§ The Parliamentary Secretary to the Board of Trade (Captain Waterhouse)
I beg to move:That the draft of an Order entitled the Prices of Goods Act, 1939 (Amendment of First Schedule), Order, 1941, proposed to be made by the Board of Trade under Section 6 of the Goods and Services (Price Control) Act, 1941, a copy of which was presented to this House on 6th August, be approved.This Order is as simple as it is short. The First Schedule to the Prices of Goods Act, 1939, sets out in broad terms those charges which a trader may properly calculate in connection with the fixing of prices and of margins. Among those various headings comes the item of insurance premiums. It might, therefore, seem that any premiums or contributions paid by the trader in respect of war damage would properly come into the calculation, but in Section 82 of the War Damage Act it is clearly laid down that these are contributions of a capital nature and must not be taken into consideration in a computation of profits for the purpose of the Income Tax Act. That principle is further expanded in Section 84. This Order merely applies to the Prices of Goods Act the principle which the Chancellor of the Exchequer laid clown for the arrangements as to Income Tax and Excess Profits Tax.
§ Mr. Doland (Balham and Tooting)
I wish to speak for a few minutes against this Motion, and, with your permission, Sir, to move the deletion of that paragraph of the Order which refers toany premium payable under a policy issued under either of the schemes operated under Part II of the said Act…
§ Mr. Deputy-Speaker (Colonel Clifton Brown)
The House cannot amend the Order; it can only accept or reject it.
§ Mr. Doland
Then might I just say a few words in protest against the Order? As I understand, under paragraph (ii), it is intended, as the Minister has just said, to exclude premiums paid under the War Damage Act from the expenses which may be calculated. I regret that the Minister did not show good reasons why these should be excluded or suggest that the Order was necessary because circumstances which had come to the knowledge of him or of those advising indicated that these premiums would increase prices abnormally. I realise that under Section 378 82 and Section 84 of the War Damage Act the contributions, or premiums, are not deductible expenses for the purpose of Income Tax adjustment. I and my friends in the distributive industry cannot see why this should prevent owners of businesses from taking such payments into account. I quite agree that the percentage of such expenses would be small. On any one article it would in many instances be infinitesimal. But in the aggregate it would, in some cases, be a serious item. Moreover, in certain circumstances this insurance is compulsory. The principal objection to this Order is that, as I think the Parliamentary Secretary will admit, all ordinary insurance premiums are a permitted expense of a business. This Order introduces a very dangerous precedent. I feel sure that the hon and gallant Gentleman knows that in some classes of business margins of profit are very seriously restricted under the Prices of Goods Act. Any further impost such as this will react seriously on the living of those in the distributive industry.
I appreciate that the President of the Board of Trade and the Parliamentary Secretary do not wish to send the small trader out of business, but I am not so sure of those who are advising them. Small traders have acknowledged with considerable satisfaction the declarations which have been made on many occasions by the President of the Board of Trade, and, I think, on more than one occasion in this House by the Parliamentary Secretary, that it is not intended to disturb the balance as between big and small traders. He has stated that explicitly, but every time such Measures or Orders are brought before the House they do to a great extent affect only the small trader. I sincerely trust that the Orders which may be made under the Goods and Services (Price Control) Act will not have a deleterious effect on thousands of small traders who are now striving to keep their heads above water. I listened to-day to the Lord Privy Seal when he gave us the Business which is to be transacted after the Recess, and when he said that further Orders on the Purchase Tax would be made. These Orders are coming in now, if not daily, almost weekly, and we, as traders, do not know where we are in this state of things. I hope the President of the Board of Trade will watch most carefully the recommendations which are 379 brought to his notice by the officials or officers of his Department, so that in future such Orders under the Act will not further tend to eliminate the small trader. I am very much concerned, as I feel certain many Members of this House are concerned, about the position to-day of thousands of persons engaged in small retail shops. In answer to a Question by the hon and gallant Member for East Leicester (Major Lyons) yesterday, it was stated that in Leicester 179 shops were being prevented from selling certain articles of food.—
§ Mr. Deputy-Speaker
We are not discussing the general position of the small trader; we are discussing this particular Order.
§ Mr. Doland
With great respect, I am only suggesting that this Order does affect the small trader more than the bigger concerns, and I am protesting against the Order to be made by this Resolution. I hope that future recommendations by officials will be carefully looked into, so that the small trader may be given an opportunity to continue in business.
§ Mr. Moelwyn Hughes (Carmarthen)
I do not want to be out of Order in discussing this particular Amendment to the Schedule of the Prices of Goods Act. All I want to do is to ask the hon and gallant Gentleman why the Order which he brings before the House to-day is so limited in scope. It will be within the recollection of Members present that in the course of the Second Reading and Committee stages of the Goods and Services (Price Control) Act there were many references not only to the Schedule of the Prices of Goods Act in general terms, but to particular items thereon, which called for amendment. The Parliamentary Secretary himself, for instance, pointed out the possibility of abuse with regard to advertising expenses, and that there are exceptions to these powers is an indication that the Board of Trade saw the necessity for amending the Schedule.
It is most important, because it is the Schedule alone which decides what variation in price may be justified from the basic figures. I would like to ask the hon and gallant Gentleman how long is it since the attention of the Board of Trade was directed to the need for amending, clarifying and defining some of these 380 items in the Schedule? The Board have the powers—they have had them for many weeks—and all they produce is this quite necessary, but exiguous, addition to the Schedule. Let me take one example. Since the time that the question of advertising has been under the eye of the Board of Trade, there has been a considerable increase in what one can only describe as useless advertising. If you look at recent issues of the Press, you will find that at great expense a number of manufacturers and traders are taking up much space with their descriptions of the meaning of the "V" sign, what "X" stands for, pictures of towns of the future and the new world that is to come, quotations from the Prime Minister's speeches and from imaginary speeches by Hitler, and descriptions of various processes in industry —all this at enormous expense, which, of course, is reflected again in the prices of the goods. The only way that can be dealt with is by amending the Schedule more extensively than can be done by means of the Order now before the House. Why is it that at this stage the House is being asked to make only this very small, but necessary, alteration?
§ Captain Waterhouse
If I may say one or two words on the points that have been raised, I would like to renew the assurance which has been given by the President of the Board of Trade, and which has been repeated many times in this House, that the last tiling in the world that the Board has in mind is to do anything to upset the fair balance between the larger and smaller units in the retail trade. If the hon. Member for Balham and Tooting (Mr. Doland) could do anything to help us to assure the influential body with which he is intimately connected of that fact, I think he would be conferring a benefit not only on the Board of Trade but on the shopkeepers themselves by removing from them a constant source of irritation and fear. He rather complained that I had not given reasons for this particular Order, but it is within the recollection of the House that the War Damage Act was approved and that the arguments set forth by the Chancellor of the Exchequer in that Debate were considered so sufficient that it did not seem up to me to have to repeat them to-day. In that connection I see no reason at all why this particular Order should affect the small trader more than the large trader.
381 As a general argument it would be obviously absurd to say that a landlord must pay the whole of his Part I contribution himself and might pass none on to the tenant, and to say that the tenant might pass on his share of the charge by increase of prices to the general consumer. On that broad line I think he will see the equity of the proposal we have put for-word. The hon. Gentleman the Member for Carmarthen (Mr. Moelwyn Hughes) complained or remarked—I am not quite certain which it was—that this was a short and simple Order. Well, I can assure him that there are better things to come. The Lord Privy Seal spoke to-day of further Orders. It is not necessary to make all alterations by modification of the Schedule; there are other ways of achieving the same thing, and I think that when he sees the Orders which will in due course be laid before the House he will be satisfied that the end we all have in view has been reasonably and properly attained.
§ Question put, and agreed to.
That the draft of an Order entitled the Prices of Goods Act, 1939 (Amendment of First Schedule), Order, 1941, proposed to be made by the Board of Trade under Section 6 of the Goods and Services (Price Control) Act, 1941, a copy of which was presented to this House on 6th August, be approved.