Clause 6. — (Reduction of Purchase Tax on Certain Household Goods.)

Part of Orders of the Day — Finance Bill – in the House of Commons at 12:00 am on 28th May 1957.

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Photo of Mr Harold Wilson Mr Harold Wilson , Huyton 12:00 am, 28th May 1957

Not month after month, but I can remember that at one stage in the history of our legislation debate on the Finance Bill was killed at eight o'clock in the morning. It would be out of order to discuss that. What I think is significant is that the Chancellor has scrapped, or at any rate half scrapped, the policy of the Lord Privy Seal. I do not complain about that. If he had entirely scrapped it and got rid of the kitchen taxes introduced by the Lord Privy Seal, we should have given him our wholehearted support, because we opposed the Lord Privy Seal. The Chancellor did not oppose him, but voted with him time after time, and was one of the few faithful supporters of the Lord Privy Seal on that occasion.

Because this has a most important bearing on the economic policy of the Government of which we hear so little, we must ask why the Chancellor has thrown over his right hon. Friend in this way—or half thrown him over. I shall not ask whether he is going to complete the process in an autumn Budget, if he is still there, because the Chancellor has very wisely said that the less a Chancellor says of future intentions about Purchase Tax the better. The right hon. Gentleman should not be confused with his successor at the Board of Trade in that matter. I think it would be useful to know—I hope that the Chancellor will ponder this and perhaps tell us a little about it, as it does not involve any disclosure of future intentions—why he has thrown the Lord Privy Seal over in this way.

Is it that the right hon. Gentleman disagrees with what the Lord Privy Seal did? Did he then think, or has he come to think, that the Lord Privy Seal was wrong, as Chancellor, in the strategy of his autumn Budget? That is a possible explanation which, no doubt, will have occurred to the Committee. Or does the Chancellor think the Lord Privy Seal was right in what he did that autumn and that now the circumstances which then in the Chancellor's mind justified the Lord Privy Seal in introducing these taxes had eased sufficiently for the Chancellor to be able to say that whatever was needed in the grim days of autumn, 1955, just after that General Election, is no longer required today because things have eased so much, our balance of payments is looking so much rosier, we have had wonderful financial dividends from the Suez operations and the rest, and as a result of all that, whatever the Lord Privy Seal did in that autumn, can now be relaxed?

That may be a possible explanation. I suggest that one of these possible explanations must be the true one. It would be valuable to the Committee as a whole, and certainly to the country, if we knew which of those two had motivated the Chancellor in what he has done. Perhaps I might remind the Chancellor, because I am sure that he has not given enough study to this point, of what the Lord Privy Seal said in introducing his autumn Budget. I have a feeling that the Chancellor has not really thought about this. If he has, we should like to know what he thinks about it and also what the Lord Privy Seal said to him.

I am referring to what the Lord Privy Seal said during the Committee stage of the Finance Bill in 1955. I will not weary the Committee by quoting what he said on Second Reading, because it has been quoted by my hon. Friend the Member for Sowerby (Mr. Houghton). Instead I will take one of the very many speeches which the poor Lord Privy Seal had to make in Committee. He was almost entirely deserted by his hon. Friends; the only Tories present were bitterly criticising him.

He began to tell us about the developing economic crisis of 1955. By some Freudian lapse he forgot to mention the Election Budget or his Election speeches, but nevertheless he went on to say that this expansion in factory building and all the rest of it had taken place. Then he said: However, it became clear by this Autumn that measures were necessary to deal with this situation, that is, the urge to expansion and an inflationary tendency "—