§ The reduction of the rate to 60 per cent., as from 1st January next, enables me to set in motion the repayment of the 20 per cent. refund under Section 28 of the Finance Act, 1941. I intend to speed up this repayment as much as I can. The total amount of these refunds, due for the life-time of the 100 per cent. rate, is about £450,000,000. But these refunds also, being repayments of E.P.T., are liable to Income Tax, so that the net refund from the Exchequer will not be much more than half this sum.
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It is provided under the relevant Sections of the Finance Acts, 1941 and 1942, that these refunds are to be paid at such date as Parliament may determine, and subject to such conditions as Parliament may fix. Arrangements will be necessary
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to ensure that they are used for the purposes for which they were intended, namely for the development and re-equipment of industry and are not—and here I quote the words of a Section of an Act of Parliament passed under the Coalition Government:
distributed for the benefit of shareholders, whether by the payment of dividends, by the issue of bonus shares or debentures, or by any other means whatsoever.
§ That was the language of the Coalition Government in war-time. We accept it now, and we are going to give it back to them. The machinery to police this arrangement may not be altogether simple, but it is being worked out; and I propose that the Commissioners of Inland Revenue should be empowered to make interim payments, pending a final settlement of E.P.T. liabilities. The Finance Bill will contain conditions which will govern the payment to ensure that the money is not misused. It must be ploughed back into the business and not scattered to the winds of heaven. These refunds will provide a net sum of about £250,000,000, which should be spent over the next few years in re-equipping British industry and in installing new machines for old—in many industries a necessary and long overdue process.