PURCHASE TAX

Dominion, Volume 33, Issue 186, 3 May 1940, Page 10

PURCHASE TAX

Explanation By Sir

John Simon

debate on budget resolutions Need To Limit Civilian Consumption (Uritish Official Wireless.) ( Received May 2, 7.5 p.m.) RUGBY, May 1. In asking the House of Commons to approve of the Budget resolution relating to the • proposed purchase tax, the Chancellor of the Exchequer, Sir John Simon, said that on the second reading of the Bill, which he hoped to present in the form in which it had been discussed with the trade associations, the House would have full opportunity of examining the scheme, which was something new in Britain's armoury of taxation.

Sales taxes, be said, existed in many parts of the world and bad been applied with success in the British Dominions. Ife explained the reasons for bis decision to impose the tax at a point between the wholesaler and the retailer and dealt with the exemption to be accorded to food, drink, fuel and public utilities and services. lie thought it would be neecsstrry to include clothing but promised to consider the views of the House. They were engaged in a tremendous struggle and it was essential to limit consumption. It was one of bis main concerns and responsibilities when there were enormous additional demands for war purposes to keep down the demand put forward by civilians. Extent of Sacrifices. The extent of the sacrifices which the war effort would require from all classes was likewise emphasized by Sir John Simon ill speaking on the resolution regarding income tax. Replying to Opposition suggestions that the tax on higher grades of income was not sufficiently severe, be warned the House that they would have to have recourse before they bad done with the war to this instrument of taxation of incomes in a most formidable fashion. It was impossible to suppose that it could operate only at one end of the scale. Not in that way could large additional sums be secured. Just us two-thirds of the whole consumption was by individuals getting live pounds a week or less, so they must face the fact that there would have to be substantial claims, many of them hard to bear, at the lower end of the scale, though be did not say the lowest of all.

They must let the lowest of till have such protection as they could give them because they had so. little. He was, however, sure that the House and the country were never going to fail to accept any or every burden proposed so long tis it was necessary to win the war.

Following Sir John Simon in the discussion, Mr. Pethick Lawrence expressed keen disappointment that the Chancellor had not given more information. The House and the country had been in the dark for a long time. De feared the tax would have a serious effect on the cost of living. The Financial Secretary to the Treasury, Captain Crookshank, said the House as a whole • was reserving its judgment on the purchase tax.

HIGH BUTTER PRICE British Position Explained LONDON, May 1. A highly-placed authority, iu terviewed by the Associated Press regarding criticism of the high retail price of butter iu the United Kingdom, claimed that it was misleading to compare the New Zealand f.o.b. price of 112/0 a cwt. with the issue price of 143/without bearing in mind that New Zealand and Australia would be obliged to bear the cost of insurance, freight, and selling charges under peace-time conditions. Therefore it was improbable that butter sold at 112/6 iu New Zealand could be retailed iu the United Kingdom at present at under 1/0 a lb. The difference of Id. a lb. between that and the present maximum price was fully justified by the wartime cost. However, the Ministry for Food was giving the closest attention to the possibility of reducing the costs of storage and distribution with a view to reducing the retail price of butter. The speaker undertook to investigate the intensive propaganda for margarine and its possible ill effect on the public interest in butter. PRICE OF MILK FIXED (British Official Wireless.) (Received May 2, 7.5 pan.) RUGBY, Mnv 1. A Food Ministry Order coming into force on Sunday says that milk must not be sold in England at a higher price than that charged at the same date last year. The maximum prices will be fixed in Scotland on a similar basis.

FRENCH LINER LEAVES NEW YORK

(Received May 2, 9.30 p.m.) NEW YORK, May 2. The liner lie de France, painted grey and loaded with aeroplane parts, sailed for an unannounced destination.