§ Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
§ Sir A. Gridley
When the Chancellor in his Budget Statement came to this question of the abolition of E.P.T. at the end of this year, he made this reference of which I will remind the House:As I propose that E.P.T. shall come to an end this year, I am including in the Finance Bill appropriate provisions dealing with terminal losses—allowance for deferred repairs and renewals, post-E.P.T. expenditure on the rehabilitation of industry to a peace-time footing, and fails in stock values.He added:I propose also to fix the date at which the provisions relating to exceptional depreciation are to come into operation."— [OFFICIAL REPORT, 9th April, 1946; Vol. 421, c. 1837.]This Resolution is in very general terms. The fact that a Resolution is required shows that the provisions, as I understand it—I may be wrong here, but I think not—will charge tax as well as get a relief from tax; otherwise the Resolution, I am advised, would not be necessary. The words in the Resolution cover 2820 the extent to which matters arising after the end of E.P.T. can be taken into account for the purposes of E.P.T. I am quoting from the Resolution. These powers appear to give power to relate profits arising after the end of E.P.T. to be brought back into E.P.T. On the other hand, Section 30 of the Finance Bill (No. 2) Act, 1945, which is already on the Statute Book, provides' that no relief shall be given in respect of any deficiency of profit occurring in any chargeable accounting period after 1st January, 1947.
We seem, therefore, to be in this position, that profits may be brought back into the E.P.T. but deficiencies of profit may not be brought back into E.P.T. If I am right, it is obvious thato these two situations must somehow or other be brought into line to avoid one-sided legislation against the taxpayer. In other words, profits or losses after 1st January, 1946, should not be capable of being related to tax under E.P.T. unless those profits and losses arrive from circumstances present during the E.P.T. period. I raise that point now because I think it is a matter which merits the most careful consideration between now and the time when the Finance Bill is drafted.
In addition, speaking for myself as an industrialist and, I am sure, on behalf of all industries that are affected by this tax, we are grateful to the Chancellor for redeeming what we understood would be his hopes to bring it to an end at the end of 1946. Those of us who remember the trouble after the end of the previous war, when we had E.P.D. instead of E.P.T., and the fact that there was no financial machinery for winding things up at the end of that war, with the result that there was chaos and muddle and prolongation for a lengthy period of disputes and arbitration and so on, welcome the fact that there is to be legislation this time which will make a clean wind-up of these postwar tax liabilities. So, while I ask the Chancellor to be good enough to look into the first part of my remarks, I would thank him, on behalf of industry, for redeeming his promise to wipe out E.P.T.
§ 10.0 p.m.
§ Mr. Glenvil Hall
In view of the way in which the hon. Member for Stockport (Sir A. Gridley) has dealt with this Resolution, there seems little left for me to say. He 2821 quoted briefly from what the Chancellor said on this matter and there is no point in my repeating what the Chancellor actually said. This deals, as he very properly said, with terminal losses, and it is essential that the two periods should coincide. The period will be laid down in the Finance Bill, and I can only assure the hon. Gentleman, and the House generally, that due note will be taken of what he has said tonight and, in so far as we can cover further points—I think we have, in fact, already covered the points he mentioned—and make it even clearer than it otherwise may be, that these two periods must coincide, we shall see that that is done.