HC Deb 21 September 1939 vol 351 cc1065-7
56. Colonel Wedgwood

asked the President of the Board of Trade whether he is aware that the war risks insurance of stocks at 6 per cent. Per annum is a tax that is likely to ruin many businesses where valuable stocks are carried; and will he consider an amendment to allow contracting out and/or a reduction of the tax proportionate to the reduction of risks of air raids in those districts which are not evacuation areas?

The Parliamentary Secretary to the Board of Trade (Major Lloyd George)

My right hon. Friend has received representations from certain trades as to the effect of the commodity insurance scheme upon them, and these representations are receiving urgent consideration. As my right hon. Friend pointed out yesterday in reply to a supplementary question by the hon. Member for Dundee (Mr. Foot), it is a complete fallacy to assume that this charge represents 6 per cent. on the stock, since the actual additional cost depends upon the number of times the stock is turned over. As regards the second part of the question, in the view of the Government it is equitable that the cost of compulsory war risks insurance of stocks should be borne by the trading community as a whole. The right hon. and gallant Member's suggestion of a differentiation in favour of certain supposedly less vulnerable areas, if carried into effect, would operate to the disadvantage of persons carrying on business in thickly populated industrial areas where the difficulties are likely to be greatest.

Mr. Bellenger

With reference to the hon. and gallant Member's remarks that the Government's view is that this burden should be borne by the trading community as a whole, is he aware that the burden is being borne the consumers and not by the trading community?

Major Lloyd George

I may say that many firms are not passing on the cost at all.

Mr. Logan

Is the Minister aware that there are some places where they do not turn the stock over more than once or twice in a year, and that this imposes a burden upon them? I have individual cases where they have dismissed hands in the shop owing to not being able to meet the expense.

Major Lloyd George

I am aware that in certain cases the stock is turned over only once a year, but that is not the rule: it is rather the exception. If the hon. Member has any information to give me I shall be grateful to him.

Mr. Logan

Will exception be made in those cases which are not turning over the stock more than once a year?

Major Lloyd George

Consideration is being given at the moment to certain cases.

Mr. Simmonds

Is the hon. and gallant Member aware that this is really causing a general rise in prices, and is having an inflationary effect when it is most important that prices should be stable?

Major Lloyd George

I am well aware that in many cases it may be having a bad effect, but I have had many cases brought to my notice in which quite unjustifiably the whole cost of the 6 per cent. has been passed on when, in fact, the stock is being turned over three and four times a year. I would remind the hon. Member that the insurance is only one half per cent. per month and ought to be multiplied only by the number of months the stock is not turned over.

Colonel Wedgwood

Is the hon. and gallant Member aware that this tax falls with special weight on the export trade which cannot raise prices?

Mr. Lipson

Would it be possible to publish the names of the firms who are offending in this way and also the firms who are not?

Major Lloyd George

What is happening at the present time is that if any cases are brought to our notice inquiry is made in order to verify the statement, and the hon. Member will understand that it is only in the last day or two that some of these cases have been brought to our notice. In every single instance inquiry is being made as to how much of the extra cost is attributable to war risks insurance.

Mr. Macquisten

Would it not be much better to abolish the whole scheme, which is an intolerable nuisance?