§ Notwithstanding anything contained in the Fourth Schedule to the principal Act capital as ascertained for the purposes of Part III. of that Act shall include money borrowed on debentures or on mortgage or other security or without security and article two of Part III. of the said Schedule shall be read as if the words "any borrowed money or" were omitted therefrom.—[Mr. G. Terrell.]
§ Brought up, and read the First time.
Mr. TERRELLI beg to move, "That the Clause be read a Second time."
4.0 P.M.
The object of this Clause is that capital shall include debentures and mortgages. Under the 1915 Act, the capital is arrived at by deducting debentures and mortgages, and it has always seemed to me a very unfair and an unreasonable interpretation. Surely debentures should be treated as part of the capital of a company. I understand, of course, it makes a very great difference to the Treasury, but we ought to remember that the original Bill was passed hurriedly, that no proper consideration was given to it, and everyone was willing to do his best to contribute what money could be found for the purpose of the War; but now the 2834 thing should be interpreted reasonably, and capital should be deemed to include debentures. Some firms have a very small nominal capital, but they have good credit, and are able to obtain good money on debentures, and yet those debentures are deducted from the value of their assets for the purpose of ascertaining their capital. That is very unfair. Then, again, you may have quite a modern firm with very large capital and no credit at all, and unable to borrow on debentures, and they get the advantage because they have a big nominal capital and no debentures, whereas another firm with no capital but good credit and debentures is put in a disadvantageous position.
§ Mr. BALDWINMy hon. Friend is, of course, aware that this matter has been discussed fairly fully on previous occasions.
§ Mr. BALDWINWhen the Excess Profits Duty was under discussion, at the time of its inception. The question was discussed whether debentures and similar money should be regarded as capital for the purpose of calculation for the Excess Profits Duty. There was a great deal to be said on both sides, but it was finally decided that they should be excluded, and not considered as capital. On that basis, during all these years, the calculation of excess profits has been made. Now to alter, after that time, so essential a part of the calculation of liability would have two effects. It would lead to a complete upset of the present incidence of the tax among different firms, and to the loss of a very considerable amount of revenue. I am afraid that, in those circumstances, having regard to the fact that this method of assessment has held good from the beginning of the tax until the present day, and from the fact that we now hope we are getting towards the end of the imposition of this particular form of tax, the Government cannot see their way to make the modification my hon. Friend asks. I feel that we must, therefore, resist the Clause.
§ Mr. REMERI must say I am very disappointed that time after time the Government turn down our Amendments, and say they cannot give us any 2835 help or assistance. It seems to me we are not receiving any concessions what ever, in spite of the promise that was given by the Chancellor, when the Debate took place, for the reduction from 60 per cent. to 40 per cent., that some of these new Clauses would receive his careful consideration. There has only been a very small concession. I feel with my hon. Friend very strongly about this important Clause. It is one in which the business community are deeply interested. It
§ bites very deeply into their interests, and I hope my hon. Friend will divide the Committee on this question. A great many Members of this House voted with the Government on that Amendment because they felt on that occasion they were going to get concessions which they have not received.
§ Question put, "That the Clause be read a Second time."
§ The Committee divided: Ayes, 22; Noes, 189.
2837| Division No. 224.] | AYES. | [4.5. P.m. |
| Atkey, A. R. | Dockrell, Sir Maurice | Palmer, Charles Frederick (Wrekin) |
| Banner, Sir John S. Harmood- | James, Lieut.-Colonel Hon. Cuthbert | Remnant, Sir James |
| Benn, Capt. Sir I. H., Bart.(Gr'nw'h) | Jones, William Kennedy (Hornsey) | Richardson, Alexander (Gravesend) |
| Borwick, Major G. O. | Kenworthy, Lieut.-Commander J. M. | Stevens, Marshall |
| Bowyer, Captain G. E. W. | Lyle, C. E. Leonard | Sugden, W. H. |
| Briggs, Harold | Macquisten, F. A. | Young, Sir Frederick W. (Swindon) |
| Curzon, Commander Viscount | Moore, Major-General Sir Newton J. | |
| Davison, Sir W. H. (Kensington, S.) | Nicholson, William G. (Petersfield) | TELLERS FOR THE AYES.— |
| Mr. G. Terrell and Mr. Romer. | ||
| NOES. | ||
| Adair, Rear-Admiral Thomas B. S. | Fell, Sir Arthu | Macdonald, Rt. Hon. John Murray |
| Adkins, Sir W. Ryland D. | Fildes, Henry | Mackinder, Sir H. J. (Camlachie) |
| Archer-Shee, Lieut.-Colonel Martin | Fisher, Rt. Hon. Herbert A. L. | McLaren, Hon. H. D. (Leicester) |
| Baird, Sir John Lawrence | Flannery, Sir James Fortescue | McLaren, Robert (Lanark, Northern) |
| Baldwin, Rt. Hon. Stanley | Ford, Patrick Johnston | M'Lean, Lieut.-Col. Charles W. W. |
| Barnes Rt. Hon. G. (Glas., Gorbals) | Fraser, Major Sir Keith | Macleod, J. Mackintosh |
| Barnston, Major H. (Newcastle, E.) | Galbraith, Samuel | Macmaster, Donald |
| Barnston, Major Harry | Ganzoni, Captain Francis John C. | Macnamara, Rt. Hon. Dr. T. J. |
| Bellairs, Commander Carlyon W. | Gibbs, Colonel George Abraham | M'Neill, Ronald (Kent, Canterbury) |
| Benn, Sir A. S. (Plymouth, Drake) | Gilmour, Lieut.-Colonel John | Malone, Major P. B. (Tottenham, S.) |
| Benn, Captain Wedgwood (Leith) | Glanville, Harold James | Marks, Sir George Croydon |
| Betterton, Henry B. | Glyn, Major Ralph | Mills, John Edmund |
| Birchall, Major J. Dearman | Goff, Sir R. Park | Molson, Major John Elsdale |
| Blair, Reginald | Green, Joseph F. (Leicester, W.) | Moore-Brabazon, Lieut.-Col. J. T. C. |
| Blake, Sir Francis Douglas | Greenwood, William (Stockport) | Morris, Richard |
| Boscawen, Rt. Hon. Sir A. Griffith- | Greig, Colonel James William | Morrison, Hugh |
| Bowerman, Rt. Hon. Charles W. | Gretton, Colonel John | Morrison-Bell, Major A. C. |
| Brace, Rt. Hon. William | Grundy, T. W. | Mosley, Oswald |
| Brassey, Major H. L. C. | Hacking, Captain Douglas H. | Mount, William Arthur |
| Breese, Major Charles E. | Hall, Captain Douglas Bernard | Murchison, C. K. |
| Bridgeman, William Clive | Harmsworth, C. B. (Bedford, Luton) | Nield, Sir Herbert |
| Brown, James (Ayr and Bute) | Hartshorn, Vernon | O'Grady, Captain James |
| Bruton, Sir James | Haslam, Lewis | Ormsby-Gore, Captain Hon. W. |
| Bull, Rt. Hon. Sir William James | Hayday, Arthur | Palmer, Major Godfrey Mark |
| Burn, Col. C. R. (Devon, Torquay) | Henderson, Major v. L. (Tradeston) | Perkins, Walter Frank |
| Butcher, Sir John George | Hennessy, Major J. R. G. | Phillipps, Sir Owen, C. (Chester, City) |
| Campion, Lieut.-Colonel W. R. | Herbert Dennis (Hertford, Watford) | Pilditch, Sir Philip |
| Carter, W. (Nottingham, Mansfield) | Hewart, Rt. Hon. Sir Gordon | Pollock, Sir Ernest M. |
| Cecil, Rt. Hon. Lord H. (Ox. Univ. | Hinds, John | Pownall, Lieut.-Colonel Assheton |
| Chamberlain, Rt. Hn. J. A.(Birm.,W.) | Hoare, Lieut.-Colonel Sir S. J. G. | Prescott, Major W. H. |
| Churchill, Rt. Hon, Winston S. | Hope, Lt.-Col. Sir J. A. (Midlothian) | Purchase, H. G. |
| Clay, Lieut.-Colonel H. H. Spender | Hopkins, John W. W. | Raeburn, sir Willliam H. |
| Clynes, Rt. Hon. J. R. | Horne, Sir R. S. (Glasgow, Hillhead) | Raffan, Peter Wilson |
| Coates, Major Sir Edward F. | Hunter, General Sir A. (Lancaster) | Rees, Sir J. D. (Nottingham, East) |
| Coats, Sir Stuart | Hurst, Lieut.-Colonel Gerald B. | Robertson, John |
| Cobb, Sir Cyril | Jackson, Lieut.-Colonel Hon. F. S. | Rose, Frank H. |
| Cohen, Major J. Brunel | Johnstone, J. (Renfrew, E.) | Samuel, A. M. (Surrey, Farnham) |
| Colvin, Brig.-General Richard Beale | Jones, Sir Edgar R. (Merthyr Tydvll) | Samuel, Rt. Hon. Sir H. (Norwood) |
| Conway, Sir W. Martin | Jones, J. T. (Carmarthen, Lianelly) | Sanders, Colonel Sir Robert A. |
| Cowan, D. M. (Scottish Universities) | Kellaway, Rt. Hon. Fredk. George | Scott, A. M. (Glasgow, Bridgeton) |
| Craig, Colonel Sir j. (Down, Mid) | Kinloch-Cooke, Sir Clement | Seddon, J. A. |
| Davies, Thomas (Cirencester) | Law, Rt. Hon. A. B. (Glasgow, C.) | Sexton, James |
| Dawes, James Arthur | Lewis, T. A. (Glam., Pontypridd) | Smithers, Sir Alfred W. |
| Duncannon, Viscount | Lloyd, George Butler | Spencer, George A. |
| Edgar, Clifford B. | Lloyd-Greame, Major Sir P. | Sprot, Colonel Sir Alexander |
| Edge, Captain William | Locker-Lampson, Com. O. (H'tingd'n) | Stanley, Major H. G. (Preston) |
| Edwards, Major J. (Aberavon) | Lorden, John William | Steel, Major S. Strang |
| Edwards, John H. (Glam., Neath) | Lort-Williams, J. | Stewart, Gershom |
| Elliot, Capt. Walter E. (Lanark) | Loseby, Captain C. E. | Sutherland, Sir William |
| Elveden, Viscount | Lyle-Samuel, Alexander | Talbot, G. A. (Hemel Hempstead) |
| Eyres-Monsell, Commander B. M. | M'Curdy, Rt. Hon. C. A. | Taylor, J. |
| Falle, Major Sir Bertram G. | M'Donald, Dr. Bouverie F. P. | Thomson, F. C. (Aberdeen, South) |
| Thomson, Sir W. Mitchell- (Maryhill) | Whitla, Sir William | Wilson-Fox, Henry |
| Thorne, G. R. (Wolverhampton, E.) | Wignall, James | Winterton, Major Earl |
| Thorpe, Captain John Henry | Wild, Sir Ernest Edward | Wood, Sir J. (Stalybridge & Hyde) |
| Townley, Maximilian G. | Williams, Aneurin (Durham, Consett) | Wood, Major M. M. (Aberdeen, C.) |
| Walters, Sir John Tudor | Williams, Lt.-Com. C. (Tavistock) | Woolcock, William James U. |
| Ward, Col. L. (Kingston-upon-Hull) | Williamson, Rt. Hon. Sir Archibald | Yate, Colonel Charles Edward |
| Waring, Major Walter | Willoughby, Lieut.-Col. Hon. Claud | Young, Lieut.-Com. E. H. (Norwich) |
| Warner, Sir T. Courtenay T. | Wills, Lieut.-Colonel Sir Gilbert | |
| Warren, Lieut.-Col. Sir Alfred H. | Wilson, Daniel M. (Down, West) | TELLERS FOR THE NOES.— |
| Wason, John Cathcart | Wilson, Colonel Leslie O. (Reading) | Lord E. Talbot and Mr. Dudley Ward. |
| Waterson, A. E. | Wilson, Lt.-Col. Sir M. (Bethnal Gn.) | |
| Watson, Captain John Bertrand | Wilson, W. Tyson (Westhoughton) |
Question, "That the Clause be read a Second time," put, and agreed to.