HC Deb 14 June 1938 vol 337 cc31-3
47 and 48. Mr. Craven-Ellis

asked the Chancellor of the Exchequer (1) in view of the necessity of sustaining the taxable capacity of the community in view of the prospective heavy liabilities of the next few years in consequence of the necessity to re-arm, what steps are the Government taking or contemplating to secure that the profitability of enterprise remains intact;

(2) whether, in view of the reduction by almost 20 per cent. in the price level of primary commodities during the last 10 months and of the detrimental effects of this movement upon the export trades of Great Britain, measures will be taken to promote the recovery of these prices in conformity with the report on the monetary policy of July, 1933?

51. Mr. H. G. Williams

asked the Chancellor of the Exchequer whether, in view of the public anxiety as to the growth of public expenditure and having regard to the reduction in trade activity, he will state what steps His Majesty's Government propose to take to deal with the situation?

The Chancellor of the Exchequer (Sir John Simon)

The question of public expenditure and of its relation to the taxable capacity of the country is one which must be continuously present to the mind of any Chancellor of the Exchequer. The subject has recently been debated in the House and I could not usefully add, within the limits of question and answer, to what was said from this bench on that occasion. The primary responsibility for the profitability of industry lies of course with the industrial community. But within their proper sphere the Government are taking every step possible to maintain confidence and credit, to establish favourable monetary conditions, and to remove obstacles to trade, industry and employment. Direct assistance by way of subsidy has been accorded in the case of a few industries where the public interest clearly warranted that course, but this method is not capable of general application. The burden of taxation is necessarily heavy because of the needs of the rearmament programme, but its effect on industry is being mitigated by increased wear and tear allowances in the computation of direct taxation. As regards the commodity price level, the Government adhere to the policy enunciated in 1933, and more than once since, of favouring a recovery of equilibrium in the price structure. Though there is no simple and quick method of achieving that result the general policy of the Government, as I have described it, is directed towards that end.

Mr. Craven-Ellis

Is the right hon. Gentleman aware that the President of the Board of Trade a few weeks ago made a statement from the Front Bench to the effect that the high commodity level was artificially high and should fall, and that that is the direct opposite to the reply of the right hon. Gentleman just now?

Mr. H. G. Williams

Will the right hon. Gentleman answer my question with regard to the growth of public expenditure, to which his answer did not relate at all? Are His Majesty's Government prepared to take steps to ease up now rather than have difficult and unjust panic readjustments in 18 months time?

Sir J. Simon

My hon. Friend will see that I replied to his question when I observed that while these matters are under consideration constantly they are really incapable of being dealt with by question and answer.

Mr. Williams

What steps do His Majesty's Government propose to take to stop the increase in public expenditure, for which they are responsible?

Mr. Herbert Morrison

Will the right hon. Gentleman take steps to secure that the abnormal profitability of the armaments industry will not remain intact?

Sir J. Simon

The right hon. Gentleman is aware that the most elaborate steps are being taken to control the profits of that industry.

Mr. Williams

Can the right hon. Gentleman give some answer to my question?