asked the Chancellor of the exchequer whether he has now had an opportunity to discuss with leaders of the British motor industry the damage which is being caused to their efficiency and to the maintenance and development of their export trade by the retention of the Purchase Tax at 30 per cent. on commercial vehicles chassis and 60 per cent. on motor cars; and whether he has now had adequate opportunity to examine their arguments and the need for remedial action.

The Chancellor of the exchequer (Mr. Derick Heathcoat Amory):

I would refer my hon. Friend to the reply given to the hon. Member for Northfield (Mr. Chapman) on 5th February.

That was no good at all. Does not my right hon. Friend recall that he gave the hon. Member for Birmingham, Northfield (Mr. Chapman) and myself some unequivocal assurances in Committee on the Finance Bill last May that he would undertake to enter into negotiations with motor vehicle manufacturers? Is he aware that we understood that answer to imply that he proposed to make a statement on these matters long ahead of the 1959 Budget? Would my right hon. Friend comment on those facts?

Mr. Amory:

My only comment would be that I should not care to give the kind of reply which my hon. Friend would regard as a good one on these matters just at the present time.

Can the right hon. Gentleman say what loss of revenue there would be if Purchase Tax on motor cars were abolished and motor cars ceased to rank as a business expense?

Mr. Amory:

If the hon. Member will put a Question on the Order Paper, I will see whether I can give him an answer or not.

A very good answer that time.

asked the Chancellor of the exchequer whether he has yet given an indication to the Organisation for European Economic Co-operation that he will give consideration to the recommendation, contained in its report of 7th December, 1958, that there is a long-term need for the reduction of Purchase Tax in the United Kingdom especially in the highest ranges; and what has been the precise nature of his reply to the proposal.

Mr. Amory:

I assume my hon. Friend has in mind the survey of economic conditions in the United Kingdom published by the Organisation for European Economic Co-operation in November, 1958. The survey called for no reply from me but I have noted the views expressed.

Can my right hon. Friend give the House an assurance that the rupture of negotiations on the subject of the European Common Market and the Free Trade Area will not in any way influence any future decision which he may take arising from advice given by O.E.E.C.? Does my right hon. Friend still regard that advice as valid and useful, and will he have some regard to it between now and April?

Mr. Amory:

I am always glad of advice from any quarter, and I always attach the appropriate weight to that advice.

Mrs. Hill:

asked the Chancellor of the exchequer whether he has considered the communication of the hon. Member for Manchester, Wythenshawe, regarding certain types of gas and coke fires; and whether he will make a further statement with regard to Purchase Tax on this type of combined appliance.

Mr. Amory:

Yes, Sir. As I have written to my hon. Friend to explain, combination gas and coke fires of the kind she has in mind are taxable at the rate of 30 per cent. She will not expect me to say more than that I will bear in mind her interest in this appliance.

Mrs. Hill:

Is my right hon. Friend aware that I am very grateful for his promise that he will bear this problem in mind when he is considering his Budget, because the tax on the whole appliance has made it extra costly when people are trying to comply with clean air legislation?

Mr. Amory:

My hon. Friend will realise that there is no anomaly, since gas and electric stoves are subject to Purchase Tax and only coke and other hard fuel stoves are exempt.

Will my right hon. Friend bear in mind that the hold-up on the subject of fuel and heating is delaying what should be a major step forward in Manchester's hospital arrangements, a step which is badly needed?

Mr. Amory:

I will take note of what my right hon. Friend has said.

asked the Chancellor of the exchequer for what reasons he has announced imposition of Purchase Tax on second-hand gem jewellery; whether tax is payable each time the article is resold or only on first resale; how the wholesale value is to be assessed; what revenue anticipations he has in this context; what articles, other than second-hand gem jewellery, attract Purchase Tax when sold second-hand; whether he now proposes to extend Purchase Tax to other articles when sold second-hand; and, having regard to the wide implications for trade and industry of his decision to extend the scope of Purchase Tax, whether he will make a statement.

Mr. Amory:

The answers to these seven questions respectively are: to remove a cloak for malpractices; each time there is a sale by wholesale to an unregistered person; in accordance with the statutory definition of value; no estimate is possible; imported chargeable goods, secondhand at the time of importation; no, Sir; no. Sir.

Is not this a disgraceful precedent? Is not it the fact that in the entire history of Purchase Tax law since 1940, it has never been applied to second-hand articles? Having regard to the precedent, which I am very grieved that a Conservative Chancellor should establish, will not it provide the means in the future for another Chancellor, for example, to put Purchase Tax on second-hand motor-cars, or second-hand fur coats, and second-hand furniture, finishing up with the wares of the rag-and-bone man? [HON. MEMBERS: "Speech."] Is there to be no end to these predatory habits of my right hon. Friend?

Mr. Amory:

I do not think that I agree with anything that my hon. Friend has said in that supplementary question. It is, of course, not an extension of Purchase Tax in a new field. It is the withdrawal of an administrative concession.

It has never been done before.

Mr. Amory:

My hon. Friend is not right in saying that there is no precedent. Purchase Tax is payable on articles eligible for Purchase Tax but imported second-hand.

While I appreciate the Chancellor's remarks on malpractices, may I ask if he will bear in mind the fact that reputable jewellers believe that, if Purchase Tax were reduced slightly below its present level, it would make it quite unprofitable for anyone to indulge in the practices to which he referred?

Mr. Amory:

I remember with interest the hon. Gentleman saying something of the same kind last year. I did, in fact, reduce the Purchase Tax, but I am afraid that the abuses have continued.

May I ask whether my right hon. Friend is aware that the number of jewellery craftsmen in Birmingham is falling year after year, and that the Purchase; Tax is one of the main reasons for it?

Mr. Amory:

I will take note of my hon. Friend's views.

On a point of order. In view of the highly unsatisfactory nature of the reply, I beg leave to give notice that I will raise this matter on the Motion for the Adjournment at the earliest minute.

Mr. H. Wilson:

Further to that point of order. Is it in order to raise on the Motion for the Adjournment a matter involving legislation on tax changes?

We can consider that question when the hon. Member gives notice.

On a fresh point of order. Did not you rule in November, 1957, Sir, that a Member of this House might raise on the Motion for the Adjournment any matter affecting the Purchase Tax, including individual Purchase Tax rates, having regard to the fact that no new legislation is required, and that only a Treasury Order is entailed?

The general position is that if these matters can be done by regulations, they can be raised on the Motion for the Adjournment, but not if an alteration of a Statute is required. However, it depends what the remedy for the hon. Member's grievance is.

asked the Chancellor of the exchequer if, in anticipation of his Budget statement, he will survey the items which contribute to safety in the home, and which carry Customs Duty and Purchase Tax, with a view to relieving the nation of costly and continuous medical, surgical, and hospital treatment.

Mr. Amory:

I know the hon. Lady's interest in this matter and I shall keep it in mind during my annual review of taxation.

Is the Chancellor aware that the Government have just undertaken a big campaign to lessen the incidence of home accidents, and that the one remaining nigger in the woodpile is himself? Will he get out of the woodpile as quickly as possible?

Mr. Amory:

I am very disappointed. When I was working in another capacity, I used to receive the most charming letters from the hon. Lady on the subject of food. I am sorry now that she has seen fit to refer to me as the nigger in the woodpile after those very happy days which I re- member when I used to receive letters from her on food.

asked the Chancellor of the exchequer what consultations he had with representatives of the jewel trade as a whole, and with the Fine Art Auctioneers of London or the London Chamber of Commerce, before the recent proposal to reimpose Purchase Tax at 30 per cent. on second-hand gem jewellery; what representations he has had from the trade since this proposal was made; and whether he has been made aware of the unanimous views in the trade of the effect that this proposal will have on the London market, which is at present held in world-wide esteem.

Mr. Amory:

No formal consultations, but the Customs and Excise keeps itself informed of trade opinion through many informal contacts. I have just received the London auctioneers' memorandum on this matter and I will give this and any other submissions from the trade my careful consideration.

If there is a nut here which needs cracking—which seems to be the case—why not prosecute the offender in the normal way, instead of producing this large and hefty sledgehammer, the use of which may easily hurt the innocent? In view of the importance of the representations made to my right hon. Friend, may I ask him to postpone the reimposition of this tax until he has had a full opportunity for consultation with the recognised representatives of the second-hand gem trade in London?

Mr. Amory:

Of course, we shall be glad to authorise prosecutions when satisfactory evidence can be collected, but that is often difficult to do. I will consider the suggestion of some deferment while I am considering the further representations being made to me, and I will make an announcement on that point within the next two or three days.