1939 RGD brochure

[skodajag]

Here's a glimpse into things on the eve of WW2: an RGD brochure from 1939 with an update of price increases from Sept 20 1939. It was quite a steep increase too - for example, their most expensive model, the 1015, increased from 110 Guineas to 121 Guineas. Does anyone know if this was common practice after war was declared? And if so, why?

[crackle]

I believe the government introduced or increased purchase tax to discourage the public from buying luxury goods so manufacturing could concentrate on the war effort.
Mike

[emeritus]

I found these comments about wartime price rises in the book "The Hornby 0 gauge System" [New Cavendish Books, 1988]. They relate to toy trains, but I expect that all manufactured goods would have been similarly affected.

During 1940 there were repeated price revisions, the first on 1st January; 'Owing to rising costs of production, the prices of Hornby Trains ... have been unavoidably increased.' The New Zealand agents, not subject to censorship requirements, were able to be more specific: ' Owing to the abnormal increase in the price of raw materials, huge expenses in connection with air raid precautions, compulsory insurance with the Government against war risks, all skilled workers on war work and scarcity of unskilled male labour due to the recruiting requirements, Messrs. Meccano Ltd have been compelled to increase prices ... Hornby products are subject to an increase of 10% in price. ... '. There were also revised price lists in April and in August, then finally on 21st October 1940, when for the first time the Government imposed a stiff purchase tax on Hornby Trains.
.....

Sales of Hornby Trains continued, and price lists were issued in May and November 1941; prices were increased substantially, in some cases to double the prewar levels. Nonetheless, stocks had been falling fast by the time the further production of Hornby Trains was prohibited under Government order, as from 1 January 1942.


The book does not give any other pricing information, such as the income tax rate.

[crackle]

Yes I thought so, here is Purchase Tax explained in Wikipedia. https://en.wikipedia.org/wiki/Purchase_Tax
Mike

[skodajag]

Originally Posted by crackle

Yes I thought so, here is Purchase Tax explained in Wikipedia. https://en.wikipedia.org/wiki/Purchase_Tax
Mike

Thanks for reference to Wiki, but that confirms luxury p/t started over a year after these increases.

[Paul_RK]

Originally Posted by emeritus

... I expect that all manufactured goods would have been similarly affected....

It does seem so, and the Belling Champion heater familiar to many of us was no exception. From a catalogue page dating most likely from 1940: "All the above prices include the 33 1/3% war increase over pre-war prices. Purchase tax is shown separately".

Paul

[skodajag]

Originally Posted by Paul_RK

It does seem so, and the Belling Champion heater familiar to many of us was no exception. From a catalogue page dating most likely from 1940: "All the above prices include the 33 1/3% war increase over pre-war prices. Purchase tax is shown separately".

Paul

But again, the Sept 1939 RGD increase preceded the 1940 p/t hike.

[Paul_RK]

Originally Posted by skodajag

But again, the Sept 1939 RGD increase preceded the 1940 p/t hike.

And, as the quote from Belling relates, purchase tax was shown separately in their catalogue: meaning that the 33 1/3% war increase was in the pre-tax prices of the heaters, and the prevailing rate of purchase tax was applied on top of those.