Orders of the Day — Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 7 February 1961.

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Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Kidderminster 12:00, 7 February 1961

All I would reply to the hon. Member is that they were about three times as bad under the Labour Government. So we have made a little progress in the matter.

Last year many people thought that I was a voice crying alone in the wilderness in this matter, though I had a good deal of sympathy. Now I have powerful support. In "The Future of Purchase Tax", published a fortnight ago, Professor A. R. Prest, a don at Cambridge, repeated what I have been striving for in the last few years. He is briefly reported in the Daily Herald, which I quote for the benefit of Socialists opposite, on 23rd January under the heading "Scrap all Purchase Tax" as follows: Purchase tax should be scrapped because it is out-of-date and unfair. This demand comes this morning from Dr. Alan Richmond Prest, the Cambridge economist. He claims the tax 'distorts consumer choice, disrupts efficient industries and restricts competition.' And it is so arbitrary in its effect that it is almost a music hall joke, he adds. Dr. Prest, Bursar of Christ College, says that the tax is too high, imposed on too few goods, and is changed too often. I assure my right hon. and learned Friend the Chancellor that I did not write those words for Dr. Prest. He had, of course, the benefit of the guidance of the 300 Parliamentary Questions which I had tabled and had had answered over the preceding three years. That was a valuable brief.

I repeat that I desire a single rate of indirect taxation applicable to all consumer goods covered by the present Schedules. It should be non-discriminatory in character. There is no such thing as a luxury in an affluent society and in an expanding economy. The Chancellor need not lose revenue greatly if he follows the advice I have given him under these four heads, but any reduction that he can make in his forthcoming Budget, subject to these reforms, should be applied at the points where they will give the greatest incentive to the expansion of our exports and the growth of our national well-being.

My final words are that production, growth, taxation reform and reduction, incentives for savings, and investment, are all indispensible concomitants of an increased export trade.