HC Deb 20 June 1921 vol 143 cc951-67

(1) For the purpose of determining the modifications to be allowed under Sub-section (3) of Section forty of the principal Act by reason of exceptional depreciation or obsolescence of assets employed in a trade or business due to the present War or the necessity in connection with the present War of providing plant which would not be wanted for the purposes of the trade or business after the termination of the present War, regard shall be had to the conditions prevailing on the thirty-first day of December, nineteen hundred and twenty.

(2) Where any modification has been provisionally made under the said Sub-section

(3) and it is found on the final determination of the modification that the amount provisionally allowed is too small or too great, the deficiency or excess, as the case may be, shall be taken into account in computing the excess profits or the deficiencies or losses, as the case may be, for the final accounting period.

Sir W. RAEBURN

I beg to move, in Sub-section (1), to leave out the words regard shall be had to the conditions prevailing on the thirty-first day of December, nineteen hundred and twenty, and to insert instead thereof the words there shall be granted as an allowance the difference between the original cost price of the asset, plus any subsequent capital expenditure, and its value after the War, and its value after the War for this purpose shall be its value on the thirty-first day of August, nineteen hundred and twenty-one. This Amendment puts forward two points. One is the principle upon which an asset, which has to be dealt with as a War asset, is to be valued; and the second is the date at which the valuation is to take place. The Clause as it stands in the Bill says, "regard shall be had to the conditions prevailing." That is the principle upon which the Clause has been based. It is an exceedingly wide phrase, and it is entirely wide of the promise that was given by the Treasury at the time the Excess Profits Duty was passed. Immediately after the Excess Profits Duty was introduced, shipowners—and I happened at the time to be President of the Chamber of Shipping—were received as a deputation by Mr. McKenna, then Chancellor of the Exchequer, and he explained to us the purport and scope of the Excess Profits Duty. He explained to us that it would be a War Enactment spread over all the years of the War, and that an average would be taken at the end of the time as to whether there had been profits, and how much those profits had been. We were afterwards deprived of that average Clause, and I am not raising it here at all. Then the Chancellor of the Exchequer went on to explain that obsolescence or depreciation of the value of the ship would be taken into account at the end of the War, and, after a long discussion, a Memorandum was issued by the Inland Revenue. It says: It will be observed that the final settlement contemplated is to be made in all cases by reference to the post-War value of the ships concerned, and not to any estimated pre-War cost which may have been provisionally considered in the circumstances referred to in the preceding paragraph. In other words, what he said was, "We wish shipowners to go on with building and buying, irrespective of what it costs. The ships are absolutely necessary. I quite realise values may go very high, but, after the War, they will go very low, and you will be entitled, when the accounting period comes, to take into account the price you pay, and the value of the vessel at the end of the War." It was a very definite statement, but when you come to the Clause in this Bill, instead of putting in words to carry out that undertaking, you have this wide phrase used: Regard shall be had to the conditions prevailing on the thirty-first day of December, nineteen hundred and twenty. You can translate anything into that. You might say it is not a question of the value on the 31st December alone that should be taken into account, and that there are a great many other subjects to take into account. One of the contentions that the Inland Revenue could apply is that, instead of the value of the ship at the date in the Bill, the owner is entitled to an estimated value of the ship on the average of seven years of shipbuilders' prices. That is a totally different way of arriving at the figures. The value is the value in the market at the end of December. Of course, I shall be told, probably by my hon. Friend, that one objection is that the value of tonnage at the end of December last had been greatly depressed by an unexpected event, namely, the throwing on the market of about 300 German ships, and therefore the December value is not the real value of the market, but a value created by circumstances which no Chancellor of the Exchequer could possibly have conceived at the time he made the statement. I was struck by the statement of the Chancellor of the Exchequer when he said he would stand by the promises of his predecessor. That is all we ask him to do in this case. There is in the Memorandum, which is not a Memorandum issued by us, but by a Government Department, this explicit statement: the post-War value of the ships concerned, and not to any estimated pre-War cost— We think that the Amendment I am now proposing carries that out. It lays down a principle upon which the difference is to be arrived at, namely, the cost of the asset and its value at the end of the period, and it does not leave us to the mere chance of what the Inland Revenue may regard as circumstances to be taken into account. That is as regards the question of the principle upon which values are to be arrived at. The second point is that, instead of 31st December, 1920, as in the Bill, the Amendment mentions 31st August, 1921. The undertaking was that the value was to be taken at the end of the War. We are not contending for a moment that there should be anything so indefinite as the "end of the War," whenever that may be, and we have put in a date. Why should any other assets be treated differently? I want to show how unfairly the 31st December would act towards shipowners. When the promise was made to shipowners it was known that the tonnage would cost far and away more than the price at which a ship would be valued at the end of the War. Out of what could the shipowner pay the enormous cost except profits? The very highest price of British tonnage was in January, 1920, when it was £31 a deadweight ton. The fall was unappreciable until June, of 1920, when the price was £24. In December, mentioned in the Bill, it had come down to £14, and from December till now it has fallen from £14 to £7 15s. It can be understood what a difference that means in the case of a vessel of 6,000 to 20,000 tons.

Therefore, we think it is not fair to take the value at 31st December. I have no doubt the Chancellor of the Exchequer will say, as he has said already to-day, "You want the best of both worlds. You want to pick and choose the time when this valuation shall be made." I want to meet the Chancellor of the Exchequer fairly in the matter. We might say that the promise was "the end of the War." Why do you say 31st December for us and 31st August for others?" Put us all on the same footing, but if you will not do that—and the fall has been going on continuously from December till now, and has not yet ceased—I say at least meet us by inserting 31st August. To make it 31st December, just before the heaviest fall commenced, is anything but fair. There were those who were induced by high prices to clear out of ships. They walked off with all the profits, and those who stuck in, and continued to serve their country, are now placed in a position of great disadvantage. Many of the big lines lost a great deal of their tonnage, which they replaced, sometimes at huge cost. Many of the general cargo shipowners bought standard ships from the Government at £18 and £20 per ton. We are not, therefore, asking anything like the full effect of the tremendous depreciation, but we say that for those who listened to the Government's invitation and pressure to go on building at whatever cost, and acquiring ships from elsewhere at any cost, it is not quite fair now to say to them, "In the first place we are not going to give you the plain and explicit principle that we promised, and we are not going to give you the benefit of the great fall that took place in the price of ships." I hope the Chancellor of the Exchequer will at any rate meet us in the matter, because this is not a matter that is raised only to-day. Ft is the outcome of this Memorandum on which we all acted. We believed in good faith that if we did carry out the Government's wish we would be treated in an equitable manner. I ask the right hon. Gentleman, therefore, to make it quite clear what is meant by this phrase, "regard being had," and also to meet us in the matter of the date of valuation.

Mr. A. SHAW

I had no idea whatever that I was to take any part in this Debate. I thought those more intimately acquainted with the problem would have done so, but I must say that my hon. Friend (Sir W. Raeburn) has made what appears to me to be, although I know shipowners are not popular in this House, a very good case for a simple act of justice. This question divides itself into three stages. The first stage was a certain interview which Sir Norman Hill and others had with the late Chancellor of the Exchequer, Mr. McKenna, in 1916, and the Committee recollects the condition of affairs then. Shipowners were being pressed by the Government to go on with their construction at all costs, and they pointed out that prices were rising very rapidly and that costs were extremely heavy, and Mr. McKenna, after reviewing the whole situation, put this to them, that at the end of the War it would be the fair and proper thing to see that those who invested their money in ships at these very high costs were not prejudiced because they had come to the assistance of the country in doing so, and he made this promise in 1916, that the difference between the enormous cost of the ships built during the War and under War conditions and the post-War value should be met by an allowance. That was the first stage, the promise made by Mr. McKenna, which was perfectly definite and clear. The second stage was that that promise was embodied in the Memorandum to which my hon. Friend has referred, a Memorandum from the Inland Revenue, dated 25th May, 1917, and the promise as made by Mr. McKenna was made perfectly clear by the terms of Clause 3 of that Memorandum, which is as follows: Under Section 40 (3) aforesaid the Board of Inland Revenue recognise in normal circumstances claims for allowances (for Excess Profits Duty purposes) in respect of the depreciation in value of assets, such as ships built under War conditions at high prices which will sink to a lower level of value at the termination of the War. The aggregate amount of the allowance to he granted will, speaking generally, have reference to the difference between the original cost price of the asset plus any subsequent capital expenditure and its value after the War. There we have a definite promise intended to be acted upon, and in fact acted upon, and we have a definite standard laid down as the measure of the allowance which is to be made. That is the second stage. The third stage must have come about through some oversight. The third stage is Clause 25 of this Bill which, instead of embodying the clear and definite language of the promise in the first place, and the Memorandum in the second place, is of the vaguest possible description, and, lawyers advise, will be totally different in effect from the Memorandum upon the faith of which so much money has been spent and so many expensive ships have been built. I do not desire to follow my hon. Friend in the very able summary of the technical details which he gave, but I would point out one or two matters in connection with Clause 25. Towards the end of the first Sub-section of that Clause hon. Members will see that regard shall be had to the conditions prevailing on the thirty-first day of December, nineteen hundred and twenty. That is a perfectly vague phrase. If the Government intended, as I have no doubt whatever that they do intend, to carry out the promise which was made and the Memorandum which was acted upon by those to whom the promise was made, the language would not be so vague as that. The language of the Memorandum ought to be inserted in the Bill, and the Memorandum, instead of saying, "regard shall be had to the conditions prevailing," says, "The aggregate amount of the allowance to be granted will, speaking generally, have reference to the difference between the original cost price of the asset" and its value after the War, a perfectly definite measure which, I suggest to my right hon. Friend, ought in all fairness to be inserted. That would clear up the situation and carry out the promise, and those who have put their money at these inflated values into ships on the faith of that promise would feel that they had had perfectly fair treatment from the Government.

The date is another matter, and I wish my right hon. Friend to clear up this point. For the purpose of traders' stocks the Bill, taken along with the Schedule, fixes 31st August as the date of valuation. With regard to plant, the date taken is 31st December last. That is a particularly unkind date with regard to ships, because the War conditions were still prevailing then, and, so far as shipping was concerned, we had not reached the end of the War. I do not think we have even now reached the end of War conditions, for it seems only yesterday, certainly only a very few weeks ago, since the Shipping Ministry was wound up, and the Board of Trade still possesses vast powers of interference with shipping. I would remind my right hon. Friend that here the language of the Bill and the language of the Memorandum are again at variance, because what the Bill says is 31st December, 1920, and what the Memorandum says is the value after the War. We know that the Government have been fixing different ends of the War for different purposes, but I suggest that in this connection, at any rate, it would be grossly unfair to take a date like the 31st December as the termination of the War for this purpose. It would suit the Treasury, but it would be extremely unfair to the subject. I will not labour that point any further, but I will confine myself to pointing out an illustration of the fact that here a substantial injustice is being done. It is true that it is being done to an unpopular class of people, but that should not make it any more acceptable to the Committee, because injustices done to unpopular classes have a way of extending their scope and their effect. The contrast to which I would wish to direct attention is this. Take two shipowners, "A" and "B." "A" goes on building big expensive ships at the request of the Government, facing the slump which he knows will come, relying on the good faith of the British Government to carry out a solemn promise made by its Chancellor of the Exchequer, and reaffirmed in an official Memorandum. He suffers under this Bill to an enormous extent, because he did as the Government asked him and relied on the promise of the Government. "B," instead of going on building ships and carrying on business, clears out. He is able to realise high values for his ships and to put his money into something else, either Government investments or something else which does not depreciate nearly to the same extent as ships. He has nothing to fear from this Clause. It is only the man who, relying on the good faith of the Government, did as they asked him that is hit, and it seems to me—I speak with all reserve—that when the matter is viewed in that light it is clear that a substantial injustice has been done. I do hope my right hon. Friend, whose difficulties in the obtaining of money we all know, and whose gallant efforts to make ends meet we all sympathise with, will see here a substantial case for justice to a class which, though unpopular, is carrying on one of the great cardinal businesses of the country, and which really merits something far better at his hands, and the hands of the State.

Sir R. HORNE

The Committee has listened to very trenchant speeches from hon. Members who are very well acquainted with the business about which they have been speaking. But I would remind them that their Amendment covers a much wider field than the shipping interest. It covers the business, not merely of shipowning, but of various factories and similar industries which during the War equipped themselves for the purpose of aiding the War, just as much as did shipping. I do not think anyone would by any means complain that the case which has been put by the two hon. Gentlemen who have just spoken was from their point of view, from the angle at which they look at it, exaggerated. There are, however, various considerations which the Com- mittee must keep in mind in coming to a conclusion upon this matter. I should like to say at the outset that the Government will stand with complete loyalty by the pledges it gave through Mr. McKenna and other Chancellors of the Exchequer who dealt with this matter. They agreed, in the terms of the Memorandum which my hen. Friend who last spoke has quoted, that The aggregate amount of the allowance to be granted, speaking generally, has reference to the difference between the original cost price of the asset, plus any subsequent capital expenditure, and its value after the War. My hon. Friend has asked that these words should be inserted in the Measure. The chief ground upon which he advocates this is that it gives, in clear language, the true measure of the allowance which ought to be made, whereas the Clause deals in very vague generalities. As I have said, we shall certainly fulfil what is involved in the pledge without any question. The Committee will take from me an assurance that this will be the main criterion by which we shall be guided. Quite frankly, I think the language of the Memorandum is much more indefinite and difficult to construe than the language proposed in the Bill, because, observe what it says: The aggregate amount of the allowance to be granted will, generally speaking". I have never seen such language in an Act of Parliament. One cannot construe it. What it generally means, of course, we know; but thereafter the phraseology which is employed is not in any way more definite than that which is in the Bill. We say, "regard shall be had to the conditions prevailing on 31st December, 1920.' My hon. Friend has asked me if I did not think that was an indefinite phrase. I do not say whether it is indefinite or not. It is certainly not less definite than the phrase in the Memorandum, which is "has reference to" the difference between the original cost price of the asset, and so on. I cannot draw very much distinction as to definiteness between the phrases "having regard to" and "have reference to." I cannot think that the criticism which is made upon that part of the Clause has really very great justification. We must remember that the principle of the Memorandum will undoubtedly be applied. It is perfectly plain, when you talk generally about having reference to the difference between the pre-War and the post-War value, that that does not mean that you can simply take pre-War value and post-War value—assuming that you can find post-War value!—and that the whole of the difference is to be written off. Take the case of a ship which was built at a cost of £15,000, say, in the year 1910. By the beginning of the War that ship was only worth £10,000. To-day, let us say—or whatever period satisfies my hon. Friend—it is worth £8,000. The Amendment would give the owner of that ship the full advantage of the difference between the cost price of building that ship before the War and the present value. That clearly would be inequitable result, because all the owner would be entitled to would be the pre-War value of the steamer at the time the War broke out. It is quite plain that you cannot go back to the building value of the ship years before the War and say, "The cost price must be taken as the measure of your liability." Nobody would contend that that is the meaning of the phraseology used in the Memorandum.

Sir W. RAEBURN

; That never entered into the calculation. That is not what we were discussing—vessels built before the War. These were vessels built during the War at War prices.

Sir R. HORNE

I am taking what the Amendment says, and what it would involve. Let me take another case, since this Amendment not merely covers ships but factories. A great many munitions factories during the time of the War were private factories and received Government grants-in-aid to put up equipment for the purpose of making war material. I myself was familiar with places in which 30 per cent., 40 per cent., 50 per cent. and 60 per cent. of the cost of putting in that equipment was paid by the State. Again, according to this Amendment, there would be no allowance at all for the fact that the State had contributed in some cases the greater part of the expenditure. It is perfectly obvious, therefore, that although your main principle is pre-War value or the value of the building in the course of the War, against the post-War value, you must take into consideration all the circumstances in regard to the particular transaction. You cannot arrive at the result simply by putting the War period cost price at that stage against the post-War value and judging it in that way. While I agree that the main principle is the principle set up in the Memorandum, it is subject in each case to consideration of the particular circumstances which apply to the industry. So much for the suggestion embodied in the ill and the phraseology of the Memorandum.

I turn now to the question of the date at which the thing should be begun. It is obvious that the phrase "value after the war" requires to be construed. What is the period which might fairly be taken as the time "after the war"? In strictness we are told to adopt a period at which the war legally terminates. No one can say to-day when that will be, because, I suppose, until peace is signed with Turkey we shall not technically be at the end of the war. Obviously this would not be an appropriate time to wait for, and, equally obviously, I am sure nobody so interpreted the phrase "after the war" when this Memorandum was drawn up. I am sure the people at that time thought roughly that the time was when hostilities might cease, or some fair period after. Supposing in the middle of last year we had suggested making a valuation, then I do not know that my hon. Friend behind me would have taken very much exception to it—

Sir W. RAEBURN

Oh, yes.

Sir R. HORNE

I am not sure, because they happened to foresee the slump that was coming, that it would not have been said that it would be unfair to interpret the phrase "after the war" in such a way as to put the date on some day which was certainly more than a year after hostilities had ceased. We want to be fair in this matter. We do not want to take the high values ruling immediately after the Armistice. Equally it is not fair to the State to take the very bottom pit of depression, and to ask that these properties should be valued at that particular point of time. You want to take something between the two. December 31st, 1920, was more than two years after hostilities had ceased; so that by actual time it does not seem to be a very unfair period to take. But hon. Members say: "You have not dealt with the question of stocks in this way. You propose. 31st August instead of December for the valuation of stocks.' The two cases are totally different. A case was presented for allowing the valuation of the stocks to take place up to 31st August of this year. It was this, and a very cogent case it was.

The manufacturers said at the time: "When you started your Excess Profits Duty we had certain stocks in hand." Every manufacturer always has stocks in hand. "You valued these stocks at that time at the market price of the day. Well, we are quite entitled to be put under the umbrella of the Excess Profits Duty for that period of manufacture which took place during the currency of the tax, and that leaves us as at the end with a margin of stocks over, namely, those which we had roughly at the time you started your Excess Profits Duty. It is only fair that you should allow that to run off before you bring the operation of the Excess Profits Duty to an end." That is a very cogent case. It does not apply in the very slightest to the position of the ships. Accordingly, the analogy does not impress me in the very slightest. What would affect me really would be if it could be brought home to my conscience and bosom that I was doing anything unfair.

Let me take the position of the shipowner which has been presented. It is said that the shipowner, at the suggestion of the Government, embarked upon the adventurous building with the fact staring him in the face that there was likely to be a big slump after the War, and in doing this he was benefiting the State at possible great injury to himself. That is the kind of case presented. But I have some personal acquaintance with what was going on in the building of ships, especially at the time when we required ships in view of the fact that the submarine campaign was at its height. I happened to be engaged at the Admiralty at the time and we had to deal with it. What I found at that time was not that you required to urge shipbuilders to build ships, but that the shipowners were praying for the opportunity to build; that the people whose ships were held back petitioned to be allowed to get on with the ships, the beginnings of which were already on the slips. Accordingly, what really happened at the time was that the shipowner perfectly well saw his opportunity for making profit by building ships. The hon. Member for Dumbarton (Sir W. Raeburn) told us that the highest price ships reached in June, 1920, was £30 a ton. That was long after the hostilities had ceased and ships were at their highest point. Why were people buying them? There was no longer the necessity of ships being built during the War or inciting the shipowner to a patriotic endeavour.

What happened was that the shipowner saw a profit in the distance, and it is impossible to say that because people have done something in business to obtain a profit that now you must go to the extreme of advantage with the result of doing the State the greatest possible injury. People were buying ships last year at a time when they thought the shipping boom was going to continue, but the slump came much sooner than anybody expected, and that is why we are asked to-day to make allowances which will continue until the 31st August. If I really could believe that we were doing anything unjust or unfair towards those interests I would be the first person to try and meet the claim put forward by my hon. Friend. I do not think, in fact, that I am doing anything unjust. I think the Government is taking a period which is not at all unfair in selecting the 31st December, 1920, for the purposes of this valuation. For these reasons I cannot accept this Amendment. Let me remind the Committee that many ships changed hands in the course of the War, and factories have also changed hands. But in none of these transactions has the capital paid anything in the shape of Excess Profits. Many people made large profits from the appreciation of capital value, and they paid nothing towards this duty. That is a fact that we have to keep in mind, and I have tried to meet the justice of the case so far as I am able.

Sir W. RAEBURN

I cannot allow some of the remarks made by the right hon. Gentleman to pass without a reply. I do not think the Inland Revenue would allow the duty in the case which has been mentioned, because you could not say that the vessel had been built as a War necessity. Just look for a moment at the amount of money which the shipping companies have had to pay for liners in order to get delivery of those vessels which they were asked to go on building. Those are the people who will suffer. Those vessels are now costing something like £1,000,000 instead of £250,000, and they are only just getting delivery of vessels now which have been held up by the joiners' strike for nearly six months. All that work was pressed upon the companies in order that the Government should get the benefit during the War. Consider the case of the owners faced with this enormous drop in value.

There is another point of hardship of which the Chancellor of the Exchequer does not seem to be aware. I will give him my own case. We had a quantity of steel used for the construction of vessels, and it was commandeered by the Government, and we have been left to pay the higher price to replace that steel. There is a considerable difference between the price we have to pay now and what we contracted for some years ago. I want the Chancellor of the Exchequer to take these points into account, and I think he ought to meet us at least half way with regard to the period. The drop during that period has been very severe, and I do not think we are asking for a great concession. One point of the right hon. Gentleman's speech which will give satisfaction to the whole House is that the Government are prepared to carry out in spirit and in practice the promise made by Mr. McKenna. We know that many of these matters will require to be adjusted, but when once the principle has been laid down we are prepared to leave the matter to the Inland Revenue.

Amendment negatived.

Mr. HOLMES

I beg to move, in Subsection (1), to leave out the word "thirty-first," and to insert instead thereof the word "fourth."

The Committee will realise that this particular Clause and the Section in the principal Act do not refer to ships alone. We have just heard speeches appealing to the Chancellor of the Exchequer to pity the poor shipowner. As a matter of fact this Clause and the one in the original Act refer to all businesses whether they were affected by the War or not. They paid excessive prices during the War for plant and machinery which has suffered greatly from depreciation and they have a right to put forward a claim under the 1915 Act. This Section is fixing the duty on which the final value of many of these assets up to the 31st December last will be based. The Chancellor of the Exchequer's argument appeared to be that "we should value at the end of the War and we consider the 31st December, 1920, may be considered as the end of the War." I want to remind the right hon. Gentleman that his predecessor in office the year before last, when introducing his Budget, surprised not only the House but the whole country by increasing the Excess Profits Duty from 40 per cent. to 60 per cent. Excess Profits Duty was introduced as war taxation and although the War was over the duty was increased. The Chancellor of the Exchequer on that occasion said there was still a shortage of goods and people were still making large profits because the demand for goods is greater than the supply, and although war hostilities had ceased war conditions still remained, and therefore he proposed to continue the duty. That duty is still being continued.

For these reasons I suggest that the end of the War so far as these promises are concerned should be synonymous with the end of the Excess Profits Duty. I want to remind the right hon. Gentleman that a large number of firms are being made liable to Excess Profits Duty up to the 31st March and 31st June this year and in some cases up to the 31st July, and is he going to say to them, "We said we would give you an allowance; we all give you depreciation with regard to your plant and machinery during the War, but we make you liable to excess profits up to the 30th June, 1921; but you must value your plant and machinery six months before you are liable to Excess Profits Duty." I am asking the Committee to make the date the 4th August which is the final date upon which any trade is liable to Excess Profits Duty. My point is that every trade or business should be allowed to value their plant and machinery for exceptional prices under this Clause on the last day for which they are liable for Excess Profits Duty and not six or seven months after. If I withdraw my Amendment I would like to know if the Chancellor of the Exchequer would be willing to accept as the date the end of the last accounting period, whichever is the latest.

Sir W. RAEBURN

I agree with the arguments which have just been put forward by the hon. Member opposite, and I heartily support this Amendment.

6.0. P.M.

Sir R. HORNE

I think I have already answered many of the points put forward by the Mover of this Amendment, although he has certainly raised some new considerations on this question. He suggests that there are many businesses whose period of accounting will not terminate on the 31st December, and that a good many, will be going on till the 4th August. In point of fact, there are varying days, as one can well understand, down to the 4th August, and on that date not more than 3 per cent. will remain open. However, there is no real connection between the period for accounting and the valuation of the plant which has been acquired during the War. What we have to do in the case of this plant is to find a reasonable period at which the value should be determined, and the real point at issue is, if you have built plant or equipment for war purposes, at what point of time can it reasonably be said you have turned such plant over to peace uses; and when you have fixed that time what is its value for the purpose of making material which is consumed in peace-time instead of making material required for the waging of war? It is not a question of the stocks in hand which have to be brought within the accounting period. The whole question is, what is its value in time of peace when used in factories for the purpose of producing material which people consume in the ordinary walks of life? The determination of the date is a matter of opinion. We have fixed, as we think, on a period, at which it can certainly be said that the factories of this country have turned their war equipment into peace equipment, and no one will suggest that anybody is still using the plant for war purposes. I gather from another Amendment of the hon. Gentleman that he recognised there should be some qualification of value at the 31st December, as he desired to take into account not only the normal value at the fixed period, but also its value for ordinary trade. If that is his point of view, that can be just as easily determined on the 31st December as on the 31st August. I am afraid, therefore, I cannot assent to a change of the date.

Mr. HOLMES

I will not press my Amendment if the right hon. Gentleman is willing to accept the later one to add at the end of Sub-section (1) the words "and the probable ultimate value in a normal period of such assets or plant."

Sir R. HORNE

I cannot do that. Amendment negatived.

Mr. HOLMES

I beg to move, at the end of Sub-section (1), to insert the words "and the probable ultimate value in a normal period of such assets or plant."

In view of what the Chancellor of the Exchequer said a few moments ago, I hope he will be willing to add these words, for the purpose of giving greater clearness to the Section.

Sir R. HORNE

In my view the Amendment of my hon. Friend would have a limiting rather than an extending effect. The phraseology used in the Bill by no means excludes calculation or consideration of the value of the machinery and its worth for ordinary peace avocations in normal times. My hon. Friend is in error in thinking that these words would be an assistance to claimants. They will not work out with the result which he anticipates, and I would rather leave the matter open for proper determination of value as on the 31st December.

Mr. HOLMES

Having got that declaration on the record, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause ordered to stand part of the Bill.