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New Clause.; — (Reduction of Purchase Tax from Five or Ten per Cent. to One per Cent.)

Part of Orders of the Day — Finance Bill – in the House of Commons at 12:00 am on 3rd July 1957.

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Photo of Mr Geoffrey Hirst Mr Geoffrey Hirst , Shipley 12:00 am, 3rd July 1957

I hope that the right hon. and learned Member for Montgomery (Mr. C. Davies) will forgive me if I do not follow him in his precise argument. Time is short, bearing in mind the large variety of subjects which can he discussed under these new Clauses, and I want to be specific and to keep to a Committee point.

I think that the public is not misled and we are not misled here this afternoon by these vast sums of money which have been mentioned and which rather beg the question, because the Opposition in this matter have been compelled, as I myself was compelled last year in a not dissimilar way, to keep within the Money Resolution by tabling Clauses which go very much wider than any of us imagine for a moment that the Chancellor could he expected to go. Nevertheless, I join with the right hon. and learned Gentleman the Member for Montgomery in saying that this does not necessarly mean that the Chancellor must be an Iron Chancellor or that, because an empirical Clause is put down, he must refuse to concede any detail in relation to it.

I wish to raise a point in which I have a great constituency interest; it affects Shipley, but it also affects other districts concerned with wool. It is a subject on which I have addressed the House of Commons previously. It is the question of the Purchase Tax on wool, which is the subject of a Motion standing on the Order Paper in my name and the names of 43 other hon. Members from all parties.

[That this House views with increasing concern the unjust discrimination against wool cloth consequent upon the removal of purchase tax on non-wool fabrics, and calls upon Her Majesty's Government to remove the tax on wool cloth and thus redress the existing disparity so that fair competition is maintained.]

I am glad to see the hon. Member for Ashton-under-Lyne (Mr. Rhodes), because he is always ready to support the needs of the textile industry.

This subject dates back in its tiresomeness to 19th April, 1955, when the then Chancellor announced a great concession of a reduction from 50 to 25 per cent. in the Purchase Tax on piece goods and household textiles of a non-wool character. It is important to bear in mind that the D scheme was then in full operation. Very soon afterwards, the Purchase Tax on these non-wool textiles was abolished altogether. In due course, the D scheme was abolished and in its place, in October, 1955, there were introduced the rates of tax to which the right hon. Member for Battersea, North (Mr. Jay) has referred this afternoon—5 per cent. on all clothing but 10 per cent. on wool cloth sold in the piece.

This rate applies only to wool cloth, and it is this discrimination in taxation on wool cloth which has not only hurt the industry, but has undermined its sense of justice in the Administration responsible for maintaining it. That is not a political point. It is a point which all parties in the Committee regret, and I know that I shall receive support from all quarters, not only from my own party, but also from the Labour and Liberal Parties.

This is a great bone of contention. All sorts of excuses have been put up for this discrimination. To begin with, the excuse was that there was no discrimination in it at all. That ran, if I may use the phrase, for no more than six months.