HC Deb 06 April 1948 vol 449 cc60-1

I should, I think, at this stage, say a word here on the subject of prices, profits and personal incomes before passing on to my proposals for taxation for this year. Many people have commented upon the fact that I have attempted to get voluntary agreement to the limitation of profits, the stabilisation or decrease in prices, and the avoidance of any general increase in wages and salaries. I am not the least surprised at this criticism of what I regard as a sensible, democratic approach to a very difficult and complex economic problem.

We start with the proposition, which is almost universally accepted, that the fixation of wages, salaries, and conditions of work, should be left to voluntary agreement between the representative bodies of employers and workers. To those who have this duty we have appealed to pay full regard to the urgent national needs of the hour. There has been no fixing of any ceiling, but we have stated that the country cannot now afford any general rise in personal incomes of any sort. We have stated no objection to adjustments as set out in the White Paper; indeed, we have envisaged the need for such adjustments in special cases. We are much encouraged in this policy by the support that the Trades Union Congress has given to our appeal.

When it comes to profits, we have taken steps by taxation to limit the amount of profits that can be distributed to shareholders. Roughly speaking, 60 per cent. of distributed profits now has to be paid in taxation through Income Tax and Profits Tax, and it is only the remaining 40 per cent. that can be distributed as personal incomes. At the same time, we have appealed to the directors of companies not to increase the distribution of profits this year, and to that appeal there has already been a wide response. I propose to leave the matter there until next year, by which time we shall see whether the promises not to increase the distribution of profits have been fully carried out.

So far as prices are concerned, we recognise that increases which have already occurred and may yet occur, in the prices of primary commodities will make it impossible to prevent a rise in some prices even when full advantage is taken of the economies which can be made by greater efficiency and of the maximum reduction of profits and of margins for distribution. It is important that, when the people are being asked to forego increases in their personal incomes there should be, so far as possible, stabilisation of prices over the whole field, whether covered by price control or not. We have, therefore, appealed to the trading community to co-operate in effecting a price standstill and in making reductions in price wherever possible, to offset the inevitable price increases to which I have referred.

Here again, there has been a marked response, and already many reductions are in operation. The Co-operative Societies, in particular, have announced a most valuable range of price reductions in essential foodstuffs, and we hope that this will stimulate others to follow this example. I hope, in particular, for price reductions from those efficient manufacturers and distributors who are able to produce or distribute at prices below the statutory ceiling prices. I am sure hon. Members opposite will be particularly pleased with this revival of competition in prices.

As the Committee knows, the President of the Board of Trade is making orders—to come into effect towards the end of this month—putting a statutory ceiling on the prices of consumer goods in respect of which the present price control is not tight enough, and he and the other Ministers concerned will be discussing margins with distributors, with a view to reductions wherever possible. Apart from this and the normal processes of price control, I do not propose any special legislative steps as regards personal incomes, prices or profits, other than the usual taxation provisions.