§ 48. Mr. Errollasked the Chancellor of the Exchequer if, since taxation of the apparent profit arising through an increase in the value of stocks held by a company increases still further the price at which these stocks are sold so as to realise a taxed sum sufficient to purchase fresh stocks at the new price, he will disregard 1860 this profit for taxation purposes in order to give partial effect to the Government's objective that taxation of profits should not enter into industrial costs.
§ The Chancellor of the Exchequer (Sir Stafford Cripps)The question of the valuation of stocks for taxation purposes is a matter within the terms of reference of the Millard Tucker Committee, and I must await their report; but I may add that an increase in the value of stocks above cost does not give rise to a profit for taxation purposes until the stocks are sold. As I said in the Debate on 27th September, there is no reason why goods in the shops or in process of manufacture should be increased in price if the materials were in the producers' hands before 18th September.
§ Mr. ErrollIn view, nevertheless, of the first part of the Chancellor's answer, that the matter is under consideration by a special committee, will he in the meantime desist from proclaiming that taxation on profits does not enter into industrial costs as profits are at present defined?
§ Sir S. CrippsNo, I shall continue saying what I have said before.