Orders of the Day — Third Schedule. — (Purchase Tax — Intermediate rate.)

Part of the debate – in the House of Commons at 12:00 am on 17th June 1947.

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Photo of Mr Hugh Dalton Mr Hugh Dalton , Bishop Auckland 12:00 am, 17th June 1947

It is not often that the Opposition appeal to me to curtail the Debate. I thought they were well set for a long Sitting, but I am always willing to respond to any suggestion. Let us not forget why these taxes were originally imposed. They were put on because we were assured that too much electricity and gas was being consumed, and having regard to what was called the fuel crisis, but which was, perhaps, more accurately described as the temporary interruption of electricity supplies, it would be desirable to impose a brake, which hitherto had not been imposed, on the increasing acquisition of these electricity-using and, to a less extent, gas-using, implements. That was the broad ground for putting on these various articles a new Purchase Tax of 66⅔ per cent. It was, as I explained in my Budget speech, a quite deliberate reversal of a policy which I had recommended and which the House had unanimously accepted earlier on, exempting these articles wholly from the Purchase Tax. We must still be mindful of the need not to waste electricity. We must not get into the habit of saying that, because of the good weather and the fact that, for the moment, everybody is being supplied that there is no longer any need to save. That would be very improvident. At the same time, after the comprehensive character of the Schedule had been apprehended, there did, of course, begin to emerge various doubts and hesitations, some on one point and some on another, and the local authorities got busy, and they have many admirable spokesmen in this House.

I must make quite clear that we cannot agree to any discrimination in the Purchase Tax. We cannot have the Purchase Tax on an article varied in accordance with whether it is placed in a local authority house, or with the way in which it is to be used by one consumer or another. We have to tax the thing itself, not the way in which it may be used. Our control is at the wholesale stage, higher up the stream, and that is a long way from the level of the retail purchaser. I must point out that it is administratively impossible to accept any Amendment to the Purchase Tax which seeks to differentiate according to the use to which such articles are put. We cannot do it in that way. The question, therefore, is how far can we go in reducing the wide field of this tax now that it has served a propagandist and educational purpose, and in what way we can make some concessions for which a strong case has been put by many hon. Members—that would not lead to waste of gas or electricity in the wider use of these articles. There are certain things which I think are very clear at either end of the scale and there are other things which are intermediate. It is essential to retain the Purchase Tax on space heaters—gas and electricity fires and so on—because it is here that most waste occurs, and where people are most improvident. All of us have done it, and we can all say that we have sinned over this. If we are to prevent the waste of electricity and gas—and I do not want to distinguish between them, as we must hold the balance quite level—I think there is a very clear case for making no concession here, but for retaining this tax where it stands.

7.0 p.m.

I am very doubtful, in the case of water heaters, which was put by the hon. Member for Hitchin (Mr. Asterley Jones), whether we ought not to retain the tax there also. After space heaters, I think they are the most wasteful of all these articles. My mind is wholly against making a concession on water heaters, but I will naturally listen to any further arguments which may be advanced. On the other hand, cookers, and cooking apparatus in general, are cases in which there should be a remission. I accept the argument which has been put forward by a number of hon. Members on both sides of the Committee that, after all, one must cook and that in many of the new local authority houses and, in fact, in all new houses, it is much more civilised, practical and sensible to cook with either electricity or gas. Therefore, I agree that cookers shall be exempted altogether from the tax.

As for further possible exemptions, the hon. Member for Stockport (Sir A. Gridley) has always been a great protagonist of the exemption of the electric kettle. It is an extremely useful implement; we have argued about this before, and I think we can exempt it.