HC Deb 20 June 1921 vol 143 cc967-83

(1) Any person who is at the end of the final accounting period the owner of a trade or business subject to Excess Profits Duty shall be entitled to claim in respect of that duty relief under Part I of the First Schedule to this Act and also relief either under Part II or under Part III of that Schedule.

(2) No claim for relief under this Section shall be allowed unless notice in writing of intention to claim the same, specifying under which Part of the said Schedule the claim is to be made, is given to the Commissioners of Inland Revenue before the first day of January, nineteen hundred and twenty-two.

(3) The provisions of Part IV of the First Schedule to this Act shall apply to any claim made under this Section.

Colonel WEDGWOOD

I beg to move, in Sub-section (1), to leave out the words "and also" ["this Act and also"] and to insert instead thereof the word "or."

I am not an accountant, and do not propose to go into the details of the repayment of Excess Profits Duty or what the actual amount is. I have put down this Amendment because I want to get, if possible, from the right hon. Gentleman a statement as to how much this is going to cost the country—into what liability it is going to land us. If you read Parts I, II and III of the Schedule, you will see that the people who have been paying Excess Profits Duty during the War and during the last two years are going to get something back from the Exchequer, and instead of Excess Profits Duty being a tax, it will be found to have been a compulsory reserve fund upon which companies are now to draw. Take the exception in Part III. According to that, any person who proves that the yearly average of his profits for the period between the 1st day of September, 1921, and the 31st August, 1925, both inclusive, is less than the amount of the percentage standard of the trade or business, or where there has not been one pre-War trade year than the pre-War standard of profits based on the statutory percentage on the average amount of capital employed in the trade or business during the first accounting period, or that he has suffered a loss in respect of that period and that the deficiency has arisen owing to the holding by him of trading stock at falling prices, he shall be entitled to certain repayments. But in many cases the percentage standard of the trade has been as much as 16 per cent. It is obvious that during the next four years the profits will be very low, so that under this proviso there may be enormous claims for refundment of Excess Profits Duty. It seems to me that under this Clause we are landing the State into an indefinite liability which the Treasury at the present time cannot possibly estimate. We do not know what the liabilities will be in 1925 when there will be a fresh House of Commons which may be faced with the necessity of paying back untold millions to these different trading companies. We ought, therefore, to have some explanation of the liability in which we are involving the country, and I think those who desire financial stability in the country will have to vote, not only for the Amendment, but for the entire excision of the Clause.

Part III seems to be the most serious part, and by this Amendment I am asking that instead of people being enabled to claim cumulative repayments or refunds under Parts I, II, and III they shall only claim under Part I or under Parts II and III, so that there might be some slight reduction in the sum asked to be refunded. The real point is that we must know before we saddle some future Parliament with an absolutely indefinite liability what the actual liability is to be. I think we are entitled to detailed information from the right hon. Gentleman as to what really the companies are going to get back under these proposals. My hon. Friend below me (Mr. Holmes), being an accountant, no doubt understands exactly where the State stands and where the companies stand, but I am bound to say that I have not the faintest idea as to what the actual result will be. Up till two years ago the companies were doing extremely well, and paying large sums in Excess Profits Duty. Since then there has been a slump, which is likely to last for at least five years. During that period there may be no profits, and losses may be incurred, and I want to know if the companies are going to be in a position to recoup themselves for those losses at the expense of the taxpayers. We ought to know what the liability is going to be, and we certainly ought not to land a future Parliament with a burden which the taxpayers might find it impossible to shoulder.

The DEPUTY-CHAIRMAN (Sir E. Cornwall)

If this Amendment be carried, the next one cannot be moved.

Colonel WEDGWOOD

I do not intend to move any of the Amendments standing in my name.

Sir R. HORNE

The question whether relief should be cumulative or not is, of course, a matter which requires considerable thought. My hon. and gallant Friend will remember that the two reliefs indicated in the White Paper and in the Report of the Financial Committee both became the subject of pledges by my predecessor in the office of Chancellor of the Exchequer, and accordingly it is essential, in our view, that we should stand by those pledges. What the precise cost would be—

Colonel WEDGWOOD

Were the pledges given before the slump?

Sir R. HORNE

Yes, but I think we are still bound to adhere to them, because a good deal has been done in reliance upon those pledges. In the next place, the alternatives which are there given are open to everyone who has been considering his business from the point of view of the effect upon it of the termination of the Excess Profits Duty. I do not think we are in a position, even supposing that we wished to do so, to go back upon those pledges. All that has been done since those pledges were given has been to do what the business community very strongly desired, namely, to provide some equalising process which would not leave one business in a particular industry in a position of great advantage as compared with another business. In the result, what we propose to do, and what is embodied in this Bill, is to allow people to carry out the revaluation of their stock up to the 31st August, 1921, in order that they may be enabled to put the losses which they have experienced during that time against the profits upon which they paid Excess Profits Duty. The fact that we do this is not in reality a true alternative to each of the other two pledges which were given, and it would be quite out of the question to say that anyone who adopted one of the other two alternatives must necessarily be cut out of the levelling process. When you examine the conditions of each pledge, and the concession which it involves, there would be no relevency or logic in saying that, because a trader adopted the relief which was given in the White Paper, or the one given as a result of the Report of the Financial Risks Committee, he must, therefore, be excluded from the levelling process. There is no ground upon which we could say that. It is no doubt perfectly true that it is difficult to arrive at an estimate of the actual amount involved in these reliefs, because you cannot tell which of the two alternatives will be taken. Nevertheless, we are fully convinced that, in the interests of the trade and industry of the country, and in the desire not to make the position more difficult for them than it need be—and, therefore, in the and, in the interests of the Exchequer—we ought to give the relief which is embodied in the levelling process. In these circumstances, I am afraid I cannot accept the suggestion of my hon. and gallant Friend that we ought to depart from one of them, and I think we must leave them in the shape in which they are.

Colonel WEDGWOOD

I cannot accept the explanation of the right hon. Gentleman. He has not made clear to us either what the liability is or whether it falls this year or five years hence, and he has not dealt with the question of taking the years 1921 to 1925, averaging the losses, and deducting them from the Excess Profits Duty. That is the serious point. Is that part of the pledge given by the right hon. Gentleman's predecessor in office?

Sir R. HORNE

I am sorry I did not explain it more elaborately, but I thought my hon. and gallant Friend would understand that the period 1921–25 is that which is involved in the relief given by the Report of the Financial Risks Committee, and that, undoubtedly, is a pledge of the Government.

Colonel WEDGWOOD

And that would fall entirely in one lump sum upon Parliament in 1925?

Sir R. HORNE

Not necessarily so at all.

Colonel WEDGWOOD

Why not? They will not know.

Sir G. COLLINS

I think the point which my hon. and gallant Friend has made is quite a reasonable one. He is anxious to find out from the Government what is the cost to the Exchequer of this concession, and what rebates or repayments will be granted in this year and in coming years through the insertion of this Clause in the Finance Act. The Chancellor of the Exchequer has recently issued a Circular to the Departments referring to the finances of the coming year. When that Circular was issued, there must have been in the minds of the Treasury certain facts as to the total revenue to be received from the arrears of the Excess Profits Duty in the coming year. Therefore, they must have taken into account, when that Circular was issued, the concessions which, as the right hon. Gentleman informed the Committee, were promised by his predecessor. Therefore, these pledges, which we are anxious that the Government should fulfil to the letter, will involve a loss of revenue to the Exchequer. We are anxious to find out what will be the proceeds from the arrears of the Excess Profits Duty in this year and in coming years. The arrears of Excess Profits Duty this year are estimated to bring in £120,000,000. That is the figure for which allowance was made in the Chancellor of the Exchequer's statement earlier in the Session. Now we are anxious to find out whether these concessions will reduce the revenue for the present year. I think that that is a reasonable point for my hon. and gallant Friend to make, and I hope the Government will inform the Committee as to the nature and amount of the concession. A further point has come to light during recent days which bears upon this matter, namely, the loss incurred by the Sugar Commission, which amounts to £21,000,000. That will have to be found by the taxpayer. Now that the Report of the Sugar Commission has been presented to the House, the House learns for the first time that the Commission were anxious to increase the price of sugar, so that the loss should not fall upon the general body of taxpayers. My hon. and gallant Friend's point is, What is the loss which will fall on the taxpayer? I think it is a perfectly reasonable point, and I hope that the Chancellor of the Exchequer will give the Committee some information upon it before the Clause is passed.

Mr. HOLMES

The Chancellor of the Exchequer is allowing all business firms in the country to revalue their stock during the last accounting period to the 31st August next, and it is impossible at the moment to make an accurate estimate as to the effect of such revaluation upon their liability to Excess Profits Duty or their right to repayment. No one can tell yet what the state of our trade and of the world's trade will be on the 31st August, and it is is difficult, therefore, to say whether prices are going up or down. If there were an upward tendency between now and then, it would improve the position of the Chancellor of the Exchequer. I would ask him if it is possible for him to say whether it is not the belief of the Inland Revenue authorities that there will always be coming in, from arrears of Excess Profits Duty or from the final assessment to Excess Profits Duty for 1921–22, 1922–23, and so on, more than sufficient to cover the claims for repayment which are likely to come under this Clause.

Colonel WEDGWOOD

My hon. Friend (Sir G. Collins) has put the point admirably clearly, and my hon. Friend (Mr. Holmes) has also made the matter clearer to me. My difficulty, however, is this: Under Part III. you are allowing traders to claim indefinite sums, depending upon what their profits are between 1921 and 1925. Until those four years are over, they cannot tell what their losses will be, but after that time, that is to say in 1925, every one of these companies will come along and say that they have made a loss, or that their profits have not been as much as they were before the War by so much—that before the War they made 16 per cent., but that in these four years they have made nothing; and they will claim repayment of Excess Profits Duty paid, it may be now, it may be three years ago. They will all have to wait until the end of 1925 in order to find out what their losses are and what their claim is. Then they will come to Parliament and say, "You must refund us so many millions." Up to then, year by year, there will have been sums coming into the Exchequer from arrears. All arrears will then be stopped, and then the payments will come. And now we have the Government coming forward and saying that they are pledged to do this, and putting the responsibility for these payments, of millions, it may be, on some future Parliament in 1925. The right hem. Gentleman has said that this was a pledge given before the slump came, and it is going to cost the taxpayers of this country millions. These light-hearted pledges given to big business interests from the Government Bench are to involve us in an expenditure of millions, and they say that, because it is a pledge, this House of Commons is bound to implement that pledge. It may be that the Government are bound to implement that pledge, but we on these Benches are not bound to implement it.

That suggestion comes curiously from a Government which is going to throw over the pledges it made to the farmers six months ago and the pledges it made to the unemployed who put their 5d. into the Insurance Fund week by week. Pledges, however, made to big businesses, have got to be kept, because it is the next Parliament that will have to pay the debt. In 1925 the right hon. Gentleman will not be in power, but sitting in his place will be my hon. Friend the Member for Edinburgh (Mr. W. Graham), and he will be asked to pay. I do not know how many millions, because at some prehistoric date the late Chancellor of the Exchequer made a wild promise before the slump came that these sums would be refunded to the payers of Excess Profits Duty. We shall, therefore, be bound to find hundreds of millions of pounds to make good that promise. The right hon. Gentleman is perfectly right to vote for this Clause, but we, obviously, are perfectly right to vote against it. By voting against it we register our intention, when 1925 comes round, of not implementing that pledge and of not paying that money back. We are showing it in the only way we can, namely, by going into the Lobby against the Government. It is almost terrible to see the way in which these enormous financial obligations are incurred quite lightly by hon. Members on the Gevernment Bench. When the time comes they either scrap them or pass them on to their successors. We do not want to carry the baby, and we shall show it by voting in the other Lobby.

Sir R. HORNE

Perhaps I may say a word or two in reply to the somewhat exacerbated language which my hon. and gallant Friend has thought fit to use at the end of his speech. There have been pressed upon the Government, in regard to these matters, certain considerations of fairness and justice which seem to be entirely absent from my hon. and gallant Friend's mind. We have given weight to a variety of views, which, undoubtedly, show that the Excess Profits Duty, driven to a logical end, would have produced conditions of great unfairness in some instances, and would also have had the effect of putting such a burden upon the industry of this country as would make it really impossible to carry it on with any certainty of success. Under these circumstances I am sure no one would desire that the State should attempt to collect money. Accordingly, you have to take into account what is fair and just and what is practicable. Under these circumstances we arrived at certain conclusions which seem to have commended themselves to the Committee up to the time the hon. and learned Gentleman arrived. He did not have the benefit of hearing the Debate on the previous Amendments, which might possibly have changed his view. The Estimate for this year of the amount of Excess Profits Duty which will be collected is £120,000,000, and for next year £70,000,000. The hon. and gallant Gentleman asks by how much the concession upon the stock valuation will de- plete the sum which otherwise we might have had from Excess Profits Duty. In arriving at the figure of £120,000,000 that concession has been taken into account; but supposing we had not made that concession and had succeeded in collecting the money according to our original estimate we should have realised something like £80,000,000 more, but this figure does not take full account of the abnormal depreciations in value which have occurred.

Sir G. COLLINS

I am grateful to the right hon. Gentleman for the information he has given us, which I understand is that if this Clause is passed the arrears of Excess Profits Duty this year will bring in £120,000,000 and next year £70,000,000. Will that be the total arrears of Excess Profits Duty?

Sir R. HORNE

No, I do not say that. There will be undoubtedly from year to

year Excess Profits Duty being collected, and of course there is a limitation upon all these concessions. It does not go beyond a certain figure under any circumstances. It is not the indefinite kind of obligation which the hon. and gallant Gentleman seems to think.

Sir G. COLLINS

I understand the actual cost of this concession amounts to something like £80,000,000.

Sir R. HORNE

I would rather put it as I put it before. You could have collected, in a period of depression and depreciation such as the present, £80,000,000 more if you had not given this concession.

Question put, "That the words 'and also' stand part of the Clause."

The Committee divided: Ayes, 218; Noes, 39.

Division No. 174.] AYES. [6.35 p.m.
Adkins, Sir W. Ryland D. Coote, Colin Reith (Isle of Ely) Holmes, J. Stanley
Agg-Gardner, Sir James Tynte Cowan, D. M. (Scottish Universities) Hood, Joseph
Archer-Shee, Lieut.-Colonel Martin Craik, Rt. Hon. Sir Henry Hope, Lt.-Col. Sir J. A. (Midlothian)
Astbury, Lieut.-Com. Frederick W. Davidson, J. C. C.(Hemel Hempstead) Hopkins, John W. W.
Astor, Viscountess Davidson, Major-General Sir J. H. Horne, Edgar (Surrey, Guildford)
Bagley, Captain E. Ashton Dawes, James Arthur Home, Sir R. S. (Glasgow, Hillhead)
Baird, Sir John Lawrence Denniss, Edmund R. B. (Oldham) Hume-Williams, Sir W. Ellis
Baldwin, Rt. Hon. Stanley Dockrell, Sir Maurice Hunter, General Sir A. (Lancaster)
Balfour, George (Hampstead) Doyle, N. Grattan Hurd, Percy A.
Balfour, Sir R. (Glasgow, Partick) Du Pre, Colonel William Baring Hurst, Lieut.-Colonel Gerald B.
Banbury, Rt. Hon. Sir Frederick G. Edwards, Hugh (Glam., Neath) Jackson, Lieut.-Colonel Hon. F. S.
Barnes, Rt. Hon. G. (Glas., Gorbals) Elliot, Capt. Walter E. (Lanark) Jameson, John Gordon
Barnett, Major Richard W. Evans, Ernest Jephcott, A. R.
Barnston, Major Harry Eyres-Monsell, Com. Bolton M. Jesson, C.
Barrand, A. R. Falle, Major Sir Bertram Godfray Johnstone, Joseph
Barrie, Charles Coupar (Banff) Fell, Sir Arthur Jones, Sir Edgar R. (Merthyr Tydvil)
Barton, Sir William (Oldham) Flannery, Sir James Fortescue Jones, Henry Haydn (Merioneth)
Bellairs, Commander Carlyon W. Ford, Patrick Johnston Joynson-Hicks, Sir William
Bennett, Sir Thomas Jewell Foreman, Sir Henry Kellaway, Rt. Hon. Fredk. George
Bird, Sir A. (Wolverhampton, West) Foxcroft, Captain Charles Talbot King, Captain Henry Douglas
Bird, Sir William B. M. (Chichester) Fremantle, Lieut.-Colonel Francis E. Kinloch-Cooke, Sir Clement
Blair, Sir Reginald Ganzoni, Sir John Lambert, Rt. Hon. George
Borwick, Major G. O. Gardiner, James Lewis, Rt. Hon. J. H. (Univ., Wales)
Boscawen, Rt. Hon. Sir A. Griffith- Geddes, Rt. Hon. Sir E. (Camb'dge) Lister, Sir R. Ashton
Bowles, Colonel H. F. Gibbs, Colonel George Abraham Lloyd, George Butler
Bowyer, Captain G. W. E. Gilmour, Lieut.-Colonel Sir John Lloyd-Greame, Sir P.
Brassey, H. L. C. Glanville, Harold James Locker-Lampson, G. (Wood Green)
Breese, Major Charles E. Goff, Sir R. Park Lorden, John William
Bridgeman, Rt. Hon. William Clive Goulding, Rt. Hon. Sir Edward A. Lowther, Major C. (Cumberland, N.)
Briggs, Harold Grant, James Augustus Mackinder, Sir H. J. (Camlachie)
Brittain, Sir Harry Green, Joseph F. (Leicester. W.) McLaren, Hon. H. D. (Leicester)
Broad, Thomas Tucker Greene, Lt.-Col. Sir W. (Hack'y, N.) McLaren, Robert (Lanark, Northern)
Bruton, Sir James Greig, Colonel Sir James William M'Lean, Lieut.-Col. Charles W. W.
Buchanan, Lieut.-Colonel A. L. H. Gritten, W. G. Howard Macleod, J. Mackintosh
Buckley, Lieut.-Colonel A. Hacking, Captain Douglas H. McMicking, Major Gilbert
Bull, Rt. Hon. Sir William James Hallwood, Augustine M'Neill, Ronald (Kent. Canterbury)
Burn, Col. C. R. (Devon, Torquay) Hamilton, Major C. G. C. Macpherson, Rt. Hon. James I.
Butcher, Sir John George Hannon, Patrick Joseph Henry Magnus, Sir Philip
Cautley, Henry Strother Harmsworth, C. B. (Bedford, Luton) Mallalieu, Frederick William
Cecil, Rt. Hon. Evelyn (Birm., Aston) Harris, Sir Henry Percy Manville, Edward
Chamberlain, Rt. Hn. J. A. (Birm. W.) Haslam, Lewis Marriott, John Arthur Ransome
Chamberlain, N. (Birm., Ladywood) Henderson, Major V. L. (Tradeston) Mildmay, Colonel Rt. Hon. F. B.
Clay, Lieut.-Colonel H. H. Spender Hennessy, Major J. R. G. Molson, Major John Elsdale
Coats, Sir Stuart Henry, Denis S. (Londonderry, S.) Mond, Rt. Hon. Sir Alfred Moritz
Cobb, Sir Cyril Herbert, Col. Hon. A. (Yeovil) Moore, Major-General Sir Newton J.
Cockerill, Brigadier-General G. K. Herbert, Dennis (Hertford, Watford) Morris, Richard
Cohen, Major J. Brunei Hills, Major John Waller Mosley, Oswald
Colfox, Major Wm. Phillips Hinds, John Munro, Rt. Hon. Robert
Colvin, Brig.-General Richard Beale Hoare, Lieut.-Colonel Sir S. J. G. Neal, Arthur
Conway, Sir W. Martin Hohler, Gerald Fitzroy Newman, Colonel J. R. P. (Finchley)
Newman, Sir R. H. S. D. L. (Exeter) Samuel, A. M. (Surrey, Farnham) Watson, Captain John Bertrand
Nield, Sir Herbert Samuel, Samuel (W'dsworth, Putney) White, Col. G. D. (Southport)
Ormsby-Gore, Hon. William Sanders, Colonel Sir Robert Arthur Williams, Aneurin (Durham, Consett)
Parker, James Seddon, J. A. Williams, C. (Tavistock)
Pearce, Sir William Shaw, Hon. Alex. (Kilmarnock) Williams, Col. Sir R. (Dorset, W.)
Pease, Rt. Hon. Herbert Pike Shaw, Capt. William T. (Forfar) Williamson, Rt. Hon. Sir Archibald
Pennefather, De Fonblanque Shortt, Rt. Hon. E. (N'castle-on-T.) Willoughby, Lieut-Col. Hon. Claud
Percy, Lord Eustace (Hastings) Smith, Sir Malcolm (Orkney) Wills, Lt.-Col. Sir Gilbert Alan H.
Perkins, Walter Frank Sprot, Colonel Sir Alexander Wilson, Rt. Hon. J. W. (Stourbridge)
Perring, William George Stanley, Major Hon. G. (Preston) Wilson, Col. M. J. (Richmond)
Philipps, Sir Owen C. (Chester, City) Stanton, Charles Butt Wilson-Fox, Henry
Pollock, Sir Ernest Murray Sturrock, J. Leng Winterton, Earl
Pownall, Lieut.-Colonel Assheton Sutherland, Sir William Wise, Frederick
Pratt, John William Taylor, J. Wood, Hon. Edward F. L. (Ripon)
Prescott, Major W. H. Terrell, George (Wilts, Chippenham) Wood, Sir H. K. (Woolwich, West)
Purchase, H. G. Thomson, F. C. (Aberdeen, South) Wood, Major M. M. (Aberdeen, C.)
Raeburn, Sir William H. Thomson, Sir W. Mitchell- (Maryhill) Worthington-Evans, Rt. Hon. Sir L.
Randies, Sir John Scurrah Tickler, Thomas George Young, E. H. (Norwich)
Raw, Lieutenant-Colonel Dr. N. Townley, Maximilian G. Young, Sir Frederick W. (Swindon)
Rawlinson, John Frederick Peel Tryon, Major George Clement Younger, Sir George
Richardson, Alexander (Gravesend) Turton, Edmund Russborough
Roberts, Samuel (Hereford, Hereford) Waddington, R. TELLERS FOR THE AYES.—
Roberts, Sir S. (Sheffield, Ecclesall) Wallace, J. Colonel Leslie Wilson and Mr.
Roundell, Colonel R. F. Warren, Sir Alfred H. Dudley Ward.
NOES.
Bowerman, Rt. Hon. Charles W. Hallas, Eldred Parkinson, John Allen (Wigan)
Briant, Frank Hartshorn, Vernon Rees, Capt. J. Tudor- (Barnstaple)
Bromfield, William Hayward, Evan Richardson, R. (Houghton-le-Spring)
Brown, James (Ayr and Bute) Hodge, Rt. Hon. John Royce, William Stapleton.
Cairns, John Hogge, James Myles Sexton, James
Carter, W. (Nottingham, Mansfield) Irving, Dan Spencer, George A.
Davies, A. (Lancaster, Clitheroe) Kenworthy, Lieut.-Commander J. M. Swan, J. E.
Finney, Samuel Kenyon, Barnet Walsh, Stephen (Lancaster, Ince)
Galbraith, Samuel Lawson, John James Waterson, A. E.
Graham, W. (Edinburgh, Central) MacVeagh, Jeremiah White, Charles F. (Derby, Western)
Grundy, T. W. Morgan, Major D. Watts Young, Robert (Lancaster, Newton)
Guest, J. (York, W.R., Hemsworth) Murray, Hon. A. C. (Aberdeen)
Hall, F. (York, W. R., Normanton) Murray, Dr. D. (Inverness & Ross) TELLERS FOR THE NOES —
Halls, Walter Myers, Thomas Colonel Wedgwood and Mr. George
Barker.

Amendment made: In Sub-section (2), leave out the word "Part" ["under which Part of the said Schedule"], and insert instead thereof the word "Parts."—[Mr. Holmes.

Mr. MANVILLE

I beg to move, in Sub-section (2), to leave out the words "first day of January," and to insert instead thereof the words "twenty-eighth day of February."

This Amendment is proposed with the object of enabling those who are distant from the country to have adequate time to express their intention of claiming. I think the Chancellor of the Exchequer is prepared to accept the Amendment.

Sir R. HORNE

There are on the Paper other Amendments dealing with this point. I shall be prepared to go further than my hon. Friend, and to accept the Amendment standing in the name of the hon. and gallant Member (Captain Bowyer), to insert the words "thirty-first day of March."

Mr. MANVILLE

Perhaps I can move the Amendment in that form, or withdraw it.

The CHAIRMAN

If the hon. Member will withdraw the Amendment, I will put the Amendment to insert the words "thirty-first day of March."

Amendment, by leave, withdrawn.

Captain BOWYER

I beg to move, in Sub-section (2), to leave out the words "first day of January," and to insert instead thereof the words "thirty-first day of March."

Amendment agreed to.

Motion made and Question proposed, "That the Clause, as amended, stand part of the Bill.

Colonel WEDGWOOD

Before the Clause is carried, I want to know if it is a fact that at the end of 5 years, that is, at the end of August, 1925, the companies who have been paying Excess Profits Duty will be able to put in claims on the then Chancellor of the Exchequer for refund of what they have already paid. I rather gathered from the right hon. Gentleman's speech that it was only a question of not paying Excess Profits Duty and not a question of actual refund, but, as I read Part III, any payer of Excess Profits Duty is entitled to claim refund, but he cannot make his claim under Part III until 1925. Then he may be able to claim refund. Is that so or not? I know there is a limit in the amount that can be reclaimed, and that it is only a certain percentage of the total amount paid by the firm. If 75 per cent. of the firms in the country find that during the next 4 years their average profits are less than their pre-War standard, and they are, therefore, entitled to make a claim for refund, there will then be a very heavy call upon the Chancellor of the Exchequer, and it will be for the right hon. Gentleman's successor to deal with that call. I may be wrong in my reading of the Act. I am not au fait with the Excess Profits Duty, but it seems to me plain English that that claim will be made and that the country will have to meet that liability.

Sir R. HORNE

Undoubtedly money may be reclaimed up to a certain limited amount.

Colonel WEDGWOOD

40 per cent.

Sir R. HORNE

Equally, also, claims may be made for a period down to 1925. In the ordinary way of business nobody anticipates that there will be many claims in the last part of the period, for the reason that people will be realising such losses as they are making in connection with this matter during the first period. It is anticipated that the great weight of these claims will fall on this year and on the next, and will taper off until there is a very small amount for the latter part.

Colonel WEDGWOOD

Have they not to take the average of the 4 years?

Sir R. HORNE

Yes. You take what business you have done in the course of the four years and the losses you have sustained; but at the same time the burden of this will fall upon this year and next year. My hon. and gallant Friend may rest assured that there is no possibility of large claims coming in in 1925.

Colonel WEDGWOOD

I do not understand. I am speaking of Part III. How can any claims fall upon this year or next year, when Part III says: If a person … proves that the yearly average of the profits of the trade or business for the period 1921–1925 is less than the amount of the percentage standard, etc. How can losses upon that period fall upon this year or next year? How can it be possible to estimate until 1925 what are your losses from 1921 to 1925? How can you avoid the plain deduction that a claim made under Part III must be handed in not earlier than 1925?

Sir R. HORNE

For the reason that the alternative relief that is given under Part III of the First Schedule of the Bill will be very small in comparison, and, therefore, what we shall have to meet in respect of that relief will be comparatively small.

Sir G. COLLINS

As a result of the discussion that has just taken place, I think it is clearly shown that the Government this year are taking credit in their annual revenue for large sums from Excess Profits Duty, and they are postponing their liabilities for payment to future years. That is a very important point, when the Committee this afternoon is being asked to pass Clause 26. The Government are discounting their economies, and post-dating their liabilities. I could give many instances to confirm that statement. It is true that the Government to-day are taking credit in their annual revenue for arrears of Excess Pro fits Duty in past years, and are postponing their liabilities to future years. They are taking credit for £120,000,000 this year, dropping to £70,000,000 next year. It is a reasonable point that before crediting the annual accounts of the nation with the arrears of Excess Profits Duty, the right hon. Gentleman should not take credit in the revenue side until he has a surplus set aside and earmarked for the definite purpose of meeting the repayments which he will require to find in the coming years. It may be a very big figure. The Chancellor of the Exchequer has already told the Committee—and I take no exception to the concession—that the concession he has made will cost £80,000,000. It may be much larger. There may be a much larger drop in the fall of prices than the Chancellor of the Exchequer anticipates. He may scratch his head as a wise Scotsman, and hope that these falls will not take place. I agree with him there, but they may take place.

Who could have perceived three months ago the very large drop in prices, the sudden, steep, downward curve, which may continue month after month in the future. If it does continue, there will be much larger repayments to firms of Excess Profits Duty. Therefore, the anticipated surplus this year of £120,000,000 and of £70,000,000 next year may not mature. The Chancellor of the Exchequer, anxious as he is to keep his revenue side up this year, has taken credit for £120,000,000, therefore avoiding coming to the House for increased taxation. He, is postponing his liabilities to a future date. I hope the right hon. Gentleman will give a definite assurance that he will, as a prudent Scotsman, set aside a certain amount of the arrears which he is gathering in week by week, and earmark it purposely

to meet repayments in future years, and not carry the whole amount of £120,000,000 into his annual revenue, because he is by this concession—a justifiable, wise, and prudent concession—giving something to traders which may month after month in future largely reduce his anticipated surplus. I ask him to take thought for the morrow, and, like a business man, set aside a certain percentage of the money he receives this year.

Question put, "That the Clause, as amended, stand part of the Bill."

The Committee divided: Ayes, 217; Noes, 38.

Division No. 175] AYES. [7.0 p.m.
Adkins, Sir W. Ryland D. Eyres-Monsell, Com. Bolton M. Lloyd, George Butler
Agg-Gardner, Sip James Tynte Falle, Major Sir Bertram Godfray Lloyd-Greame, Sir P.
Ainsworth, Captain Charles Fell, Sir Arthur Locker-Lampson, G. (Wood Green)
Archer-Shee, Lieut.-Colonel Martin Flannery, Sir James Fortescue Lorden, John William
Astor, Viscountess Ford, Patrick Johnston Lowther, Major C. (Cumberland, N.)
Bagley, Captain E. Ashton Foreman, Sir Henry Mackinder, Sir H. J. (Camlachie)
Baird, Sir John Lawrence Foxcroft, Captain Charles Talbot McLaren, Hon. H. D. (Leicester)
Baldwin, Rt. Hon. Stanley Fremantle, Lieut.-Colonel Francis E. McLaren, Robert (Lanark, Northern)
Balfour, George (Hampstead) Ganzoni, Sir John M'Lean, Lieut.-Col. Charles W. W.
Balfour, Sir R. (Glasgow, Partick) Gardiner, James Macleod, J. Mackintosh
Banbury, Rt. Hon. Sir Frederick G. Geddes, Rt. Hon. Sir E. (Camb'dge) M'Micking, Major Gilbert
Barlow, Sir Montague Gibbs, Colonel George Abraham McNeill, Ronald (Kent, Canterbury)
Barnes, Rt. Hon. G. (Glas., Gorbals) Gilbert, James Daniel Macpherson, Rt. Hon. James I.
Barnett, Major Richard W. Gilmour, Lieut.-Colonel Sir John Maitland, Sir Arthur D. Steel
Barnston, Major Harry Glanville, Harold James Mallalieu, Frederick William
Barrand, A. R. Goff, Sir R. Park Manville, Edward
Barrie, Charles Coupar (Banff) Goulding, Rt. Hon. Sir Edward A. Marriott, John Arthur Ransome
Bellairs, Commander Carlyon W. Green, Joseph F. (Leicester, W.) Mildmay, Colonel Rt. Hon. F. B.
Bird, Sir A. (Wolverhampton, West) Greene, Lt.-Col. Sir W. (Hack'y, N.) Molson, Major John Elsdale
Bird, Sir William B. M. (Chichester) Greig, Colonel Sir James William Mond, Rt. Hon. Sir Alfred Moritz
Blair, Sir Reginald Gritten, W. G. Howard Moore, Major-General Sir Newton J.
Borwick, Major G. O. Hacking, Captain Douglas H. Morris, Richard
Bowles, Colonel H. F. Hailwood, Augustine Mosley, Oswald
Bowyer, Captain G. W. E. Hamilton, Major C. G. C. Munro, Rt. Hon. Robert
Boyd-Carpenter, Major A. Hannon, Patrick Joseph Henry Neal, Arthur
Breese, Major Charles E. Harmsworth, C. B. (Bedford, Luton) Newman, Colonel J. R. P. (Finchley)
Bridgeman, Rt. Hon. William Clive Haslam, Lewis Newman. Sir R. H. S. D. L. (Exeter)
Briggs, Harold Henderson, Major V. L. (Tradeston) Nield, Sir Herbert
Brittain, Sir Harry Hennessy, Major J. R. G. Ormsby-Gore, Hon. William
Broad, Thomas Tucker Henry, Denis S. (Londonderry, S.) Parker, James
Bruton, Sir James Herbert, Col. Hon. A. (Yeovil) Parry, Lieut.-Colonel Thomas Henry
Buckley, Lieut.-Colonel A. Herbert, Dennis (Hertford, Watford) Pearce, Sir William
Bull, Rt. Hon. Sir William James Hills, Major John Waller Pease, Rt. Hon. Herbert Pike
Burn, Col. C. R. (Devon, Torquay) Hinds, John Percy, Lord Eustace (Hastings)
Butcher, Sir John George Hoare, Lieut.-Colonel Sir S. J. G. Perkins, Walter Frank
Cautley, Henry Strother Hohler, Gerald Fitzroy Perring, William George
Cecil, Rt. Hon. Evelyn (Birm., Aston) Holmes, J. Stanley Philipps, Sir Owen C. (Chester, City)
Chamberlain, Rt. Hn. J. A. (Birm. W.) Hood, Joseph Pollock, Sir Ernest Murray
Chamberlain, N. (Birm., Ladywood) Hope, Lt.-Col. Sir J. A. (Midlothian) Pownall, Lieut.-Colonel Assheton
Clay, Lieut.-Colonel H. H. Spender Hopkins, John W. W. Pratt, John William
Coats, Sir Stuart Home, Edgar (Surrey, Guildford) Prescott, Major W. H.
Cockerill, Brigadier-General G. K. Horne, Sir R. S. (Glasgow, Hillhead) Purchase, H. G.
Cohen, Major J. Brunei Hunter, General Sir A. (Lancaster) Raeburn, Sir William H.
Colfox, Major Win. Phillips Hurd, Percy A. Randles, Sir John Scurrah
Colvin, Brig.-General Richard Beale Hurst, Lieut.-Colonel Gerald B. Raw, Lieutenant-Colonel Dr. N.
Conway, Sir W. Martin Jackson, Lieut.-Colonel Hon. F. S. Rawlinson, John Frederick Peel
Coote, Colin Reith (Isle of Ely) James, Lieut.-Colonel Hon. Cuthbert Richardson, Alexander (Gravesend)
Cowan, D. M. (Scottish Universities) Jameson, John Gordon Roberts, Samuel (Hereford, Hereford)
Craik, Rt. Hon. Sir Henry Jephcott, A. R. Roberts, Sir S. (Sheffield, Ecclesall)
Davidson, Major-General Sir J. H. Jesson, C. Roundell, Colonel R. F.
Dawes, James Arthur Johnstone, Joseph Royds, Lieut.-Colonel Edmund
Denniss, Edmund R. B. (Oldham) Jones, Sir Edgar R. (Merthyr Tydvil) Samuel, A. M. (Surrey, Farnham)
Dockrell, Sir Maurice Jones, Henry Haydn (Merioneth) Samuel, Samuel (W'dsworth, Putney)
Doyle, N. Grattan Joynson-Hicks, Sir William Sanders, Colonel Sir Robert Arthur
Du Pre, Colonel William Baring Kellaway, Rt. Hon. Fredk. George Seddon, J. A.
Edwards, Allen C. (East Ham, S.) King, Captain Henry Douglas Shaw, Hon. Alex. (Kilmarnock)
Edwards, Hugh (Glam., Neath) Kinloch-Cooke, Sir Clement Shaw, Capt. William T. (Forfar)
Elliot, Capt. Walter E. (Lanark) Lambert, Rt. Hon. George Shortt, Rt. Hon. E. (N'castle-on-T.)
Entwistle, Major C. F. Lewis, Rt. Hon. J. H. (Univ., Wales) Simm, M. T.
Evans, Ernest Lister, Sir R. Ashton Smith, Sir Malcolm (Orkney)
Sprot, Colonel Sir Alexander Waddington, R. Winterton, Earl
Stanley, Major Hon. G. (Preston) Wallace, J. Wise, Frederick
Stanton, Charles Butt Warren, Sir Alfred H. Wood, Hon. Edward F. L. (Ripon)
Stevens, Marshall Watson, Captain John Bertrand Wood, Sir H. K. (Woolwich, West)
Sturrock, J. Leno Weston, Colonel John Wakefield Wood, Major M. M. (Aberdeen, C.)
Sutherland, Sir William White, Col. G. D. (Southport) Worthington-Evans, Rt. Hon. Sir L.
Taylor, J. Williams, Aneurin (Durham, Consett) Young, E. H. (Norwich)
Terrell, George (Wilts, Chippenham) Williams, C. (Tavistock) Young, Sir Frederick W. (Swindon)
Thomson, F. C. (Aberdeen, South) Williams, Col. Sir R. (Dorset, W.) Younger, Sir George
Thomson, Sir W. Mitchell (Maryhill) Williamson, Rt. Hon. Sir. Archibald
Tickler, Thomas George Willoughby, Lieut.-Col. Hon. Claud TELLERS FOR THE AYES.—
Townley, Maximilian G. Wills, Lt.-Col. Sir Gilbert Alan H. Colonel Leslie Wilson and Mr.
Tryon, Major George Clement Wilson, Rt. Hon. J. W. (Stourbridge) Dudley Ward.
Turton, Edmund Russborough Wilson-Fox, Henry
NOES.
Barker, G. (Monmouth, Abertillery) Halls, Walter Richardson, R. (Houghton-le-Spring)
Bowerman, Rt. Hon. Charles W. Hartshorn, Vernon Royce, William Stapleton
Briant, Frank Hayday, Arthur Sexton, James
Bromfield, William Hayward, Evan Spencer, George A.
Brown, James (Ayr and Bute) Hodge, Rt. Hon. John Swan, J. E.
Cairns, John Hogge, James Myles Walsh, Stephen (Lancaster, Ince)
Carter, W. (Nottingham, Mansfield) Kennedy, Thomas Waterson, A. E.
Davies, A. (Lancaster, Clitheroe) Kenworthy, Lieut.-Commander J. M. Wedgwood, Colonel Josiah C.
Finney, Samuel Kenyon, Barnet White, Charles F. (Derby, Western)
Galbraith, Samuel MacVeagh, Jeremiah Young, Robert (Lancaster, Newton)
Graham, W. (Edinburgh, Central) Morgan, Major D. Watts
Grundy, T. W. Myers, Thomas TELLERS FOR THE NOES.—
Guest, J. (York, W. R., Hemsworth) Parkinson, John Allen (Wigan) Mr. Lawson and Mr. Frederick
Hallas, Eldred Rees, Capt. J. Tudor (Barnstaple) Hall.