HC Deb 29 June 1943 vol 390 cc1544-7

It shall be lawful for the Treasury to permit such firms as can prove pre-war overseas trading and development expenditure, to set aside out of profits, as a reserve for future trading and development, a sum each year based upon their normal pre-war expenditure for this purpose: such money shall be held by the Government during the war and returned to the firms concerned at the conclusion of hostilities only for the specific purpose of active overseas trading and development.—[Mr. Hannah.]

Brought up, and read the First time.

Mr. Hannah (Bilston)

I beg to move, "That the Clause be read a Second time."

Very few of us will want to quarrel with a remark made something like 2,000 years ago by Eliphaz the Temanite that "man is born to trouble as the sparks fly upward." Two main worries disturb the peace of mind of all of us at the present time apart altogther from the terrible war in which we find ourselves engaged. The first is the vital statistics of this country which are, in the language of a well known Member of this House, most unsatisfactory, and the second is our National Income which is causing us very considerable worry. It is not merely as representing an industrial area in the Black Country that I am particularly worried about our exports. A large number of people have taken it in hand to advise us how best to spend our post-war income, but I am principally concerned that there will be a post-war income to be equitably divided. That our whole future depends upon exports is, if one may be allowed to borrow an expression of Caxton's, notoriously known throughout the universal world. I do not propose to argue about what is as a stone wall or an axiom of Euclid for obviosity. We must arrange for exports after the war. This country cannot possibly get on by its citizens taking in each other's washing. Unfortunately our export trade has come to an end during the war and companies have not been able to make provision for establishing exports after the war on the account of the Excess Profits Tax. None of us wants to see the old scramble for markets that took place before the war. We all hope that we may manage in collaboration with the United States and our other Allies so to arrange the trade of the world that all may get a fair share. We must, however, have the largest amount of the export trade that can possibly be equitably assigned to us. We have to make a great effort so that funds shall be available after the war for this most necessary purpose.

Therefore, I am moving in this new Clause that it shall be lawful—I do not say obligatory—for the Treasury to permit firms which can prove that they spent money on exports before the war to count as recognised business expenditure money set apart for future trading and development; that each year during the war a sum shall be payable to the Government to be returned to the firms concerned at the conclusion of hostilities, based upon what was used for that purpose by the said firms before the war, and that this money shall be used for no other purpose than actively prosecuting overseas trade and development. Further, I hope that those firms which in 1940 patriotically followed the Government's advice and pushed exports in every way they possibly could, although they did not have pre-war exports, shall be allowed to pile up some such reserves. An amount of 10 per cent. of the free on board value of the orders they received, roughly calculated for each year, has been suggested. Nobody will, I think, for a moment dispute the fact that exports are absolutely indispensable for the future of this country.

I do not propose to reiterate the cuckoo cry that so many Members somehow or other have used about their being perfectly certain that the Chancellor will not do what they ask him. I would like to look at it from a rather different point of view. We all respect the Chancellor very highly and we hope that he will continue to be Chancellor after the war. We ask him, therefore, to look ahead and to be certain that when he comes to the Budgets after the war there shall be some National Income on which taxes can be levied. It is not a matter of dispute that exports are indispensable. I do not think the Government realise it as much as I should wish. This new Clause is in a general way approved by the Institute of Export and it is approved by a considerable number—I am inclined to think by all—of those firms in the Black country, and especially Bilston, whose trading profits, nay whose very existence, depend to a large extent on their ability to export. I will close with a truism. What Bilston thinks to-day, England will think to-morrow.

Mr. Lipson (Cheltenham)

I beg to second the Motion.

Sir K. Wood

I congratulate my hon. Friend upon his speech and also upon the excellent support he had from his seconder. I am afraid that I must tell my hon. Friend that his speech was much better than the new Clause.

Mr. Hannah

May I be candid? The speech was my own. The wording of the Amendment was from other hands.

Sir K. Wood

Then I would suggest to my hon. Friend that on other occasions he should seek some other source for assistance because unfortunately I am advised that the new Clause has little or no meaning, and would have no effect, so far as the taxation law is concerned. That is particularly unfortunate when I know what my hon. Friend really desires to do in the matter. The Clause as drafted does not make the provision which my hon. Friend desires and it leaves the existing taxation position exactly as it is. I agree generally, and I think the House does, with what my hon. Friend has said about the importance of exports. I have taken the opportunity on more than one occasion of emphasising that matter. I am sure that it will be a necessary part of the policy of any Government after the war to do their best to promote exports in every possible direction. I must, however, take exception at this time to my hon. Friend's proposal. He desires that certain firms in Bilston and elsewhere should be able to accumulate reserves until the end of the war and that that should be done, I am sorry to say, at the expense of the Excess Profits Tax. I have a great affection for that tax and the money it brings in to me, and I am not in a position to permit a variation of the tax to be effected in that way. If a principle like this were admitted it would go to the very root and basis of the tax. Therefore, my reason for asking the House to reject the new Clause is not in any way directed against the object which my hon. Friend has in mind and which we all commend, but the proposal would be most objectionable from the point of view of taxation and the full obtainment of the Excess Profits Tax.

Mr. Hannah

May I ask my right hon. Friend whether he accepts the principle of this new Clause?

Sir K. Wood

I am always reluctant to commit myself to principles.

Question, "That the Clause be read a Second time," put, and negatived.