Orders of the Day — First Schedule. — (Amendments of Purchase Tax Rates.)

Part of the debate – in the House of Commons at 12:00 am on 28th November 1955.

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Photo of Mr Henry Brooke Mr Henry Brooke , Hampstead 12:00 am, 28th November 1955

In fact, the issue is even narrower than I indicated. We are really talking about bottled gas appliances only. It is really impossible to argue that, on ordinary tax grounds, there should be a radical difference in tax treatment between these two types of appliance; that the one should be taxed at 60 per cent. and the other at nil. Both make equal demands on scarce metal supplies; both fulfil absolutely identical purposes.

Meanwhile, one has the curious situation that between the two direct competition exists over a certain range with an artificial tax discrimination. In a country area where electricity supplies are coming from the generating stations for the first time, people have to consider whether or not to use them. At present, they enjoy a special tax advantage if they keep to bottled gas heaters and do not change over. If they do decide to change over they will lose the artificial tax advantage. I do not think that such a situation is defensible.

My hon. Friend the Member for Kidderminster (Mr. Nabarro) asked for equitable treatment and no discrimination. The hon. Member for Cleveland (Mr. Palmer) quoted the Beaver Report, and appealed for an all-round removal of tax on all these appliances. We have settled the rate of tax on both gas and electric mains heaters under Clause 1, so I cannot go back and discuss that now. All we are now discussing is whether a special and artificial exemption should be still retained for this very narrow group of heaters. I submit that it is indefensible on tax grounds, that it came into existence simply and solely because of the fuel crisis of 1947 and the action taken thereafter in the Finance Bill of 1947 and that, now the rate of tax is being raised on the other heaters from 50 per cent. to 60 per cent., it would not be justifiable to continue to leave the bottled gas heaters free.