HC Deb 12 December 1939 vol 355 cc1000-1
17. Mr. Stokes

asked the President of the Board of Trade whether he will take steps to ensure that all companies directly or indirectly concerned with Government contracts or the supply of essential goods publish consolidated balance sheets giving the full net profit from each subsidiary and the amount of their holdings therein; and whether, to this end, he will make compulsory a standard form of publishing accounts?

Mr. Stanley

While Section 126 of the Companies Act, 1929, requires that there shall be annexed to the balance sheet of a holding company a statement showing how the profits and losses of subsidiary companies have been dealt with in the accounts of the holding company, it expressly provides that it shall not be necessary to specify in any such statement the actual amount of any profits or losses. The question whether any modification of this statutory provision is required is one of the points which have been noted for examination when amendment of the Companies Act is under consideration, but I doubt whether it will be possible to introduce legislation on this subject in the near future.

Mr. Stokes

Does not the right hon. Gentleman think that the general public, out of whose efforts all these profits have to be produced, have a right to a true and accurate picture of the position; and is he aware that concealment is possible under the present regulations?

Mr. Stanley

The matter was under actual consideration long before the question of armament profits arose and this, as I say, was noted for amendment, but the amendment required would not be at all simple in character, and could not be undertaken except as part of a general review of company legislation.

Mr. Herbert Morrison

Does not the right hon. Gentleman think it vitally important, having regard to the circumstances of the war, that there should be full and accurate public knowledge as to the profits which are being made by contractors to the Government?

Mr. Stanley

Everybody wishes the fullest and most accurate public knowledge that is practicable to be given, but this requires technical amendment of a particular part of the Companies Act, which cannot be done in any simple way. It is a matter which has been under consideration, quite apart from this question of armament profits.

Sir F. Sanderson

Is it not a fact that every company, whether it be a parent company or a subsidiary company, will, fact, pay Excess Profits Tax?