CLAUSE 48. — (Interpretation of Part IV.) (Hansard, 10 December 1945)

§ Mr. Glenvil Hall
I beg to move, in page 42, line 2, at end, insert: (4) Where any expenditure has been incurred on or after the first day of April, nineteen hundred and forty-five, in developing or re-equipping a trade or business, any sum used in or towards the recouping of that expenditure shall be deemed for the purposes for this Part of this Act to have been used in developing or re-equipping that trade or business and any undertakings given under this Part of this Act shall have effect accordingly. This Amendment has been put on the Order Paper by my right hon. Friend the Chancellor of the Exchequer to meet points which were raised when we were dealing with this part of the Bill in Committee. We have met hon. and right hon. Gentlemen opposite completely, except in so far as the date is concerned. The 83 Amendment makes the date 1945 and I believe that the hon. Gentleman the Member for Stockport (Sir A. Gridley) is anxious to see the date put some years further back, namely, to 1941. We hope, however, he will not press his Amendment because it would be very difficult to go back to 1941 for a variety of reasons. It is true that the late Sir Kingsley Wood first mentioned this matter in 1941— which is the only reason I can assume for the year 1941 being pressed by the hon. Gentleman. The ex-Chancellor of the Exchequer referred to the matter again in April, 1945, and that appears to be the operative date from which this Amendment to the Clause should apply. I hope, therefore, as we have gone a long way towards meeting the hon. Gentleman, he will drop his Amendment to the proposed Amendment, and let us have ours, and call it a day.

§ Sir A. Gridley
I beg to move, as an Amendment to the proposed Amendment, in line 2, leave out "forty-five," and insert "forty-one."
I am astounded at the statement made by the Financial Secretary and the reason he has given for inserting 1945. When I first read the Amendment of the Chancellor I thought that "1945" must be a mistake and that "1941" was intended. The Financial Secretary has very lightly dismissed what the Chancellor's predecessor said early in April last year. When he was asked by the hon. Member for Edgbaston (Sir P. Bennett) "Would the credits, when repaid, be able to cover such expenditure? "—that is, back expenditure from 1941 onwards—the right hon. Gentleman the Member for the Scottish Universities (Sir J. Anderson) said: I can give an unqualified answer in the affirmative. If a firm draws on its reserves, or gets an overdraft, in order to carry out development for postwar purposes, the fact that the obligation in connection with the development may be incurred now, before Parliament has decided on the repayment of these credits, will not in any way prejudice the firm concerned." — [OFFICIAL REPORT, 26th April, 1945; Vol.. 410, c. 1084.] I understood the present Chancellor to indicate in a previous Debate that he himself would honour this pledge. There are many concerns which, on the face of what the previous Chancellor said, have incurred capital expenditure during the war on additional equipment and the like 84 and, not infrequently, at the instigation of Government Departments themselves— otherwise it is possible they might not have done it. What they did count on as they incurred that expenditure on improvements and new equipments—and very often on a special kind to meet the requirements of war—was on being able to recoup themselves with E.P.T. refund, no matter whether they had borrowed the money from their bankers or raised their finance in any other way temporarily. There are others which had finished their re-equipment by the end of 1944 and will have no need to spend any further money on new equipment after the end of that year. Having regard to all these facts, and to the promise of a previous Chancellor, that traders who had spent their money in this way could look for it to be recouped out of E.P.T. refund, I am bitterly disappointed that this is not brought in from 1941 onwards, but merely makes provision from 1945 onwards. I hope the Chancellor will think again about this, because grave disquiet will be caused throughout the country unless my Amendment can be accepted.

§ Sir John Jarvis (Guildford)
I beg to second the Amendment to the proposed Amendment.
I ask the Chancellor to reconsider his decision on this matter. I have been working in a depressed area with companies which had no prewar standing but have been doing quite a large amount of work, not paying dividends but building up reserves for a rainy day which might come after the end of the war. We re-reived encouragement from the previous Chancellor of the Exchequer and we obtained licences to carry out extensions and improvements—work which has been done out of reserves—and we relied upon the previous Chancellor's promises, other-we would not have spent that money. I urge upon the Chancellor, even if he cannot go the whole way, at all events to meet us to some extent.

§ Mr. Dalton
May I comment upon the speech of the mover and seconder of the Amendment to my proposed Amendment? The statement made by my predecessor, the pledge that he gave, was in general terms; it contained no dates and it was made with special reference to postwar development. April, 1945, is a convenient date to take for the financial end of the war and prior to that it cannot, 85 I think, be argued that work has been undertaken in general—there may have been a few exceptional cases but in general it cannot be argued that that was for postwar work. We were all flat-out winning the war at that time, and although there was some beginning of plans for postwar development, I do not think it can be contended that before April, 1945, there had—save in certain very exceptional cases, which cannot be made the basis of a general rule—been genuine postwar expenditure. It is for that reason that it appears to me that April, 1945, is the right date from which to start the concession contemplated in my Amendment.
My picture of the matter is that, as from April, 1945, it may be assumed that work on development is postwar work, and in respect of that refunds may properly be given. Therefore, I do not admit that any pledge has been broken. No pledge was given as to date, and it appears to me that proper and common-sense interpretation of the date is to take April, 1945, as being the financial end of the war. In addition to that, as my hon. Friend the Financial Secretary said earlier, there would be very great practical difficulty in tracing events back to 1941. It would be very difficult to check claims which might be put up that certain expenditure which was incurred, of which no exact particulars were then furnished to the Revenue, was really on postwar work, even in the exceptional cases which I have mentioned already.
This may be illustrated by the case cited on the Committee stage of the Bill, when the hon. Member for Chippenham (Mr. Eccles) took the example of the Rhodesian copper industry, which carried out capital works in order to ensure the maximum production of copper during the war for war purposes. That was incurred after 1941, and he was hoping that that might come in for the benefit of the refund. Clearly, that should not do so, for it was war work to produce copper in wartime. Once we extended it as far as that, our refunds would be flying right and left, in respect of all sorts of work done merely with a view of carrying on the war. Therefore, I do not think that the limitation of date I have put in is at all unreasonable, and I must ask the House to reject the hon. Gentleman's Amendment and to accept my Amendment.