HC Deb 19 February 1948 vol 447 cc1337-8
61. Mr. Collins

asked the Chancellor of the Exchequer what action he proposes to take to counter the inflationary effect of the large untaxed profits arising from new capital issues.

Mr. Glenvil Hall

The result of such a transaction is not necessarily inflationary since there must be purchasers as well as sellers.

Mr. Collins

But is my right hon. Friend aware that these profits are certainly untaxed, and will he convey that fact to the Chancellor, and also point out that they are equal at least to the increased cost of maintaining food subsidies at their present level and covering increased costs by increased subsidies?

Mr. Glenvil Hall

I think my right hon. and learned Friend is well aware of the point put by my hon. Friend, but I would remind him that capital appreciation up to now has not been taxed, whether in this form or any other.

Mr. Leslie Hale

Is the right hon. Gentleman aware that the loan transactions upon which these capital issues are based are definitely inflationary and that in a recent instance a company with a prewar profit of £4,000 and a post-war profit of over £100,000 received the permission of the Capital Issues Committee to float on that basis, and will he look into that matter?

Mr. Glenvil Hall

It all depends on what the seller does with the money he receives.