HC Deb 26 June 1916 vol 83 cc629-31

(1) Section forty-three of the principal Act (which relates to excess Mineral Eights Duty) shall have effect as if sixty per cent, of the excess were substituted as the rate of duty for fifty per cent, of the excess, in the case of minerals which have become subject to a mining lease after the fourth day of August, nineteen hundred and fourteen for all accounting years, and in the case of other minerals for any accounting year ending after the completion of the first accounting year, and any additional duty may be recovered accordingly.

(2) It is hereby declared that the words in Sub-section (1) of Section forty-three of the principal Act "assets of any trade or business" refer only to assets of the trade or business of the person receiving the rent for the right to work the minerals or for the mineral wayleaves.

Mr. CURRIE

I beg to propose, at the end of Sub-section (1) to insert the following new Sub-section:

"(2) Section forty-three of the principal Act shall have effect as if it provided as follows:—

  1. {a) Excess Mineral Eights Duty shall not be payable by any person unless the rent payable to him in the accounting year exceeds the actual pre-war standard of that rent;
  2. (b) The actual pre-war standard of rent shall for the purpose of this Section be taken to be the average of any two of the three last pre-war rents to be selected by the taxpayer;
  3. (c) The pre-war rents shall, as respects each of the three years immediately preceding the first accounting year, be taken to be the sum actually payable in respect of rent for the year in question;
  4. (d) The amount of excess Mineral Rights Duty payable by any person shall, 630 where necessary, be reduced so as not to exceed the difference between the rent for the year of accounting and the actual pre-war standard of rent."
When the House imposed this tax last year it did so in order to bring minerals into line with other businesses, but we never intended, I am sure, that the mineral landlord whose income, through the operation of the sliding scale, was reduced, should be liable for the payment of Excess Profits Duty. What we meant was that where the income was increased then the tax should be paid. The Chancellor of the Exchequer said in reply to a question of mine a month ago that he was aware of cases in which the state of affairs of which I complain was beginning to be a trouble. All I want is that where the owner of a mineral field finds his income reduced he should not be made to pay the excess tax. That would be quite a mistaken application, and I am sure that it was never intended. I would ask the Chancellor whether he cannot meet a case of this difficulty.

Mr. McKENNA

I am really sorry that I am not in a position to accept my hon. Friend's Amendment. I am not sure that the Amendment, as it stands, effects his purpose. It is a somewhat complicated matter, but as I read it there is a double construction which might be put upon his Amendment. One construction would be out of order, and the other would represent a proposal which the House has already discussed and rejected. I know the object which my hon. Friend has in view. I am afraid that it is inconsistent with the principle upon which, unlike the rest, the excess profits—the Excess Mineral Rights Duty—is levied. We do take into account, in the Excess Profits Duty on mineral rights, and we do not take into account anywhere else pre-war prices, and we have to do so because the profit on mineral rights is unlike the profit which may be obtained in other matters. The additional revenue to the owner may depend either upon more minerals being worked, in which case he is getting a larger return on his capital, or it may depend upon the higher prices of those minerals which are worked. We have to discriminate between those two cases. I am not sure that my hon. Friend's Amendment has taken full regard to those differences, and I regret that I am not in a position to accept his proposal.

Mr. CURRIE

I dare say that it is quite possible that my drafting is very faulty, but without wishing to upset the principle of the sliding scale, my point is that surely a bar of some kind might be put upon the application of the tax in a case of such extreme hardship as this. The House never intended that a man whose income had been reduced should be made to pay an Excess Profits Tax. I think that the Chancellor of the Exchequer could meet this to a certain extent without trenching on the principle. In one case which was brought to my notice, the effect has been that a man who spent a great deal of money in encouraging the miners in his place to enlist—he was asked to do so by the War Office—finds that as a result he is deprived of labour and cannot get out his coal. It is not the case that he is holding up his coal. I think that the Chancellor of the Exchequer should meet cases of that kind to a certain extent.

Mr. McKENNA

I am afraid I cannot add anything to what I have already said, but if the hon. Member will put down a question I shall be glad to consider it.

8.0 P.M.

Mr. AINSWORTH

May I point out that in place of a fixed royalty these royalties are now on a sliding scale, meaning that the amount of the royalty is in proportion to the price of the mineral when it is sold.' The result of that is that the proprietors during a good year have the advantage of getting a larger proportion in royalties, for when prices are high the receipts are enormously larger. It seems to me that the Chancellor of the Exchequer has in these royalties a very large source of revenue towards Imperial expenditure. The royalty being fixed in relation to the selling price means that in a good year the landlord receives a larger amount than he would in normal times. In consequence of the War there is a vastly larger proportion of royalties than there would have been if the War had not been going on. The price of minerals would not be what it is now if there had been no war, and the royalties would have been correspondingly reduced. I hope, therefore, that the Chancellor of the Exchequer will see that he has a large source of income here, and that he will leave the Bill as it is, so that he may be able to have this source of revenue.

Amendment negatived.

Clause ordered to stand part of the Bill.