HC Deb 11 February 1941 vol 368 cc1242-5

(EXPENDITURE ARISING OUT OF THE WAR.)

2. "That a sum, not exceeding 1,000,000,000 be granted to His Majesty, towards defraying the expenses which may be incurred during the year ending on the 31st day of March, 1942, for general Navy, Army and Air Services and for the Ministry of Supply, in so far as specific provision is not made therefor by Parliament, for securing the public safety, the Defence of the Realm, the maintenance of public order and the efficient prosecution of the war, for maintaining supplies and services essential to the life of the community and generally for all expenses beyond those provided for in the ordinary Grants of Parliament, arising out of the existence of a state of war."

First Resolution read a Second time.

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."

Mr. Hammersley (Willesden, East)

I apologise for delaying my remarks till the Report stage of the Resolution. I read the Committee stage, and I was interested by the fact that the Debate was dominated to a great extent by economic and financial considerations. I would like, shortly, to put the producers' point of view. We have to consider the future of the country after the war, and it is essential that the efficiency of the producer should be maintained, having regard to the financial burden that will have to be carried by the community as a whole.

The Chancellor of the Exchequer made two main points with which everybody in the Committee agreed. They were that civilian consumption must continue to be curtailed and that the taxpayers' further efforts to fortify the revenue were essential. I do not think there is doubt that those two main lines of policy are agreed upon throughout the House, but a considerable division of opinion was shown during the Debate as to how those policies should be carried out. The hon. Member for Hastings (Mr. Hely-Hutchinson), whose observations on these matters I always read with great interest, said that the public are in a great difficulty. He said that if he was fortunate enough to be able to sell his house, he would not be entitled to go on the razzle with the proceeds. I think he would agree that if that is true about his house, it is also true about his stocks and shares, his silver and plate, and whatever capital assets he may possess. He went on to say: Those who have capital assets have to be prepared to accept from the Government a restriction on their free power to dispose of the proceeds. Speaking as a free man and not under compulsion, I declare that with a whole heart I am willing to accept that restriction on my free power of disposal."—[OFFICIAL REPORT, 6th February, 1941; col. 1132, Vol. 368.] I wonder whether the hon. Member had considered the implication of that expression of view. It is something with which I entirely disagree. How could that restriction be brought into effect? It could be brought into effect only on the assumption that the banks were instructed to divide a person's private account into what might be described as income and what might be described as capital. If they were called upon to block the private accounts of capital in respect of each individual, that, in my opinion, would result in not what the House and the country require, which is less control by bankers, but greater control by bankers. Moreover, it would not be effective, because whatever you could do in respect of a man with a banking account, I do not think the country would be willing to deprive a small man of the right of withdrawing his savings, and it is the withdrawn savings of the small man that do in fact constitute the greater part of a possible increase of purchasing power. On this question of the curtailment of consumption, I prefer the idea put forward by the hon. Member for East Birkenhead (Mr. White), namely, the extension of rationing and the extension of price control. We should have rationing of the bulk of the articles which enter into the cost-of-living index, including rents. It is true that there would be a possibility of a rise in the prices of luxury goods, hut I cannot see the danger in that. I do not think it would be against the national interest if the price of articles like pianos was increased three or four times the prewar price.

Then there is the question of more taxation. It seemed to me that there was an underlying feeling that a further increase in the general level of Income Tax was almost inevitable, and, speaking as a producer and perhaps with a biased point of view, I think the general level of Income Tax is already high enough It might be possible to introduce a differential rate of Super-tax so that Super-tax payers who drew their income from unearned sources would pay a higher rate than Super-tax payers whose income was earned. But that is only a little bit of slack that remains in the general community. If we are to forge ahead after this war, we must get private enterprise back into business. How can that be done if the rate of Income Tax is to be maintained at something like 10s. in the £? It would be a situation in which the man with enterprise would say that the dice were loaded against him. If the enterprise is unfortunate, he loses everything. If the enterprise is fortunate, the State takes the bulk of the proceeds. Therefore, private enterprise will not he brought back into business if the present level of Income Tax is increased. Of course, the Chancellor of the Exchequer must get the money—

Mr. Speaker

The hon. Member is speaking about Income Tax, and he certainly cannot do that in Supply.

Mr. Hammersley

I was dealing with a question which was raised during tile Committee stage of the Bill. I am sure the House will forgive me, because, from the country's point of view, it is important that the producer's point should be put forward. I shall not occupy the House another minute; I am answering a point which was raised during the Committee stage. I was saying that the Chancellor requires to have his revenue fortified. I was going to suggest that, instead of raising the average level of income Tax, there is another source of revenue open to the Chancellor.

Mr. Speaker

The hon. Member is doing exactly what I said he must not do. He is dealing with Income Tax in Supply.

Mr. Hammersley

I will leave Income Tax entirely, and proceed with what I was going to say, namely, that you can tax capital.

Mr. Speaker

The hon. Member cannot raise that either in Supply.

Mr. Hammersley

I think that I have been able to put the producer's point of view to a certain extent, and, in view of your Ruling, Sir, I hope that we shall get the Report stage without further discussion.

Sir Irving Albery (Gravesend)

I rise only to say that it seems to me to be desirable that this House should have an opportunity for a general Debate on finance.

Question, "That this House doth agree with the Committee in the said Resolution," put, and agreed to.