member for Shoreditch is an outstanding member of the party which is led from the other side, but I am glad to observe that from time to time he does not follow the principles of leadership laid down by the party opposite, and takes a line of his own.
The hon. Member is going rather wide. Perhaps he will return to the Amendment under discussion.
I apologise, Mr. Beaumont, but I wanted to pay a tribute to the independent quality of the hon. Member.
I want to save the embarrassment of the hon. Member.
I am obliged to you, Mr. Beaumont. You have always been so tolerant, and I thank you very much for putting me on the right line. I warmly support the Amendment.
12.45 a.m.
I join with the two hon. Members who have spoken in pleading this case with the Economic Secretary to the Treasury. I was very happy to hear the hon. Member for Moseley (Sir P. Hannon) supporting this Amendment. If the Economic Secretary has not been impressed by the arguments he has heard so far, perhaps he will note that there are 20 Amendments on the Order Paper in connection with this proposed increase of the Purchase Tax on non-utility furniture. That in itself must be quite impressive. Why not? Has not the tax on non-utility furniture risen in the last two years from 33⅓ per cent. to 50 per cent., and then to 66⅔, and so into the semi-luxury class? No hon. Member will argue that furniture, whether utility or non-utility, is a mere luxury. I venture to suggest that there are five million homes in this country at the present day in urgent need of furniture, and they will not get that furniture so long as there is this excess of taxation at 66⅔ per cent. Furniture is essential; it is listed as essential by the Board of Trade; recently it was included in the cost of living index, and surely that is the final argument that it is indeed an essential item in our households.
Hon. Members have referred to the great demand which exists. The utility scheme has provided two classes with considerable furniture, but, of course, there are many classes outside that. Many people in this country have not had furniture for 10 years. I would point out that in the years before the war it was quite impossible for many people in this country to acquire furniture, particularly in the depressed areas in the days of financial stringency. It was quite impossible for some people to get furniture. Those people today, under full employment, with higher wages, are in a position to buy furniture, but this tax is, in my opinion, preventing them from doing so.
I would also like to mention that furniture, such as it is, has been very much used in the last 10 years. In many cases we have asked two and three families to share a home, and the furniture has certainly come in for a great deal of wear and tear. We were all happy in the House of Commons to hear the President of the Board of Trade say a few days ago that he proposed shortly to announce a widening of the sale of utility furniture. When that is done, we shall have this curious anomaly, and I would ask my hon. Friend to note this particularly: it is possible that from Thursday next we shall have in our furniture shops in this country utility furniture for sale alongside non-utility furniture, much of the same standard, and this utility furniture, I understand, is to be made available to the general public. What will the position be? We shall have utility furniture without tax and, alongside it, non-utility furniture carrying a 66⅔ per cent. tax. What will the result be? People are not going to buy non-utility furniture—as they are not buying it at the moment—and the result will be that those furniture manufacturers who are manufacturing non-utility furniture will gradually go further and further out of business. That is their experience at the moment.
I am told by very reputable manufacturers in this non-utility section of the trade that 90 per cent. of their industry has come to a standstill. I believe figures could be given in support of that. One manufacturer who is responsible for a group of four firms told me only a couple of days ago that there are 1,200 men making mostly non-utility furniture who are working only two days a week, that there is under-employment to the extent of their working only two days a week; and that reflects itself in their pay packets at the end of the week to the extent of, perhaps, £3. That is entirely due to the fact that orders completely dried up when this excess of tax was announced I have a copy of a letter here sent to one firm cancelling orders for £10,000 worth of non-utility furniture, and I could produce many illustrations similar to that I do not want to delay the Committee at this late hour, but one hon. Member referred to a section of the industry known as the working masters, who are the small men of the industry. These men are not making utility furniture. They are dependent on the six items of furniture he referred to, occasional tables and similar furniture. These men are almost out of business as a result of this tax and, if it continues, they will be completely out of business. There are other types of furniture we may refer to in addition to the items covered by the Amendment. I particularly emphasise the case of nursery furniture, which certainly cannot be described as a mere luxury. To a great many families nursery furniture is absolutely essential, and yet it is carrying a 66⅔ per cent. tax.
My hon. Friend may remember that not so very long ago the President of the Board of Trade, in the days when timber was scarce, appealed to the furniture industry to show their ingenuity and to make use of substitute material, as a great many of them did with great success. So successful were they that he has expressed warm appreciation of what they have done. And then along comes the Chancellor of the Exchequer and puts on this punitive tax. I beg my hon. Friend to look most seriously at this, not only in the interest of the consumers, but also in the interests of the workers and of those enterprising manufacturers who have been encouraged by the President of the Board of Trade. I appeal to him to accept this Amendment and at least to reduce the tax to 33⅓ per cent.
The hon. Member for Shoreditch (Mr. Thurtle), supported by the hon. Member for Wycombe (Mr. Haire) with such great knowledge and eloquence, are proposing that a wide range of furniture should be brought within the lower range of Purchase Tax. The suggestion contained in the Amendment supported by my hon. Friends is of a much narrower scope, and should commend itself to the Committee, for it involves the exemption from tax of chairs designed and bought for use in schools. There is a rather ridiculous position at present in that desks which are designed and bought for use in schools are exempt altogether from Purchase Tax, but the chairs which go with the desks already carry a Purchase Tax and, if the Government's proposals are accepted, will carry a 66⅔ per cent. tax. There can be no logical reason why the desks are exempt and the chairs should carry such a high tax.
If the Government are going to make such a distinction, they should make a strong case for it. The schools are expanding with the expanding population. Many schools have been unable to purchase much furniture since 1939. In the general interest of education, it should surely be made as easy as possible for children to have the chairs on which they must sit to study in comfort. I am not suggesting that the armchair in the headmaster's study should be exempt from Purchase Tax. If the two conditions are fulfilled that the furniture is both designed and bought for use in schools, there need be no fear of abuse. I am prepared to agree that there are many types of chairs which, though designed for use in schools, could also be used for other purposes, but if they are bought for use in schools as well as designed for that purpose, there can be no abuse. For these reasons, I ask for the support of the Committee and the sympathy of the Government in considering this matter.
May I start by declaring my interest in the matter of furniture? I have had the pleasant duty of giving away in marriage both my daughters in the last two years, and have thus had a parental experience of the difficulties of young people forming their homes, such as probably few hon. Members present have had. I strongly support my hon. Friend the Member for Shoreditch (Mr. Thurtle) in his plea that the simple furniture that the small makers are permitted to make should not be taxed at more than 33⅓ per cent. Many of these firms are in my constituency. Unfortunately, there is not only short time but some unemployment, and many of them are too small to carry much accumulation of stock. They tell me that their business has practically ceased to exist since the imposition of this increased tax.
I am also responsible for the Amendment in line 13, for a reduction in the tax on mirrors. Last year I made a similar plea to the Chancellor of that time, and got a concession which gave a reduction from 100 per cent. to 66⅔ per cent. Unfortunately, since then, the tax has risen to 75 per cent. and to 100 per cent. again. I am satisfied that a year ago we made our case for the reduction. I was backed on that occasion, I think, by all the lady Members in the Committee. Mirrors are an essential in every home, and in more than one room in the home. The Chancellor himself must have a mirror by which to shave in the mornings. Every man and child must have a mirror. To declare that these things are luxuries is just an absurdity.
I think the Purchase Tax has evolved into an entirely new form. The old designations of utility, semi-luxury and luxury have disappeared. There is muddle creeping into the tax. I was dismayed when the old 16⅔ per cent. rate disappeared, because that was the appropriate rate for some things, though necessities should be free of tax altogether. I make my plea for the young people, for those whose furnishings have worn out, for those who have never had anything that could give them any sense of personal pride in their homes—and there were many such in the East End of London before the war. They have a little more money in their pockets now, but they cannot afford to pay for mirrors six or seven times the 1938 prices.
I will say one thing in mitigation of the position. A few months ago, when these Schedules were no doubt being prepared, there were vociferous cries from hon. Gentlemen opposite that there was imminent danger of inflation. During the last few days, during consideration of this Bill, I have not heard one word on those lines. That is because this Budget is one of the most dramatic, heroic actions of this Government in countering what was undoubtedly a tendency in the inflationary direction. Now what is the position? From the point of view of the business world, of the furniture makers, of the makers of mirrors—of whom I have at least two firms in my constituency—inflation is no longer the problem. The price level is wobbling and uncertain. People are very discriminating. They want to hang on to their money in the expectation that it will fetch better value in the near future.
It is in that changed situation that I appeal to the Chancellor to save constituencies like those in the East End of London from growing unemployment or under-employment. Purchase Tax was a valuable means of stopping the inflationary tendency. Today it is rapidly becoming a danger to the full employment we are determined to maintain. In a very few months, I believe, it will be necessary to cut Purchase Tax in a considerable volume as a means of opening markets, to absorb the products of our productive industries. I appeal to the Chancellor to meet us to some extent in these matters.
1.0 a.m.
I should like to express my agreement with the sympathy which fell from the lips of my hon. Friend the Member for Moseley (Sir P. Hannon) for the Chancellor of the Exchequer. He does carry upon his frail and elderly shoulders the whole burden of our wobbling economy and he has been submitted to the strain of these pernicious all-night Sittings. It must follow that a little later on this morning he will go to his important work with his mind to some extent dimmed and his judgment to some extent vitiated, and yet, when he leaves the Front Bench for a breather, the whole Front Bench becomes intellectually emasculated.
I reinforce what the hon. Member for Shoreditch (Mr. Thurtle) said on the subject, and I can speak with some little sympathy because when I was a young man I had a small varnish factory in Shoreditch. I know that the industry of Shoreditch is very largely made up of small furniture firms, employing two or three skilled craftsmen, who are definitely affected by this increase in Purchase Tax.
I suggest to the Chancellor that cheap good furniture is second only to cheap good food. I cannot imagine how young people can contemplate getting married today, in view of the difficulties which confront them. The hon. Member for King's Norton (Mr. Blackburn) may laugh, but it is a serious point. If they do not get married, the sanctity of home life is bound to decline, and I am sure that is the very last thing the right hon. and learned Gentleman would wish to see. I would emphasise that this Amendment does not seek to exempt this furniture. It merely seeks to put it upon a lower rather than a higher rate. I very much hope the Government will see their way to accept it.
The hon. Member for Shore-ditch (Mr. Thurtle) put a very persuasive argument, and so did several of my hon. Friends behind me, for making a considerable concession over a very wide range of general furniture, over and above the promise of consideration of the case for kitchen furniture which my right hon. and learned Friend has already given. I am afraid a concession on that scale would certainly carry us farther than we could afford at this stage. To enable the Committee to see this proposal rather more in perspective, I think I ought to mention the fact that before we started this Debate today, we had already given concessions of Purchase Tax in this Budget amounting to £50 million gross, and even on balance, after allowing for the increase, this will amount to about £27 million.
My hon. Friend the Member for South-West Bethnal Green (Mr. Holman) said that, in view of economic conditions, we ought to make a concession of large volume, I think he said, in Purchase Tax. We have done that already, and if we were to go far beyond that, we would upset the structure of the Budget as it now stands.
In the case of general furniture, there is utility furniture to meet the needs of the consumers, which we all admit are very acute and very important. There has been a shortage of utility furniture, but that shortage is diminishing, and the President of the Board of Trade quite recently foreshadowed an expansion in the facilities for buying utility furniture. Secondly, we have given the exemption, mentioned in the previous Debate, for built-in furniture; and thirdly, the Chancellor has announced that we are willing to consider concessions for kitchen furniture. On the whole, we thought that since were were compelled to select between the two, the need in the case of kitchen furniture, for all the reasons given in the course of that Debate, was the greater of the two. If we accept the Amendment moved by the hon. Member for Shoreditch it will cost us a further £6 million. I am sure he will understand that that is one of the largest sums involved in any of the Amendments we have discussed so far today.
The hon. Member for Huntingdon (Mr. Renton) raised the special question of school furniture. He wanted to exempt chairs designed and bought for use in schools. Of course, chairs specially designed for schools, and not available for domestic or office use are, as I understand it, already exempt. To that extent we have done something to meet this need. In addition to that, as I expect my hon. Friend realises, the Treasury has-approved a scheme by which chargeable school furniture, including chairs purchased by education authorities to meet the raising of the school-leaving age—I think the hon. Member spoke of the need for an extension of school facilities at this time—is produced under the utility furniture arrangements, and of course such furniture is free of tax. We have by that means, we think, gone some way to meet this particular problem, and in present circumstances, and in view of the other concessions which we agreed to consider, we think that is as far as we can go.
It gives me great pleasure to support an Amendment moved by the hon. Member for Shoreditch (Mr. Thurtle), especially as I understand that he does not now propose to contest my constituency with me, but is content to fight the hon. Member for Finsbury (Mr. Platts-Mills). I am bound to say that I was very disappointed with the reply we have just received from the Economic Secretary. I thought that the proposal by the hon. Member for Shoreditch was really the most important proposal made during the whole of this evening. I plead with the Chancellor to consider this matter again. I do not know whether the right hon. and learned Gentleman really appreciates the immense difficulties that the people of this country are having now over furniture.
A great many people have been lucky enough to be brought up in families which have been well off for two or three generations or more. In those families, generally, there is a certain amount of furniture—in some quite a lot. When the children of those families marry and set up house, it is possible for some furniture to be spared for them, to make it possible for the new home to be furnished. But that is not so in the vast number of cases in this country. The vast number of those who marry have nothing to start with. I suggest that if the Chancellor is anxious to see the home life of this country given a chance, nothing is more important than that fur- niture should be made available to people who are getting married.
There is a tremendous encouragement, at present, to people to spend money on the wrong things. I think that a great deal of money has been spent badly in this country in the last year or two by all classes of society. I think that it is one of the duties of the Government to encourage people to spend their money well and not badly. When one thinks of the immense amount of money poured out on drink, gambling, and tobacco, it is really shocking to see the amount that is spent on such things as furniture. But one of the things that makes people hesitate to buy furniture is this taxation.
When a man buys a piece of furniture he looks upon it as an investment, but he does not like buying it nowadays because, if he should want to sell it when the tax is removed, the value of that investment will be enormously reduced. That sort of thing is discouraging people from buying furniture. The Chancellor should try to encourage people to spend money on things which are not only of genuine value, but really necessary. Young married people either do not buy this furniture or, if they do, they run into debt. They buy on the hire-purchase system and then find the price is such that, having been tempted because of hire-purchase to buy more than they should, there is difficulty in paying the instalments.
So far as the trade is concerned, I have gathered from what has been said by hon. Members opposite that there are serious difficulties on account of this tax. I draw the attention of the Committee to the fact that this is a serious and substantial increase. It is not a question of keeping the tax at the present level. This is a time, three years after the war, when we might expect taxes to start to be reduced, especially on such things as furniture for the home. What, for example, could be more important than that there should be a reasonable and cheap supply of good beds? I recall that when I was getting married, I was advised by my family solicitor, among a lot of advice he gave me, that the most important thing was to make sure that I got a really good bed. "Do not stint yourself on that," he told me; "it is a most important thing." Yet the Chan cellor is coming forward—
On a point of Order. Is the right hon. Gentleman moving to report Progress?
Three years after the war, the Chancellor is coming forward with a large increase on such an important item of furniture as a bed. I do not move to report Progress, but I ask the Chancellor to be progressive. I ask him to think this thing over again and to realise that there are large numbers of people in this country who cannot pay this heavy tax on articles which make home life happier. I hope he will do something to reduce the price of furniture, which is absolutely essential for the home.
1.15 a.m.
I shall not follow the right hon. Gentleman in trying to lull the Chancellor to sleep by referring to comfortable beds, but I want to refer to the statement made by the Economic Secretary that the loss resulting from this change would be £6 million. I realise that this estimate is based on the best information obtainable, but in my view, a complete misconception has already arisen and is likely to be intensified in the next few days. This particular matter cannot be looked at unless it is regarded in conjunction with the position of utility furniture. Only today there has been published an Order which gives a new and greatly extended range of utility furniture. Many more models have been produced and we hope they will draw off a great deal of the demand for furniture and will not be subject to tax, and that the needs of the people will be satisfied without paying tax at all.
The President of the Board of Trade has made it perfectly clear, both here and in a speech he made over the weekend, that there is to be good news with regard to utility furniture, which we hope will take the form of removing it from the tax. That can only mean that there will be a very great increase in the demand for utility furniture which will, I hope, absorb at a comparatively low price a great deal of the overall demand, and will not pay one penny in Purchase Tax at all.
I think that will have a major effect in reducing the yield of Purchase Tax from this field of furniture generally and, secondly, the effect of the increased tax of 66⅔ per cent. will widen the disparity between the two classes. In the main, utility furniture is of very high quality and relatively good value. The obvious outcome of this is that the non-utility furniture at 66⅔ per cent. will scarcely sell at all, and the £6 million cannot possibly be earned unless the tax is reduced to 33⅓ per cent. on non-utility furniture. I am not an advocate of non-utility furniture, and it would not worry me if circumstances demanded that it should not be made at all. If that is the intention, let us say so, and not let it die a natural death. In the short term it might not be a bad thing, but in the long term it must be a bad thing to allow it to die, because it means a contraction of designs and the suspension of many types of craftsmen and irreparable damage to the furniture industry as a whole, apart from the fact that it would put out of business quite a number of manufacturers who are not designated as manufacturers of utility furniture and may not become so.
Therefore, on that one major point alone, having regard to this very great expansion of the demand and range of utility furniture and the fact that it will absorb a great proportion of the market, I ask my right hon. and learned Friend whether he will not again inquire into the matter and ascertain what has been the effect of this increased tax on sales. I am sure he will find that the estimate of £6 million will be seriously weakened. It would be a serious proposition to suggest that with a tax of 33⅓ per cent. the Revenue might be greater than this £6 million.
The hon. Member for Taunton (Mr. Collins) has raised an important consideration. This is rather a matter of principle which we are discussing, because I feel it to be quite wrong that our fiscal system should be used to get people to go in for the same type of furniture, utility furniture, as against a wider range. During the Debate we have heard mention of newly-married couples. Suppose there were three newly-married couples, all married at the same church, who went to the same place for their honeymoon and stayed at the same hotel. Then suppose, if they were lucky enough, they all got the same type of council house. When they got into those council houses each wife would want to furnish her house in an entirely different way from the other two. When it comes to furniture our housewives are complete individualists, and it is absolutely wrong that they should be forced by our system of taxation to go in for one type of sideboard, table and chairs, and everything else; even if there is a wide range. Reasonable furniture, ordinary furniture, should not be regarded as a luxury.
For the second time in some four hours the Government find themselves at loggerheads, not only with the Opposition, which is a normal and salutary process, but with an important body of their own supporters. I am quite sure that, could a vote be taken on this Amendment on grounds of conviction, without the intervention of any Whips, among hon. Members who have heard this Debate, as it has gone so far, hardly half a dozen would go into the Lobby in support of the Government. I think the Chancellor would be wise to think again, in the light of the important speeches which have been made, not only by those who sit on this side of the Committee, but by some of his own party.
For instance, the hon. Member for Wycombe (Mr. Haire), with his constituency troubles lying heavily upon his shoulders—he knows what is happening in the furniture trade—has come to the Committee, very rightly, and told us of the situation in his constituency. That is one consideration—what we might call the industrial consideration—which should cause the Chancellor to think again. There is also the argument, to my mind quite unanswerable, put forward by the hon. Member for Shoreditch (Mr. Thurtle)—and, indeed, by the hon. Member for South-West Bethnal Green (Mr. Holman) a little later—as to the impact of all this upon young couples who are setting up house in these difficult times.
I say to the Government that this is a dilemma in which they will find themselves over and over again, not only as we go through this lengthy sitting, but in future years. The right hon. and learned Gentleman's predecessor told us in 1945 that he regarded the Purchase Tax as a useful and permanent feature of our fiscal system. The longer that view is held by the Government, the more these difficulties will arise. I submit to the right hon. and learned Gentleman that, whereas a Purchase Tax is a useful piece of apparatus in time of war, when it is desired that spending shall cease and people's capital and cash shall be diverted into the savings movement, in time of peace, the Purchase Tax must inevitably be bad when people are wanting to spend their money to set up homes, to assist businesses to recover from the war, and the like. It must be a bad tax, at any rate in so far as it is imposed upon necessities. That point will, I think, emerge over and over again as we go along. It emerged on the last Amendment; it is emerging again now; and it will go on emerging. There is still something to be said for a Purchase Tax upon luxuries; but there is no case whatever—
I am afraid the hon. and gallant Gentleman cannot, on this Amendment, discuss the general merits of the Purchase Tax.
No, Mr. Touche, but this Amendment is surely very relevant to the argument which I am putting.
The hon. and gallant Gentleman must make his argument relevant to the Amendment, not the other way round.
Indeed, yes; I am sorry if I got it the wrong way round. That sort of thing happens at this hour. If it is not the case that tables, chairs, sideboards, beds, and so on, are necessities, then, of course, I should feel I was getting rather wide of the Amendment; but I think it can be claimed that they are necessities, and a Purchase Tax upon necessities is necessarily a bad thing. On this Amendment, which the hon. Member for Shoreditch moved in such able language, I think the Chancellor will now have to yield to the almost unanimous opinion of the Committee.
This is an occasion when the Committee, and Private Members, should impose their will quite firmly on the Executive. These things have happened before and should happen now, if only in the interests of the Chancellor's own supporters—not that I have any undue solicitude for hon. Members opposite.
Look what the Chancellor is doing to them. Think of the effect on all those hon. Members opposite, particularly those who sit with slender majorities. I can see more than one at the present moment. Imagine the latest edition of "Your M.P." showing the votes which have been given, and see the newly-married couples rise in their wrath. If only on that point of solicitude for their friends and their Parliamentary majorities, in addition to the important social arguments put by the hon. Member for Shoreditch and the industrial arguments of the hon. Member for Wycombe, I trust hon. Gentlemen opposite will show their sincerity by accompanying us into the Division Lobby.
This act by a Socialist Government is the most antisocial ever taken. To pay 66⅔ per cent. on the most important thing in the whole of one's life cannot but be anti-social and reactionary. After all, the bed is the most important thing in one's life—at least for most people, who spend one-third of their life in bed. One is born in bed—or most people are—one makes love in bed, and one dies in bed; and I suggest that it is absolutely monstrous that there should be a 66⅔ per cent. tax on this most important factor in a man's life.
Let me take another example to show the strange way in which this Socialist Government acts. There is such a thing as a camp bed. On the one hand, the Government do all they can, and rightly so, to urge people to take holidays. They spend money on encouraging camping, and developing sites for camping, and yet, on the other hand, put 66⅔ per cent. of tax on camp beds. Surely, now, when we have got holidays with pay widely extended throughout the country and accommodation is very short, it is desirable that there should be a plentiful supply of camp beds. I suggest that this little incident shows how wrong the Government are going in principle, and this can be multiplied in many ways. I hope the Chancellor will think again, and will agree that it is astonishing to find that this most reactionary and most anti-social act comes from a Socialist Government.
I think the Chancellor should be deeply indebted to the hon. Member for St. Marylebone (Sir W. Wake- field). Whatever case was established on this side of the Committee, the hon. Member has completely ruined it by the speech he has just made.
I cannot pretend for one moment that I regard the reply as satisfactory. It was most disappointing and unsatisfactory, and I would like to remind the Economic Secretary, that although the Chancellor has given away some £27 million by way of concessions, it is disappointing to think that so high-minded a person as the Chancellor, and such a great respecter of the family as an institution, should not be able to suffer an additional
£6 million loss to make British homes more comfortable. I, therefore, record my disappointment at the Chancellor, because I had high hopes of him. If I have acquired any wisdom at all in this House in the course of a fairly long experience, it is that it is folly to run into head-on collision with one's own Government, and therefore I beg to ask leave to withdraw the Amendment.
No.
Question put, "That the word 'Second' stand part of the Schedule."
The Committee divided: Ayes, 207; Noes, 71.
Division No. 193]. AYES. [1.31 a.m. Acland, Sir Richard Fairhurst, F. Manning, Mrs. L (Epping) Adams, Richard (Balham) Farthing, W. J. Marquand, H. A. Adams, W. T. (Hammersmith, South) Fernyhough, E. Mellish, R. J. Alexander, Rt. Hon A. V. Field, Capt. W. J. Middleton, Mrs. L. Anderson, A (Motherwell) Fletcher, E. G. M. (Islington, E.) Millington, Wing-Comdr. E. R. Attewell, H. C. Foot, M. M. Monslow, W. Austin, H. Lewis Forman, J. C. Moody, A. S. Baird, J. Fraser, T. (Hamilton) Morley, R. Barton, C Freeman, J. (Watford) Morgan, Dr. H. B Bechervaise, A. E Freeman, Peter (Newport) Morris, Lt.-Col. H. (Sheffield, C.) Beswick, F. Gallacher, W Morris, P. (Swansea, W.) Bing, G. H. C Gilzean, A. Moyle, A. Blackburn, A. R Glanville, J. E. (Consett) Murray, J. D Blenkinsop, A. Greenwood, A. W. J. (Heywood) Nally, W. Blyton, W. R. Grey, C. F Neal, H (Claycross) Braddock, Mrs. E. M. (L'pl. Exch'ge) Griffiths, D. (Rother Valley) Nichol, Mrs. M. E. (Bradford, N.) Braddock, T (Mitcham) Gunter, R. J Nicholls, H. R. (Stratford) Bramall, E. A. Guy, W H. O'Brien, T Brook, D. (Halifax) Hall, Rt. Hon. Glenvil Oldfield, W. H. Brown, George (Belper) Hamilton, Lieut.-Col. R Oliver, G. H. Bruce, Maj. D. W. T Hardy, E. A. Orbach, M Burke, W. A. Hastings, Dr. Somerville Paling, Will T. (Dewsbury) Butler, H. W. (Hackney, S.) Henderson, Joseph (Ardwick) Palmer, A. M. F Carmichael, James Herbison, Miss M Pargiter, G. A. Chamberlain, R. A House, G. Parkin, B. T. Champion, A. J Hoy, J. Paton, J. (Norwich) Chetwynd, G. R Hubbard, T. Pearson, A. Cobb, F A. Hudson, J. H. (Ealing, W.) Peart, T. F Coldrick, W Hughes, Hector (Aberdeen, N.) Perrins, W. Collindridge, F. Hughes, H. D. (W'lverh'pton, W.) Popplewell, E Colman, Miss G. M Hynd, H. (Hackney, C.) Pritt, D. N. Comyns, Dr. L. Hynd, J. B. (Attercliffe) Proctor, W. T Cooper, Wing-Comdr. G Irvine, A. J. (Liverpool) Randall, H. E Cove, W. G Irving, W. J. (Tottenham, N.) Ranger, J. Crawley, A. Jay, D. P. T. Rankin, J. Cripps, Rt. Hon. Sir S Jeger, G. (Winchester) Rees-Williams, D. R Crossman, R. H. S. Jeger, Dr. S. W. (St. Pancras, S.E.) Reeves, J. Daines, P. Jones, D. T. (Hartlepool) Reid, T. (Swindon) Dalton, Rt. Hon. H. Keenan, W. Rhodes, H. Davies, Edward (Burslem) Kenyon, C. Ridealgh, Mrs. M Davies, Ernest (Enfield) Kinley, J. Robens, A Davies, Harold (Leek) Lee, F (Hulme) Robertson, J. J. (Berwick) Davies, Haydn (St. Pancras, S.W.) Leonard, W. Rogers, G. H. R. Davies, S. O. (Merthyr) Lewis, J. (Bolton) Ross, William (Kilmarnock) Deer, G. Lindgren, G. S. Royle, C. Delargy, H. J. Lipton, Lt.-Col. M Sargood, R. Diamond, J. Longden, F Sharp, Granville Dodds, N. N. McAdam, W Shawcross, C. N. (Widnes) Driberg, T. E. N. McAllister, G Silverman, J (Erdington) Dugdale, J. (W. Bromwich) McGhee, H. G Silverman, S S. (Nelson) Dumpleton, C. W. Mack, J. D. Simmons, C. J. Durbin, E. F. M Mackay, R. W. G. (Hull, N. W.) Skeffington, A. M. Edelman, M. McKinlay, A. S Smith, C. (Colchester) Edwards, W. J. (Whitechapel) McLeavy, F. Smith, H. N (Nottingham, S.) Evans, Albert (Islington, W.) Macpherson, T (Romford) Snow, J. W. Evans, E. (Lowestoft) Mallalieu, E. L. (Brigg) Sorensen, R. W. Evans, S. N. (Wednesbury) Mallalieu, J. P. W (Huddersfield) Soskice, Sir Frank Ewart, R. Mann, Mrs. J. Steele, T. Stokes, R. R. Wallace, G. D. (Chislehurst) Williams, R. W (Wigan) Stubbs, A. E. Wallace, H. W. (Walthamstow, E.) Williams, W. R. (Heston) Swingler, S Warbey, W. N. Willis, E. Symonds, A. L Watkins, T. E. Wills, Mrs. E A. Taylor, Ft. J. (Morpeth) Watson, W. M. Wise, Major F. J Thomas, D. E. (Aberdare) Wells, P. L. (Faversham) Woods, G. S Thomas, John R. (Dover) Wells, W. T (Walsall) Wyatt, W Thomas, George (Cardiff) West, D. G. Yates, V. F Tiffany, S. Whiteley, Rt. Hon. W. Younger, Hon. Kenneth Tolley, L. Willey, F T. (Sunderland) Tomlinson, Rt. Hon. G Willey, O. G. (Cleveland) TELLERS FOR THE AYES: Ungoed-Thomas, L. Williams, J. L. (Kelvingrove) Mr. Hannan and Mr. Wilkins.
NOES. Agnew, Cmdr. P. G. Hannon, Sir P. (Moseley) Poole, O. B. S. (Oswestry) Assheton, Rt. Hon. R. Hare, Hon. J. H. (Woodbridge) Rayner, Brig. R Beamish, Maj. T. V. H Harris, F. W. (Croydon, N.) Roberts, Emrys (Merioneth) Bossom, A. C. Harvey, Air-Cmdre. A. V. Roberts, W. (Cumberland, N.) Bowen, R. Henderson, John (Cathcart) Ropner, Col. L. Braithwaite, Lt.-Comdr. J. G. Hope, Lord J. Scott, Lord W. Buchan-Hepburn, P G. T. Howard, Hon. A Smith, E. P. (Ashford) Byers, Frank Hurd, A. Smithers, Sir W. Channon, H. Hutchison, Col. J. R. (Glasgow, C) Spearman, A. C. M Corbett, Lieut.-Col. U. (Ludlow) Jarvis, Sir J. Spence, H. R. Cuthbert, W. N. Kendall, W. D. Studholme, H. G. Darling, Sir W. Y. Lambert, Hon. G. Taylor, C. S. (Eastbourne) De la Bère, R. Legge-Bourke, Maj. E. A. H Teeling, William Dodds-Parker, A. D Linstead, H. N. Thomas, J. P. L. (Hereford) Drayson, G. B. Lloyd, Selwyn (Wirral) Turton, R. H. Drewe, C. Low, A. R. W. Wadsworth, G Dugdale, Maj. Sir T. (Richmond) McCorquodale, Rt. Hon. M. S Wakefield, Sir W. W Duthie, W. S. McFarlane, C. S. Wheatley, Colonel M. J. (Dorset, E.) Eccles, D. M. Mackeson, Brig H. R. White, Sir D. (Fareham) Fletcher, W. (Bury) McKie, J. H (Galloway) Williams, C. (Torquay) Fox, Sir G. Macpherson, N. (Dumfries) York, C Fraser, Sir I. (Lonsdale) Maitland, Comdr. J. W Gage, C. Marshall, D. (Bodmin) TELLERS FOR THE NOES: George, Lady M. Lloyd (Anglesey) Moore, Lt.-Col. Sir T. Major Conant and Major Ramsay. Granville, E. (Eye) Noble, Comdr A. H. P
I beg to move, in page 67, line 11, at the end, to insert:
If it is accepted that there is great loss of food because of these pests, I think it unwise of the Minister to retain the tax on these cages and traps. The amount of revenue involved cannot be large, and cannot compare with the £6 million mentioned earlier in regard to furniture. But I hope the Chancellor will not rule this out because it is such a small amount. The inducement for the ordinary man in the country to purchase these traps is one which he can, if he so desires, overcome by not purchasing the traps. This is not a case, as has been argued by hon. Members on other Amendments, of asking for the removal of a tax in the knowledge that people must purchase the article because they need it. People can do without purchasing these traps. I ask the Chancellor to concede this point.
I would like to deal with the narrower point of vermin traps—[ Interruption. ]—and I am not introducing the few comments I wish to make in any spirit of levity, but because I want to impress on the Committee an important fact. For 25 years the R.S.P.C.A. has used all its great capacity for research in finding some siutable form of steel trap to take the place of the steel-tooth trap that has meant so much horror and torture to animals in this country.
Will the hon. and gallant Member permit me? Such traps are not covered by this tax. This is domestic, and relates to the ordinary "Little Nipper" trap. They are only for domestic use, and are not the traps used on farms, which are not covered.
I accept the right hon. and learned Gentleman's explanation and would like to know in advance whether he will accept an Amendment on Report removing these traps.
They are not there.
In that case, I seem to have spent two hours in this Committee when I might have been in bed. However, in order that I should not let down the hon. Member for Harborough (Mr. Attewell), let me say that I support his Amendment.
1.45 a.m.
As my right hon. and learned Friend has just said, this tax does not apply either to farm traps or to rat cages. It applies only to domestic mousetraps of the type called, I understand, and as my right hon. and learned Friend said, "Little Nippers," and also to the falling-front box type. On the average the tax amounts only to a penny per trap, and, therefore, we do not think it is likely to have a very great effect on the campaign for the destruction of vermin in the protection of food. As the amount involved is small, and in order to meet the wishes of the Committee in this matter, we are willing to consider this matter.
I should like to congratulate the Chancellor of the Exchequer on his picturesque expressions just now. Such levity is not ill-becoming to him. In fact, I may say that to most of us it was rather a pleasant change, and it does show that something can be done at any time. I should rather like to know what is really meant in this matter of rat cages, because, undoubtedly, the subject is one to be gone into. It does seem, from what the Economic Secretary has just said, that we may be hopeful of getting this small amount of money off the mousetraps. I I am surprised, after some of the answers we have had from Ministers, that they should do anything at any time even to discourage the life of a mouse. Not only do we look at this move with surprise; we should like to congratulate the Government on not being quite determined to do everything they can to encourage all forms of vermin. From that point of view alone, I think that probably the whole Committee will welcome the fact that almost certainly small mousetraps will not be taxed. That is one good thing, at any rate, we have extracted from the Government in the course of the last few hours.
I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
I beg to move, in page 67, line 11, at the end, to insert:
The position with regard to office equipment is entirely illogical. Some types are excluded from taxation. Things like metal clothes lockers, of a kind installed in cloakrooms, other than domestic cloakrooms, are specifically exempted. Typewriters and office machines are not subject to Purchase Tax. Yet filing cabinets and safes are. This is an illogical position and it is open to objection. The objection is twofold. First, these things are really part of the capital equipment of an industry. It is the equipment of the factory office, the modern organisation of which is just as important as the organisation of the factory itself. The second objection is that it is really essential, if our industry is to hold its own in the world, for it to be modernised in every direction. Office systems are undoubtedly labour-saving and contribute to economy in manpower.
This exclusion which I urge would not make for greater sales, because the material out of which they are made and their production is controlled by the Board of Trade's control of material. Abolition of the Purchase Tax would mean very little loss of revenue. It would make the category very much more logical. They are susceptible to exact definition, and I think it would help the consumer in nationalised industries and in British industry generally if the tax were lifted.
The hon. Member wants us to exempt specialised furniture of a type designed exclusively for use in offices. I have already explained on earlier Amendments that, reluctantly, we were not able to make further concessions in the case of domestic furniture and school furniture. Though no doubt it would be of assistance to the consumer, we do not think that a stronger claim could possibly be made out for office furniture than for domestic or school furniture. It seems to us that proprietors of offices are better able to pay higher prices than are schools or ordinary householders. Therefore, I am afraid we are obliged to reject the Amendment.
I wish to support the Amendment. We hope on this occasion we can get some concession from the Government. This is the only equipment in any modern factory which bears any tax.
What about stationery?
I had forgotten stationery for the moment. I was talking about equipment. Raw materials and machinery are not taxed. Why should furniture and office equipment be taxed? We are not asking for a concession on fully-fashioned stockings, which does help in the amenities of the office, because we concede the Government have a case there. But this equipment does act for the efficiency of industry.
I wish to congratulate the Government on this occasion. I was wondering, if there was a Division, how I should vote. I never like to give my vote without saying why. I regret that on this occasion, if there is a Division, I may have to go through the Government Lobby rather than through the Lobby belonging to a section of the Liberal Party. The reason for that proceeding—unless there is any stronger argument to be put forward by the Liberal Party or anyone else—is that we have been singularly unlucky in our efforts to get any help for the ordinary poor people and housewives. Although I realise that it is essential for trade and business to get the best possible furniture for the office, and I would support the Amendment on any ordinary occasion, I cannot honestly support it when we have been told that something similar is not going to be done for the ordinary individual in this country, who is very much more in need—especially the newly-married people—than any of the factories. For that reason, although it is not particularly pleasing to me to have to vote against that section of the Liberal Party, or in favour of the Government, I shall vote against the Amendment. I see one or two members of the Communist Party here, and they may give the Committee other ideas upon this subject; but up to now, I am convinced that I shall almost inevitably have to vote against this Amendment, for the one reason I have given.
The support of the hon. Member for Torquay (Mr. C. Williams) for the Government, makes me, as mover of the Amendment, suspicious of the Government's reaction to my Amendment.
I did not support it; I was against it.
The proposition which the hon. Member for Torquay has put forward puts me in great temptation to challenge a Division on this Amendment. There is one thing I want to make clear. My moving of this Amendment should not be taken as meaning that I in any way consider the removal of this tax as more important than the removal of the tax from domestic furniture. I fully support the arguments which were put forward for the removal of the tax from domestic furniture. It is far the more important of the two. But we have disposed of the case regarding domestic furniture. I hope the Government will consider this matter next year, and I now beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
I beg to move, in page 67, line 11, at the end, to insert: when people who are better equipped escape such tax. In many working-class homes the bathroom is sometimes so cold that it is not used readily, and for bathing the baby and younger children some receptacle is bought which can be used in front of a fire. It is a regular thing for working-class people to buy baths of this description, and I do not think there is any good case for something which is a necessity to bear a tax of 33⅓ per cent. I move that this tax should be done away with because it is a tax on the poor people. I have put my case quite shortly, and I hope that the Chancellor will meet me on this point.
2.0 a.m.
I support the Amendment, for two reasons. I had on the Paper an Amendment, which was not called, to exempt galvanised baths—an article used largely by housewives in many parts. They are used largely in the constituency I represent, especially among the mining population, and if there is one section of the community which should have some concession it is the mining fraternity. I support the Amendment on behalf of housewives and the mining community.
I support what has been said, and I should be glad if the Chancellor could state exactly what this would cost.
I hope that the Chancellor will accept this Amendment, which has been supported by a Socialist Member who, like myself, represents a country Division. It is very important that the Chancellor should remember the plight, as the hon. Member for West Ealing (Mr. J. Hudson) has pointed out, and the difficulty, in many working-class homes, where these receptacles are used so that members of the family may perform their ablutions. I see that the hon. Member for West Fife (Mr. Gallacher) is looking at me, and I hope we shall have his support.
Even in this Socialist administration, with its advanced policy and better housing programme, we have not had that rapid progress which we were promised in 1945. If the better housing of our people, which would have secured a bathroom for every home, had been achieved, not only for the mining constituencies such as that represented by the hon. Member for Brecon and Radnor (Mr. Watkins), but also for other working-class homes in my own constituency, this Amendment might not have been necessary. If we had had that kind of progress, it would not have been necessary for two of the Chancellor's supporters to have spoken so strongly as they have to-night. If we do not get a favourable reply, I hope the two hon. Members who advocated this Amendment in such strong words will have the courage to support in the Lobby what they have said, and they certainly will have my support.
We sympathise with the arguments which have been put forward especially on behalf of miners and agricultural workers and we will look at this particular proposition. We shall have to satisfy ourselves that we can get a satisfactory definition of what is meant.
When the hon. Gentleman is considering this, I hope he will think not only of the miners and agricultural workers. I hope he will think also of Glasgow and Dundee.
rose
I am cheered beyond measure.
We have had a large number of people mentioned. We have heard of agricultural workers and miners and others, and I want to mention my dockyard workers, and fishermen—yes, and why should there not be mention of railway workers? They are a very important section of the community, and they have to come in. I think I am entitled to mention that to strengthen the case, because we have nearly got a promise from the Chancellor. I wish also to thank the Government very sincerely for the position they have taken up. In spite of all the rude noises which are being made, I congratulate both hon. Members on having moved the Amendment so successfully, because they have got the Chancellor nearly to make a concession. I hope he will really make it. I should not like it to go down in history that the Chancellor taxes the baths in the same way as Walpole taxed the windows.
I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
I beg to move, in page 67, line 20, leave out "or gas."
The primary object of this Amendment, as of other similar Amendments on the Paper, is to reduce gas water heaters to the 33⅓ per cent. rate of Purchase Tax. The Amendment would go a little further than that, but I propose to deal with the case for reducing the rate on gas water heaters. One of the objects of the Purchase Tax is to raise revenue, and for that purpose the articles on which the tax is levied are divided into three categories. In the top category we have jewellery, walking sticks and mink coats. I do not think it can be contended that gas water heaters come into that category to raise revenue. Whatever other reasons there may be, the bringing in of heaters cannot be justified solely on the basis of raising revenue.
The second reason for the Purchase Tax is to reduce purchases of these apparatus either because they are in short supply or because the fuel which goes to heat them should be saved. As far as the gas industry is concerned, there is not the shortage of the necessary generating plant, taking it by and large, which is an argument that may apply to the electricity industry. Further, there is now no fuel shortage, so that that argument also cannot be applied.
There is one further point, that I think we can take is as axiomatic that hot water is essential in the present day, and if hot water is not created in one form it will be created in another. Although I cannot speak on the technicalities of the subject—I hope some other hon. Members will do so—I am informed that in fact the gas water heater is the most economical method of heating water that exists. It is much more economical than the boiler behind the open fire, and more economical than the gas stove. For those reasons, it appears that to attempt to save fuel by preventing the installation of gas water heaters is to defeat the object. Water heaters of some kind are essential in houses, and there seems to be no good and sufficient reason why people should be called upon to pay more than a reasonable price for them.
At the moment, the tax being what it is, I am informed that the net list price of multipoint heaters is £19 10s., to which must be added the Purchase Tax of £15.
On the assumption that some apparatus for heating water is to be installed in houses, and on the further assumption that the coal or coke boiler is uneconomical—as it is, because it means that a fire has to be lit when hot water is required, which inevitably takes far more fuel than if it were simply turned on when wanted—I suggest that the most economical method which can be found is, in many cases, the gas heater. There seems to be little reason why an additional £15 should be added to the cost of a new house, or added to the cost of installing a geyser in an existing house.
It is sometimes contended that an argument for the Purchase Tax is that it skims off some of the inflationary spare money which is about. Whether there is or is not any spare money about is a matter for argument. At all events, I do not think anybody would spend spare money on a geyser, which seems to be a quite utilitarian article. I do not think anybody would say, "Because I have £30 in my pocket which I do not know what to do with, I will have two geysers in my bathroom instead of one." There are many other means of spending spare money. This very great tax of 100 per cent. on gas water heaters is having a really unfortunate effect on the future prospects of a very excellent industry, which I am informed is looking forward to the future with some trepidation. The prospects are that the capacity of the industry, both in men and equipment, will be very seriously reduced.
When my right hon. Friend the present Chancellor of the Duchy of Lancaster was dealing with this matter as Chancellor of the Exchequer, he said that he could not discriminate between gas and electric water heaters, and that, as it was necessary to cut down the installation of electric water heaters, gas water heaters must be dealt with in the same way. I must say that I do not follow that argument at all. Just because there is not sufficient electricity generating capacity seems to be a very poor argument indeed for attempting to restrict in this way the installation of gas water heaters. However that may be, I would put this further point on which I do not think I carry my hon. Friends with me. There are many places in country districts which have no gas laid on, and that being so it seems to be somewhat unfair that those persons, if they have to rely on other things than fires for water heating, should have to pay the full Purchase Tax on a very convenient type of immersion heater.
The Chancellor may very well say—I take it this is his argument—that is is necessary to restrict the installation of new electrical equipment. If that is so, I suggest that the Purchase Tax is the least convenient way of doing it. If, in fact, he wants to cut down the installation of electrical equipment, I suggest that could be done very much better by making a statutory instrument forbidding the installation of new electrical equipment, rather than in an indirect way penalising people for whom that sort of equipment is necessary. Therefore, the argument for keeping a 100 per cent. Purchase Tax on electric water heaters does not appear to me to be very strong, although I admit it is very much stronger than in the case of gas water heaters.
Another point on which I do not carry my hon. Friends with me is the matter of gas fires, because gas fires do not appear to me to be an unnecessary extravagance. They are an economical way of heating, more economical than coal fires, and therefore 33⅓ per cent. would appear to me to be a reasonable rate of purchase tax rather than 100 per cent. In view of these arguments I hope that the Chancellor will be prepared favourably to consider this Amendment.
2.15 a.m.
May I put this question to the hon. Gentleman? Do I understand that a young married couple entering a pre-fab house, in purchasing a water heater at £19, must pay a sum of £36?
No, they cannot very well pay for that, but I know that people going into a new permanent house who prefer to have some form of gas water heating have to pay the full price. and certainly other people in existing houses have to pay the full price plus Purchase Tax.
There is an Amendment in line 28, in the name of myself and two of my hon. Friends, which deals with the narrower point of instantaneous water heaters, and I imagine it is in Order to refer to them now that the hon. Member for Hitchin (Mr. Asterley Jones) has referred to them in his speech. There are many arguments which could be advanced in favour of this Amendment, but as the Chancellor has, I understand, been the recipient of a memorandum of considerable length from the British Gas Council, all that is necessary is to try and make the main points for the purposes of the record. I think it is unfortunate that there has been no representative of the Ministry of Fuel and Power present during the discussion of this important group of Amendments. I would have welcomed the presence of the Minister of Fuel and Power, although I could understand the subject being disagreeable to him.
The fact that these heaters were exempt entirely prior to April, 1947, the stage at which the 66⅔ per cent. tax was imposed, were increased to 75 per cent. in the interim Budget last Autumn, and are now stepped up once more to 100 per cent. in April, 1948, does show that this particular form of heating has been subject to very fierce steps and sharp increases, and one does not understand why the Government have taken that course. It does fall very heavily upon the very poor sections of the community. It is rather like the earlier Amendment on domestic furniture, having not only social consequences, but industrial consequences on the producers and manufacturers of these water heaters, and for that reason also it is to be opposed.
Spare parts are going to be difficult to get, and I do not think that there is any doubt at all that, if the undertakings are to be shortly under the State, to keep these heaters in a safe condition will be difficult in circumstances where spares are difficult to obtain. Large numbers of skilled workers are likely to have their employment very seriously affected and to suffer discharge. There is every indication that the public feel strongly about this further very sharp increase to 100 per cent. The intervention of my hon. Friend the Member for Moseley (Sir P. Hannon) emphasised what is happening —that an expenditure of £19 becomes £38 once the tax is imposed. Housing and local authorities have expressed great concern about the effect of this on housing schemes.
(Camberwell, North-West): The housewife appreciates the importance of having some easy means of heating water. If she is without a water heater of this kind, she has in Summer time to devise ways of heating water for bathing. I am like the Minister of Fuel and Power in that I have never felt able to indulge in a bath very frequently for the simple reason that I have not had an adequate means of getting a bath easily during the Summer. I have had an electric immersion heater fitted, but I found it so expensive and it consumed so much electricity that I felt that in the interests of the nation it was not vital to use it.
It is a different matter with gas water heaters. The consumption is strictly limited and it is a most economical way of obtaining hot water. One can heat a saucepan of water on the gas or in the copper and cart it upstairs to the bath, but none of those things is desirable, and they are destructive of the housewife's easy temperament. It is unfortunate that at this stage, when the housewives are looking for an easing of their burden, we should find a tax imposed on the installation of a simple, effective and economical method of heating water for baths so as to make it prohibitive for people with a moderate income to obtain this easement of their household difficulties. It is apparent that people who have the money will continue to have these appliances installed, but people without money will be hit. From that point of view, the Chancellor should reconsider this proposal.
Manufacturers in my constituency have informed me that since the raising of the tax to 66⅔ and ultimately to 75 per cent., their business has declined to an alarming extent, and they are anticipating having to close down in view of the increase to 100 per cent. This is serious for the skilled men they employ. If those men are dispersed, we shall find that we are unable to get them when we are again prepared to dispense with Purchase Tax. There will be a difficult situation in regard to employment and the installation of these heaters on housing estates if we proceed with this tax.
I have deliberately abstained from adding my name to my hon. Friend's Amendment, which takes in electric appliances and space-heating appliances. I appreciate the difficulty so far as electricity is concerned, but I am assured by the gas industry that there is no such difficulty in their case. I appeal to my right hon. and learned Friend to make this differentiation between the two in- dustries. It is no answer to say that because the electricity industry cannot bear the load, the gas industry also cannot bear the load. After all, we ought to try to consider the needs of our people, and if one industry will, in fact, stand up to those needs, we should try to make that differentiation. I do not for the life of me see what need there is to try to put them on an equal basis, and I ask definitely that we may have the Tax on gas water heaters—not space heating, not electrical heating—reduced at least to the first category.
I do not want to detain the Committee for long, but I raised this matter last year, I have taken much interest in it, and I am very glad to see that this time I have some support from the hon. Lady the Member for North-West Camberwell (Mrs. Corbet), who has put the arguments so excellently, and from the hon. Member for Hitchin (Mr. Asterley Jones), who moved the Amendment. Last year, when we were discussing the matter, the then Chancellor of the Exchequer came out against me, first on the grounds that no water heater was instantaneous—I understand that the present Chancellor acknowledges that the gas water heater can be instantaneous—and secondly on the grounds that, even if it were instantaneous, there would still be great waste. He said that the installation of this form of heater would be very wasteful in a large number of homes, because so many people did not know how to make the best use of it. When I asked him, at the end of the Debate—[ Interruption ]—this is rather important, I would remind the hon. Member for Bolton (Mr. J. Lewis), for I am asking for a concession from the Government, and if the hon. Member for Bolton wants to go home, let him go home now.
I hope the hon. Member for North Blackpool (Mr. Low) did not think I was being discourteous. I was discussing this matter.
I appreciate that. I did not want to waste my words or have to repeat them. We were given certain arguments last year and I am supposing that the right hon. and learned Gentleman, if he follows his predecessor, may use the same arguments this year. I am trying to address my mind to them. The second argument was that the installa- tion of this form of apparatus would lead to waste. When I asked the Chancellor, at the end of the Debate, how he could get waste out of the installation of the instantaneous gas water heater in the house except by leaving all the taps on, he was, of course, quite unable to reply. There is no other way unless we suppose that the housewife is going to leave all the taps on so that she can have hot water all the time, and thus waste gas. It is very important that the Committee should realise that these instantaneous gas water heaters are the least wasteful of all forms of heating water. I want to emphasise one point which the hon. Member for North-West Camberwell put last, because I believe it is of the greatest importance, and it is that if this 100 per cent. Purchase Tax is left on these gas water heaters, it will be a great injustice to the lower income groups. That is a point I made last year and I think it was given too little attention by the then Chancellor. The importance of being fair to all income groups, and the importance of allowing people to have access to apparatus which will save fuel, should not be lightly swept away.
2.30 a.m.
We have assumed that the Chancellor's aim in putting on this tax was not chiefly to get revenue, but to do something that would be in the interest of the fuel situation. As I understand it, he does not expect this item to be important in helping his anti-inflationary battle. As a result of what has happened so far, the number of gas water heaters sold on the home market has been cut by about half. It is clear that the result of this tax is in no way anti-inflationary. For these reasons, and for the reasons put up by hon. Members on both sides of the Committee, I hope that the Chancellor will be able to tell us that he will reconsider the matter, and that eventually he will tell us that he has been able to cut the tax to 33⅓ per cent., if not to remove it altogether.
As the Committee will remember from earlier Debates, the reason for the Purchase Tax on these appliances was to help in the general aim of saving fuel; but having listened to the speeches of hon. Members on both sides, and being fully apprised of the views of the Minister of Fuel and Power, and having a good deal of data from the industries concerned—which rather confirms some of the statements made tonight—we do feel that some case has been made for a differentiation between electrical appliances and gas appliances. The hon. Member for North-West Camberwell (Mrs. Corbet) put the point emphatically and clearly. I must make it clear that we cannot consider a concession on the electrical appliances. The only thing we could consider would be a reduction in the rate for gas space heating and water heating appliances from the 100 per cent. rate to the 66⅔ per cent. rate, and that point we are prepared to consider.
I am very glad to hear what the hon. Gentleman has said. It is encouraging at this time of morning to have a concession from the Government. We are hoping to have a few more before we get to breakfast. I would like to mention one point. It is extremely disturbing to industry to have such constant changes in their arrangements as have been made in this particular trade. In October, 1945, the 33 per cent. tax was taken off altogether; in April, 1947, it was reimposed at 66 per cent.; in November, 1947, it was made up to 75 per cent.; now it has been increased to 100 per cent., and we are to have a concession. We are grateful for the concession, but it is awfully difficult for industry to carry on with all these changes, and I am sure the Chancellor appreciates that.
I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
I beg to move, in page 68, line 13, at the end, to insert: only reasonable to suppose that some of the fruit and vegetables which now go to waste would be preserved. That would help the home food production campaign. I hope for this reason the Chancellor can see his way to removing Purchase Tax from these machines. This is another way of helping the housewife. Again and again the Chancellor has said he desires to help her and to help food production. These home canning machines help both, and so I hope the right hon. and learned Gentleman will sympathetically consider this Amendment.
I support my hon. Friend's Amendment. I would point out to the Chancellor that these machines are often used in a communal way. If there is one in a village, the Women's Institute will use it, and perform communal work with it. I am sure the Chancellor will approve of that. Even if he cannot make the concession in respect of all the machines, perhaps he will make it in respect of those bought for communal purposes?
The tax on these machines was previously 50 per cent. It is being reduced to 33⅓ per cent. I think that most hon. Members will be inclined to agree with me, therefore, that this, among the very large number of deserving cases we are considering tonight, is not one of the strongest. We still intend to tax many domestic articles, such as washing machines, sewing machines, carpet sweepers, and so on; and it would be very difficult to justify to the housewife the continuance of taxation on such necessary machines of that kind while exempting altogether from tax machines of this kind. On the whole, we do not feel that this concession can be made.
I hope the Paymaster-General and the Chancellor may change their minds on the subject of this Amendment when they have heard the very few words I propose to address to the Committee. I ought to declare my interest in this matter. One of my favourite hobbies is cooking, and I have a productive garden. Canning is in my judgment, preferable to bottling, because of the somewhat uncertain sterilisation when bottles are used. At present if one bottles fruit or vegetables there is a small percentage which do not sterilise the first time. They have to be re- sterilised. That involves an extra expenditure of fuel, whereas by means of canning one obviates that, and thereby saves fuel. I urge the Chancellor to agree to this Amendment, because not only will it help to conserve food, and thereby help in the economic situation, but it will also help to conserve labour and fuel.
If the hon. Gentleman has any more trouble with bottling, he should come over here and we will give him some tips.
If a Member gets canned, what does it matter?
Amendment negatived.
I beg to move, in page 68, line 28, at the end, to insert:
I must ask the hon. Member to deal with the Amendment before the Committee, or I will pass on to the next Amendment.
I am trying to say that in these circumstances it is absolutely essential that every possible article of domestic use should be at the disposal of the housewife at the cheapest rate possible. We are not considering the housewife with two or three rooms and the opportunity of filling them up with all kinds of domestic conveniences, so much as the hundreds of thousands of housewives whose one room constitutes the whole house. On these grounds I ask the Chancellor to regard this as one concession which should have his favourable consideration.
2.45 a.m.
Perhaps I should clarify a little what would be the effect of accepting this Amendment. The Amendment would exempt from Purchase Tax domestic cutlery, spoons, forks, and so on, providing that they were not of the expensive varieties. We have already reduced the tax on this type of article from 50 per cent. to 33⅓ per cent. Therefore, the Chancellor has already made some reduction in the tax to meet the needs of householders. The concession for which we are now asked would cost £2 million. In view of all the arguments that we have to consider, we feel that this is not a case in which we can make any further concession.
Amendment negatived.
I beg to move, in page 68, line 39, at the end, to insert: 60-watt electric lamp, it would work out at about £2 12s. 8d., whereas in a rural district the use of a four-candle power vapouriser and pre-heating torches giving a smaller amount of light, would cost about £8 7s. 9d. with Purchase Tax. That is a considerable difference.
Here I would like to pay tribute to the help I have received, in getting a certain amount of detail, from the Treasury, which has been very helpful. But I am still not quite aware of what the total cost of this would be. But I feel that the Chancellor of the Exchequer would help a great number of people who, at, any time, suffer a great deal of inconvenience. I can speak from personal experience, because a few years ago I went through a certain amount of time using this type of lighting. I know how often the breakages do occur, and how costly they are. I sincerely trust that the Chancellor of the Exchequer will accept the Amendment.
Before my hon. Friend sits down, may I ask whether his Amendment is intended to include not only what are called illuminating lamps, but also primus cooking stoves?
No; those are actually free of the tax in any case.
This is a matter with which those of us who have lived in the country are familiar, and certainly it is an expensive form of lighting. It does not have the conveniences of other forms of lighting, either. I would very much like to do anything I can along these lines for the rural communities. I will, therefore, look at this matter and see whether some definition can be designed which will not lead to the letting in of a great many other things as well, which is always the danger. Therefore, I would say that we will consider this again but I cannot go farther and promise more than that.
We are grateful to the Chancellor. He does seem to take a great interest in the rural parts of the country.
May I be permitted to say one further word, because there is a point which has not been brought out; and before I continue, may I thank the right hon. and learned Gentleman, on behalf of a great many people in the country, for the kindly way in which he dealt with this proposition? There has been a considerable development of electricity in the country districts going on for many years. Where one has electricity coming to a country district, one has, by the cheapness of that electricity, given a great boon to the country worker. But those with this old type of lamp are at a disadvantage and I should like the Chancellor to remember that certain parts of the country, which more or less suffer from this disadvantage, are becoming connected with electricity. Therefore, any taxation which the Chancellor may get is growing less all the time. The people suffering from the disadvantages of this sort of lamp are those in the most remote places. It is for them that I speak and I hope the Chancellor will not object too much to my putting the point, but it is one worthy of consideration.
In view of what has been said by the Chancellor of the Exchequer, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
I beg to move, "That the Chairman do report Progress and ask leave to sit again."
Might I respectfully suggest, Major Milner, that people at this hour are getting a little fatigued and tired. I mink that the proceedings in Committee during the night have, on the whole, been satisfactory and we on this side have tried to make ourselves as friendly and kindly as possible, or, as my hon. Friend the Member for Edinburgh, South (Sir W. Darling) says, "helpful and harmonious," and I think we have arrived at a time when deliberations cannot be made with that sound judgment, clarity and mature consideration which is necessary for a Bill of this complexity. It is clear that we cannot finish the Committee stage of the Bill with any satisfaction to the Bill, or to the Chancellor himself, during the course of tonight. It is obvious, also, that we shall have to have another day, or part of a day, to consider the remainder. Right hon. and hon. Members should go home to their beds—those beds which have been referred to in such touching words by hon. Members opposite.
We cannot, of course, accept such a Motion. I think that we can very well get through the Bill in the next few hours, and there should be no difficulty in finishing it before two o'clock tomorrow.—[AN HON. MEMBER: Two o'clock today.] As a matter of fact, as no doubt hon. Members opposite know, the arrangement was made through the usual channels that a certain amount of time should be allowed for this and it was considered ample time. We must therefore proceed and try to finish the Bill tonight.
May I make one point? There is in the new Schedule which the right hon. Gentleman is moving a very important matter which many people wish to discuss at length and in some detail. When it was raised before, it was decided by you, Major Milner, that it should be discussed when the Schedule arose. That will, in fact, occur possibly at nine, ten, or 11 o'clock this morning. Therefore, a situation might arise in which it would be better to discuss it at a later stage. If we do that, we shall find ourselves in the same position. I submit that the fact that we are sitting at such a late hour does mean that this matter can only be discussed at a time obviously of great inconvenience to all sides of the House.
There has already been discussion, as hon. Members know, as to when would be the most convenient time to discuss the new Schedule. We put it on the Paper because we thought Members would like a long notice of it. If it is thought it might be more convenient to discuss it on the Report stage we shall be quite happy to discuss it on the Report stage rather than on the Committee stage.
I think that if the Chancellor will consider the position he will realise that if we discuss it on the Report stage we shall be discussing it again at a very late hour in the morning because it comes at the end of the Bill and we are confined to one day's Debate.
That depends upon what progress we make on the Report stage.
Naturally we do not like discussing these important matters in the middle of the night and I do not think the Chancellor likes it very much either. But it appears he is insistent on finishing the Bill tonight. My only comment will be that I hope on future occasions he will give more time to the Finance Bill than he has given on this occasion.
On the matter of reporting Progress, the Chancellor was kind enough to say a moment ago that there had been plenty of time allowed. I do not agree with him at all. It is all very well for him with his well-known ideas but here we have been discussing at three o'clock today—and this is why it would be an advantage to report Progress—matters which affect the ordinary household of almost every elector. We have had very few long speeches. I think the average speech has been a column or one and a half columns of HANSARD. AS far as this side of the House is concerned there have been very few long speeches. There have been speeches in almost every case from all sides of the Committee, and very excellent speeches from the other side, entirely disagreeing with the Chancellor. I have listened to something like 20 speeches and very rarely have I heard so much criticism of the Chancellor from his own back benchers.
That has nothing to do with the Motion before the Committee.
I think we should report Progress to enable the Chancellor to go into the matter of further Amendments and give us time to discuss them at a time of day when everyone is able to deal with them easily. We had an illustration a minute or two ago, when an hon. Member opposite was not very quick in finding the place on the Order Paper. It seems to me that to adjourn now would I have great advantages to the Government and the Committee as a whole. We have done an excellent day's work, and I do think that now we might report Progress.
3.0 a.m.
Let me turn to another side of the picture, which was taken up by the Chancellor just now, when he said it was agreed that we should have five days. I am not sure what he means. If he means that was the amount of time allotted by the Government, that, of course, is his position. If, as time goes on during a Bill of this kind, it is found, as we are finding today, that very many things affecting the people of the country are not being adequately discussed, surely it is of advantage for the people of the country that another half day or full day should be taken out of Government time. It really cannot be right that we should go on at the present time, with the Chancellor looking very tired indeed, and when many hon. Members do not feel very easy about the position. On grounds of sheer humanity it is time to report Progress and to ask leave to sit again.
Many other reasons could be given, but I will give just this one. Some of us have important engagements later on in the morning, for which we have to prepare. I think the Government would be well advised, in their own interests, to accept this Motion. I am sure the country is not particularly anxious that we should be dealing with its affairs in a hasty way at this time of the morning. If the Chancellor wishes to interrupt me, I shall be per fectly willing to give way, but
The hon. Gentleman has really been very irrelevant, not only in this speech but in most of the speeches he has made tonight. I must ask him to keep to the precise point, and not to indulge in tedious repetition.
I very much regret if I have in any way repeated myself. I must say—and certainly this is not repetition—the way in which the Chancellor is abusing his position and treating the Committee is a gross scandal.
In view of what the right hon. and learned Gentleman has said, and not having any desire to delay the proceedings of the Committee, in order to help the Committee and not to embarrass the Chancellor further, I beg to ask leave to withdraw the Motion.
Motion, by leave, withdrawn.
I beg to move, in page 69, line 9, to leave out "Second," and to insert "First."
This Amendment relates to garden furniture in Group 16, paragraph ( b ). I propose that the Purchase Tax on garden furniture should be reduced from 66⅔ per cent. to 33⅔ per cent. Of course, there are all kinds of garden furniture, some of which even adorns the Tory benches. I do not intend that the lower category shall relate to luxury garden furniture, of which one sees a certain amount in some of the West End stores. The garden furniture I have in mind includes the very humble deck chair, and things of that kind. Many a working man, upon whom the Chancellor and other Ministers have been calling to work harder, would like, after a hard day's work, to sit in his deck chair, which offers greater comfort than an ordinary kitchen chair. A deck chair does cost four or five times as much as before the war. A chair could be bought then for about eight shillings and now it costs about £2. It is subject to 66⅔ Purchase Tax. The essence of the Amendment is that the Chancellor should see his way perhaps to reducing the tax on garden furniture, but not of the luxury kind, to 33⅓ per cent. I hope he will see his way to do this.
We are all, of course, sympathetic with persons who like to sit in deck chairs or indeed in any comfortable or restful form of chair, but I think it would be quite wrong for us to consider a case of this kind when we have unfortunately had to turn down very much more important ones than this, and I do not think the Committee would wish us to waste time.
Amendment negatived.
I beg to move in page 69, line 15, to leave out "Second," and to insert "First."
From the remarks made by the Chancellor on the last Amendment but one I think there are possibilities in this Amendment. We were concerned on that occasion with the question of regular employment, but I am more concerned at the moment with clocks and watches. I do not want to stress the watches unduly, but I cannot understand why there should be a 66⅔ per cent. increase of Purchase Tax on clocks. I want specially to stress my case in relation to the alarm clock. I know that it seems ironical at this hour in the morning to be discussing alarm clocks, but apart from ourselves there are many intelligent persons in the community who require them in the morning, and I think that we should make the necessary provision for them. This Government have done a wonderful job with regard to the housing of the people, and I do suggest that one of the most essential articles in the house is an alarm clock. I admit I have never been happy with the alarm clock, but it is a very essential article, and I do ask the Financial Secretary or the Economic Secretary to give this matter very serious consideration.
There has been a serious shortage in every working class area up and down the country and there is a demand which must be met. We are constantly being told the need for extra production. That is only possible with full employment and there an alarm clock is essential. There are two types—the very old fashioned ones, and the electric one, just recently on the market, and I think the ordinary house built by the local authorities are well equipped for that type of clock, and I hope a concession, if it is made, will not be confined to the one type alone.
As to production, this is practically a new industry, and in many parts of the country small factories are being established with between 100 and 200 employees. In my area is a small factory employing about 110 people. Since the intimation that this tax was to be imposed, something like 40 people have been dismissed. This is regarded as a light industry. I represent an area which has 3,000 unemployed, and that number will be increased if this imposition is not eased in some way. I hope that the hon. and right hon. Gentleman concerned will give this sympathetic consideration. I have waited patiently for two days and I have watched concession after concession being granted to hon. Members on both sides of the Committee. I hope that my appeal will be as successful as some of the others have been.
I would remind the Committee that the Purchase Tax on clocks and watches began at 33⅓ per cent. and went up to 50 per cent. and according to this Schedule, now goes to 66⅔ per cent. I would also remind the Committee that in October, 1945, the Chancellor of the Exchequer and the hon. Member for Mid-Redford (Mr. Lennox-Boyd) were praising the fact that £200,000 of the taxpayer's money was to be given towards the re-establishment and the assistance of the clock and watch manufacturing industry. Today the Chancellor is doing something which he would not have agreed to do in October, 1945. My constituency has taken one of the 11 new factories in the development areas, and it was with great pleasure that I listened to those speeches from both sides of the Committee. I am glad to find the hon. Member for Mid-Bedford supporting me. It does not mean that it is a bad case because both sides of the Committee have put it forward. My first recollection was of hearing the Chancellor assisting this industry, and a great deal of financial support has been given.
In my constituency is Ystradgynlais one of the most ideal sites for such a factory. A stranger would think he was in Switzerland. The factory is among the mountains on an ideal site. More than that, it gave a "New Look" to that district long before the women thought about it. There was a mining community with a great many sufferers from silicosis and pneumoconiosis looking to a new future. The Chancellor of the Exchequer, the Chancellor of the Duchy of Lancaster, the Minister of National Insurance, the Economic Secretary to the Treasury and the Paymaster-General have all taken part in ceremonies in support of that industry. They are a formidable team on the Front Bench, and surely they will give some concession?
3.15 a.m.
As a vigilant Member, I would say to the Committee that every form of Government assistance has been lavished on this project, not without appreciation from the people I represent and the people of South Wales. I am the first speaker from South Wales this evening, but others will follow on other industries. It is a serious thing that after three years of our Government we have a tendency towards more unemployment, and some of it is due to the increased Purchase Tax. This heavy Purchase Tax will have a great effect. It will, in my estimation, have three major effects. First, there will be an increase in unemployment. Some people, as has been said, will already have been dismissed. There is what is, to me, the far more heart-burningproblem—the great number of silicotic cases, practically 50 per cent. of those unemployed at the present time, who will not be able to find employment in the future unless something is done.
There is also the tragic argument from the industrialists' standpoint, which is that these factories are only in a stage of 50 per cent. production as yet, and within the next two years there will not be 100 per cent. production, and here they are being cut down in their prime without any explanation whatsoever. May I remind the Committee that this is a great loss of war potential? Perhaps no one else may look at that aspect of it, but the instrument industry of this country had a great deal to do with the victory in the last war. Here, for the first time, we have an industry of this kind coming to South Wales—and a very important industry—and I understand from information given me that our country has the greatest war potential in regard to instruments of any country in the world.
I would also remind the Committee that this will be a very heavy financial blow to the Treasury, because they have supported these ventures. If hon. Members look at the Estimates for 1945 they will see that if these factories are allowed to go out of existence altogether, or at least do not come up to the production they are expected to achieve, it will be a blow to the Treasury. In an adjoining trading estate one factory has gone out of existence altogether since the Purchase Tax was made known. In all probability, the Chancellor or the Economic Secretary to the Treasury or whoever will reply may say that he cannot accept the Amendments, but I would suggest that they consider the particular Amendment in my name and that of the hon. Member for Mid-Bedford. I will say nothing about alarm clocks—that can be emphasised by other speakers—but I have an Amendment on that subject. Turning to watches, that is perhaps a case where the Chancellor can help a particular industry in which I am interested, in my constituency, and my Amendment here makes provision that utility watches having a selling price, less Purchase Tax, of not more than 35s. for pocket watches and 55s. for wristlet watches should pay only 33⅓ per cent. Purchase Tax.
The watches with which I am concerned are popular and are made not in Switzerland, but in South Wales. I want to get these watches on the market in our own country and abroad as well. The pocket watches are used, I suggest, by miners in particular, because one cannot think of a miner wearing a wristlet watch. He has to have a watch to remind him of the time. I would not consider wristlet watches to be a luxury at all. They are something to which young people look forward, particularly if they are going courting on a Sunday night and the young man is working on a night shift. These are important matters and I hope the Committee will lend me their support on this Amendment if the Chancellor will do nothing on the other Amendments.
The hon. Member for Brecon and Radnor (Mr. Watkins) has made a very persuasive speech. It is true that the present Government have devoted a good deal of effort and labour to the setting up of the watch and clock industry in this country. We have done that because, as the hon. Member says, the watch and clock industry is extremely important from the point of view of war potential, and also because it is important from the point of view of saving foreign exchange on imports. This new industry has been located largely in the development areas, mainly in Scotland and in South Wales. I have had the good fortune to visit the Ystradgynlais site which the hon. Member knows so well. We are moved by all these considerations, particularly the importance of this new industry to this country, and in the light of information which has come to us since the Budget we are prepared to consider making a concession over the whole field of clocks and watches, excluding those made of precious metals. What we would be prepared to consider is a reduction from the 66⅔ rate to the 33⅓ rate.
I cannot say how delighted I am at the concession which has just been announced. Naturally on this side of the Committee we are equally interested in this industry which has been developed rapidly in recent years. But apart from that, the main interest, at any rate on this side, is in the consumer, the man who wants to buy the watch. We think that he has to pay too much, that watches and clocks are too highly taxed, and we are very grateful for the concession.
When the Economic Secretary says he is going to ease the situation to cover all watches and clocks, does that also include the clocks made by the Lord Roberts' Workshops? There has been very good work by ex-Service men at these workshops, which are now turning out electric clocks, and I hope the concession covers that.
I understand that, providing they are not made of precious metals, those clocks would be covered. But may I repeat that this is not a concession we have made, but a promise to consider one?
My name was down to an Amendment on this point. I want to say that we do appreciate the concession that has been made, but I want to add this further point. When the Government are helping to create and support a new industry of this kind, it is important that they should be consistent in their policy and maintain good faith. It was most unfortunate, and I put it no higher than that in view of the concession that has been made, that this tax was raised from 33⅓ per cent. to 50 per cent., and then to 66⅔ per cent. It did create a feeling which must have been contrary to what was desired when great efforts were being made to establish this industry. It is important when dealing with these very difficult Purchase Tax items that this aspect should be kept in mind. I am grateful for the concession, and will not detain the Committee further.
I desire to save the time of the Committee and to express my appreciation of the remarks of the Economic Secretary. I beg to ask leave to withdraw the Amendment.
Before the Amendment is withdrawn I want to ask the Economic Secretary to make it clear beyond doubt that alarm clocks, whether wound or electric, will be covered.
indicated assent.
Amendment, by leave, withdrawn.
In calling the Amendment in the name of the right hon. Member for West Bristol (Mr. O. Stanley), in page 70, I would say that I hope the discussion upon it will cover all the Amendments relating to wireless sets and parts.
May I ask your assistance, Major Milner? You will notice amongst the Amendments following, one which proposes to exempt television receivers, radio valves and cathode ray tubes. A very considerable number of hon. Members on this side of the Committee regard that Amendment as being of supreme importance. May I express the hope that that Amendment may be discussed separately?
The Amendments all cover the same matter in principle, and the hon. Gentleman may have an opportunity of putting his point of view.
I beg to move, in page 70, to leave out lines 2 to 11, and to insert:
This is a new industry, and it has developed very rapidly. Some Members of the Committee may think it has developed too rapidly. That, of course, is due to the fact that during the war it was necessary to increase the size of the industry to about five times what it was before the war, for the purpose of providing equipment for the Armed Forces. At the end of the war the industry was large, and straight away it set about doing two things: first, supplying the home demand, which was very great; and also expanding its export market. I think it had considerable success. Exports rose to something like five and a half times the highest they had been before the war.
3.30 a.m.
However, this is an industry in which there is very great competition, especially from the United States of America. It is certainly an industry in which very large sums must be spent on research if it is to keep abreast of similar industries in other countries. I think its record in research has been very good. It has spent as much as £3 million a year. Its discoveries during the war, and the equipment it made for radar, show that our wireless industry is at least as good as any in the world. I think sometimes it is even better.
Therefore, we have the right to rely on this industry to provide us with a steady stream of foreign exchange, growing, I hope, as television grows and the market for equipment for ships and aircraft expands. I do not think that the expanding nature of the industry is likely to come about unless there is a good and steady "bread and butter" business at home. The prices at which they can sell for export also depend very largely on having a good turnover at home. If it were not for the fact that this industry can make such a contribution to our export drive, I do not think my hon. Friends would have put down this Amendment. We think the high rate of Purchase Tax will have economic effects that greatly outweigh the revenue collected.
In rural areas, where people cannot get into towns as often as they would like, wireless sets are of immense importance. Television, when it comes to rural areas, will make an enormous difference to the amenities of villages where they cannot have cinemas. We have here something which has a very real bearing on making agricultural life a pleasure. Then there is the defence aspect. We cannot ignore the possibility of requiring a war potential, and the radio industry, as we know, has a very large part to play in our defence.
I believe it is true that this industry has over-produced in some respects, but, on the other hand, they did consult the Government and make arrangements about the size of their production, and I think the Government should recognise that they have some responsibility for the flow of output that has been coming on the market. If it is a fact, as a radio dealer tells me, that it is now becoming increasingly difficult to sell radios at home—there is some sales resistance developing—then surely it would be wrong not to facilitate the flow of radios on, to the market so that development may take place and the industry may keep abreast of America.
If it is the purpose of the Government to direct labour away from this industry, because they consider the industry is employing too much labour at present and it ought to be smaller, then Purchase Tax is not the way to deal with that. We ought to have a statement from the Government about the policy behind this tax on radios. Is it to reduce the industry from its present size? If that is not the policy, I really do not think there is any valid reason for allowing these stocks to continue to pile up. I think this is an industry which deserves help, and it would repay that help in the export market.
There is a series of Amendments in the names of some of my hon. Friends and myself which broadly support the Amendment which has been moved by the hon. Member for Chippenham (Mr. Eccles). My Amendment, and those of my hon. Friends, broadly seek to restore wireless sets to the pre-Autumn Budget position, and to free television sets from Purchase Tax, for reason which I will briefly mention. The Chancellor of the Exchequer has said on at least one occasion, and possibly on more than one occasion, that those hon. Members who ask for concessions in Purchase Tax should suggest other items to compensate for the loss of revenue which the granting of the concession might entail. That is a pertinent and valid challenge to make if, in fact, any concessions granted will mean loss of revenue.
There is, however, a danger that sometimes the Purchase Tax may rise to such heights that it depresses the demand for the goods affected, and may of itself lead to loss of revenue. I know that the Treasury will have much more ample information at its command than I can have; but my study of the information placed at my disposal leads me to believe that there is a grave possibility of depression of the demand, because the raising of the tax to 66⅔ per cent., as is now proposed, will cause a loss of revenue to the Treasury. My right hon. Friend will, no doubt, have all the figures which have been submitted to him.
I have here an interesting graph which shows the effect of the tax since it was raised to 50 per cent. in the Autumn Budget, and since the present proposal to raise it to 66⅔ per cent. The sample was taken from 87 wireless retailers' shops for the months of October last year and May this year. The average sales per month rose in October from 30 to 70. Then there was a sudden drop in March this year after the Autumn Budget to 20 a month, showing the effect of the raising of the tax to 50 per cent., and in the succeeding months to May this year sales dropped to below 10 a month.
There is further evidence. As an example, I would quote from information given to me by a large firm of manufacturers in my constituency. They would normally be despatching about 2,000 sets a week to dealers. During March, owing to the already depressing effect of the 50 per cent. tax which was imposed in the Autumn Budget, the figure had dropped from 2,000 to 1,200 a week, and in the weeks beginning April 16th, 23rd and 30th, the average output was only 300 a week. The effect of this tremendous drop in demand following this large increase in the tax will lead to losses of revenue, and, I am assured by those in the industry, may have the further effect of causing a rise in overall prices, and consequently in export prices, which will affect their export trade. Their export prices, they feel, are already too high to meet competition and to maintain their export output, but the overall danger is that they will have to raise them still farther. The third fact, which is very serious, is the unemployment which is caused. In my own constituency a firm has had to discharge 200 to 300 employees and I understand that this is happening elsewhere. I hope that the Chancellor will see fit to do what is suggested in my Amendment.
May I also refer to television? I suppose nobody would claim that ordinary wireless sets are a luxury article. It is absolutely necessary that people should have ample means of obtaining news, and wireless has become accepted as a necessity. But a television set may be claimed to be a luxury article. The television industry is one on which the Government is spending money. We have the finest television system in the world coming up against intense competition from foreign countries, and the only way we can establish that industry and make it the leading one of its kind in the world is to encourage the home market for television sets. For that reason, television sets should be exempted.
At this hour I will not detain the Committee by repeating the arguments which have been put forward, and with which I agree, but I would like to refer to the reduction in sales which has resulted from the two increases in the tax. According to my information, weekly sales of sets fell from 30,000 in November and December to 14,000 in March, and since the April Budget, the figure, so I am informed, is 7,000 sets. If the right hon. and learned Gentleman wants revenue, it would appear that he will lose rather than gain from the increase in tax.
A prominent Liverpool firm—and I am glad to see two of the hon. Members from Liverpool in their places supporting, I hope, this point—has received cancellations of orders to the extent of £64,189, and it has had to reduce its labour force to the extent of 200; this is a similar case to that which has been quoted by the hon. Member for St. Albans (Mr. Dumpleton). It is obvious that there is a high degree of unanimity on all sides of the Committee, and I hope that as a result, we may have some favourable consideration from the Chancellor.
3.45 a.m.
While agreeing entirely with the hon. Member for Chippenham (Mr. Eccles), my hon. Friend the Member for St. Albans (Mr. Dumpleton) and the hon. and learned Member for Wirral (Mr. Selwyn Lloyd), I think there is just a slight danger of getting one aspect of this matter out of perspective. I speak with feeling because in my constituency 700 workers have been put out of employment, but it would be a gross exaggeration to say that it was due to the increase in Purchase Tax or the unfortunate and violent fluctuations in the tax. The hon. Member for St. Albans may recall that before the war there was no Purchase Tax but there were violent fluctuations in employment in the radio industry every year.
While I am willing to agree that the changes in the scale of the tax have been a bad thing, I think that since the end of the war the industry has enjoyed rather greater security of employment than in any comparable period before the war.
As the hon. Member for Chippenham said, this is a good industry; it produces good sets, well designed and of high technical quality. I think everyone would wish to encourage an industry of that character, and particularly to encourage the development of the newer branch of the industry—the production of television sets. I hope the Chancellor will see his way to make substantial concessions in this matter. I should have thought it desirable, indeed, to get concessions amounting to the total abolition of Purchase Tax, at least for a temporary period, but one comes up against many complications, and if such a concession had been made, the position of retailers would have been disastrous.
The best we can ask in the interests of productivity and distribution is that the tax should be reduced to 33⅓ per cent. Such a concession would be of great benefit to the industry, the retailer, and those members of the public who for a long time have wanted to replace their outworn receivers. The factories are heavily overstocked and cannot get rid of their sets. I emphasise that there is danger of too much blame being attached to the Government in this matter. It is not altogether a question of Purchase Tax. All sorts of different winds have blown over the industry. Governments over which we have no control have allocated import licences to particular manufacturers and then, without a word of warning, have suddenly cut them catastrophically. Those are all contributing factors.
I want the Government, and the Chancellor in particular, to think well about the need for concessions and the need for some kind of continuity in the method of the tax. I think that if it had been fixed at 100 per cent. two years ago, the industry could have borne it, and weathered the difficulty. But it is the fluctuations which have led to the difficulty. I know the Government cannot commit themselves to an indefinite period again, but nevertheless, as far as guarantees can be given, they should be given that the tax will be fixed and that any concession will fix the level for a long time to come.
I rise to support the Amendment moved by my hon. Friend the Member for Chippenham (Mr. Eccles) in such forceful terms and convincing logic that I am certain it must have made a rare impression on the mind of the Chancellor. Two considerations arise. The first is whether the continuity of this industry is of importance to the export drive with which we are all so much concerned and to which the Chancellor himself attaches so much importance.
A few days ago I had the privilege of meeting the radio manufacturers in their association, and I can assure the right hon. and learned Gentleman that in all my life I never met a more sorrowful body of men. They looked forward only to a period of unemployment for their workpeople, and in many cases to the dissolution of the industry in which they were engaged. I certainly wish the Chancellor could have been there and seen, face to face, the devastation which will be brought upon this industry if this Amendment is not accepted.
To increase the price of a set from the figure at which it was before the imposition of the tax—from £21 to £30—is a very serious blow to the continuity of the industry. Again and again it has been represented to the Chancellor that the export drive depends for its efficiency in large measure upon the support of the home market, which has to carry the overheads of most of our industries. In this industry the home market is of particular importance in making its contribution to the competitive power of the trade. If the Chancellor is not prepared to give these manufacturers the opportunity of putting their goods into the home market under reasonably competitive conditions, then I do not see what hope there is for the maintenance of the export drive.
The Chancellor is one of the most sensible persons in this country. I have paid him that compliment repeatedly; I have exalted his wisdom on every possible occasion. This is an occasion upon which he ought to exercise his wisdom, first on the ground of the continuity and expansion of the export drive, and secondly on the ground of maintaining employment in this industry, which produced radio sets which played such an important part in winning the war. We sometimes seem to forget the important part this industry played during the war. Although the Chancellor is not paying the slightest attention to me at the moment, I hope he will at least take into consideration the submissions made to him by other hon. Members.
(Houghton-le-Spring): I do not want to take up much time, but I should like to speak on this problem from the unemployment point of view. The Economic Secretary was at a factory in South Shields recently, and I am sure he learned that reductions in staff and dismissals are bound to follow in the train of this increase in the Purchase Tax. The figures I have show that of 55,000 persons employed in this industry at present, 20 per cent. have either finished work or are under notice. The North-East is a depressed area; the Government have invited these people to go into these areas to make these wireless components. But this Purchase Tax means that the Government have let these men down, because once again they are faced with the spectre of the unemployment which they suffered in the twenties and thirties, because there is no alternative employment for these people in our area.
I rise only to ask the Chancellor to consider reducing the tax to 33⅓ per cent., so as to ensure that our people in the North-East have employment, and that they will not feel that they have been let down by the Government by going from the South of England to an area where unemployment will be rampant.
I shall be very brief in the remarks I have to make. First, I ought to declare that I have an interest in an electrical company, which manufactures radio receivers. I do not think the Government are altogether to blame for the position in which this industry now finds itself. There are many other factors responsible for it. The overseas markets in many cases have closed. In India they closed for one period of months, and at one time they closed also in South America and Egypt.
The industry is now a very tidy one. The relations with the workpeople are good. The industry has had growing pains in the last 20 years, but it is now well organised and equipped with modern factories. The radio set is one of the cheapest and perhaps the best form of entertainment, in spite of criticisms of the B.B.C. Hundreds of thousands of people have had their lives made much happier by having a radio set. Also it serves many useful purposes—for example, in giving weather reports, not necessarily accurate, to agricultural workers and fishermen. Many others, such as shift and night workers, receive the benefit of the broadcasts. Their only form of entertainment is the radio in the few hours they are off work.
There are approximately 6,800,000 sets in use; 55 per cent. of that number are eight years old, and 43 per cent. nine years old. There are 11½ million radio licences in the country—nearly as many as the number of houses—which shows the necessity for having a set in every home. This would not have happened in the 20 years of the industry's life if there had been high prices. Prices were about £30 or £40 in the late 1920's, but they had dropped to about £8 or £9 in 1939, and were then within the reach of most people by way of extended payments and the like. There is no doubt that the industry is frustrated by this crippling Purchase Tax at present. It is causing people to hang on to their old sets and to spend money in repairs, and a lot of valuable time of radio engineers is taken up in this respect. It also means that manufacturers have to make spare parts and old type valves, which dislocates their production.
When these men have left the industry I doubt very much whether they will come back again. They will probably be absorbed elsewhere or lose their skill. After all, even when Sir Robert Watson-Watt began his researches in Radar at Felixstowe he drew his technicians from the radio companies, and that saved the country in 1940. I ask the Chancellor to give this industry every help, and to reduce the tax or abolish it altogether; otherwise, there will be considerable unemployment. We must get rid of this surplus of sets and allow the manufacturers to go ahead with new designs.
4.0 a.m.
This increase in the Purchase Tax on radio sets has worried some of us very considerably. Twelve months ago the Purchase Tax was 33⅓ per cent. Last Autumn it jumped to 50 per cent., and now it is proposed to raise it to 66⅔ per cent. The Chancellor is aware that out of about 50,000 persons employed in the industry, some 20,000 are now unemployed or under notice.
This increase—the Chancellor will not misunderstand the language I use—has been exceptionally cruel in the area which I represent. Several factories there make radio sets. I would like to pay a tribute in this House to their extremely conciliatory attitude towards the large number of disabled persons whom we have there in the ranks of the unemployed. Every possible effort has been made—I am a witness of it—to absorb these men into this, for South Wales, brand new industry. There are nearly 1,000 men on the disabled persons register in my constituency, and these firms have taken those men in considerable numbers and trained them to become highly skilled workmen. The employment of many of them is now in the balance. We have done all we can to induce the employers to keep them on. Let us hope and pray that the Chancellor will revert, at least, to the tax which existed 12 months ago —33⅓ Per cent. Quite a number of my fellow Members from South Wales are here, and they feel as keenly as I do. On behalf of those people in South Wales, I make the strongest appeal to the Chancellor at least to bring the tax back to 33⅓.
Valves and cathode ray tubes are subject to the tax. The reason why we appeal to the Chancellor to exempt cathode ray tubes from Purchase Tax is that not only are they essential to radio sets, but that the cathode ray tubes, even in the cheapest sets, cost about £9 and in the best sets about £15. If the Chancellor would exempt these, and reduce the tax in respect of the rest to 33⅓ per cent., many thousands of workmen and workwomen would bless such an act of his at this late hour—or rather at this early hour of the morning.
I have listened with the greatest care and anxiety to this Debate. I do not think anybody would accuse me of being prejudiced against this particular industry. I suppose I personally was more responsible for its expansion than anyone else, and I think there are very few factories where wireless sets are made which I have not visited myself and talked with the management and workers. Therefore, I naturally feel a very great desire to do anything I can to assist them. The Committee will, I am sure, bear in mind what has been said by more than one hon. Member in the course of this Debate, and that is that the decline of this industry was almost inevitable as soon as we ran into trading difficulties in the rest of the world. This obviously cannot entirely be attributed to the Purchase Tax, although it may have been a factor in disturbing and even diminishing the home sales. The major factor has, I think, been the decline in the overseas sales arising from unfortunate circumstances of which most of us are aware.
Whatever we could do, therefore, by way of Purchase Tax adjustments, it must not be considered as being the royal way of putting the industry back on a highly successful level. On the other hand, as the hon. Member for Chippenham (Mr. Eccles) said, it is essential that we should bear in mind that this is a very important defence industry and one which we must not, in any circumstances, allow to decline too far, even though it may have been over-expanded, as of course it was over-expanded, during the war. Owing to the temptation to make good the deficiencies in civilian goods, that over-expansion was undoubtedly continued in the post-war period. On more than one occasion I have advised some manufacturers of that fact and urged them to have some other form of manufacture to which they could turn when the demand for wireless sets slowed down, as indeed it was bound to do.
Taking all these matters into account, and the importance of the industry, I am quite prepared to consider the reduction to 33⅓ per cent. of the tax on all domestic, portable and road vehicle wireless sets, including television sets and also including valves and cathode ray tubes. I think any narrower classification than that would not be effective. I do not pledge myself to do anything, but I do pledge myself to give the matter very careful consideration indeed, with a view to seeing whether we can effectively help this very valuable and, on the whole, very good industry.
I am sure that the whole Committee are very glad to hear what the Chancellor has had to say. I am not saying that his proposal goes quite as far as some hon. Members on both sides of the Committee had hoped. The case was very ably put by my hon. Friend the Member for Chippenham (Mr. Eccles) and has been supported on both sides of the Committee, and I am sure that the general feeling of the Committee is that we ought to do all we can to help this industry. It is quite clear that the proposals as originally made would have crippled the industry, led to a decline in exports, would certainly have caused considerable unemployment and would have dissipated the technical resources. Added to that, there was the danger that it might have produced less revenue for the Exchequer and might even have endangered national security. All those considerations have led the Chancellor to modify the decision he originally made, and we are very glad of that.
I think I must comment on the fact that this very important matter is being discussed at 10 minutes past four in the morning. It is really a scandal that our business is conducted in this way. [ Interruption. ] I am only suggesting that it is rather unfortunate that such an important matter as this is being discussed at 10 minutes past four in the morning. We cannot conduct our business quite as well after sitting nearly 14 hours as we can if we take it at an earlier hour of the night—or a later hour of the day. The Chancellor of the Exchequer fully understands this, I believe. I think he somewhat under-estimated the amount of time his Budget has required, and made a mistake in assessing the amount of time needed. I urge, as I did earlier, that next year we shall be given more time for these matters, so that we shall not be obliged to discuss them at this hour of the morning.
I thank the Chancellor for what he has said, and to ask him to pay attention to the position in which the retailers will be if he finally accepts the suggestion of the Amendment. There will be a number of retailers, who having paid tax on their stocks, will be asked by their customers to reduce their prices straight away. I wonder if the Chancellor will look into that matter, to see if a rebate can be made to the retailers, so that they do not suffer the losses which they otherwise will, and which inmost cases will be very considerable. I am sure a rebate could be made.
When I came down to the House for this Debate I had just presided over a meeting to cut by £40,000 a year the pay roll of the radio factory where I work. I do not say that was due wholly to the incidence of the Purchase Tax, because, as the hon. Member for Chippenham (Mr. Eccles) and others have said, the radio industry would have gone through a bad time this year, anyway. However, the increase in the Purchase Tax has made it worse. To have to cut pay rolls in factories, where some of the men and technologists cannot find alternative employment, is a rotten job. No one likes doing it. Now I shall be able to go back tomorrow morning with this very cheerful news and give it to the factory.
I am sure the workers there will thank the Chancellor, as will the other workers in the industry, for the statement he has made. It will not make a great deal of difference immediately, but it will make a great deal of difference in September, when the radio season really starts. Had the Chancellor not made this concession, I believe the radio industry would have gone through a very miserable time during the Autumn this year.
I join with everybody else in thanking the Chancellor for this concession, but I think I ought to sound a note of warning. Will this really solve the problem? I speak from the point of view of an exporter of radio sets all over the world for one of the leading companies. In the long run, if the exporter is to do the job efficiently, and be able to compete with the increased pressure from America and other countries in the overseas markets, he must be able to rely on the continuity of the firm whose goods he is trying to sell. For a long time there has been in the minds of those exporters who purchase large blocks of thousands of sets and spend money advertising them in America and other countries, grave doubt whether the whole of that expense and pioneer work will be put in jeopardy if the home market is to be run on the basis of the big closing down of firms.
4.15 a.m.
There has been great enterprise in this industry. I know one firm which has overcome certain technical problems in the Far East which have not been overcome by others, and I pay great tribute to it. But at the present time there is a big glut of radio sets here, and it is likely to in- crease. It is obvious that the take-off for the export market will not be increased by the diminution of the Purchase Tax at home. What will happen when the glut increases? It will not be a question of too much money chasing too few goods, but of too little money chasing too dear goods. It will be very interesting from the point of view of the exporter, taking a long term view of the needs of the export drive, to see what the effect of this concession will be, and his mind is already deeply troubled by the great difficulty of carrying on his business. While thanking the Chancellor for this concession, I think it right to sound that warning, and to say that he may have to make further cuts to get rid of the glut.
I am indeed glad that the Chancellor of the Exchequer will consider these points. He did not answer one point in an Amendment put down by my hon. Friends and myself, relating to the Purchase Tax on dry batteries used by people in the country. In December, 1947, I put this point to the Chancellor, and although originally he did not agree he did give way later, realising the difficulties in the rural areas and the necessity of having this type of wireless set where electricity is not available. I would like him to say that he will again consider this matter.
Amendment negatived.
I beg to move, in page 71, line 2, to leave out "umbrellas and."
We now turn to a rather different matter, but one of great importance in its way. The effect of this Amendment is to exempt umbrellas from Purchase Tax. This Amendment has won fairly wide support, which indeed extends to the Communist Party. I presume that the Communist Party have no particular interest in umbrellas of their own, although I understand that they are always anxious to come under other people's. I submit that it is wholly illogical to increase the Purchase Tax on umbrellas; if anything it should be reduced or abolished. After all, the object of umbrellas is protection, but I hope the Economic Secretary will not tell us this time that it is something to do with the Geneva Agreement, because it is not that type of protection. It is a question of protecting clothes, which is something of great importance at the present time.
And I should have thought it worth while to protect the body from colds or worse.
I wonder if this tax has been put on to help export, because if that is so, the umbrella manufacturers say they are having difficulty in exporting because they cannot get the right materials for making umbrellas to sell abroad. Logic demands that we reduce the tax in order to ensure that everyone carries an umbrella. We might put a ban on exports to make certain there would be a greater demand for the hats we would export. That would be the logic of the situation. Why should umbrella manufacturers have to pay 66⅔ per cent., while walking sticks, as long as they are only made of wood, are taxed at 33⅓per cent. What is the logic of that? Is it that we are so debilitated that we have to depend on walking sticks to support out tottering footsteps? The real essence is, that an umbrella is a necessity, especially for ladies. I understand it is the policy of the Government not to tax necessities, and certainly not at 66⅔ per cent. It seems reasonable to suggest that, on the one hand, the manufacturer should not be unduly handicapped and, on the other hand, the consumer should not have to pay excessive prices for umbrellas.
The hon. Member argued quite effectively that umbrellas are very useful. We do not dispute that. We are in favour of umbrellas, but that does not constitute a case for removing this tax. The hon. Member asked me why there is a distinction between umbrellas and walking sticks in that the tax on the latter was lower. The reason was that representations were made in this House that walking sticks were largely used by the aged, infirm and lame, and on these grounds we made the concession. I do not think it could be argued that, whatever uses umbrellas have, they are used as a support for the lame and infirm. Though a case can be made out on the whole in relation to all the other items we have been discussing, we cannot regard this one as a high priority for concession. If we made a concession on one item we might not be able to make the concessions we promised to consider. I cannot hold out any hope to the hon. Member.
Could the hon. Gentleman say what the cost of the concession would be?
It would be of the order of £500,000 a year.
The Economic Secretary has said that walking sticks are used by the lame and infirm. Nevertheless, he is suggesting that it is right that they should come into category 1 and be subject to 33⅓ per cent. tax. May I draw attention to the fact that bath chairs are equally necessary to the infirm, and that such chairs are not subject to Purchase Tax. Why cannot the hon. Gentleman exempt walking sticks? Will he answer that point?
I have had representations from more than one quarter about the effect of this heavy increase in the tax upon the umbrella trade. I hope that, before the next stage of the Bill, the Economic Secretary will look into this matter again. It is a tremendous addition to the tax when a manufacturer is subjected to a tax of 66⅔ per cent. instead of 33⅓ per cent. In this case I am told that it is going to knock this-trade about in a most surprising way. I do not know whether the Economic Secretary has gone into the details of it, but I hope that he will do so before the-Report stage.
Amendment negatived.
I beg to move, in page 71, line 13, at the end, to insert:
"( a ) Articles not comprised in any of the following paragraphs of this Group…Second."
This is a further formal Amendment necessary to give effect to concessions-which we undertook earlier on to make.
Amendment agreed to.
I beg to move, in page 71,' to leave out line 20, and to insert:
"( b ) Articles which, except for external fitments, are made wholly of cane or wicker…First."
May I ask the Economic Secretary if he can say whether the Amendment he has just moved includes baby cots, cribs and baby baskets? I imagine that it does. If so, I would like to ask if the hon. Gentleman will reconsider this with a view to exempting from' Purchase Tax altogether such articles required for babies. It does not seem to make sense that baby cots, cribs, and baskets should be taxed. After all, perambulators are tax free. It is not right that these absolute necessities for children should be taxed. If this Amendment which the Economic Secretary has moved does include these articles, as I believe it does, I hope that in accordance with the various other matters connected with children which are exempt from Purchase Tax, he will reconsider this matter, and exclude baby cots, cribs, and baskets from the Purchase Tax.
4.30 a.m.
My only purpose in rising now is to express grateful thanks to the Chancellor of the Exchequer for having tabled this Amendment, and having gone a very long way to meet the case which was dealt with in the Amendment put down by my hon. Friends and myself. The Amendment will go a very long way towards relieving any fear of unemployment or other hardship, which might otherwise have been occasioned to a large number of blind and handicapped basket makers. There is one particular point, however, on which I would like the advice of the Economic Secretary, and that is in connection with the fact that the Amendment, as it stands, excludes certain baskets, and they include cots, I imagine, which are lined. Presumably, they will still be at 66⅔ per cent. and not 33⅓ per cent., and I wondered if that point was thought of when the Amendment was framed. If it has been overlooked, can the wording be adjusted so that lined baskets can be included? Work baskets, which are the subject of export trade, supported by a home trade, should also be considered. This should be a most useful Amendment.
I should like to thank the Government for having modified their original proposal by reducing the tax to 33⅓ per cent. on some baskets, but the claim made by the hon. Member for Taunton (Mr. Collins) that this goes a long way towards helping disabled and blind ex-Service men is, I submit, only partially valid. There are a great many disabled people who can only make baskets effectively when they use a round, or oval, or square wooden bottom or base, and baskets with such a base are still subject to tax at 66⅔ per cent. My advisers at St. Dunstan's tell me that some 25 per cent. of blinded soldiers can only make baskets when they have these wooden bottoms which, in their case, act as a guide.
I hope that the Economic Secretary can bring these articles—cycle baskets, shopping baskets and maternity baskets, into the lower range. It is probably an administrative, rather than a legislative, point, but where disabled ex-Service men are being trained in basket making, and make extremely bad articles during their first few weeks of training, there arises the question of what to do with the baskets. Nevertheless, it is possible to sell these articles at a price and it does not seem right that they should carry Purchase Tax. Is there no way in which these baskets made by trainees can be sold without Purchase Tax? It is always a great encouragement to people who have been badly shattered and who are learning something by way of a trade, to feel that whatever they are making, however haltingly, has a market.
I have put down an Amendment which, I understand, will not be called although there is some latitude allowed us in talking about this whole subject. That Amendment asks that all baskets should be exempt from Purchase Tax and I want to submit reasons why that would be sensible and reasonable. First, there are the special arguments I have already made for disabled people, but apart from that this is an extremely small industry employing only a few thousand people. Almost all the articles made are of utility character. A very small fraction are ornamental or lined or have expensive attributes. The great majority are industrial baskets, agricultural baskets, work baskets, and babies' baskets. I am not sure it would not be simple as well as wise for the Government to exempt the lot.
I therefore ask the Minister who is to reply whether this morning or between now and the next stage the Chancellor will go into this question? I believe that the employment of disabled people will be prejudiced unless the basket-making industry is encouraged and helped at this time. It could, of course, be helped by tariffs on imported baskets or by limiting imports, but it would be out of Order to discuss that. It could be helped by taking the Purchase Tax off entirely and that is the course I urge upon the Minister.
This concession has been framed solely to safeguard the blind from unemployment as a result of the imposition of the tax and for that reason its scope has been restricted so as to exclude the products of which the hon. Member for Marylebone (Sir W. Wakefield) and my hon. Friend the Member for Taunton (Mr. Collins) spoke. But I think in spite of that the concession does go a long way to meet the main argument brought against this tax, that it threatens unemployment among the blind. The hon. Member for Lonsdale (Sir I. Fraser) raised the point about the work of trainees. That was a new point to me and I would like rather longer to think it over. We will consider it and see if anything can be done to meet it.
Did I understand the Economic Secretary to say that, whereas baby cots and cribs and baby baskets did not fall within this particular part of the Schedule, although made of wicker, he was not going to give any exemption at all and that these baby needs are still going to be taxed at 66⅔ per cent.? I understand that the manufacturers have been advised that they are now subject to 66⅔ per cent. tax and fall within the Group II ( b ) of the Eighth Schedule. I realise that that has been passed for some time but in view of the fact that it seems that baby cribs and baskets would come within this item we are now discussing I hope that opportunity will be given between now and the Report stage for the Economic Secretary to reconsider the matter. I am sure it was not intended by the Chancellor that these urgent baby necessities should be taxed at 66⅓ per cent.
I support my hon. Friends on the question of baby necessities. As a family man I can assure the Minister that these items are a necessity in all homes which bring up children, although I am not quite so anxious about cots as I am about cribs and baby baskets, usually referred to as Moses baskets. I believe that all these articles should be excused excessive taxation. This is a hard world, and it might be argued that children should at the earliest possible moment be brought into contact with the taxation that they will have to face in the future. Even so, I would remind the Economic Secretary that this is very hard on some parents. For those of us who find ourselves responsible for twins this is a rather serious item, and a 66⅔ tax on these necessities discourages an increase in the birthrate. It is most unfair oh a section of the public which is doing its best for the country.
I was very sorry that the Economic Secretary did not deal with what was the strongest point made by my hon. Friend the Member for Lonsdale (Sir I. Fraser), that wooden bases are used for these baskets made by the most seriously disabled ex-Service men. It is a very great hardship that they should be excluded, and I hope the hon. Gentleman will now tell us that between now and the Report stage he will reconsider the wording of this Amendment to see if he cannot cover the most seriously disabled, and the most deserving men in the country.
Would the Economic Secretary qualify one point he made in his second speech on this Amendment? He said in reply to my hon. Friend the Member for Lonsdale (Sir I. Fraser) that this Amendment was designed specifically to deal with baskets manufactured by the blind. Would he give an assurance that it also includes baskets manufactured by seriously disabled men who are not blind? I should like to cite the Lord Roberts' Memorial workshops, where a good deal of work is done by disabled men who are not blind, to whom this Amendment could be of great service if they were covered. I understand that the rate at the moment is 50 per cent. for all baskets, and if that were cut down to 33⅓ it would be very welcome. Personally I should like to see it abolished altogether, as I think it could be, certainly in the case of blind and disabled men.
Although one is grateful for the concession which the Economic Secretary has already suggested, there are two points I wish to make. First, I support the plea made by my hon. Friend the Member for Lonsdale (Sir I. Fraser); secondly, I cannot quite see that the wording of the Amendment really gets down to the point, because it says:
"Articles which, except for external fitments, are made wholly of cane or wicker."
The hon. Member for Taunton (Mr. Collins) mentioned, I think rightly, the instance in which there is an internal lining. If the Amendment is left as it appears on the Order Paper it seems to be really playing with the problem. It only means that at some other stage the other work can be done, thereby getting out of the tax. Surely it would be far wiser, when we are dealing with matters concerned with the blind, with whom hon. Members on all sides of the Committee have every sympathy, if the actual wording which the Economic Secretary has selected were further considered before the Report stage.
The point about the wooden bases, mentioned by the hon. Member for Lonsdale (Sir I. Fraser) is a new aspect to me, and we should also like an opportunity to consider it. To the hon. Member for Roxburgh and Selkirk (Lord William Scott), I would point out that I also am the father of twins, so I am as conscious as he or anybody else of the extent to which baby cots and such things are necessities. But I am afraid we did set out in this case to make a concession to assist the employment of the blind, and that is as far as we can go now.
Amendment agreed to.
4.45 a.m.
I beg to move, in page 72, line 12, at end, insert: that the life of the policeman, if not very remunerative, is at least useful and sometimes happy. This sheet is subject to 100 per cent. Purchase Tax.
As a result of this 100 per cent. tax upon pictorial sheets, as head teachers have only a limited amount to spend on each child per year for all the requisitions of the school, it has led to their ceasing to give orders for these fully pictorial sheets. I am told by the producers of these sheets that they are thinking of ceasing production because of the lack of demand on account of the high price. If that happens it will mean that a useful instrument of class teaching will no longer be available for teachers in the schools. The State saves nothing financially by this 100 per cent. tax on the pictures used in the schools. When it orders these pictures, the local education committee pays the tax, but it gets a grant of 60 per cent. from the Ministry of Education for all approved expenditure, so that some money goes into the Treasury and an almost equivalent amount is paid out by the Ministry of Education. That is not a very successful way of fighting inflation. On educational and financial grounds, I ask the Government to consider the abolition of this 100 per cent. tax or its very considerable mitigation.
I support my hon. Friend the Member for Southampton (Mr. Morley). During the war, school stocks of these charts ran down considerably. Now that head teachers want to replace them they find this swingeing tax makes it almost impossible, and this is at a time when visual aids to education have become more and more popular. One real way of getting under the Chancellor's skin is to say that this is part of our war potential. This is not in a positive sense part of this country's war potential, but perhaps it is in a negative sense in that it helps to educate the children. Maybe we should not have wars if we had a more educated population. We should get a considerable reduction in this tax, even if it is not removed altogether, bearing in mind that visual aid stocks badly need building up after the war.
This tax is a surviving anomaly because Purchase Tax has been removed from all the other forms of visual aids such as films, film strips, and cinematograph projectors. The Ministry of Education and others interested are thinking in terms of visual units, and it is anomalous that wall charts, the smallest item in the unit, should remain subject to Purchase Tax. There is a technical argument that it is impossible to discriminate between wall charts used for educational purposes and other wall charts, but the wording of the Amendment helps the Treasury to overcome that. It says:
"designed for the express purpose of class instruction in schools."
Other Amendments have been accepted giving a distinction to articles used for industrial purposes, and the technical objection that we cannot discriminate between users is met by the terms of the Amendment. The amount involved is exceedingly small. An estimate given to me is £8,000 in the current year. I do not know whether that is accurate, but a very small amount is involved. I hope that the Chancellor will sweep away this anomaly.
I hope that the Chan cellor will accept this Amendment. It is regrettable that the modern teacher has given up the use of the blackboard, on which I acquired such knowledge as I have. If that skill has departed and we have to represent ideas in diagrammatic form—the example has been followed by the Ministry of National Insurance in a recently published booklet—quite obviously this preposterous tax should go. The hon. Member who raised the matter made an excellent point which showed the absurdity of all this legislation. Here is the Treasury engaged in paying a tax of 100 per cent. and another Department is engaged in making a grant of 6o per cent. The whole of the farcical procedure of last night and this morning is well exemplified by this method of collecting revenue. I feel that the Chancellor, not merely on this matter alone but on general considerations, will probably apply his mind to a Sales Tax which would do away with such methods
That is quite out of Order.
I did not complete my sentence, even though I was out of Order.
The remainder of the hon. Member's sentence would, therefore, presumably be out of Order.
I will continue by pointing out that although such matters are distinctly out of Order, I was commenting on the character of the tax itself, its anomalous character, and its clumsiness in application. This sum of addition and subtraction is desirable in a school class but not in the Treasury. These are important matters. They convey ideas which cannot satisfactorily be conveyed otherwise, and if pictures are freed from Purchase Tax, as they are, I see no argument to support the Chancellor's wish to continue this impost. I strongly support the Amendment.
The tax is, after all, a tax on pictures and our difficulty is that those charged with the responsibility of collecting the taxes have found it extremely, difficult to distinguish between the picture used in the schoolroom and the picture used for other purposes. They have done their best to meet the point which hon. Members have raised, with which, of course, we have sympathy, and they have regarded the diagrammatic type of wall chart as not chargeable. They have gone further and added some pictorial matter without liability being incurred, provided that that pictorial matter is not the predominant element, but with the best will in the world they have been unable to find—and they cannot find in this Amendment—a satisfactory way of distinguishing between the picture and the type of illustration required here.
All efforts made to find a satisfactory way of excluding the educational picture and distinguishing it from the other picture have been found to break down. It is, therefore, by no means as illogical as the hon. Member for Edinburgh, South (Sir W. Darling) seemed to think that the ultimate tax should, in fact, be paid from public revenue through the local authorities. There is nothing more illogical in it than in giving draw-backs on Import duty when the goods on which the duty is levied are eventually exported. It is the same kind of principle. I am sorry we are unable to accept the Amendment.
The Amendment says:
" Wall charts and wall pictures … designed for the express purpose of class instruction."
Surely it is not beyond the ingenuity of Treasury Officials to frame regulations by which it could be ensured that any pictures sold free of Purchase Tax are used in schools and not elsewhere?
There are two points I should like to make. It seems that a clear distinction can be made between pictures as such and pictures in the form of charts to be used for instruction. I think the distinction is that the latter invariably have some kind of writing on them, whereas the ordinary picture does not contain writing, except perhaps the signature in the corner. It seems unfair that a distinction should be made and that it should not be beyond the wit of the Treasury to discriminate in this fashion.
The other point is that I do not think it is quite fair to consider this matter just from the point of view of the Treasury giving with one hand and taking away with the other, because there is a definite limit to the educational purchases in Scotland, at any rate, as they are apportioned out, so that the schools have to work within a definite limit which they cannot exceed. It does not matter how much the education authority gets back from the Treasury afterwards. The fact remains that the schools still work within that limit, and it is to enable them to increase the number of charts that they can use that this Amendment is moved. I hope the right hon. Gentleman will look at it again.
5.0 a.m.
I am sorry that the Chancellor of the Exchequer put up the Paymaster-General
of all people to answer this proposal. The right hon. and learned Gentleman has rendered signal service in the field of education. It is clear that if the Chancellor wants to do "so he can find a way of dealing with this matter. It is purely one of administration. No attempt has been made to justify this discrimination, which amounts to a tax on learning, and I sincerely hope that he will recognise that he is impeding the service of education by this penal tax.
With all respect to the hon. Member who has just spoken, I do not think this is a matter of administration. The hon. Member for West Wolverhampton (Mr. H. D. Hughes) gave an estimate of the cost, which has not been challenged. He said it would be £8,000. If that is so, are not the Government making extremely heavy weather of this? Supposing a few of these things did get into the wrong hands. Nobody is going to buy for fun the kind of educational sheet the hon. Lady held up, or as some form of luxury. If they should stray into the nursery, or into somebody's study in a private house is that really going to be a great matter? If the total cost is only £8,000 it is rather ridiculous to put up a Minister to resist a suggestion of this sort. If that is the case, I hope the hon. Member for Southampton (Mr. Morley) will press this to a Division, if only as a protest against Ministerial fatuity.
Question put, "That those words be there inserted."
The Committee divided: Ayes, 46; Noes, 155.
Division No. 194. AYES. 5.3 a.m. Assheton, Rt. Hon. R. Kendall, W. D. Smithers, Sir W Beamish, Maj. T. V. H Legge-Bourke, Maj. E. A. H Spearman, A. C. M Beechman, N. A. Linstead, H. N. Spence, H. R. Bossom, A. C Lloyd, Selwyn (Wirral) Taylor, C. S. (Eastbourne) Bowen, R McFarlane, C. S. Thomas, J. P. L. (Hereford) Braithwaite, Lt.-Comdr. J. G Macpherson, N. (Dumfries) Thomas, George (Cardiff) Cuthbert, W. N. Manning, Mrs. L. (Epping) Turton, R H. Darling, Sir W. Y. Marshall, D (Bodmin) Wadsworth, G Drewe, C. Morley, R. Wakefield, Sir W. W. Eccles, D. M. Noble, Comdr A. H. P. Wheatley, Colonel M. J. (Dorset, E.) Fox, Sir G. Poole, O. B. S. (Oswestry) Williams, C. (Torquay) Fraser, Sir I. (Lonsdale) Pritt, D. N. York, C Hannon, Sir P. (Moseley) Ramsay, Maj. S Henderson, John (Cathcart) Rayner, Brig R TELLERS FOR THE AYES: Hope, Lord J. Roberts, W. (Cumberland, N.) Major Conant and Howard, Hon. A. Scott, Lord W. Brigadier Mackeson. Hutchison, Col. J. R (Glasgow, C) Smith, E. P. (Ashford)
NOES. Acland, Sir Richard Greenwood, A. W. J. (Heywood) Pearson, A. Anderson, A, (Motherwell) Griffiths, D. (Rother Valley) Peart, T. F. Attewell, H. C. Gunter, R. J. Perrins, W Austin, H. Lewis Guy, W. H Popplewell, E. Bechervaise, A. E Hamilton, Lieut.-Col. R Proctor, W. T. Beswick, F. Hannan, W. (Maryhill) Randall, H. E Bing, G. H. C. Hardy, E. A. Ranger, J. Blackburn, A. R Hastings, Dr. Somerville Reeves, J. Blenkinsop, A. Henderson, Joseph (Ardwick) Reid, T (Swindon) Blyton, W. R Holman, P. Rhodes, H. Braddock, Mrs. E. M. (L'pl, Exch'ge) House, G. Robertson, J. J. (Berwick) Braddock, T. (Mitcham) Hoy, J. Rogers, G. H. R Bramall, E. A. Hubbard, T Ross, William (Kilmarnock) Brook, D. (Halifax) Hughes, Hector (Aberdeen, N.) Royle, C. Brown, George (Belper) Hynd, H. (Hackney, C.) Sargood, R Bruce, Maj. D. W. T. Hynd, J. B. (Attercliffe) Shawcross, C N. (Widnes) Burke, W. A. Jay, D. P. T. Silverman, J. (Erdington) Butler, H. W. (Hackney, S.) Jeger, G. (Winchester) Simmons, C. J. Chamberlain, R. A Jones, D. T. (Hartlepool) Skeffington, A. M. Champion, A. J Jones, P. Asterley (Hitchin) Smith, C. (Colchester) Chetwynd, G. R Keenan, W. Sorensen, R W Cobb, F. A. Kenyon, C. Soskice, Sir Frank Collindridge, F. Kinley, J. Steele, T. Collins, V. J. Lee, F (Hulme) Swingler, S. Colman, Miss G. M. Leonard, W. Symonds, A. L Cooper, Wing-Comdr. G. Lipton, Lt.-Col. M Taylor, R. J. (Morpeth) Corbet, Mrs. F. K. (Camb'well, N.W.) Longden, F. Thomas, D. E. (Aberdare) Cripps, Rt. Hon. Sir S. McAdam, W Tiffany, S Crossman, R. H. S. McAllister, G Tolley, L Daines, P. Mack, J. D. Wallace, G. D, (Chislehurst) Dalton, Rt. Hon. H. McKinlay, A. S Wallace, H. W. (Walthamstow, E.) Davies, Edward (Burslem) McLeavy, F Watkins, T. E. Davies, Harold (Leek) Macpherson, T (Romford) Watson, W. M. Davies, Haydn (St. Pancras, S.W) Mallalieu, E. L. (Brigg) Wells, P. L. (Faversham) Davies, S. O. (Merthyr) Mallalieu, J. P. W. (Huddersfield) West, D G. Deer, G. Mann, Mrs. J. Whiteley, Rt. Hon. W. Delargy, H. J. Marquand, H. A. Wilkins. W. A Dodds, N. N. Mellish, R. J Willey, F. T. (Sunderland) Driberg, T. E. N. Middleton, Mrs. L Willey, O. G. (Cleveland) Dumpleton, C. W. Millington, Wing-Comdr E. R Williams, J. L. (Kelvingrove) Edelman, M. Mitchison, G. R Williams, R. W. (Wigan) Edwards, W. J. (Whitechapel) Monslow, W Williams, W R. (Heston) Evans, Albert (Islington, W.) Morgan, Dr. H. B. Willis, E. Evans, E. (Lowestoft) Morris, Lt.-Col. H. (Sheffield, C.) Wills, Mrs. E. A. Evans. S N. (Wednesbury) Morris, P. (Swansea, W) Wise, Major F. J. Fairhurst, F. Moyle, A. Woods, G. S Fernyhough, E Murray, J. D Wyatt, W. Field, Capt. W. J. Nally, W. Yates, V. F Foot, M. M. Neal, H (Claycross) Younger, Hon. Kenneth Fraser, T. (Hamilton) Paling, Will T. (Dewsbury) Freeman, Peter (Newport) Pargiter, G. A, TELLERS FOR THE NOES: Gilzean, A Parkin, B. T. Mr. Snow and Ganville, J. E. (Consett) Paton, J. (Norwich) Mr. Richard Adams.
I beg to move, in page 72, line 24, to leave out "Third" and insert "Second."
This Amendment deals with Purchase Tax on jewellery. We put it down to bring to the notice of the Chancellor the plight in which craft workers find themselves as a result of this stifling tax. These craft workers are people who have very small businesses. They make individual pieces for private purchasers and theirs is a select market not catered for by machine-made products. They cater for people of artistic taste who do not necessarily possess large incomes. It is not at all a question of a luxury trade. These craft workers have been extremely hard hit. I want to quote part of a letter which the Chancellor's predecessor wrote to the Central Institute of Art and Design:
In supporting this Amendment I would remind the Chancellor that the persons affected by this tax are mostly ladies who have spent a lifetime in a very highly skilled industry and for whom there is no other alternative employment of a similar character. What they have learned at their craft is not of great benefit to them in any other form of production. It seems rather tragic that those highly skilled in a very high form of art should be left high and dry. I hope the Chancellor will recognise that they are being victimised by this form of tax.
These are austere times and it is important to see that in the midst of necessary austerity we do not lose beauty. In West Cornwall a number of people are engaged in making most beautiful jewellery which, for my part, I think superior to that for which large sums of money are paid. The Chancellor will be making a mistake in forcing utility goods Upon the country and upon other countries when we are making and known to be making goods of high quality. Here is a unique chance to combine austerity with beauty.
5.15 a.m.
I quite appreciate that the two noble Lords who introduced this Amendment were not seriously expecting me to accept it, because jewellery covers all kinds of articles, and to do what they ask would cost the Exchequer something like £2 million. I am quite sure that we could all think of a better way to spend that £2 million than the way they have suggested. I appreciate their care for the craftsman which, if I may say so, I share with them. I think it is extremely necessary that in these times of mass production we should guard as carefully as we can the skill of the craftsmen, which has been traditional to this country not only in jewellery, but in pottery and in furniture, and a great many other things. But I do not think that that is a matter which can be dealt with under the Purchase Tax regulations. I have for some months been exploring this matter carefully, and I hope that I shall be able to do something to give material assistance to craftsmen before long.
Will the Chancellor have in mind the Scottish cairngorm industry? It is only a small industry, but it is an industry of craftsmen.
I shall have in mind all craftsmen—Scottish, Irish, Welsh, or English.
I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
I beg to move, in page 73, line 41, at the end, to insert:
Detergents, I would imagine, though I am not expert in the matter of cleaning and have not yet learned all my lessons in that, are almost entirely used for industrial purposes. There pan, therefore, be no good reason why they should be taxed. It is, as has been argued before, a tax upon the necessities of industry, and particularly upon the milk production industry. That, in itself, should commend it to the Chancellor, and I hope he will relieve the tax on all detergents; the case is good, and just as good, I submit, for disinfectants.
The hon. Gentleman seeks to exempt from tax detergents and disinfectants. So far as the detergents are concerned, I think that the Amendment would not have the effect which is what the hon. Member wants because group 33, to which this Amendment applies, is only applicable to medical preparations and specifically excludes toilet preparations.
Very shortly, as I understand it, the word "detergent" means something which removes grease from pails or other cans, and that is hardly a toilet preparation.
It would be only applicable as a medical preparation. So far as disinfectants are concerned, I would remind the Committee that all are not subject to Purchase Tax. Disinfectants which make no claim to be antiseptics are not charged to Purchase Tax. What the hon. Gentleman has in mind, I think, is that the Treasury has power, as he will remember from the recent Debate on drugs and medicines, to exempt by order certain kinds of disinfectants by reference to their medical content if there is a sound reason for so doing. That is the best way to meet the main purpose which the hon. Gentleman has in mind.
May I ask for the Economic Secretary's point of view as to whether disinfectants or detergents are not brought under tax by Rule 33?
What I was saying is that detergents would only be brought in so far as they could be claimed to be medical preparations.
As I understand the position, accepting the Treasury view that it ought to go under another group, if the article is a domestic disinfectant it bears no tax, but if it is an antiseptic disinfectant it bears a tax of 33⅓ per cent. If it is described under some other name, it becomes "chlorinated sodium, B.P.C.," and the position would be different. Antiseptic disinfectant must be bought under a name. It is Jeyes' Fluid, or Dettol, or something like that. Otherwise it is highly dangerous and if it is sold under a name by which it is not known, people may use it and receive a fatal dose. The agricultural Amendments moved from this side of the Committee have been refused throughout, but I do hope the Chancellor—
indicated dissent.
I beg the right hon. and learned Gentleman's pardon. I must have been out having a small sausage, but there has been no major concession to agriculture. We are trying for the moment to clean up our herds and it is vital to encourage the farmers to use as much disinfectant as possible. That would be highly desirable. They use it on animals and buildings as well. There is contagious abortion for example. That disease must be kept under control and eliminated as quickly as possible. For that the farmers must Use it in the buildings and even in the fields where there has been any trace of the brucella abortus. I ask the Chancellor to think over the matter between now and the Report stage and to give another agricultural concession.
I think there is a little misunderstanding about the situation. The term "disinfectant is a wide one and the connotation may mean different things. This part of the Schedule deals only with medicines and drugs, that is, things applied to animate bodies. It does not apply to disinfectants used for washing out a cowhouse, and unless the substance is recommended by the maker as indispensable for animate bodies it would not fall within this category of drugs at all and therefore no exemption here would be of any value.
I think what the hon. Member has been dealing with really is what is in his Amendment, and that is animal medicines. That is a different consideration altogether. Apart from animal medicines or substances, the hon. Member suggested that farmers should apply it to themselves. I think he is in danger of a vote of censure from the N.F.U. I do not think there is any case for this Amendment. Ordinary disinfectant is not included in this and when we come to the animal medicines it would be better dealt with then.
Could the Chancellor give us any information as to whether disinfectants of this sort are subject to Purchase Tax?
No, they are not.
In view of what the right hon. and learned Gentleman said, and while reserving the right to put down an Amendment on the Report stage, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
I beg to move, in page 73, line 43, at the end, to insert: cines, no doubt by the prescription of the doctor, a patient is able to avoid having to pay Purchase Tax by using the B.P.C. with its rather long descriptions of the drug, but when we are dealing with animal medicines the whole thing is different because the farmer is unable to get ft prescription every time the animal is ill. He has to buy the branded names. He Usually has to buy these medicines, not from a chemist at all but from the local grocer, because he lives a long way from the market town where he could get the medicine from the chemist, if the chemist had it.
5.30 a.m.
I would stress how undesirable it would be if, by means of this Schedule, farmers were forced away from the branded names —sheep dip, or the sundry disinfectants about which I was speaking a few moments ago. I hope the Chancellor will put this Amendment on his priority list in view of the great effect it will have on animal production and the curing of animal diseases. The whole of my remarks on the brucella abortus can be related to this Amendment, and I do not want to repeat what I have said. It is important that we should get the farmers to attack these problems of animal diseases at the present time, and I feel that the 33^ per cent. tax which farmers will have to bear on all their animal medicines, without any possibility of getting off it by obtaining the medicine under some B.P.C. name, will be a serious hardship on the agricultural industry.
The hon. Member used the phrase "which they will have to pay." Of course, there is no change in this at all. It is not as if this was any imposition or increase of the tax; it has been the tax for some period. In fact, I think that the right way of dealing with this is to deal with it exactly as we have with human medicines. I do not think we can give the animal any particular preference over the human being in this matter. As the hon. Member knows, this has been dealt with in two ways. First, it has been dealt with under the machinery for making orders giving lists of exempted subjects, like the Purchase Tax No. I Order, 1948, which came into operation on 1st April, and set out a long list of medicines, and in Part V of the Schedule set out a list of animal medicines, the others being human medicines. That is the first way in which it can be dealt with, and subsequent lists can be made if it is found advisable or necessary to add to the list which is there.
Secondly, a large number of nonproprietary remedies—simple things like iodine and other things which are also used for animals as well as human beings —will, if they can comply with conditions laid down in Part II of the Schedule, be exempted under the new scheme of exemption. Therefore, we feel that those two ways of dealing with animal medicines which are being adopted for dealing with human medicines should be adequate to cover the point the hon. Member has in view.
Just one word on that —[HON. MEMBERS: "Oh!"]. Well, really! Agriculture is a rather important matter, and out of the five days in which we are trying to deal with this Bill, we are spending but a short time on the most important question of animal diseases. All I wish to say is that I appreciate most sincerely what the Chancellor has said. At the same time, I am not quite happy in my mind—[ Laughter ]—I am not satisfied, if hon. Members opposite prefer that word, that the Chancellor has gone far enough on this matter. I do not think it probable that he can say anything more at the present time, but those of us who are interested in these matters feel that we should watch this matter very closely. We hope that the Government, in making orders in this respect—and it is the orders on which the Chancellor is basing his answer—will give the Minister of Agriculture very much more power, so that he can ensure that the orders which the Chancellor has mentioned so carefully do really exempt the bulk of animal medicines.
Amendment negatived.
I beg to move, in page 74, line 5, to leave out "First," and to insert "Exempt."
This is an Amendment to exempt from Purchase Tax stationery and office requisites. I am moving it because the Purchase Tax is essentially a tax on consumer's consumption, and two years ago we made an effort to get this tax and the tax on office machinery abolished. We were successful in regard to office machinery, but not in regard to office stationery which is the raw material of the office machinery. It is essentially a tax on production and I hope that if we cannot be successful on this occasion, the Chancellor will remember this alleviation for production as the buyer's market falls more heavily on this country.
I would like to emphasise that stationery is not what the man in the street usually regards it. Only 5 per cent. of stationery is a consumer's requirement. It happens to be a most essential consumer's requirement since it is the link between separated members of families. It has been especially emphasised in that respect during and since the war, and it is therefore to be encouraged rather than to be discouraged by taxation. But 95 per cent. of stationery is used for business purposes; it meets almost every requirement in the office in the form of account books, statements, invoices, and everything else coming under the term stationery. It is used largely in administration, and therefore the revenue obtained from Purchase Tax falls on ratepayer, taxpayer, and on production and commerce. Both private enterprise and the Co-operative movement are united in the demand for its abolition at the earliest possible moment. I thank the Chancellor for reducing the tax from 50 per cent. to 33⅓ per cent. If he can do nothing owing to the size of the concession, I would ask him to bear it closely in mind for attention at the earliest possible moment in the future.
I think the hon. Member in the last few sentences of his speech did not really expect his Amendment to be accepted. We have reduced the tax on stationery and office requisites from 50 per cent. to 33⅓ per cent. by this Budget and that has cost £ 9 million a year. To give the concession now asked for would cost a further £ 18 million. That is quite outside the range of possible consideration today.
I am really astonished that any Government, possessing any sort of real appreciation of the difficulties under which we are passing in our commercial life, would tax stationery to this extent. It is true that we have made reductions but industry has to carry out its ramifications all over the world by the implement of stationery. The consump- tion of stationery by the various Government Departments must be on a gigantic scale. Surely the poor taxpayer is to be considered in this matter? If the tax on stationery is to remain 33⅓ per cent., that is still a very considerable rate to be borne by commercial and industrial firms. No Government with any regard to the interests of the economic life of the country would have an imposition of that kind attached to the cost of the stationery so necessary in carrying on the business of the country. I suppose it is no use asking the Chancellor to change his mind. He has been very good to us during the long process of this Debate. He has made many concessions, some useful and some not so useful. He must be conscious that he is leaving industry with an incubus by refusing to remove this tax of 33⅓ per cent.
It is very encouraging to hear the hon. Member for Moseley (Sir P. Hannon) speaking at 20 minutes to six in the morning. I am sure we all agree with the substance of what he has said. I was a little sorry that the hon. Member for South-West Bethnal Green (Mr. Holman) was a little half-hearted about the Amendment, but when the Chancellor told us that it would cost £ 18 million, some of us began to realise why he was a little half-hearted in his proposal. We do not know how much of the £ 18 million is paid for by the Government or how much of the stationery of the country is consumed by the Government, but I should think it is a very large proportion. It would be interesting to know the figure. The Chancellor has told us frequently that he wants to free the raw materials of industry from Purchase Tax. There is no doubt that in these days stationery is a raw material of industry, and I hope that when we come to the next Budget, the Chancellor will be able to sweep this away.
I cannot do better than give the Committee a letter written to the Chancellor recently by a leading firm in my constituency. It illustrates the great burden which firms have to bear at present because of this tax. This letter shows that it is only a small part of the firm's business. It says:
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The letter which came back in reply from the Chancellor was most unsatisfactory. It began:
I have an Amendment almost identical in terms with that of the hon. Member who opened this discussion and I do not want to cover the ground which has been covered by others, but I would assure him of our support in his request. There are only three matters to which I would like to refer, and the first is the rather cursory way in which the Paymaster-General dismissed the possibility of doing anything because it would cost so much money.
I wonder whether it is realised what is the nett cost this might involve for the Government. I understand conversations have taken place between representatives of the trade concerned and the Customs and Excise, represented by Sir William Croft, and they came to the conclusion at the end of a very complete examination that the nett cost was not £ 18 million, but something between £ 8 million and £ 10 million. The trade go further and claim that, with the cost of collecting the Tax and the extra cost of the Government's purchases, with Purchase Tax, there would be no loss whatever. I do not know how far that could be substantiated, but it is clearly unfair to dismiss the claim on the grounds that it is going to cost the country £ 18 million.
I do not know whether the right hon. and learned Gentleman fully appreciates how much stationery enters into production costs. It is practically a raw material in almost every industry. Apart from the importance of stationery, in production costs—it may take the form of bills of lading, cost sheets, and a thousand forms—I want to draw attention to the ease with which this Tax can be evaded and how, in fact, evasion is tending to increase because of the Tax. It is possible to get this printing done either by the purchase of machines by the firm itself or by contracting out, and when the raw material concerned is paper and there is processing, neither of which suffers tax, the nett result of the process as treated by the Government is that it suffers a 33⅓ percent. Tax and when treated in this way it escapes Tax altogether. In fact, the Norfolk County Council reported the other day that by spending £ 42 on a guillotine machine it expected to save £ 147 a year by evading the 33⅓ per cent. Purchase Tax. This question of evasion is one which all the time and to an increasing extent is occupying the minds of those who feel this Tax is too heavy to bear.
The last point I want to make is that the most ridiculous anomalies are all the time cropping up in connection with the description of stationery. For example, When enough printing has been imposed or printed or stamped on an envelope, it ceases to be an envelope and becomes a seed packet. I do not regret the opportunity of having these considerations, to which we attach great importance, examined even at this hour of the morning.
In requesting permission to withdraw this Amendment, I would yet like to ask the Chancellor of the Exche- quer to give close consideration to these things in his next Budget, and to endorse what the hon. Member has said about the increasing evasion being practised by many big firms, including banks. It is mainly the smaller men who have suffered from this tax.
Amendment, by leave, withdrawn.
Motion made, and Question proposed, "That the Schedule, as amended, be the Eighth Schedule to the Bill."
I said when we started this happy Debate several hours ago that when we came to the end of the Schedule I would make some statement in regard to the several matters on which we had reached a decision. The right hon. Gentleman the Member for Bristol, West (Mr. Stanley), suggested it would be rather better for me to give longer thought to those matters, and that in the course of 48 hours I should make them known to the Press and deal with them when we came to the Report stage. I think everyone agrees they should be communicated as quickly as possible, so that those who rely on our Debates may be informed of the result. It is clearly understood, I hope, that we have not given any pledges regarding any recommendations. We have said there are a number of matters, perhaps eight or 10, which we will take into close consideration, and that in the course of the next day or two we will put out a statement on what the results of those considerations are. Any necessary Amendments will be put down on the Report stage.
Can the right hon. and learned Gentleman say at this stage what interval is likely to elapse between now and the Report stage being taken? On one other point, can he tell us whether, following publication of that statement, it would be worth while putting down on the Report stage some of the matters which have not been called, or have not been taken, during the Committee stage. Will the Press statement close the door to any further consideration?
I am afraid that after the very full discussion we have had there will be no possibility of making further concessions on Report stage. That is why I was anxious to wait till these discussions had taken place before announcing any decision. On the other matter, I cannot anticipate any statement as to business, but there is always a period of time between the Committee stage of the Finance Bill and the Report stage.
There is one matter that ought to be considered before agreeing to this course. I think this statement ought to be made to the House of Commons if possible. I agree that it ought to be given as much publicity as possible in the Press, and that those concerned should have the earliest information about what is going to happen. It would be convenient, I think, if the Chancellor found it possible to make the announcement in the House at the end of the week. I feel that that course would be more in accordance with the traditions of the House, and would not establish a possibly rather dangerous precedent.
I shall certainly consider that. However, it was because the right hon. Gentleman the Member for West Bristol suggested an alternative course that I do not make any announcement now. I might otherwise have taken the opportunity of consultation during the last half hour or so to try to arrive at a decision. I think it was wise not to do so in the circumstances, because one's mind is not so clear after an all night sitting as it might be. I hope that it will not be thought I shall have in any way gone back on anything I promised to do if I do not make a statement in the House. I do not see why that should not be possible, and I shall try to do it if it is possible.
On a point of Order. Am I to understand, Major Milner, that you are putting the Question that Part I of the Schedule stand part, because I understood, when we were discussing Clause 21, that there would be an opportunity of considering Part II of the Schedule at this stage?
I am putting the Question "That this Schedule, as amended, be the Eighth Schedule to the Bill."
Would not the Chancellor meet the question raised anent his statement by putting his decisions in the form of Amendments to be moved on the Report stage, and having notice of them given on the Order Paper?
I shall, of course, do that, but, as the hon. and learned Gentleman knows, it may take a few days to put them into the right form.
I should like to draw the Chancellor's attention to a matter of terminology in Group 12. There is reference to "wash boilers" and "wash coppers." I wonder if the Board of Trade would have anything to say about that. Some time ago I endeavoured to get something done about coppers, and the question was referred by the Board of Trade to the Treasury, presumably because the Board thought I was talking about "coining." Eventually I discovered that the Board of Trade have a technical term for them—"furnace pans." I think that it would be as well to have that matter of terminology clarified on the Report stage.
I hope that when the Chancellor comes to consider the concessions he is to make he will bear in mind that, although we have throughout the night been concerned with consumers' interests, there is also the producers' need. Producers are often seriously affected by changes in Purchase Tax, and particularly affected are the blind and the seriously disabled who, I believe, will suffer as long as Purchase Tax is levied upon goods produced by them. I hope the Chancellor will see his way to exempting such goods altogether.
I should like to refer to Part II of the Schedule, to which no reference has been made so far. I do not think the Schedule should be passed without some comment on that Part. In particular, I would draw the attention of the Committee to subparagraph (3) of paragraph 3, and most especially to (3, e ). It is really absurd to lay down as one of the regulations that less admitted in the earlier part of the Debate that it is done merely to enable the Treasury to get money easily. That is the main purpose. I think we must bear in mind there is a danger that, once this distinction has been made, it will be adhered to indefinitely. The whole experience we have had of taxation is that once a tax is on, it does not come off very easily. The Economic Secretary said he was prepared to make regulations from time to time exempting drugs from tax by order.
6.0 a.m.
The whole basis of this Part is that advertised drugs are to be penalised. Reputable firms do not advertise a drug unless they have confidence in its quality. Most advertising is done in the medical profession and I should have thought that, provided the medical profession is prepared to give its support to a drug, then it does not matter whether it is advertised to the consumer or not. That the criterion of whether a drug is advertised to the public by a distinguishing mark should determine whether it has to pay 33⅓ Purchase Tax or nothing is completely untenable. It is absolutely unreasonable that this should be made the criterion at the present time. I urge the right hon. and learned Gentleman to give consideration to this matter. It is obviously too late to give consideration at this stage, but it is worth while to consider the implications of this matter between now and Report stage: the implications, first of all, on the export trade.
He is striking a blow at the whole export of drugs from this country, because it is on their prestige in this country that their export is built up. If he says he is going to tax advertised drugs 33⅓ per cent., that is as much as to say that this country, where the drugs are actually made, has no confidence in them. That is not a very good advertisement for our drugs abroad. What in fact he is out to do is to get money. I had down on the Order Paper a series of Amendments which you, Major Milner, have not seen fit to call, but the purpose of these Amendments was simply to make certain that so long as a drug could be recognised by the medical profession and could obtain their support, it would be exempt from tax, whether- it bore a trade mark or description and no matter how big or how small the name and address of the manufacturer, seller or distributor was shown. The present distinction will not bear examination at all and I hope it will be removed at the earliest possible moment.
I do not think the hon. Member is putting this forward seriously, because in the course of the discussion my hon. Friend the Economic Secretary said we would take this matter back for discussion and see whether before the Report stage we could find a form of words to distinguish between undesirable and desirable drags. Some of these drugs are desirable, and some are undesirable. We will, before the Report stage, look into this matter and make any suggestion we think necessary with regard to the form of the words.
Is it to be left to the Economic Secretary to decide whether a drug is desirable or undesirable?
No; to myself.
I apologise for rising now, but I merely wish to refer to an Amendment which was supported by hon. Members on all sides of the Committee, but which you did not call, Major Milner. I will not advance any argument in favour of that Amendment, but will just say that I hope that between now and the Report stage the Government will re-consider the question of tooth brushes.
There is one question which I wish to put to the right hon. and learned Gentleman, because I want to make it clear, when I go to my constituency, that I really know all about this Schedule. There is in it one word of which I am not sure. There is on page 75, in Part II, line 17, the word "excipient."
I understand that that is rather like all the other terms there. It is one of the foundation materials incorporated in a drug for the purpose of assimilating it into the human frame.
While that explanation may do for a law court, it will not do for my constituency. Is this a mineral or a vegetable formation?
If the hon. Member imagines that he is appearing before the microphone asking whether this is animal, vegetable, or mineral, I am afraid that he will not catch me on that.
I am afraid that the right hon. and learned Gentleman has to admit some lack of knowledge of his own Schedule.
I am sorry that there was some objection when an hon. Member earlier made some observations about Part II, but I feel sure that hon. Members who have not perhaps taken as close a part in these proceedings as he has will forgive him.
Is it in Order for an hon. Member to try to suppress the enthusiasm of other hon. Members for remarks made in this Committee? We were simply saying, "Hear, hear," to show our appreciation.
Evidently it was applause which I mistook for the expression of some other sentiment. It really appeared to me that there was some critical note, at any rate. I was only trying to protect the Member of a small minority in this House which has not a great many representatives here to speak for it today.
We could say a great deal about this Schedule, but the hour is getting late, and we see that "the rosy-fingered dawn" is already here. I am sure that some hon. Members will be hoping to get to bed soon, but there is one word about which I wish to ask the Chancellor, and that occurs on page 74, in line 46. It is the word, "hearsettes." Can he explain what that means?
I am not a very good monumental mason, or retailer of caskets, but I imagine that it was some small form of hearse, drawn by hand.
We will allow the Chancellor to look into this matter before the Report stage.
Question put, and agreed to.
NINTH SCHEDULE.—(Agreement between the United Kingdom Government and the Eire Government amending the Agreement of 1926 (as amended by the agreement of 1928) in respect of double income tax.)
Motion made and Question proposed, "That this Schedule be the Ninth Schedule to the Bill."
I have only one observation to make about this. At the end of page 76 which sets out the Agreement, one finds the name "Hugh Dalton."
Question put, and agreed to.
"54 & 55 Vict. c. 39. The Stamp Act, 1891.
In page 78, line 45, to leave out:
"5, 6 and 7," and insert "and 6."—[ Sir S Cripps. ]
Schedule, as amended, agreed to.
NEW SCHEDULE.—(Special Provisions as to Working Directors.)
1. Where on an application in that behalf it is shown to the satisfaction of the Special Commissioners as respects any individual that during a period (hereinafter referred to as "the relevant period") being or comprised in the year 1947–48 he was a working director of a company which during the relevant period was a private company and was not an investment company, the following provisions shall have effect.
2.—(1) Where investment income of his for the year 1947–48 consisted of income from share capital of the company, his income from such share capital shall not be treated as investment income except in so far as it exceeds the standard amount specified in the next following sub-paragraph reduced by the amount of his emoluments from the company as a working director for the relevant period, being emoluments which fall to be included in his total income for the year 1947–48.
(2) The standard amount hereinbefore referred to is the amount applicable under head ( a ) of this sub-paragraph or the amount applicable under head (b) thereof, whichever is the greater, that is to say—
(3) If head ( b ) of the last foregoing sub paragraph has effect and the number of the working directors of the company changed during the relevant period, that sub-paragraph shall apply as if each period during which that number was constant were a separate relevant period.
3. An application under paragraph I of this Schedule may be made either before or after an assessment to contribution has been made, but shall not be made later than the thirty-first day of December, nineteen hundred and fifty.
4.—(1) Effect shall be given to any adjustment of investment income required by paragraph 2 of this Schedule either by discharge or reduction of the assessment in ques-
TENTH SCHEDULE.—(Enactments Repealed.)
Amendments made: In page 77, line 10, at end, insert:
In the First Schedule, the heading Faculty or Dispensation of any other kind.'"—[ Mr. Assheton. ]
tion or by repayment of contribution to the persons by whom it was paid or from whom it was recovered, or by all or any of those means as the case may require.
(2) Where contribution is repaid under this Schedule there shall also be repaid any interest paid in respect of that contribution.
(3) Where under this Schedule repayment is made of any contribution the whole or any part of which was discharged by payment in advance, the amount of the repayment shall be calculated as if the payment in advance had been made in respect of the contribution as adjusted under this Schedule and as if the interest referred to in subsection (2) of section fifty-three of this Act had been calculated accordingly
5.—(1) In this Schedule the following expressions have the meanings hereby assigned to them respectively, that is to say:—
"company" means a company within the meaning of the Companies Act, 1929, or the Companies Act (Northern Ireland), 1932;
"director" includes any person occupying the position of director by whatever name called, and any person in accordance with whose directions or instructions the directors of a company are accustomed to act;
"investment company" has the same meaning as in Section twenty of the Finance Act, 1936;
"private company" means a private company within the meaning of the said Act of 1929 or the said Act of 1932, being a company the directors whereof had a controlling interest therein, so however that for the purposes of this definition no body corporate shall be treated as a director unless it was during the relevant period itself a company the directors whereof had a controlling interest therein;
"working director" in relation to a company means any director thereof who during the period in question worked full time in the actual management or conduct of the trade or business of the company.
(2) For the purposes of this Schedule the profits of a company shall be taken to be the profits as computed, without abatement and including franked investment income, for the purposes of the profits tax, except that—
(3) Where the relevant period comprises one or more accounting periods or parts of accounting periods of the company for the purposes of the Profits Tax, the profits of the company The Solicitor-General. ]
Brought up and read the First time.
I beg to move, "That the Schedule be read a Second time."
This Schedule deals with the position of working directors in private companies. It deals with a situation to which attention has been called in connection with the Special Contribution, arising from the incidence of the tax on the companies which are really analogous to partnerships. The point was made that where there was a small company owned by the directors it was unfair that the tax should devolve on the dividends paid by the company as on the dividends of a large public company. It was said that a company of that sort was only a partnership in another form and that the dividends payable on the shares of such a company should not attract that liability. We have put down the new Schedule to deal with this situation. We did not go the whole length of the argument but we provided that a working director can treat up to £ 2,000 of the emoluments which he draws from the company as earned income and, therefore, free of tax.
There are two alternative figures by reference to which he can assess his tax-free emoluments. But it is now 6.15 in the morning and this Schedule involves considerable complications. No doubt many hon. Members might like to look al it and make contributions, and I wondered if I might suggest a way in which it might be treated. I have introduced it cursorily with a few sentences, but the Committee has not had an opportunity to discuss the machinery, which is rather complex and elaborate. Amendments have ben put on the Order Paper, and I wonder whether it would be for the convenience of the Committee if I did not further elaborate the provisions of the new Schedule at this stage in the hope that the Amendments might be withheld now and a discussion on a rather fuller scale initiated on the Report stage.
6.15 a.m.
The advantage of that will be that hon. Members will have more time to consider the precise effect of the various paragraphs of the Schedule and to make up their minds how it meets the situation. A not inconsiderable advantage is that we shall not be called upon now to embark on a discussion which will require considerable concentration and mental effort on the part of hon. Members interested in the Schedule. I throw out that suggestion. If it meets with the approval of the Chair and the approval of the Committee, I shall not proceed further in my observations.
We thank the Solicitor-General for the suggestion he has made. This is a very complicated Schedule and we do desire to look at it carefully. I hope that when we come to the Report stage we shall have two days; otherwise the Schedule will occur at exactly the same time as is on the clock now. We should like to feel that we are going to have a reasonable time both in length and in the hour of the day. I hope the Solicitor-General will look at the two points about which we are worried. One is what really is the definition of a working director and the other is whether it is fair to exempt half of a man's earned income and not the other half. It is because we do not feel that either of these two points is covered by the Schedule, that we should like fuller time to look at it.
I rise to reinforce the request made by my hon. Friend for plenty of time on the Report stage. According to my calculations, the Committee stage has taken 60 hours—nearly 12 hours a day. If we add Questions and the Adjournment Motion, it means a working day of 13 hours. It is quite impossible for the Committee to discharge its work properly and efficiently if it works as long as that. I do not think much time has been wasted. We should not discuss the new Schedule now, but I hope that adequate time on the Report stage will be given.
I wish to adopt the suggestion made by the Solicitor-General and supported by my hon. Friends. I would only point out that the Amendments deal with agricultural estates managed without an agent, which is rather different from the points in the Schedule. I ask the Minister to consider that now because we are losing one opportunity of debating it and I ask him if he will consider between now and the Report stage putting an Amendment down to deal with it.
Question put, and agreed to.
Schedule read a Second time, and added.
Bill reported, with Amendments; as amended, to be considered upon Monday next, and to be printed. [Bill 110.]
Gas [Money] (No. 2)
Considered in Committee under Standing Order No. 69.—( King's Recommendation signified. )
[Mr. HUBERT BEAUMONT in the Chair]
Motion made, and Question proposed,
"That, for the purposes of any Act of the present Session to provide amongst other things for the establishment of Area Gas Boards and a Gas Council and for the exercise and performance by those Boards and that Council of functions relating to the supply of gas, it is expedient to authorise the payment out of moneys provided by Parliament of compensation to persons employed in or in connection with the examining of gas meters or the testing of gas who suffer loss of employment or other loss in consequence of the said Act."—[ Mr. Jay. ]
I know the position quite well, but I think it only fair to ask what is the estimated amount of money concerned? If the Economic Secretary has not the figure now I shall be quite happy if he will endeavour to let me have it at the earliest possible moment.
indicated assent.
Today?
Yes.
Question put, and agreed to.
Resolution to be reported this day
Adjournment
Resolved, "That this House do now adjourn."—[ Mr. Snow. ]
Adjourned accordingly at Twenty-three Minutes past Six o'Clock a.m.