§ Motion made, and Question proposed, "That the Clause stand part of the Bill."
§ Mr. Wilmot
This Clause and several which follow are for the purpose of extending some concessions to certain mining and oil-getting enterprises in relation to the nature of their standard for excess profits purposes. This need having been recognised I rise to inquire why it is that it has been limited in this way, and the most, vital ore-getting industry at the moment excluded. I have several times expressed somewhat unorthodox views on the effects of the Excess Profits Tax. While the general principle of the tax is to be approved, its effects have in many cases been somewhat unexpected and undesirable in that it favours established and unenterprising industries and penalises young, progressive, dynamic and experimental industries. In 'the post-war years we may pay a very heavy price in crippling the expansion of new[...] ideas in industry through the Excess Profits Tax.
I have voiced this view before and nothing very much has happened, but I think that here we have an opportunity of pointing out one of the most undesirable effects of the Excess Profits Tax as it affects the coal mining industry. At this time the coal mining industry is called upon to make unusual efforts to obtain the maximum amount of coal in the minimum amount of time and with the least possible labour. That calls for the maximum of mechanisation. If a coal concern does expend large sums of money upon mechanical appliances for extracting coal at a higher rate than is normal it is, in fact, exhausting its physical assets, and if it has a high standard it is exhausting them for the financial benefit of the Chancellor of the Exchequer, whereas another concern, less patriotic or less enterprising and far-seeing, which does not exploit its minerals to the same extent will benefit financially by its failure 272 to do so. In view of the urgent, overriding need for the maximum output of coal during the next——
§ The Deputy-Chairman
The hon. Member had better not develop the argument about coal. If he really wished to bring in coal, there should be a new Clause.
§ Mr. Wilmot
You have indeed' been very indulgent, Mr. Williams, and I will, therefore, bring my remarks to a close by asking the Chancellor to explain why this concession is extended to some minor forms of mining, whereas the principal form of mining upon which we depend in this war, has been excluded from the concession.
§ Mr. Woodburn
Before the Chancellor replies I should like to ask what steps the Treasury are taking to see that the benefits given under this Clause do not induce the exploiters of mineral wealth to be wasteful, as it were, in its exploitation. Let me illustrate my point by' an example from the coal fields. In the past it has been the practice of some coal getters to throw away millions of tons of the nation's assets in order to work a rich seam without any regard to what was lost in the process. As far as I can gather, there would be an inducement under this Clause to certain exploiters of mineral wealth to work one rich seam of ore without taking out the rest of the coal; they would leave the rest of the coal in the earth and it would, in fact, never be worked. They would be getting the maximum out of the present situation and the rest would be lost to the community. From the point of view of the community I suggest that the Treasury ought to exercise some supervision to see that this position is not exploited to the detriment of the nation's mineral wealth resources.
§ Sir K. Wood
So far as the last point is concerned, I think the taxation position at the moment is a sufficient precaution against that happening. I do not think the taxation position would allow anybody to go to any extreme lengths with the idea of taking an advantage of the present situation. I feel that we have a sufficient check there. As to the limitations of the Clause, what I have done has been to deal with those minerals which have been brought to my attention—sand, gravel, asbestos and mica. It is in those circumstances that the Clause has been restricted.
§ Mr. Wilmot
Will the right hon. Gentleman tell me how those industries differ from coal in this connection?
§ Sir K. Wood
I do not think I am called upon for an explanation at this time. This Clause has been introduced to meet the cases put before me.
§ Question, "That the Clause stand part of the Bill," put and agreed to.