Clause 5. — (Increase of rates of Purchase Tax.)

Orders of the Day — Finance Bill – in the House of Commons at 12:00 am on 2nd December 1947.

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Photo of Mr Robin Turton Mr Robin Turton , Thirsk and Malton 12:00 am, 2nd December 1947

I beg to move, in page 3, line 3, to leave out "one-third," and insert "one-quarter."

On the previous Clause the Financial Secretary described the Government's intention as a general mopping up process. The question why the Purchase Tax on necessities has increased by 100 per cent. requires an explanation. If the purpose of this tax is to bring in extra revenue, I do not think the Committee would like to extract that revenue from the poorer section of the population. If, on the other hand, the purpose is to prevent unnecessary spending, one would expect that the highest increase would have gone on the luxuries in order to stop people wasting their money. The Committee will probably recollect the origin of the Purchase Tax. It was introduced in 1940, with a basic rate of 33⅓ per cent. and a reduced rate of exactly half. Superimposed on it later we had the higher rate in respect of luxuries, and the intermediate rate which was graded so that it was twice the basic rate. The higher rate was three times the basic rate.

The former Chancellor in introducing this Budget has upset that ratio completely. He has doubled the tax on the reduced rate in respect of the necessaries of life. He has increased the tax by 50 per cent. on the basic rate, by 12½ per cent. on the intermediate rate and by only 25 per cent. on the higher rate in respect of luxuries. I submit that that is an unfortunate state of affairs, and, therefore, I am moving this Amendment to bring the reduced rate—that is the tax on the necessaries of life—to 25 per cent., so that it shall have the same proportionate increase as the increase on the remainder. I appreciate that according to an answer which I received yesterday from the Financial Secretary, there will be a loss to the Revenue in the current financial year of £2 million, and an estimated loss of £16 million in the succeeding financial year. It is not open to me as a Private Member to make any suggestions as to how that position should be redressed, but it is quite clear that if it is important to obtain revenue, that redress should be obtained from taxation on luxury goods rather than on necessities.

I would remind the Committee of the types of articles which come under this grouping of the reduced rates. They include clothes; rubber boots for children as well as for grown ups, which is an important matter in rural districts; Thermos flasks; holloware; drugs and medicines; and wallpaper. Those articles are certainly indispensable. One cannot suddenly say, "I am going to try to save and not wear any clothes," or that one will do wallpaper drugs and medicines or even wallpaper in the house. Nobody can suggest that there should be no expenditure on those items at the present time. Therefore, I hope the Chancellor will look with a friendly eye on this Amendment, which is not intended as a wrecking Amendment, but is intended to improve the financial measures which he has adopted,

I wish the Financial Secretary were present, because I feel sure that he at least would be sympathetic. When the Finance Bill was adopted in 1940, and the Minister of Transport of the present Government described it as unfair, undemocratic and vicious in its impact on prices and wages, the Financial Secretary voted against the reduced rate of Purchase Tax, because in his view it inflicted too great a burden on the poorer people. I do not believe that in this short space of seven years there can be a great change in the Financial Secretary's opinion. Perhaps that is the reason why he is not present on the Treasury Bench. I would like to give an illustration, taking a guinea's worth of goods in the four Budget groups. The price of the necessities of life has gone up by 3s. in the guinea. The price of articles in the basic group, like hats, gloves and toys, is going up by 2s. 7¼d. in the guinea. The price of articles in the intermediate group, such as electric heaters and mirrors, is going up by is. o¼d. in the guinea; and the price of luxuries, like cosmetics and jewellery, is going up by 2s. 7¼d. in the guinea.

I submit that these figures alone show that there is something wrong with the Chancellor's proposals as they are at present drafted. We propose that these necessities of life should only go up by is. 6d. instead of 3s. They will then be at a lower rate than cosmetics and jewellery, which is only just at the present time. I ask Members of all parties to support me in this appeal. We are facing a hard winter, and we should not, therefore, make the necessities of life even harder to obtain than they will, of necessity, be during this winter. Unless this Amendment is carried, there will be a heavy increased burden on the poorer section of the community.

Photo of Sir Archer Baldwin Sir Archer Baldwin , Leominster

I think that the figures which have been given by my hon. Friend the Member for Thirsk and Malton (Mr. Turton), who so ably moved this Amendment, show that due thought has not been given to the effect of this increase in Purchase Tax. As he rightly pointed out, the large percentage rise will weigh on the lower range of incomes, and by "lower range of incomes" I mean not only working people, but old age pensioners and those with fixed rates of income, particularly the two latter classes. We see continual little rises going on in the price of what are necessaries of life, and if these do not stop the effect will soon be that the old age pension of 26s.

will buy no more than the original pension of 5s. a week.

The effect of this increase, taking the index figure of 100 for 1942, is that the index figure for household goods now rises to 215, which is a pretty substantial rise in five years. Wearing apparel, etc. will rise from 100 to 152, again a substantial rise. The percentage rise on the various items is out of all proportion and bears excessively on the lower range of incomes. It is fantastic to think that the effect of these increases will be that the lower range of incomes will be called upon to pay to the Exchequer money which has to be made available to be paid out on various forms of subsidies. If any subsidies are to be paid, they should not be paid from a levy on the lower range of incomes.

Photo of Sir Stafford Cripps Sir Stafford Cripps , Bristol East

One always has great sympathy for people who are suggesting that a rising tax should be lowered, especially when that tax may effect some very small section of the poorer class. I would first point out to the Committee that the hon. Member for Thirsk and Malton (Mr. Turton) spoke of the wide range of goods covered by the tax, but he omitted altogether the qualification that it does not cover utility garments and footwear at all. It is utility garments and footwear which the poorer sections of the people buy, and it is for the very purpose that they should be able to buy them at a cheap rate that the utility scheme was worked out. The goods embraced by those utility schemes have never attracted Purchase Tax. That has been purposely arranged in order that a range of goods might be available without Purchase Tax.

There are some other goods, such as rubber boots, Thermos flasks and hollowware, but only certain parts of the hollow-ware range are covered by the tax, a great number have already been excluded from Purchase Tax. Lawnmowers are not a thing used exclusively by the poorer sections of the population, and as for sports requisites, a large reduction of tax was granted as a concession in the last Finance Act, owing to legitimate pressure then brought upon the Chancellor to encourage sports. There is, indeed, a wide range of these goods, which covers all classes of the public who purchase goods of this kind. Therefore, one cannot, as the hon. Member seemed to do, deal with this matter as if it were something aimed at one particular section of the community. Nor, indeed, can one deal with this as a matter of percentage increases in the existing duty; that is a perfectly irrelevant consideration.

5.15 p.m.

What the late Chancellor did, in introducing these new scales of Purchase Tax, was to be a new floor, a new minimum, which he made 33⅓ per cent. and he did that both in order to support the increases in the higher level, and to attract more money into the Treasury to counteract the inflationary tendencies. If one were to go back on that, it would only mean that one would be knocking out of the Budget a large block of money which would otherwise be attracted by this increase, and one would be driven to finding the money somewhere else. There are definite limits in the higher ranges beyond which it is really impossible to tax, because evasion reaches such a scale that the tax is not recovered. It was on that basis that the 100 per cent. tax was only increased to 125 per cent. There is a limit to which it can be done, and that was thought to be the limit.

The Chancellor raised the floor or the base of this taxation, and then made increases in the higher ranges. He expressly stated that as this was an emergency Budget, and it was not possible to embark upon a lot of elaborate recasting, he had not touched the classifications. He also stated that before the next Budget the whole matter of the classifications would be gone into in the light of these changes which are made by this Budget, and if it was necessary to change goods from one class to another, or to take goods out of one class altogether, that will be considered. If one is bringing forward an emergency Measure for the purpose of quickly raising money one cannot undertake all the elaboration which is dealt with in the usual course of the ordinary Budget of the year. I can assure hon. Members that before the April Budget we shall be reconsidering the effect of this taxation—this uniform rise per class on the goods in the various classes—to see whether any consequential adjustments should be made as regards the classification of goods.

It is a complicated matter; it is not as simple as it may seem to be. A good deal of consideration is needed whether there is any case for changing the classification of these goods. I hope that in the light of the explanation I have given, the Committee will allow this charge to remain, and this hierarchy of charges, if I may use that expression, to proceed, as we believe it is the only way in which we can obtain the amount of money which we think it desirable to raise by this means.

Photo of Hon. Oliver Stanley Hon. Oliver Stanley , Bristol West

I am sure that the Committee are grateful to my two hon. Friends for raising this point. It is a serious matter, and it is in that spirit that the Chancellor of the Exchequer has replied to their speeches. I was particularly glad to hear him reaffirm, and, indeed, strengthen the promise given by his predecessor that before next April the whole question of classifications would be looked into again. We on this side of the Committee are prepared to accept the proposals in this Bill as emergency proposals, and we recognise that it would be inappropriate, as they are such, to go through the whole of the details of the contents of each class. But we also feel that any sharp rise in the amount of tax, such as is introduced in this Bill, creates a necessity for looking anew at the classes in which the various goods are put. We are glad to hear that between now and April that task will be undertaken by the Chancellor of the Exchequer. I recognise that if this Amendment were carried it would result in the loss of a very substantial amount of revenue which, as far as I personally am concerned, is revenue obtained in a way which I regard as perhaps the most appropriate method for combating inflation.

There is considerable force in the Chancellor's reply to the perfectly logical case put up by my hon. Friends, that is the case that the percentage increases in the higher ranges ought to be higher than they were in the lower ranges. The Chancellor's answer that if the higher taxes were increased too much we would run into a series of evasions by which the amount we would receive would not be increased but actually would be decreased, is an effective one. Therefore, I hope that my hon. Friends will feel satisfied that they have achieved their purpose in the pledge which the right hon. and learned Gentleman has given for an investigation before next April, and that they will not feel it necessary to take this matter to a Division.

Photo of Mr Robin Turton Mr Robin Turton , Thirsk and Malton

As this is an interim Finance Bill, and in view of the assurance given by the Chancellor of the Exchequer. I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Photo of Mr Selwyn Lloyd Mr Selwyn Lloyd , Wirral

I beg to move, in page 3, line 13, at the end, to insert: or drugs or medicines manufactured or prepared.

Photo of Lieut-Colonel Sir Thomas Moore Lieut-Colonel Sir Thomas Moore , Ayr District of Burghs

On a point of Order. Could you, Major Milner, tell us what is your intention in regard to the various Amendments to Clause 5 which follow more or less upon this one? Is it your intention to take them together? Will there be a general discussion?

Photo of Mr Douglas Clifton Brown Mr Douglas Clifton Brown , Hexham

I am obliged to the hon. and gallant Gentleman. After some hesitation, I have decided to call the proposed Amendments to the Purchase Tax. Many of these matters were fully discussed in the last Finance Act and I hope hon. Members will not take too long. I do not want this course to be taken in any way as a precedent and I hope that hon. Members will make their points shortly.

Photo of Hon. Oliver Stanley Hon. Oliver Stanley , Bristol West

I quite agree with what you have said, Major Milner, but you will realise that we have deliberately refrained on this occasion from raising a great mass of detailed Amendments which we would have done on a normal Finance Bill. I hope that when we come to the Finance Bill in April it will not be held that we have missed our chance because we did not take it now in the same Finance Bill as that in which the Government were making the alterations.

Photo of Mr Douglas Clifton Brown Mr Douglas Clifton Brown , Hexham

I said that this course was not to be regarded as a precedent. The proceedings on this particular Bill are different because this Bill has only a limited and not a general ambit.

Photo of Mr Selwyn Lloyd Mr Selwyn Lloyd , Wirral

The purpose of this Amendment is to exclude from the increase in Purchase Tax drugs and medicines manufactured or prepared. At the moment, drugs and medicines are subject to a tax of one-sixth, which is now to become one-third, of the wholesale value of the goods. The object of this Amendment is to ensure that that increase should not apply. As you have pointed out, Major Milner, this matter was dealt with during the Debate on the last Finance Act. I do not propose to go again into all the arguments referred to then. When my right hon. Friend the Member for West Bristol (Mr. Stanley) spoke on this subject on that occasion, he succeeded in extracting from the Financial Secretary to the Treasury a promise that during the 12 months after that date, which was 17th June, he would look into the matter of drugs and medicines and would examine the illogicalities which he admitted existed. He promised to bring the matter before us again. I suggest that this is a convenient moment for the Financial Secretary, or someone on his behalf, to make a progress report upon how far he has gone in looking into a matter which was so full of illogicalities.

The Financial Secretary also said on that occasion that no one could say that these medicines or drugs were essential to the life of the community. That is an interesting view. Over the week-end I attempted to find out which drugs and medicines were subject to Purchase Tax and which were not. I do not think that the right hon. and learned Gentleman the Chancellor of the Exchequer will be able to rely upon his utility argument in this case. For example, a simple medicine very commonly used is iodine which, I understand, is subject to Purchase Tax. One cannot help being rather surprised that a Government so prone to making cuts should be keen on doubling the Purchase Tax on so simple an antiseptic. Again, in regard to quinine, I am told that that will be subject to this increase. Is it not rather surprising that a Government who have succeeded in bringing as much cold and misery to most homes as an Government before, should double the tax on so simple a cold preventive.

I am told that all the simpler forms of nerve tonic will be subject to this increase. The Government lead us on from crisis to crisis. Is it not rather sadistic that they should double the Purchase Tax on these simple remedies? With regard to aspirin, I suppose, in view of the firm attitude taken in regard to earlier alcoholic Clauses, that perhaps the right hon. and learned Gentleman is on rather stronger ground in relentlessly doubling the Purchase Tax. On the other side of the sheet, I am told that many of the simpler forms of poison are on the free list. It may be that that is a deliberate act of Government policy and that from the humanitarian point of view, they are providing a cheap means of escape for those not able to face the brave new world of Socialism.

However that may be, the fact is that many simple, ordinary, common medicines and drugs will be subject to this doubling of the Purchase Tax. I am told that almost all the ingredients of the common cough mixtures, certain of the drugs for relieving pain and many of the simpler medicines, will be subject to the increase. There are also other illogicalities. I understand that vaseline bought in a four ounce tin is free from tax, but if it is bought in a smaller tin it is not. I put these matters before the Committee on information given to me. I confess quite frankly that the schedule shown to me was so obscure and difficult to follow that I may not have been wholly accurate in what I have said. It is difficult sometimes to follow the technical descriptions of most of these drugs.

5.30 p.m.

The arguments in favour of my Amendment for the exclusion of drugs and medicines can be shortly summarised. This imposition constitutes an additional tax on sickness, and it constitutes a tax on things which may prevent minor ailments from becoming more serious. If it is meant to be a mopping up of purchasing power and an anti-inflationary measure, I would say that if a minor ailment is permitted to develop into a major ailment, which probably means hospital treatment, nursing and so on, it may easily defeat its purpose. Anyhow, the Government are very large purchasers of these drugs and medicines, and, therefore, the financial aspect of the matter is not as important as it would appear. The present classification is hopelessly illogical, and I suggest that it would be wise for the Government to accept this Amendment.

Photo of Sir Henry Morris-Jones Sir Henry Morris-Jones , Denbigh

I beg to reinforce the plea made by my hon. and learned Friend, and to suggest that we ought to have some explanation from the Government on this question. Personally, I have never been able to understand why these drugs and medicines were subject to Purchase Tax at all, because there is no really solid argument for taxing medicine, any more than there is for taxing food, so far as I can see. In the overwhelming proportion of cases, medicines are a necessity. It may he that there is an infinitesimal proportion of people who take medicines and who do not need them, but the number must be very small. On the other hand, there is a substantial category of people who take medicines because they think they do them good, and, if they think so, it is quite as important as doing them good.

A drug like iodine, which is a great preventive, is capable of rendering very great economic help in the prevention of colds. I do not pretend to be giving advice, though I use it myself, and for the prevention of colds it is a very fine remedy. If we can prevent colds in 100 people in this country, we are doing something which will be of real value at a time when we are wanting the maximum productive effort from our people. It is true that this is an interim Bill, and that the Chancellor, in an earlier speech, promised us that further consideration will be given to the whole question of the categories liable to Purchase Tax, but I would suggest that the point made by my hon. and learned Friend was a cogent one, and that, at this stage of an interim Finance Bill, we should give consideration to the cases of medicines which are necessities of life, preventives or sedatives, as in cases of sleeplessness. There are some drugs which are subject to double tax and which are of very great help in combating sleeplessness, and, under the present strain and stress of modern life, the loss of sleep to our working population is a vital matter. Surely, for the sake of the amount of money which the right hon. and learned Gentleman hopes to get from this extra tax on medicines, he will reconsider the schedule, or, perhaps, consider abolishing it altogether?

Photo of Mr Frederick Erroll Mr Frederick Erroll , Altrincham and Sale

I wish to raise in particular the difficulties of the chronic sick, who can hardly be said to be adding to the inflationary pressure of the country at the present time. A great many of the old and infirm have a very real need of medicines and drugs from time to time, and the extra Purchase Tax represents, in many cases, a very serious addition to their weekly budget. We here may not think that a few pence or shillings matter very much, but, to such people they matter a very great deal on top of the many other increases in the cost of living for old and infirm people today.

In addition to the increase, this tax operates most unfairly and discriminates between different types of diseases. While we have got an amazing list of drugs and medicines on which the increased tax is to be levied, there are certain notable exemptions brought about by the Purchase Tax (Exemption) Order, 1945, which exempts, amongst other drugs, penicillin, the sulphonamide group, vaccines and morphine. We tax the curing of toxic goitre and malaria, and leave free the curing of pneumonia and gonorrhœa. We ought to have a sense of logic in these matters, and have matters so arranged that all important diseases can be cured without the higher rate of Purchase Tax being imposed on the drugs and medicines necessary to effect the cure.

There is the further point of the dispensing practitioner who makes up medicines for the use of his patients, and who, particularly when a panel doctor, receives a certain fixed rate for such medicines as he supplies, so that any increase in the Purchase Tax on the ingredients for those medicines must be entirely borne by him. This can scarcely be regarded as a tax to prevent inflationary pressure, because there is no inflationary pressure here. For these reasons, and for those advanced by my hon. and learned Friend, I hope the Chancellor will reconsider the matter and accept this small Amendment.

Photo of Sir Hugh Linstead Sir Hugh Linstead , Wandsworth Putney

In supporting the Amendment, I would ask the Chancellor to take this opportunity of having a look at the whole operation of the Purchase Tax as it affects medicine. When we last discussed this question in Committee, the then Chancellor of the Exchequer indicated that he could not afford the loss of revenue which the remission of the tax would entail. I think the figure is something like £9 million. If we double that, and assume that we are going to lose a revenue of £18 million, that is not merely the measure of the lost taxation, but the measure of the amount we are going to extract from the sick. There is, of course, machinery for exempting from the tax costly and essential drugs, but, as the examples given by my hon. and learned Friend show, that machinery has been used in a very restrained way, and it is very difficult to see why somebody suffering from malaria should pay the tax, while someone else requiring to take a drug regularly, though it is not an essential drug, should pay the full rate of tax. One has only to look at the long list of articles exempted from Purchase Tax to realise how anomalous is any tax on drugs which are essential to sick persons. I think we all feel that the Chancellor is in good form today in answering questions. I would like to put this question to him. Wigs are exempted from Purchase Tax and, that being so, why are not hair restorers also exempted?

It was said in the Debate on the Second Reading of the Bill that the Treasury could not afford not to have the revenue from this tax. But the situation now is entirely changed; it is no longer a question of balancing the Budget. The whole point of this tax is to absorb surplus purchasing power by curtailing purchasing power on non-essentials. I do not think anybody could seriously maintain that expenditure on drugs and medicines is expenditure on non-essentials. If the Chancellor imposed additional taxation on patent medicines, there would, possibly, be a good deal of sympathy with it. If he wants to do that, then this is the opportunity for the whole question of the taxation of medicine to be examined with a view to seeing whether some definitions can be arrived at which do more justice to sick people than the present definitions employed in the operation of this tax. That would enable the Treasury, if they feel they must do it, to take the tax off the large nationally advertised medicines while, at the same time, making sure that the sick person is having to bear, in respect of the things he really needs, not merely the 16⅔ per cent., but this heavy additional tax which it is now proposed to impose.

Mr. McKie:

I wish to support this Amendment. My hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd), as far as I understood him, said that he was not sure whether certain drugs and medicines be mentioned would be included within the scope of the Purchase Tax. Last Saturday afternoon I made a special visit, at his request, to a member of the pharmaceutical profession in my constituency. I can assure my hon. and learned Friend that that gentleman will give full con- firmation of the fact that the drugs and medicines which he listed come within the scope of this proposed 100 per cent. increase on the tax hitherto in existence. I will go even further than my hon. and learned Friend and associate myself with the hon. Member for Denbigh (Sir H. Morris-Jones), who said he could not see why on earth it was necessary to include drugs and medicines at all. I was certainly horrified to hear him say that iodine and quinine, two of the most valuable drugs, especially at the present time, are going to be included in this list.

Nobody knows what the coming winter is going to be like. I think that hon. Members will agree with me that it is looked forward to with a great deal of anxiety, and even dread, by a large number of people in Great Britain at the present time, particularly those belonging to the working classes. That being so, I am greatly surprised that we have not yet had one speech from hon. Members opposite in support of this very valuable Amendment. I cannot, for the life of me, see why that should be. Nobody knows what the winter is going to be like. It is already giving promise of being quite a hard winter. These things go in cycles, and we may even have a repetition of the hard climatic conditions which prevailed in February and March this year. Then, owing to the lowered vitality of the people, we might easily have serious epidemics. I am sure that nobody on the Treasury Bench will attempt to deny that the vitality of the people is lowered. The fact that there were 2,500 cases of fainting in the streets of London on the day of the Royal Wedding is direct proof that the vitality of the people of this country is considerably lower than it was.

5.45 P.m.

If I am right in my supposition—[Laughter.] In spite of the hilarity on the other side of the Committee, I am completely unmoved. If that is the position at the beginning of December, what are we going to be like when we get to January? What is the health of the people going to be like in January, February and March, and particularly in February, which is always a testing time in this country. That, I am sure, nobody will dispute. If these two drugs—iodine and quinine—are going to be subject to this heavy additional impost, I would ask hon. Members opposite, who take this in such a lighthearted manner, to realise the hardships which will rest upon those in their constituencies who are affected by it. I only hope that particular note will be taken by their constituents of the lighthearted manner in which they are disposed to regard this matter.

In the last few minutes, I have been reading a written answer to a Question put to the Chancellor by my hon. Friend the Member for the London University (Sir E. Graham-Little) which seemed to treat in a cavalier way my hon. Friend's suggestion for the reduction of this proposed tax. I am afraid that the right hon. and learned Gentleman does not give us very much of a concession. I can assure him, and those who support him, that if they are prepared so to do, they will not only be acting in their own interests, politically or morally, but will earn the thanks of a very large number of people in this country, not merely the maladcs imaginaires type, but the chronics, and, indeed, of those who are haunted by the fear that if an epidemic takes place in this country they will not be so readily able, as in the past, to buy the necessary drugs. If the right hon. and learned Gentleman is not able to make such a concession, I sincerely hope that my hon. and learned Friend will take this Amendment to a Division, when I shall certainly give it my support.

Photo of Sir Stafford Cripps Sir Stafford Cripps , Bristol East

One always has sympathy with any taxation which will increase the cost for anybody. It is necessary just to see what exactly, is the scope of this Purchase Tax. First, there is a very large and long list of excluded drugs which were dealt with by the Exclusion Order, 1945. I may tell the Committee that, for some time, there has been under discussion with the Ministry of Health the question of the extension of that list in order to get it on a sounder and better basis. I am quite prepared to admit that its present basis does not seem to be wholly logical. It has "just growed" and like so much of our legislation which grows up, it does not always grow up on the most logical lines. Therefore, when the opportunity comes—as I hope it will—this is a matter of which, between now and next April, there should be a re-examination, with a view to excluding those drugs which are of real importance.

I would remind the Committee that prescribed medicines do not, of course, attract the tax. That is to say, by the definition in the Finance Act, 1940, medicines that are made up by a chemist do not attract the tax as a manufactured article. They are not considered to be a manufactured article, and therefore they are not charged the tax, though some drugs in the medicine may be taxed. If one looks at the proportion of the drugs and the cost, compared to the final article, one would come to the conclusion that the incidence is not very heavy. At the present time this tax affects what used to be known as patent medicines.

The Committee will remember that during the war the medicine Stamp Duty on those was withdrawn and Purchase Tax was substituted. It would be found, so far as the vast majority of receipts from this tax are concerned that they are really a substitution for the old medicine Stamp Duty. The fact that it was made rather wider in its application, and certain exemptions made, may have left certain things which it may be desired now to remedy. But the basis and foundation of the receipts, the £8 million mentioned by the hon. Member for Putney (Mr. Lin-stead) will be found to be the old patent medicines which attracted in the old days the medicine Stamp Duty and which I think nobody would deny are a very good subject matter for taxation.

I know this is a matter on which hon. Members may differ a good deal, but I cannot believe that the taking of patent medicines without the advice of a doctor is a very good way of dealing with the health of any population. A great many doctors certainly would say it is a most undesirable and unhealthy practice, and one that ought to be avoided as far as possible. It is not always known whether the contents of these medicines, as they are called, will be very good, either to accomplish the ends which they are advertised to accomplish, or, indeed, to accomplish any ends at all. If there are some inclusions in this list which it would be desirable to remove when the list can be properly considered, the Committee can take it that the bulk of this increase in taxation will fall on those classes of goods which formerly used to be subject to the Stamp Duty, and I am sure that the Committee would not object.

Therefore, I am afraid I cannot accept this Amendment, though it is a matter which I propose to look into before next April to see whether there cannot be more logical and better arrangements about exemptions from this Clause. We shall be very much assisted by the fact that the new Health Service Act will be coming into operation and we shall have the assistance of the Ministry of Health. They will be very large users in the various hospitals and in connection with other matters with which they will be concerned. I hope that on that basis the hon. Member will be able to withdraw his Amendment.

Photo of Hon. Oliver Stanley Hon. Oliver Stanley , Bristol West

I hope the Committee realises that we are really only discussing this Amendment now because the Treasury have been so dilatory in the past. Certainly so far as I am concerned, and, I think, as far as the mover and the supporters of the Amendment are concerned, this would never have been put down if the promise of the Treasury to remove from this Clause the real essential medicines had been carried out. If all we were discussing was a tax upon the kind of patent medicines to which the Chancellor referred, I would have no sympathy with this Amendment. The Chancellor's words would have carried with me a great deal more weight had he not said exactly the same thing in more or less the same words that the Financial Secretary to the Treasury said many months ago. When the Financial Secretary said it we thought that something was going to happen. But nothing has happened. All we get now is a promise by the Chancellor of the Exchequer in December, to say he will look again, before April, at what the Financial Secretary promised on 17th June last, would be a matter for immediate steps. In those circumstances I find myself in a very considerable difficulty.

The reference by the Chancellor of the Exchequer to the effect of patent medicines opens up a vista of pleasant debate which my hon. Friends may wish to continue, and it is one on which we may all take different points of view. I agree with the Chancellor of the Exchequer. I do not believe that a patent medicine taken without a doctor's prescription is likely to do much good. I think that there are a good many cases in which it does a considerable amount of harm. All of us will agree that there are included in this list a certain number of essential medicines which cannot in any circumstances fall into the sort of class to which the Chancellor has referred. They have been much too long included. We have been promised their removal in the past, and nothing has been done to implement that proposal. Certainly, if the matter were to be taken by my hon. Friends to a Division, I should not only be voting for a reduced tax on a class of patent medicines but registering a protest against the grave ineptitude of the Government in failing to remove essential drugs which they have still included in the list.

Photo of Sir Isaac Pitman Sir Isaac Pitman , Bath

I have two remarks I would like to make, but before I do so I would like to protest against this suggestion that when anybody has anything wrong with him he must take up the time of a doctor and impose an additional strain upon the medical profession in curing what may be a minor ailment. In my own home in my early youth—and it is being repeated in the case of my sons and daughters—we did not go to the doctor for every conceivable ailment. We combated it with commonsense and som knowledge of a particular medicine or by rubbing something on the chest, or by giving an aperient and sending the child quickly and early to bed. I think we are barking up an entirely wrong tree in suggesting that these proprietary brands, and other brands, should always be administered only after they have been prescribed by a doctor.

If the Chancellor is going to look at this list surely he could act quite apart from Budget day, and could do it now or at any minute. He could give instructions to his civil servants to look at the list of exemptions and put into it a great number of the drugs, if not all of them, about which we have been talking this afternoon. I would say both in fairness and from the point of view of getting the drugs available in the shops—the business about retailers is a very good instance of what happens to drugs when they think the tax is going to be taken off—he should do that now, and not wait until April. If he cannot do it now, let him look at the grants paid to doctors doing their own dispensing under the Health Acts, because grants to the doctors are low enough as it is and their expenses will now be increased. I hope that is something he can do, and can handle at once.

6.0 p.m.

Photo of Lieut-Commander Joseph Braithwaite Lieut-Commander Joseph Braithwaite , Holderness

I think that on this side of the Committee it is not difficult to detect that the Chancellor's attitude to this Amendment is less austere and more sympathetic that it was to those which preceded it. I think we can see from these benches the main difficulty in which the right hon. and learned Gentleman is placed. First, he has this yawning gap in front of him. [HON. MEMBERS: "Where are all the Opposition leaders?"] I am always glad to give a little cause for hilarity amongst hon. Members opposite. I meant, this yawning financial gap. He has inherited a bankrupt estate in this Budget. My right hon. Friend the Member for West Bristol (Mr. Stanley) pointed out just now that the Government have been considering this for some time and have not yet arrived at a decision. It is only fair to add that the new Chancellor has not been cogitating this particular matter very long, and he may want to give it further thought between now and April.

I would, however, submit to him, in view of the arguments that have been urged, that this impost does run counter to the main objectives of this Budget, which are to take counter-inflationary steps and to mop up unnecessary expenditure. No one can accurately describe someone lying ill in bed as mopping up anything, except occasional doses of broth, and so on; and no one can describe these medicines or drugs in any way as luxuries. They are not optional. In many cases, they are necessities. I do not pretend to enter into the controversy whether the taking of patent medicines is good or bad. I think that the hon. Member for Denbigh (Sir H. Morris-Jones) probably put his finger on the spot, as a member of the medical profession, when he said that what mattered was not so much whether a medicine did good or not, but whether the patient thought it did him good—which, I understand, is the chief argument of the medical profession; it is psychological. Surely, to impose Purchase Tax upon these drugs as a deterrent entirely misses the purpose. Nobody takes them for fun. People take them because they are feeling ill.

I thought that I detected in the remarks of the Chancellor of the Exchequer, not a pledge but certainly a very broad hint, that he was likely to take sympathetic action between now and next April. I would put this to him, with the greatest respect—that it is much more important to act now in December than when the winter of our discontent is over. Here I find myself in disagreement with my hon. Friend the Member for Galloway (Mr. McKie). I should have thought that the thing to do was to accept the Amendment now, then have the cogitation between now and next April and, if necessary, in the April Budget put on the taxation which the right hon. and learned Gentleman requires, if he then requires it. I think that would be the more humanitarian approach.

In any case, I hope that my hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) will carry the matter a little further, for this reason. There is something in what Sam Weller called "beeswaxing and turpentining" the right hon. and learned Gentleman's memory. If a Division took place now it would impress upon the Chancellor of the Exchequer what the Committee feels on this matter. I cannot believe that it is only on this side of the Committee that these views are held. I am sure that hon. Members opposite are anxious to record in the Division Lobby their anxiety for the sick in their constituencies, and their desire to deal with patent medicines; and I am sure that their constituents are very anxious to see what their views are on this very important matter. So that we can have on the record those who are inclined to succour the sick and those who take the more reactionary view, I hope that the matter will be pressed to a Division.

Photo of Sir Godfrey Nicholson Sir Godfrey Nicholson , Farnham

I am very much tempted to follow my hon. Friend the Member for Bath (Mr. Pitman). It was, indeed, a lovely picture that he drew—of prescribing for various members of his family. I wondered, as he drew it, which member of his family prescribed a hair restorer for him. I entirely agree with what the Chancellor of the Exchequer said about patent medicines. There are numbers of people who have the positive vice of constantly dosing themselves. I was always brought up in the tradition of my family. I had a great-aunt who died in the early eighties who had this habit—so much so, indeed, that the chemist's boy was under instructions to call for orders every morning. She died young. People like that ought to be stamped out of existence. The people, however, who really will be hit by this extra taxation are the poor who are urgently in need of moderate doses of medicines at a particular time, and I do beg the Chancellor of the Exchequer to think again about this.

What does concern me—and this applies to the whole of this Budget—is that His Majesty's Board of Customs and Excise have not exercised their usual care. We had an example of that in the Amendment on which we have just divided. Surely, there ought to be more specification in the long Schedule to the principal Act; and there ought to be more specification in this case. I think we are entitled to demand from the Government a little more attention to detail, and I hope that my hon. and learned Friend the Member for Wirral (Mr. S. Lloyd) will not withdraw the Amendment.

Photo of Sir Hugh Linstead Sir Hugh Linstead , Wandsworth Putney

I intervene for a moment or two because it became obvious to me while the Chancellor was replying that in one particular respect he had been misadvised—I think in a rather important respect. He based part of his case for the rejection of this Amendment on the fact that medicines prescribed by doctors would not be increased in price by the effects of the tax.

Photo of Sir Stafford Cripps Sir Stafford Cripps , Bristol East

I did not say that. What I said was that they did not attract the tax because the making of the prescription was not manufacture.

Photo of Sir Hugh Linstead Sir Hugh Linstead , Wandsworth Putney

I, of course, accept the Chancellor's phrase, but it still illustrates my point. They will, in fact, attract the tax in so far as they are proprietary medicines. If we set aside medicines prescribed under the National Health Insurance Act, 50 per cent. of the medicines prescribed today are, in fact, proprietary medicines. Therefore, something like 50 per cent. of the non-N.H.I. medicines will attract the full 33½ per cent. tax. The right hon. and learned Gentleman went on to say that, in fact, this tax was nothing more than a repetition of the old medicine Stamp Duty. I do not think he has been informed on this point, that the old medicine Stamp Duty did not apply to medicines which were sent to the chemist to be sent out with a medical prescription. Therefore, once again, we are going to have a heavy incidence of tax on medicines which previously did not bear any tax at all. I think that these two particulars missing from the material supplied to the Chancellor of the Exchequer should be brought to light before a decision is taken.

Photo of Mr Selwyn Lloyd Mr Selwyn Lloyd , Wirral

I am grateful to the right hon. and learned Gentleman for the sympathetic way in which he has dealt with this matter; but his sympathy has been simply verbal. We have had verbal sympathy on previous occasions from the Financial Secretary. What I had hoped to get on this occasion was some action. My fear in putting down this Amendment was with regard to the diminution of the anti-inflationary character of the Chancellor's proposals. That argument has been completely disposed of by the Chancellor of the Exchequer, who said

that the gain to the revenue will come from the patent medicines, and that he calculates, apparently—or his advisers calculate—that very little of this sum of £8,000,000 or £9,000,000 will come from the essential medicines to which I referred. Administratively, it is a very easy matter for him. Surely, he could have stated that he would add to the list of chemists' medicines and drugs those which I mentioned. In this circumstance, and in view of the fact that the right hon. and learned Gentleman was simply repeating the sort of assurance the Financial Secretary gave in June, I shall ask my hon. Friends to go into the Division Lobby with me.

Question put, "That those words be there inserted."

The Committee divided: Ayes, 131; Noes, 278.

Division No. 36.]AYES.[6.11 p.m.
Amory, D. HeathcoatHead, Brig. A. HO'Neill, Rt. Hon. Sir H
Anderson, Rt. Hn. Sir J. (Scot. Univ.)Headlam, Lieut-Col. Rt. Hon Sir C.Osborne, C
Assheton, Rt Hon. R.Henderson, John (Cathcart)Peto, Brig. C. H. M.
Baldwin, A. E.Herbert, Sir A. PPitman, I. J.
Barlow, Sir J.Hollis, M. CPonsonby, Col. C. E.
Beamish, Maj. T. V. HHolmes, Sir J. Stanley (Harwich)Poole, O. B. S. (Oswestry)
Beechman, N. AHoward, Hon. A.Prescott, Stanley
Bennett, Sir P.Hudson, Rt. Hon. R. S. (Southport)Prior-Palmer, Brig. O
Birch, NigelHutchison, Col. J R. (Glasgow, C.)Raikes, H. V.
Boles, Lt.-Col D. C. (Wells)Jennings, R.Rayner, Brig. R.
Boyd-Carpenter, J. A.Keeling, E. H.Reid, Rt. Hon. J. S. C. (Hillhead)
Braithwaite, Lt.-Comdr. J. G.Lambert, Hon. G.Roberts, Maj. P. G. (Ecclesall)
Bromley-Davenport, Lt.-Col. W.Lancaster, Col. C. GRopner, Col. L.
Buchan-Hepburn, P. G. T.Langford-Holt, J.Ross, Sir R D. (Londonderry)
Butcher, H W.Law, Rt. Hon. R. K.Salter, Rt. Hon. Sir J. A
Challen, C.Legge-Bourke, Maj. E. A. H.Sanderson, Sir F.
Churchill, Rt. Hon. W. SLindsay, M (Solihull)Shephard, S. (Newark)
Clarke, Col. R. S.Linstead, H. NShepherd, W. S. (Bucklow)
Clifton-Brown, Lt.-Col. G.Lipson, D. LSmiles, Lt.-Col. Sir W
Cooper-Key, E. M.Lloyd, Maj. Guy (Renfrew, E.)Smith, E P (Ashford)
Corbett, Lieut.-Col. U. (Ludlow)Lloyd, Selywn (Wirral)Snadden, W. M.
Crookshank, Capt. Rt. Hon. H F CLow, A. R. W.Stanley, Rt. Hon. O.
Crosthwaite-Eyre, Col. O. E.Lucas-Tooth, Sir HStoddart-Scott, Col. M.
Crowde[...], Capt. John ELyttelton, Rt. Hon. O.Strauss, H. G (English Universities)
Cuthbert, W N.MacAndrew, Col. Sir C.Studholme, H G
Darling, Sir W. Y.Macdonald, Sir P. (I. of Wight)Sutcliffe, H
Davidson, ViscountessMackeson, Brig. H. R.Taylor, C. S. (Eastbourne)
Digby, S. W.McKie, J. H. (Galloway)Teeling, William
Dodds-Parker, A. D.Maclay, Hon. J. S.Thorneycroft, G. E. P. (Monmouth)
Dower, Lt.-Col. A. V. G (Penrith)Macmillan, Rt. Hon. Harold (B'mley)Thornton-Kemsley, C. N.
Drayson, G. B.Maitland, Comdr. J. W.Thorp, Lt.-Col. R. A. F.
Dugdale, Maj. Sir T. (Richmond)Manningham-Buller, R. E.Touche, G. C.
Eccles, D. M.Marples, A E.Turton, R. H.
Eden, Rt. Hon. A.Marsden, Capt. A.Vane, W. M. F
Elliot, Rt. Hon. WalterMarshall, D. (Bodmin)Walker-Smith, D.
Erroll, F. JMaude, J. C.Ward, Hon. G. R.
Galbraith, Cmdr T DMellor, Sir JWebbe, Sir H. (Abbey)
Gammans, L. D.Molson, A. H. E.Wheatley, Col. M. J. (Dorset, E.)
Glyn, Sir R.Moore, Ll.-Col. Sir TWhite, Sir D. (Fareham)
Gomme-Duncan, Col. AMorris-Jones, Sir H.Williams, C (Torquay)
Grant, LadyMorrison, Maj. J. G. (Salisbury)Willoughby de Eresby, Lord
Grimston, R. V.Morrison, Rt. Hon. W. S. (Cir'nc'ster)Young, Sir A. S L. (Partick)
Hare, Hon. J. H. (Woodbridge)Nicholson, G.
Harvey, Air-Comdre, A. V.Noble, Comdr. A. H. P.TELLERS FOR THE AYES:
Mr. Drewe and Major Conant.
NOES
Adams, Richard (Balham)Ewart, R.Middleton, Mrs. L
Allen, A. C. (Bosworth)Fairhurst, F.Mitchison, G. R.
Allen, Scholefield (Crewe)Farthing, W. J.Monslow, W.
Alpass, J. H.Field, Capt. W. J.Morley, R.
Anderson, A. (Motherwell)Fletcher, E. G. M. (Islington, E.)Morgan, Dr. H. B.
Anderson, F. (Whitehaven)Foot, M. M.Morris, Lt.-Col. H. (Sheffield, C.)
Attewell, H C.Forman, J. C.Morris, P. (Swansea, W.)
Austin, H. LewisFraser, T. (Hamilton)Morrison, Rt Hon. H. (Lewisham, E.)
Awbery, S. S.Freeman, Peter (Newport)Mort, D L.
Ayles, W. H.Gaitskell, Rt. Hon. H. T. N.Moyle, A.
Ayrton Gould, Mrs. BGanley, Mrs. C. S.Murray, J. D.
Bacon, Miss A.George, Lady M. Lloyd (Anglesey)Naylor, T. E.
Balfour, A.Gibbins, J.Neal, H. (Claycross)
Barstow, P. GGilzean, A.Nicholls, H. R. (Stratford)
Barton, C.Glanville J E. (Consett)Noel-Baker, Capt. F. E. (Brentford)
Battley, J. R.Goodrich, H. E.Noel-Baker, Rt. Hon. P. J. (Derby)
Bechervaise, A. E.Gordon-Walker, P. C.Noel-Buxton, Lady
Belcher, J. W.Grenfell, D. RO'Brien, T.
Bellenger, Rt. Hon. F. JGrey, C F.Oldfield, W. H.
Benson, G.Grierson, E.Oliver, G. H.
Berry, H.Griffiths, D. (Rother Valley)Paget, R. T
Beswick, F.Griffiths, Rt Hon. J. (Llanelly)Paling, Will T (Dewsbury)
Bevan, Rt. Hon. A. (Ebbw Vale)Griffiths, W. D. (Moss Side)Parkin, B. T.
Bins, G. H. CGunter, R. J.Paton, Mrs. F. (Rushcliffe)
Binns, J.Haire, John E (Wycombe)Pearson, A
Blackburn, A. RHall, Rt. Hon. GlenvilPeart, T. F.
Bowden, Flg.-Offr. H. W.Hardy, E. A.Perrins, W.
Bowles, F. G. (Nuneaton)Harrison, JPoole, Cecil (Lichfield)
Braddock, Mrs. E. M. (L'pl, Exch'ge)Hastings, Dr SomervillePopplewell, E.
Braddock, T. (Mitcham)Haworth, J.Porter, E. (Warrington)
Bramall, E. A.Herbison, Miss M.Porter, G. (Leeds)
Brook, D. (Halifax)Holman, P.Price, M. Philips
Brooks, T. J. (Rothwell)Holmes, H. E (Hemsworth)Proctor, W. T.
Bruce, Maj. D. W. THouse, G.Pryde, D. J.
Burden, T. W.Hoy, J.Pursey, Cmdr. H
Butler, H. W (Hackney, S.)Hudson, J. H. (Ealing, W.)Randall, H. E.
Castle, Mrs. B. A.Hughes, Emrys (S. Ayr)Ranger, J.
Chamberlain, R A.Hughes, Hector (Aberdeen, N.)Rees-Williams, D. R
Champion, A. J.Hughes, H. D. (W'Iverh'pton, W.)Reeves, J.
Chater, D.Hutchinson, H L (Rusholme)Reid, T. (Swindon)
Chetwynd, G RHynd, H. (Hackney, C.)Rhodes, H.
Cluse, W. S.Hynd, J B. (Attercliffe)Ridealgh, Mrs. M.
Cobb, F. A.Irvine, A. J. (Liverpool)Robens, A.
Cooks, F. S.Irving, W. J. (Tottenham, N.)Roberts, Emrys (Merioneth)
Coldrick, W.Isaacs, Rt. Hon G. ARoberts, Goronwy (Caernarvonshire)
Collick, P.Jay, D. P. T.Rogers, G. H R
Collindridge, F.Jeger, Dr. S W (St. Pancras, S.E.)Ross, William (Kilmarnock)
Collins, V. J.John, W.Royle, C.
Colman, Miss G. MJones, D. T. (Hartlepools)Scollan, T.
Comyns, Dr. L.Jones, Elwyn (Plaistow)Scott-Elliot, W
Cook, T. F.Jones, P. Asterley (Hitchin)Segal, Dr. S.
Cooper, Wing-Comdr. GKeenan, W.Shackleton, E. A. A
Corlett, Dr. J.Kendall, W. D.Sharp, Granville
Corvedale, ViscountKenyon, C.Shinwell, Rt. Hon. E.
Cove, W. G.Key, C. W.Silverman, J. (Erdington)
Crawley, A.King, E. M.Silverman, S. S. (Nelson)
Cripps, Rt. Hon. Sir S.Kinghorn, Sqn. -Ldr. ESimmons, C. J.
Daggar, G.Kinley, J.Skeffington, A. M.
Daines, P.Lang, G.Skinnard, F W
Davies, Clement (Montgomery)Lawson, Rt. Hon. J J.Smith, C. (Colchester)
Davies, Edward (Burslem)Lee, F. (Hulme)Smith, Ellis (Stoke)
Leonard, W.Smith, S. H (Hull, S W.)
Davies, Haydn (St. Pancras, S.W.)Levy, B. WSolley, L. J.
Davies, R. J. (Westhoughton)Lewis, T. (Southampton)
Davies, S. O. (Merthyr)Lipton, Lt.-Col M.Soskice, Maj. Sir F
de Freitas, GeoffreyLongden, F.Stamford, W
Delargy, H. J.Lyne, A. W.Steele, T.
Diamond, J.McAdam, W.Stubbs, A E
Dobbie, W.McAllister, G.Swingler, S.
Dodds, N. NMcEntee, V. La TSylvester, G. O
Donovan, TMcGhee, H. G.Symonds, A. L.
Driberg, T. E. N.Mackay, R. W. G. (Hull, N.W.)Taylor, H. B. (Mansfield)
Dumpleton, C. W.McKinlay, A. S.Taylor, R. J. (Morpeth)
Ede, Rt. Hon. J. C.Maclean, N. (Govan)Taylor, Dr. S. (Barnet)
Edelman, M.McLeavy, F.Thomas, D. E. (Aberdare)
Edwards, Rt. Hon. Sir C. (Bedwellty)MacMillan, M. K. (Western Isles)Thomas, Ivor (Keighley)
Edwards, John (Blackburn)Macpherson, T. (Romford)Thomas, I. O. (Wrekin)
Edwards, N. (Caerphilly)Mallalieu, J. P. W.Thomas, John R. (Dover)
Edwards, W. J. (Whitechapel)Mann, Mrs. J.Thorneycroft, Harry (Clayton)
Evans, A. (Islington, W.)Marshall, F. (Brightside)Thurtle, Ernest
Evans, E. (Lowestoft)Mathers, Rt. Hon. G.Tiffany, S.
Evans, John (Ogmore)Medland, H. M.Titterington, M. F.
Evans, S. N. (Wednesbury)Mellish, R. J.Tolley, L.
Turner-Samuels, M.Wells, P. L. (Faversham)Williams, W. R. (Heston)
Usborne, HenryWells, W. T. (Walsall)Willis, E
Vernon, Maj. W. FWest, D. G.Wills, Mrs. E. A.
Viant, S. PWheatley, J. T. (Edinburgh, E.)Wise, Major F J
Wadsworth, GWhile, C. F. (Derbyshire, W.).Woods, G. S
Walker, U. H.White, H. (Derbyshire, N.E.)Wyatt, W
Wallace, G. D. (Chislehurst)Whiteley, Rt. Hon. WYates, V F
Wallace, H. W. (Walthamstow, E.)Wilkins, W. A.
Warbey, W. N.Willey, F. T. (Sunderland)TELLERS FOR THE NOES:
Watkins, T. E.Willey, O. G. (Cleveland)Mr. Joseph Henderson and
Watson, W. M.Williams, D. J. (Neath)Mr. Hannan.
Webb, M (Bradford, C)Williams, J. L. (Kelvingrove)

Question put, and agreed to.

Photo of Sir Charles Taylor Sir Charles Taylor , Eastbourne

I beg to move, in page 3, line 13, at the end, to insert: or batteries or accumulators used in wireless sets which cannot be operated by an electric mains supply. Many hon. Members will agree that wireless sets today are almost a necessity in the average household. Certainly it cannot be said that they are any longer a luxury. The Committee will know that there are two types of sets, the one which is stimulated into activity by the electric mains supply, and the other by means of batteries or accumulators. The purpose of this Amendment is to exempt batteries and accumulators for the second type of wireless set from increased Purchase Tax. There is, of course, no Purchase Tax on the mains supply of electricity. Battery sets are in use today largely for two reasons. First, the battery set may be an old type of set, owned by people who cannot afford a new set, or cannot be supplied with one of the modern types. Secondly, they are used by those who have no electric mains supply available. It would appear, therefore, that these sets are largely owned by the poorer sections of the community. It seems quite illogical to tax batteries for battery operated sets, whereas the mains electricity supply gets off scot free. The revenue from these batteries must be incredibly small, and I hope, therefore, that the Chancellor of the Exchequer will consider this question very sympathetically.

Photo of Mr Luke Teeling Mr Luke Teeling , Brighton

There is very little I can add to what has been said by my hon. Friend the Member for Eastbourne (Mr. C. S. Taylor). This concerns mainly those living in the country who have no electricity supply. Our country is probably one of the worst off from that point of view, and it particularly applies in the case of those living in the countryside. Those who are particularly affected are the people who live in cottages and in the poorer parts of the country. The people in the cities and towns are in no way affected, because they have an electric mains supply, but those without a mains supply of electricity find that they are penalised for no apparent reason.

Photo of Colonel Alan Gandar-Dower Colonel Alan Gandar-Dower , Penrith and Cockermouth

In considering his reply, the Chancellor of the Exchequer should bear in mind that people in the remote parts of the country very often cannot get a daily paper, to say nothing of evening papers, especially now in view of the difficulties of transport and deliveries. It is these people who find the news on the wireless most valuable. I live in a very remote part of the country, and I have to rely on a battery wireless set for my news and entertainment. It is seven or eight miles from the nearest place where I can acquire a newspaper, which means that I do not very often get a paper. People in these remote parts have a greater need for wireless sets than those who live in the towns

Photo of Mr Victor Collins Mr Victor Collins , Taunton

I hope that sympathetic consideration will be given to this Amendment. If it should be impossible to accept it, I hope that particular consideration will be given to the 120-volt high tension dry batteries, which are used in almost all ordinary wireless sets in the rural areas. It is not at all funny to suggest that rural areas do not all receive daily newspapers. It is perfectly true. If there is one section of the community that really needs and depends on a wireless, it is the people in the rural areas. I do not think it is generally appreciated what a wide discrepancy there is between the cost of running a wireless set off the mains and the cost of running a battery driven set. This difference is out of all proportion, and I hope that my right hon. Friend will seriously take it into consideration. As I understand it, four 120-volt dry batteries are needed a year for a battery driven set, which costs £2 9s. without tax, and two accumulators costing 31s. It costs 26s. a year to charge the accumulators every week. Together with the cost of the wireless licence, this works out at £6 6s. per year, as against 24s. in the case of the all-mains wireless set. To that amount must be added 28s. 2d. Purchase Tax.

It will be seen, therefore, that it is a real imposition to raise the Purchase Tax. I suggest that this is not a matter which can be left over until next April, which would take us through the winter. Something ought to be done now, because many of my constituents and others living in rural areas will not be able to afford to buy these batteries at the increased cost, with the result that they will have to do without wireless altogether. I hope that the Chancellor can make an exception in regard to these batteries, taking into account the wide discrepancy in running costs between the two types of set. We must give the farmworkers and others living in rural areas a chance to maintain their sets. I would urge not merely that the tax be left at the old rate, but that my right hon. Friend should consider making a clean sweep and removing it altogether.

6.30 p.m.

Photo of Sir William Darling Sir William Darling , Edinburgh South

As hon. Members know, I am one of those least likely to look for malevolent designs on the part of the Government, but when I observe this tax on wireless sets using batteries, I am inclined to think that there is a desire on the part of the Government to restrict the public from hearing the truth and the news. I am inclined to connect it up with the restrictions which have been imposed on the newspapers and other printed matter. If I am not to persist in that view I can only be returned to that state of native innocence which I enjoy if the right hon. and learned Gentleman will withdraw this impost. Battery sets are of great importance, not only to country dwellers but to town dwellers. There are certain areas in which reception from the B.B.C. is indifferent, and in which the use of battery sets makes it possible for those who would otherwise not get good reception to have this very useful annex to their daily life.

Photo of Mr Frederick Cobb Mr Frederick Cobb , Elland

Would the hon. Gentleman give us some technical details about this interesting discovery?

Photo of Sir William Darling Sir William Darling , Edinburgh South

I always disappoint the Committee if I speak too briefly, but perhaps on this occasion I may be allowed to persist in my normal habit of speaking briefly and to the point, an example which might be followed by the hon. Gentleman, who has just done me the honour of suggesting that I might give the Committee some further technical details. Such details as I have in mind are addressed to the Chancellor. This is a bad tax, which seeks to tax the obsolete. I would agree that the battery system tends more and more to become an obsolete form of wireless reception. A bad tax is one which tends to diminish further the source from which the taxation comes. The effect of this taxation will be to disgust an increasing number of persons with the battery system they are using. From the Chancellor's point of view there will be a decrease in revenue. I, personally, would not continue to use a battery set with this new impost laid upon it, because it is an inconvenient apparatus and carries with it many disadvantages.

Photo of Mr Victor Collins Mr Victor Collins , Taunton

Is not the main point that people have to use battery sets, because they are not on the main electricity supply?

Photo of Sir William Darling Sir William Darling , Edinburgh South

I am grateful to the hon. Member for pointing that out, but I would like to be excused for thinking that the main point is the one which I am making. The Chancellor should have in mind that those who use battery sets are making no demand on the diminishing resources of his colleague, the Minister of Fuel and Power. Although I believe that the amount of power which is used is an all-electric set is very small, it is only by small mercies that we can hope to get through our present economic crisis. This impost will encourage people who still intend to enjoy B.B.C. broadcasts to abandon battery sets which consume no power.

I would remind the Chancellor that he has already stumbled into this folly, or at least his predecessor did, and he is his predecesor's inheritor. The Chancellor's predecessor manipulated the Purchase Tax on electric fires, and discovered that the withdrawal of some of that tax increased the consumption of electricity. I may well be that this extraordinary paradox, which was so obscure to the ex-Chancellor, may be repeated by the present Chancellor. The right hon. and learned Gentleman's desire to put extra Purchase Tax on these batteries will encourage people to consume more power, an action which his right hon. Friend the Minister of Fuel and Power will not be inclined to encourage.

Photo of Mr Henry Hynd Mr Henry Hynd , Hackney Central

Is the hon. Gentleman aware that batteries have to be charged by electricity?

Photo of Sir William Darling Sir William Darling , Edinburgh South

The amount of technical information which I am getting from the Benches opposite must be as interesting to you, Sir Robert, as it is to me. I am aware of that, but the hon. Gentleman will also be aware that the amount of power used to charge batteries is less than the continued use of power for an all-electric set.

Photo of Mr Frederick Cobb Mr Frederick Cobb , Elland

Would the hon. Gentleman tell us more about this interesting discovery?

Photo of Sir William Darling Sir William Darling , Edinburgh South

I shall not, on this occasion, give way. The attempt to make this Committee a universal brains trust is one that I deprecate, especially as it is obvious that I am carrying off all the honours in the exchanges. I suggest that the Chancellor will get very little from this impost. He will offend the sense of justice which is inherent in our people. He will get even less money than before, because the tendency of this impost will be to discourage people from continuing the somewhat economical, though inconvenient, battery system.

Photo of Colonel Ralph Glyn Colonel Ralph Glyn , Abingdon

I, too, hope that the Chancellor will reconsider this matter, because I believe that the Government have made a mistake. While it may sometimes be difficult for them to accept an Amendment without loss of face, I am sure that in this case the matter was not adequately considered. It is important for the Government to keep in touch with everybody in an emergency. All of us who sit for rural areas know that it is impossible for all the people in those areas to get a mains electricity supply, and the White Paper which was issued today will put that further off than ever. It is essential that the country dweller, removed from all opportunity of a supply from the grid, should have an equal chance with those in towns, who pay nothing directly for their supply. Further, from the point of view of agriculture it is very important for rural people to take full advantage of weather forecasts. It is impossible for people in scattered districts to get those forecasts unless they have the necessary wireless set with which to hear them. I believe that this extra tax will be an annoyance. It will not bring in much revenue, and I beg the Government to reconsider the matter.

Photo of Sir Frank Soskice Sir Frank Soskice , Birkenhead East

On this matter, I must give the answer which has been given on previous Amendments. If we were to accept the view that a case has been made out in this instance, we might have to go on to consider a number of other suggestions which might have equal cogency. As my right hon. and learned Friend reminded the Committee, the Budget was designed to mop up inflationary pressure. The rates of Purchase Tax were raised en bloc, and the merits of particular article were not distinguished for that purpose. Members on both sides of the Committee have pointed to the undoubted fact that country dwellers, who have no electric light installed in their houses, are at a disadvantage in the reception of B.B.C. broadcasts. I fully appreciate the force of that argument If it were opportune to review the merits and demerits of Amendments to move out of the scope of increase in tax a variety of articles, this Amendment would have to be carefully considered.

It is, unfortunately, the fact that when the Government increase taxes, someone has to suffer a certain amount of hardship. For these reasons, while I entirely appreciate the force of the case put forward on behalf of the country dwellers, I feel that I must ask the Committee to accept the view that, at the moment, we cannot accept the Amendment. In point of fact, the amount of money involved is about £1 million; to accept this Amendment would thus be to give a not unsubstantial concession, and, to that extent, it would militate against the object of the Budget, and of the Bill which we are now discussing. For those reasons, while I entirely appreciate the force of the arguments to which I have listened very sympathetically, I regret that I cannot accept the Amendment.

Photo of Hon. Oliver Stanley Hon. Oliver Stanley , Bristol West

I confess that I am extremely disappointed at the reply of the hon. and learned Gentleman. I did not have the opportunity of witnessing personally, but I read with interest this morning of the hon. and learned Gentleman's appearance yesterday in the role of "Farmer Jarge." I gather that he made a great success in answering agricultural questions. It was remarked on all sides that he knew much more about agriculture after ten minutes' study of the Departmental answers, than the Minister of Agriculture after two years in office. He has replied to a case put in the interests of the country-dweller, and I thought that we would get a sympathetic answer. Instead, we got a dusty answer—and, by now, it is the very dusty answer which we have received on every one of these Amendments. All of us, facing the seriousness of the position, and realising that superfluous purchasing power would have to be mopped up by increases in Purchase Tax, have adopted a self-denying ordinance, as is borne out from the Order Paper today.

When we compare it with the Order Paper on the ordinary Budget, when Members on all sides of the House put down the particular articles in which they are interested, I am sure that the Government will pay tribute to the fact that, with the exception of four articles, hon. Members have refrained from doing anything which might substantially reduce the effort which they are all agreed will be necessary. There are, therefore, only four articles to be considered. Even if all four were accepted, it would not make very much of an impact on the main purpose of the Bill. I go so far as to say that of these four, there are only two which I personally consider to be of very great importance. With all respect to the hon. Gentleman opposite, I may change my mind when he moves his Amendment and I have heard from him an explanation as to what is mutton-cleaning material. I do not know whether it is used to clean mutton, or whether it is made out of mutton, but it does not seem to me quite on the same level of importance as the other things which we are discussing.

Equally, toilet preparations would appear to be a little more in the luxury class. There are, therefore, only two things which hon. Members thought sufficiently important to make any impact upon the general principle. One was the question of essential drugs. That was disposed of by the vote of the Committee. The other is this question of batteries, which, I think, Members for agricultural constituencies realise, imposes not only a big financial burden, but may, during the coming winter, have a considerable effect on the morale of the agricultural population.

6.45 p.m.

The right hon. Gentleman need not fear that by giving some concession in this case, he is opening the flood-gates to more. There is no possibility of that. There are only two more Amendments to be taken, and it is unlikely that, at another stage of the Bill, any new Amendment will be called. He can be absolutely certain, therefore, that if he gives this concession, no other is likely to be pressed, and, so far as I am concerned, no other will be asked for. The right hon. Gentleman is now fortified by the return of the Chancellor of the Exchequer, and I am sure that one of my hon. Friends will be glad to keep up the Debate for a minute, or perhaps an hon. Member opposite will discuss the technical details and carry on the Debate, in order to give the brief space of time which the Financial Secretary will require to get from the Chancellor, what I am sure he will give—the authority to make this concession.

Photo of Colonel Sir Alan Gomme-Duncan Colonel Sir Alan Gomme-Duncan , Perth

Taking advantage of the suggestion of my right hon. Friend the Member for West Bristol (Mr. Stanley), I will, for one second, if I may, put to the House a very earnest plea for the users of these batteries in Scotland, and, particularly, in the Highlands of Scotland. The distance there from electricity, in spite of the promises and plans made for electricity, means that there are vast areas where no one can possibly hope to get electricity for many years to come. I think that in these days of crisis—because we all admit a crisis is on its way—it is essential that the people of these areas should have facilities for hearing what is going on every day, because they are as much affected as those in more populous areas. These batteries are, I think, a necessity. I do not think that the financial effect is such that the Chancellor need have any fear if this little concession is granted. I hope that he will see his way to look at this matter once again.

Photo of Mr Frederick Cobb Mr Frederick Cobb , Elland

Before my right hon. Friend listens to the appeals of the charmers on the other side, I hope that he will get the facts right. We have had a complete mine of information from hon. Members opposite, both Gaelic and Sassenach. These batteries are divided into two—high-tension and low-tension. Do not let hon. Members on the other side think that wireless users are continually buying low-tension accumulators, because they are not. A great majority of these are rented. They are bought by radio dealers and rented to the user who, generally, has two of them. They last for several years, and, therefore, the Purchase Tax will not affect people immediately.

Photo of Sir William Darling Sir William Darling , Edinburgh South

To what extent does the rental system of batteries go on in the Highlands of Scotland or the depths of Wales?

Photo of Mr Frederick Cobb Mr Frederick Cobb , Elland

If the hon. Gentleman will go and look, he will find that it goes on to a very considerable extent. That is why I say that my right hon. Friend should get the facts right. The second fact is that the use of battery sets is by no means confined to rural areas. A very great number of the users of these are people who live in leasehold premises which have only got for 20 or 30 years to run and where the landlord would not put in electric light.

Photo of Sir William Darling Sir William Darling , Edinburgh South

He would not be allowed to do it.

Photo of Mr Frederick Cobb Mr Frederick Cobb , Elland

He would not do it before the war. Therefore, I suggest to hon. Members opposite that if they want to counteract the effect of this tax let them do something about the obsolete method of property.

Photo of Mr Charles Williams Mr Charles Williams , Torquay

Will the hon. Member for Elland (Mr. Cobb) develop more fully what he called the obsolete method of property owning

Photo of Mr Frederick Cobb Mr Frederick Cobb , Elland

I would not be allowed to do so, but I put it to hon. Members opposite that they should think about it. I have just put these two points, and I plead with the Chancellor of the Exchequer before he gives way on this or even considers it to get the facts of the position, and I think he will find that the situation is not so difficult for the users of this type of set as has been made out.

Photo of Lieut-Colonel Sir Walter Smiles Lieut-Colonel Sir Walter Smiles , Down

There is just one point which I wish to put before the Committee and it is in regard to the flight from the country to the towns. Every amenity that we can give to the country people is a great advantage in this connection. On the Copeland Islands exactly opposite my home, only one and a half miles from the mainland, there used to live 150 people with a church and a school. Two years ago the last of those people left those islands. People nowadays look for something more in their lives than just working on the land from daylight to dark. Another island I might mention is Rathlin Island, where Robert Bruce once took refuge. On that island there are about 200 people and each night these people gather in neighbours' houses to listen to the news on the wireless. Anything which can make their lives happier and enable them to enjoy things is for the benefit of the whole community. Sometimes in the winter they are cut off from the mainland for as much as three weeks through storms, and in the past aeroplanes have had to drop food for these people or they would have starved. As for newspapers, of course, in stormy weather it is impossible to get them over. There are a number of other islands round the coast of Scotland which are in exactly the same position. I hope when the Chancellor is making up his mind he will consider these people who live and earn their living in these isolated islands round our coasts.

Mr. Vane:

I am delighted to support the plea of the hon. and gallant Member for Penrith and Cockermouth (Colonel Dower) as one of his constituents who lives in a remote district, has no kind of electric light and uses a battery wireless set. In his turn one of my constituents, whom I see on the benches opposite will, I hope, rise and support me because, this is no party issue. It is too important an issue to be that. I sincerely hope before we divide on this Amendment that we may hear something a little less technical and more practicable than the one contribution which so far we have heard from the benches opposite.

I have had considerable correspondence from my constituents on this matter and they are worried about the rise of price. I would quote a recent letter which I had from the Minister of Supply who admitted that a 120-volt H.T. battery had risen from 7s. 6d. to 15s. 2d. since 1939. That is a 100 per cent. rise, but what the Minister forgot to say was that the life of these batteries now is very much less than it was owing to the reduction in quality. Most users of high tension batteries now reckon the life in terms of weeks, where previously they reckoned it in terms of months. In consequence it is no exaggeration to say that the running of a battery set now is an expensive luxury. Perhaps we will be able to charm the Chancellor into exuding a little sympathy.

I was not at all impressed by the argument of the Solicitor-General, who said that he thought it was impossible to consider any of these Amendments; and that he could not accept any exceptions because bicycles have already been excepted. It is quite unreasonable to offer something to the few persons who may be in need of new bicycles, and they are a very small number, and nothing to the people in country districts who use battery sets and who are far more numerous than those who would buy a new bicycle. I suggest that the Chancellor should change his view and accept this most important Amendment.

Photo of Sub-Lieutenant Herschel Austin Sub-Lieutenant Herschel Austin , Stretford

I was very glad to hear that the Solicitor-General, though quite sympathetic to the objects of the Amendment, was not prepared to accept it at the present moment. There is one consideration which I want to put to the Committee, which I feel might convert even the Opposition to the view that this Amendment cannot be accepted. The Amendment refers to a wireless set which cannot be operated by electric main supplies. Wireless sets used in motor cars cannot possibly be operated by electric main supplies, and I am certain it never was the intention of those who put down this Amendment to extend this concession to those who use wireless sets in their motor cars. If at a later date the Government see their way to accept this Amendment they should not include those who are fortunate enough to have wireless sets in their motor cars. Therefore, if only on technical grounds, which generally are so dear to the hon. Member for South Edinburgh (Sir W. Darling), I support the Government and resist this Amendment.

Photo of Commander Sir Douglas Marshall Commander Sir Douglas Marshall , Bodmin

When the main Budget at the beginning of the year was introduced I raised this question at a very late hour with the then Chancellor of the Exchequer. He was very sympathetic towards my point of view, but he asked me, if my memory serves me right, not to press him at that stage. That was at a time when this tax was not doubled as it is now. I trust that the Chancellor of the Exchequer will listen to the arguments that have been advanced tonight, and I feel sure that he will realise the full and vital necessity of giving what we possibly can to agriculture at the moment.

The question of the production of food is of vital importance, and it is physically impossible to get the different amenities to the country which we would wish owing to the crisis that has developed, but if we can possibly help in a small way with something which is necessary and helpful to the amenities and which is not over great in cost, we should gain a lot by doing so. I sincerely trust that the Chancellor will take all these matters into account, and realise that my hon. Friends from Scotland, Northern Ireland, England and myself from Cornwall have put in front of him different telling points with regard to this matter and that he will reconsider this case in the interests of agriculture and with that graciousness which we know he can show, go to the Box and say "This is proof that I can alter my decision as a result of the Debate that has taken place tonight."

7 p.m.

Photo of Sir Stafford Cripps Sir Stafford Cripps , Bristol East

I am sure that hon. and right hon. Gentlemen will believe me when I say that if I am convinced I shall not have the slightest hesitation in altering my views. I do not believe that my views are so much better than those of anybody else that one can always absolutely rely upon them. I am very much influenced, as a countryman myself, by the arguments put forward on behalf of the rural population. There is no doubt that many people with the present rather low standard of transport facilities are thrown back on their own resources for entertainment. I would be quite prepared to consider this matter before the Report stage and to see whether I can do anything. I give no promise and make no undertaking, but I will look into this whole matter before the Report stage to see whether anything can be done.

Photo of Hon. Oliver Stanley Hon. Oliver Stanley , Bristol West

I am sure that all my hon. Friends would like me to say on their behalf how grateful we are to the Chancellor of the Exchequer for what he has said. We quite realise that he has made no pledge of any kind, but we know also that when he says that he will look into this matter he will do so with a desire to meet, if that is any way possible, the arguments that have been advanced to him from both sides of the House, with one exception. In view of the Chancellor's action I am sure that my hon. Friend will feel that the moving of the Amendment has served an extremely useful purpose, and will be prepared to withdraw it.

Photo of Sir Charles Taylor Sir Charles Taylor , Eastbourne

I also would like to thank the Chancellor of the Exchequer for the attitude that he has taken up. In view of the assurance that he has given that he will consider this matter before the Report stage, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Photo of Mr John Lewis Mr John Lewis , Bolton

I beg to move, in page 3, line 13, at the end, to insert: or knitted stockinette (mutton) cleaning cloth. It is with a song in my heart that I move this Amendment, in view of the statement which the Chancellor made in regard to the last Amendment before the Committee. I felt very glad when I heard the Solicitor-General say that individual objects would be considered on their merits. I feel that it is necessary at this stage, in the light of what I have to say, to put it on record that these omnibus increases in the basic rates are generally conflicting and confusing, and are unsound. Several Amendments are to be introduced today in cases where the increase in the basic rates of Purchase Tax will inflict hardships upon the lower income groups. I want to make it perfectly clear that I did not vote on this matter because I felt that it was not my duty to do so.

The Amendment deals with one example, among others, of ill-advised action which is inflicting great hardship upon a large number of people. I believe this feeling is shared by many hon. Members on this side of the Committee. The material referred to in the Amendment is specified as: plain, unbleached all-cotton fabric of louse texture, of a type normally used for covering food or cleaning machinery, being fabric made on a circular machine and from a single yarn. In order to extricate the right hon. Member for West Bristol (Mr. Stanley) from his intellectual difficulties, I would explain that this is fabric used only for covering food and for cleaning. It cannot be used for the manufacture of apparel of any kind. Unfortunately, this fabric comes under Class 2, which is defined as: tissues and fabrics of whatever width (other than jute fabric) whether in the piece, shaped, or partly made up. I suggest to my hon. and learned Friend the Solicitor-General that it is very unfair that this material, which is used in cleaning and for industrial uses——

Photo of Hon. Oliver Stanley Hon. Oliver Stanley , Bristol West

I hope the hon. Member will forgive me for interrupting, but I would like to clear up one point. He has read out a description of articles which he wants removed from the Schedule, but the description does not seem to correspond with the definition that he uses in his Amendment. I did not hear anything about nets, stockinette, or mutton—or indeed any—cleaning cloth.

Photo of Mr John Lewis Mr John Lewis , Bolton

I sought to explain that the fabric referred to, which is "knitted stockinette (mutton) cleaning cloth," was included in the Schedule under Class 2, comprising tissues and fabrics, among the net or lace curtains. I seek to discriminate among the materials which are included in the Schedule referring to "fancy net or lace curtains." This type of material, which is used for industrial priority purposes for cleaning machinery and for covering food, is a purely utility product. It is not a luxury commodity. It is wrong that it should be subject to this increase in taxation, and I hope that the Solicitor-General will emulate the Chancellor of the Exchequer by not merely showing sympathy for the Amendment but making the statement that he intends, in the period before the Report stage, to give further consideration to the matter.

Photo of Sir Frank Soskice Sir Frank Soskice , Birkenhead East

I am sorry that I cannot accede to my hon. Friend's request. I listened carefully for an argument which would distinguish this cloth from other sorts of cloth which could be used for similar purposes. A case can be made out for excluding all sorts of cloths, and before it would be right to accept an Amendment there would have to be something to distinguish this cloth from others. It would be necessary to make out for this cloth a stronger case than can be made out for all the wide range of similar materials. I am not even quite certain as to the exact effect of the Amendment. I am not quite certain whether the definition: knitted, stockinette (mutton) cleaning cloth "— could be limited to the purposes which were indicated by my hon. Friend. It is a general description of a particular type of cloth, with "cleaning" appended as an adjective. It is not an adjective which I should have thought would include a very precise definition of the purposes for which it is used.

Photo of Mr John Lewis Mr John Lewis , Bolton

It is in the Commissioner's Notice No. 78J.

Photo of Sir Frank Soskice Sir Frank Soskice , Birkenhead East

I am trying to concentrate upon the actual words that my hon. Friend uses in his Amendment, because it is by those words, if they become part of the Bill, that those who will have to administer the Measure will be governed. For those reasons, although I listened very carefully to the arguments of my hon. Friend, I much regret to say that I found nothing in his arguments which makes a case for this sort of cloth in contradistinction to other cloths which serve equally useful purposes but are nevertheless included within the scope of the taxation.

Photo of Hon. Oliver Stanley Hon. Oliver Stanley , Bristol West

On this Amendment I do not feel I can give to my hon. Friends any useful guidance. I must confess that so far I have not understood one word of the discussion. I have neither understood the reasons why the hon. Gentleman wants a kind of cloth which seems to appear under a good many different names at different times excluded from the Schedule, or any idea why the Solicitor-General wants to retain it. In those circumstances I can only suggest to my hon. Friends an attitude of neutrality.

Photo of Mr John Lewis Mr John Lewis , Bolton

I am sorry that I did not manage to clear the mind of the right hon. Member for West Bristol. In point of fact, this is a very simple matter. There are certain types of cloth which certain people, such as engineers, use for cleaning their machinery and other people for covering their food. They have to buy this cloth. There are two purposes for mutton cloth. The first is for covering food and the other is for the cleaning of machinery. Engineers use it, I think they say, as their rags. It is a utility product. The important point is that it is being included in the same category as lace and net curtains, and that seems very unfair. I must apologise to the Committee if I did not make the position quite clear originally. However, that is the purpose of the Amendment, which I suppose in the circumstances I must beg to ask leave to withdraw.

Amendment, by leave, withdrawn.

Photo of Lieut-Colonel Sir Thomas Moore Lieut-Colonel Sir Thomas Moore , Ayr District of Burghs

I beg to move, in page 3, line 13, at end, to insert, "or toilet preparations."

We now come to something more colourful than the mutton cloth we have been discussing. The object of the Amendment is to persuade the Government to be more generous to toilet preparations and those who use them. I am grateful to the Chair for calling this Amendment, because I approach it with a certain amount of diffidence. In fact I am more than surprised that it was left to a male Member of this Committee to introduce, and I can only assume that the Lady Members are unwilling to reveal the source of their charms. As will be seen, the fate of this Amendment largely depends upon how the Government have decided to treat our women. Are they to be treated as butterflies, as an impertinent lot of hussies, as irresponsibles, or as the Lord President would have them now that he is seeking their assistance, as responsible members of the community who may be pampered and coddled. That is, no doubt, due to the possibility of empty ballot boxes at the next General Election.

I have one friend, anyhow, in addition to the Lord President. I have here a statement made by the late Chancellor in his first broadcast—those happy halycon days—after his first Budget in which he said that it was his urgent wish to give women an opportunity to make themselves more beautiful. He said in reference to the tax reduction: I think this will interest the ladies. I want you to look your best these days. I have the late Chancellor on my side and, from the point of view of pure sympathy and fraternal desire to be of assistance, I should have thought that the present Chancellor would hold similarly friendly views.

The purpose of the Amendment is to exclude toilet preparations from the scope of the Clause and I have three not frivolous but solid justifications and arguments to prove what might otherwise seem to be a rather carefree Amendment in these austere days. There is something far greater about this Amendment than the mere reading of it on the Order Paper. The first argument is that to a very large number of professional women, cosmetics are what is well known in the Treasury as the tools of their trade. I am speaking of stage actresses, cinema performers, television performers and stage entertainers of every kind. They must have cosmetics if they are to perform their job efficiently and earn their living, so why impose this extra burden on them in their efforts?

My second argument is that these toilet preparations or cosmetics are the greatest single factor in the morale of women, with very few exceptions. It is the same with tooth paste and a tooth brush which give good morale and a sense of friendliness and self-respect to men and women alike. Just as a razor and shaving soap give morale and self-respect to men, so with women a touch of powder possibly, a touch of rouge—I do not know—and a touch of lipstick give them that nervous courage which has been so essential to them in their very arduous work during the past seven years. I believe that to e true; they have told me so themselves. In factories and in queues it makes them far more able to carry out their soul-searing jobs if they feel that they are adequately protected in regard to their face and general appearance. Any man can prove that at any time by looking carefully at a woman who has come to look for a job. She will have done her best to make herself look neat and well groomed and her face as pretty as nature will allow. These facts are recognised throughout the civilised world and in parts of the world about which some of us have doubts. Even in Soviet Russia very special concessions are given to beauty parlours.

7.15 p.m.

The Chancellor should also pay particular attention to the position of the industry and the manufacturers. During the five years of actual war the Americans got a tremendous jump forward in capturing the world market for beauty preparations. They have a five years start of us. Although we now have the science, the skill, the technicians and the craftsmen, we have not got the Government support for the industry to enable us to race after and race ahead of the American developments. How can our manufacturers compete with the Americans abroad unless their domestic market is secure, and how can it be secure if we are to wipe it almost out of existence by this fantastically high tax? Therefore in the interests not alone of the women—I do plead for them—but in the interests of a very great and growing industry, I ask the Financial Secretary to give sympathetic consideration to the points I have made and the arguments I have used, which I believe would fully justify his consideration.

Photo of Colonel Sir Alan Gomme-Duncan Colonel Sir Alan Gomme-Duncan , Perth

I feel sure somehow that the Financial Secretary will refuse this Amendment. I support it in order to ascertain the actual situation in regard to the trade. Can the Financial Secretary give us some figures? Can he give us some idea what a tax of this kind means in money? That will make it a great deal easier for people to form their own opinion. The Amendment is a very sound one. I cannot put it in the very happy language of my hon. and gallant Friend the Member for Ayr Burghs (Sir T. Moore), but there is a great deal in it, particularly from the point of view of the trade.

Photo of Mr William Hall Mr William Hall , Colne Valley

The hon. and gallant Member for Perth (Colonel Gomme-Duncan) is quite right: I am about to ask the Committee to resist this Amendment. I was surprised at the two hon. and gallant Gentlemen who spoke to this Amendment which deals with toilet preparations, that is, aids to beauty. They both sit for Scottish Divisions and, therefore, I assume that they are speaking largely for those who live in those areas.

Photo of Lieut-Colonel Sir Thomas Moore Lieut-Colonel Sir Thomas Moore , Ayr District of Burghs

We have the best raw material on which to work.

Photo of Mr William Hall Mr William Hall , Colne Valley

I was going to say that from my experience I should imagine that the lassies in Scotland needed toilet preparations to assist them in being beautiful less than almost anyone. They are almost universally lovely because of the air in Scotland and the surroundings of their native hills. Therefore I do not think the fact that we cannot accede to this request will lose those of us who vote against this Amendment any votes from Scotland. The reason why I cannot accept this proposal on behalf of my right hon. and learned Friend is twofold. First, it would cost a great deal too much—and this is the reply to the Question raised by the hon. and gallant Member for Perth. It would cost no less than £2,500,000 in a full year, and we think we should not forgo this sum in this direction. If my right hon. and learned Friend has money to spare, I think that the Committee would agree on reflection that there are other directions in which it could be much more usefully remitted. I can remember discussions we have had here, often in the middle of the night, on this or that item in this or that schedule under the Purchase Tax. There is, for example, the question of toothbrushes. I remember that we had a most interesting discussion on this question one night, and I am positive that most hon. Members would prefer to see toothbrushes relieved of Purchase Tax rather than toilet preparations for which the hon. and gallant Member for Ayr Burghs (Sir T. Moore) has pleaded so eloquently tonight.

Therefore I ask the Committee to realise what it would cost, and to realise that we are nor in this supplementary Budget overhauling the various categories subject to the Purchase Tax. The time for such an overhaul as my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) said when he opened his Budget some weeks ago, is when we are considering the proper Budget in the spring of the year. For those reasons I must ask the Committee to reject this Amendment.

Photo of Lieut-Colonel Sir Thomas Moore Lieut-Colonel Sir Thomas Moore , Ayr District of Burghs

While I think the right hon. Gentleman has totally evaded my last and strongest argument with regard to foreign trade and dollars coming to this country, I would be the last to suggest that we should lose £2,500,000 at the present time. However, while I am asking leave to withdraw my Amendment, I will ask leave to reproduce it next Budget to see if it will get a better response.

Amendment, by leave, withdrawn.

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

Photo of Sir Alexander Spearman Sir Alexander Spearman , Scarborough and Whitby

Before we lose this Clause, may I make one point briefly? First, however, may I say that I am not criticising increased Purchase Tax which I believe at the present time, unpleasant as it may be, is absolutely necessary. However, it is inequitable in its application to postal charges. I have here a bill from Messrs. Parke Davies to one of my constituents for Effia Citrate Tabs. What these tabs are, I am not sure, but they cost 4s. 4d. each, the Purchase Tax, quite properly in my opinion, is 2s. 11d and then there is a Purchase Tax, on the postage of 2d. That adds up to rather a lot. Also it puts the country retailer at a rather unfair disadvantage compared with his brother in the town who does not need to send these things by post. He, therefore, is in the position of having to charge his consumer more than would be charged elsewhere. Secondly, it is only urgent things such as medicine which go by post, and so bear this charge. I would ask the right hon. and learned Gentleman, therefore, before Report stage to look at the matter to see whether it would not be possible to take away this small charge which mounts up against certain people. There may be some good reason for it, but I would ask for some explanation or an assurance that it will be looked into in the hope that it may be removed at a later date.

Photo of Mr Peter Roberts Mr Peter Roberts , Sheffield Ecclesall

I wish at this stage to issue a warning to the Government against treating this form of tax collection in this way. I appreciate the objects of the Government in bringing in this Clause, but it increases the percentage on the various schedules. If this form of taxation is to be a precedent, we shall get into a great deal of trouble in the future. I do not like this Clause, for the following reasons. The Purchase Tax has been put on either to raise money, to reduce unnecessary spending, or to cut out luxuries in this austere life. Three different reasons have been put forward by various Chancellors for putting on the Purchase Tax. In this case the reason for increasing it is to keep money away from the inflation spiral. If the method of doing this is merely to increase the percentage on all sections of the various schedules, by one amount or another, we are bound to have anomalies and difficulties. Tonight certain exceptions have been put forward from both sides of the Committee, and the reasons underlying all of them have been the same, that we are now increasing the Purchase Tax by a general percentage in order to take money off the market, when the reason for various things being included in the schedule was quite different.

All I wish to point out at this stage of the proceedings is that it should not be a precedent for Chancellors to raise money merely by using these percentages as a sliding scale. It is the easiest thing in the world for Treasury officials to say, "If you increase the percentage by so much, you will get so much more money." It is an easy way out for the Chancellor not to have to go into all the details raised on each particular item, but I am certain that, on the general principle, mistakes are being made. The only proper way is for each schedule to come up for review if the Purchase Tax is to be altered. In that way we shall be able to see the reasons for these various items being included in the schedule. We know that times are changing, products are changing, demands are changing, and it is quite improper that various items which have been on a schedule since 1940 should remain there without review. If we accept this method of taxation, using a sliding scale of percentages, there will be a great deal of confusion in the future, and purely from that point of view I wish to enter a caveat against this form of legislation.

Photo of Sir Isaac Pitman Sir Isaac Pitman , Bath

In no way have we been chiselling at any of these Purchase Tax items, and so one has not put down Amendments which might be regarded as attempts to chisel away the tax coming in from this Clause. However, since the Chancellor has said that he will be reviewing the whole classification of Purchase Tax, I wish to call attention to the peculiar position in regard to stationery. Some 94 per cent. of taxed stationery goes to companies or to the Government, which is, in effect, increasing the tax on itself or increasing the deduction from profits which are taxed. If it is desired to tax companies in that way, the right way to tax them is on their profits, and not on the amount of stationery they consume, which they wish to keep down in any case. The marginal use of stationery for the ether 6 per cent. falls on a form of personal communication which is very dear to everybody in this Committee and is the beginning of civilisation. Books are tax free, and they are likened to the Old Testament; letters are taxed, and I would liken them to the Epistles of the New Testament. There is a very good case in any reconsideration of the Purchase Tax to consider this point of the 94 per cent. of stationery tax, which is either taxation by the Government of itself, or taxation by the Government of business already paying half of that taxation in another form.

7.30 p.m.

Photo of Sir John Foster Sir John Foster , Northwich

Increased Purchase Tax is due when an article is delivered. This has caused hardship in the case of a working man who, unable to fetch goods on the Thursday, which was 13th November, when they were ready, could only collect them on the Friday or the Saturday. He was told that as he was notified before 13th November that the goods were ready and he could not get there to pay for them, he would have to pay the increased Purchase Tax. I am sure the right hon. Gentleman would feel sympathetic on a point like that. He could deal with it by giving an instruction that delivery should include notification that the goods were ready before the increased Purchase Tax came into effect. I add my plea to the Government that when they come to reconsider the Purchase Tax they should deal with it in categories, and on principles. Many articles subject to increased Purchase Tax relate to cleanliness and health. I need only mention dishcloths and floorcloths on which enormously increased Purchase Tax has to be paid, although they are necessary all over the country for the purpose of cleaning. No one can say that they are luxuries or that their purchase is an illegitimate use of purchasing power which calls for mopping up. When the Government come to study articles liable to Purchase Tax in the next Budget, I hope they will bear that point in mind.

Photo of Sir Henry Legge-Bourke Sir Henry Legge-Bourke , Isle of Ely

The general principle of the increased Purchase Tax has been sufficiently discussed, but I wish to bring to the attention of the Committee the effect which it may have on agriculture. I believe the Government are quite sincere in their drive—if not quite explicit as to the actual methods by which they propose to achieve it—to increase production by British agriculture. In this year's Lord Mayor's Show there was a very fine team of Suffolks, which came from my constituency. Part of the equipment of those Suffolks was their collars. I have only been informed this morning, and so have not had an opportunity of putting down an Amendment on the subject, that the lining of the collar, which is subject to Purchase Tax, has increased from 33⅓ per cent. to 50 per cent. In the various Schedules of the many Finance Acts referred to in this Finance Bill I have been trying to find where a "collar check"—which is the saddler's technical name for it—appears. Saddlers are definitely under the impression that the collar check will be subject to increased Purchase Tax, and I believe there may be other materials and goods which are absolutely essential to agriculture which may suffer increased tax as a result of this Bill. I hope that when the Financial Secretary discusses this matter of Purchase Tax he will see to it that we are given a complete and up to date list of the various items which come under it, because it is a feat beyond the average hon. Member to sort out all the items subject to the Tax, which refers back to the first Finance Act of 1940. It is extremely difficult to find exactly what is the situation.

I wish to add an extra plea to the Chancellor and the Financial Secretary about the incidence of Purchase Tax on medicine, particularly in regard to old people. The Assistance Board have been provided with a list of the average weekly expenditure of old age pensioners, and on that list there is the item of 1s. a week which old age pensioners who are relying on the Assistance Board have to devote to medicine. No one class of people in this country are having a more difficult time than old age pensioners, particularly the non-contributory old age pensioners, and for that reason I hope that the right hon. Gentleman will see that before the next full Budget is introduced this matter is looked into. I also hope that the whole matter will be segregated into proper categories, as my hon. Friend the Member for Northwich (Mr. J. Foster) suggested, so that we shall not have this very muddled and, I think, unfair basis on which the Tax is levied.

Photo of Mr Christopher Hollis Mr Christopher Hollis , Devizes

In support of the plea made by my hon. Friend the Member for Bath (Mr. Pitman), when the whole principle of the Purchase Tax comes to be considered, as I hope it will be, I hope consideration will be given to the fact that it is a pure waste of time for the Government to pay Purchase Tax to themselves. There is a large amount of unnecessary complication in the charging of Purchase Tax on articles predominantly bought by the Government, which means taking money from one pocket and transferring it to another. There is delay in book-keeping, and the receipts the Government profess to get under the Purchase Tax are to that extent loaded, because to that extent some of them are increased Government expenditure.

Photo of Mr William Hall Mr William Hall , Colne Valley

As some of the points have been put by different Members, I will not deal with them separately, but in groups, The hon. Member for Scarborough and Whitby (Mr. Spearman) drew attention to a chemist's bill, which he has been good enough to give me, so that I could understand his point. He said that someone had made a purchase of certain drugs to which Purchase Tax at 33⅓ per cent. had first been added and that after this, still more Purchase Tax had been charged on the postage. The reason for this is that when Purchase Tax was first instituted in 1940, it was, by general agreement levied at the wholesale stage. It followed that the goods which were to be subject to Purchase Tax had not at that time reached the retailer and certainly not the ultimate purchaser. To get the goods physically from wholesaler to retailer, transport charges must he paid either to the Post Office, or to a railway, or to someone who owns a lorry and these charges must be included in the price on which tax is charged. Where, because of the physical circumstances, a transport charge does not enter into the cost of the article in question, it is part of the law of the country that it must be added back in assessing Purchase Tax.

I can only say that although it may seem a curious way of doing it, it has been done consistently since 1940. It has been done in association with, and as a result of consultations with, the various trades and industries concerned, and I understand that it has been done largely at their request. I have not dealt with this point for some time, but I believe that what I am saying is true. In order that all should be treated alike, this charge for transport from the wholesaler to the retailer, which is sometimes notional, is added hack and included.

Photo of Sir Alexander Spearman Sir Alexander Spearman , Scarborough and Whitby

I am not sure it I quite understand the right hon. Gentleman's explanation. If I understand him aright, it still remains the fact that there is an anomaly between the man in the town who perhaps does not get his goods by post and, therefore, does not pay this charge, and the man in the country who does. It so happens that urgent things like medicine which are chargeable do go by post and not by other cheaper methods.

Photo of Mr William Hall Mr William Hall , Colne Valley

It is added back for that very reason. Sometimes it is notional and no charge arises because of the physical proximity of the wholesaler and the retailer who may indeed be the same. In another case the charge is added to the price of the article. When this matter was under discussion in the early days, it was considered that in order to treat all alike, this charge, whether notional or real, ought to be added in. I would emphasise that this was done with the consent of industry generally because it was considered the reasonable, necessary, and proper thing to do.

Photo of Sir John Foster Sir John Foster , Northwich

On what basis is the notional amount calculated?

Photo of Mr William Hall Mr William Hall , Colne Valley

In this case it is based on what it cost to post the article.

Photo of Sir John Foster Sir John Foster , Northwich

I asked on what basis is the notional amount calculated?

Photo of Mr William Hall Mr William Hall , Colne Valley

I have not the exact percentage, but it is worked out from industry to industry. It must obviously vary according to the type of the articles concerned and the normal method of sending them from the wholesaler to the retailer.

The hon. Member for Bath (Mr. Pitman) pointed out that the Government are great users of stationery, and appear to be paying Purchase Tax to themselves because the Tax is levied on the wholesaler, as it is in the case of other articles. The hon. Member thought that was absurd and that something should be done about it. I know what the hon. Gentleman desires; he wants stationery to be relieved of Purchase Tax altogether. We have had many discussions on this matter, and the hon. Member has made some inroads into the tax on this class of consumer goods. For example, typewriters are now costing less than they otherwise would. The other day I was asked why certain articles, which seem so essential, are charged a fairly high rate of Purchase Tax, whereas typewriters, which would appear to some people to be not very necessary to the art of living, are exempted altogether. I had to point out that this was due very largely to the insistence of the hon. Member for Bath.

Photo of Sir Isaac Pitman Sir Isaac Pitman , Bath

I appreciate the compliment, but the essence of the matter is that these are productive machines which are capable of adding to the national wealth.

7.45 P.m.

Photo of Mr William Hall Mr William Hall , Colne Valley

All I would say is that we all have our views as to what we would like to be subject to tax and what we should like to be exempted. The hon. Gentleman has very rightly—I am not complaining—been active in putting the case against the imposition of this tax on stationery. From one point of view it is possibly an anomaly. Nevertheless, it would probably lead to a good deal of chaos if we had two sets of stationery, both identical, one of which was not subject to the Tax because it was designed for Government use, and the other which was subject to Purchase Tax because somebody else was going to use it. The only way to meet the hon. Gentleman is to remove the Tax altogether. As I indicated in reply to an earlier Amendment, this is not the time to make changes in the Purchase Tax. The time for that will be when my right hon. and learned Friend deals with this matter in his Budget next April.

The hon. Member for Northwich (Mr. J. Foster) raised a point which has been put quite a number of times recently at Question Time. It concerns the man who buys a suit, who does not collect it on 12th November but goes on the 13th or 14th, and finds that Purchase Tax has been levied at a higher rate. He naturally feels aggrieved because, according to him, the suit was already ordered; he could have picked it up before and it is pure chance that he did not do so. As my right hon. and learned Friend and I have indicated, this tax is levied at the wholesale stage. When one buys a suit which is bespoke, obviously the registered tailor is acting in a dual capacity; he is both wholesaler and retailer. That suit does not attract tax until it is actually made up and ready for the individual who has bought it and is going to wear it.

In the case of a suit "off the peg"—that is, a ready-made suit hanging up in the shop—the retailer has no right to charge the purchaser the extra Purchase Tax which came into force on 13th November if this increased Purchase Tax had not been paid at the wholesale stage. I have made some inquiry about this because it is a matter which has interested quite a lot of hon. Members. Both my right hon. and learned Friend and I have had questions addressed to us about the matter, and I have gone into it. Those who make inquiries will find that tailors who still have suits that came into their possession from wholesalers before 12th November are still charging the pre-Budget price.

The difficulty is that we are bound to have anomalies with this Purchase Tax. May I remind the Committee that it cuts both ways? We are under a great deal of pressure to allow people to pick up suits or other consumer goods which are subject to this tax—it does not relate only to clothes—at the old rate, if they had ordered them before the specified date. There will come a time, I hope, when the Purchase Tax will be reduced, and in some cases it will be drastically reduced. Will hon. Members then be willing that the tax should be levied at the rate in force on the date when the article was ordered and not at the rate in force on the date when it was delivered? Unfortunately for all of us, this tax cuts in one particular direction just now and there is no method of getting round it. We are informed by our experts that if we back dated the increase to a certain time there would be a great deal of wangling. It would be impossible in a large variety of instances to substantiate when the commodity was ordered, if the date of ordering and not the date of delivery were the date on which the tax began to operate.

Photo of Sir John Foster Sir John Foster , Northwich

The case which I have in mind is a little different and harder. In this case the goods were ready at a certain date. I was not pleading that the tax should be imposed on the date of ordering. If the article is ordered and is not ready until after the date when the Purchase Tax is imposed, the increased Purchase Tax ought to be paid, but I think it is rather unfair when the retailer has notified the person who has ordered the article that it is ready, and because that person is working all day and cannot fetch it, he is penalised. It would be quite easy for the Chancellor to decide that the date when a purchaser is notified that the article is ready should be deemed to be the date of delivery.

Photo of Mr William Hall Mr William Hall , Colne Valley

The hon. Gentleman is a distinguished lawyer, and I need not waste too much time on this point. I need only point out that it would be impossible, if the arguments which I had put before the Committee are valid, to distinguish any more easily between when it is ready and delivered than it would be to distinguish between when it is ordered and when it is delivered. Therefore, we must adhere to the delivery point, because that is the one thing upon which one can fix. Otherwise, a man could say, "I ordered this six months ago. Therefore, I shall not pay the tax." To oblige the customer, the shopkeeper might quite easily say, "It was ready before this tax came into operation." Therefore, we must adhere to the date of delivery, although, as my right hon. and learned Friend said at Question Time, it does, unfortunately, lead occasionally to hardship in individual cases.

I have covered most of the points which have been made. The hon. and gallant Member for the Isle of Ely (Major Legge-Bourke) said that agriculture might be affected in some directions by Purchase Tax, and he pleaded for an up-to-date list of what goods are charged with tax and into what categories these fall. I am not sure whether he was in the Committee when my right hon. and learned Friend spoke earlier on this subject. He indicated to the Committee that he intends, at an early date, and certainly before next April, to have the whole of this area looked at, so that he can, if possible, wipe out any anomalies that may exist, and to clean up the whole field in a proper and systematic way. It seems to be a corollary of that promise that up-to-date lists will be prepared, so that we shall all know what goods are charged, at what rate they are charged, and in which category they fall.

I think I have answered the hon. Member for Devizes (Mr. Hollis) in what I have said in reply to other hon. Members. Therefore, I hope that, in view of what I and my right hon. and learned Friend the Chancellor and my hon. and learned Friend the Solicitor-General have said, and the fact that we have had a pretty long discussion over the whole field, the Committee will now be ready to let us have this Clause without further debate.

Photo of Captain Harry Crookshank Captain Harry Crookshank , Gainsborough

After the courteous and full reply of the Financial Secretary, I do not think there is need to carry the Debate on this Clause any further. We made clear our views on the increases in the Purchase Tax in the earlier Debates. Today we have only been dealing with some of the details. I hope that in the interval the right hon. Gentleman will look again at the point raised by my hon. Friend the Member for Scarborough and Whitby (Mr. Spearman). It is true that 1940 is a long time ago, and I admit that I was in the right hon. Gentleman's place then and dealt with the original Purchase Tax. I well remember how Lord Simon described this tax as one which was collected when articles and goods leaped over the wall from the wholesale to the retail area.

Although I should have to look it up again to confirm my memory, I quite accept what the right hon. Gentleman said, because on his argument Purchase Tax is collected, or is assessed, when the goods reach the retailer, and, I understood him to say, there is a notional figure included for charges. I take it that it follows that the actual charge to the retailers for certain classes of goods differs all over the country for the same article because of differences in the carriage of the goods. Supposing they went by rail in one case, or road in another, or up to Scotland, or something like that in another case, all the charges would be different. That, I take it, is the right hon. Gentleman's explanation why, if they are sent by post, a charge is specifically made on the postage, whereas in other cases the charge is either notionally fixed over the whole field, so as to be the same to everybody or else is varied according to the cost.

If that is the explanation, and that is what has always happened, I do not think there is any particular complaint which one can raise, because the structure of the tax has been in being for so long that it would be difficult to alter it from that point of view. It seemed rather strange to my hon. Friend to be asked, for the first time, to pay this charge on a bill made out in that way. It may be that the charge was wrongly raised in that case, and that it should have been notional. It may be that this particular retailer had paid twice, first, on the notional charge, and secondly on the postage. I do not say that it happened in this or other cases, but it looks as if some further clarification ought to be made. Obviously, it cannot be made tonight, and I hope that we can now proceed to the next Clause.

Clause ordered to stand part of the Bill.