§ 91. Mr. MACQUISTENasked the Chancellor of the Exchequer whether he is aware that the owners of large fleets of ships sold them at enhanced prices subsequent to the declaration of war and prior to the Finance Act of 1917, and went out of business, and thereby ceased to be liable to payment of excess profits on the enhanced earnings of such ships; that the purchasers of such ships, in consequence of being debited with the enhanced prices thereof, showed little, if any, excess profits in their balance sheets; that these transactions, which were very common, were to the loss, injury, and damage of the revenue; and whether he is to take steps, and what steps, to recover for the State the excess profits which but for these transactions would have been paid?
§ Mr. BALDWINMy right hon. Friend is aware that sales of ships have taken place in such circumstances that the profits accruing therefrom to the vendors are not subject to the charge to Excess Profits Duty He is, however, unable to agree with the hon. Member that there has been a resultant loss of revenue from the profits accruing to the purchasers of these ships. The provisions of Section 47 of the Finance Act, 1916, under which the Commissioners of Inland Revenue are empowered to require the purchaser of a ship to adopt the vendor's pre-war standard for the purposes of Excess Profits Duty, was retrospective in effect and applied to all ships sold after 4th August, 1914. As regards the last part of the question, as the hon. Member is aware, a Select Committee of the House is about to be appointed to consider the practicability of the taxation of wealth accumulated during the War.