New Clause. — (Reduction in Rates of Purchase Tax.)

Finance Bill – in the House of Commons at 12:00 am on 20th June 1950.

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(1) Subsection (2) of section twenty of the Finance Act, 1948 (which provides that in Part I of the Eighth Schedule of that Act the words "First," "Second," and "Third" indicate the first, second and third rates of purchase tax which are respectively one-third, two-thirds and one hundred per cent. of the wholesale value of the goods), shall have effect as if the words "one-quarter" were substituted for the words "one-third," the words "one-half" were substituted for the words "'two-thirds," and the words "four-fifths" were substituted for the words "one hundred per cent."—[Mr. Lyttelton.]

Brought up, and read the First time.

Photo of Mr Oliver Lyttelton Mr Oliver Lyttelton , Aldershot

I beg to move, "That the Clause be read a Second time."

Within the limitations of your Ruling, Major Milner, I will endeavour to present the new Clause to the Committee. We have seen, in an earlier part of the Debate upon Purchase Tax on commercial vehicles, how far that tax has now been spread. It is well, I think, at the outset of this Debate, to look at its history and to remember that it originated as a check to consumer buying and as an anti-inflationary measure during war-time. The intended application of the tax at that time has now been widely departed from, as also from the general conception which brought it into being.

This year it has, first of all, been used as a tax upon capital goods and upon the tools of industry, because that is what commercial vehicles are. The tax has spread far away from those articles which are considered to be not indispensable—I apologise for the double negative—and the tax is now levied upon many absolute necessities, or, at best, upon goods which are semi-necessities. If proof were needed that this tax is spreading, it would be found by looking at the yield. In 1941, the yield was £97 million, and it has risen to £303 million in 1950. It is thus a very important source of revenue, but we hold that it is an objectionable tax, at least in its present form, as a permanent part of the fiscal system.

Many of the original classifications, as I shall show are arbitrary—I might almost say wayward—and much of the original object in curbing spending on luxuries has been lost sight of in the desire for revenue. I hesitate to embark on any definition of what is a luxury, because luxury spending was what the tax was originally designed to prevent, and I toyed with the idea of saying that a luxury was something which was unnecessary. But I realise that under that heading would fall many Departments of State, and, as I want to persuade and not to annoy, I drop that idea altogether and turn to the Oxford Dictionary. Shortly, it defines luxury as The habitual use of or indulgence in what is choice or costly. The compilers of that great work from the University, which was the nurse of so many right hon. Gentlemen on the Treasury Bench, would have been shocked to discover what is now defined as a luxury. I will say something later about why I do not consider that soap—even taking into account the heterodox view of the Minister of State—or toothbrushes, razor blades, dusters or face cloths fall within this class. In the course of defence of this tax, the Financial Secretary to the Treasury said in the Budget Debate that the abolition of the Purchase Tax would reduce the cost of living index only by about a point, or 1.1 per cent.—I forget which. That is merely another means of saying that the cost-of-living index is not a very good guide to the true cost of living. Indeed, that is so.

I was interested to see in the report of the E.C.A. mission upon the British economy, which, I think, contains some brilliant research with some of which I do not agree, that every family of about four persons earning less than £10 a week and representing about 80 per cent. of the population, pays about 4s. 6d. a week in Purchase Tax. This seems to me to focus, in a better way than a statistical index, the effects upon the consumer of the imposition of this tax.

The estimated receipts from Purchase Tax under the three categories, are, of course, very different. There are £42½ million for the 100 per cent. rate, £43½ million for the 66⅔ rate, and no less than £217 million on are 33⅓ per cent. rate.

I want to deal with these categories in turn. I realise that we are under some Parliamentary difficulties in this matter, Parliamentary difficulties which have not yet been resolved satisfactorily for Members in all parts of the Committee. I will try to make illustrations rather than descend into detail. I trust I shall be successful in keeping in order. My object is to show, first of all, the very severe effect upon the consumer. Then, I want to show the arbitrary, and sometimes ridiculous, incidence of the tax. When I have done that, I shall proceed to the other, very substantial point, which is the effect of Purchase Tax upon our exports market and the drag and deterrent which it exercises against the production of high quality goods.

In the 100 per cent. group, admittedly, the original objects of the tax are much more readily discernible, but the yield is only about one-seventh part of the general tax. Under this heading of 100 per cent. tax I pick out cosmetics, lipsticks, powder and perfume. I realise that on this subject I am on extremely delicate ground, but lipstick and face powder seem to me, with to-day's social habits, at least a semi-necessity. On this occasion I feel I am certainly on the side of the angels. I am: glad to see the hon. Lady the Member for Blackburn, East (Mrs. Castle) nodding her head at this point. [An HON. MEMBER: "And in a white dress, too."]

Perhaps I should agree that women might have to pay some tax for making themselves look more attractive than Nature would otherwise permit, but to tax lipstick and face powder at 100 per cent. is carrying the Crippsian asceticism much too far. To use in the favourite Treasury phrase, a powerful fiscal weapon of this kind in favour of shining noses is, like so much Socialist doctrine, already long ago obsolete.

I do not want to touch on perfumes for more than one moment, except to remind the Committee that a well-known American firm, who were passing from the manufacture of soap to that of perfume, offered a large prize to anybody who could provide them with a suitable slogan. They awarded the prize, though they did not use the slogan, to a man who invented this: "If you don't use our soap, for heaven's sake use our perfume." Soap is already in the 33⅓ per cent. category.

I want to refer to the matter of furs, although I agree that this is a most unsuitable time of the year in which to do so. It is admittedly a luxury trade, but I am advised from many sources that the trade is running into serious difficulties because the home market has been cut off from it as a result of Purchase Tax. The trade makes a very important contribution to our exports, and some relaxation—I think a fairly large relaxation—of the Purchase Tax is necessary if we are to continue to be a large exporter of high grade fur goods. We have to face the stark fact that some ladies may get away with being able to buy a fairly cheap fur coat at a much lower rate of Purchase Tax—a horrible idea—in order that the export trade may be kept alive in furs.

I now turn to leather goods, and I will not develop this part of the argument very much because one or two of my hon. Friends have very detailed knowledge of the subject. All articles made of leather, like ladies' handbags and suitcases, are subject to 100 per cent. Purchase Tax on the wholesale price, and manufacturers are further mulcted by between 10 per cent. and 25 per cent. if the goods are sold direct to retailers, which, I am advised, is the almost universal custom in this trade. I think that a handbag or a suitcase falls entirely within the definition of what is indispensable. I am not sure whether or not I detected the hon. Member for Blackburn (Mrs. Castle) nodding, but I go so far as to say that they are indispensable.

Photo of Mrs Barbara Castle Mrs Barbara Castle , Blackburn East

It would entirely depend on what the handbag is made of. A leather one is not indispensable.

Photo of Mr Oliver Lyttelton Mr Oliver Lyttelton , Aldershot

But leather is much the best material out of which to make a handbag. I know that I shall carry the hon. Lady with me there.

Our position in this leather goods trade has always been pre-eminent. In olden days English saddlery was sought the world over, and since then one of the things which the tourist and traveller in this country goes for straight away are high grade leather goods which are made by the unique skill of our craftsmen in this industry. We must be very careful, in imposing this swingeing rate of Purchase Tax, that we do not kill a most useful export industry.

Now I turn to the 66⅔ per cent. range, and I want particularly to refer to the case of woollen and worsted cloth. The rate of tax on non-utility cloth—this is one of the first instances I shall give of the volatile nature of the policy of His Majesty's Government in this matter—was increased from 33⅓ per cent. to 50 per cent. in October, 1947, and to 66⅔ per cent. in the Budget of 1950. I am advised that this tax is having an effect little short of disastrous on this important export industry. The collapse of demand at home as a result of the tax did not really make itself felt until three or four months ago, and now the shrinking home market has made it very difficult for the manufacturer to make the cloths that are required for our export trade.

I do not wish to labour the point, but it is familiar to all Members of the Committee that we shall not get a satisfactory export of this type of special textile unless the manufacturer is permitted some home market. If he is not, he has to bear the entire risk of export himself. It is more difficult to gauge demand abroad than it is at home, and, owing to the incidence of this tax, he has been asked to take all the risks and to be in danger of not even covering his overhead expenses on these special textiles, which should be one of the fruitful sources of earning foreign exchange for our country.

9.30 p.m.

I must worry the Committee with figures to show how the amount of Purchase Tax has affected a length of cloth. That has come about not only by the incidence of Purchase Tax, although that is very heavy, but also by devaluation and the consequent rise in the price of wool. In January, 1946, the cost of 33½ yards—that is a single garment length, I believe—was £6 6s., of which Purchase Tax, at 33⅓ per cent., represented £1 11s. 6d. In March, 1948, the price had risen to £9 12s. 10d., of which Purchase Tax, at 50 per cent., represented £3 4s. 3d.; in February, 1950, it had risen to £12 10s. 10d., of which Purchase Tax represented £5 0s. 4d. Thus, while the cost of the material had risen by 60 per cent., the amount of tax had risen by over 300 per cent. I have seen estimates that by the end of this year the total cost will have risen to £14 11s. 8d., of which Purchase Tax will be £5 16s. 8d. This is one of the things which shows how carefully the cost-of-living index must be related to the cost of living.

These figures seem to me to be fantastic, and they have their effects upon the consumer. In addition, they make it impossible to develop high grade textiles without the support of a continual home market. I am informed—and I hope the Treasury Bench will give us some information on the subject—that revenue is falling very sharply from this source. I suggest most strongly that the time has come for the Government to revise the incidence of this tax.

I also want to refer to the exhilarating subject of gas water heaters, and I can do so with all the more force because I am connected with the electrical competitive industry. The point I want to make is about the volatile rate of tax, and when the Committee have heard these figures they will agree that my description is not exaggerated. The tax was originally 33⅓ per cent. in 1940; was withdrawn in October, 1945; reimposed at 66⅔ per cent., or double, in April, 1947; increased in November, 1947, to 75 per cent.; in April, 1948, to 100 per cent.; and reduced in June, 1948, to 66⅔ per cent. If this is not an example of an infirmity of purpose I do not know what is. How is it possible for management, traders and shopkeepers to deal efficiently in business, when a tax goes up like the temperature chart of a man suffering from delirium tremens. It is quite ridiculous.

Under this rate of 66⅔ per cent. are some essential processing materials, which seems to be as clearly out of place in this particular category as does the Purchase Tax on commercial vehicles. A roll of tapers' flannel, which is material covering the drying cylinders of the sizing equipment in weaving, costs £88 17s. 6d., of which the Purchase Tax is £56 5s. 9d. I suppose the idea of this tax is that women, who have actually been put off by 100 per cent. tax on lipstick, will turn in disgust from ordinary materials and use tapers' flannel as a form of evasion if there were no such tax. I really suggest that the black market in tapers' flannel as a form of women's clothing is unlikely to be very great even in our Socialist society of 1950. At any rate, I recoil from the whole subject which, I think, rather repulsive, and suggest that tapers' flannel is a material which is part of the material of industry, and should not attract tax at this very high rate.

Then, again, the difference between utility and non-utility goods has become almost impossible to distinguish. For example, utility towels, if they are available, are retailed at 3s. 7½d. and exactly identical towels, which are described as non-utility, cannot be sold at less than 6s. 11d. I am informed that experts cannot tell the difference, and I do not know how the ordinary customer is to begin to do it. Then there is the plain white towel, which costs 4s. 9½d. because it is utility. If it were subjected to some simple dyeing process, which costs practically nothing, it becomes non-utility and sells at 10s. 6d.

Lastly, and the only other instance I want to give of the 66⅔ per cent. tax on all non-utility furnishing materials. I apologise for the terminology, which is not mine, but in many cases the tax inflicts vexation and hardship upon the housewife. I have an example of a lady who bought printed linen at 11s. 8d. a yard for curtains at a time when the fabric was in the utility range. For some fitful reason it came out of the utility range, and when she went to buy some more of the same material to cover some chairs the price was 21s. 6d.—for exactly the same thing. It seems very difficult to understand.

Now I turn to the 33⅓ per cent. range. I want very politely to issue a warning to hon. Members opposite. If they vote against this Clause I intend to make quite clear—and so will my hon. Friends—exactly what are the effects of their vote. It will be a vote against reducing the Purchase Tax on a number of absolutely essential articles and upon a number of others which I regard as semi-necessities. Let me make perfectly clear what they will be doing. We know from the "Daily Herald"—those of us who read it—what the defence of this tax is—that it is a tax on luxury goods. That is what it is asserted to be. But this 33⅓ per cent. tax is levied upon many things which appear to me to be absolute necessities—soap, washing boards, sponges, scissors, sewing machines, and stationery. It is levied on cutlery, knife boards, razor blades, pencils, toothbrushes.

In this connection toothbrushes happen to fall into the same category as eyebrow brushes, which I should not mind attracting a little tax. Moreover, I do not pretend that animal toilet combs including nit combs, should not be subject to tax, but I do take leave to take a strong line about the taxation of toothbrushes. To say they are a luxury, and that it is right to deter the consumer, in an anti-inflationary drive, from buying a new toothbrush, is reducing economic policy to a farce. Nor, if I may come to my own industry, do I think that electric bulbs, electric lamps, or meat covers for that matter, fall into the same category as nit combs, animal combs, and eyebrow brushes. There, I do not follow the right hon. and learned Gentleman—perhaps because I do not keep fully in touch with Fabian thought at the moment.

I cannot go into the cases of all the anomalies, but I think I must make a special reference to the tax on stationery, because that tax has a direct bearing on all those carrying on business of all kinds. Alas that it should be so, but it is; and the Government themselves are some of the chief users. We have so many things to fill in now that paper is becoming one of the principal raw materials of British industry. I think hon. Members must know that if this tax were reduced on stationery there need not necessarily be very much loss of revenue because, so far, stationery used for commercial undertakings is chargeable to revenue and there would be more taxable profits. But there are also many anomalies in stationery. Any registered trader can buy paper in bulk and himself print it on duplicating machinery and escape the tax.

If hon. Members opposite vote against this Clause 1 shall make use of their vote, and shall show that they voted against a reduction in the case of these articles which, I think, all of us in our non-political moments—as when we are using our toothbrushes and wearing our pyjamas—would really allow are absolute necessities.

I shall not keep the Committee for more than a minute or two longer, but I wish to turn back to the important subject of exports and to the effect of the tax upon industry The whole effect of the Purchase Tax under any of the three categories is a blow to the production of quality goods. That is the nature and the excuse for the tax. It is unnecessary to discuss again whether quality goods may justly be described in certain cases as luxuries but those who have studied the export trade closely would, I think, agree with the general proposition that the development of primary and secondary industries among many of our overseas customers—I mean industries like cotton spinning and weaving in Brazil, the steel industry in Australia and the attempted industrialisation of the Argentine and the manufacturing industries of Japan and India—is a modern development. I think that it is almost universally agreed that we must look more and more for increases in our export trade to high quaility goods.

This tax, from the nature of it, falls upon this very class of article, and in no market does that apply with more force than in the United States, the very arsenal of manufacturing goods in the world. Nevertheless, there is still a market there for the higher quality products produced by our workpeople in this country, who certainly have no superiors, even if they have any equals, for skill in the world. I am sure it is true, and I am sure that Ministers have often said it at other times, that we must look to high quality goods for the most fruitful source of our increased exports. I say with every sense of responsibility that the effect of Purchase Tax is to drive our manufacturers away from developing those high quality products—I have textiles particularly in mind, like Yorkshire cloth—which alone can penetrate and hold markets where the demand for high quality goods has been so firmly established.

The incidence of this tax is arbitrary and fitful. I have given only a few examples and they are quite indefensible. The Government has departed far from the original idea of the tax, which falls unjustly between one commodity and another and between one category of goods and another. Sometimes it falls upon the same commodity at different times in a very different way, and it is imposed sometimes upon the productive part of the industry. It must be a deterrent to the production of high quality goods and a handicap to the development of our export trade in them.

Lastly, it falls very hard upon the consumer and leads to a direct increase in the true cost of living, whatever the statisticians say. It includes within its grasp many things which only a jaundiced imagination could possibly describe as other than indispensable. Is it really an anti-inflationary measure to try to deter people from buying soap and toothbrushes? For all those reasons we regard the time long past when this tax should be drastically reduced as to its incidence. It is urgent that the rate of tax should be reduced in the way in which we suggest in our proposed new Clause.

Photo of Mr David Eccles Mr David Eccles , Chippenham

I am particularly glad to be able to support the proposed new Clause which my right hon. Friend has moved. He began by saying that the origin of the tax was a war-time necessity to mop up purchasing power. We think the time has come when a general reduction should be made in it. I would stress the general nature of our new Clause because we think the whole tax requires modifying and reducing. The remarks I propose to make will be addressed not to particular instances but to the general rates of the whole tax.

9.45 p.m.

During the autumn Budget Debates in 1945, the then Chancellor of the Exchequer, who is now the Minister of Town and Country Planning, said this: We must go very slow in remitting Purchase Tax on anything just now, because all remissions … release purchasing power … but … as we go forward into a period of greater production and abundance, this argument for maintaining the Purchase Tax will lose much of its force."—[OFFICIAL REPORT, 19th November, 1945; Vol. 416, c. 140–1.] Three years later the same right hon. Gentleman said: I always took the view that Purchase Tax ought to be gradually, but not rapidly, reduced."—[OFFICIAL REPORT, 7th April, 1948; Vol. 449, c. 197.] His party were behind him, as I believe they are now when he talks about isolation. They were behind him when he said that Purchase Tax ought to be reduced as more production came forward and more goods came into the shops. This intention was, in our belief, sound, and had it been followed it would have done something to offset the rise in the cost of living, but it has very clearly been abandoned because Government expenditure has risen to such heights that every source of revenue has now to be squeezed to the full.

My right hon. Friend has shown that the retention of this tax will harm the export trade. We are slowly learning that the problem of the balance of payments and our domestic policies cannot be kept in watertight compartments. To maintain a tax which increases the cost of living and stimulates wage demands is likely to damage our competitive powers, and, similarly, to maintain a tax which discourages the production of goods which we can sell abroad must certainly have the same damaging effect. These evils can be illustrated by example. They are quite sufficient argument for the new Clause.

I want to deal with another and broader aspect of Purchase Tax which the Committee has neglected for too long. In years gone by there were tremendous debates in the Committee on the relative merits of direct and indirect taxation. Socialist hon. Members will remember that before they came to power they always argued against indirect taxation because it is regressive. If we want to collect a large sum by indirect taxes, we have to select certain widely consumed articles knowing that the expenditure on those articles will take a larger proportion of the budget of the poor man than of that of the rich man. "Indirect taxation is a violation of every just and sound principle," said Mr. Snowden, and he said it many times. It was not a peculiarly Socialist view. Dr. Johnson, a stout Tory, defined "excise" in his dictionary as, "a hateful tax upon commodities." The word "hateful" is the word I commend to the Committee.

When we come to Mr. Gladstone's time we find that he held that a Chancellor ought to be impartial as between direct and indirect taxation, and in his Budget speech of 1862 he used words which have become classical on this subject. He said: I never can think of direct and indirect taxation except as I should think of two attractive sisters who have been introduced into the gay world of London, each with an ample fortune, both having the same parentage—differing only as sisters may differ, as where one is of lighter and another of darker complexion, or where there is some variety of manner, the one being more free and open, and the other somewhat more shy and retiring and insinuating. I cannot conceive any reason why there should be any unfriendly rivalry between the admirers of these two damsels; and I frankly own, whether it be due to a lax sense of moral obligation or not, that as a Chancellor of the Exchequer, if not as a Member of this House, I have always thought it not only allowable, but even an act of duty, to pay my addresses to them both. I am, therefore, as between direct and indirect taxation, perfectly impartial. If my right hon. Friend will allow me to cast a small stone at his great uncle, I think that great statesman cannot have had much experience of the result of paying equal attention to two sisters with their unrivalled opportunities for comparing notes.

It has always appeared to me that this impartiality between the two forms of taxation was a mystical rather than a rational proposition. Mr. Lloyd George took a sensible view of the matter when he said: All should give, as in a church, but according to their means. They all have an interest in the State. When in a Committee of this House in 1911 Mr. Lloyd George was speaking on the food taxes, he said: You must not have a class with great political power which did not pay any taxes.' That is the justification for having some indirect taxation—everyone should pay something—but what matters is that the total taxation levied upon an individual should be in proportion to his ability to pay. I think that is the modern principle. But Socialists like Mr. Snowden did not hold this view. They said that the whole of taxation ought to be direct taxation because only direct taxation can be controlled and made precisely in proportion to the income and wealth of the taxpayer.

Further, of course, the large family pays more in Purchase Tax than the single man or the childless couple. Purchase Tax is not only regressive—falling more heavily as it descends the income scale—but it is also what is called horizontally regressive—falling more heavily the larger is the family. It is interesting to recall that the right hon. Gentleman who is now the Minister of Town and Country Planning, when he was a writer on economics, took a strong view about taxes of the kind we are now discussing. He thought they were bad because the taxpayer did not notice what he was paying. Lord Stamp referred to this view in a book published in 1924, familiar I expect to all hon. Members. He there wrote: 'Dr. Dalton has said that in a strictly honest State he "— that is, the taxpayer— ought to be told when he was purchasing one of these articles that so much was the price of the article and so much was the tax due to the State. I do not think the Purchase Tax would last long if the advice of the right hon Gentleman was taken and the tax was tacked on to every article—[An HON. MEMBER: "Everybody knows it."]—for instance, on every packet of cigarettes. Lord Stamp continued as follows in what I consider to be a striking passage: But part of the whole virtue of indirect taxation is its silent character. This being so, the man, of course, is kept in a kind of childish attitude towards the results of taxation, and the object of State expenditure. It is a more advanced stage when the State has the pluck to go to him and tell him like a grown man what the sum is that he owes to the State, and what it is for. He then knows that all the collective operations of society cost money, and how much they cost, and takes a far more personal and direct interest in that great power of governing which has been now committed to his hands. That is a good argument. The argument there is that a progressive Government would steadily shift the sources of taxation from things to persons.

What have the Labour Government been doing in this respect? If we take indirect taxation as a proportion of the total revenue raised, we find that in 1945–46 it was 36 per cent.; in 1946–47, 38 per cent.; in 1947–48, 40 per cent.; in 1948–49 and 1949–50, 41.5 per cent.; and in the present Budget for 1950–51, 43.3 per cent. There is a steady shift under Socialist administration towards taking more and more of the Revenue in indirect taxes, and in the Budget that is now before the Committee the Government actually boast that they have found the money to reduce Income Tax by increasing two of the indirect taxes—the Petrol Duty and the Purchase Tax upon lorries.

There is a very serious matter of principle here.

Photo of Mr David Eccles Mr David Eccles , Chippenham

It has been done from the Treasury Front Bench all the time. They said that these two taxes are linked one with the other and that if we voted for the Income Tax reduction we must necessarily link it with the new indirect taxes. I only wish to point out to the Committee that all the theories of the Socialists have been turned upside-down and that in practice, instead of reducing taxation, they increase indirect taxation

Of course, the party opposite have abandoned, along with so many of their other ideals—internationalism, for example—the brave and human principle of making taxation fair, understandable and conducive to that sense of individual responsibility without which a modern democracy will degenerate into some kind of totalitarianism. In power we see that Socialists prefer things to persons. This is just one more proof of how the individual and the family, who are the true objects of civilisation, are disregarded by the centralising State with its exorbitant expenditure and its ruthless pressure to extract the means to pay.

I take a different view of the purpose of society. I believe that all our institutions—and taxation is one of the most powerful and pervading—should be directed to building up the character and the sense of responsibility of the people. I am on the side of Dr. Johnston—I think that this is a hateful tax; and therefore, I would add this moral and social principle to the sound economic arguments for asking the Committee to insert this Clause in the Bill.

Photo of Mrs Barbara Castle Mrs Barbara Castle , Blackburn East

The right hon. Member for Aldershot (Mr. Lyttelton), who moved the. Second Reading of the Clause, started his speech in the rôle of a siren, offering blandishments to the womenfolk by his references to cosmetics, handbags, and those little trifles which are supposed to ensnare the wayward woman's heart.

Photo of Mr David Eccles Mr David Eccles , Chippenham

Our hearts, not yours.

Photo of Mrs Barbara Castle Mrs Barbara Castle , Blackburn East

With handbags? The right hon. Gentleman concluded by a threat, in which he said that if Members on this side voted against his Motion, he would make it perfectly clear throughout the country that we were voting against reductions in taxation on certain very essential domestic articles. I intend to resist the blandishments, on the one hand, and I hope to retaliate in kind with a small threat of my own before I finish my speech.

Of course, it is obvious that no one in this Committee or in the country likes or enjoys Purchase Tax. Anyone who is in the Committee could make out a case—and it looks as though some hundred will attempt to do so in the next hour or so—against one form of Purchase Tax or another. It is perfectly easy, it is very good political propaganda, and I am sure it will be indulged in freely by hon. Members opposite. But, clearly, if we are responsible Members, who are really genuinely trying to do our best to lift the burdens from the backs of our people where they are heaviest and least justified, we cannot come to this wide range of Purchase Tax and pick out, piecemeal, one item here, and another there. [An HON. MEMBER: "Who is suggesting that?"]

10.0 p.m.

The right hon. Gentleman who moved the Motion was able to have a lot of fun with individual items and many of us can do it, but irrevocably what we have to bear in mind—and this is a point to which the right hon. Gentleman made no reference in his speech, I thought rather typically—is that if we carry this Motion tonight we shall lose in revenue, on my estimate—and I stand subject to correction by the Treasury spokesman—some £68 million—an item which will make a very big impression on our expenditure during the coming year.

I suggest to the housewives of this country, when they are judging this Debate, should not for one moment be ensnared by the belief that the right hon. Gentleman is really concerned with or thinking about their combs, or razor blades, or dusters—[Laughter.] I buy my husband's razor blades. They come out of the housekeeping items. The right hon. Gentleman has moved a Motion which would cost £68 million revenue which would force us into a corresponding reduction in expenditure elsewhere. We know that a favourite item of hon. Members opposite is food subsidies. [HON. MEMBERS: "Nuts."] It is not nuts.

The £68 million will not be absorbed by lifting the tax from these little homely articles about which so much play has been made tonight, because so successfully has this tax been graded and adjusted through the past few years by successive Chancellors of the Exchequer on this side of the House that in actual fact, as I hope to show the Committee in a moment or two, the total amount of revenue now raised by Purchase Tax on the simple, homely articles is quite small and only a fraction of the sum about which hon. Members opposite talk. [An HON. MEMBER: "Take it off."] But that is not what hon. Members opposite are asking.

We are being asked to vote on a Motion which would cost £68 million and that loss of revenue, as I will show, would not come from reliefs on these essential articles, substantially. If the Committee looks at this Motion and studies its practical effect, they will find that not only does it propose to reduce Purchase Tax on all rates, all categories, all groups of articles coming within the Purchase Tax range, but will reduce taxation most on the least essential. In other words, it is a typically discriminatory Tory Motion in favour of the rich.

I will give the right hon. Gentleman an illustration, and here I retaliate in kind. If Members of the Committee vote for this Motion I propose to let the housewives of Britain know that what they are voting for is for a reduction in the wholesale price of such essentials as lino or wallpaper or mats for the floor—essential items for the home—of 1s. 8d. in the pound, for a reduction of the wholesale price of gramophone records of 3s. 4d. in the pound and for a reduction in the wholesale price of fur coats, jewellery and perfume of 4s. in the pound.

Photo of Mr Oliver Lyttelton Mr Oliver Lyttelton , Aldershot

Will the hon. Lady also tell the housewife that whereas £217 million is raised by the 33⅓ per cent. tax only £42 million is raised by the 100 per cent. tax?

Photo of Mrs Barbara Castle Mrs Barbara Castle , Blackburn East

That does not really affect my argument. The fact that there are very few members of the community who are able to sport fur coats or perfumes does not alter my argument that it is the interests of that section of the community with which hon. Gentlemen are concerned.

The interesting effect of this Motion is that if we vote tonight for this form of reduction of Purchase Tax we shall be voting for the biggest saving for those who buy the least essential articles. All this talk we have had in these Debates on this Finance Bill about how the Chancellor has not done enough for the smallest income groups, how he has done nothing for the smallest income groups of all goes by the board and a reduction of £68 million in the food subsidies is offset by a reduction in these luxury items.

Photo of Mr John Rodgers Mr John Rodgers , Sevenoaks

Is the hon. Lady aware that the only reduction in tax which hon. Gentlemen opposite have made up to date has been on Rolls Royces?

Photo of Mrs Barbara Castle Mrs Barbara Castle , Blackburn East

Yes, and it was warmly welcomed by hon. Gentlemen opposite.

I suggest that in a situation of this kind, in which austerity and sacrifice must still be our watchword and must still be the watchword in thousands of humble homes, to come along at this moment, when everyone knows that we are having to economise in various directions and when there are forms of expenditure of a humane kind which hon. Gentlemen opposite have asked for during the course of this Debate and to which we have had to say "No" because it could not be afforded, with a suggested cut in our revenue of £68 million which will be made up of a saving of 4s. in the pound in the wholesale price of garden ornaments, hand-painted trays, artificial fruit and French perfume, is to approach the situation with a total lack of reality. It shows a total lack of appreciation of what life is really like in some homes in Britain today which it should be our concern tonight to seek to alleviate in every possible direction.

I wish to make it quite clear that there are some items of Purchase Tax which I and many others would like to see not only reduced but abolished. If I were Chancellor of the Exchequer and were dealing with Purchase Tax I could, for a fraction of the sum which hon. Gentlemen by their Clause are proposing to give up, wipe out the Purchase Tax on all the outstanding essential articles used in the modest home. I suggest to hon. Gentlemen opposite that, in those circumstances, that is the sort of home we ought to be thinking about; that is the sort of home where the real pinch of the cost of living is being felt.

When the right hon. Gentleman comes to the Committee and has his fun about dusters, tape, and so on, he is enveloping the Debate in a smoke screen. The fact is that so carefully has this tax been adjusted to the real essential needs of the community that the revenue from these outstanding essential articles, which have not yet been exempted from tax under one heading or another, is now very small. If, as I believe, the right hon. Gentleman has studied the Schedules, giving the full details of Purchase Tax and the items in the groups and exemption, he must have been struck by the wide range of exemptions which already obtain in the humble domestic articles. He must know that the most important items like children's clothing, for example, are totally exempt from Purchase Tax and that some 75 per cent. of adult clothing is exempted under the utility scheme; 85 per cent. to 90 per cent. of the footwear, even high grade footwear is exempt. Utility clothes are exempt, and, under the heading of haberdashery, the utility scheme again has the effect of bringing into the exemption class items like handkerchiefs, braces, and so on.

In the range of domestic textile articles there are utility towels and glass cloths and 90 per cent. of the production of this category of goods are exempt. In the case of sheets 90 per cent. of them are utility and exempt from Purchase Tax; wool blankets, 96 per cent. already exempt from Purchase Tax. If we go into the kitchen and look at the items there we find that we have exempted cooking stoves, grates, wash boilers, coppers, brooms, brushes and babies' baths. We spent five years in weeding out from the Purchase Tax the range of things which really are essential. The impression given in the country of the great pressure of Purchase Tax on the modest home has been quite exaggerated. So much has it been exaggerated that I would like the Chancellor to make it one of his primary aims in his taxation policy to wipe out the rest of these items. It would not cost anywhere near £68 million—

Photo of Mr David Eccles Mr David Eccles , Chippenham

In this Budget it would cost £217 million. If we wipe out entirely one article in the 33⅓ per cent. class, under the terms of the Budget Resolution we must wipe out them all and that would cost £217 million. That is why half of the argument of the hon. Lady is nonsense.

Photo of Mrs Barbara Castle Mrs Barbara Castle , Blackburn East

I am sorry that hon. Gentlemen opposite have been bound by the terms of this particular Budget Resolution because—[Laughter]—just a moment, because I would have liked them not to have had this alibi but to have been obliged to disclose their real hand. Then I do not think we would have found them putting up a fight for the wiping out of these last remaining few millions. Haberdashery is only running at £5, £6 or £7 million in toto. I do not think that their main fight would have been to remove the last vestiges of Purchase Tax from hardware, which is only costing about £4 million.

I do not think they would have bothered very much about razor blades, and so on; the whole taxation being paid on these essential toilet requisites is running to the tune of only £2 to £3 million at this moment. I do not think they are concerned with that. If that was what they were concerned with, it would have been possible, under the terms of the Financial Resolution, for hon. Gentlemen opposite to put down a Motion for the total abolition of the 33⅓ per cent. Purchase Tax and ignored the 66⅔ and the 100 per cent.—ignored the garden ornaments, the gold and silver ware, the hand-painted trays and the French perfume. But they did not.

10.15 p.m.

Photo of Mr Oliver Lyttelton Mr Oliver Lyttelton , Aldershot

The hon. Lady is now erecting a perfectly defensible argument, and I give this pledge: If the Government will reduce by £15 million the Purchase Tax on the most essential things I will willingly ask leave to withdraw the proposed new Clause.

Photo of Mrs Barbara Castle Mrs Barbara Castle , Blackburn East

I am delighted that the unanswerably of my arguments has so completely converted the right hon. Gentleman. I am delighted to know that he has dropped all the talk we heard in his speech, earlier, about the inequity of the 100 per cent. rate upon my and other people's cosmetics. The housewives of Great Britain are more genuinely concerned about the lino on the floor and getting basic essentials as cheaply as possible than with being wooed by right hon. and hon. Gentlemen opposite with talk of cheaper cosmetics. I am glad, therefore, that the right hon. Gentleman has come to have a greater sense of proportion.

My theme tonight is this: when hon. and right hon. Gentlemen opposite talk about this great shadow of Purchase Tax over ordinary working-class homes they are grossly exaggerating the real picture. I repeat, if the party opposite go into the Division Lobby tonight to vote for this proposed new Clause we shall make it clear to the housewives of Britain just whose taxes they are most concerned with.

Photo of Hon. John Maclay Hon. John Maclay , Renfrewshire West

There have been a lot of interesting proposals made in the speech to which we have just listened, but upon reflection I prefer to alter "proposals" to "suggestions." I do not propose to follow them. The most interesting, of course, was that it would have been very much better had we been able to discuss specific details in this Debate this evening. We are working under considerable difficulties. I shall detain the Committee for only a short time, and I will go straight into illustration, as far as the Chair will permit me, of one tax in one of the categories which the hon. Lady seemed to think we should not be daring to touch—the 66⅔ per cent. category.

The hon. Lady seemed to feel that in suggesting a reduction in that category we were catering for the luxury trades. If it can be shown that a tax is producing rapidly diminishing returns, that it is virtually destroying an ancient industry, and when that industry is one which has made British high quality products famous throughout the world, which has contributed in the past greatly to our export trade, and which is capable of doing it now and in the future, then I suggest there is a very strong case indeed for reducing that tax, and probably for eliminating it altogether.

The industry I am referring to specifically is the hand-woven tweed scarf and rug industry. That industry is, of course, of prime importance to the Highlands of Scotland. It has been conducted for years in cottages all over the Outer Isles, and in Orkney and Shetland. But it is not only a Highland industry. I think it is too often thought of as exclusively a Highland industry. A lot of very fine hand-loom weaving goes on south of the Highland line. If you, Colonel Ropner, will permit me, I shall illustrate my point very briefly by quoting what is happening today to one factory south of the Highland line, which for years past has been producing the very finest quality hand-woven tweed scarves and rugs and exporting them all over the world.

I said that diminishing returns should be one test. This factory in the first three months of 1948 paid in Purchase Tax about £568; in 1950, during the equivalent three months, it paid £169; and I am advised that in the present quarter it is very unlikely that it will pay more than £70. Its sales have gone down and down, the factory is quite unable to sell sufficient goods to pay its wage bill today, and the reason is solely that it is having to pay this very high rate of 66⅔ per cent. Purchase Tax in competition with utility goods and others.

It can be argued, and somebody might argue, that hand woven tweeds and scarves are luxuries, but if we are going to call any fine British product of real handicraft a luxury we are really going too far. This kind of product has been valuable to us in the past, for it was that kind of product which built up our reputation as craftsmen throughout the world. I am told that this question has been argued before, but it is a long time since it was argued in detail; at least two years. The excuse was then given by the Front Bench opposite that, while they appreciated the need to keep this hand woven woollen industry going, it was extremely difficult administratively to reduce the tax on hand woven tweeds and other articles without getting into trouble with a lot of other goods, both home produced and foreign.

An indication was given by the Financial Secretary that the Government were studying the matter two years ago to see if something could be done. Nothing has happened, and I suggest that, no matter what administrative difficulties there may be in reducing or abolishing altogether this tax on hand woven tweeds, that job should be tackled, because it would be a great disaster to Scotland above all and to the United Kingdom as a whole if this industry was forced out of existence, as appears likely at the present rate of taxation.

Photo of Mr Donald Wade Mr Donald Wade , Huddersfield West

In considering this new Clause and the general principles which are raised by it, we must start with the assumption that the Purchase Tax as a form of raising revenue is a bad tax. If revenue has to be raised in this way, it can only be justified, in the first place, if the articles on which the tax is placed are luxuries, and, secondly, if it is a necessary part of our fiscal policy to discourage the purchase of these particular articles.

I should like to illustrate that point by referring to cricket gear. For reasons best known to the Chancellor, some cricket gear, such as leather bags used by cricketers, pay 100 per cent. tax, canvas bags pay 66⅔ per cent. and the remaining essentials for the game—bats, balls, stumps and so forth—pay 33⅓ per cent. I estimate, from figures supplied to me by the Federation of British Manufacturers of Sports and Games, that the amount of tax—I have excluded imported goods—levied on these articles amounts to approximately £160,000.

That is a very small sum from the point of view of the Chancellor and the Treasury, but to those who wish to enjoy playing cricket it is a very heavy burden. However necessary it may be to raise revenue, is it right that this healthy form of exercise, which is regarded as our great national game, should be taxed in this way, and to such an extent that many of our youths are no longer able to play this game? It is true that in the case of schools grants are made to the local educational authorities, but that is merely a case of taking money out of one Government pocket and putting it into another. The cost of cricket equipment is heavy. I do not propose to give a lot of details, but a good class cricket bat now costs 69s. 11d., and the price of a grade A ball has risen from 13s. 6d. to 36s. 6d.

Photo of Colonel Leonard Ropner Colonel Leonard Ropner , Barkston Ash

The hon. Gentleman is out of order when he directs his speech to the reduction of tax on specific articles.

Photo of Mr Donald Wade Mr Donald Wade , Huddersfield West

I shall conclude my illustration by pointing out that some of this cricket equipment is liable to 100 per cent. Purchase Tax, and some to only 33⅓ per cent. I wish to make it clear that the M.C.C. inquiry committee and the British Federation, to which I have already referred, have gone to great trouble to satisfy themselves that the increased cost is not due to reasons other than Purchase Tax. In conclusion, I suggest that this is material because it is the kind of consequence arising from Purchase Tax. May I quote a letter from the president of the Huddersfield Cricket League in which he says—

Photo of Colonel Leonard Ropner Colonel Leonard Ropner , Barkston Ash

The hon. Member endeavoured to put himself in order by saying he was giving an illustration, but he is really not keeping within the Rules of Order now.

Photo of Mr Donald Wade Mr Donald Wade , Huddersfield West

In that case, Colonel Ropner, I will not refer to the letter, much as I should like to do so.

As I said earlier, if we are to justify this tax, it must, in the first case, be shown that the items covered are luxuries or comparative luxuries, and further, that it is a necessary part of our fiscal policy to discourage the purchase of those articles. The illustration which I have given about cricket gear show that, in this case, neither of those conditions are satisfied.

Photo of Flight Lieut Wavell Wakefield Flight Lieut Wavell Wakefield , St Marylebone

The burden of the speech made by the hon. Lady the Member for Blackburn, East (Mrs. Castle), was, if I understood it aright, that under Socialism, austerity has to continue indefinitely, and that, m fact, a smokescreen had been laid over the Debate on this Clause by my right hon. Friend the Member for Aldershot (Mr. Lyttelton), who. I thought, most ably put the case for the need of a reduction. He showed that Purchase Tax is now out of date, and that its purpose and object no longer exist. He said that it ought to be abolished as soon as practicable. The hon. Lady opposite said that it would be impossible to get rid of Purchase Tax, because that would mean doing away with a large and substantial amount of revenue.

I suggest to the Committee that it is not impossible, and that there is a gross waste of expenditure taking place at present. We had an example this afternoon, in answer to a Question, of some £70,000 being completely wasted in Portsmouth. If that and many other examples, of which hon. Members are fully aware, were taken into account, and if expenditure were reduced, then the reductions in Purchase Tax for which we ask in this Clause could be achieved.

10.30 p.m.

I want to draw attention to one point to which my right hon. Friend referred, namely, the effect of this tax on our overseas trade. I have here an example of a firm in my constituency, which may be taken as typical of many cases hon. Members, certainly on this side, and I imagine on the other side as well, can give. This firm is doing precisely the work my right hon. Friend suggested; they are doing an important and valuable export trade in high quality goods. They say: Our home sales have been rendered extremely difficult by reason of the 66⅔ per cent. Purchase Tax. Buyers in great numbers come forward to buy our goods, but, in the great majority of cases, decline to go through with the purchase because they are not willing to pay Purchase Tax. What is the result? Failure to sell in the home market. Anybody in business knows that one cannot have a flourishing export trade unless one has a sound home trade to back that up. The firm further say: Unless some relief is afforded we shall be faced with the necessity of closing down our works and putting over 80 people out of work. They are highly skilled men, specially trained for our industry, and, once dispersed, it will be extremely difficult to bring them together again and the valuable export business we are still doing will be lost to the country. That is the effect of the Purchase Tax on our export trade. I would suggest that if this tax were reduced, increased revenue, not less revenue, would accrue to the Exchequer. We have so many anomalies in this Purchase Tax. I have a whole sheaf of them, but I will not weary the Committee with them, because they are well known. It is utter nonsense for the hon. Lady opposite to say that Purchase Tax is being successfully graded. I have examples which show there are grave anomalies existing. I would like to suggest to the Chancellor of the Exchequer that an advisory committee be set up to go into the whole question of Purchase Tax to see what can be done to prevent our export trade being lost, as my right hon. Friend and I have illustrated. We already have an Imports Advisory Committee. The many anomalies which exist could be thoroughly examined and many grievances which exist in business could be done away with. At present, when industries make representations to the Treasury about the difficulties they have under the anomalies of Purchase Tax, no notice is taken. I think that is simply because there are no people in the Treasury who appreciate and understand the difficulties which affect business in Purchase Tax.

My right hon. Friend drew attention to the difficulty of production in the gas industry, and showed how utterly impossible it is for the industry to plan with Purchase Tax going up and down. An advisory committee would be able to give advice on this matter. I hope the right hon. and learned Gentleman will carefully consider such a proposal. In conclusion, I would suggest that the action of the Chancellor of the Exchequer in devaluing the pound last autumn has had an effect on Purchase Tax which I am sure he did not foresee, and that is another reason why Purchase Tax is out of date and ought to be gradually eliminated.

I want to quote a few sentences from a speech by the chairman of one of our great companies, which put the position in a nutshell. He said: The line of demarcation between utility and general merchandise was, and continues to be, usually one of price. Below a given figure of production costs, the article is deemed to be utility and therefore free of purchase tax. Above that level it is non-utility, and subject to tax at a rate of anything up to 100 per cent. Where devaluation is beginning to have a sinister effect on the plan is that in such cases a rise in the cost of raw materials makes it impossible for the manufacturer to produce utility goods at a profit under a ceiling price, and there is no alternative but to bring the article into the non-utility category. The consequent rise in retail price as a result of the operation of purchase tax is out of all proportion, to the rise in the cost of raw materials, or to any real value. That statement was made by Lord Woolton, and if any man knows what he is talking about in business, it is Lord Woolton. I would draw those remarks of a wise business man to the notice of the Chancellor of the Exchequer. Here is another example in support of the new Clause which we, on this side of the Committee, have put down. If the Chancellor will only look at the various sane, sensible, business-like arguments put forward he will agree that what we on this side of the Committee are proposing is in the best interest of the national economy.

Photo of Bernard Braine Bernard Braine , Billericay

We have heard a number of instances from hon. Members on both sides of the Committee, and no doubt as the evening wears on we shall hear many more, of the way in which Purchase Tax is bearing down on various industries and is having a damaging and detrimental long-term effect. One which occurs to me—and I must, at the outset of my remarks declare that I have a personal interest here—is the fur trade, which my right hon. Friend the Member for Aldershot (Mr. Lyttelton) has mentioned. This is a trade which contributes substantially to the economy of the country. It has done so for many centuries. But it is being literally taxed out of existence. There is a view that the fur trade is a luxury trade and is, therefore, less deserving of tax reductions than many other trades. That is a shortsighted and wholly misleading view. I think it is relevant to say that, before the war, measured in terms of value, the fur trade was the leading entrêpot trade of this country. Even now, despite the distraction of the war, it is a substantial dollar earner and I am advised that during the past three years our exports have averaged annually something in the region of £10 million.

There is no reason at all why there should be a fur trade in this country. We have to import everything so we can export the finished products. Indeed there is no reason why the fur trade should not be centred in Paris, or Brussels, or New York, except that for more than three centuries skills and business organisation have gradually reached a peak of efficiency here, so that this country today is the centre of the world's fur trade. Yet since the early part of 1949, the trade has faced the gravest difficulties because of its inability to sell in the home market. I have a copy of a letter addressed by the trade's spokesman to the President of the Board of Trade, dated 12th August, 1949. It includes this statement: Earlier in the year the position in the trade was serious; today we are faced with the stark possibility of the whole industry ceasing to exist at all unless an effective transfusion of life and hope can be made in the matter of weeks. It is the considered opinion of my Committee that an adjustment of the Purchase Tax can alone restore to the trade its health and virility. The position has worsened since then, as is well known to the President of the Board of Trade.

Now, if this Clause is not accepted it will mean that non-utility furs will continue to bear Purchase Tax at the rate of 100 per cent. and that utility furs will continue to carry Purchase Tax at the rate of 33⅓ per cent. Tax at these rates is pricing furs out of the home market.

The Committee may be interested to know that utility furs are the only utility articles that carry Purchase Tax. Yet it is essential for the trade to have a substantial home market, for two reasons. The first is so that importers do not have to depend entirely upon exports to sell the whole of their collections. The existence of a home market is absolutely imperative to the fur trade because it needs stability, the trade itself being of such a fluctuating nature. The second reason, and one which I suggest will appeal to hon. Members on both sides of the Committee, is that by its means continuity of employment can be guaranteed to the skilled craftsmen in the industry and their skills in the dressing and dyeing and on the manufacturing sides of the industry can be maintained.

It has already been mentioned by my right hon. Friend that British furs have a world-wide reputation for quality, but that quality depends upon skills difficult to acquire and easy to lose. It is my contention that the present rates of tax are discouraging sales on the home market. In fact, they are doing more than that. They are actually acting as a disincentive to quality production, and all that that may mean to the future of a great British industry. Let me take one illustration. The production cost of the utility fur coat is £18.

Photo of Colonel Leonard Ropner Colonel Leonard Ropner , Barkston Ash

The hon. Member is in order in trying to illustrate the point he is making, but he will be out of order if he continues to address his remarks to one article only.

Photo of Bernard Braine Bernard Braine , Billericay

I bow to your Ruling, Colonel Ropner. But it is quite clear that unless the Chancellor is prepared to make substantial concessions before the next fur trade season begins, in September, it will collapse in a comparatively short time, leading to widespread unemployment and loss of skills which, in turn, will lead to the long-term decline of the industry—and that at a time when German competition is on the increase. More than that, the Chancellor will lose revenue. Indeed, he is already losing revenue. One manufacturer of my acquaintance told me that in the first quarter of this year he paid, in Purchase Tax, the sum of £168, whereas usually he paid somewhat in the region of £7,000 to £8,000. It is quite clear that the present incidence of the tax is causing the Chancellor to lose revenue. Most men at some time of their lives are either led or prodded into buying their wives a fur coat—

Photo of Colonel Leonard Ropner Colonel Leonard Ropner , Barkston Ash

The hon. Member is out of order.

Photo of Bernard Braine Bernard Braine , Billericay

I was only going to suggest that the Chancellor might well go down in history as the man who has made it impossible for any man to buy his wife a fur coat.

10.45 p.m.

Photo of Colonel Leonard Ropner Colonel Leonard Ropner , Barkston Ash

The hon. Gentleman cannot resume his speech unless he brings his remarks in order.

Photo of Mr David Gammans Mr David Gammans , Hornsey

All I want to say on this subject can be briefly summarised by asking the Chancellor two questions. First, are we now to understand that Purchase Tax is a permanent feature of our taxation system? Up till now there has been a sort of fiction that it was something brought in during the war to discourage buying and to combat inflation. Is that fiction now to be dropped, because, if so, I think the Chancellor should say so? This is the first Budget in the new Parliament. Here is a tax that raised £300 million. Is there no hope whatsoever of this tax disappearing, or even being reduced, because, if not, then I think the Chancellor should "come clean" and tell the Committee and the country.

The second question is this: Ought not the right hon. and learned Gentleman to give up the pretence that this tax affects only luxuries? The hon. Lady the Member for Blackburn, East (Mrs. Castle)—my distinguished constituent—made a very gallant attempt to pretend that it did not affect the working-class home, but the only man who does not pay Purchase Tax is a man who lives up a tree, wrapped up in a utility blanket—

Hon. Members:

Eating nuts.

Photo of Sir William Darling Sir William Darling , Edinburgh South

There is a tax of 33⅓ per cent. on rose bushes.

Photo of Mr David Gammans Mr David Gammans , Hornsey

He is asked to pay a tax when he comes down to earth. He is asked to pay a tax when he cleans his teeth or washes the back of his neck or rides a bike or writes a letter or shaves. It is exactly four years since I was in the jungles of Borneo, interviewing, on behalf of His Majesty's Government, the head-hunters of Borneo. I wondered whether they were the only people left on earth who would not have to pay Purchase Tax, but I am sure the right hon. and learned Gentleman would charge them tax on their blow-pipes.

It is ridiculous to suggest that this tax is any longer a tax on luxuries. Will the Chancellor therefore pay special attention to these points: has this tax come to stay? Is it a permanent tax on the whole community? If the answer is, "Yes," then I suggest that this tax so reeks of anomalies in every conceivable direction that he or his successor should make some attempt to iron out the anomalies.

Photo of Mr Ellis Smith Mr Ellis Smith , Stoke-on-Trent South

The reinforcements have arrived!

Photo of Mr Albert Cooper Mr Albert Cooper , Ilford South

I am sure that both sides of the Committee were very amused by the few words from the hon. Lady the Member for Blackburn, East (Mrs. Castle). Her facts and the arguments she adduced may have been somewhat faulty, but it was quite obvious to see and sense her embarrassment. One can sense, too, the embarrassment of hon. Members opposite: it is like that of a man whose pyjama-string breaks in the hem.

Recently, I put down a Question to the Chancellor, asking what steps he proposed to take to reduce the cost of living and I want to deal with this question of Purchase Tax on lines somewhat different from those taken up by my hon. Friends. I believe Purchase Tax is a very serious item in the cost of living. I should have thought that it would have been one of the first duties of the Chancellor of the Exchequer, in framing his Budget proposals, to have brought forward such measures as would have brought about reduction in the cost of living. I was interested to hear the hon. Lady the Member for Blackburn, East, reveal some sense of sympathy for those enjoying the lowest incomes in this country. It is somewhat refreshing for hon. Members opposite to take that view in this Parliament; it has for so long been left to right hon. and hon. Members here to press the case of the lowest paid workers the whole time through—and we shall continue in that capacity. When I inquired of the Chancellor I received a reply—frankly, I thought it was an impudent reply—to a serious Question. The right hon. and learned Gentleman merely referred me to the Budget statement. Well, I was here and listened throughout that ordeal, but I could find no proposals for reducing the cost of living.

Here is an opportunity for the right hon. and learned Gentleman to bring about some relief for these people who have to enjoy the least of this country's good things, Purchase Tax taking, as it does, sums from 5s. to 10s. a week. That is what is taken from the lowest paid workers. It acts as a disincentive to saving, and is one of the prime reasons why there are considerable demands nowadays for higher wages.

If this Clause were accepted, the effect would immediately be to reduce some of the pressure to which I have referred; there would be an incentive to saving, and there would, in effect, be an increase in wages without increasing the costs of production. Money in people's pockets is the thing they need. At present the Chancellor, in one form or another, extracts practically all they have. I can tell the hon. Lady the Member for Blackburn, East, who appears to have little knowledge of what happens in working-class homes these days, that both in my own election campaign, and subsequently, I made considerable researches into how these people are affected. [HON. MEMBERS: "Oh."] Yes, I made a whole lot of inquiries. [HON. MEMBERS: "These people!"] I quite appreciate this hilarity. It is a question of "empty vessels …"

The figures may interest hon. Members opposite. They can confirm them by a simple letter to the Postmaster-General. In the weekly savings withdrawals the average amount drawn out is not £5 or £10, as the Chancellor so euphemistically says, to buy all those things in the shops. These sums are 5s., 10s. and 15s., and when I asked people why they were encashing their savings they said, simply, "We cannot make ends meet unless we do it." If this Clause is accepted we can, without inflation, make it possible for people who are now forced to draw out this money, to make ends meet otherwise. For that reason alone, and heaven knows that is strong enough, the Clause ought to be accepted.

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

As my hon. Friend the Member for Blackburn, East (Mrs. Castle) said, more or less correctly, to accept the Clause would cost £70 million of the total of £400 million of which Opposition Amendments wish to deprive us. I am not sure whether this Clause is one of those which the Opposition mean seriously and which they will really carry out if they come to power, or whether it is one of those that the hon. and gallant Member for North-West Bristol (Lieut.-Commander Braithwaite) described as "an annual parade" a few nights ago. It would be a help to the Committee and the country if the Opposition would tell us which falls into which category. Nevertheless, I think that the Clause, whether a parade or not, has been extremely useful in that it has enabled us to have a wide and interesting Debate on the whole subject of the Purchase Tax. I believe, quite candidly, that the Purchase Tax is intrinsically a less good tax than either Income Tax, Profits Tax, or Death Duties.

The right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) suggested that we should look back at the history, of the tax. Having said that, he did not, in fact, look back at the history, but I think his suggestion is a very good one, and I think that it is worth looking back in that way. Before the war, as the hon. Gentleman the Member for Chippenham (Mr. Eccles) quite correctly reminded us, the Labour Party generally resisted high indirect taxation on necessities on the ground that they were regressive, and bore very hardly on the poor man. But—and the hon. Member for Chippenham did not remind us of this at the same time—the Tory Party constantly advocated a general sales tax, as it was then called, on the ground that it would throw the burden of taxation more widely over the whole community and not confine it to the payer of Income Tax who, in those days, was a comparatively wealthy member of the community. That, moreover, was—

Photo of Sir Kenneth Pickthorn Sir Kenneth Pickthorn , Carlton

Mr. Pickthorn (Carlton) rose

Photo of Sir Charles MacAndrew Sir Charles MacAndrew , Bute and North Ayrshire

If the Minister does not give way. the hon. Member must not continue to stand.

Photo of Sir Kenneth Pickthorn Sir Kenneth Pickthorn , Carlton

Will the Minister allow me to ask a question? Having said that the Tory Party constantly recommended a sales tax, will he now give the details and date when that happened?

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

No, Sir; it is common knowledge, just as it is common knowledge—and I am not attempting to dispute what the hon. Member for Chippenham said—that we constantly opposed regressive taxation. Moreover, that was in the days when there were heavy indirect taxes not merely on beer and tobacco, but also on tea and sugar, which we abolished last year, apart from the Imperial Preference. There were also, in those days, no food subsidies which are, of course, a negative indirect tax on necessities and which act progressively in exactly the same sense as the hon. Member for Chippenham pointed out that the indirect tax is regressive.

It was following that controversy over the sales tax before the war—[An HON. MEMBER: "When?"] I am coming to the date. It was following that controversy over the sales tax, before the war, that Sir John Simon, as he then was, as Chancellor, in April, 1940, in the Conservative and Liberal Coalition of that day, introduced the Purchase Tax. Most of our thoughts were fixed on other matters at that time and so it is, perhaps, now worth recalling what that proposal was in its original form, in April, 1940. His proposal was a flat rate of tax, not differentiating at all between the less necessary and the more necessary types of goods. It was, in fact, the sales tax, although the name was altered.

11.0 p.m.

It covered, too, all the groups falling under the tax: all clothing, all boots, shoes, newspapers, books and periodicals. The right hon. Gentleman the Member for Aldershot said that Purchase Tax was originally designed to prevent luxury spending. I wonder whether he remembered when he said that that the original tax was to fall on all clothing, boots and shoes without any utility scheme. Sir John Simon excused the regressive nature of the tax by saying it was impossible—and it was a commonly used argument—to raise large sums if necessities were excluded, though, in fact, we have been able to exclude large numbers of necessities included at that time, and to raise much more revenue.

These proposals, at the beginning of 1940, were severely criticised by the Labour Party, and the right hon. Gentleman has asked for the history. As a result, after the formation of the Coalition Government in May, 1940, two very important changes were made to meet the main criticisms. First of all, children's boots and shoes, newspapers and books were excluded altogether. Secondly, the flat rate of 25 per cent. was abandoned, and two rates—16⅔ per cent. and 33⅓ per cent.—were applied to the more necessary and the less necessary goods respectively. Sir Kingsley Wood, introducing the amending Measure later that year, pointed out that food, water, gas, electricity, transport, education, coal and children's boots and shoes were now exempt from the tax. He defended the tax at that time on the ground that 86 per cent. of consumers' ordinary spending was not affected by the tax, and he said it could not, therefore, be a severe burden on the cost of living of the mass of the people.

After that, important changes were made later in the war which converted this tax still further from being a regressive one on goods of general consumption towards being a tax on less necessary articles and luxuries. First, the utility scheme was introduced, which put a large part of the supplies of clothes, boots, shoes, furniture and household textiles outside the range of the tax altogether. Second, the differentiation between the rates applying to the more necessary and the less necessary goods was carried very much further. That process was continued by my right hon. and learned Friend's predecessor as Chancellor, and by my right hon. and learned Friend himself in the Budget of 1948, when we overhauled the whole tax so as to minimise its effect on the cost of living, while retaining it as a disinflationary tax calculated to restrain spending. The right hon, Gentleman the Member for Aldershot said the purpose of the tax was to be anti-inflationary and to restrain spending. Surely he would not argue that there is no need for anti-inflationary measures today, because the Opposition is constantly telling us that there is an inflationary pressure facing us at the present time, and they go so far as to tell us we are suffering from overfull employment.

Photo of Mr Henry Strauss Mr Henry Strauss , Norwich South

The hon. Gentleman says that we say the country is suffering from overfull employment. He remembers, does he not, that the first person in this House to use that expression was the present Leader of the House, who used it at a Press conference in August, 1947, two months before it was used by any Conservative Member?

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

Yes, Sir, but the hon. Gentleman the Member for Chippenham used it in a letter to "The Times" last week. When we were reorganising Purchase Tax in 1948 we sought to reduce the rates on those goods which seriously affected the cost of living of the wage earner and left the rates high on goods like furs, jewellery, cosmetics, and so on, which surely cannot be held to influence the cost of living of the wage earner.

We also sought deliberately to use the tax as an instrument of planning—I know the right hon. Gentleman does not like the word "weapon"—particularly in encouraging exports in industries like the motor car industry, where, surely, it cannot be argued that the Purchase Tax has been a severe deterrent to exports. In making that differentiation we gave a net relief amounting to £39 million a year to the taxpayer. Incidentally, I remember that at the time we were attacked by the "Economist" for doing that on the grounds that we were weakly giving way to pressure and abandoning our disinflationary policy. That shows how newspaper criticisms change from time to time. As a result of those changes in 1948 we now have a tax which, despite some imperfections of detail, is surely not unsuitable for an inflationary period.

Today, quite apart from food, gas, electricity, water, and so forth, utility clothes—apart from furs and fully-fashioned stockings, which the right hon. Gentleman forgot—utility boots and shoes, utility household textiles and utility furniture are exempt. The hon. Lady the Member for Blackburn, East gave some figures of the extent of the supplies of these goods which are in the utility field, but I doubt even now whether it is fully realised how high the percentages are. According to the latest figures, which mainly relate to the second half of 1949, 96½ per cent. of leather boots and shoes are in the utility class; hosiery, 87 per cent.; cotton, linen, rayon and nylon cloth, 59 per cent.; wool cloth, 78 per cent.; towels, 73 per cent.; sheets, 76 per cent.; cotton blankets, 86 per cent.; wool blankets, 92, and so forth.

It is, of course, just for those reasons that a combined reduction in Purchase Tax and in food subsidies at the present time would occasion a rise in the cost of living and that the reductions proposed by the Clause would fall, as the hon. Lady said, very largely on the least necessary goods which do not enter to any significant extent into the cost of living of ordinary families. Actually, of the £300 million or so of Purchase Tax revenue raised in 1949 as much as £175 million came from the following items: non-utility clothes, textiles and fabrics, wireless sets, toilet requisites, perfume and lipsticks, and so on, stationery and office requisites, and passenger motor cars.

Photo of Sir Isaac Pitman Sir Isaac Pitman , Bath

When the hon. Gentleman mentions stationery does he not realise that the tax on stationery is passed on to all these articles which he claims are exempt? Business stationery is 95 per cent. of stationery and bears virtually all the Purchase Tax in that field, and that tax is recovered in these utility blankets, in food, and in all cost of living items of the people. The whole of that big sum of tax on stationery is actually borne by others than the payers, including the working people in their homes.

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

I think not to a very significant extent. The big items are non-utility clothes, passenger cars, radios, and one or two others. It is on these items that the larger part of the £70 million of revenue, which this Clause wants us to relinquish, would, in fact, come. The right hon. Gentleman the Member for Aldershot told us that if we voted against this proposal he would tell the country that we had voted for higher prices of all manner of things. If I wanted to use that sort of language, I could say that if hon. Members opposite vote for this proposal we shall tell the country that they are voting against the reductions in Income Tax. The right hon. Gentleman should not utter threats if he does not want us to retaliate. When one takes this proposal for remitting Purchase Tax revenue with the Opposition's other proposals for reductions in food subsidies, one is unable to see how any cut in the cost of living could be achieved in this fashion. If we carried out both these proposals the prices of expensive clothing, motorcars and wireless sets, would come down, and the prices of bread and milk would increase.

The right hon. Gentleman said he did not like the cost-of-living index. The fact is that this is a case where, as the statistics did not support his argument, he took refuge in abusing the statistics. Complete abolition of the Purchase Tax and reduction of the food subsidies by the same amount would raise the cost of living by six or seven points. A cut in the food subsidies equivalent to the amount involved in the proposal we are discussing would raise the cost of living by about two points. He quoted a family as paying something like 4s. 0d. in Purchase Tax. We can all argue about these average and sample families. I was interested in an article in "Picture Post" of 3rd June, which gave a family budget of a railwayman in Darlington, with a wife and three children, who was living on £4 15s. 0d. a week wages, plus 10s. 0d. I do not know whether the facts were exactly correct, but what struck me about that family budget was that there was, so far as I could are, no single item in it on which Purchase Tax is charged other than soap. A cut of £70 million in the food subsidies would have added 2s. 9d. a week to the budget of that family.

We therefore resist this Clause at present because, in our view, it is still necessary to withstand inflationary forces, and because this proposal, particularly if it was combined with any proposal for cuts in food subsidies, would transfer the burden of the cost of living from those fairly well off to those less well off; it would mean relieving to some extent the better off section of the community. I was asked whether this tax was intended to be permanent. I have not the power of peering into the indefinite future; but in the less distant future, when inflation is no longer our problem, the time will doubtless come when rates of Purchase Tax can be moved downwards and exemptions increased.

11.15 p.m.

It is, in my view, a less good tax than the Income Tax, Profits Tax, and Death Duties. Nevertheless, after the changes we made in 1947 and 1948, many representations were made to us from industry that frequent changes in the tax were undesirable, and that a little stability would be a good thing. The right hon. Gentleman accused us of variability, and of infirmity of purpose in frequently changing the rates Well, it was precisely for this reason, among others, that we decided not to make any detailed changes in the Finance Act, 1949, or the Finance Bill of 1950. There was great force in that argument, and I believe it establishes the case for not making changes this year, and, therefore, for not accepting this Clause tonight.

I hope, however, that when, in the future, the need to restrain spending becomes less paramount in our economic policy there will be a chance for a revision of this tax. Such a revision might very well maintain the principle on which we of the Labour Party insisted successfully in 1940, that Purchase Tax should be, at least to this extent, a luxury tax, that the greater part of the revenue should be raised from the less essential goods.

Photo of Captain Harry Crookshank Captain Harry Crookshank , Gainsborough

Perhaps I may be allowed just to say a few words before we come to the expected division. We certainly have discussed this matter in a very interesting form this year. Owing to the Chancellor's having thought of a method in which Purchase Tax could be raised in Debate, we have carried on, not in the Dutch auction style, but in the illustrative manner, and a great many topics have, therefore, been incidentally raised. I hope—the hon. Gentleman did not say so—that the particular points of detail which were raised by my hon. Friends will be considered by the Government.

I think that the hon. Gentleman really lives in a world of his own. We know that that world is one where he knows best, but he seems to be quite out of touch with the effect of the Purchase Tax on innumerable households. Indeed, he seemed to question the quotation which my right hon. Friend made when he said that it had been estimated that in the case of the lower income families—that is to say, families of four with an income under £500 a year—the amount of tax was 4s. 6d. a week. The hon. Gentleman rather derided that statement: but after all, it was taken from the Report entitled "Facts about the British Economy" by the E.C.A. mission, and not from "Picture Post"—a very much more reliable body, I should have thought. "Picture Post" may be all right or it may not, but the family it mentioned does not, apparently, brush its teeth.

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

May I just point out to the right hon. and gallant Gentleman that I was only suggesting that the figure quoted was, I think, an average one for all families with under £500 a year? Therefore, one cannot say precisely how accurate that would be for one particular group of, say, £5 a week or less.

Photo of Captain Harry Crookshank Captain Harry Crookshank , Gainsborough

That is what the hon. Gentleman said, but the fact remains that it is a burden, and while it is all very well the Government and their supporters trying to make out that it is really only a luxury tax—supported by the "Daily Herald" about every three weeks—it is not so. I do not want to quote a lot of things, but perhaps I may be allowed to pray in aid what the Chairman of Woolworth's said about it. Whatever else may be said about that great organisation, it does not really cater in the most luxurious class of goods or for the wealthier section of the community. I presume we are all agreed about that. The Chairman said: I think it appropriate to repeat the contention I uttered last year—the terrific burden the consumer public bears in the matter of Purchase Tax, increasing as it does the cost, not only of essential goods, but also of semi essential goods. That is said by one who, after all, is in touch with what one may call the generality of the population, and certainly not only the highest income groups.

What I was sorry about in the hon. Gentleman's speech was that, while he gave us the history of the Purchase Tax and reminded us of the time it was instituted—and I myself was in his position at that time, so I remember it very well—he hardly dealt at all with any of the matters raised in the Debate. I do not remember this story that a sales tax was part of the Tory policy a few years before the war and the hon. Gentleman is quite unable to give any instance where an official Amendment on behalf of the Conservative Party was put to a Finance Bill in those years. If they were in power and if that was their policy they would have presumably done something to carry it out. It would not have been left to back benchers to move Amendments on a most important point of policy. The whole thing is absolutely nonsense.

The argument deployed about this tax today by my right hon. and hon. Friends, and notably in the speech about fur, which was "run out," is that owing to the heavy incidence of tax even on some of the luxury goods we are in danger of losing trade in the export market. I do not see why the hon. Gentleman does not deal with that point. Surely it is not only of vital importance to maintaining our export trade. If we begin to lose that, what becomes of their full employment policy? Purchase Tax at the present high level is endangering the very foundation of their policy as they propagate it on all possible occasions. What is more, the Government have admitted that to be the case, because in this Bill they have reduced the Purchase Tax on high priced cars. What have they done that for? Surely it is to maintain a certain market for high priced cars in this country in order that the export market in these high priced cars may also be maintained. If that is not the reason, I should like the Chancellor of the Exchequer to tell me what is the reason. But, of course, that is the reason. They already see the red light in this case. And what applies to high priced cars applies equally well in other cases. Does the hon. Gentleman wish to intervene?

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

I was not saying that it did not apply to high-priced cars. I was contesting the argument that it applies equally everywhere else.

Photo of Captain Harry Crookshank Captain Harry Crookshank , Gainsborough

The hon. Gentleman may contest it, but he did not say anything about it in his speech, and it has been the burden of many of the observations on this side. The point of a Debate is to have such points answered.

My hon. Friends, perhaps a little more foreseeing than the gentlemen in Whitehall, fear that that may happen in the case of other goods and other markets, and that is one of the reasons, and no mean reason, why we ask to have this Clause inserted in the Bill. The hon. Gentleman then went on to say that if the Government accepted this Clause it would mean that it would be impossible to reduce the Income Tax. I agree with that, but he must have a very short memory because we were told all through the Debate on petrol—which I do not wish to go into, of course—that it was the concession on petrol which was going to cancel out Income Tax. How does this come into the picture at all? The hon. Gentleman has hardly dealt with the points raised, but I have more hope of the Chancellor of the Exchequer. He has been listening to this Debate, and he has noted the points, even if the hon. Gentleman did not trouble to answer them, and I put it most seriously on behalf of my right hon. and hon. Friends that we are alarmed at the continued high Purchase Tax from the point of view of employment in this country and the maintainance of our export trade. It is a burden, and it is no good trying to pretend that it is only a luxury tax.

All the figures show that luxury goods are by far the smallest proportion. The largest amount of tax is obtained from semi-necessities. I admit there are a lot of commodities outside the range. But the list of things which my right hon. Friend the Member for Aldershot read out—I will not repeat it now; they are all on record and are fresh in the minds of hon. Members—did touch every single family in this country. We feel that the time has come to make a start in reducing the Purchase Tax. We do not know whether it is the Government's intention that it should stay on for ever. But we say that it should not, and we want to start reducing it. Obviously, a tax of this magnitude cannot be swept away in one Finance Bill. We see that, of course, but we do think that a start can be made by chipping pieces off it.

I suspect that if our new Clause were put into the Bill there would be very few complaints from industrialists about the reduction of the tax. I hope that the Government will pay keen attention to all that has been said in the Debate, and that before very long we may press the matter to a Division and settle the issue.

Photo of Sir Stafford Cripps Sir Stafford Cripps , Bristol South East

The right hon. and gallant Gentleman has invited me to say a word on one or two points, and it would not be courteous if I were not to respond to that invitation. He asked a question about the reduction of the Purchase Tax on motor cars, that is, on the expensive motor car. The right hon. and gallant Gentleman will have observed that, while we have reduced that tax, we have not reduced it to nothing. We have brought it down to the same rate as that on other motorcars. It is true that from time to time it is found in other matters that certain manufactures may be affected by a particular tax of this kind. That is a matter which we have watched very carefully, and as far as we are aware there is at present no other case which will suffer from that particular danger. Were they to do so there is, the right hon. and gallant Gentleman knows, power to make adjustments of various kinds in the tax.

But the evidence of full employment, and the good volume of exports at present have shown that at the moment, at any rate, it is not having any very serious effect from that point of view. So far as the question of its incidence is concerned, one could go on arguing that for ever. There is obviously a very large section of goods, such as motorcars and several others which have been mentioned, which do not come into the cost of living and with which one cannot deal as making the ordinary person in the £500 a year class pay much more for his cost of living. There are some goods remaining among those bearing Purchase Tax, as my hon. Friend said, which do come into the cost of living. There is some element in it; but the main element in it is the luxury, or the semi-luxury, non-essential type of goods.

From the point of view of anti-inflationary policy that is exactly the type of goods of which, I think, everyone will agree that we want to restrict the purchase. We want to concentrate upon necessities, and not to waste our resources upon things which are not so necessary. In an inflationary situation that is the type of restraint that is required. No hon. Member has suggested that on the Budget we have £70 million too much surplus. There has been not one word to that effect. If we make a reduction the loss in revenue would mean that there would have to be some alternative tax.

Photo of Viscount  Hinchingbrooke Viscount Hinchingbrooke , South Dorset

Reduce Government expenditure.

11.30 p.m.

Photo of Sir Stafford Cripps Sir Stafford Cripps , Bristol South East

We have been into all that argument, not this evening, but on another occasion. I am making the submission that to preserve the necessary balance of the Budget, it would be necessary to substitute some other tax. I do not think that that would create a very easy task for anyone, or lead to a very successful result.

We therefore believe that this tax, as it has been developing in the last few years, and in 1947 and 1948 particularly, has now become a tax which is not, broadly speaking, regressive in its character, and has become a tax which for the purposes of the present time is a suitable way of raising money. What will happen in the future, as my hon. Friend has said, if we get into a deflationary situation or anything of that kind will have to be dealt with by whoever is responsible for the situation then, and nobody can foretell now what is likely to be done as regards taxation. We have always said that the whole purpose of a Budget is to adjust itself to the economic circumstances of the time, and that it must be kept flexible, and this tax, like every other, must also be kept flexible. I would ask the Committee to proceed to a Division if they feel it is necessary, and to reject the new Clause.

Photo of Mr Eric Smith Mr Eric Smith , Grantham

I will not keep the Committee long on this interesting Debate. We have heard a lot of constructive arguments from this side of the Committee, but we have not heard one constructive answer from the other side. There is one point which has not been mentioned sufficiently yet. When, eventually, the Government see their way to reducing Purchase Tax, what is to happen to the retailer? What about the small shopkeeper? Something must be done to relieve his position when a reduction in Purchase Tax takes place. It is coming sometime, and there must be some solution.

Although hon. Members opposite may think they understand what happens with people like that, they have no idea of the difficulties of the small shopkeepers who have to contend with all this mass of regulations and snowstorms of instructions. They have a very difficult task to perform. When Purchase Tax is altered they get more difficulties to contend with. Hon. Members opposite do not bother about the small shopkeeper. They are

not even bothering to listen tonight. In time the small shopkeeper will realise that it is we on this side of the Committee who bother about them. Perhaps I know more about them than many hon. Members opposite. I have seen these men trying to contend with the difficulties which are put in their way by the rules and regulations issued by the Government. They have many difficulties, and many of them have told me that though they are honest men and intend to continue to be honest, their difficulties today are so great that they cannot keep up with the regulations which are forced on them.

What I am asking the Chancellor to do is this; when he eventually sees the sense of our argument, as we hope he will—and if he does not, the country will—we hope he will also see that these small shopkeepers have a proper chance of dealing with these regulations, and that when Purchase Tax is reduced they are not the ones who suffer most. I ask the right hon. and learned Gentleman to consider this matter very seriously.

Photo of Mr William Whiteley Mr William Whiteley , Blaydon

rose in his place, and claimed to move, "That the Question be now put."

Question put, "That the Question be now put."

The Committee divided: Ayes, 288; Noes, 280.

Division No. 35.]AYES[11.36 p.m.
Acland, Sir RichardBurke, W. A.Diamond, J.
Adams, RichardBurton, Miss E.Dodds, N. N.
Albu, A. H.Butler, H. W. (Hackney, S.)Donnelly, D.
Allen, A. C. (Bosworth)Callaghan, JamesDonovan, T. N.
Anderson, F. (Whitehaven)Carmichael, JamesDriberg, T. E. N.
Attlee, Rt. Hon. C. R.Castle, Mrs. B. A.Dugdale, Rt. Hon. J. (W. Bromwich)
Awbery, S S.Champion, A. J.Dye, S.
Ayles, W. H.Chetwynd, G. REde, Rt. Hon. J. C.
Bacon, Miss A.Clunie, J.Edwards, John (Brighouse)
Baird, J.Cocks, F. S.Edwards, Rt. Hon. N. (Caerphilly)
Balfour, A.Coldrick, W.Edwards, W. J. (Stepney)
Barnes, Rt. Hon. A. J.Collick, P.Evans, Albert (Islington, S. W.)
Bartley, P.Collindridge, F.Evans, E. (Lowestoft)
Bellenger, Rt. Hon F. J.Cook, T. F.Evans, S. N. (Wednesbury)
Benson, G.Cooper, G. (Middlesbrough, W)Ewart, R.
Beswick, F.Cove, W. G.Fernyhough, E.
Bevan, Rt. Hon. A. (Ebbw Vale)Craddock, George (Bradford, S.)Field, Capt. W. J.
Bing, G. H. C.Crawley, A.Finch, H. J.
Blackburn, A. R.Cripps, Rt. Hon. Sir SFletcher, E. G. M. (Islington, E.)
Blenkinsop, A.Crosland, C. A. R.Follick, M.
Boardman, H.Crossman, R. H. S.Foot, M. M.
Booth, A.Cullen, Mrs. A.Forman, J. C.
Bottomley, A. G.Daines, P.Fraser, T. (Hamilton)
Bowden, H. W.Darling, G. (Hillsboro')Freeman, J. (Watford)
Bowles, F. G. (Nuneaton)Davies, A. Edward (Stoke, N.)Freeman, Peter (Newport)
Braddock, Mrs. E. M.Davies, Ernest (Enfield, E.)Gaitskell, Rt. Hon. H. T. N
Brockway, A. FennerDavies, Harold (Leek)Ganley, Mrs. C. S.
Brook, D. (Halifax)Davies, R. J. (Westhoughton)Gilzean, A.
Brooks, T. J. (Normanton)Davies, S. O. (Merthyr)Glanville, J. E. (Consett)
Broughton, Dr. A. D. D.de Freitas, GeoffreyGooch, E. G.
Brown, George (Belper)Deer, G.Greenwood, A. W. J. (Rossendale)
Brown, T. J. (Ince)Delargy, H. J.Greenwood, Rt. Hn. Arthur (Wakefield)
Grenfell, D. R.Mack, J. D.Shinwell, Rt. Hon. E
Gray, C. F.McKay, J. (Wallsend)Shurmer, P. L. E.
Griffiths, D. (Rother Valley)Mackay, R. W. G. (Reading, N.)Silverman, J (Erdington)
Griffiths, Rt. Hon. J. (Lianelly)McLeavy, FSilverman, S. S. (Nelson)
Griffiths, W. D. (Exchange)MacMillan, M. K. (Western Isles)Simmons, C. J.
Gunter, R. J.McNeil, Rt. Hon. H.Slater, J.
Hale, J. (Rochdale)MacPherson, Malcolm (Stirling)Smith, Ellis (Stoke, S.)
Hale, Leslie (Oldham, W.)Mainwaring, W. H.Snow, J. W.
Hall, J. (Gateshead, W)Mallalieu, E. L. (Brigg)Sorensen, R. W.
Hall, Rt. Hn. W. Glenvil (Colne V'll'y)Mallalieu, J. P. W (Huddersfield, E.)Soskice, Rt. Hon. Sir F
Hamilton, W. W.Mann, Mrs. J.Sparks, J. A.
Hannah, W.Manuel, A. C.Steele, T.
Hardman, D. R.Marquant, Rt. Hon. H. A.Stewart, Michael (Furham, E.)
Hardy, E A.Mathers, Rt. Hon. GeorgeStokes, Rt. Hon. R R.
Hargreaves, A.Mellish, R. JStrachey, Rt. Hon. J.
Harrison, J.Messer, F.Strauss, Rt. Hon. G. R. (Vauxhall)
Hayman, F. H.Middleton, Mrs. L.Summerskill, Rt. Hon. Edith
Henderson, Rt. Hon. A. (Rowley Regis)Mikardo, IanSylvester, G. O.
Herbison, Miss M.Mitchison, G. R.Taylor, H. B. (Mansfield)
Hewitson, Capt. M.Moeran, E. W.Taylor, R. J. (Morpeth)
Hobson, C. R.Monslow, W.Thomas, D E. (Aberdare)
Holman, P.Moody, A. S.Thomas, George (Cardiff)
Holmes, H. E. (Hemsworth)Morgan, Dr. H. B.Thomas, I O. (Wrekin)
Houghton, DouglasMorley, R.Thomas, I. R. (Rhondda, W.)
Hoy, J.Morris, P (Swansea, W.)Thorneycroft, Harry (Clayton)
Hubbard, TMorrison, Rt. Hon. H. (Lewisham, S.)Thurtle, Ernest
Hughes, Emrys (S. Ayr)Mort, D. L.Timmons, J
Hughes, Hector (Aberdeen, N.)Moyle, A.Tomlinson, Rt. Hon. G
Hughes, Moelwyn (Islington, N.)Mulley, F. W.Turner-Samuels, M.
Hynd, H. (Accrington)Murray, J. D.Usborne, Henry
Hynd, J. B. (Attercliffe)Nally, W.Vernon, Maj. W F
Irvine, A. J. (Edge Hill)Neal, H.Viant, S. P
Irving, W. J. (Wood Green)Noel-Baker, Rt. Hon. P. JWallace, H. W
Janner, B.Oldfield, W. HWatkins, T. E
Jay, D. P. T.Oliver, G. HWebb, Rt. Hon M. (Bradford. C.)
Jeger, G. (Goole)Orbach, M.Weitzman, D.
Jeger, Dr. S. W. (St. Pancras, S.)Padley, W. E.Wells, P. L (Faversham)
Jenkins, R. H.Paling, Rt. Hon. Wilfred (Dearne V'lly)Wells, W. T (Walsall)
Johnson, James (Rugby)Paling, Will T. (Dewsbury)West, D. G.
Johnston, Douglas (Paisley)Pannell, T. C.Wheatley, Rt. Hn. John (Edinb'gh, E.)
Jones, D. T. (Hartlepool)Pargiter, G. A.White, Mrs. E. (E. Flint)
Jones, Frederick Elwyn (West Ham, S)Parker, J.White, H (Derbyshire, N. E.)
Jones, Jack (Rotherham)Paton, J.Whiteley, Rt. Hon W
Jones, William Elwyn (Conway)Pearson, A.Wigg, George
Keenan, W.Peart, T. F.Wilcock, Group-Capt. C. A. B.
Kenyon, C.Poole, CecilWilkes, L.
Key, Rt. Hon. C. W.Popplewell, E.Wilkins, W. A
King, H. M.Porter, G.Willey, F. T. (Sunderland)
Kinghorn, Sqn.-Ldr. E.Price, M Philips (Gloucestershire, W.)Willey, O. G. (Cleveland)
Kinley, J.Proctor, W. TWilliams, D. J. (Neath)
Lee, F. (Newton)Pryde, D. JWilliams, Ronald (Wigan)
Lee, Miss J. (Cannock)Pursey, Comdr. HWilliams, Rt. Hon. T Don Valley)
Lever, L. M. (Ardwick)Rankin, J.Williams, W T (Hammersmith, S.)
Lever, N. H. (Cheetham)Rees, Mrs. D.Wilson, Rt. Hon J. H (Huyton)
Lewis, A. W. J. (West Ham, N.)Reeves, J.Winterbottom I. (Nottingham C.)
Lewis, J. (Bolton, W.)Reid, T. (Swindon)Winterbottom, R E (Brightside)
Lindgren, G. S.Reid, W. (Camlachie)Wise, Major F J
Lipton, Lt.-Col. M.Rhodes, H.Woodburn, Rt. Hon. A
Logan, D. G.Richards, R.Woods, Rev G S
Longden, F. (Small Heath)Robens, AWyatt, W. L
McAllister, G.Roberts, Goronwy (Caernarvonshire)Yates, V F
MacColl, J. E.Robertson, J. J. (Berwick)Younger, Hon. Kenneth
McGhee, H. G.Rogers, G. H. R. (Kensington, N)
McGovern, JRoss, William (Kilmarnock)TELLERS FOR THE AYES:
McInnes, J.Shackleton, E. A. A.Mr. Royle and Mr Kenneth Robinson.
NOES
Aitken, W. TBennett, W. G. (Woodside)Bullus, Wing-Commander E. E
Alport, C. J. M.Bevins, J. R. (Liverpool, Toxteth)Burden, Squadron-Leader F. A
Amery, J. (Preston, N.)Birch, NigelButcher, H. W.
Amory, D. Heathcoat (Tiverton)Bishop, F. P.Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n)
Arbuthnot, JohnBlack, C. WCarr, L. R. (Mitcham)
Ashton, R. (Chelmsford)Boles, Lt.-Col. D. C. (Wells)Carson, Hon. E
Assheton, Rt. Hon. R. (Blackburn, W.)Boothby, R.Channon, H
Astor, Hon M,Bossom, A. CChurchill, Rt. Hon. W S.
Baker, P.Bowen, R.Clarke, Col. R. S. (East Grinstead)
Baldock, J. M.Bower, N.Clarke, Brig T H (Portsmouth, W.)
Baldwin, A E.Boyd-Carpenter, J. A.Clyde, J. L.
Banks, Col. CBracken, Rt. Hon. BrendanColegate, A.
Baxter, A. BBraine, B.Cooper, A. E. (Ilford, S.)
Beamish, Maj. T. V. H.Braithwaite, Lt.-Comdr J. G.Cooper-Key, E. M
Bell, R. M.Bromley-Davenport, Lt.-Col. W.Corbett, Lieut.- Col. U. (Ludlow)
Bennett, Sir P (Edgbaston)Browne, J. N. (Govan)Craddock, G B (Spelthorne)
Bennett, R F. B. (Gosport)Buchan-Hepburn, P. G. T.Cranborne, Viscount
Crookshank, Capt. Rt. Hon H. F. C.Hyde, H. M.Prior-Palmer, Brig. O.
Cross, Rt. Hon. Sir R.Hylton-Foster, H. BProfumo, J. D.
Crosthwaite-Eyre, Col O E.Jeffreys, General Sir GRaikes, H. V.
Crouch, R. FJennings, R.Rayner, Brig R.
Crowder, Capt. John F. E. (Finchley)Johnson, Howard S. (Kemptown)Redmayne, M.
Crowder, F. P. (Ruislip-Northwood)Jones, A. (Hall Green)Remnant, Hon. P.
Cundiff, F. W.Joynson-Hicks, Hon. L. W.Renton, D. L. M.
Cuthbert, W. N.Kaberry, D.Roberts, P. G. (Heeley)
Darling, Sir W. Y. (Edinburgh, S.)Kerr, H W. (Cambridge)Robertson, Sir D. (Caithness)
Davidson, ViscountessKingsmill, Lt.-Col. W. H.Robinson, J Roland (Blackpool, S)
Davies, Nigel (Epping)Lambert, Hon. G.Robson-Brown, W. (Esher)
de Chair, S.Lancaster, Col. C. G.Rodgers, J. (Sevenoaks)
Deedes, W. F.Langford-Holt. J.Roper, Sir H.
Digby, S. WingfieldLaw, Rt. Hon. R. K.Ross, Sir R. D. (Londonderry)
Dodds-Parker, A. D.Leather, E. H. C.Russell, R. S.
Donner, P. WLegge-Bourke, Maj. E. A. H.Ryder, Capt. R. E. D
Douglas-Hamilton, Lord MLennox-Boyd, A. T.Sandys, Rt. Hon. D.
Drewe, CLindsay, MartinSavory, Prof. D. L.
Dugdale, Maj. Sir T. (Richmond)Linstead, H N.Scott, Donald
Duncan, Capt. J. A. L.Liewellyn, D.Shepherd, W. S. (Cheadle)
Dunglass, LordLloyd, Rt. Hon. G. (King's Norton)Smiles, Lt.-Col. Sir W.
Duthie, W. S.Lloyd, Maj. Guy (Renfrew, E.)Smith, E. Martin (Grantham)
Eccles, D. M.Lloyd, Selwyn (Wirral)Smithers, Peter H. B. (Winchester)
Eden, Rt. Hon. A.Lockwood, Lt.-Col. J. C.Smithers, Sir W (Orpington)
Elliot, Lieut.-Col. Rt. Hon. WalterLongden, G. J. M. (Herts, S. W.)Smyth, Brig. J. G. (Norwood)
Erroll, F. JLow, A. R. W.Snadden, W. McN.
Fisher, NigelLucas, Major Sir J. (Portsmouth, S.)Soames, Capt. C.
Fletcher, W. (Bury)Lucas, P. B. (Brentford)Spearman, A. C. M
Fort, R.Lucas-Tooth, Sir HSpence, H. R. (Aberdeenshire, W)
Foster, J. G.Lyttelton, Rt. Hon. O.Spens, Sir P. (Kensington, S.)
Fraser, Hon. H. C. P. (Stone)McAdden, S. J.Stanley, Capt. Hon. R. (N. Fyide)
Fraser, Sir I. (Lonsdale)McCallum, Maj. D.Stevens, G. P.
Fyfe, Rt. Hon. Sir D. P. M.McCorquodale, Rt. Hon. M. SSteward, W. A. (Woolwich, W.)
Gage, C. H.Macdonald, A. J. F. (Roxburgh)Stewart, J. Henderson (Fife, E.)
Galbraith, Cmdr T D (Pollok)Macdonald, Sir P. (I. of Wight)Stoddart-Scott, Col. M.
Galbraith, T. G. D. (Hillhead)Mackeson, Brig, H. R.Storey, S.
Gammans, L. DMcKibbin, A.Strauss, Henry (Norwich, S.)
Garner-Evans, E. H. (Denbigh)McKie, J. H. (Galloway)Stuart, Rt. Hon. J. (Moray)
Gates, Maj E. E.Maclay, Hon. J. S.Summers, G. S
George, Lady M LloydMaclean, F H. R,Sutcliffe, H.
Glyn, Sir R.MacLeod, lain (Enfield, W.)Taylor, C. S. (Eastbourne)
Gomme-Duncan, Col. AMacpherson, N. (Dumfries)Taylor, W. J. (Bradford, N.)
Gridley, Sir A.Maitland, Comdr. J W.Teeling, William
Grimond, J.Marlowe, A. A. HThomas, J. P. L. (Hereford)
Grimston, Hon J (St Albans)Marples, A. E.Thompson, K. P. (Walton)
Grimston, R V. (Westbury)Marshall, D. (Bodmin)Thompson, R. H. M. (Croydon, W.)
Harden, J. R. EMarshall, S. H. (Sutton)Thorneycroft, G. E. P. (Monmouth)
Harris, F. W (Croydon, N.)Maude, A. E. U. (Ealing, S.)Thornton-Kemsley, C. N
Harris, R. R. (Heston)Maudling, R.Tilney, John
Harvey, Air-Codre A. V. (Macclesfield)Medlicott, Brigadier F.Touche, G. C.
Harvey, I (Harrow. E.)Mellor, Sir J.Turton, R. H.
Hay, JohnMolson, A. H. E.Tweedsmuir, Lady
Head, Brig. A HMoore, Lt.-Col. Sir T.Vane, W. M. F.
Heald, L FMorrison, Maj. J. G. (Salisbury)Vaughan-Morgan, J. K.
Heath, Col. E RMorrison, Rt. Hon. W. S. (Cirencester)Vosper, D. F.
Henderson, John (Cathcart)Mott-Radclyffe, C. E.Wade, D. W.
Hicks-Beach, Maj W WNabarro, G.Wakefield, E. B. (Derbyshire, W.)
Higgs, J M CNicholls, H.Wakefield, Sir W. W. (St. Marylebone)
Hill, Mrs. E. (Wythenshawe)Nicholson, G.Walker-Smith, D. C.
Hill, Dr. C. (Luton)Nield, B. (Chester)Ward, Hon. G. R. (Worcester)
Hinchingbrooke, ViscountNoble, Comdr. A. H. PWard, Miss I. (Tynemouth)
Hirst, GeoffreyNugent, G. R. H.Waterhouse, Capt. C.
Hogg, Hon. QNutting, AnthonyWatkinson, H.
Hollis, M. C.Oakshott, H. D.Watt, Sir G. S. Harvie
Holmes, Sir J Stanley (Harwich)Odey, G. W.Webbe, Sir H. (London)
Hope, Lord JO'Neill, Rt. Hon. Sir H.Wheatley, Major M. J. (Poole)
Hopkinson, H. L. D'A.Ormsby-Gore, Hon. W. DWilliams, C. (Torquay)
Hornsby-Smith, Miss POrr, Capt. L. P. S.Williams, Gerald (Tonbridge)
Horsbrugh, Miss F.Orr-Ewing, Charles Ian (Hendon, N.)Williams, Sir H. G. (Croydon, E.)
Howard, G. R. (St. Ives)Orr-Ewing, Ian L. (Weston-super-Mare)Wills, G.
Howard, S. G. (Cambridgeshire)Osborne, CWilson, Geoffrey (Truro)
Hudson, Sir Austin (Lewisham, N.)Perkins, W. R. D.Winterton, Rt. Hon. Earl
Hudson, Rt. Hon. R. S. (Southport)Peto, Brig. C. H. M.Wood, Hon. R.
Hudson, W. R. A. (Hull, N.)Pickthorn, K.York, C.
Hulbert, Wing-Cdr. N. J.Pitman, I. J.Young, Sir A. S L.
Hurd, A. RPowell, J. Enoch
Hutchison, Lt.-Com. Clark (E'b'rgh W.)Prescott, StanleyTELLERS FOR THE NOES:
Mr. Studholme and Major Conant.

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes, 280; Noes, 288.

Division No. 36.]AYES[11.48 p.m.
Aitken, W. T.Fraser, Hon. H. C. P. (Stone)McKie, J. H. (Galloway)
Alport, C. J. M.Fraser, Sir I. (Lonsdale)Maclay, Hon. J. S.
Amery, J. (Preston, N.)Fyfe, Rt. Hon. Sir D. P. M.Maclean, F H R.
Amory, D. Heathcoat (Tiverton)Gage, C. H.MacLeod, lain (Enfield, W.)
Arbuthnot, JohnGalbraith, Cmdr. T. D. (Pollok)Macpherson, N. (Dumfries)
Ashton, H. (Chelmsford)Galbraith, T. G. D. (Hillhead)Maitland, Comdr. J. W
Assheton, Rt. Hon. R. (Blackburn, W.)Gammans, L. D.Marlowe, A. A. H
Astor, Hon. M.Garner-Evans, E. H. (Denbigh)Marples, A. E.
Baker, P.Gates, Maj. E. E.Marshall, D. (Bodmin)
Baldock, J. M.Glyn, Sir R.Marshall, S. H. (Sutton)
Baldwin, A. E.Gomme-Duncan, Col. A.Maude, A. E. U. (Ealing, S.)
Banks, Col. C.Gridley, Sir A.Maudling, R.
Baxter, A. B.Grimond, J.Medlicott, Brigadier F.
Beamish, Maj. T. V. H.Grimston, Hon. J. (St. Albans)Mellor, Sir J.
Bell, R. M.Grimston, R. V. (Westbury)Molson, A. H. E.
Bennett, Sir P. (Edgbaston)Harden, J R. E.Moore, Lt.-Col. Sir T
Bennett, R. F. B. (Gosport)Harris, F. W. (Croydon, N.)Morrison, Maj. J. G (Salisbury)
Bennett, W. G. (Woodside)Harris, R. R. (Heston)Morrison, Rt. Hon. W. S (Cirencester)
Bevins, J. R. (Liverpool, Toxteth)Harvey, Air-Codre, A. V. (Macclesfield)Mott-Radclyffe, C. E
Birch, NigelHarvey, I. (Harrow, E.)Nabarro, G.
Bishop, F. P.Hay, JohnNicholls, H
Black, C. W.Head, Brig. A. H.Nicholson, G
Boles, Lt.-Col. D. C. (Wells)Heald, L. F.Nield, B. (Chester)
Boothby, R.Heath, Col. E. RNoble, Comdr. A H. P
Bossom, A. C.Henderson, John (Cathcart)Nugent, G. R. H.
Bowen, R.Hicks-Beach, Maj. W. W.Nutting, Anthony
Higgs, J. M. C.Oakshott, H. D.
Bower, N.Hill, Mrs. E. (Wythenshawe)Odey, G. W.
Boyd-Carpenter, J. A.Hill, Dr. C. (Luton)O'Neill, Rt. Hon. Sir H.
Bracken, Rt. Hon. BrendanHinchingbrooke, ViscountOrmsby-Gore, Hon. W. D
Braine, B.Hirst, GeoffreyOrr, Capt. L. P. S.
Braithwaite, Lt.-Comdr. J. GHogg, Hon. Q.Orr-Ewing, Charles Ian (Hendon, N.)
Bromley-Davenport, Lt.-Col. W.Hollis, M C.Orr-Ewing, Ian L. (Weston-super-Mare)
Browne, J. N. (Govan)Holmes, Sir J. Stanley (Harwich)Osborne, C.
Buchan-Hepburn, P. G. T.Hope, Lord J.Perkins, W. R. D.
Bullus, Wing-Commander E. E.Hopkinson, H. L. D'A.Peto, Brig. C. H. M
Burden, Squadron-Leader F. A.Hornsby-Smith, Miss P.Pickthorn, K.
Butcher, H. W.Horsbrugh, Miss F.Pitman, I. J.
Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n)Howard, G. R. (St. Ives)Powell, J. Enoch
Carr, L. R. (Mitcham)Howard, S. G. (Cambridgeshire)Prescott, Stanley
Carson, Hon. E.Hudson, Sir Austin (Lewisham, N.)Prior-Palmer, Brig. O
Channon, H.Hudson, Rt. Hon. R. S. (Southport)Profumo, J. D.
Churchill, Rt. Hon. W. S.Hudson, W. R. A. (Hull, N.)Raikes, H. V
Clarke, Col. R. S. (East Grinstead)Hulbert, Wing-Cdr. N. J.Rayner, Brig. R
Clarke, Brig. T. H. (Portsmouth, W.)Hurd, A R.Redmayne, M.
Clyde, J. L.Hutchison, Lt.-Com. Clark (E'b'rgh W.)Remnant, Hon. P
Colegate, A.Hyde, H. M.Renton, D. L. M
Cooper, A. E. (Ilford, S.)Hylton-Foster, H. B.Roberts, Emrys (Merioneth)
Cooper-Key, E. M.Jeffreys, General Sir GRoberts, P. G. (Heeley)
Corbett, Lieut.-Col. U. (Ludlow)Jennings, R.Robertson, Sir D. (Caithness)
Craddock, G. B. (Spelthorne)Johnson, Howard S. (Kemptown)Robinson, J. Roland (Blackpool, S.)
Cranborne, ViscountJones, A. (Hall Green)Robson-Brown, W. (Esher)
Crookshank, Capt. Rt. Hon H. F. C.Joynson-Hicks, Hon. L. WRodgers, J (Sevenoaks)
Cross, Rt. Hon. Sir R.Kaberry, D.Ropner, Col. L.
Crosthwaite-Eyre, Col. O. E.Kerr, H. W. (Cambridge)Ross, Sir R. D. (Londonderry)
Crouch, R. F.Kingsmill, Lt.-Col. W HRussell, R. S
Crowder, Capt. John F. E. (Finchley)Lambert, Hon. G.Ryder, Capt. R. E. D
Crowder, F. P. (Ruislip-Northwood)Lancaster, Col. C. G.Sandys, Rt. Hon D.
Cundiff, F. W.Langford-Holt, J.Savory, Prof D L.
Cuthbert, W. N.Law, Rt. Hon. R. KScott, Donald
Darling, Sir W. Y. (Edinburgh, S)Leather, E. H. C.Smiles, Lt.-Col. Sir W.
Davidson, ViscountessLegge-Bourke, Maj. E. A. HSmith, E. Martin (Grantham)
Davies, Nigel (Epping)Lennox-Boyd, A. T.Smithers, Peter H. B (Winchester)
de Chair, S.Lindsay, MartinSmithers, Sir W (Orpington)
Deedes, W. F.Linstead, H N.Smyth, Brig. J. G. (Norwood)
Digby, S. WingfieldLlewellyn, D.Snadden, W. McN
Dodds-Parker, A. DLloyd, Rt. Hon. G. (King's Norton)Soames, Capt C
Donner, P. W.Lloyd, Maj. Guy (Renfrew, E.)Spearman, A. C. M
Douglas-Hamilton, Lord MLloyd, Selwyn (Wirral)Spence, H. R. (Aberdeenshire, W.)
Drayson, G. B.Lockwood, Lt.-Col. J. C.Spens, Sir P. (Kensington, S.)
Drewe, CLongden, F (Small Heath)Stanley, Capt. Hon. R. (N. Fylde)
Dugdale, Maj. Sir T. (Richmond)Low, A. R. W.Stevens, G. P.
Duncan, Capt. J. A. L.Lucas, Major Sir J. (Portsmouth, S)Steward, W. A (Woolwich, W.)
Dunglass, LordLucas, P. B. (Brentford)Stewart, J. Henderson (Fife. E.)
Duthie, W. S.Lucas-Tooth, Sir H.Stoddart-Scott, Col [...]
Eccles, D. M.Lyttelton, Rt. Hon. O.Storey, S.
Eden, Rt. Hon. A.McAdden, S. J.Strauss, Henry (Norwich, S.)
Elliot, Lieut.-Col. Rt. Hon WalterMcCallum, Maj. D.Stuart, Rt. Hon. J (Moray)
Erroll, F. J.McCorquodale, Rt. Hon. M. S.Summers, G S
Fisher, NigelMacdonald, A. J. F. (Roxburgh)Sutcliffe, H.
Fletcher, W. (Bury)Macdonald, Sir P. (I. of Wight)Taylor, C S. (Eastbourne)
Fort, R.Mackeson, Brig. H. R.Taylor, W J. (Bradford, N.)
Foster, J. G.McKibbin, A.Teeling, William
Thomas, J. P. L (Hereford)Wade, D. W.Williams, Gerald (Tonbridge)
Thompson, K. P. (Walton)Wakefield. E. B (Derbyshire, W.)Williams, Sir H. G. (Croydon, E)
Thompson, R. H. M. (Croydon, W.)Wakefield, Sir W. W. (St. Marylebone)Wills, G.
Thorneycroft, G. E. P. (Monmouth)Walker-Smith, D. C.Wilson, Geoffroy (Truro)
Thornton-Kemsley, C. NWard, Hon. G. R. Worcester)Winterton, Rt. Hon Earl
Tilney, JohnWard, Miss I. (Tynemouth)Wood, Hon. R
Touche, G. CWaterhouse, Capt. CYork, C.
Turton, R. HWatkinson, H.Young, Sir A. S. L.
Tweedsmuir, LadyWatt, Sir G. S. Harvie
Vane, W. M. F.Webbe, Sir H. (London)TELLERS FOR THE AYES:
Vaughan-Morgan, J. KWheatley, Major M. J. (Poole)Mr. Studholme and Major Conant.
Vosper, D. FWilliams, C. (Torquay)
NOES
Acland, Sir RichardDye, S.Keenan, W.
Adams, RichardEde, Rt. Hon. J. C.Kenyon, C.
Albu, A. HEdwards, John (Brighouse)Key, Rt. Hon C. W
Allen, A. C. (Bosworth)Edwards, Rt. Hon. N. (Caerphilly)King, H. M.
Anderson, F. (Whitehaven)Edwards, W. J. (Stepney)Kinghorn, Sqn.-Ldr. E
Attlee, Rt. Mon. C. R.Evans, Albert (Islington, S. W.)Kinley, J.
Awbery, S. SEvans, E. (Lowestoft)Lee, F. (Newton)
Ayles, W H.Evans, S. N. (Wednesbury)Lee, Miss J. (Cannock)
Bacon, Miss AEwart, R.Lever, L. M. (Ardwick)
Baird, J.Fernyhough, E.Lever, N. H. (Cheetham)
Balfour, A.Field, Capt. W. J.Lewis, A. W. J. (West Ham, N.)
Barnes, Rt. Hon A JFinch, H. J.Lewis, J. (Bolton, W.)
Bartley, P.Fletcher, E. G. M. (Islington, E.)Lindgren, G. S.
Bellenger, Rt. Hon. [...]Follick, M.Lipton, Lt.-Col. M
Benson, GFoot, M. M.Logan, D. G.
Beswick, FForman, J. C.Longden, G. J. M. (Herts, S. W.)
Bevan, Rt. Hon A. (Ebbw Vale)Fraser, T. (Hamilton)McAllister, G
Bing, G. H. C.Freeman, J. (Watford)MacColl, J. E.
Blackburn, A. R.Freeman, Peter (Newport)McGhee, H. G.
Blenkinsop, A.Gaitskell, Rt. Hon. H. T. NMcGovern, J.
Boardman, HGanley, Mrs. C. S.McInnes, J.
Booth, A.Gilzean, A.Mack, J. D.
Bottomley, A. G.Glanville, J. E. (Consett)McKay, J. (Wallsend)
Bowden, H. W.Gooch, E. G.Mackay, R. W. G. (Reading, N.)
Bowles, F. G. (Nuneaton)Greenwood, A. W. J. (Rossendale)McLeavy, F.
Braddock, Mrs. E. M.Greenwood, Rt. Hn. Arthur (Wakefield)MacMillan, M. K. (Western Isles)
Brockway, A. FennerGrenfell, D. R.McNeil, Rt. Hon. H.
Brook, D. (Halifax)Grey, C. F.MacPherson, Malcolm (Stirling)
Brooks, T. J. (Normanton)Griffiths, D. (Rother Valley)Mainwaring, W. H.
Broughton, Dr. A. D. D.Griffiths, Rt. Hon. J. (Llanelly)Mallalieu, E. L. (Brigg)
Brown, George (Belper)Griffiths, W. D. (Exchange)Mallalieu, J. P. W. (Huddersfield, E.)
Brown, T. J. (Ince)Gunter, R J.Mann, Mrs J.
Burke, W. A.Hale, J. (Rochdale)Manuel, A. C.
Burton, Miss E.Hale, Leslie (Oldham, W.)Marquand, Rt. Hon. H. A.
Butler, H. W. (Hackney, S.)Had, J. (Gateshead, W.)Mathers, Rt. Hon. George
Callaghan, JamesHall, Rt. HN. W. Glenvil (Colne V'll'y)Mellish, R. J.
Carmichael, JamesHamilton, W. W.Messer, F.
Castle, Mrs. B. A.Hannan, W.Middleton, Mrs. L
Champion, A. J.Hardman, D. R.Mikardo, Ian
Chetwynd, G. R.Hardy, E A.Mitchison, G. R
Clunie, J.Hargreaves, A.Moeran, E. W.
Cocks, F. S.Harrison, J.Monslow, W.
Coldrick, W.Hayman, F. H.Moody, A S.
Collick, P.Henderson, Rt. Hon. A. (Rowley Regis)Morgan, Dr. H. B.
Collindridge, F.Herbison, Miss M.Morley, R.
Cook, T. F.Hewitson, Capt. M.Morris, P. (Swansea, W.)
Cooper, G. (Middlesbrough, W.)Hobson, C. R.Morrison, Rt. Hon. H. (Lewisham, S.)
Cove, W. G.Holman, P.Mort, D. L.
Craddock, George (Bradford, S.)Holmes, H. E. (Hemsworth)Moyle, A.
Crawley, A.Houghton, DouglasMulley, F. W
Cripps, Rt. Hon. Sir SHoy, J.Murray, J. D.
Crosland, C. A. R.Hubbard, T.Nally, W.
Crossman, R. H. SHughes, Emrys (S. Ayr)Neal, H.
Cullen, Mrs. A.Hughes, Hector (Aberdeen, N.)Noel-Baker, Rt. Hon. P. J.
Daines, P.Hughes, Moelwyn (Islington, N.)Oldfield, W. H.
Darling, G. (Hillsboro')Hynd, H. (Accrington)Oliver, G. H.
Davies, A Edward (Stoke, N.)Hynd, J. B. (Attercliffe)Orbach, M.
Davies, Ernest (Enfield, E.)Irvine, A. J. (Edge Hill)Padley, W. E.
Davies, Harold (Leek)Irving, W. J. (Wood Green)Paling, Rt. Hon. Wilfred (Dearne V'lly)
Davies, R. J. (Westhoughton)Janner, B.Paling, Will T. (Dewsbury)
Davies, S. O. (Merthyr)Jay, D. P. T.Pannell, T. C.
de Freltas, GeoffreyJeger, G. (Goole)Pargiter, G. A.
Deer, G.Jeger, Dr. S. W. (St. Pancras, S.)Parker, J
Delargy, H. J.Jenkins, R. H.Paton, J.
Diamond, J.Johnson, James (Rugby)Pearson, A.
Dodds, N. N.Johnston, Douglas (Paisley)Peart, T. F.
Donnelly, D.Jones, D. T. (Hartlepool)Poole, Cecil
Donovan, T. N.Jones, Frederick Elwyn (West Ham, S)Popplewell, E.
Driberg, T. E. N.Jones, Jack (Rotherham)Porter, G.
Dugdale, Rt. Hon. J. (W. Bromwich)Jones, William Elwyn (Conway)Price, M. Philips (Gloucestershire, W.)
Proctor, W. T.Steele, T.West, D. G.
Pryde, D. J.Stewart, Michael (Fulham, E.)Wheatley, Rt. Hn. John (Edinb'gh, E.)
Pursey, Comdr. H.Stokes, Rt. Hon. R. RWhite, Mrs. E. (E. Flint)
Rankin, J.Strachey, Rt. Hon. J.White, H. (Derbyshire, N. E.)
Rees, Mrs. D.Strauss, Rt. Hon. G. R. (Vauxhall)Whiteley, Rt. Hon. W.
Reeves, J.Summerskill, Rt. Hon. EdithWigg, George
Reid, T. (Swindon)Sylvester, G. O.Wilcock, Group-Capt. C. A. B.
Reid, W. (Camlachie)Taylor, H. B. (Mansfield)Wilkes, L.
Rhodes, H.Taylor, R. J. (Morpeth)Wilkins, W. A.
Richards, RThomas, D. E. (Aberdare)Willey, F. T (Sunderland)
Robens, A.Thomas, George (Cardiff)Willey, O. G. (Cleveland)
Roberts, Goronwy (Caernarvonshire)Thomas, I. O. (Wrekin)Williams. D. J. (Neath)
Robertson, J. J. (Berwick)Thomas, I. R. (Rhondda, W.)Williams, Ronald (Wigan)
Rogers, G. H. R. (Kensington, N.)Thorneycroft, Harry (Clayton)Williams, Rt. Hon. T. (Don Valley)
Ross, William (Kilmarnock)Thurtle, ErnestWilliams, W. T. (Hammersmith, S.)
Shackleton, E. A. A.Timmons, J.Wilson, Rt. Hon. J. H. (Huyton)
Shinwell, Rt. Hon. E.Tomlinson, Rt. Hon. G.Winterbottom, I. (Nottingham, C.)
Shurmer, P. L. E.Turner-Samuels, M.Winterbottom, R. E. (Brightside)
Silverman, J. (Erdington)Usborne, HenryWise, Major F. J
Silverman, S. S. (Nelson)Vernon, Maj. W. F.Woodburn, Rt. Hon. A
Simmons, C. J.Viant, S. P.Woods, Rev. G. S
Slater, J.Wallace, H. W.Wyatt, W. L
Smith, Ellis (Stoke, S.)Watkins, T. E.Yates, V. F.
Snow, J. W.Webb, Rt. Hon. M. (Bradford, C.)Younger, Hon. Kenneth
Sorensen, R. W.Weitzman, D.
Soskice, Rt. Hon. Sir F.Wells, P. L. (Faversham)TELLERS FOR THE NOES:
Sparks, J. A.Wells, W. T. (Walsall)Mr. Royle and Mr. Kenneth Robinson.

To report Progress, and ask leave to sit again.—[Mr. Whiteley.]

Committee report Progress; to sit again on Thursday.