HC Deb 22 June 1916 vol 83 cc389-90

Motion made, and Question proposed,

4. "That it is expedient in calculating Excess Profits Duty in cases where a ship has been sold since the fourth day of August, nineteen hundred and fourteen, to take the pre-war standard of profits to be—

  1. (1) where the standard adopted is a profits standard, the profits arising from the use of the ship during the pre-war trade years; and
  2. (2) where the standard adopted is a percentage standard, the same standard as if the ship had not been sold, or, in the case of a ship which was used for the first time after the fourth day of August, nineteen hundred and fourteen, the capital represented by the ship at the date when it was first used,
and to make further provisions as a consequence of the alteration of the standard."

Mr. McKENNA

This Resolution is as to excess profits due to the sale of ships. This subject is not new in this House. We had a Clause in the Finance Bill last year which we subsequently withdrew because it did not appear to offer a proper remedy for an evil which everybody has recognised. It is quite obvious that the sale of a ship at the present time would alone be to deprive the State of the benefit of the Excess Profits Duty in respect of the profits earned by that ship. Everybody is agreed that it is quite clear that some steps must be taken so that either the vendor of the ship or the purchaser of the ship shall be made to contribute out of the excess profits on the sale of the ship the due share of taxes. It is not an easy matter. It is a very difficult matter to assess in regard to taking the due proportion as between the vendor or the purchaser, or whether it shall fall altogether on the vendor or the purchaser. But we have a proposal now which I think has been agreed, which is in the Bill in italics, and which I hope will prove satisfactory to the House.

Mr. DENNISS

I do not quite understand why the Clause in the last Bill was withdrawn. It seems to me that the argu- ment which applied then applies now, and with greater force. Take an instance. The freights which prevailed then were not anything like as large as they have become since. The Argentine freights before the War were 12s., and they rose to 80s. last September, and they have now risen to £9 10s. In consequence, ships have gone up enormously in value, and anything like a decent ship is now two or three times its former value. I would like to think that the Chancellor of the Exchequer will not allow these enormous profits to go directly into the pockets of the shipowners, in addition to the astounding profits they have already made out of freights, which profits, of course, come out of the pockets of the people of this country, and inflict the greatest possible hardship on the poorest people, whose principal food is bread. It presses especially hardly on old age pensioners, who can only afford to buy two and a half loaves per week now, where before they could buy four. I am delighted to think that the Chancellor has seen his way, without any injustice to the shipowners, and to the great advantage of the country, to put on this very desirable tax.

Resolution agreed to.