The Economic Secretary to the Treasury (Mr. F. J. Enroll):
I beg to move,
That the Purchase Tax (No. 3) Order, 1959 (S.I., 1959, No. 1176), dated 6th July, 1959, a copy of which was laid before this House on 9th July, be approved.
This Order brings into line with modern developments the scope of Group 16 (a) of the Purchase Tax Schedule, which has been substantially unchanged since 1940. It does not alter the rate of tax, which remains at 25 per cent.
The scope of the group was previously confined to
… lawn mowers and grass boxes for lawn mowers".
Since 1940, there has been a great deal of development and there are now two main types of grass mowing machines: the traditional cylinder type of mower which cuts by means of a revolving reel of knives, and the "rotary" type which cuts by means of a horizontal "fan" of knife-edge blades.
With the traditional cylinder type of machine, all those of a small width of cut, that is to say, less than 18 inches, have always been taxable as "lawn mowers". Broadly, a similiar consideration applies in the case of the newer rotary machines except that, in one or two instances, smaller types of rotary machine escaped tax under the old heading because they were claimed to be unsuitable for use over a substantial area of lawn.
There are no differences in character between these tax-free machines and taxable rotary mowers. The former are also in direct competition with taxable, narrow-cut, cylinder machines designed for much the same purposes. The Order therefore applies the tax generally to all grass cutters, regardless of type, having a width of cut of less than 18 inches, thus removing the anomaly, and introducing equitable treatment.
Another recent development has been the use of powered tools in gardening. The makers of mechanical garden cultivators and power tools sell a wide range of accessories or attachments for hoeing, digging, ridging, weeding and so forth, and also for grass mowing. It is clearly right in equity that mowing attachments which perform the same task as taxable lawn mowers and grass cutters should themselves be taxable.
May I ask a question of my hon. Friend before he gets further in this argument? What happens in the case of a tool which is less than 18 ins. in width and is designed specifically for the cutting of long grass and weeds and cannot be used to cut a lawn in any circumstances? Is that now to be taxed whereas previously it was not taxed?
No, I am going to finish my speech. I know that my hon. Friend is going to speak, if he catches your eye, Mr. Speaker, and we shall listen to him with interest.
The Order removes any doubt there may have been about this liability. Finally, the Order applies the tax to grass collecting bags for mowers and cutters. These bags have recently been developed as a substitute for the traditional grass box, which has always been taxed. The Order, therefore, modernises, clarifies and makes more equitable the scope of tax in this sector. The effect of it is not great and the resultant addition to the revenue is negligible.
It will be noticed that the presence of both the Economic Secretary and the Financial Secretary is necessary in order to explain and to justify this Order. I do not imagine that anybody will wish to question the principle of the Order although perhaps the Financial Secretary, even though he is now leaving the Chamber, will wind up the debate after the hon. Member for Kidderminster (Mr. Nabarro) has spoken—if he catches your eye, Mr. Speaker.
This Order illustrates a point which many hon. Members, including myself, have made in the past regarding Purchase Tax. It is that so long as we have the number of ratings which we have at present and so long as we include in the tax the vast array of products which come under it, we are bound to be involved in this extraordinary question of demarcation and distinction which the Economic Secretary has laid before us. We started with lawn mowers in 1940. We go on to lawn mowers and grass boxes for lawn mowers and then, by the natural progress of things, we are involved in lawn-mowing attachments, grass boxes or bags for lawn mowers, etc. As long as the tax has various rates, the kind of complication apparent in the Order is absolutely inevitable.
Looking at the Order with no wish to be pedantic, but in a common-sense spirit, and trying to understand what the Economic Secretary wishes the House to do, I should like to ask this question. We are asked to bring under tax at 25 per cent. cutters or attachments having a width of cut of less than 18 in. What is not clear to me—I am sure it is clear to the Economic Secretary—is what happens to cutters or attachments of more than 18 in.? Are they exempt from tax? If so, why? If not, do they bear some rate other than 25 per cent. and if so, what is the rate they bear? That is not clear to me on reading the Order, and I am sure that the Economic Secretary would wish to make it clear to the House before we finally give approval to the Order.
The right hon. Member for Battersea, North (Mr. Jay) went to the nub of the matter when he used the words "demarcation and distinction" over a wide range of articles and with many rates of Purchase Tax applicable to them. This simple agricultural and garden tool, the lawn mower, has been the subject of a long Parliamentary history, Mr. Speaker, as no doubt you will recall. It was Question No. 69 in my first century of Purchase Tax Questions and I asked it on 6th March, 1958. It was one of the minor victories I may modestly claim to have scored at the expense of the Treasury, which capitulated on the point which I then brought to its attention.
The bureaucracy within the Treasury leads it to the conclusions enunciated this evening by the Economic Secretary, namely, that evidently a lawn mower, to be a lawn mower, must have a width of less than 18 inches if it is to be used for domestic purposes. There are appliances and tools having a width of less than 18 inches which are designed specifically in such a fashion as to make it impossible for them to cut the short grass on a lawn. They are extensively used in orchards by horticulturists in the Vale of Evesham, in the Teyn Valley, in other agricultural areas of the United Kingdom, by county councils and by those responsible for operating cemeteries, for example, where long grass is a serious consideration.
Far be it from me to sponsor or espouse the cause of any proprietary appliance, but there is one particular appliance called a "Grassmaster" manufactured by a company called the Tarpen Engineering Co. Ltd. It is advertised as a Grassmaster ", but it cannot cut a lawn, because the construction of the machine is such that it cannot cut grass down to just two inches, which is the normal growth that one encounters in cutting a lawn, for example, my lawn at home, which I cut regularly on Sunday afternoons.
This matter was raised on 6th March, 1958. It is important that I should detain the House and quote what then transpired in the context of the minor and modest victory I scored at the hands of the Treasury. On that occasion I asked the Chancellor of the Exchequer:
why mechanical devices specifically designed for cutting long grass and weeds, and in no way suitable for use as lawn mowers, have recently been selected as liable for Purchase Tax lawn-mowers under Group 16; and whether he will arrange for this decision to be rescinded forthwith".
The present Financial Secretary to the Treasury replied:
As my hon. Friend is aware, this matter has been reviewed, and the particular machine to which he refers will not, in future, be regarded as taxable".
I then asked a supplementary question. It was rather a long supplementary, but it was a matter of importance and you, Mr. Speaker, did not interrupt me. I said:
That is a great victory for me for once. Is my hon. and learned Friend aware that, after a long battle against the Treasury, the Purchase Tax on these machines has now been removed, although a large number of customers who bought this machine have already paid the Purchase Tax? Would my hon. and learned Friend now be scrupulously fair and authorise the manufacturers who have collected the Purchase Tax to repay to each of the owners of the machines the Purchase Tax which they have illicitly, at his behest, charged?
The Financial Secretary replied:
This is an example of the way the Customs is always willing to review the interpretation, in conjunction with the trade interests concerned. As for any tax which has been paid already on this article, the Customs will, of course, consider any claim for repayment."—[OFFICIAL REPORT, 6th March, 1958; Vol. 583, c. 1310–11.]
Does the right hon. Member for Colne Valley (Mr. Glenvil Hall) wish to intervene—
I was merely anxious, Mr. Speaker, that the right hon. Gentleman should put in the OFFICIAL REPORT the words he uttered sotto voce to the effect that I was quite wrong. On the contrary, I am not wrong.
The Financial Secretary said on that occasion that he would consider repaying the tax, but the tax was then repaid, and it was ruled by the Treasury and by the Customs and Excise that these machines, being Tarpen Grassmasters, designed, although less than 18 in. in width, only for cutting long grass and weeds, were not within the scope of the Purchase Tax Regulations and should be tax-free. The effect of this Order is to restore payment of Purchase Tax to these machines—not retrospectively, so far as I am aware, but the Order does restore payment of Purchase Tax to these machines.
In 1958, after a long struggle, on the ground that they were agricultural machines, we secured the removal of the Purchase Tax. The Treasury has now restored it, and that creates the rather extraordinary state of affairs that in a matter of just two years it is found that these machines, the Tarpen Grassmasters, were free of Purchase Tax prior to 1957, that they were subject to Purchase Tax in 1957, that they were freed again from Purchase Tax in 1958, remaining free of Purchase Tax until 1959, and now, under this Order of July, 1959, they are restored once more to Purchase Tax. Can the Treasury make up its mind once and for all in this matter?
I was so uncertain as to the logic of what my right hon. Friend the Chancellor of the Exchequer was proposing in this Order that I telephoned the Economic Secretary's private secretary this morning and said that as I proposed to raise the matter tonight would he finally confirm that the Tarpen Grassmaster did come within the scope of the Order. His answer was affirmative—that it does come within the Order
Therefore, the victory that my hon. and gallant Friend the Member for Knutsford (Lieut.-Colonel Bromley-Davenport), myself and many other hon. Members on both sides of the House secured eighteen months ago has now evidently been overturned—and without any explanation at all from the Economic Secretary. This machine is an agricultural and horticultural machine. It is exactly on all fours with a combine harvester, but in a different sphere of work.
The Economic Secretary, who is looking so disdainful when I say that, should remember that Altrincham and Sale is not necessarily a predominantly agricultural or horticultural division. He has few, if any, farmers among his constituents—
The Economic Secretary is trying to be funny at my expense, but he evidently does not realise that this machine never cuts a lawn, cannot cut a lawn, and was never designed to cut a lawn—yet he sits in his place, bleating, "I have lawns in Altrincham and Sale". He has a poor wit, and is extremely illogical in what he has to say.
Every agricultural hon. Member should be with me here tonight in claiming that this machine is an agricultural machine in exactly the same way as is a combine harvester, although it performs a relatively minor function. It cannot be used for domestic purposes. It is wholly wrong to subject it to Purchase Tax. The Treasury recognised in 1958 that it was wholly wrong to subject it to Purchase Tax, and I see no justifiable cause, fifteen months later, for suddenly reimposing Purchase Tax on a machine which though less than 18 inches in width, cannot possibly cut a lawn.
I hope that my hon. Friend the Member for Worcestershire, South (Sir P. Agnew), who will perceive these machines all round his constituency doing valuable agricultural work, will lend his voice in aid in protest against this suggestion, and I invite my hon. Friend the Economic Secretary to see a demonstration of the work done by the machine, not in Altrincham and Sale—for they do not grow any long grass there, or weeds, but only refined lawns of a domestic character—but in Worcestershire, or elsewhere, where we are doing the yeoman task of agricultural production.
Without repeating the arguments so cogently put before the House by my hon. Friend the Member for Kidderminster (Mr. Nabarro), I strongly support his point of view in this matter. I do not think that anybody objects, not even I, as his Member of Parliament—because he is my constituent—to the fact that he has to pay Purchase Tax on the mowing machines that cut so beautifully the lawns of his lovely house at Broadway, in my constituency.
When, however, it comes apparently to imposing a tax, that has not manifestly been applicable before, upon machines that are exclusively used for horticulture in places like the Vale of Evesham, it is indeed a matter which should have been deployed at the same time as were the Budget Resolutions and the Finance Bill, when, against all the reliefs that were given, would have stood out the fact that machines were being taxed and a slightly heavier burden thereby placed upon an industry—horticulture—which is not enjoying a particularly prosperous time. Therefore, I take exception to this Order being brought down to the House late in the Session like this to be rushed through late at night.
I congratulate my hon. Friend the Economic Secretary on the extremely sympathetic manner in which the Treasury has dealt with lawn trimmers that work on a horizontal rotary system as opposed to a rotary vertical system. I am sure that all hon. Members will be familiar with the fact that all that the Order does is to treat these two different types of trimmer in a different manner.
My only reason for rising is to place on record my extreme satisfaction, and that of one of the manufacturers in my constituency, with the logical, helpful way in which my hon. Friend has dealt with the representations that have been made to him.
After the speech of my hon. Friend the Member for Hitchin (Mr. Maddan), I must get up on the side of those who have spoken against the Order. It is essential that we have machines of this sort to cut the weeds and the grass in our orchards. I hope that my hon. Friend the Economic Secretary will be able to say that he will again remove this type of machine from the Purchase Tax Order. It is essential that he should do so.
Perhaps I may reply briefly to the debate by first thanking my hon. Friend the Member for Hitchin (Mr. Maddan) for his remarks about the logical way in which the Customs and the Treasury approached this matter. That is indeed what we had in mind. When my hon. Friend the Member for Kidderminster (Mr. Nabarro) asks what we are doing and why we cannot make up our minds once and for all and stick to our decision, my reply is that there are developments in this industry, as in many others, and we have to adapt the scope of the tax to deal with the developments, in this case particularly the attachments.
That enables me to reply to the right hon. Member for Battersea, North (Mr. Jay) concerning rotary grass cutters and attachments over 18 inches in width. They will be free of tax. They are typically articles of the kind used for rough grass cutting in orchards, paddocks and the like and, therefore, they are not regarded as lawn mowers or akin to lawn mowers, in which case they would have attracted the tax.
The hon. Gentleman's basic aim, therefore, is to levy tax on mowers normally used for lawns in gardens and to leave exempt equipment which is used for agricultural or horticultural purposes. Is that what the hon. Gentleman is trying to do?
That is the basic aim. There is, however, a difficulty with the narrow cutters. That was the main burden of the argument of my hon. Friend the Member for Kidderminster.
We are in the difficulty that when dealing with rotary grass cutters under 18 inches in width, there is no line of demarcation between them and those rotary grass cutters which are admittedly lawn mowers. Therefore, the only fair thing to do is to take a dimensional limit and say that all rotary grass cutters under 18 inches in width shall be treated like lawn mowers and shall attract the tax at 25 per cent.
One must also remember that these small rotary grass cutters under 18 inches in width are in competition with the small cylinder types of machines which already attract tax, and so, to be fair to the small cylinder machines, it is appropriate that the tax should also cover the similar small rotary machines.
My hon. Friend the Member for Kidderminster dealt particularly with the Tarpen "Grassmaster." I have been looking at the pamphlet which that company issues describing its "Grassmaster," both the wheeled and the roller version. While it is true that this "Grassmaster" can do rough jobs it is also obviously intended to do lawn cutting jobs as well.
I have read the leaflet through very carefully. I do not want to take up too much of the time of the House by reading the whole of it out loud, but I will quote one or two extracts. For example, in the panel which is entitled, "Advantages of the Grass-master" it says it
Cuts growth very short.
In another paragraph it points out that machines for garden use can be operated
by a lady, which would imply that it is going to be used for something fairly genteel. In the centre panel under the heading, "For gardens, sports grounds and estates", it says—I quote so as not to appear to be giving a biased answer—
The Grassmaster or the Wheeled Grass-master provide the complete answer to rough grass and weed cutting problems but for a very fine and close finish the Roller Grass-master is recommended.
A very fine and close finish is the sort required for a lawn.
It also cuts
rough grass, weeds and nettles down to ground level in the most awkward places.
There are one or two more examples which I could give. There is, for example, the reference to the "Verge-master," which is quite clearly designed for cutting edges of lawns electrically.
Although I must say I recognise the feelings which have been aroused in the breast of my hon. Friend the Member for Kidderminster, the fact remains that the Tarpen "Grassmaster" ought properly to fall within the scope of the tax, and I hope that the House will now approve the Order.
I will now ask the question. Would my hon. Friend the Economic Secretary tell the House in what way the arguments he has used this evening differ from those used by the Treasury two years ago immediately prior to the rescinding of the tax on this machine? Why did it then rescind tax, and why does it now reimpose it on exactly the same machine?
Before the Economic Secretary is irrevocably seated, will he answer this question? I am merely asking a question. Will he confirm that he is by this Order imposing a tax on certain forms of mower which at present are exempt from tax?