asked the Financial Secretary to the Treasury why it has been decided that the tag labels used in collecting farmers' milk and in sending milk from the creameries to customers are now subject to Purchase Tax from which they have been hitherto free; whether he is aware of the extra cost thereby entailed; and whether he will consider the serious effect of this policy on the production price of milk?
I assume that my hon. and gallant Friend is referring to labels attached to milk churns and containing the name of the consignee. These labels have been liable to Purchase Tax since the commencement of the tax. There is no reason to believe that the amount of tax involved has any material effect on the production price of milk.
Is it not a fact that up to quite recently anything used in the packing or despatch of food, including milk, was free of this tax, and in view of the large number of labels that have to be used, is not this certain to result in an increase in the price of milk in the very near future?
These labels have been liable to tax ever since this tax has been in operation. As regards the cost, I am informed that the tax charged, including the printing, does not come to so much as 4s. per 1,000, and that it is much less in the case of labels printed in large quantities, and that does not seem to make it very likely to affect the price of milk.